Nexa announces that the Peruvian Government has decided to further extend the quarantine period in its ongoing efforts to control the COVID-19 outbreak. The new quarantine period is now expected to last until April 26, 2020.
As a result, production at Cerro Lindo, Atacocha and El Porvenir mines remains suspended. Mining activities continue to be limited to critical operations with a minimum workforce to ensure appropriate maintenance, safety and security. Mining production shall resume once the quarantine period ends, as defined by the Peruvian Government.
Cajamarquilla smelter is expected to continue running at reduced rates as we estimate to have sufficient concentrate to support production during this period. Metal production may need to further ramp down if the quarantine period continues. Mining and smelting operations in Brazil continue to operate normally. In relation to the Aripuanã project, workforce was planned to increase during April. However, due to the additional safety procedures adopted to prevent the global outbreak development in the region, we have restricted the number of people on the site.
Consequently, construction activities in April will be behind our estimates. An updated plan for the project, including a new rebaseline schedule and capex review, will be provided in
2Q20.
The Company continues to implement additional safety procedures in all its operations to ensure the health and safety of its employees, contractors and communities. At the same time, Nexa remains committed to the continuity of its business and it has implemented measures to mitigate and reduce the potential impacts of the global
outbreak on its operations, supply chain and financial situation.
The Company also has proactively managed its liquidity position to navigate this adverse scenario by adding US$650 million to its cash balance through the assumption of US$350 million of additional debt in March and fully drawing down its revolving credit facility of
US$300 million in April, as previously announced. In addition, Nexa is taking other measures to improve its cash flow, such as cost reductions and postponement of cash disbursements, capital expenditures, project development and exploration investments.
Nexa reinforces its commitment to the health and safety of its employees, contractors and communities, and will keep the market informed of further developments.
