Nexa Resources: A Turnaround Story Gaining Momentum in 3Q25

In the third quarter of 2025, Nexa Resources has emerged as a standout performer in the base metals sector, showcasing a compelling blend of operational resilience, strategic capital management, and ESG-driven progress. With zinc output surging, a non-cash impairment reversal boosting profitability, and disciplined CAPEX execution, the company is positioning itself as a prime candidate for long-term investors seeking value in a cyclical recovery.

Strategic Operational Recovery: Zinc Output and Impairment Reversal

Nexa's 3Q25 results underscore a pivotal shift in its operational trajectory. Zinc production rose by 14% quarter-over-quarter to 84kt, driven by robust performance at its Aripuanã, Vazante, and El Porvenir operations. Notably, Aripuanã achieved a record 10.4kt of zinc output, signaling the success of its ramp-up phase, according to Nexa's 3Q25 results. This surge in production, coupled with higher realized metal prices, directly fueled a 9.3% increase in adjusted EBITDA to US$186 million compared to 2Q25, according to the same results.

A critical catalyst for profitability was the non-cash impairment reversal at Cerro Pasco, which lifted net income from US$13 million in 2Q25 to US$100 million in 3Q25, as disclosed in the report. This reversal reflects improved operational visibility and asset valuations, reversing prior write-downs and restoring investor confidence in the company's long-term asset base.

Disciplined Capital Allocation: CAPEX and Future Growth

Nexa's capital allocation strategy in 3Q25 further solidifies its turnaround narrative. The company spent US$90 million on CAPEX, with US$12 million specifically allocated to Phase I of the Cerro Pasco Integration Project, the 3Q25 report shows. This project, on track for 2026 commissioning, is expected to unlock significant synergies by integrating lower-cost operations and expanding processing capacity. Crucially, Nexa maintained full-year CAPEX guidance at US$347 million, demonstrating fiscal discipline amid inflationary pressures, according to the company's 3Q25 disclosure.

The company's ability to balance growth investments with debt reduction is equally noteworthy. Net debt fell to US$1,479 million, improving the net debt/LTM adjusted EBITDA ratio to 2.2x, the report indicates. This deleveraging, combined with a focus on high-margin zinc production, positions Nexa to navigate sector volatility while funding strategic initiatives.

ESG Progress: A Long-Term Differentiator

Beyond financials, Nexa's ESG advancements are reshaping its risk profile and stakeholder appeal. The company launched health campaigns in local communities, invested in infrastructure upgrades, and advanced decarbonization projects. A standout initiative is the hybrid crushing plant at Cerro Lindo, which reduced CO₂ emissions by up to 30%, the company noted in its 3Q25 report. These efforts align with global decarbonization trends and enhance Nexa's ability to secure financing and regulatory approvals in an increasingly sustainability-focused market.

Conclusion: A Compelling Investment Thesis

Nexa Resources' 3Q25 performance illustrates a company in transition. Rising zinc output, a reversal of prior impairments, and disciplined CAPEX are driving EBITDA and cash flow growth, while ESG progress mitigates long-term risks. For investors, the combination of operational momentum and strategic clarity makes Nexa a compelling case study in post-crisis recovery. As the Cerro Pasco Integration Project nears completion and zinc prices remain elevated, the company is well-positioned to capitalize on its turnaround and deliver sustained value.