Ero Copper Reports Third Quarter Results

(all amounts in   US   dollars,   unless otherwise noted   )

Ero Copper Corp. (the "Company") (TSX : ERO ) today is pleased to announce its financial results for the three and nine months ended September 30, 2020. Management will host a conference call tomorrow, Friday, November 6, 2020, at 11:30 a.m. Eastern time to discuss the results. Dial-in details for the call can be found near the end of this press release.

HIGHLIGHTS

• Third quarter copper production of 10,961 tonnes of copper;
• New record quarterly C1 cash costs* of $0.63 per pound of copper produced ($0.65 per pound in Q2 2020) contributing to record quarterly cash flow from operations of $44.4 million during the three month period ended September 30, 2020;
• Increasing gold and silver production at the NX Gold Mine totalling 9,436 ounces of gold and 5,736 ounces of silver at new record quarterly C1 cash costs* of $421 per ounce of gold produced during the period ($437 per ounce in Q2 2020);
• Generated a new quarterly record $62.5 million in Adjusted EBITDA* during the three month period ended September 30, 2020 – a $20.1 million improvement over Q2 2020;
• Adjusted net income attributable to owners of the Company* of $36.7 million ($0.40 per share on a diluted basis) during the three month period ended September 30, 2020;
• Continued strong liquidity position at September 30, 2020 of $54.3 million; and,
• Reaffirm copper production guidance for the full year. While previously revised C1 cash cost ranges remain unchanged, the Company expects to be near or slightly below the low-end of the range for 2020. Capital guidance has been revised to incorporate continuity and expansions of the Company's ongoing exploration programs into the fourth quarter.
  

Commenting on the results, David Strang, President & CEO, stated, " Firstly,   I would like to congratulate   all of our   colleagues   at our MCSA operations for achieving a full   year without a lost-time-injury   on September 30 ^th .   While we had to celebrate this accomplishment   virtually, I am extremely proud of the   team   's   dedication and   hard work   that went into achieving this milestone,   made more difficult   this year   by   the additional challenges   associated with   mitigat   ing   the impact   of   COVID-19   on   the   ir   families, community and   our   operations   .   On top of this, operations at MCSA have continued to perform well and we have   continued to execute   on   key   objectives   in preparation of our updated life-of-mine plan   ,   which remains on track for   complet   ion   during   the fourth quarter. These initiatives   and objectives   includ   e near-mine   exploration programs   ,   our new   HIG Mill   installation and   commissioning   ,   integration   and development of Platinum Group Metal (PGM) assay capability in-house   and   our   recently completed   ore-sorting   trial   campaign   .   We continue to have no   disruption t   o our supply chains, sales   channels   or produc   tion   to date   as a result of COVID-19.

At MCSA   on the operational side,   we continued to see quarter-on-quarter   increases in grades min   ed and processed, as well as improved metallurgical recoverie   s, as expected   . Our newly commissioned HIG Mill was handed over to ope   rations   during the month of September   ,   contributing to   our best   average   monthly metallurgical   recovery   this year   of   92.0%   –   a   significant improvement over base-line   recoveries   at the same grade profile   s   . While   a limited data set,   and feed and control system work remain ongoing   , the performance gains post-commissioning are a   n encouraging   leading indicator, and we   expect the HIG Mill to deliver as advertised   once this work is complete   .   The combination of increase   d   grades, metallurgical recoveries and continued weakness in the BRL contributed to another record quarter of C1 cash costs   , averaging   $0.63 cents per   pound   during the period   .   As a result of strong performance to date, w   e have reaffirmed our   annual   copper production guidance and are   now   guiding towards   or slightly below   the low   er   -   end of   our C1 cash cost guidance   range   of approximately $0.70 per pound   of copper produced   .

