Ero Copper’s Tucuma Project: On Track for H1 2025 Commercial Production

Ero Copper Corp. (TSX: ERO) (NYSE: ERO) is making strides toward a critical milestone: achieving commercial production at its Tucuma copper mine by mid-2025. The project, which began processing ore in late 2024, has overcome technical hurdles and is now poised to deliver a significant boost to the company’s output. Here’s what investors need to know about the progress, risks, and potential rewards.

Progress to Date: Overcoming Bottlenecks

The Tucuma project faced a setback in late 2024 when bottlenecks in its tailings filtration system limited throughput. However, the first quarter of 2025 brought a turning point: the successful repair and commissioning of the third tailings filter in April 2025. This milestone, described as “critical” by management, resolved the last major technical obstacle to ramp-up.

Q1 2025 results reflect this progress:
- Ore processing volumes rose 32% quarter-on-quarter to 294,314 tonnes, with over half of copper production (5,067 tonnes) occurring in March.
- Metallurgical recovery rates hit 89.4%, aligning with design targets.
- The company reaffirmed its full-year production guidance of 53,000–58,000 tonnes of copper from Tucuma in 2025, a key indicator of confidence in its H1 2025 commercial production timeline.

Key Milestones: H1 2025 Target Within Reach

Commercial production at Tucuma is defined as the point at which the mine operates at design capacity for 90 consecutive days. With the third tailings filter now operational, management has repeatedly stated that this target is on track for H1 2025. Key details include:
- Throughput Growth: Tucuma’s mill is designed to process 4.0 million tonnes of ore annually. The Q1 2025 ramp-up suggests it is progressing toward this goal, with sequential increases expected in 2025.
- Grade Management: While copper head grades are projected to decline gradually (2.18% in Q1), higher throughput volumes will offset this trend.
- Cost Transparency: C1 cash costs for Tucuma will be reported once commercial production is declared—a key metric for investors to watch in upcoming quarters.

Financial Health: Strong Liquidity Supports Expansion

Ero Copper’s financial position reinforces its ability to execute on its growth plans:
- Liquidity: The company ended Q1 2025 with $115.6 million in cash and undrawn credit facilities, providing a buffer for capital expenditures.
- Capital Expenditure (CapEx): The 2025 budget of $230–$270 million includes funds for sustaining Tucuma’s ramp-up and modernizing other operations, such as Xavantina.
- Revenue Drivers: Tucuma’s output is expected to contribute to Ero’s 2025 consolidated copper production target of 75,000–85,000 tonnes, up from 46,300 tonnes in 2023.

Risks and Challenges

While progress is encouraging, investors should consider potential risks:
1. Operational Delays: Though the tailings filter is repaired, mechanical issues or labor disruptions could still arise.
2. Grade Declines: Lower copper grades could pressure margins if throughput growth stalls.
3. Market Conditions: Copper prices remain volatile. A sustained downturn could impact profitability.

Conclusion: A Strategic Inflection Point

Ero Copper’s Tucuma project is nearing its pivotal H1 2025 commercial production target, with critical milestones already achieved. The mine’s design capacity, coupled with sequential production increases, positions Ero to deliver record output in 2025.

The data tells the story:
- Production Growth: Tucuma’s Q1 output of 5,067 tonnes is just the start. Management expects full-year production to hit 53,000–58,000 tonnes, a 105–125% increase over 2024’s 25,900 tonnes.
- Liquidity and Capital: With $115.6 million in cash and a well-defined CapEx plan, Ero is financially prepared to scale.

Investors should watch for C1 cash cost disclosures post-commercial production, which will clarify Tucuma’s cost efficiency. If the project meets expectations, Ero could become a top-tier copper producer in Brazil, with long-term growth potential.

For now, the path forward is clear: Tucuma is on track, and its success could propel Ero to new heights in 2025 and beyond.