Good morning, and welcome to Nexa Resources first quarter 2022 conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. This event is being recorded and is also being broadcast via webcast, and may be accessed through Nexa's investor relations website, where the presentation is also available. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Remember that participants of the webcast will be able to register via website questions. Simply type your question in the box and click Send, and that will be answered soon. I would now like to turn the conference over to Ms. Roberta Varella, Head of Investor Relations for opening remarks. Please go ahead. Good day and good afternoon, everyone, and welcome to Nexa Resources first quarter 2022 earnings conference call. Thanks for joining us today. During the call, we'll be discussing the company's performance as per the earnings release that we issued yesterday. We encourage you to follow along with this on-screen presentation through the webcast. Before we begin, I'd like to draw your attention to slide number two, as we'll be making forward-looking statements about our business, and we just ask that you refer to the disclaimer and the conditions surrounding those statements. It's now my pleasure to introduce to you our speakers. Joining us today is our CEO, Ignacio Rosado, our CFO, Rodrigo Menck, and Leonardo Coelho, our Senior Vice President of Mining, as well as the investor relations team. With that, I'm going to go ahead and turn the call over to Ignacio. Ignacio, please go ahead. Thank you, Roberta, and thanks to everyone for being with us this morning. Please, let's move now to slide number three, where we will begin our presentation. As the main highlights, you can see that overall operating performance was as expected and in line with guidance. In the first quarter, our production was mainly affected by the Vazante's flooding due to the heavy rains. However, we announced in early April that Vazante is operating at full capacity. Also, in this quarter, we have continued to benefit from high base metal prices that combine with our solid operational performance and financial discipline, generated a record high-adjusted EBITDA and a strong operational cash flow. Our balance sheet continues to be strong with a low financial leverage. In this quarter, we also announced and concluded the early redemption of our 2023 notes in the amount of $130 million. Aripuanã has continued to progress, and we are on track to start production in the third quarter of this year. Mechanical completion has ended, and we are at more than 75% of commissioning. In Aripuanã, it is worth mentioning that at the beginning of the year, we signed an agreement to replace an obligation of royalty payments for a five-year copper supply contract. The copper concentrate produced by Aripuanã will be sold during this period at market prices subject to a cap, including then a financial instrument. The fair value of this financial instrument had a non-cash impact of $19 million in the quarter, and it's excluded from our adjusted EBITDA analysis. Finally, we would like to emphasize that we remain very optimistic about market fundamentals for the coming months. Moving now to the next slide number four, where I will discuss our results in more detail. In this slide, you can see that zinc production in the first quarter of this year decreased by 14% compared to the first quarter of 2021. This was mainly driven by the temporary reduced capacity in Vazante and lower treated ore volume in Cerro Lindo. As previously disclosed, Vazante underground mine was partially flooded from mid-January until the end of March due to the heavy rainfall levels in the state of Minas Gerais. At Cerro Lindo, treated ore volume was below our expectations as the workforce was impacted by COVID, and we also anticipated maintenance at the concentrator plant. For the next quarters, we expect zinc production from Cerro Lindo and Vazante to improve, while Pasco Complex and Morro Agudo are estimated to be relatively stable, similar to their first quarter performance. Mining cash costs in this quarter decreased by 23% compared to the prior year. This was mainly explained by higher byproducts and lower TCs, which offset higher operating costs and a decrease in zinc volumes. Similar to the end of last year, we continue to face inflationary cost pressures in third-party services, consumables, and logistic expenses. Now moving to the smelting segment in slide number five. In the first quarter, metal sales total 134,000 tons, 9% lower compared to the first quarter of last year, following lower production in Peru and in Brazil. In Brazil, smelter production was affected by the decrease in supply of Vazante, as well as lower calcine availability from Peru. In Peru, as previously anticipated, production in Cajamarquilla decreased year-over-year due to the reduction of calcine supply. For the second quarter, smelter production is expected to increase. As Vazante supply is normalized, sales are expected to follow higher production volume and our 2022 guidance remains unchanged. Our smelting cash costs in this first quarter increased by 26.5% compared to the same period of last year, and this was mainly driven by higher zinc LME prices, which increased 37%, lower TCs, and higher operating costs. These factors were partially offset by higher by-products contribution. Conversion costs in the first quarter was $0.25 per pound compared to $0.182 per pound in the first quarter of last year. This increase is driven by the increase in energy prices and other variable costs, also influenced by higher inflation rates. Now moving to the next slide