It posted net income of $15.3 million compared to a net loss of $1.4 million in the same period of 2018 and almost 37% higher than the $11.2 million reported in the past quarter. It reported revenues of $72 million, an 81% increase over the $39.7 million achieved during the same period of 2018 but 15% lower than the $85.1 million reported in the fourth quarte of 2018.
"The results are highlighted by a significant quarter-on-quarter increase in grades mined and processed as we started to mine the main orebodies of the Vermelhos mine [in Brazil] during the period," said president and CEO David Strang.
The company saw its cash and equivalents position fall 18% to $22.1 million compared to the prior year period, and its net debt increased 20% to $133.1 million from $110.7 million. During the quarter, Ero increased its unsecured line of credit with a Brazilian bank from R$35 million to R$40 million (about $10.3 million), and entered into credit agreements for R$20 million (about $5.1 million) lines of credit with another Brazilian bank. As of May 7th, these lines of credit are undrawn.
The company processed 530,133 tonnes of ore grading 2.19% copper during the quarter producing 10,645 tonnes of copper in concentrate after average metallurgical recoveries of 91.8%.
The quarter saw production from the first operating stopes of the main orebodies at Vermelhos commence, resulting in a 34% quarter-on-quarter improvement in grades mined. At Pilar, a decline in grades was anticipated due to planned stope sequencing, with the company expecting grades to improve through the remainder of the year.
The company plans capital expenditure of $62 million this year, of which $42 million will be at Pilar and $18 million at Vermelhos. A review of the Boa Esperança 2017 feasibility study is underway with the goal of extending the potential mine life and increasing copper production.
Ero also ramped up its exploration efforts in the Curaçá Valley where it has 24 drill rigs operating, with a $20 million budget for 2019. It plans to release an updated mineral resource estimate towards the end of the third quarter.
It has 11 rigs working in the Vermelhos district focused on in- and near-mine expansion as well as drilling a north-northeast mineralised trend with a combined strike length of about 5.5km.
At Pilar, 13 drill rigs are operating with a focus on previous discoveries of the West Limb and Deepening Extension zones. Drilling has identified a high-grade zone within the southern portion of the West Limb and newly identified and now digitised data continues to augment exploration activity.
At the NX mine, six rigs are operating focused on a recently discovered new mineralisation zone between and on-trend of the Bras and Buracão veins. Mineralisation has been delineated over about 400m in strike-length and 200m down-dip.
Shares in Ero Copper (TSX:ERO) opened up almost 3% at C$17.17 Wednesday, valuing the company at C$1.4 billion. Its share price has increased almost 69% so far this year.
