Nexa Resources S.A. (NEXA) Q3 2021 Earnings Report, Transcript and Summary

Good morning, and welcome to the Nexa Resources Third Quarter 2021 Conference Call. [Operator Instructions] Presenters on this call are Mr. Tito Martins, CEO of Nexa Resources; Mr. Rodrigo Menck, CFO of Nexa Resources; and Mr. Roberta Varella, Head of Investor Relations. Please also note this event is being recorded. I would now like to turn the conference over to Mr. Tito Martins. Please go ahead.

Thank you. Good morning, and good afternoon, everyone. Welcome to Nexa's earnings conference call, and thank you for taking the time. Today, we will be talking about our results for the third quarter of 2021. Please, let's move now to Slide 3, where we will begin our presentation. I will start by briefly make some comments about our results. In the third quarter of '21, we have continued to benefit from favorable base metal prices. Our adjusted EBITDA was $155 million, up 141% year-over-year. Note that adjusted EBITDA in the quarter was affected by silver streaming and by the recovery of undue GSF energy costs with a total negative impact of $9 million. Excluding these effects, adjusted EBITDA would be $164 million. Planned and unplanned maintenance shutdowns affected our operational performance, but operations are already at normal levels of utilization rates, and we expect to deliver our guidance. In terms of zinc production, we estimate we will be closer to the midpoint of the guidance range, while copper is moving toward the upper-end range. In addition, we have revised our cash cost guidance, which we will cover in more detail during this presentation. In the first 9-months of the year, we generated approximately $517 million of adjusted EBITDA is strongly recovering from 2020 and a record high for the 9-month period. This performance not only reflects favorable market conditions, but also the commitment of our team through operational and financial performance. Global demand for our products remains strong and is expected to continue to expand, supported by government stimulus packages in the transition for a more green economy. Growing global concern on rise inflation rates, logistics bottlenecks and energy shortages are risks to this scenario. We ended the quarter with total cash around $800 million and leverage of 1.2x, relatively flat to the previous quarter. We continued to monitor COVID-19 evolution in all protocols to mitigate the spread of the virus remain in place in our operations, explorational activities and projects, and we believe they have been very effective. Most of our employees and contractors have already been vaccinated at least with 1 dose. We also continue providing support to our host communities and to the governments in the regions where we operate. We remain fully committed on delivering our first greenfield mining project, Aripuana. Moving to the next slide, Slide 4, I will discuss it in more details. On October 7, the operating license for the Aripuana project was granted. Construction works continue to advance. And overall, fiscal progress has reached 96.5% at the end of September. In June, it was 89%. Several systems from the beneficiation plant, reached mechanical completion and have started commissioning at the end of the third quarter. These deliver systems allow the cold commissioning of the front end equipment. We are on track to conclude mechanical completion in the fourth quarter of '21 as well as most of the cold commissioning. Hot commissioning is estimated to start next month and first production is estimated to start during the first quarter of '22. In addition, the qualification program for future mining operators continues to progress. There are currently 161 students in the fourth training class, of which 46% are women. Aripuana will be one of the few mines in the world with a strong presence of women in its total workforce. We believe the new mine will start production with at least 35% women in its workforce. We are planning to move it up to 50% along the first 2 years of production. With respect to our exploration program, exploratory drilling has been focused on northwest expansion at Babacu and new drilling continues to confirm a high-grade mineralization area, supporting our belief that Aripuana will be a long life mine. Moving now to Slide 5, please. Mining development activities in Rx and link mines have continued to progress and reached an accumulated 13,400 meters at the end of September, approximately 435,000 tons of ore has already been stockpiled, which corresponds to roughly 2 regular months of production. We plan to have 3 months of ore stockpile ahead of the start-up of the plant. We have today 443 employees working on the mine plan, environment, safety and health and administrative facilities. This number should continue to increase as we are preparing ourselves for the startup. Now, I would like to pass to Roberta Varella, our Head of Investor Relations, who will comment on our financial results. Roberta, please?

