Ero Copper Corp.

DESCRIPTION OF CAPITAL STRUCTURE

Common Shares

The Company’s authorized share capital consists of an unlimited number of Common Shares without par value. As at

March 7, 2024, there are 102,759,852 Common Shares issued and outstanding, 1,874,031 Common Shares issuable pursuant to outstanding options of the Company to purchase Common Shares (“Options”) pursuant to the amended and restated stock option plan of the Company approved by the shareholders of the Company on April 26, 2023, 971,690 Common Shares issuable pursuant to outstanding performance share units of the Company (“PSUs”) pursuant to the amended and restated share unit plan of the Company approved by the shareholders of the Company on April 26, 2023 (the “Share Unit Plan”) and 340,570 Common Shares issuable pursuant to outstanding restricted share units of the Company (“RSUs”) pursuant to the Share Unit Plan. Pursuant to the Share Unit Plan, the Company has the right to redeem the aforementioned PSUs and RSUs on the applicable vesting date in cash, shares or a combination of both.

All of the Common Shares rank equally as to voting rights, participation in a distribution of the assets of the Company on a liquidation, dissolution or winding-up of the Company and entitlement to any dividends declared by the Company. The holders of the Common Shares are entitled to receive notice of, and to attend and vote at, all meetings of shareholders (other than meetings at which only holders of another class or series of shares are entitled to vote). Each Common Share carries the right to one vote. In the event of the liquidation, dissolution or winding-up of the Company, or any other distribution of the assets of the Company among its shareholders for the purpose of winding-up its affairs, the holders of the Common Shares will be entitled to receive, on a pro rata basis, all of the assets remaining after the payment by the Company of all of its liabilities. The holders of Common Shares are entitled to receive dividends as and when declared by the Board in respect of the Common Shares on a pro rata basis. The Common Shares do not have pre-emptive rights, conversion rights or exchange rights and are not subject to redemption, retraction, purchase for cancellation or surrender provisions. There are no sinking or purchase fund provisions, no provisions permitting or restricting the issuance of additional securities or any other material restrictions, and there are no provisions which are capable of requiring a security holder to contribute additional capital. Any alteration of the rights, privileges, restrictions and conditions attaching to the Common Shares under the Company’s Articles of Incorporation (“Articles”) must be approved by at least two-thirds of the Common Shares voted at a meeting of the Company’s shareholders.

Senior Unsecured Notes

On February 2, 2022, the Company completed an offering of US$400 million aggregate principal amount of 6.50% Senior Notes due 2030 (defined herein as the “Notes”). The Notes will mature on February 15, 2030. The Company used a portion of the net proceeds of the offering to repay the outstanding borrowings under the 2018 Senior Credit Facility of approximately US$50 million and is using the balance for capital expenditures at the Tucumã Project and general corporate purposes.

EBP and MCSA are currently the only guarantors of the Notes on a senior unsecured basis. The Notes are direct, senior obligations of the Company, EBP and MCSA, and are not secured by any mortgage, pledge or charge. NX Gold S.A. and Ero Gold Corp. will not guarantee the notes. The Company’s subsidiaries that do not guarantee the Notes will have no obligation, contingent or otherwise, to pay amounts due under the Notes or to make any funds available to pay those amounts, whether by dividend, distribution, loan or other payment. The Notes are structurally subordinated to all indebtedness and other obligations of any non-guarantor subsidiary such that in the event of insolvency, liquidation, reorganization, dissolution or other winding up of any such subsidiary that is not a guarantor, all of such subsidiary’s creditors (including trade creditors) would be entitled to payment in full out of such subsidiary’s assets before the Company would be entitled to any payment in respect of its ownership interest in the subsidiary.

