Why Nexa’s latest reserve update matters for shareholders

Nexa Resources (NEXA) has released its 2025 year end mineral reserves and resources update, reporting a 4.4% increase in consolidated mineral reserves to 115.1 million tonnes and longer life of mine plans across several operations.

This reserve update hinges on infill and extension drilling in Peru and Brazil, plus revised economic parameters that reflect higher metal price assumptions, all of which partially offset annual depletion in contained zinc.

Nexa’s latest reserve update comes after a period where price momentum has picked up. The 7 day share price return is 10.63%, the 90 day share price return is 12.68% and the year to date share price return is 24.35%, alongside a 1 year total shareholder return of 82.63% that points to stronger sentiment over a longer horizon.

If this kind of resource driven story interests you, it can be useful to compare Nexa with other metals names by checking out 8 top copper producer stocks

With reserves higher, profits growing and the shares trading at an estimated 20% discount to intrinsic value but slightly above the average analyst target, investors have to decide: is there still an entry point here, or is the market already pricing in future growth?

Most Popular Narrative: 55.6% Overvalued

The most followed valuation narrative puts Nexa’s fair value at $7.03, well below the recent $10.93 close. This sets up a clear tension between market price and modeled cash flows.

The plan to reach Aripuana’s nameplate capacity only in the second half of 2026, with the fourth tailings filter still in installation and commissioning, concentrates a lot of future zinc volume and cash flow in a single asset. Any delay or underperformance could weigh on revenue growth and EBITDA.

Want to see what kind of revenue path and margin rebuild have to line up for that fair value to work? The key is how earnings, capital spend and future profit multiples fit together over the next few years, and the narrative spells out those assumptions in detail.

Result: Fair Value of $7.03 (OVERVALUED)

However, if Aripuana ramps smoothly and Cerro Pasco delivers stable output with controlled CapEx, higher volumes and steadier cash generation could challenge this overvalued call.

Another view on Nexa’s valuation

The narrative fair value of $7.03 points to Nexa as 55.6% overvalued, yet our DCF model values the shares at $13.70, which is about 20% above the current $10.93 price. When one model sees upside and another sees downside, which set of assumptions do you trust more?

Next Steps

With mixed signals on value and sentiment running high, this is a moment to look at the numbers yourself and decide where you stand, starting with 3 key rewards and 3 important warning signs

Looking for more investment ideas?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.