Ero Copper Corp. (ERO) Earnings Call Transcript & Summary

Welcome to the Ero Copper Shareholders meeting. [Operator Instructions] Please also note, the conference is being recorded. [Operator Instructions] I would now like to hand the conference over to Mr. Noel Dunn, Executive Chairman of Ero Copper. Please go ahead.

Good afternoon, everybody. The meeting will commence in 5 minutes. So for those who have not registered and now want to take this opportunity to register with Computershare, please do so now. Thank you.

I confirm -- it's Vanessa from Computershare. I confirm everybody on the list now.

Okay. Thank you for that. In which case, we will commence the meeting. Good afternoon. On behalf of David Strang and I, I would like to welcome you to the Annual General and Special Meeting of the shareholders of Ero Copper Corp. Before proceeding with the business of the meeting, I'd like to introduce the following Ero Copper directors who are in attendance on this call; David Strang, President and Chief Executive Officer; John Wright, Lead Director; Lyle Braaten; Steve Busby; Dr. Sally Eyre; Robert Getz; Chantal Gosselin and Matthew Wubs. While in 2020, we have entered a period of unprecedented market uncertainty. I want to recognize all of the hard work undertaken in 2019 and thus far in 2020 to continue to move our company forward. In addition to those in attendance, I would like to especially recognize our operating teams in Brazil who've done an outstanding job in the face of the COVID-19 pandemic to protect our colleagues, our local communities and more broadly, the region in which we operate. As a company, we have sought to provide aid wherever possible to help to fight the COVID-19 pandemic locally through company-sponsored awareness campaigns, donation of critical protective equipment and engaging with local governments and regional medical facilities to coordinate response efforts. We are incredibly proud of the work that our guys are doing and I want to extend our gratitude to our teams and local communities in Brazil for continuing its efforts. We intend to keep today's call to the issues at hand. And I would further note that we'll be hosting a conference call tomorrow morning, 8:30 Pacific, 11:30 Eastern to discuss Ero Copper's First Quarter 2020 Financial and Operating Results. Should you have any questions relating to financial or operating results, for the first quarter of 2020, or specifics regarding the actions we are taking in response to COVID-19, we would ask you to reserve those questions until tomorrow's call. Conference call details can be found in the company's press release dated April 9. I would ask that you turn your phones on mute unless you're providing a voice vote or making an objection. I would also ask that you reserve any questions until the end of the meeting. I will now call the meeting to order. In accordance with the articles of the company, I shall preside as Chairman of this meeting. I will ask Deepk Hundal to act as the Secretary of the meeting. Unless there's an objection, I will ask Vanessa Lee of Computershare Investor Services Inc to act as Scrutineer for the meeting. I will pause as you go through this call, because we're doing it virtually to the extent that people are on mute and wish to object or make a comment, we will pause at certain times to allow you to do that. The Secretary has advised me that the notice of the meeting, together with a formal proxy and management information circular have been sent to each director of the company and mailed to each shareholder of record on March 10, 2020, the record date for the meeting. An affidavit of mailing has been provided by the Computershare Investor Services to the company, and I direct that the affidavit be annexed to the minutes of this meeting. Accordingly, unless there is an objection, I will dispense with the ruling of the notice of meeting. The Scrutineer has provided me with the preliminary report regarding shareholder attendance and representation at this meeting. I now will ask the Scrutineer to report on the attendance in the meeting.

Vanessa Lee from Computershare. We confirm there are 2 shareholders in person representing 2 shares, 65 shareholders by proxy, representing 76,357,766 shares, total 67 shareholders holding 76,357,768 shares. Percentage of outstanding shares represented at the meeting, 89.04%. Thank you.

Thank you, Vanessa. I declare that the requisite quorum of shareholders is present, and the meeting is duly and properly constituted for the transaction of business. I direct that the Scrutineer's complete report on attendance be annexed to the minutes of the meeting. The first item of business, the audited consolidated financial statements of the company for the financial year ended December 25, 2019, and the report of the auditors thereon are hereby placed before the meeting. Our annual report containing the audited financial statements, along with the related management's discussion and analysis, has been mailed to each shareholder of record, and I do not propose to read it to the meeting. We will now proceed with the setting of the number of directors at 9. Unless a shareholder or proxy holder entitled to vote at this meeting request a ballot, I shall conduct a voice vote in order to expedite the voting. I would ask someone to move the following resolution, which I will now read. Be it hereby resolved that the number of directors be and hereby set at 9.