The Notes were issued pursuant to an indenture dated February 2, 2022, among the Company, MCSA (as guarantor) and Computershare Trust Company, N.A., as trustee (“Note Indenture”). Interest on the Notes started accruing from

February 2, 2022 and are payable in cash semi-annually in arrears on February 15 and August 15 each year, commencing on August 15, 2022. Pursuant to the Note Indenture, the Company has the following early redemption options:

•On or after February 15, 2025, the Company has the option, in whole or in part, to redeem the Notes at a price ranging from 103.25% to 100% of the principal amount together with accrued and unpaid interest, if any, to the date of redemption, with the rate decreasing based on the length of time the Notes are outstanding;

•Before February 15, 2025, the Company may redeem some or all of the Notes at 100% of the principal amount plus a “make whole” premium, plus accrued and unpaid interest, if any, to the date of redemption; and

•At any time before February 15, 2025, the Company may redeem up to 40% of the original principal amount of the Notes with the proceeds of certain equity offerings at a redemption price of 106.50% of the principal amount of the Notes, together with accrued and unpaid interest, if any, to the date of redemption.

The Note Indenture provides that upon the occurrence of specific kinds of changes of control triggering events, as defined therein, each holder of the Notes will have the right to cause the Company to repurchase some or all of its Notes at 101% of their principal amount, plus accrued and unpaid interest to, but not including, the repurchase date.

The Notes contain certain customary covenants and restrictions for a financing instrument of this type, such as transaction-based restrictive covenants that limit the Company’s ability to incur additional indebtedness and make restricted payments in certain circumstances.

Credit Ratings

The following table summarizes the Company’s credit ratings as at March 7, 2024:

Moody’s

On January 24, 2022, Moody’s assigned first-time ratings to Ero Copper, consisting of a “B1” corporate family rating (CFR), a “B1-PD” probability of default rating (PDR), a “B1” senior unsecured rating, an “SGL-2” Speculative Grade Liquidity Rating, and a “Stable” ratings outlook, which remain unchanged as at March 7, 2024.

Moody’s CFRs are long-term ratings that reflect the relative likelihood of a default on a corporate family’s debt and debt-like obligations and the expected financial loss suffered in the event of default. A CFR is assigned to a corporate family as if it had a single class of debt and a single consolidated legal entity structure.

Moody’s issuer and issue-level long-term credit ratings are on a rating scale that ranges from Aaa (highest quality) to C (lowest quality). Moody’s appends numerical modifiers 1, 2, and 3 to each generic rating classification from Aa through Caa. The modifier 1 indicates that the obligation ranks on the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of that generic rating category. According to Moody’s credit rating system, obligations rated ‘B1’ are considered speculative and are subject to high credit risk. A ‘B’ rating is the sixth highest of nine categories in Moody’s long-term rating scale.

A PDR is a corporate family-level opinion of the relative likelihood that any entity within a corporate family will default on one or more of its long-term debt obligations. Moody’s assigns a PDR to corporate families of Aaa-PD (highest quality, subject to the lowest level of default risk) to D-PD (in default on all long-term obligations). In most cases, the PDR assigned to an issuer will align with the CFR assigned by Moody’s.

Moody’s Speculative Grade Liquidity (“SGL”) Ratings are opinions of an issuer’s relative ability to generate cash from internal resources and the availability of external sources of committed financing, in relation to its cash obligations over the coming 12 months. Speculative Grade Liquidity Ratings are assigned to speculative grade issuers based on a scale that ranges from SGL-1(very good liquidity) to SGL-4 (weak liquidity). According to Moody’s SGL scale, an issuer with an SGL-2 rating possesses good liquidity and is likely to meet its obligations over the coming 12 months through internal resources but may rely on external sources of committed financing. Furthermore, an SGL-2 rated issuer’s ability to access committed sources of financing is highly likely based on Moody’s evaluation of near-term covenant compliance.

Fitch

On January 24, 2022, Fitch assigned a first-time rating to Ero Copper, consisting of a “B” long-term issuer default rating, with a “Stable” outlook, as well as a “B” rating and a recover rating of 4 (RR4) to the Company’s Notes, which remain unchanged as at March 7, 2024.

Fitch publishes credit ratings that are forward-looking opinions on the relative ability of an entity or obligation to meet financial commitments. Issuer default ratings (IDRs) are assigned to corporations, sovereign entities, financial institutions such as banks, leasing companies and insurers, and public finance entities (local and regional governments). Issue-level ratings are also assigned and often include an expectation of recovery, which may be notched above or below the issuer-level rating. Issue ratings are assigned to secured and unsecured debt securities, loans, preferred stock and other instruments.

