34.  Derivative financial instruments

See related accounting policies in Note 2.4(b).

The volatility in the prices of these minerals led Management to enter into futures contracts in previous years. These contracts aimed to reduce the cash flow risk attributable to the fluctuation in the prices of copper and zinc, in line with existing sales commitments, which in total should not exceed 50 percent of the estimated metal content in their production for the next 12 months, according to the risk strategy approved by the Board of Directors.

During the year 2023, Management assessed its hedging risk strategy for the prices of these metals, so the Group did not enter into new futures contracts since the end of the first quarter of 2023 to date. As a result of this decision, as of December 31, 2024, and December 31, 2023, the Company did not have any outstanding receivable/payable amounts related to hedging derivative financial instruments not receivable/payable amounts from closed positions. For the years 2023 and 2022, the Group recognized an unrealized loss of US$8,839,000 and an unrealized gain of US$15,171,000, respectively, under the item “Hedging derivative financial instruments” (unrealized loss of US$6,232,000 and unrealized gain of US$10,696,000 net of income tax, respectively).

As of December 31, 2024, the Group does not have any hedging derivative contracts for copper and zinc prices.

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As of December 31, 2024 and 2023, the Company did not have hedging derivative instruments. For the years 2022, the effect on results was a gain of US$818,000, and is presented in the caption of “Financial costs” see note 29(a).

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Changes in “Hedge derivative financial instruments” is included in “Unrealized gain (loss) on hedge derivative financial instruments of interest rate hedge, net of income tax” in consolidated statements of other comprehensive income.

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For the year 2022, the Company recorded an unrealized gain of US$644,000 (unrealized gain of US$454,000 net of income tax).

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