Thank you, Tito. Good morning, and good afternoon, everyone. Please, let's move to Slide 7. Beginning with the chart on your upper left, consolidated net revenue in third quarter 2021 was $655 million, up 22% compared to the same period a year ago, mainly driven by higher metal prices and by product contribution, which was partially offset by lower amount of sales volume and the silver streaming adjustment. In the third quarter, Nexa recognized a reduction of $19 million as a remeasurement adjustment in its silver streaming revenues, given forecasted higher long-term prices and the updated mining plan for Cerro Lindo. Also for the quarter, Nexa recognized a recovery energy cost of $10 million related to undue costs paid by our energy power plants in the past. These non-recurring items had a negative net impact of $9 million in our adjusted EBITDA of $155 million. Compared to third quarter 2020, adjusted EBITDA increased by 2%, mostly driven by the Mining segment performance. In the next slide, we will discuss in further details our segment's performance. On Slide 8 and 9, I will comment on our Mining segment results. Zinc equivalent production reached 136,000 tons, down 1% year-over-year, while remaining flat compared to the previous quarter. Zinc production in the quarter decreased by 2% compared to both third quarter 2020 and second quarter 2021, mainly driven by lower zinc head grade and planned and unplanned maintenance shutdowns in Peru during the period. As Tito mentioned earlier, we are already operating at normal levels. In terms of net revenue, we reached $276 million in third quarter 2021, up 34% year-over-year, explained by higher average LME prices and lower benchmark treatment charges, which offset the negative impact of the silver streaming adjustment of $19 million in the quarter. Adjusted EBITDA for the Mining segment was $92 million compared to $67 million a year ago. As you can see on Slide 9, this performance was mainly explained by the positive net price effect of $46 million due to higher zinc prices, lower treatment charges with a positive variation of $25 million and higher byproduct contribution, which were partially offset by the increase in operating costs, driven by increased maintenance and mine development costs in the period, higher workers' participation provisions due to better results, higher exploration and project evaluation expenses and the negative effect of $17 million with respect of silver streaming and energy cost adjustments. In the first 9 months of the year, adjusted EBITDA amounted to $331 million, strongly recovering from a year ago. Consolidated mining cash cost was $0.23 per pound in third quarter 2021, down 32% compared to last year. This decrease was primarily driven by higher by-product credits and lower treatment charges, which were partially offset by lower zinc volumes and higher operating costs. Note that the operating costs in third quarter 2020 were temporarily reducing as operations in Peru were still ramping up after the maintenance shutdown due to COVID-19. Compared to second quarter 2021, cash costs increased by $0.09 per pound due to lower volumes and increased operating costs. We have revised our full year cash cost guidance for the Mining segment. Although we are starting to see additional inflationary pressure in our mining operations, cash costs at Cerro Lindo and Atacocha mines have been better than expected due to continued higher by-product metal prices. Consequently, cash cost guidance for these 2 operations has been reduced. Consolidated cash cost guidance is now $0.23 per pound compared to our previous guidance of $0.33 per pound. Now, let's turn to the Smelting segment results. On Slide 10 and 11, we will discuss our Smelting segment operational results. In third quarter 2021, metal sales amounted to 156,000 tons, down 2% year-over-year and 1% from second quarter 2021. The decrease in production was partially offset by the increase in resale of metal from third-parties. Net revenue in the quarter was $523 million, totaling $1.5 billion in the first 9 months of 2021, positively impacted by higher LME prices and sales volumes. Adjusted EBITDA for the Smelting segment in third quarter 2021 stood at $65 million compared with $86 million a year ago, driven by lower treatment charges and higher operating costs. As you can see on Slide 11, this performance was mainly explained by lower treatment charges with a negative impact of $21 million and higher operating costs, driven by higher consumption of imported material, inflation, maintenance and energy costs, which were partially offset by the positive net price effect of $15 million related to higher LME prices and changes in market prices, resulting in quotation period adjustments and the energy cost adjustment of $80 million. And before proceeding, I'd like to further discuss the treatment charge impact. As you know, for the majority of our third-party contracts, which are renewed during different periods throughout the year, we used the 3-year benchmark TC as a reference. So for this year, the reference price considers the treatment charge of 2021, 2020 and 2019. At the beginning of the year, we tend to receive raw material reference at all the TCs. And as demands evolve, our reference is closer to the treatment charge of the current year. Consequently, we are seeing a higher negative treatment charge impact in the third quarter compared to the previous quarter. Going back to our results, in the first 9 months of the year, adjusted EBITDA increased by 29% to $241 million. In terms of cash costs, as you can see on the bottom right, consolidated mounting cash costs of $1.16 per pound in third quarter 2021, increased by 47% year-over-year, mainly driven by market-related factors such as higher zinc prices and lower treatment charges. We also updated our full year smelting cash cost guidance to $1.14 per pound compared to our previous guidance of $0.95 per pound, primarily driven by higher zinc prices. Operating costs have also been affected by higher energy prices due to the current Brazilian scenario as well as an increase in maintenance costs, which has also been affected by inflation. I will now turn over the call to Rodrigo Menck, our CFO, who will provide more detailed information about our balance sheet. Menck, please.