At NX Gold   this quarter   , we   saw   steady   quarter-on-quarter   increase   s   in production   volumes   from the   Santo Antonio   V   ein   as well as   significant improvement in   metallurgical recover   ies du   ring the period   , both contributing factors   in   our   increased gold   production   of   9,436 ounces   at   another record   quarterly   C1 cash cost of $421 per ounce of gold pr   oduced   .   A   portion of the Santo Antonio orebody we   expected to mine   this yea   r   has   encountered   sub-optimal ground conditions   , and   as a result,   we   have   only   achieved   limited production in this area   due to inherited constraints associated with the   existing   mining method   and   ground   support capabilities   .   While we have been able to offset some of this   decline in production by   increas   ing   production   from   other areas   within   Santo Antonio   ,   we   now   expect   slightly   lower full year production   and have revised our guidance accordingly   . T   he team   at NX Gold   has   recently completed engineering studies for the installation of a modular paste-fill plant to recover   production   from   this area as well as enhance overall   resource conversion and   mine recover   y   in the future   .   W   hile a modest investment of only US$2 million, we see this as   a significant   step towards securing   long term   production   stability and   extending the   life of mine for NX Gold   ,   which we expect to incorporate into our updated life-of-mine plan   , also on track for completion during the fourth quarter   .

As you will   note   in our revised capital guidance, we   have i   ncrease   d   our full year exploration spend as we continue   to uncover both near-mine and regional opportunities   at both MCSA and NX Gold. Exploration   efforts during the fourth quarter   will continue   to focus on   (i)   the   newly discovered   mineralization between the Vermelhos Mine and   the   high-grade massive sulphide zones   of   the   Siriema   d   eposit,   where we see continued evidence of "stacked"   mineralized structures   over a strike length of approximately 700 meters   ,   (ii)   the Deepening Extension which continues to remain wide open   to depth and to the north   a   nd (iii)   advancing   our regional exploration programs   .

^{*EBITDA, Adjusted EBITDA, Adjusted net income (loss), C1 cash cost of copper produced (per lb) and C1 cash costs of gold produced (per ounce) are non-IFRS measures – see the Notes section of this press release for a discussion on non-IFRS Measures}

OPERATIONS & EXPLORATION HIGHLIGHTS

◾ Mining & Milling Operations – tracking copper production guidance   , increasing grades and recoveries   into Q4   2020   , no COVID-19 disruptions to date

• 553,148 tonnes processed grading 2.18% copper producing 10,961 tonnes of copper in concentrate after metallurgical recoveries that averaged 90.8% at the Company's Curaçá Valley operations; and

• The Company's 97.6% owned NX Gold Mine processed 41,749 tonnes of ore grading 7.64 grams per tonne gold, resulting in the production of 9,436 ounces of gold and 5,736 ounces of silver as by-product after metallurgical recoveries that averaged 92.0% during the third quarter of 2020.

◾ Exploration Activities – Complet   ion of   priority near-mine   programs   during the period   for inclusion in upcoming mine plan   updates   ,   continued to   shift t   o   more regional focus

• Pilar District

➢ Exploration activity within the Pilar District, where nine drill rigs are currently operating, is focused on extending the limits of high-grade ‘Superpod' mineralization of the Deepening Extension zone. The Company has now identified a mineralized target area that extends over approximately 900 meters in strike length, over a total depth of approximately 525 meters and over an average thickness of ranging from 10 to 20 meters with localized thickening throughout the zone. The zone remains open to the north and to depth. Results during the period continue to support the potential to meaningfully extend the mine life while maintaining an elevated grade profile from the Pilar Mine and demonstrate that zone remains open to the north and to depth.

• Vermelhos District

➢ Exploration in the Vermelhos District, where eleven drill rigs are currently operating, is focused on further demonstrating continuity between two newly discovered zones of mineralization between Vermelhos and the Siriema deposit. These new zones, when viewed in context with the previously announced high-grade massive sulphide Keel Zone of Siriema and prior Siriema conduit drill results suggest that multiple "stacked" mineralized structures may be present between the Siriema deposit and the Vermelhos Mine, a distance of approximately 700 meters in strike-length. Down-hole electromagnetic ("EM") work and further drilling is ongoing to evaluate the full potential of these stacked structures. There are currently seven drill rigs focused on this area.

