Mineralization within the Curaçá Valley is hosted by a series of irregular-shaped, layered or zoned mafic-ultramafic intrusive bodies of Archean to Proterozoic age. Determination of genetic models for the deposition of copper has been complicated by the multiple episodes of metamorphism and deformation. These deposits are generally believed to be magmatic sulphide deposits and interpreted to be similar to those found in O’okiep, South Africa, Mayer and Barnes (1996).

The Vermelhos District is located within the Caraíba Complex, comprised of gneissic rocks which have undergone granulite facies metamorphism and were intruded by Cu-rich mafic to ultramafic intrusions.

The Vermelhos UG Mine area is largely covered by quartz-rich colluvium with rare outcrops occurring along drainages.

The Vermelhos District is composed by: i) Orthogneiss (enderbites and tonalites gneiss); ii) Paragneiss iii) maficultramafic intrusions; iv) rocks of granitic origin (granite, pegmatite and associated potassic metasomatic assemblages); v) quartz veins; vi) mylonite; vii) diabase dikes.

The mafic rocks are composed of the norites, gabbros, and gabbro-norites. The ultramafic rocks are the main ore host of the copper mineralization and are composed by the pyroxenites and melanorites, as well as hydrothermally altered rocks such as phlogopite schists and serpentinites.

Quartz veins form tabular siliceous bodies that crosscut the gneisses and mafic/ultramafic rocks. The veins may contain weak chalcopyrite mineralization.

N-S, NW-SE and NE-SW subvertical faults and mylonitic shear zones occur in the Vermelhos UG Mine area.

The granites are normally subvertical with SW dips. In the Vermelhos UG Mine, they have a NE direction in the southern portion and trend N in the northern portion of the mine?

The main ore minerals at Vermelhos consist of chalcopyrite (approximately 70 to 75%), bornite (20 to 25%) and minor chalcocite. Copper sulphides are associated with minor pyrite, and pyrrhotite and pentlandite. Mineralization occurring as disseminated to brecciated and massive, is associated with the mafic- ultramafic rocks and commonly concentrated along contacts with the gneiss. Although not significant, mineralization can also occur in altered zones in the gneiss, pegmatites and quartz veins (zones with silicification).

Oxidized mineralization occurs as malachite within the weathered zone that occurs from 15 m to 40 m in depth and is always associated with mafic-ultramafic rocks at surface.

As currently defined, mineralization at Vermelhos UG Mine generally occurs within both flat-lying and vertical bodies that trend north-south and plunge to the north.

For the purposes of defining geologic zones of interest, a value of 0.20% Cu was selected to delineate near-surface low-grade mineralized lenses. In contrast, a value of 0.45% Cu was used to delineate higher grade lenses that occur at depth. Three dominant mineralized geological Domains were generated at the Vermelhos UG Mine.

The Vermelhos UG Mine is located approximately 80 km north of the Pilar UG Mine and the Caraíba Mill. Trial mining and test metallurgical processing started in the third quarter of 2018. Following receipt of the Mine’s Operating License on October 10, 2018, average daily production rates are ramping up to 2,500 tonnes of ore per day. The current envisioned mine depth is limited to 300 m below surface, commensurate with the focus of historic exploration activities. Current Mineral Reserves at that depth are sufficient for production of approximately six years. The main Vermelhos UG Mine deposit remains open along strike and at depth, and Ero Copper is actively exploring extensions of the deposit to depth, including a newly announced discovery east of the Vermelhos UG Mine.

The SOS (Sublevel Open Stope) method was chosen as the mining method at Vermelhos UG Mine considering the dip, plunge and thickness of the ore-bodies as well as the rock quality designation and overall competence of the host rock, as described in more detail earlier in this Report. Variations of this method are planned for the central area for maximum possible recovery using the CRF technique.

The design entails mining panels of up to 35 m in vertical dimension without the need for rib pillars to support the open excavation. In the central and western high-grade areas (the “Toboggan”) mining occurs using sub-horizontal stopes. In these areas, the panel size has been reduced to 25 m and will be filled using CRF to maximize mining recoveries and limit in-situ stresses. Panel size and thickness has been constrained by the geotechnical design parameters as determined by 2D and 3D geotechnical modeling of the stresses generated by panel excavation. The analyses were performed by MCSA’s geotechnical engineering team and validated by Planminas.

The top and bottom levels are drilled within each mining panel. Drilling will be performed ascending (from the base level) 15m and descending (from the top level) 15m, with a 3” diameter in a radial fan pattern within the sub-horizontal stopes of the Toboggan zone.

Within the Vermelhos UG Mine, the vertical sections of the deposit typically range from 2.5 m to 8.0 m wide, with strike dimensions of up to 80.0 m. Within the sub-horizontal high- grade portion of the deposit (Toboggan) the dimensions are approximately 195 m in length, 75 m in thickness and 23 m to 27 m in height.

The typical dimensions of stopes within the Toboggan central zone are 15 m in width by 25 m in height by 65 m in length. Stopes of the east and west vertical areas have the average dimensions of 10 m in width by 30 m in height by 50 m in length.

Vermelhos UG Mine ramp development utilizes a maximum design grade of 15% and 25 m radius on center. Ramp design targets an average distance of 40 m from the ramp to ore gallery access to limit access development meterage.

Gallery access design dimensions of 4.5 m x 5.0 m are employed due to the size of the equipment operated by MCSA and the infrastructure necessary for further development of the galleries (ventilation ducts and production equipment access). Production galleries design dimensions are 4.0 m x 4.5 m. Transport cross- cuts are located at an average distance of 35 m from the ore body and are made parallel to the mineralized zone.

The Vermelhos UG Mine pumping system design consists of four main pump stations capable of pumping a total flow of 130 m³/h. The pumping stations are located, on average, every 60 m in vertical elevation along the ramp development. Water pumped from the mine undergoes treatment in a surface thickener to return to the mine in a closed circuit for operational use.

Each main pumping station consists of two pumps, where one is to remain on standby in case of failure. The stations utilize a system of sluice gates to aid in the removal of fines prior to pumping.

The Vermelhos UG Mine is located approximately 80 km north of the Pilar UG Mine and the Caraíba Mill. Mining and processing started in the third quarter of 2018. Following receipt of the Mine’s Operating License on October 10, 2018, average daily production rates are ramping up to 2,500 tonnes of ore per day. The current envisioned mine depth is limited to 300 m below surface, commensurate with the focus of historic exploration activities. Current Mineral Reserves at that depth are sufficient for production of approximately six years. The main Vermelhos UG Mine deposit remains open along strike and at depth, and Ero Copper is actively exploring extensions of the deposit to depth, including a newly announced discovery east of the Vermelhos UG Mine.

The flotation circuit at Caraíba consists of a conventional rougher-cleaner-scavenger flotation process. The rougher circuit consists of three rougher banks divided into two stages of flotation (rougher, cleaner) with four cells in each unit operation. The first four cells of each bank produce a rougher concentrate that passes to the four cleaner cells. In practice, the concentrate of second rougher stage is returned to the head of the circuit to increase total rougher mass pull and retention time. Rougher concentrate is fed to the cleaner circuit and tails are fed to the scavenger circuit.

Rougher concentrate, combined with recleaner circuit tails and scavenger concentrate, is sent to the cleaning circuit which consists of four cell banks. Each bank contains one recleaner cell, three cleaner cells and four scavenger cells. Operated in a continuous process, the recleaner cell concentrate becomes the final product grading 35% copper with minimal impurity elements.

The startup of the Vermelhos UG Mine will change slightly the tenors of the concentrate.