Thank you, Roberta. Good morning, and good afternoon, everyone. I am now on Slide 12. As demonstrated in the upper left graph, our liquidity remains strong and we continue to report a healthy balance sheet with extended debt profile. By the end of the first quarter, our current available liquidity was $1.1 billion, which includes our undrawn revolving credit facility of $300 million. As of September 30, the average maturity of our total debt was 5.5 years with a 4.96% average debt cost. Our leverage, measured by the net debt to adjusted EBITDA ratio increased to 1.24x from 1.19x, mainly driven by higher net debt as a consequence of reduced cash. The debt breakdown by category and currency is shown on the right side of the slide. In light of our strong balance sheet, during the quarter, we continued to advance with our liability management program and have prepaid additional existing financial debt, reducing our gross debt by $177 million. Now, moving on to Slide 13. On this slide, we present Nexa's free cash flow generation. During the quarter, our free cash flow generation was negative in $260 million. Describing it further and starting from our $155 million EBITDA, we had a $21 million loss in working capital, $57 million of sustaining CapEx and $30 million from interest paid and taxes. Still, Nexa has generated $39 million of cash before expansion projects during the analyzed period. After that, we invested $80 million in non-sustaining CapEx, which includes mainly our Aripuana development project with $79 million. We also had a negative net effect of $172 million as we have prepaid, as mentioned, debt during this quarter. Finally, dividends payment of $9 million in our energy subsidiary projects and other non-operational impacts, including foreign exchange effects of $38 million concluded a free cash flow of negative $260 million. Now, I turn to the next slide, Slide 14. As previously disclosed, our 2021 CapEx guidance remains unchanged at $510 million. In the second quarter, we have invested $144 million in CapEx being $79 million directed to the Aripuana project. In the period of 9 months, in 2021, we have invested a total amount of $344 million and 52% directed to Aripuana and the remaining 48% to other projects, including sustaining and HSE. As projects attains, we estimate we will have a higher disbursement in the fourth quarter of '21 compared to the previous quarters due to mine development, mining equipment purchase, planned maintenance shutdown at the Tres Marias smelter, among other less material events. With regard to mineral exploration and project evaluation, we have invested a total of $18 million in the quarter, totaling $49 million in the period of 9 months of 2021. For the whole year, we expect to continue our mineral exploration and project revaluation investments as we will maintain our efforts to replace and increase mineral reserves and resources, supporting our business growth. On October 21, we published our exploration report for the third quarter of 2021. We hope it could provide further clarity over our results and exploration program strategy. I will now hand the call back to Tito. Tito, please.

Thank you, Menck. We are now at Slide 16. Here, we will make some comments about the market fundamentals. Zinc price maintained its upward trend and increased by 28% when compared to the third quarter of '20 and 3% when we compare to the third -- the second quarter '21. Despite price volatility during the quarter, the planned stimulus packaging in infrastructure in the United States and the positive signs from the Fed to maintain economic funding boosted sentiment in equity and commodity markets and supported zinc price at high levels. In the short term, we expect zinc price to remain at the levels they are today, mostly because the tight balance between supply and demand. In the mid to long term, zinc fundamentals also remain attractive. As you can see on the chart on the upper right, despite the estimated increase in supply, there is an unbalance between supply and demand. With respect to copper, price volatility was driven by some signs of slowdown in the Chinese economy, which was intensified by a potential downturn in the real estate sector as well as concerns about the delta variant of COVID-19. In the mid to long term, the outlook for zinc and copper also remains positive, given their role in the energy transition. Moving now to our last slide. As many of you may know, we will start my transition process during this quarter. First of all, I would like to extend my sincere gratitude to our employees for the constant dedication and professionalism that allow us to innovate our business, transform our culture and achieve our goals. It has been an honor and a pleasure to be part of this outstanding team. I also want to thank our Board for its incentive and support long initiatives and decisions along these years. I have witnessed a remarkable evolution of the company and the expansion of its operations in mining and smelter. In 2019, we launched the Nexa Way program, implementing a continuous improvement program that has resulted in operational efficiency, cost optimization and culture transformation. Nexa Way helped us to navigate during this pandemic scenario, while generating value for our shareholders. We have closely monitor the progress of the Nexa Way and we believe this is now a part of our DNA. It's our day-to-day work. Another milestone for us is Aripuana. As I mentioned earlier, we are close to deliver our first world-class greenfield project. Last but not least, we continue in the able to create shared value through pursuing ESG initiatives that are aligned with community needs, our business strategies and our customers' priorities. We are also finalizing our corporate ESG goals and metrics, which will be presented soon. I'm very proud of what our company has become today. And I believe we are on the right track to build the mining of the future. It was a privilege to lead this company as CEO for nearly a decade. Thank you all for your time, and let's move to the Q&A session.

