20-F: Nexa Resources Reports Annual Results for Fiscal Year 2024

Nexa Resources files its 20-F, reporting financial results and operational activities for the year ended December 31, 2024.

Summary

• Nexa Resources S.A. has filed its Form 20-F for the fiscal year ended December 31, 2024.
• The company is a large-scale, low-cost, integrated polymetallic producer with zinc as its main product.
• Nexa owns and operates mines in Peru and Brazil, as well as zinc smelters.
• In 2024, the Aripuan mine completed its ramp-up phase and transitioned to an ongoing operation.
• The company met its consolidated mining production guidance, with zinc, lead, and silver production within the annual guidance range, while copper production exceeded the upper end of the range.
• Metal sales were in line with the mid-range of the guidance, and mining and smelting cash costs were in line with the guidance range.
• The company reported net revenues of US$2,766.5 million, a 7.5% increase from 2023.
• Nexa reported a net loss of US$187.4 million, a 35.8% decrease as compared to 2023.
• The company invested US$276.8 million in capital expenditures in 2024.
• In July 2024, Nexa sold the Morro Agudo Complex in Minas Gerais, Brazil for R$80 million (approximately US$16 million).
• The company is advancing the Cerro Pasco Integration Project to extend the life of the mining complex.
• Nexa increased its ownership in Tinka Resources Ltd. to approximately 19.87%.

Sentiment

Score: 6

Explanation: The document presents a mixed sentiment. While there's positive growth in net revenues and a decrease in net loss, there are also negative aspects such as fatalities and ongoing risks.

Positives

• Net revenues increased by 7.5% to US$2,766.5 million.
• Net loss decreased by 35.8% to US$187.4 million.
• The Aripuan mine completed its ramp-up phase in June 2024.

Negatives

• The company reported a net loss of US$187.4 million for 2024.
• There were three fatalities at Nexa's mines in 2024.

Risks

• The business is highly dependent on international market prices of metals, which are cyclical and volatile.
• Changes in demand and supply for metals could adversely affect sales volume and revenues.
• Adverse economic developments in China could have a negative impact.
• The mining business is subject to inherent risks, some of which are not insurable.
• Failure of a tailings dam could negatively impact the business and reputation.
• Currency exchange rate fluctuations could materially and adversely affect the financial position.
• Estimates of Mineral Reserves and Resources may be materially different from actual mineral quantities recovered.
• Health, safety and environmental laws and regulations may increase costs and restrict operations.
• Political, economic and social conditions in the countries in which Nexa operates could adversely impact the business.
• VSA has substantial control over Nexa, which could limit shareholders ability to influence corporate decisions.

Future Outlook

In 2025, Nexa expects to continue focusing on increasing the plant throughput rate, improving concentrate grades, and maximizing metal recoveries at the Aripuan mine.

Industry Context

The report provides insights into Nexa's performance within the mining and smelting industry, highlighting its position as a large-scale, low-cost integrated metals producer.

Comparison to Industry Standards

• Nexa is among the top five global zinc producers in 2024, according to Wood Mackenzie.
• Nexa was the fifth largest producer of refined zinc globally in 2024, according to Wood Mackenzie.
• Cajamarquilla was ranked as the fifth largest zinc smelter globally by production volume in 2024, according to Wood Mackenzie.

Legal Proceedings

• Nexa is party to various legal and administrative proceedings relating to labor, civil, environmental and tax matters.
• There is an ongoing dispute between Nexa and Peruvian tax authorities in respect of the applicability of the Cerro Lindo stability agreement.
• Nexa is involved in transfer pricing discussions in Peru, relating to the discount and premium applied by Nexa CJM in the export of refined zinc to its related parties.

Related Party Transactions

• Nexa enters into transactions with related parties, including VSA and companies that are owned or controlled, directly or indirectly, by VSA, in its ordinary course of business.

Stakeholder Impact

• The report provides information relevant to shareholders, employees, customers, suppliers, and local communities.
• The report highlights Nexa's commitment to ESG principles and sustainable development, which impacts stakeholders.

Next Steps

• Continue to focus on improving operational performance at the Aripuan mine.
• Continue to advance the Cerro Pasco Integration Project.
• Continue to focus investments on projects around the mines Nexa operates.

Key Dates

Keywords

Nexa Resources, financial results, mining, smelting, zinc, copper, lead, silver, Aripuan, Mineral Reserves, Mineral Resources