related to the completion of our Aripuanã project. In Aripuanã, we continue to make solid progress in all areas. The beneficiation plant was delivered to the operations team for commissioning, which reached more than 75% of progress by the end of March. In the second quarter, we plan to continue with the cold and hot commissioning of flotation circuits of the three minerals and their concentrate filters. Also, the rest of the beneficiation plant circuits as flocculants are under the commissioning phase to allow the start of operations. We are on track to start commercial production in the third quarter of 2022. In mine development, we have been very successful developing our Arex and Link mines, and have reached 3.3 months of production in stockpiles. I had the opportunity to visit Aripuanã at the beginning of this month, and I am confident that we are close to completion. As I mentioned before, Aripuanã will become a long-life flagship mine. Now moving to the next slide, where I will give you an update on explorations. In the first quarter of this year, we executed our exploration program as planned, and 28,000 meters were drilled. At Cerro Lindo, the exploration program continued to focus on extensions of known ore bodies to the southeast of the mine, and on the new VMS discovery at the Pucasaia target, in which drilling keeps confirming the continuity of zinc and lead mineralization. At Aripuanã, the Babaçu Northwest reveal thick intersections with still pending assay results. At the Pasco Complex, drilling remained focused on extending the existing mineralized bodies. In Buen Suceso, infill and deep exploratory drilling continued to reveal thick and high-grade mineralized intersections that will increase resources in the north extent of this body. Now moving to the next slide to show our financial results. In slide number eight, beginning with the chart on your upper left, consolidated net revenue for the first quarter grew 20% compared to the first quarter of 2021. This was mainly driven by higher LME prices, which compensated for lower volumes. Consolidated adjusted EBITDA for the quarter was $208 million, a record high for a first quarter, and increased by 16% from the first quarter of 2021. This performance is explained by higher metal prices and higher by-products contribution, which offset lower volumes and an increase in unit costs resulting from inflationary pressures. Compared to the fourth quarter of last year, adjusted EBITDA increased by 53%. In addition to the comments mentioned before, adjusted EBITDA was also affected by the decrease in mineral exploration and project evaluation expenses and lower SG&A expenses. In the next slide, I will discuss the financial performance by segment. In the mining segment, net revenue totaled $322 million in the first quarter and increased 26% versus the first quarter of last year. This factor was mainly driven by higher average LME prices. Adjusted EBITDA for the mining segment followed the upward trend and reached $127 million, 31% compared to the first quarter of 2021. Higher prices and by-products contribution offset the decrease in volumes and the increase in variable and fixed costs, as well as the decrease in pre-operating expenses of the Aripuanã project in the amount of $10 million. In the smelting segment, net revenue in the first quarter totaled $562 million and rose 20% versus the first quarter of last year, also supported by higher LME prices. Adjusted EBITDA was $82 million, a slight decrease compared to the first quarter of last year, but a strong recovery from the fourth quarter of last year, and this was explained by higher LME prices, the expected reverse in hedge book difference, as we explained in the previous quarter, and higher by-products contribution and higher TCs. I will now turn over the call to Rodrigo Menck, our CFO, who will comment on our investments. Good morning and good afternoon, everyone. In the first quarter, we have invested $83 million in CapEx, being $27 million directly to the Aripuanã project. The Brazilian real appreciation against the US dollar had a negative impact of $4.7 million in the quarter on this specific line. With regards to the mineral exploration and project evaluation, we invested a total of $16 million in the quarter, being almost $11 million related to mineral exploration and mine development. As part of our long-term strategy, we will maintain our efforts to replace and increase mineral reserves and resources, supporting our business growth. Total planned exploration and project evaluation expenditures are expected to be $82 million in 2022 and remains unchanged. Moving to the next slide, where we will discuss our cash flow generation. Here on slide eleven, starting from our $208 million adjusted EBITDA, and considering their reconciliation to cash flow, cash flow provided by operations before working capital changes was $227 million. We had $93 million from interest paid in taxes and $46 million of sustaining CapEx. Still, Nexa has generated $80 million of cash before expansion projects and working capital during the analyzed period. After that, we invested $10 million in non-sustaining CapEx and $27 million in Aripuanã. We also had a negative net effect of $43 million due to the early redemption of our 2023 notes of approximately a $133 million, partially offset by a new export credit agreement in the principal amount of $90 million. Dividends and shareholder premium payments totaled $50 million, and foreign exchange effects on cash and cash equivalents was positive in $31 million. Finally, there were working capital investments of $156 million in the first quarter, highly impacted by higher