[Operator Instructions] And today's first question comes from Orest Wowkodaw with Scotiabank.

And firstly, Tito, I want to wish you best of luck in your next endeavors. We'll be missing you here. But I wanted to get a better understanding of what's happening at the Aripuana mine. It sounds like you've already started commissioning some parts of it and you expect to finish mechanical completion by year-end. And then I'm confused though why you do not anticipate first production until the end of the first quarter. Can you maybe give us some color on what's happening there.

Thank you very much for your words. I hope we can be to get some time in the future. About Aripuana, what's happening. We have been very cautious. You're right. We have already started commissioning part of the plant. Actually, the mine is on track on the schedule. So development of the mine is according to the original schedule. So we would be ready to start production as soon as the plant is completely conditioned. While we've been cautious, you have to see. We are entering right now in the rainy season. So the – and holidays as well. There will be the holidays at the end of the year. Based on our experiences about what happened last year during this period of time, we decided actually to be more conservative in our plans. When we state that we should see production start sometime by the second half of the quarter, let's put this way, it's because we may see good things happen even before that. But we didn't want to actually pass the idea that everything is going to be fine in the demand. I don't know if many of you has another thing to say about this. But clearly, it's a conservative approach.

And Tito, just as a follow-up, your disclosure seems to reference that you plan to revise your Aripuana guidance, I guess, in January. Should we be interpreting -- so does that suggest that you plan to lower the Aripuana guidance for...

If we have these delays, we are mentioning about the ramping up. Of course, it will be affecting the production. The reason why we have not said -- we are not seeing anything right now is exactly because of the level of uncertainty we have about how the end of construction and the commissioning will behave in the next 2 to 3 months. We're going to be more -- assurance of how the one path will form where we end this period of time, this last quarter of the year, I should say.

And then do you anticipate...

By January you will have that.

We will, as always, provide guidance in the -- probably in the second half of January. Until then, we'll have more certainty of, Tito mentioning, we'll be able to compound our 3-year guidance and our 2022 guidance with Aripuana on the rest.

And just finally, do you see any knock-on impact here on '23 at Aripuana or should just -- or is there only...

No, no, no, no. We have not seen any impact, not at all. You can ask have not changed. We should be operating in full capacity sometime along '22. The concerns we are having today are much more related with the capacity to start commissioning at the time we believe that we should start. But we are -- based on the plants we are running right now, we are still working with a full capacity production sometime in the second half of the year. It should be 100%, no problem at all.

[Operator Instructions] Our next question today comes from Jackie Przybylowski with BMO Capital.

I'll echo Orest’s comments. Tito, we'll miss you and best of luck as you move on. Maybe if I can ask about the zinc market because it's been such a coaster lately. I know you are in a bit of a different situation for things like power, just given your smelters are located in South America. Does that provide you with an advantage? Are you able to capitalize on the current shortages and closures that we're seeing in the rest of the world? And how do you guys approach that?

It's interesting, you've mentioned that. Our dream would to be more able to capitalize this shortage. We are seeing other places. The problem is we cannot produce more. If we were able to produce more, probably would be selling more, no doubt about that. What we are seeing is clearly, Europe, the announcements made in Europe about the cut in production they help the price. That's why we saw that the volatility in price is moving up so aggressively. But demand in Latin America and North America is still very strong. So if we would be able to produce more, for sure, we would be selling more. We saw some reflects, some impact in premiums, mostly in both in Europe and Asia, which in some ways may favor us along the next few months, not -- it's a marginal gain, of course. And talking about the problems with energy we are seeing in Asia and in Europe. Fortunately, in our case, there is a slight impact in Brazil because of the hydro generation was suffering along the last few months. But in general, we have not seen the impact we were seeing before, right? The reservoirs in Brazil, they were in lower levels. That's why the energy costs increased. But once more, it's not comparable with what we are seeing in Europe and Asia, not at all. It seems that their energy problem, the world is affecting everybody. But fortunately, our impacts have been lower than the ones we see in other places. I would say, in general, we're still very optimistic about the market. I mean, we are already working with the first quarter of next year. And it seems that the demand, even when we say China, we may see a reduction in the demand in China, probably, but -- given other factors. But demand for zinc is still very high, very strong and doesn't look like it's going to change. If I have to bet today, I would bet at '23, is going to be a similar year to '22, sorry, '22 will be a similar year to '21 in terms of supply and demand. And there is no additional information. We are not seeing additional concentrate being supplied in China, which means that everything we've been saying along the last few years, is proven to be right. I mean, most of the additional concentrate being shipped -- being in the Chinese market is coming from abroad. So if we have a lack of metal today, we may see a lack of concentrate sometime in the near future.