• NX Gold Mine

➢ Exploration at the NX Gold Mine is primarily focused on testing down-plunge extensions of the Santo Antonio Vein. Drill results during the period continued to extend the known extent of mineralization within the Santo Antonio Vein down-plunge and are highlighted by the best results drilled to date by the Company at NX Gold on a grade-meter intercept basis as well as the deepest intercept within the Santo Antonio Vein drilled to date.

• Regional Exploration

➢ Regional work at MCSA comprised of both exploration drilling and ground-based geophysical work is focused on four new and recently interpreted mineral systems within the portfolio of targets defined by the Company's comprehensive targeting work. Each of these new systems has an average strike length of five kilometers and contain multiple priority drill targets. The majority of the Company's drill meterage is expected to be allocated to regional exploration during the fourth quarter.

➢ In addition, the first regional exploration effort within the broader NX Gold Mine property continued to progress during the period.

◾ Execution of   Growth   Projects   – HIG Mill   commissioning   complete   , ore-sorting project   test   -   work   complete   ,   PGM   assay capability in-house   near-completion and updated life-of-mine plans   on track for Q4 2020

• The Company's new HIG Mill installation was completed in July and hand-over to operations was completed in the middle of September. While feed and control system integration and optimization work remain ongoing, monthly recoveries in September achieved a record for this year, averaging 92.0%. This represents a significant improvement over the Company's baseline recoveries at similar grade profiles, and is a positive, albeit preliminary, technical leading indicator. The Company continues to expect that the HIG Mill will contribute to improved metallurgical performance during the fourth quarter and in the future.

• The full-scale testing of the Company's ore-sorting plant was completed during the period, and while confirmatory testing remains ongoing, excellent upgrade ratios at minimal copper losses were achieved. The Company expects that ore-sorting will be an integral component of the Company's upcoming life-of-mine update, currently expected during the fourth quarter.

• Five drill rigs continue to systematically drill the Deepening Extension zone of the Pilar Mine, in continued support of ongoing engineering studies for the inclusion of this zone into the Company's updated mine plan. Due to the limits of drilling underground infrastructure to the north, additional surface and underground drill programs utilizing directional drilling technology were introduced to better evaluate the mineralized potential of the Deepening Project further to the north than is currently possible using conventional drilling methods.

• The Company's multi-element inductively coupled plasma mass spectrometry ("ICP") unit is operational and is in the process of ramping up daily sample volumes and ensuring quality-assurance quality-control ("QA/QC") with third-party umpire assays, as scheduled. Once fully integrated, the addition to the laboratory is expected to significantly reduce cost and, more importantly, turn-around time for PGM assay results.

• Updated life-of-mine plans for both the Company's Curaçá Valley Operations and NX Gold Mine remain on track for completion during the fourth quarter.

◾ Corporate Highlights – Continued   capital management and   improved   liquidity position

• Ended the third quarter with strong liquidity position of approximately $54.3 million in cash and cash equivalents.

OPERATING AND FINANCIAL HIGHLIGHTS

^{Footnotes
[1] EBITDA, Adjusted EBITDA, Adjusted net income (loss) attributable to owners of the Company, Adjusted earnings (loss) per share, Net Debt, Working Capital, C1 Cash Cost of copper produced (per lb) and C1 Cash Cost of gold produced (per ounce) are non-IFRS measures – see the Notes section of this press release for a discussion on non-IFRS Measures.}

ADJUSTED EBITDA & NET INCOME (LOSS) RECONCILIATION

2020 OUTLOOK

While the Company's copper production guidance for 2020 remains unchanged, gold production outlook from the NX Gold Mine has been reduced as a result of difficult ground conditions encountered in the upper panel of the Santo Antonio Vein. The Company expects to recover this production through the installation of a modular paste-fill plant and associated infrastructure that is expected to be operational during the second half of 2021. While previously revised cash cost guidance for 2020 remains unchanged, the Company is guiding towards or slightly below the lower-end of the range at its Curaçá Valley operations on consideration of prevailing foreign exchange rates and by-product metal prices. The Company has maintained its previously revised non-exploration capital expenditure guidance range at its Curaçá Valley operations and has increased exploration capital guidance to reflect the continuity and expansion of these programs into the fourth quarter. Additional information is outlined below and further detailed in the Company's press releases dated January 15, 2020 and May 7, 2020.

