Highlights

• Q3 2026 Revenue of USD 348.0 million, adjusted EBITDA of USD 200.6 million and Net Income of USD 118.0 million

• Net Debt fell to USD 353.5 million; Leverage down to 0.5x from 1.2x at year-end 2025

• Copper output guidance unchanged at 67,500 to 77,500 tonnes; consolidated C1 cost guidance raised to USD 2.25 to USD 2.45 per pound

Ero Copper Corp. (TSX:ERO) released record third quarter results in a news release issued last Monday, with Cash Flow from operations, adjusted EBITDA and net income all reaching the highest levels in the company's history. Management also confirmed that net debt fell by roughly one hundred million dollars in the period, reaffirmed its copper production outlook, raised its copper cost outlook and reset the gold guidance for its Xavantina operation. Figures in the release are stated in United States dollars.

A Brazilian copper producer with a gold side business

Ero Copper is a Vancouver-based Mining company whose operations are located in Brazil. Its core Assets are the Caraíba operations in Bahia state and the Tucumã operation in the Carajás region of Pará state, both of which produce copper in concentrate. A third operation, Xavantina, is an underground gold mine in Mato Grosso. The company also has an earn-in agreement with Vale Base Metals over the Furnas copper-gold project in the Carajás Province, which sits at the exploration and study stage.

That mix gives the Business a copper-led profile with a meaningful precious metals contribution, a combination that has made quarterly results sensitive to both base metal pricing and the Brazilian real. The shares are listed on the Toronto Stock Exchange and the New York Stock Exchange, and the issuer reports under international financial reporting standards.

Record Earnings and cash generation

Revenue for the third quarter came in at roughly three hundred and forty-eight million dollars, up sharply from the second quarter and nearly double the level of the same quarter a year earlier. Adjusted EBITDA reached about two hundred million dollars, while net income was about one hundred and eighteen million dollars. Cash flow from operations was approximately one hundred and ninety-one million dollars, an increase of close to forty percent sequentially.

Operationally, Caraíba and Tucumã each produced roughly nine thousand tonnes of copper, and consolidated output of about eighteen thousand tonnes was up from the prior quarter. Throughput improved at both sites, helped by a company-wide cost and efficiency program branded OneEro, although head grades were lower than a year earlier. Blended cash cost for copper was about two dollars and fifty cents per pound, higher than the same period last year because of a stronger real and inflationary pressure.

Realized foreign exchange hedge gains of roughly ten million dollars in the quarter offset part of the cash effect of the stronger Brazilian currency. Those gains are reported separately and are excluded from unit operating costs, which is why management also published guidance with hedge gains applied.

Deleveraging takes centre stage

The Balance Sheet was arguably the most important part of the release. Net debt closed the quarter at about three hundred and fifty-four million dollars, down from roughly four hundred and fifty-three million dollars at the end of June and about five hundred and two million dollars at the end of last year. Net debt leverage, measured against trailing twelve-month adjusted EBITDA, fell to one-half of a turn from one and two-tenths at the start of the year.

Liquidity also improved. Cash stood at roughly one hundred and fourteen million dollars, the revolving Credit Facility was undrawn to the extent of one hundred and fifty million dollars, and total available Liquidity exceeded two hundred and sixty million dollars. Year to date, most of the cash available after Capital spending, interest and Lease payments was directed to repaying debt principal. Management described accelerated deleveraging as a core commitment to shareholders.

Guidance: production steady, costs and gold reset

Consolidated copper production guidance for the year was left unchanged, with the fourth quarter expected to be the strongest of the year at both copper operations. The cost outlook moved the other way. Consolidated cash cost guidance was raised, with the company citing the stronger real, Inflation linked to the ongoing conflict involving Iran, and delayed access to the higher-grade bottom of the Surubim pit at Caraíba. Costs are expected to ease in the fourth quarter as volumes rise. Capital Expenditure guidance was unchanged.

At Xavantina, mined gold guidance was reduced materially after extended downtime in the first half for ventilation and cooling work, together with lower grades in the third quarter. Offsetting that, the operation recovered a record quantity of gold from historic concentrate stockpiles, and total gold output guidance for the year was lifted. About fifteen thousand ounces from those stockpiles are projected for the fourth quarter, part of which was already invoiced in October.

Growth Options and sector backdrop

The Furnas drill program was completed in the quarter, more than two years ahead of schedule, satisfying the exploration requirement of the earn-in arrangement. Permitting, hydrogeology, environmental work and confirmatory metallurgical testing continue, and a pre-feasibility study is expected next year. At Tucumã, modular tailings filters are scheduled for installation and commissioning in the fourth quarter, with the added capacity excluded from current guidance.

Readers following Metal & Mining Stocks will recognize the wider setting. Copper has benefited from strong Demand tied to electrification and data infrastructure, and the release itself reflects an environment of elevated metal prices alongside persistent cost inflation, with diesel and other consumables weighing on producers across the sector. For Canadian-listed miners with foreign operations, currency movements add another layer, since costs are incurred in local currency while revenue is linked to dollar-denominated Commodity prices.

Risks and what to watch

Several variables will shape the next few quarters. The fourth quarter needs to deliver the production ramp that guidance implies, particularly at Caraíba, where grade and access to the Surubim pit bottom have already pressured costs. Gold output depends on whether underground development, which reached a record in the third quarter, translates into higher mining rates and grades at Xavantina. The company also noted that guidance rests on estimates of reserves, grades and metallurgical recovery, all of which can shift.

Currency is a second area of exposure. A stronger Brazilian real raises local costs when measured in dollars, and while hedging softens the effect, it does not remove it. Inflation in diesel, explosives and other inputs, linked in part to geopolitical tension, adds to that pressure, and the cost guidance increase shows how quickly such factors can reach unit costs.

Finally, the pace of debt reduction may moderate as capital spending continues at the levels guided. Capital expenditure for the year remains in a range of roughly two hundred and eighty-five million to three hundred and thirty million dollars, spread across the three operations and exploration.

Index context and next steps

Ero Copper is a constituent of Canadian resource indices and trades alongside other base metal producers on the Toronto exchange, where the [S&P/TSX Composite Index] carries a heavy weighting in materials and energy. Movements in copper prices, the Canadian dollar and the Bank of Canada policy path all influence sentiment toward the sector, although none of those factors changes the operating picture described in the release.

Next on the calendar are the fourth quarter production figures, the commissioning of the Tucumã tailings filters, further work on the Furnas permitting and metallurgy programs, and updates on how quickly the stockpile gold is converted into sales.