Fitch Ratings Elevates Ero Copper on Operational Strength and Production Gains

Fitch Ratings raised Ero Copper Corp.’s long-term issuer default rating to ‘B+’ from ‘B’ on December 19, 2025. This upgrade reflects the successful ramp-up of the Tucuma copper operation, which has notably increased the company’s scale, profitability, and cash flow generation. Alongside the issuer rating, Fitch also upgraded Ero’s senior unsecured notes to ‘B+’ with a Recovery Rating of ‘RR4’. The rating action signals improved financial metrics and stronger credit fundamentals based on recent operational achievements.

Operational Expansion: Tucuma’s Growing Role and Mine Life Stability

The Tucuma mine commenced commercial production in Q3 2025, with quarterly output climbing nearly 20%, aided by enhancements in the tailings filtration circuit and the strategic sequencing of high-grade blocks. Fitch forecasts that Tucuma will account for about 40% of Ero Copper’s revenue in 2026, surpassing the estimated 33% contribution from the company’s Caraiba copper mine. Additionally, Ero leverages elevated gold prices through processing high-grade gold concentrates at its Xavantina mine, operational since Q4 2024. Fourth-quarter projected gold sales reach 15,000 ounces, with an expected annual output of 50,000 ounces.

Ero Copper sustains stable mine life across its portfolio, with reserves-to-production ratios estimated at 17 years for Caraiba, 12 years for Tucuma, and 11 years for Xavantina. The company is also advancing the Furnas project in Para, Brazil, recently completing the second of three drilling programs within a scoping study. This project aims at acquiring a 60% stake from Vale Base Metals Ltd, representing further growth potential.

Financial Outlook and Analyst Scenarios

Fitch projects Ero Copper’s EBITDA will escalate to around $550 million in 2026, up from more than $360 million in 2025, driven by increased copper and gold production volumes. Capital expenditures are expected to rise to $310 million next year, funding projects including a new external shaft at the Caraiba mine. Importantly, Fitch anticipates Ero will generate positive free cash flow in 2026. Correspondingly, total and net EBITDA leverage ratios should improve markedly to 0.8x and 0.7x, respectively, down from 1.7x and 1.5x in 2025.

Copper prices remain a key earnings driver. Ero realized an average copper price of $3.91 per pound in 2024, up from $3.64 per pound in 2023. Fitch highlights that a $500 per metric ton increase from the current 2026 copper price assumption of $9,500 per metric ton would boost EBITDA by approximately $37 million, underlining the company’s sensitivity to commodity price fluctuations.

The rating upgrade demonstrates Fitch’s confidence in Ero Copper’s operational delivery and financial trajectory, positioning the company favorably in the competitive copper and gold mining sector.

Ero Copper: Market Outlook

Ero’s EBITDA forecast to reach $550 million in 2026, combined with the Tucuma mine’s growing revenue share, underpins the company’s improved credit profile. The transition to positive free cash flow and enhanced leverage ratios marks a significant financial milestone. Investors will closely track Ero Copper’s ability to sustain production growth, advance key projects like Furnas, and navigate commodity price volatility over the coming year. With Fitch’s upgraded ratings, Ero is well-positioned to capitalize on strong market fundamentals in the copper and gold sectors.