Production   Guidance

Production guidance for the Company's Curaçá Valley operations remains unchanged. Copper production is expected to come from ore mined from the Pilar and Vermelhos underground mines. While the Company expects total recovered copper production to be within its guidance range, production is tracking to be slightly above forecast tonnes processed and slightly below forecast copper grades; however, these variances are expected to be within the levels of accuracy intrinsic to the Company's annual operating guidance.

The Company is lowering its full year production guidance for its NX Gold operations as a result of difficult ground conditions encountered in the upper panel of the Santo Antonio Vein. The Company expects to recover this production later in the mine's life through the installation of a modular paste-fill plant and associated infrastructure expected to be operational during the second half of 2021.

^{Footnotes:
[1] Guidance is based on certain estimates and assumptions, including but not limited to, mineral reserve estimates, grade and continuity of interpreted geological formations and metallurgical performance. Please refer to the Company's SEDAR filings for complete risk factors, including the AIF (defined below).}

Operating   Cost Guidance

The Company is maintaining its previously revised operating cost guidance ranges, and expects C1 cash costs for the full year to be near or slightly below the low-end of the range at its Curaçá Valley operations due to strong operational performance to date, prevailing foreign exchange rates and elevated gold and silver prices.

^{Footnotes:
[1] C1 Cash Costs of copper produced (per lb.) and C1 Cash Costs of gold produced (per oz.) are non-IFRS measures – see the Notes section of this press release for a discussion of non-IFRS measures.}

Capital Expenditure   Guidance

The Company is further revising its 2020 capital guidance to reflect the continuity and expansion of its ongoing exploration campaigns both at MCSA and at the NX Gold Mine during the fourth quarter. Non-exploration capital expenditures are expected to be at the high-end of the Company's previously revised guidance ranges as the Company prepares for meaningful extensions of the Company's life-of-mine operating plans at both MCSA and NX Gold as well as initiation of several growth projects, such as the installation of a modular paste-fill plant at NX Gold, which are expected to be included in these plans. Capital expenditure guidance is presented below in USD millions.

^{Footnotes:
[1] Pilar Mine and Caraíba Mill Complex capital expenditure guidance for 2020 includes completion of the high-intensity grinding mill and operation of the ore-sorting pilot plant.
[2] Exploration capital expenditure guidance for 2020 in the original and previously revised guidance was only forecast through September of 2020, whereas the Company's newly revised 2020 exploration guidance includes expected exploration expenditures through the entirety of the year.}

NOTES

Non   -   IFRS measures

Financial results of the Company are prepared in accordance with IFRS. The Company utilizes certain non-IFRS measures, including C1 cash cost of copper produced (per lb), C1 cash costs of gold produced (per ounce), EBITDA, Adjusted EBITDA, Adjusted net income (loss) attributable to owners of the Company, Adjusted earnings (loss) per share, net debt and working capital, which are not measures recognized under IFRS. The Company believes that these measures, together with measures determined in accordance with IFRS, provide investors with an improved ability to evaluate the underlying performance of the Company. Non-IFRS measures do not have any standardized meaning prescribed under IFRS, and therefore they may not be comparable to similar measures employed by other companies. The data is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

C1   c   ash   c   ost of   c   opper   p   roduced   (   per   lb.)

C1 cash cost of copper produced (per lb) is the sum of production costs, net of capital expenditure development costs and by-product credits, divided by the copper pounds produced. C1 cash costs reported by the Company include treatment, refining charges, offsite costs, and certain tax credits relating to sales invoiced to the Company's Brazilian customer on sales. By-product credits are calculated based on actual precious metal sales (net of treatment costs) during the period divided by the total pounds of copper produced during the period. C1 cash cost of copper produced per pound is a non-IFRS measure used by the Company to manage and evaluate operating performance of the Company's operating mining unit, and is widely reported in the mining industry as benchmarks for performance, but does not have a standardized meaning and is disclosed in addition to IFRS measures.

