Nexa Resources (NYSE:NEXA) management highlighted a “strong finish” to 2025, pointing to higher zinc production, improved mining costs, and stronger price realizations that helped drive the company’s strongest quarter of the year, according to executives on the company’s fourth-quarter and full-year earnings call.
Fourth-quarter results and full-year summary
Chief Executive Officer Ignacio Rosado said the fourth quarter reflected “consistent operational execution” and the benefits of a focus on safety, efficiency, and cost management in what he described as a supportive pricing environment. For the quarter, Nexa reported net revenues of $903 million and adjusted EBITDA of $300 million, and posted net income of $81 million, or $0.38 per share. The company generated $51 million in free cash flow in the quarter and ended with net leverage of 1.7x.
Free cash flow for the year was negative $105 million, which the company said included debt reductions and dividends.
Mining performance led by Aripuanã
On the mining side, Nexa produced 91,000 tons of zinc in the fourth quarter, a 9% increase from the third quarter, driven by improved performance at Vazante, Aripuanã, Cerro Lindo, and Atacocha. Management noted that first-half volumes were impacted by temporary operational constraints and lower grades.
Consolidated mining cash cost, net of byproducts, improved sequentially to negative $0.58 per pound, benefiting from stronger byproduct grades and lower treatment charges. For the full year, cash cost was negative $0.30 per pound, which management said was below guidance and reflected “disciplined cost management and favorable price dynamics.”
Mining segment fourth-quarter net revenues were $532 million and adjusted EBITDA was $266 million, representing a 50% margin. For full-year 2025, the mining segment generated about $1.6 billion in net revenues and $658 million in adjusted EBITDA, a 42% margin.
Rosado singled out Aripuanã, which achieved its highest quarterly production to date in the fourth quarter. Management attributed the improvement to higher operational reliability, reduced plant downtime, and lower workforce turnover. The company also said a fourth tailings filter arrived in early November and installation is progressing as planned, with commissioning still targeted for the first half of 2026 and full operational capacity expected in the second half of 2026.
During the Q&A, executives provided additional operational color on seasonality and throughput. Management said the current three-filter configuration allows the plant to run around 140,000 to 145,000 tons per month and that the operation has delivered at that rate over the past six months. They said performance through January and February remained consistent despite the rainy season, and that the fourth filter is expected to ramp up between April and June, supporting a move to full capacity in the second half of the year.
Smelting volumes steady, margins pressured by concentrate market dynamics
In smelting, Nexa reported quarterly sales of 142,000 tons and full-year sales of 567,000 tons, aligning with the company’s 2025 guidance. Management said the sequential decline was mainly due to lower production at Brazilian smelters and softer demand for zinc oxide, while Cajamarquilla remained stable.
Smelting cash cost was $1.41 per pound in the quarter and $1.28 per pound for the year. Management said the environment of high zinc prices and lower treatment charges pressured margins amid tight concentrate supply. Conversion cost was $0.34 per pound in the quarter, slightly lower sequentially, but higher year-over-year due to increased operating costs and unfavorable foreign exchange in Brazilian units. For the full year, conversion costs were below annual guidance, which management attributed to cost control.
The smelting segment generated net revenues of $573 million and adjusted EBITDA of $34 million in the fourth quarter. For the full year, net revenues were approximately $2.0 billion and adjusted EBITDA was $113 million, an EBITDA margin of 6%. Looking ahead, management said increasing global mine supply is expected to lift treatment charges and support a gradual rebound in margins.
Capital allocation, balance sheet actions, and liquidity
Chief Financial Officer José Carlos del Valle said 2025 capital expenditures totaled $352 million, slightly above the company’s $347 million guidance, primarily due to the appreciation of the Brazilian real against the U.S. dollar, which he said had an approximate $7 million impact. Fourth-quarter CapEx was $125 million.
For the Cerro Pasco Integration Project, phase one investments were $12 million in the quarter and $42 million for the year, slightly below the initial plan of $44 million. Exploration and project evaluation spending totaled $78 million, below an $88 million initial plan.
Del Valle walked through cash flow items, noting $846 million in operating cash flow before working capital and other variations. The company invested $354 million in CapEx and paid $254 million in interest and taxes. Working capital and other variations were a negative $212 million, which management said was largely driven by other cash items, including one-offs. Nexa reduced net debt by $96 million, and del Valle cited liability management actions including the issuance of a 12-year bond in April and the redemption and tender offers for earlier-maturity bonds. The company also paid $48 million in dividends, including share premium reimbursements and payments to non-controlling interests.
Nexa ended the quarter with total liquidity of $842 million, including an undrawn $320 million sustainability-linked revolving credit facility. Del Valle said average debt maturity increased to 7.6 years from 5.6 years at the end of 2024, and average cost of debt was 6.49%. He added that available liquidity excluding the RCF covers all financial commitments over the next five years.
Asked about debt paydown plans, management reiterated that debt repayment remains a priority and said excess cash—after dividends according to policy—would be directed to reducing debt.
Market outlook, silver stream step-down, and key project updates
On market conditions, management said zinc prices were supported through 2025 by tight concentrate supply and low LME inventories, with treatment charges in China averaging negative levels. Looking into 2026, the company expects mining supply to improve gradually, supporting a modest recovery in treatment charges, though the recovery may differ by region. Management also said zinc prices should remain supported at least in the first half of 2026 due to tight inventories, resilient demand, and a softer U.S. dollar environment.
Management pointed to silver as a meaningful contributor, stating Nexa produces around 11 million ounces annually. Executives emphasized that beginning in the second quarter of 2026, the company’s silver streaming agreement steps down from 65% to 25%, increasing Nexa’s exposure to silver prices. In Q&A, management reiterated the step-down would occur once a milestone is reached and described the change as leaving an additional 40% of Cerro Lindo silver production with Nexa. When asked about pursuing additional silver streaming for deleveraging, management said it is not a priority.
Nexa also discussed the Cerro Pasco Integration Project. Management said preparatory studies for Phase 2 are advancing, including technical assessments and underground integration alternatives. However, during Q&A, Rosado said the company decided to postpone Phase 2 as drilling in the mine intersection has identified additional high-grade resources, and Nexa wants to continue drilling to build a larger reserve inventory before finalizing a mine plan. The company did not provide a specific date for accessing high-grade reserves at Atacocha, suggesting more clarity could come in one to two years. Separately, management said Phase 1 CapEx in 2026 should be similar to 2025’s roughly $42 million, with the aim to complete Phase 1.
Other updates included Ayawilca, where management said the project’s environmental impact study was disapproved and the company is in discussions with the government about how to proceed, without specific actions announced. On its Tinka Resources investment, management said it chose not to participate in a follow-on equity process, resulting in dilution, citing other priorities.
Executives also addressed weather-related topics, saying heavy rains in Peru had not impacted production or logistics so far, and that the company’s operations are prepared. In closing remarks, Rosado referenced intense rainfall in Juiz de Fora, Brazil, and said Nexa’s dam structures are being closely monitored and remain safe, while the company is supporting affected employees and the broader community.
About Nexa Resources (NYSE:NEXA)
Nexa Resources SA is a Brazil-based metals and mining company with a primary focus on zinc and copper. Listed on the New York Stock Exchange under the ticker NEXA, the firm develops, extracts and processes mineral resources for industrial applications worldwide. Headquartered in São Paulo, Brazil, Nexa is a leading participant in Latin America’s mining sector with a diversified portfolio of upstream and downstream operations.
The company’s operations span multiple mining and smelting complexes in Brazil’s Minas Gerais and Mato Grosso regions, as well as in Peru’s coastal and Andean zones.