And does that help on your smelter side with treatment charges? I know you're -- obviously, some of that's going to be inter company, but the stuff that you're buying from third parties, are you able to get a better terms on?

Probably, probably. If it happens, probably we're going to have a better conditions to negotiate with our suppliers. It's interesting, one -- we haven't seen yet the impact in the concentrate market given the announcements made in Europe for the production cut. Actually, some of the commodity analysts were saying that -- some of them were not believing that the producers in Europe actually would cut production. The only way we will see it, it's when we see more concentrated availability in Peru, right? If it happens, we will benefit from that for sure in the next TC negotiation.

And if I could just ask a separate question on the management transition. It's unfortunate, I guess, we're not able to speak with the incoming CEO. I guess, he starts -- start the role -- starts working for next and next week. So this might not be a fair question, but since it's the only time we'll have an opportunity to talk to this before you leave. I guess, it's -- I'm going to ask anyways. Do you have any sense, Tito, when the new incoming CEO joins, if there's going to be any kind of strategic shift of the company or in terms of the new projects packing order, I guess, if there's going to be any change to the way he moves things forward. Are you able to give any color at all on...

What I can tell you is the following. Our Board has been very concerned about the strategy. We have strategic discussions on a regular basis. After '21 is the year when we had a chance to promote what we call our internal strategic dialogue, every 3 years, we do it, okay. So every 3 years we check the strategy and revise what needed to be revised. And we validate or not the original plans. Every 3 years, we do it. And we just finished that. In the last call we had, you read the questions about if we would look for new geographies, geopolitical litigation things like that. And I said, yes, we are doing that. We are not leaving our projects aside, but we have the obligation to look at other opportunities in the market. If you ask me today, do you think it's going to change dramatically? No, I don't think it will. I mean Nexa has been very consistent. We may have some setbacks about our projects, but we have been very consistent in telling the market that we would pursue the development of our projects. The Nexa coming in doesn't mean that this is going to change. I don't think it's not a change at all. But it's my point of view. And I'm sure as to when it he steps in here, he would have a chance to speak with you even before the next quarter release, the results release. So he will be with you sometime in the beginning of the year probably.

Sometime in the beginning of the year, Jackie, you can revert to me on that. It's a promise.

And our next question today comes from Alex Hacking with Citi.

And let me be the third to have my thanks, Tito, and wish you best of luck in your new endeavors. My question is just come back to Aripuana. Any update on how you're thinking about the operating cost there? I mean, I think since the technical report, obviously, cost of some things, consumables have gone up. There's also been movements in exchange rates. So any update on the cost guidance would be helpful.

Alex, it's Rodrigo here. We haven't this type of information so far in detail. That's part of the, let's say, the -- what we included in the earnings release saying that we will revise guidance. There's also cash cost changes, as you mentioned. But in any case Aripuana is really well placed within the cash cost curve, and it will remain being so with some impacts here and there. But I wouldn't expect -- thinking about it, I wouldn't expect a major shift on that, right? As you said, consumables are more expensive, FX has gone a bit wider than anticipated, which offsets part of its impact. So although you will see annual guidance probably for the year of 2022, especially considering this slight potential delay that Tito described I would be thinking about having it in the same range that you were considering.

And then just one follow-up question. Has the new Peruvian government provided any sort of framework yet in terms of how they're thinking about changes to mining taxation?