LME prices on inventories and receivables, and lower outstanding amounts of accounts payable. With all the effects presented in this slide, free cash flow was negative in $168 million in the first Q. This negative effect was financed by our strong balance sheet explained in the following slide. On slide 12, you can see that our liquidity remains strong, and we continue to report a healthy balance sheet with an extended debt profile. By the end of the first quarter, our current available liquidity was approximately $900 million, which includes our undrawn revolving credit facility of $300 million. Total cash decreased compared to December 31, 2021, mainly driven by the early redemption of the outstanding 2023 notes and the continued investment in excess of operating cash flows over the quarter. As of March 31, the average maturity of our total debt was 5.4 years with a 5.16% average debt cost. Our leverage, measured by the net debt to adjusted EBITDA ratio, was 1.53x, compared with 1.37x at the end of 2021 and 1.73x a year ago. Moving to the next slide. On this slide 13, we show you that the average zinc price in the first quarter of the year increased more than 35% when compared to the same period one year ago, as limited supply has continued to support higher prices. Furthermore, the Russia-Ukraine war boosted base metal prices, which were already on a strong upward trend. Copper prices similarly increased by 18% in the first quarter of 2022 compared to the first quarter of 2021. Regarding market fundamentals, there is no change from what we presented in our call back in February. The supply projections for zinc continue to be above real mine production, and this effect, combined with solid demand, should support higher zinc prices. I will now hand over the call back to Ignacio who will continue our presentation. Ignacio, please. Thank you, Rodrigo. I am now on slide 16. Corporate social responsibility is key for our industry, and it is core for our strategy. Last year, we started to revise our material topics related to corporate goals and ESG management guidelines. We have already established ESG metrics to our executives' annual compensation. In the first quarter of this year, we published our code of conduct for suppliers. The purpose of this document is to establish the rules that will guide our suppliers' ethical and socio-environmental behavior, which are directly related to our code of conduct and reflect a responsible and transparent performance. In May 2022, we expect to publish our annual sustainability report, which provides detailed and transparent information on the ESG results achieved throughout the year. For this year, we expect to finalize and have the final approval of the board of our ESG targets and KPIs to be disclosed to the market. We aim to enhance our transparency and accountability to our ESG initiatives. Now turning to our last slide. I would like to close this presentation by briefly reinforcing our priorities for this year. We are very close to deliver our third flagship mine, Aripuanã, and we need to focus on its startup and commercial production, as well to continue to work on its life of mine extension. We will continue working on improving our cash flow generation from our operations. Inflationary cost pressures are expected to continue, and we remain committed with our financial discipline on costs and CapEx optimization. Extending our life of mine of our main assets remains a priority, and this action has to be implemented in combination with a clear growth strategy in copper. Finally, we need to deliver a strong balance sheet so we can fund most of our growth with our cash flow while generating value to all of our stakeholders. Thank you very much for attending this presentation. I will now open up for questions. We will now begin the question-and-answer session. To ask a question, you may press star then one on your touch tone phone. If you are using a speaker phone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. You may also send questions via the chat at the webcast platform. The first question comes from Carlos de Alba with Morgan Stanley. Please go ahead. Yeah. Thank you very much, everyone. So first question, if I may, is on the new offtake agreement in Aripuanã that replaced the royalty liability. We read the notes. We heard the comments earlier. Maybe if you could explain a little bit more, I still don't fully understand what exactly happened. Was this an obligation that you were supposed to start paying earlier than the new start of Aripuanã, and exactly what is happening there in terms of what is the volume at which it is capped, the concentrate sales, as well as the price, the minimum price. Which is, I think, if I understood correctly, it's either the lower of the LME price or a fixed price. So if you could provide details around that so we can model, that'll be great. As well as to when exactly these concentrate deliverables will start. Presumably, as early as the third quarter when the operation commences. My second question, if I may, has to do with working capital and cost of run-of-mine trends. In the first quarter, obviously working capital increased. Part of that definitely is prices. If you could comment as to how your level of inventories in terms of volumes where do they stand right now, and what are the trends that you expect in working capital from that perspective? That would be very useful. Also, any comments that you may have on the trend of cost per run-of-mine given that they have been they increased year-over-year and quarter-over-quarter as well. Thank you. Hola, Carlos. Good morning. Thank you for the questions. Rodrigo Menck