Nexa Resources S.A. (NYSE:NEXA) Q2 2020 Earnings Conference Call - Final Transcript

Jul 31, 2020 • 10:00 am ET

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Nexa Resources S.A. (NYSE:NEXA) Q2 2020 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

Thank you. We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Jackie Przybylowski with BMO Capital Markets. Please go ahead.

Analyst
Jackie Przybylowski

Hi, good morning. I guess my first question is just a specific one. I haven't seen any mention, excuse me, on the Jarosite conversion project mentioned in this release. Can you maybe talk a little bit about what the plan is? Is that project completely on hold or cancelled right now?

Executive
Tito Martins

Hi, Jackie. Thank you for your question.

Analyst
Jackie Przybylowski

Hi, Tito.

Executive
Tito Martins

I hope you are okay. Life has not been easy for anybody. Jarosite, what's going on. As we announced over the year, we stopped the project to revise it. It has been suspended. With the COVID, we decided not to go back to this along the year. It is still in our plans, revision has been almost at the end. So, as soon as we can actually come back to a more normal situation, we should have news about the Jarosite. It is still very important project for us in terms of increasing the recovery and the production capacity in Cajamarquilla.

Analyst
Jackie Przybylowski

Okay, thanks. And on Aripuana, I know you're working on the rebaselining study now. Can you talk a little bit about what that might include? Is it going to be a new project timeline and some sort of inflation do you think to the capex budget that you have right now?

Executive
Tito Martins

Yeah. What happened is, we had those difficulties at the end of last year, which impacted and it made us move the completion of the project to the third quarter of '21. We're still keeping this date up to now. We have revised some impacts that COVID may have along this first semester -- along the crisis, right. What happened is, we never stopped to move on with the project, with the development, but we are operating in reduced capacity. I mean, we've been operating around 80%. So, the difficulty we are facing today is actually to define if the schedule will be kept, I mean, to the third quartile of next year and how much, in financial terms, it will actually affect us. I tend to be optimistic. I think there will be some additional costs because time now is different from the original ones.

So, we are finishing this. We should have moved that in some -- in a couple of months, but still with the level of uncertainty, given how much the COVID actually can affect us moving forward. I mean, we know how much it has affected already, but we don't know how much it can impact in the future. There will be more delays. We should be able to bring in all the people we need at on-site. Just to give an example, we have nowadays 1,500 people on-site, but we should have already more than 2,000. Difficulties related to the protocols that were implemented, to bring in people to Aripuana -- Aripuana is really far away from everything.