Ero Copper Corp. (ERO) Q3 2024 Earnings Call Transcript
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Nov 06 2024
0mins
Should l Buy ERO?
Source: SeekingAlpha
Copper Production at Caraíba 9,920 tonnes, an increase of 11.9% year-over-year, driven by higher mine grades at Vermelhos and Pilar.
C1 Cash Costs at Caraíba $1.63 per pound, a decrease of 24.5% year-over-year, due to higher copper grades, favorable treatment and refining terms, and a favorable exchange rate.
Copper Production at Tucumã 839 tonnes, below expectations due to power disruptions; revised guidance for full year production to 8,000 to 11,000 tonnes.
Operating Cash Flows $52.7 million, reflecting expansion of operating margins.
Adjusted EBITDA $62.2 million, driven by reduced unit costs at Caraíba and higher gold prices at Xavantina.
Adjusted Net Income $27.6 million, or $0.27 per share, attributable to higher operating margins.
Gold Production at Xavantina 13,485 ounces, with C1 cash costs of $539 and all-in sustaining costs of $1,034 per ounce.
Liquidity Position $125.2 million at quarter end, indicating strong liquidity.
Foreign Exchange Hedge Program Unrealized gain of $9.8 million and realized loss of $3.4 million for the quarter.
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Analyst Views on ERO
Wall Street analysts forecast ERO stock price to fall
10 Analyst Rating
4 Buy
6 Hold
0 Sell
Moderate Buy
Current: 30.020
Low
22.32
Averages
25.65
High
30.23
Current: 30.020
Low
22.32
Averages
25.65
High
30.23
About ERO
Ero Copper Corp. is a copper producer with operations in Brazil. The Company's primary asset is a 99.6% interest in the Brazilian copper mining company, Mineracao Caraiba S.A. (MCSA), 100% owner of the Company's Caraiba Operations, which are located in the Curaca Valley, Bahia State, Brazil, and the Tucuma Operation, an open pit copper mine located in Para State, Brazil. The Company also owns 97.6% of NX Gold S.A. (NX Gold), which owns the Xavantina Operations, an operating gold and silver mine located in Mato Grosso State, Brazil. It also has an agreement with Vale Base Metals for a 60% interest in the Furnas Copper-Gold Project, located in the Carajas Mineral Province in Para State, Brazil. The Caraiba Operations are located in northeastern Bahia State, Brazil, approximately 385 kilometers (km) north-northwest of the capital city of Salvador. The Xavantina Operations are located in southeastern Mato Grosso State, Brazil, approximately 670 km east of the capital city of Cuiaba.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Impala Asset Management Increases Stake in Century Aluminum Company
- Share Increase: Impala Asset Management disclosed a purchase of 168,805 shares of Century Aluminum in Q4 2026, valued at approximately $5.27 million, indicating strong confidence in the company's market position.
- Stake Proportion Rise: Following the purchase, Impala's stake in Century Aluminum reached 21.17%, making it the fund's largest single investment, reflecting a bullish outlook on the aluminum sector amidst current market volatility.
- Strong Financial Performance: Century Aluminum's latest earnings report revealed net sales of $632.2 million and adjusted EBITDA of $101.1 million, significantly up from the previous quarter, showcasing improvements in aluminum pricing and operational leverage.
- Outstanding Market Performance: As of February 12, 2026, Century Aluminum's stock price stood at $49.70, up 146.5% over the past year, greatly outperforming the S&P 500, highlighting its competitive edge and investment appeal in the industry.
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- Earnings Miss: Ero Copper missed adjusted earnings estimates in Q3, prompting Bank of America to downgrade its rating from Buy to Neutral, with a price target cut from C$49 to C$45, reflecting concerns about the company's future performance.
- EBITDA Forecast Reduction: BofA lowered its 2026 EBITDA estimate by 16%, primarily due to revised lower volumes and higher costs, indicating ongoing challenges in operational efficiency that could impact long-term growth potential.
- Market Performance Outlook: While BofA remains bullish on copper prices, analysts noted that Ero Copper's current valuation appears to discount either higher copper prices or significantly improved execution, limiting upside potential and suggesting it may underperform compared to other copper peers.
- Impact of Operational History: Ero Copper's weak operational delivery and repeated guidance misses over the past two years have diminished BofA's confidence in its near-term execution, leading analysts to believe it will likely lag behind competitors with more consistent operating histories.
