Ero Copper Corp. announced Thursday that its Tucumã copper mine in Brazil achieved commercial production this week, marking a milestone for the Vancouver-based company's second major operation. The mine, located in Pará State, reached the threshold effective July 1 after months of technical challenges and plant modifications.
The achievement comes as analysts question whether Ero can meet its full-year production targets, with the company's first-half copper output reaching only 11,467 tonnes against annual guidance of 75,000 to 85,000 tonnes.
Tucumã produced approximately 6,400 tonnes of copper during the second quarter, including about 2,000 tonnes in the second half of June1. The operation achieved sustained throughput levels exceeding 75% of design capacity last month following completion of a third filter press and process plant modifications1.
"The achievement of commercial production at Tucumã reflects the resilience of our organization over the past several months," said Makko DeFilippo, Ero's president and chief executive officer1. The company expects plant throughput volumes to continue increasing through year-end, supporting sequential copper production growth in the second half1.
Metallurgical recovery rates and copper concentrate grades have met or exceeded design targets, according to the company1. The mill is designed to treat 4 million tonnes of ore annually2.
Ero shares fell 3.3% to $22.93 Thursday morning in Toronto, giving the company a market value of about $2.4 billion1. The stock has traded between $13.17 and $31.73 over the past year1.
Scotia Capital mining analyst Orest Wowkodaw said achieving 2025 guidance "appears at risk" given the weak first-half performance1. "While the achievement of commercial production represents meaningful ramp-up progress, the relatively weak second-quarter performance and the negative implications to 2025 guidance is a disappointing development," he noted1.
National Bank Financial analyst Shane Nagle offered a more optimistic view, suggesting free cash flow in the second half could exceed $50 million, allowing Ero to focus on deleveraging and shareholder returns1.
Tucumã is projected to produce 37,500 to 42,500 tonnes of copper in 2025, representing half of Ero's full-year guidance1. The mine accounts for about one-third of Ero's net asset value1 and achieved first production on schedule in the third quarter of 20241.
The operation addressed bottlenecks identified in late 2024 through recent maintenance work1. Cash costs at the facility are expected to range from $1.05 to $1.25 per pound of copper produced this year1.