C1 cash cost of gold produced (per ounce)

C1 cash cost of gold produced (per ounce) is the sum of production costs, net of capital expenditure development costs and silver by-product credits, divided by the gold ounces produced. By-product credits are calculated based on actual precious metal sales during the period divided by the total ounces of gold produced during the period. C1 cash cost of gold produced per pound is a non-IFRS measure used by the Company to manage and evaluate operating performance of the Company's operating mining unit and is widely reported in the mining industry as benchmarks for performance but does not have a standardized meaning and is disclosed in addition to IFRS measures.

Earnings before interest, taxes,   depreciation   and amortization (EBITDA)   and Adjusted EBITDA

EBITDA represents earnings before interest expense, income taxes, depreciation, and amortization. Adjusted EBITDA includes further adjustments for non-recurring items and items not indicative to the future operating performance of the Company. The Company believes EBITDA and adjusted EBITDA are appropriate supplemental measures of debt service capacity and performance of its operations.

Adjusted EBITDA is calculated by removing the following income statement items:

• Recovery of value added taxes
• Foreign exchange loss
• Share based compensation
• Loss on debt settlement

Adjusted Net Income (Loss) attributable to owners of the Company and Adjusted Earnings (Loss) Per Share attributable to owners of the Company

The Company uses the financial measure "Adjusted net income (loss) attributable to owners of the Company" and "Adjusted earnings (loss) per share attributable to owners of the Company" to supplement information in its consolidated financial statements. The Company believes that, in addition to conventional measures prepared in accordance with IFRS, the Company and certain investors and analysts use this information to evaluate the Company's performance. The Company excludes non-cash and unusual items from net earnings to provide a measure which allows the Company and investors to evaluate the operating results of the underlying core operations.

During the period, the following non-cash or unusual adjustments to calculated adjusted net income (loss):

• Share based compensation
• Unrealized foreign exchange loss on USD denominated debt in MCSA
• Unrealized loss on foreign exchange derivative contracts, net of tax
• Unrealized loss (gain) on interest rate derivative contracts

Net Debt

Net debt is determined based on cash and cash equivalents, restricted cash and loans and borrowings as reported in the Company's consolidated financial statements. The Company uses net debt as a measure of the Company's ability to pay down its debt.

Working capital

Working capital is determined based on current assets and current liabilities as reported in the Company's consolidated financial statements. The Company uses working capital as a measure of the Company's short-term financial health and operating efficiency.

CONFERENCE CALL DETAILS

The Company will hold a conference call on Friday, November 6, 2020 at 11:30 am Eastern time (8:30 am Pacific time) to discuss these results.

This press release should be read in conjunction with the unaudited condensed consolidated interim financial statements and management's discussion and analysis ("MD&A") for the three and nine month period ended September 30, 2020 available on the Company's website www.erocopper.com and on SEDAR ( www.sedar.com ).

ABOUT ERO COPPER CORP.

Ero, headquartered in Vancouver, B.C., is focused on copper production growth from the Vale do Curaçá Property, located in Bahia, Brazil. The Company's primary asset is a 99.6% interest in the Brazilian copper mining company, Mineração Caraíba S.A. ("MCSA"), 100% owner of the Vale do Curaçá Property with over 40 years of operating history in the region. The Company currently mines copper ore from the Pilar and Vermelhos underground mines. In addition to the Vale do Curaçá Property, MCSA owns 100% of the Boa Esperança development project, an IOCG-type copper project located in Pará, Brazil and the Company owns 97.6% of the NX Gold Mine, an operating gold and silver mine located in Mato Grosso, Brazil. Additional information on the Company and its operations, including technical reports on the Vale do Curaçá, Boa Esperança and NX Gold properties, can be found on the Company's website ( www.erocopper.com ) and on SEDAR ( www.sedar.com ).

The disclosure of scientific or technical information in this press release was reviewed and approved by Emerson Ricardo Re, MSc, MBA, MAusIMM (CP) (No. 305892), Registered Member (No. 0138) (Chilean Mining Commission) and Resource Manager of the Company who is a "qualified person" within the meanings of National Instrument 43-101, Standards of Disclosure for Mineral Projects ("NI 43-101").