See More
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- Record Copper Production: Ero Copper achieved a record copper production of 64,307 tonnes in 2025, reflecting significant operational optimization, with expectations to further increase production to between 67,500 and 77,500 tonnes in 2026, indicating strong growth potential.
- Significant Gold Production Increase: The total gold production for 2025 reached 52,290 ounces, with Q4 production at 13,837 ounces, more than doubling compared to Q1, driven by a value-creation initiative at Xavantina, which is expected to continue boosting future gold output.
- Enhanced Liquidity: The company's liquidity at the end of 2025 was approximately $150 million, an increase of nearly $40 million quarter-on-quarter, primarily due to strong sales of copper and gold, enhancing the company's capacity for future investments and expansions.
- Capital Expenditure Plans: Capital expenditures for 2026 are expected to range from $245 million to $280 million, primarily aimed at supporting growth at Xavantina and the construction of a new shaft at the Pilar Mine, demonstrating the company's strong commitment to future development.
See More
EroCopper to Release Q4 and Full Year 2025 Results
- Earnings Release Schedule: EroCopper will publish its Q4 and full year 2025 financial results on March 5, 2026, after market close, demonstrating the company's commitment to transparency and investor communication.
- Conference Call Details: The company will host a conference call on March 6, 2026, at 11:30 AM Eastern Time, which is expected to attract investor and analyst participation, thereby enhancing market focus on the company's performance.
- Webcast and Replay Availability: On the day of the earnings release, EroCopper will provide a webcast and replay service, ensuring that investors can access key information promptly, thus improving information accessibility and transparency.
- Company Background: EroCopper is a Brazil-focused mining company with a diversified portfolio of copper and gold assets, committed to safety and operational excellence, showcasing its long-term growth potential in the mining sector.
See More
ERO Options Analysis: $30 Strike Price Offers Significant Appeal
- Options Overview: The current bid for the put contract at a $30 strike price is 50 cents, meaning that if an investor sells-to-open this contract, they commit to buying the stock at $30 while collecting a premium, effectively lowering their cost basis to $29.50, making it an attractive alternative to the current market price of $30.27.
- Potential Return Analysis: Should the contract expire worthless, the premium would yield a 1.67% return on the cash commitment, translating to an annualized return of 9.51%, indicating that utilizing options strategies can effectively enhance investment returns under current market conditions.
- Market Risk Assessment: Current analytical data suggests a 56% probability that the contract will expire worthless, highlighting the need for investors to consider potential market volatility and risks when opting for this strategy.
- Volatility Comparison: The implied volatility for the put option is 54%, while the actual trailing twelve-month volatility stands at 53%, indicating that the market's expected volatility for this contract is closely aligned with historical volatility, which investors should monitor for changes.
See More
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- Price Decline: Copper futures fell to $13,033 per metric ton on the London Metal Exchange, down 2% from all-time highs, reflecting market concerns over future demand.
- Future Forecast: Goldman Sachs analysts predict copper prices will drop to $11,000 per ton by year-end 2026, primarily due to rising global inventories and underperforming demand, indicating a deterioration in market fundamentals.
- Weak Demand: China's copper demand growth fell short of expectations in Q4 2025, with weakening electric vehicle sales posing further downside risks, prompting manufacturers to consider switching from copper to aluminum.
- Policy Impact: The Trump administration's decision to delay tariffs on critical mineral imports may lead to lower premiums for U.S. copper, although prices are expected to remain around $13,000 in Q1 due to uncertainty surrounding refined copper tariffs.
See More
Impala Asset Management Increases Stake in Century Aluminum Company
- Share Increase: Impala Asset Management disclosed a purchase of 168,805 shares of Century Aluminum in Q4 2026, valued at approximately $5.27 million, indicating strong confidence in the company's market position.
- Stake Proportion Rise: Following the purchase, Impala's stake in Century Aluminum reached 21.17%, making it the fund's largest single investment, reflecting a bullish outlook on the aluminum sector amidst current market volatility.
- Strong Financial Performance: Century Aluminum's latest earnings report revealed net sales of $632.2 million and adjusted EBITDA of $101.1 million, significantly up from the previous quarter, showcasing improvements in aluminum pricing and operational leverage.
- Outstanding Market Performance: As of February 12, 2026, Century Aluminum's stock price stood at $49.70, up 146.5% over the past year, greatly outperforming the S&P 500, highlighting its competitive edge and investment appeal in the industry.
See More
BofA Downgrades Ero Copper to Neutral Amid Earnings Miss
- Earnings Miss: Ero Copper missed adjusted earnings estimates in Q3, prompting Bank of America to downgrade its rating from Buy to Neutral, with a price target cut from C$49 to C$45, reflecting concerns about the company's future performance.