here. First of all, the offtake. I will provide you some things that you will be able to have a rationale because the details of the contract are under confidentiality, so cannot open up, for example, the price cap. As you can see on the intangibles, we have an inception in January, which is what would be the cost of our mining rights. Okay? Then the mark to market that you see affecting our results is the variation on this price. We have committed to deliver up to 31,000 tons of copper in five years, beginning October this year. All right? There is a curve of deliveries throughout the five years, which respect the ramp-up of the project. Once we deliver the 30, approximately 31,000 tons, we finalize the obligation. This obligation extinguishes part of the royalty that we have in Aripuanã, one specific royalty for this specific offtake that we had in the past. This was a negotiation that we had as we were managing these agreements of royalties from the past. That's pretty much it. You will follow up this month, quarter to quarter by the mark-to-market that we will disclose. This can be positive or it can be negative, depending on the price, the future prices of the copper curve. I hope this is clear. Yeah, very clear. Thank you. Just to comment. Yeah. The second one, working capital. Working capital is mainly price, mainly on receivables and of course, inventories. Our volumes in inventories for the first quarter has increased a bit for calcine and also zinc concentrate in preparing for the maintenance stoppages that we have also, right? In some parts of our process. This is forecasted to be consumed in the coming quarter. Not necessarily all at once, but this provides production stability in our smelters, so it's very important for us. Price is going up, of course, by the end of the quarter. You know, it was above $4,000 per ton. This increase the mark to market of inventory, so this is forecasted to be reversed in the coming quarters when you consume those outstanding. On the payables, what happened was that we had higher payments than the ratio of generation of new payables. Why is that? As you saw in the fourth quarter, we invested $160 million, approximately of CapEx. In this first quarter, we invested half of that. As our average term for this type of payment is around 45-50 days, you can do the math, really the outstanding amounts were reduced, so this impacted the investment of working capital. If you look overall, we are balanced in the working capital index. We are investing $9 million only in our whole balance sheet position. I hope this is clear as well. Yeah. Carlos, just to add to Rodrigo's comment. As you can see in slide 11, the main effect that affect our cash flow was mainly working capital. As Rodrigo was explaining, we were building this inventory and then some receivables and payables, and this is, some of these effects are gonna turn back. So we believe that in the second quarter, we will have hopefully with these prices cash flow positive quarter. Yeah. Regarding costs, yeah, we already factor in in our projections and the guidance that we gave to the market, 7% of inflation in costs because these inflation pressures were not in this quarter. They began during last year, you know? There were a lot of increases in energy costs, a lot of increases in cement, in lime. We had a lot of pressure from the contractors in terms of salaries and in terms of replacement of equipment, et cetera. This has been the case in this quarter. Given that we have anticipated that, we sort of comply with the cost per ton that we had in the quarter. In the second quarter, we don't see a more important effects. However, we have to be very cautious because, you know, at high tin prices and these high prices that we have, all the industry and all the providers also face pressures, and we have to be balanced with them as well because we have to keep long-term relationships. We are cautious. We don't see in the second quarter more increases. If we see those, we will get back to you, and we will provide guidance to the market as well. Thank you very much, Ignacio, Rodrigo, and Roberta. Yeah. Thank you. Our next question comes from Orest Wowkodaw with Scotiabank. Please go ahead. Oh, hi, good morning. I also wanted to talk a little bit more about cost today. I'm just very surprised that you're not seeing or not guiding to higher costs. Just when I think about some of the impacts to your business right now, certainly zinc TCs have moved up and the Brazilian currency has strengthened. Obviously, there's rising input costs across the board. How does your cost guidance. I get that you already assumed 7% higher cost guidance, I assume, in the guidance. But I'm just wondering how to think about those factors in the fact that there's no change in your cost guidance. Yeah. I mean, there are many variables to consider here. The comment that I mentioned before was on the cost per ton, yeah, which is the one that is controlled at the mine. If you consider the C1, you will see that the TCs will influence that, and that's true because TCs are going up, and you are right on that. Again, our byproducts, all the sales of our byproducts with these prices and the volume that we have, will sort of offset this C1 cash cost as well. The cost per ton per mine is the one that I made, the comments I made, yet we are having pressures on those. We anticipated the 7% on those costs. We are having more pressures, but with volume and some internal initiatives related to efficiencies on rock support, efficiencies in the mine, in the utilization of equipment, efficiency in productivity, we are sort of managing those. TC is something that we