






On Thursday, July 3, Ero Copper announced that its Tucuma copper project in Brazil had achieved commercial production, though at least one analyst expressed skepticism about the company's ability to meet its full-year production targets.
In a statement on Thursday, Ero said that the Tucuma project produced approximately 6,400 mt of copper in Q2, including roughly 2,000 mt in the second half of June.
The company stated that throughput at the project's processing plant should continue to increase by year-end, supporting consecutive growth in copper production in H2.
Located in the state of Pará in northern Brazil, Tucuma is expected to produce 37,500-42,500 pounds of copper in 2025, accounting for half of Ero's full-year guidance of 75,000-85,000 pounds. According to Shane Nagle, a mining analyst at National Bank Financial, the Tucuma project commenced first production as planned in Q3 2024, representing approximately one-third of Ero's net asset value.
Orest Wowkodaw, a mining analyst at Scotia Capital, stated in a report on Thursday that achieving Ero's 2025 guidance "appears at risk," given that the company's copper production in H1 was only 11,467 mt.
He added, "While the achievement of commercial production represents a meaningful acceleration, the relatively weak Q2 performance and negative implications for the 2025 guidance are disappointing. We are awaiting a gradual improvement in copper production in Q3."
Ero said on Thursday that throughput at the Tucuma processing plant exceeded 75% of designed capacity last month. The company added that metallurgical recovery rates and copper concentrate grades continued to meet or exceed designed targets.
In an investor report last month, Ero stated that recent maintenance work at Tucuma had helped the company address bottlenecks identified at the end of 2024. Higher throughput at the processing plant should offset the impact of gradually declining copper grades. Tucuma has a designed annual processing capacity of 4 million mt of ore.
Tucuma has proven reserves of approximately 30.7 million mt of ore, containing about 273,200 mt of copper at a grade of 0.89%. Additionally, other estimated probable reserves amount to approximately 12.4 million mt, containing about 83,400 mt of copper at a grade of 0.67%.
Ero stated that cash costs for copper production this year are expected to range between $1.05-1.25 per pound.
Nagle said, "Considering Tucuma's achievement of commercial production mid-year, we anticipate a significant free cash flow inflection in H2." He added that free cash flow in H2 could exceed $50 million, enabling Ero to focus on balance sheet deleveraging and supporting capital returns to shareholders.
(Wenhua Comprehensive)
For queries, please contact Lemon Zhao at lemonzhao@smm.cn
For more information on how to access our research reports, please email service.en@smm.cn