I so move.

May I have the motion seconded?

I second the motion.

I will now call for a vote on the motion. All in favor, please signify by saying, 'aye'.

Aye.

Aye.

Nay, if any? I declare that the resolution has been carried. We will now proceed with the reelection of directors of the company for the ensuing year. The number of directors to be elected at the meeting is 9. The Board has adopted a majority voting policy in respect to the election of directors, as more particularly described at Page 63 of the information circular. The management nominates the following persons as specified in the information circular delivered with the notice of meeting, namely, Christopher Noel Dunn, David Strang, Lyle Braaten, Steve Busby, Dr. Sally Eyre, Robert Getz, Chantal Gosselin, John Wright and Matthew Wubs to be reelected to serve as directors of the company, to hold office until the next annual meeting of shareholders or until their successors are duly elected or appointed in accordance with the articles of the company. Are there are any further nominations? Since there are no further nominations, I hereby declare the nominations closed. I have been advised by the Scrutineer that the vast majority of proxies deposited for the meeting have been voted for the reelection of each of the directors, and I'll ask someone to move the following resolution, which I will now read. Be it hereby resolved that the 9 persons nominated by management be reelected as directors of the company to hold office until the close of the next annual meeting of shareholders, or until their successors are duly elected or appointed in accordance with the articles of the company.

I so move.

May I have the resolution seconded?

I second the resolution.

Unless a shareholder or proxy holder entitled to vote at this meeting request a ballot, I shall conduct a voice vote in order to expedite the voting. All in favor, please signify by saying, 'aye'.

Aye.

Aye.

Nay, if any? I declare that the resolution has been carried. We will now proceed with the reappointment of the auditors of the company. Unless a shareholder or proxy holder entitled to vote at this meeting request a ballot, I shall conduct a voice vote in order to expedite the voting. I would ask someone to move the following resolution, which I will now read. Be it hereby resolved that KPMG LLP, Charles & Professional Accountants; be, and they are hereby reappointed as auditors of the company to hold office until the close of the next annual meeting of shareholders or until their successors are appointed. As such remuneration as may be fixed by the directors and the directors be and are hereby authorized to fix such remuneration.

I so move.

May I have the motion seconded?

I second the motion.

I will now call for vote on the motion. All in favor, please signify by saying, 'aye'.

Aye.

Aye.

Nay, if any? I declare that the resolution has been carried. We will now proceed with the ratification, authorization and the approval of the granting of 8,086 incentive stock options on August 15, 2019, to each of Dr. Sally Eyre and Chantal Gosselin upon appointment to the Board of Directors of the company. Unless a shareholder or proxy holder entitled to vote at this meeting request a ballot, I shall conduct a voice vote in order to expedite the voting. I would ask someone to move the following resolution, which I will now read. Be it hereby resolved that, one, the granting of the Incentive Option Grants be and are hereby approved, confirmed and ratified; and any one or more of the directors or senior officers of the company be and is hereby authorized and directed to perform all such acts, deeds and things and execute under the seal of the company, or otherwise, all such documents and other writings, including treasury orders, as may be required to give effect to the true intent of these resolutions.

I so move.

May I have the motion seconded?

I second the motion.

I will now call for a vote on the motion. All in favor, please signify by saying, 'aye'.

Aye.

Aye

Nay, if any? I declare that the resolution has been carried. We will now proceed with the authorization and approval of the company's stock option plan, including amendments thereto and the unallocated stock options issuable thereunder. Unless a shareholder or proxy holder entitled to vote at this meeting request a ballot, I shall conduct a voice vote in order to expedite the voting. I would ask someone to move the following resolution, which I will now read. Be it hereby resolved that: one, the amendment of stock option plan, as substantially described in the information circular with respect to the meeting, be and is hereby approved, confirmed and ratified; two, all unallocated stock options issuable pursuant to the Amended Stock Option Plan are hereby authorized, approved, confirmed and ratified; three, the Compensation Committee of the Board of Directors of the company be and hereby authorize to reserve a sufficient number of shares to satisfy the requirement of the Amended Stock Option Plan; four, the Compensation Committee of the Board of Directors of the company be and is hereby authorize to grant stock options under the Amended Stock Option Plan until May 7, 2023, being the date that is 3 years from the Meeting date; and five, any one or more of the directors or senior officers of the company be and is hereby authorized and directed to perform all such acts, deeds and things and execute, under the seal of the company, or otherwise, all such documents and other writings, including treasury orders, as may be required to give effect to the true intent of these resolutions.