don't control, and the by-products are driven by price. That's why the C1, we don't see that C1 going up. Yeah. That's more or less it. Regarding the Brazilian real, yes, it, we forecasted an exchange rate higher. We had, I think, an average of 5.2- 5.5 for the year, right? Yeah. Guidance was forecasted with 5.5 of FX exchange rate ours. Of course, now that we are under that, we have a pressure. As a sensitivity that we can use as a rationale for the whole year, every 10 cents, we have kind of an increased nominal dollar increase of $10 million for the whole year, and then proportionally throughout the year. Together with those initiatives that Ignacio mentioned, there are some balance between one and another. One thing that is important is that within the 7% expectation that we included in our guidance, cost guidance, we were very pessimistic about energy costs. In Brazil, as you know, our main components of the matrix is hydrological. At that moment, we had the red flag, as we call it, in the system here, and the prices were really expected to go up. The rainy season was really good for the basins here, and now we are in the green flag, and the expectation is for costs to go down. We are observing. It's too early in the year to know if this is going to really benefit us because we also have, as Ignacio mentioned, pressure on the transportation and logistics side, and some other inputs, warehouse items and all that. We are being cautious, we are observing, and we'll come back to the market with some change on that, but we are not anticipating, at this point in time, anything that for us means anything higher than 7% in dollar terms for the year. Is it clear? Okay. Thank you. It is. Thank you for that. Can you? That's the difference, a bit of a difference that Brazil has with the other countries. Definitely. Can you please remind us just on how your smelting contracts work? The new TC, I assume, will come into effect here in the second quarter for zinc. Can you just remind us sort of how that three-year kind of trailing TC is gonna work for the smelting business? Yes. The higher TC, you know, is related to the availability of smelting throughout the world, especially Europe. Europe is facing a very high energy cost, so some of the smelters are closing down. Because of that, the TCs are going up. Part of the contracts, part of the inputs in our smelters in Peru, 50% are from Cerro Lindo and from El Porvenir and Atacocha. In Brazil, a big percentage of those come from Vazante and from Morro Agudo. The new TC will translate to the mines, yeah, because we have to follow market tendencies, but the profitability will go to the smelters. Yeah? The other TCs, regarding the concentrate that we bought to fill the plants, a big percentage was already fixed with the previous TC. We are not getting the benefit in the smelters of these TCs. We, however, have some spots, small spots that are being benefited from this new TC. That's more or less the mix that we are having today in this effect of new TCs in the market. If you want some proportions, or just to remind you, 50% of our concentrate is sourced by our own mines. The new TC will impact as an accounting policy ever since the beginning of the year, throughout the year as a reference, so from our internal transfers. 50% of what we consume is sourced by third parties, as Ignacio was mentioning. 80%-90% under the brick agreements, as he was describing, and 10%-20% from spots, and then we have a mild impact there, but it's very marginal overall. Now it's going up a bit with this new TC. Just to remind you of the percentages. Thank you. Our next question comes from Alex Hacking with Citi. Please go ahead. Hi. Yeah, good morning. I just have a couple of follow-up questions, if I may. Firstly, on the TCs, the smelting charges, is there any price participation, zinc price participation back in those contracts? Thank you. I'm sorry, Alex. How are you? Just for me to clearly understand your question, you mean escalation mechanisms in case zinc prices go up, such as what was disclosed as the benchmark? I'm sorry. I had a problem with my headset. My question was just around price participation in the treatment charges this year. Is there any price participation in the contracts? No, this is not a common feature for us. In some spot negotiations, you might have some escalation. As you saw recently, for example, it's 230, and if prices stay above a certain level, you can have additional dollars in the TCs, but we don't have this type of features in our agreements. As I was describing to Orest's question about the percentages that we have, what remains in the spot is really 10% of the 50%, so 5% overall, which has a minor effect in our overall TCs impact. Is this clear? Yeah, that's clear. Then just to follow up on Carlos's question earlier about the Aripuanã uptake. Just to clarify, it's 30,000 in total, right? Over five years, so it would be roughly 6,000 tons a year. Over five years. Yes. It's only 30,000 over five years, so it's not 30,000 per year. Okay, perfect. Just finally on the cost side, are you seeing significant increases in the costs of your explosives? You know, this is something that a couple of other, you know, miners who have highlighted as seeing significant cost inflation for them. Thank you. No. In this, from our end here, as I explained, we are pretty, I wouldn't say comfortable, we're cautious, but we are seeing that the pressure that we're feeling on our cost end is really within those 7% range that we have disclosed. Of course, through this increase, we will be updating our estimates. Okay. Thank you. Thank you, Alex. Our next question comes from Jackie