NEXA · Nexa Resources S.A.

Nexa’s Q1 2026 results reflect a sharp year-over-year improvement driven primarily by macro-driven metal price strength—especially silver, with LBMA prices up 164% YoY amid geopolitical risk premiums and central bank demand—and higher smelting sales volume. Despite sequential softness in mining output due to heavy rainfall at Cerro Lindo, an illegal blockade at Atacocha, and a shaft constraint at El Porvenir, the company achieved record zinc production at Aripuanã and strong smelter output gains in Brazil (Juiz de Fora +56% YoY, Três Marias +17%). The 126% YoY Adjusted EBITDA growth underscores the resilience of Nexa’s integrated model, where smelting operations absorbed lower owned-mine volumes via third-party concentrate while benefiting from higher treatment charges and by-products pricing. Margin expansion to 31.8% YoY reflects both scale and pricing leverage. Critically, the April 2026 transition of the Cerro Lindo silver streaming agreement—from 65% to 25% streamed—removes a major structural drag on cash flow, unlocking recurring value starting in Q2. While free cash flow was negative due to typical Q1 working capital outflow (US$283 million), management explicitly frames this as seasonal and reversible, reinforcing confidence in full-year delivery. With net leverage improved to 1.59x and liquidity covering all debt maturities through 2030, the balance sheet remains robust. Guidance reaffirmation signals operational normalization and execution confidence across key initiatives: Cerro Pasco Integration Phase I (US$8M invested in Q1), Aripuanã tailings filter commissioning, and ongoing Brazilian smelter recovery—all positioning Nexa to strengthen free cash flow generation meaningfully in H2 2026.