- EBITDA Forecast Reduction: BofA lowered its 2026 EBITDA estimate by 16%, primarily due to revised lower volumes and higher costs, indicating ongoing challenges in operational efficiency that could impact long-term growth potential.
- Market Performance Outlook: While BofA remains bullish on copper prices, analysts noted that Ero Copper's current valuation appears to discount either higher copper prices or significantly improved execution, limiting upside potential and suggesting it may underperform compared to other copper peers.
- Impact of Operational History: Ero Copper's weak operational delivery and repeated guidance misses over the past two years have diminished BofA's confidence in its near-term execution, leading analysts to believe it will likely lag behind competitors with more consistent operating histories.
See More
Ero Copper Reports Record Copper Production for 2025
- Record Copper Production: Ero Copper achieved a record copper production of 64,307 tonnes in 2025, reflecting significant operational optimization, with expectations to further increase production to between 67,500 and 77,500 tonnes in 2026, indicating strong growth potential.
- Significant Gold Production Increase: The total gold production for 2025 reached 52,290 ounces, with Q4 production at 13,837 ounces, more than doubling compared to Q1, driven by a value-creation initiative at Xavantina, which is expected to continue boosting future gold output.
- Enhanced Liquidity: The company's liquidity at the end of 2025 was approximately $150 million, an increase of nearly $40 million quarter-on-quarter, primarily due to strong sales of copper and gold, enhancing the company's capacity for future investments and expansions.
- Capital Expenditure Plans: Capital expenditures for 2026 are expected to range from $245 million to $280 million, primarily aimed at supporting growth at Xavantina and the construction of a new shaft at the Pilar Mine, demonstrating the company's strong commitment to future development.
See More
EroCopper to Release Q4 and Full Year 2025 Results
- Earnings Release Schedule: EroCopper will publish its Q4 and full year 2025 financial results on March 5, 2026, after market close, demonstrating the company's commitment to transparency and investor communication.
- Conference Call Details: The company will host a conference call on March 6, 2026, at 11:30 AM Eastern Time, which is expected to attract investor and analyst participation, thereby enhancing market focus on the company's performance.
- Webcast and Replay Availability: On the day of the earnings release, EroCopper will provide a webcast and replay service, ensuring that investors can access key information promptly, thus improving information accessibility and transparency.
- Company Background: EroCopper is a Brazil-focused mining company with a diversified portfolio of copper and gold assets, committed to safety and operational excellence, showcasing its long-term growth potential in the mining sector.
See More
ERO Options Analysis: $30 Strike Price Offers Significant Appeal
- Options Overview: The current bid for the put contract at a $30 strike price is 50 cents, meaning that if an investor sells-to-open this contract, they commit to buying the stock at $30 while collecting a premium, effectively lowering their cost basis to $29.50, making it an attractive alternative to the current market price of $30.27.
- Potential Return Analysis: Should the contract expire worthless, the premium would yield a 1.67% return on the cash commitment, translating to an annualized return of 9.51%, indicating that utilizing options strategies can effectively enhance investment returns under current market conditions.
- Market Risk Assessment: Current analytical data suggests a 56% probability that the contract will expire worthless, highlighting the need for investors to consider potential market volatility and risks when opting for this strategy.
- Volatility Comparison: The implied volatility for the put option is 54%, while the actual trailing twelve-month volatility stands at 53%, indicating that the market's expected volatility for this contract is closely aligned with historical volatility, which investors should monitor for changes.
See More
Copper Futures Drop to $13,033, Goldman Sachs Predicts $11,000 by Year-End 2026
- Price Decline: Copper futures fell to $13,033 per metric ton on the London Metal Exchange, down 2% from all-time highs, reflecting market concerns over future demand.
- Future Forecast: Goldman Sachs analysts predict copper prices will drop to $11,000 per ton by year-end 2026, primarily due to rising global inventories and underperforming demand, indicating a deterioration in market fundamentals.
- Weak Demand: China's copper demand growth fell short of expectations in Q4 2025, with weakening electric vehicle sales posing further downside risks, prompting manufacturers to consider switching from copper to aluminum.
- Policy Impact: The Trump administration's decision to delay tariffs on critical mineral imports may lead to lower premiums for U.S. copper, although prices are expected to remain around $13,000 in Q1 due to uncertainty surrounding refined copper tariffs.
See More