Przybylowski with BMO Capital. Please go ahead. Thanks very much, and congratulations on the quarter. I just wanted to ask a question about Aripuanã and the commissioning there. It looks like you're on track still to hit commercial production later this year. Can you maybe just talk about where the definition of commercial production related to full nameplate capacity? Is that do you expect to hit your full nameplate capacity by the third quarter? Also, can you maybe just talk about what are the, maybe, the risks that you see over the next couple of months to hitting commercial production? Thanks. As I was saying, 75% of the commissioning is already done. I guess we are in the process of testing with water most of the equipment today. So far we are not having any problems. As you may know now, also the plant is all automated, so we need to run all these cables and make sure that the automation process works. We are in that process right now. We are very close to starting the ramp up of the plant. Having said that, I would say we are very close to start the ramp up. I cannot put a time on it because, you know, this is a process. However, I would say that it's gonna be soon, and it's gonna be in the third quarter, hopefully, beginning to mid third quarter, it is starting to ramp up. Regarding commercial production, I don't know, Rodrigo. We have defined the level of the stability that needs to be achieved for us to call it a commercial production. That will be throughout the ramp-up process. Once we have it, we will be disclosing. As Ignacio said, there is a plan of the ramp up, but things can happen. This might be variable. We expect to achieve it throughout this year, yes. Yeah. Jackie, I mean, we are very, very confident we are towards the end of the project. This is gonna be in the third quarter, and we are very confident that that's happening. Yeah. Sorry. I mean, maybe just to clarify my question, can we assume that, you know, when you hit commercial production or let's say by the end of the third quarter or sometime this year like Rodrigo mentioned, can we assume you're at your nameplate, or is there still a gap between where you hit commercial production and where you hit full capacity? I'm just wondering because some people define commercial production as a lower throughput rate than that. Yes, there's a GAAP gap between what we call. Okay. Commercial production and nameplate capacity, certainly. Nameplate capacity we'll be achieving only by next year, probably the second half of next year. Remember that our disclosure for the ramp-up period was up to 15 months. We are working the curve throughout this period. Usually, commercial production is around 70% of the nameplate capacity utilization. We are working on those curves and numbers, Jackie. Okay. That is actually what I was. Yeah, I guess. Yeah. Thank you. Sorry. Okay, thank you, Jackie. Once the ramp up starts, Jackie, I think we can provide more guidance to the market on how this is gonna evolve through the end of the year. We will do that. Okay. Thanks. Thanks, Ignacio. Thanks, Rodrigo. That's super helpful. Thank you. Our next question comes from Hernán Kisluk with MetLife. Please go ahead. Good morning. Thank you for taking my questions. I have two questions actually. The first one is regarding your plans to expand in copper production. In the report, you mentioned you are targeting 100,000 tons at some point in time. I have already seen the projects that you have on the pipeline, Magistral and Pukaqaqa. It seems that Pukaqaqa is still on hold, so I would like maybe to hear more color from you guys in terms of when and how, and maybe even where you expect to deploy your resources to increase your copper production. That's the first question. The second one is around Cerro Lindo production. Since the end of 2020 or all along 2021 and into the first quarter of 2022, it seems that production has been on a declining trend, that it has actually resumed a declining trend that started a long time ago. My question here is what should we expect in terms of production from Cerro Lindo? And also, the other side of this is that costs per ton before byproducts are going up because of lower dilution, I guess. Also what should we expect in terms of costs from this mine? Thank you. Pardon me. It appears we've lost contact. Yeah. With our main speaker location. Yes, I can take question. They told me that they have lost connection. Hernán, you're right. For the previous years, Cerro Lindo has been reducing production mainly because of grades, which was expected by our reserve model. Throughput was about stabilizing between 6.5 million tons a year. We expect to keep that level of production for the coming years. We're still assessing our geotech models to see how that's gonna be behaving long term. Grades we don't see right now any major change for the long term. We're still seeing that we are reaching an average grade for the deposit. That's what we're seeing right now. In terms of cash costs, of course, that's the impact in the first quarter we saw because of the impact on volume. You see also that the cost can be stabilized in a level between what you have right now. Okay. Basically, we should expect stability from now on from Cerro Lindo in terms of production. You're right. We intend to see some stability from now on at the levels you were seeing previously, in the previous years. Okay. I'm very sorry. This is Ignacio. We don't know what happened, but our call was canceled and we are back. I don't know if we answered the Cerro Lindo question. Is that correct? Yes, that's correct. Yes. Do you have the answer for the corporate strategy, Hernán? No, not