It is an interesting question. Actually, this week, the new government is in the process to get the confidence vote from the parliament, from the Congress. But this week there were some, I would not say announcements, but there is some -- the government released some information about potential plans to increase taxes in general. Those tax increase, of course, it would also affect the mining industry there. But the biggest question, Mark, is the goal actually will be able to do anything given its position and Congress -- they don't have the Congress majority. So -- and the Congress has been very tough on the government. I mean, the government is already in place for the last 3 months, almost 4 months, and they haven't got yet the vote of confidence. I mean the government needs the vote to allow the ministry to work, and they haven't got that yet. So we don't think that the life of the new government will be very easy. It seems to us that probably will see pretty much what you've seen there along the last 10 to 15 years when Congress had a very strong position and the presidency was supposed to negotiate on a case-by-case basis and we don't believe the tax increase will be favorable by the Congress. So we're still looking at that and being skeptical about any major change happening during this period of time, I mean, in the next month or in the next years. It is still time to pay attention.

Just to complement what Tito saying, Alex, there is a process there. So they need a vote of confidence, they need to discuss the proposal that was sent this week. And let's be reminded that they have to approve anything until December 31 to have it valid for 2022. Otherwise, it's going to be an additional year for -- of discussion to make it valid for 2023. So it doesn't necessarily go on the urgent aside of the Congress matters that it could potentially follow the Chilean behavior. These are all possibilities that are on the table, just that.

I would pay attention to what's going on in Chile to at least -- to try to guess what may happen in Peru later on.

By that comment, do you mean that the tax framework that eventually emerges out of Chile could be a benchmark for Peru or are you talking more on the procedural?

They may try to do a similar thing. That's what I'm saying. Yes.

My comment was rather on the process, Alex, because it's takes time. And they've mentioned in Chile it was really hard and then the reality check was -- would not so easy to do. But also of course, they are neighbors, and there are some of the practices that might be followed.

That's a good example. The Chileans want to have a new constitution there were some fools in Peru asking about that. The Peru, they don't want to change the constitution. This is just an example, okay. But in terms of tax increase, the Peruvian government may pursue something similar to what the Chileans want to. That's what.

This concludes our question-and-answer session. Now we will hand it over to Tito for his final remarks. Mr. Martins, please go ahead.

Thank you. Before I made my statement -- last statement, Rodrigo, do you want to say something last, something that we are missing here, something that should be addressed?

I think we covered everything. Maybe Roberta has something...

So what I'd like to add in terms of highlight that we included some information in our earnings with these in terms of the outstanding metal. So with these, I think we believe it will help you in order to update your models and thinking forward. So one thing that l would like to pay attention, for example, with the outstanding price adjustment that we have, for example, in our Mining segment, when we compare the second quarter of 2021 with the third quarter, that we have a net price effect, it was negatively in $24 million. So it will depend in terms of the pricing movement for the current prices. So only like to pay attention to you guys on that topic because we believe with the information that we are now providing with the table of how much metal we have outstanding both mining segments will help on the future valuation.

Thank you, Roberta. And besides that, I would address that we have increasing costs in the smelters along the last quarter, but you should pay attention that the margins are still very high. I mean, margins in the smelters traditional, they vary between 8% and 12%, and we are right now around 12%, which is still good. Besides that, I know that the quarter was a disappointment for most of the analysts. I think that you should look at the big picture. The 9 months of '21 have been very good despite a lot of problems we placed. Of course, prices are helping us, no doubt about that. But in terms of performance, we have blockages in the first half of the year. We had an issue of not having availability housing in the Peruvian market because those run were shutdown. We had a blockage on the third quarter. Good -- the price were good. That's why we decided to move to keep up the level of production in the first half in order to enjoy prices. Of course, in doing So we had to re-plan some maintenance shutdowns, which happened in the third quarter. But looking at the big picture, I would say that we tend to have a very good year. I mean, it must become the best year of Nexa's effort given the prices and given the performance we foresee for the last quarter of the year. So I ask you to pay attention to that because we may see again the analysts not very happy with us because the models will forecast a fourth quarter looking like the third quarter. I would ask you to pay attention to that. Having said that, it's my last call. I thank you all for your attention, your support along these years. I'm not sure what I'm going to do, but hope we can meet in the future. And I'm really confident the Nexa can deliver. I have no doubt about that. We have a very strong team, which knows where they want to be in the future and what they need to do in line to get there. The company is very well structured, has a very good strategic plan with a very knowledgeable Board, which has been very supportive to us and a very energetic management team. So I'm really confident that Nexa will be able to deliver what it's intend to deliver. And they all wish you, all the best for all of you and once more thank you very much. Have a good day. Have a good weekend.

Thank you, sir. This includes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines, and have a wonderful day.