I so move.

May I have the motion seconded?

I second the motion.

I will now call for a vote on the motion. All in favor, please signify by saying, 'aye'.

Aye.

Aye.

Nay, if any? I declare that the resolution has been carried. We will now proceed with the authorization and approval of the company's share unit plan, including amendments thereto and the unallocated units issuable thereunder. Unless a shareholder or proxy holder entitled to vote at this meeting request a ballot, I shall conduct a voice vote in order to expedite the voting. I would ask someone to move the following resolution, which I will now read. Be it hereby resolved that, one, the Amended Share Unit Plan, as substantially described in the information circular with respect to the meeting, be and is hereby approved, confirmed and ratified; two, all unallocated units issuable pursuant to the Amended Share Unit Plan are hereby authorized, approved, confirmed and ratified; three, the Compensation Committee of the Board of Directors of the company be and is hereby authorized to reserve a sufficient number of shares to satisfy the requirement of the Amended Share Unit Plan; four, the Compensation Committee of the Board of Directors of the company be and is hereby authorized to grant units under the Amended Share Unit Plan until May 7, 2023, being the date that is 3 years from the meeting date; and five, any one or more of the directors or senior officers of the company be and is hereby authorized and directed to perform all such acts, deeds and things and execute, under the seal of the company, or otherwise, all such documents and other writings, including treasury orders, as may be required to give effect to the true intent of these resolutions

I so move.

May I have the motion seconded?

I second the motion.

I will now call for a vote on the motion. All in favor, please signify by saying, 'aye'.

Aye.

Aye.

Nay, if any? I declare that the resolution has been carried. We will now proceed with the authorization approval of amendments to the articles of the company to increase the quorum requirements for meetings of directors and shareholders. Unless a shareholder or a proxy holder entitled to vote at this meeting request a ballot, I shall conduct a voice vote in order to expedite the voting. I'll ask someone to move the following resolution, which I will now read. Be it hereby resolved by special resolution that: one, the amendments to the Articles of the Company to increase the quorum requirement for the company's shareholder meetings to 2 persons who are, or who represent by proxy, shareholders who, in the aggregate, hold at least 25% of the issued shares entitled to be voted at the meeting; and increase the quorum requirement for the transaction of the business of the directors to be set at a majority of the directors, all as further described in the information circular with respect to the meeting, which such amendments shall not take effect until the Articles of the Company are altered to reflect such amendments, be and are hereby approved, confirmed and ratified; and two, any one or more of the directors or senior officers of the company be and is hereby authorized and directed to perform all such acts, deeds and things and execute, under the seal of the company, or otherwise, all such documents and other writings as may be required to give effect to the true intent of these resolutions.

I so move.

May I have the motion seconded?

I second the motion.

I will now call for vote on the motion. All in favor, please signify by saying, 'aye'.

Aye.

Aye.

Nay, if any? I declare that the resolution has been carried. We will now proceed with the authorization and approval of a nonbinding advisory say on pay resolution, accepting the company's approach to executive compensation. Unless a shareholder or proxy holder entitled to vote at this meeting requests a ballot, I shall conduct a voice vote in order to expedite the voting. I'll ask someone to move the following resolution, which I will now read. Be it hereby resolved that on an advisory basis and not to diminish the role and responsibility of the Board of Directors of the company, the shareholders of the company accept the approach to executive compensation disclosed in the information circular with respect to the meeting.

I so move.

May I have the motion seconded?

I second the motion.

I will now call for vote on the motion. All in favor, please signify by saying, 'aye'.

Aye.

Aye.

Nay, if any? Is there any other formal business that may be properly brought before this meeting? Or are there any questions? As there is no further business or questions, that concludes the formal business brought before the meeting. I wish to thank you for attending. I would now ask for a motion that this meeting be terminated.

I move that this meeting be terminated.

I second the motion.

All in favor, please signify by saying, 'aye'.

Aye.

Aye.

Nay, if any? I hereby declare the motion carried and the meeting is now terminated.

Thank you. This concludes today's conference call. You may now disconnect your lines. Thank you for participating, and have a pleasant day.