that one. In terms of copper, you know that we produce copper in Cerro Lindo, almost 30,000 tons and with the other mines and considering Aripuanã, we might go up to 40. The idea is that we produce at least 100 in five years. That's the aim. That's what we are trying to achieve. We have some projects in the pipeline. We have the most important one is Magistral. Magistral is in FEL 3 right now, and it's a very good project in Peru. The question mark I would say in Magistral is that we don't expect in Peru that our operations today are gonna be affected by any economic impacts on taxes or other impacts that will affect our profitability today. Having said that, to fund a project today in Peru of sort of $800 million-$1 billion is something that we have to be cautious regarding Magistral, and we have to compare this investment with other alternatives that we can find in the market. We have a dedicated team looking for opportunities, and we are very flexible on many opportunities. What we are trying to look at is the brownfield projects close to production, some producing mines. We are assessing a lot of opportunities, and we are very active in the market. When the time comes, we may come back to you with some news. Having said that, in this price cycle, everything is very expensive. It's very difficult to find something that is gonna be accretive for the company. I mean, as the process goes on, we will assess many opportunities. The idea is that hopefully we reach 100,000 tons of copper in five years. Thank you very much. Very clear. Our next question comes from Lawson Winder with Bank of America. Please go ahead. Hello, Ignacio, Rodrigo, and team. Excuse me. Thank you for the exploration report that you guys put out earlier this week. That was very helpful. I'd like to ask about the work that's happening at Cerro Lindo, particularly the focus on Pucasaia. So there's four drill rigs operating. One, are those all drilling from underground? Excuse me. Or are there some drilling from surface? Two, how much of Pucasaia material is already included in the existing reserve and resource estimates? Also, how much or how material would you view the opportunity here? Finally, what is your confidence level that Pucasaia will ultimately add to reserves at your year-end update? Thank you. Sure. Yeah, no. Pukaqaqa is a VMS. It's a massive volcanic deposit. Pukaqaqa, these drill holes that we have in Pukaqaqa are from underground. We are still working on the extension of Pukaqaqa. Pukaqaqa is probably close to 3-4 km from the extraction center of Cerro Lindo. This is for us an upside in terms of reserves going forward. In the reserves that we have today, Pukaqaqa is not considered. From a structural point of view of Cerro Lindo, we today have eight years. We are replacing these reserves, most of them, from the surroundings of the main ore bodies. We are drilling with a lower grid, and we are infill drilling those. We are replacing reserves from those. However, we see Pukaqaqa as a new discovery that is gonna be, could be massive. As I was saying, it is still open, yeah. The idea is that we drill Pukaqaqa this year and next year, and we will come back with news on its extension and its potential in terms of volume, and how are we gonna incorporate that mineral in the reserves. Okay. That's great color. Are there other targets? Yeah, no, that's extremely helpful. Thank you. Are there other targets at Cerro Lindo on which you're focusing drilling in 2022? Yes. As I was saying, we have other targets. We have targets close to the mine. They are not as promising as Pukaqaqa, but given that they have continuity on the ore bodies that we are mining today. The idea or the expectation that we have is that we add more resources from those that will be converted into reserves in the coming years. How many targets do we have? I mean, we can give you more detail later on. I believe that there are like two or three targets very close to the mine. I don't recall the names right now, but it's important that we add those in the coming years as reserves as well. Ignacio- Okay, great. If you allow me to complete. Oh, yeah. To add additional information. Those targets, the satellite targets, they are drilled from surface. Once you identify them and close the minimum level of understanding, the target is to develop towards underground to get a better shape on that and then add into our resources base and reserves later. Yeah, that's super helpful. Then maybe just sort of one final question to wrap this all up. What proportion of the entire exploration budget for 2022 is for Cerro Lindo is just focused at Pukaqaqa? The Cerro Lindo target today, let me see. I think we have like 18,000 meters in Cerro Lindo. It should be like 10% of the total target, total budget of exploration that includes also greenfields is in Cerro Lindo, more or less. Okay, fantastic. Thanks so much, guys. Sure. Now we have some questions from the web. First one comes from BTG Pactual, Jose. Can you give a range of the EBITDA contribution that we should expect from Aripuanã in 2023, given your current assumptions? In 2023, we're gonna be still in the ramp-up process. We will not reach full- Full cash generation capacity. I would say as a projection, for example, we have the technical report, which is a bit outdated. I would expect more EBITDA contribution from Aripuanã than it is there in the technical report because we have higher prices. Technical report states EBITDA contribution with full capacity at $120 million, but with prices around $2,600, $2,700. We can estimate a much higher EBITDA with current price levels and considering full capacity above $200 million of