Ero Copper eyes $2B value, 24-year life for Furnas

A maiden preliminary economic assessment for Ero Copper‘s (TSX, NYSE: ERO) Furnas project in Brazil puts a $2 billion value on an operation that could supply metal for almost a quarter century.

Furnas is projected as a large-scale operation with four distinct mining areas that would produce about 1.2 million tonnes of copper, 2 million million oz. of gold and 9 million oz. of silver over a 24-year life, Ero said late Monday in a statement. Over the first 15 years, its average annual copper-equivalent production could reach 108,000 tonnes.

Vancouver-based Ero produced 64,307 tonnes of copper last year, a new record, as well as 37,291 oz of gold across its three sites in Brazil.

Using long-term copper, gold and silver prices of $4.60 per lb., $3,300 per oz. and $40 per oz. respectively, the PEA gave the Furnas project an after-tax net present value – at an 8% discount rate – of $2 billion and a 27% internal rate of return. Its initial capital cost is estimated at $1.3 billion, for a low capital intensity of about $16,000 per tonne of copper equivalent.

Ero Copper shares jumped 7.4% to C$45.83 apiece Tuesday afternoon in Toronto, giving the company a market capitalization of about C$4.8 billion. The stock’s 52-week high was $53.69.

Multiple drilling campaigns

The PEA results, says Ero Copper chief executive officer Makko DeFilippo, showed “what an exceptional asset” the Furnas project is. The report is the “culmination of multiple exploration drilling campaigns and a strong foundation of engineering and technical studies” for over a decade, he added.

The project was previously worked on by Vale (NYSE: VALE) and Anglo American (LSE: AAL), which together completed 90,000 meters of drilling. The property covers 2,400 hectares within the Carajás mineral province and sits about 50 km southeast of Vale’s Salobo copper operations.

Ero partnered with Vale in late 2023 and now holds the right earn into 60% of the Furnas project after the parties reached an agreement in July 2024. As sole funder of exploration, Ero has so far completed 45,000 metres of drilling in two phases.

Based on the first 28,000 metres of drilling alone, the company produced a resource estimate of 275.6 million tonnes indicated grading 0.83% copper equivalent and 195.9 million tonnes inferred grading 0.76% copper equivalent.