Bullish Case: Potential upside from increased copper prices and successful development of the Furnas project could drive ERO's stock significantly higher, despite current bearish sentiment.

Bearish Case: Continued equity dilution risks from needed fundraising may pressure ERO's stock, compounded by production delays at the Tucumã project, leading to negative investor sentiment.

Potential Outcomes:

• Successful Furnas development: 65% chance.
• Further equity raises leading to dilution: 80% chance.
• Production delays at Tucumã: 30% chance.
• Market recovery in copper prices: 50% chance.

Trading Oracle: Consider initiating a bullish call debit spread, such as buying ERO 04/17/2025 $17.50C and selling $20C. This leverages current high implied volatility and allows for potential price inflation from positive project news. Target a holding period aligning with key announcements, aiming for short to medium-term gains.

November 23, 2024