EBITDA contribution. This is only a forecast. It's still in the projections, and we need to observe the ramp up curve evolution so that we can have this more in detail. I would use the proxy of the technical report for estimating. Okay, we also have another question here in the webcast from Terence. Could you please provide more color on zinc markets, like the balance between metal versus concentrate, if there is any surplus or deficit this year, and about treatment charges? As we were saying, the key today in the zinc market are the smelters. We as I was mentioning before, most of the smelters or some of the smelters in Europe especially, are facing very high power costs, and this translate to them to shutting down these smelters or reducing the capacity. Because of that, and given that the mine supply or the concentrate is not going down that much, I mean, it's sort of stable, the TC's have gone up. Having said that, when we sell our metal, we see a lot, still a lot of demand, and that translates in the premiums that we are receiving. The premiums today on a spot base are much higher today. From a zinc point of view, we are very bullish on the price of zinc today. Of course, you never know what will happen, but as we were saying in our presentation, for the coming months we see a very high prices of zinc. What will happen next year, we don't know. I mean, it might be that Europe will face some recession because of the war. We don't know that. For this year, given these high TCs that we are seeing and high premiums, we believe that the market is very tight because of this smelter problem that we are facing. We have time for one more question. From the web, from Joanna: Can you just remind me how this energy accounts in total costs? Can you comment on the higher net leverage ratio compared to the end of 2021? Also mention you intend to deleverage. Can you tell us if you have any net leverage targets or guidance for the end of the year? In terms of rating, do you have any expectations regarding an upgrade of the S&P rating to investment grade? Hi, Joanna. This is Rodrigo. Thank you very much for the questions. For the first question, it's around 5% overall. Okay? Measures to mitigate impact of volatility in energy costs, it's very complicated to do that everywhere because energy you have a pass-through which is almost immediate everywhere. In Brazil what we follow up is the energy curve here internally. Now that we are in the green flag, these things begin to soften down a bit in the pressure of the own costs. About leverage, it's like there is no leverage targets. We have by our policy, our target overall is to be below 2x net debt to EBITDA according to our risk management policy. This is something that we already are below. With current prices we certainly will be generating more cash and this ratio is probably trending towards 1x net debt to EBITDA by the end of the year. We have deleveraged on a gross basis last year, considering that we had many bank loans that were pre-payable. Currently, out of our $1.7 billion debt, we have $1.2 billion that is the long-term bonds. The remaining amounts are pretty much on export credit notes in Brazil up to five years and also ECAs, export credit agencies, including the KfW as one. There's less, let's say, base for gross deleverage, but we will be generating cash and we will be considering this capital allocation either for growth or returning cash to the shareholders. In terms of rating, we have been in close discussion with all the rating agencies. I do not anticipate any change in our ratings in the short term, but this is a constant discussion. Our credit metrics and our business fundamentals are really strong. This is something that we have to follow up according to their reports updates that they periodically do. I hope this has answered your questions. One other comment that I wanna make. Here is that you are right, the net debt EBITDA ratio for the end year was 1.37, and now it's 1.53. You could see that we are increasing. We wanted to be clear here is that the cash, the net cash that we consume in the quarter was $168 million. But out of those, $156 million were working capital that we already explained. We see this working capital that a good part of that is gonna reverse. I would say that the leverage ratio is gonna go down with these prices, should go down in the second quarter, and towards the end of the year should go down as well. This was the main thing that influenced this ratio. Thank you. This concludes our question and answer session. We will now hand over to Ignacio for his final remarks. Mr. Rosado, please go ahead. Thank you. Thank you everybody for attending the call. We hope we were clear with the results that we have in this quarter. We are very pleased that Vazante today is up and running again. We are projecting a good month in April, and we are projecting that we will achieve the guidance for the second quarter. As I was saying, Aripuanã, we are confident that it's gonna be starting the ramp up in the third quarter. We are very close to that. We are very committed to make sure that we are disciplined in this environment, that there is a lot of inflationary pressures. We have a lot of meetings through the weeks with the operations to make sure that we have initiatives to compensate for these pressures. We are very committed to increase our cash flow. This is at the end the objective that we have. Thank you very much for attending the call. Thank you very much for the time. We will speak soon. You know that, Roberta and Natima here, if you have further questions, we will be very happy to answer later on. Thank you and have a good day.