Ero Copper Corp ERO announced that it extended its precious metal purchase agreement related to the Xavantina operations with Royal Gold, Inc.'s RGLD wholly-owned subsidiary, RGLD Gold AG.

Details of ERO-RGLD Deal

ERO Copper will receive an additional $50 million in upfront proceeds from Royal Gold under the terms of the agreement. Including this, Royal Gold provided $160 million under the Xavantina streaming agreements from 2021.

As part of the streaming agreement, Royal Gold will continue to purchase 25% of gold production, with payments tied to the prevailing spot gold price. Under the initial stage of the agreement, Royal Gold already received 45,177 ounces of gold as of Dec. 31, 2024. 

ERO will provide 25% of gold production to Royal Gold until 160,000 ounces have been delivered. Once this milestone is reached, RGLD will receive 10% of gold production for the remaining life of the mine.

This deal will provide Royal Gold with an additional 40,200 ounces of gold deliveries from the Xavantina operations commencing in 2028.

Ero Copper’s Benefits From Xavantina Operations

ERO will gain from the significant growth potential of its Xavantina operations, backed by its promising performance, and recent increases in mineral reserves and resources. Ero Copper will gain from Royal Gold’s partnership to solidify its Xavantina operations as it provides crucial funding for ongoing growth and asset integrity initiatives at the mine.

These investments are aligned with Ero Copper's 2025 capital expenditure guidance, and are expected to drive growth, improve operating performance and create long-term value.

ERO Stock’s Price Performance

Shares of Ero Copper have lost 40.9% in a year compared with the industry’s 17% decline.

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Ero Copper’s Zacks Rank & Stocks to Consider

ERO currently carries a Zacks Rank #5 (Strong Sell).

Some better-ranked stocks from the basic materials space are Axalta Coating Systems Ltd. AXTA and CSW Industrials Inc. CSWI. AXTA sports a Zacks Rank #1 (Strong Buy) and CSWI has a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Axalta Coating has an average trailing four-quarter earnings surprise of 16.2%. The Zacks Consensus Estimate for AXTA’s 2025 earnings is pegged at $2.51 per share. Axalta Coating shares gained 2.5% in the last year.

CSW Industrials has an average trailing four-quarter earnings surprise of 10.1%. The Zacks Consensus Estimate for the company’s 2025 earnings is pegged at $8.50s per share. CSW Industrials shares jumped 26.1% in the last year.

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Royal Gold, Inc. (RGLD) : Free Stock Analysis Report

Axalta Coating Systems Ltd. (AXTA) : Free Stock Analysis Report

Ero Copper Corp. (ERO) : Free Stock Analysis Report

CSW Industrials, Inc. (CSWI) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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