Ero Copper sees resource growth potential in Brazil

New drilling at Ero Copper’s (TSX, NYSE: ERO) Furnas polymetallic project in northern Brazil has extended mineralization beyond the current resource model’s limits, reinforcing the potential for further growth at the deposit.

Hole FURN-DD-00357 cut 90 metres grading 0.74% copper, 0.5 gram gold per tonne and 3.18 grams silver from 726 metres depth, Ero said Wednesday in a statement. Within that interval, Ero intersected 32 metres grading 1.17% copper, 0.68 gram gold and 5.40 grams silver. The hole extended known mineralization in the Southeast zone by about 115 metres down dip.

Under a 2024 earn-in agreement with Vale’s (NYSE: VALE) base metals unit, Ero can acquire a 60% interest in Furnas by completing exploration, engineering and development milestones over a five-year period. Ero said it remains on track to complete the required drilling programs by year-end, about two years ahead of schedule.

“Today's drilling supports the conversion of inferred resources to further improve project economics,” National Bank Financial mining analyst Shane Nagle said Wednesday in a note. It is “expected to complete the necessary earn-in spending under the agreement with Vale Base Metals by year-end,” he added.

The latest results suggest Furnas could become Ero's next major copper mine, as the company benefits from its agreement with Vale and advances the project towards a prefeasibility study.

24-year life

Located in Brazil's Pará state, Furnas lies about 70 km southeast of Vale's Salobo operations and roughly 190 km northeast of Ero's Tucumã mine. Regional infrastructure includes paved roads, a power substation and rail access.

A preliminary economic assessment released in February outlined a 24-year mine life for Furnas, with average annual production of 52,000 tonnes of copper, 84,000 oz. gold and 374,000 oz. silver over the period. Ero is targeting completion of a prefeasibility study in 2027.

The latest drilling results cover about 24,000 metres. Through the end of May, Ero had drilled more than 75,000 metres at Furnas, with assays received for roughly 52,000 metres. Ten drill rigs are turning at the project, and the deposit remains open to depth and along strike.

Other notable step-out results include hole FURN-DD-00354, which cut 45 metres grading 0.98% copper, 0.36 gram gold and 1.72 grams silver from 459 metres depth. This included 20 metres of 1.78% copper, 0.25 gram gold and 3.12 grams silver. The intercept lies about 80 metres beyond the current inferred resource boundary in the Southeast zone.

Central zone

Ero also reported encouraging results from the Central zone, an area located between the established Northwest and Southeast mineralized corridors. Hole FURN-DD-00368 cut 41 metres grading 0.94% copper, 0.44 gram gold and 1.58 grams silver from 380 metres depth. The hole was drilled about 220 metres below the current inferred resource and more than 1.1 km west of the Southeast zone resource.

"Every drill result from Furnas reinforces the scale, quality and growth potential of the deposit," CEO Makko DeFilippo said in the release. "High-grade continuity within the SE and NW zones remains strong, and new step-out drilling in the Central zone, near planned infrastructure, highlights new opportunities to build upon an already compelling PEA mine plan."

Ero shares fell 1% to $36.13 in Wednesday morning trading in Toronto, valuing the company at about $3.8 billion (US$2.7 billion). The stock has traded between $17.66 and $53.69 in the past year.