Nexa Resources (NYSE:NEXA) reported third-quarter adjusted EBITDA of $301 million, its highest result of 2026, as higher zinc prices, stronger byproduct contributions and improved operating performance lifted results. Adjusted EBITDA rose 62% from a year earlier and 5% from the second quarter, producing a 32% margin.
The company generated $73 million in free cash flow during the quarter and reduced net leverage to 1.24 times, from 1.4 times at the end of June and 2.21 times a year earlier. However, Nexa recorded a net loss of $47 million, or $0.47 per share, largely because of a $124 million non-cash impairment related to its combined Juiz de Fora and Três Marias System in Brazil.
Higher Prices and Operations Support Results
Net revenue totaled $937 million, up 3% sequentially and 23% year over year. Del Valle attributed the quarterly increase to higher smelting sales and higher zinc and copper prices, partly offset by lower silver prices and lower mining sales volumes. Compared with the prior-year period, the company benefited from higher zinc prices and a $65 million increase in byproduct contributions.
CEO Ignacio Rosado said the quarter was supported by higher zinc prices and stronger contributions from silver and copper, the continued normalization of Peruvian operations, improved performance at Aripuanã, and a recovery at the Cajamarquilla smelter after a May fire.
Mining zinc production reached 85,000 tons, rising 7% from the second quarter and 1% from a year earlier. Aripuanã, Vazante and El Porvenir led the sequential production increase. Mining revenue was $454 million and adjusted EBITDA was $236 million, up 7% sequentially and 44% year over year, with a 52% EBITDA margin.
Mining cash cost net of byproducts was negative $0.64 per pound, improving from both the second quarter and a year earlier. Nexa cited mark-to-market adjustments on lead and copper concentrates, lower costs and higher zinc sales at Aripuanã, as well as a stronger byproduct contribution from higher prices.
Aripuanã and Cerro Pasco Projects Progress
At Aripuanã, treated ore reached a quarterly record of 471,000 tons, up 18% from the second quarter. Zinc production increased 48% to 13,000 tons, matching the mine’s prior best quarter. Plant utilization averaged 84% and reached 90% in September as the fourth tailings filter performed as expected.
Rosado said Nexa expects Aripuanã to reach full capacity in the coming months and said the company does not expect the rainy season to disrupt production because of the expanded filtering capacity. Zinc production is expected to remain stable in the fourth quarter, with higher throughput offsetting lower planned grades.
The company is accelerating mine development at Aripuanã to open additional mining fronts and support higher throughput in 2027. Rosado said costs remain elevated due to the remote location of the operation, logistics requirements and employee turnover, but Nexa expects cost reductions to begin in the third quarter of next year. He said the mine should become comparable with Nexa’s other Brazilian operations, including Vazante, toward the end of 2027.
At Cerro de Pasco, phase one of the integration project remains on track for mechanical completion in December. Pre-commissioning and commissioning have begun, with pumping expected to start in early third-quarter 2027 after the anticipated operating authorization in the second quarter. Nexa now expects environmental approvals for El Porvenir and Atacocha modifications in March and April 2027.
Smelting Recovery and Updated Spending Outlook
Smelting production rose 28% sequentially and 8% year over year to 159,000 tons, driven by Cajamarquilla’s recovery and the processing of cathode inventories accumulated after the fire. Sales increased 9% from the second quarter to 146,000 tons, while some output was held for fourth-quarter sales.
Smelting adjusted EBITDA was $65 million, broadly unchanged sequentially and nearly triple the year-earlier result. The company said higher byproduct revenue, zinc prices and realized treatment charges supported the improvement. Cash cost net of byproducts rose 15% from the second quarter to $1.65 per pound because higher zinc prices increased the cost of purchased concentrate.
Nexa raised its 2026 capital-expenditure guidance by 10% to $420 million. The increase reflects additional mine development at Aripuanã, accelerated investments in Cerro de Pasco tailings facilities and the stronger Brazilian real. The company invested $111 million during the quarter and $272 million through the first nine months.
Production and sales guidance for 2026 was unchanged. Nexa expects the fourth quarter to be its strongest of the year, though it expects copper production to finish at the lower end of its guidance range because of lower grades at Cerro Lindo.
Balance Sheet, Ratings and Ownership Transition
Cash and cash equivalents increased by $25 million during the quarter to $405 million. Available liquidity totaled $735 million, including an undrawn $320 million revolving credit facility. Only 8% of Nexa’s debt, or $136 million, matures through the end of 2027, according to the company.
Del Valle said Fitch placed Nexa’s BBB- rating on Rating Watch Negative in August following the announced transaction involving Boliden. S&P subsequently lowered Nexa’s long-term issuer and senior unsecured note ratings to BB+ from BBB-, assigned a stable outlook and affirmed its A-3 short-term issuer credit rating.
Votorantim signed an agreement in August to sell its controlling stake in Nexa to Boliden. Rosado said the parties continue to work toward closing in the first quarter of 2027, subject to customary approvals. Until then, Nexa will continue operating independently and retain its existing strategy and capital-allocation priorities.
About Nexa Resources (NYSE:NEXA)
Nexa Resources SA (NYSE:NEXA) is a global mining and metals company focused primarily on the production of zinc, lead, copper and silver. The company also produces related byproducts and refined materials, including sulfuric acid and various metal alloys, which serve customers in industrial, infrastructure, construction and manufacturing markets.
Nexa operates an integrated platform that includes underground and open-pit mines, mineral-processing facilities and zinc smelters. Its principal mining and metallurgical operations are located in Brazil and Peru, with the Cajamarquilla zinc refinery in Peru and additional mining and smelting assets in Brazil.