Fitch’s credit rating scale for issuers and issues is expressed using the categories ‘AAA’ to ‘BBB’ (investment grade) and ‘BB’ to ‘D’ (speculative grade) with an additional +/- for ‘AA’ through ‘CCC’ levels, indicating relative differences of probability of default or recovery for issues. Investment-grade categories indicate relatively low to moderate credit risk, while ratings in the speculative categories signal either a higher level of credit risk or that a default has already occurred. Credit ratings express risk in relative rank order, which is to say they are ordinal measures of credit risk and are not predictive of a specific frequency of default or loss.

According to Fitch’s credit rating scale, an IDR of B indicates that material default risk is present, but a limited margin of safety remains and that while financial commitments are currently being met, capacity for continued payment is vulnerable to deterioration in the business and economic environment. A RR4 rated security has characteristics consistent with instruments historically recovering 31%-50% of current principal and related interest in a default scenario.

S&P

On January 24, 2022, S&P assigned a first-time rating to Ero Copper, consisting of a “B” long-term issuer credit rating (ICR), with a “Stable” outlook, as well as a “B” issue-level rating and “3” recovery rating to the Notes, which remain unchanged as at March 7, 2024.

S&P’s ICR is a forward-looking opinion about an obligor’s overall creditworthiness, or ability to pay its financial obligations. This opinion focuses on the obligor’s capacity and willingness to meet its financial commitments as they come due. It does not apply to any specific financial obligation.

S&P’s long-term ICRs are on a scale that ranges from AAA (highest quality) to D (lowest quality). The ratings from ‘AA’ to ‘CCC’ may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the rating categories. According to S&P’s rating system, an issuer rated ‘B’ currently has the capacity to meet its financial commitments, but adverse business, financial, or economic conditions will likely impair the obligor’s capacity or willingness to meet its financial commitments. A ‘B’ rating is the sixth highest of ten categories in S&P’s rating system.

Regarding the issue-level rating, S&P’s assigned ratings are based, in varying degrees, on its analysis of the following considerations: (i) likelihood of payment; (ii) nature of and provisions of the financial obligation; and (iii) protection afforded by, and relative position of, the financial obligation in the event of bankruptcy or reorganization. S&P’s issue-level ratings are similarly assigned on a scale that ranges from AAA (highest quality) to D (lowest quality), with the ratings from ‘AA’ to ‘CCC’ having plus (+) or minus (-) modifiers. According to S&P’s rating system, an issue rated ‘B’ indicates that the obligor has the capacity to meet its financial commitments on the obligation, but adverse business, financial, or economic conditions will likely impair the obligor’s capacity or willingness to meet its financial commitments on the obligation. A ‘B’ rating is the sixth highest of ten categories in S&P’s rating system.

S&P’s recovery ratings focus solely on expected recovery in the event of a payment default of a specific issue, and they utilize a numerical scale that runs from 1+ to 6. The recovery rating is not linked to, or limited by, the ICR or any other rating, and provides a specific opinion about the expected recovery. A ‘3’ recovery rating indicates S&P’s expectations of meaningful (i.e., 50%-70%) recovery in the event of default.

The credit ratings received from Moody’s, Fitch and S&P are not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by any such credit rating organization. Moody’s, Fitch and S&P each charged the Company a customary fee in respect of the credit ratings service they provided and will continue to charge the Company a customary annual fee in respect of such credit ratings services.

The information concerning the Company’s credit ratings relates to Ero Copper’s financing costs, liquidity and operations. The availability of funding options may be affected by certain factors, including the global capital market environment and outlook as well as the Company’s operating and financial performance. Ero Copper’s ability to access capital at attractive or reasonable terms, specifically in the debt capital markets, is materially influenced by its assigned credit ratings and ratings outlook, as determined by credit rating organizations such as Moody’s, Fitch and S&P. If the Company’s credit ratings or outlooks were lowered or withdrawn entirely, financing costs and future debt issuances could be unfavorably impacted. There is no assurance that any rating will remain in effect for any given period of time or that any rating will not be revised or withdrawn entirely by a rating agency in the future if, in its judgment, circumstances so warrant. Credit ratings given to Ero Copper's corporate debt may not reflect the potential impact of all risks on the value of debt instruments, including risks related to market or other factors discussed in this AIF. See also “Risk Factors”.