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We have recently announced that our Board of Directors has approved the appointment of Rodrigo Menck to succeed Mario Bertoncini as Nexa's as CFO. From March 1st, Menck will be replacing Mario. Menck is an executive with more than 20 years of experience in finance, treasury, structured finance, and capital markets. He worked for more than 10 years in banks such as BankBoston, WestLB, Citi, and BNP Paribas. He was also Structured Finance Manager and Shared Services Director for Braskem, a Brazilian company. He joined Nexa in 2016 as Head of Treasury and Investor Relations where he led our team in the restructuring of our debt, long term and short term, and he carried out other different initiatives. Menck was also directly involved in the Company's IPO and his current position at Nexa's is the head of M&A.

Finally, I would like to remind you that we maintain our focus on financial discipline, sound capital structure, and low leverage. We believe it will be essential to support the current and future growth of our company. Most important, Nexa is continuously embracing best practice in terms of environment, emissions, water consumption, dams, and safety standards. We also believe in working together with our local communities in order to promote its economic and social development.

Please now move to slide five. Here we will be addressing market conditions. On average, zinc went down 19% in the fourth quarter of 2018 when compared to the same quarter of 2017, and the average price was $2,631 per ton. When comparing the full year of 2018 with full year of 2017, the average price was only 1% higher. However, the market dynamic was completely different. In 2017, the price had an upward trend throughout the year as the fundamentals were growing stronger. In 2018, there was a downward trend, although the fundamentals were also strong and metal stocks decreased to all-time lows.

The continuous trade war between China and the US negatively impacted market confidence and sentiment. As a consequence of this, price went down. For 2019, we highlight three key topics: first, environmental protection in China. There's still the main question mark for the zinc price, how much this will affect the balance of supply and demand. The smelters are struggling to restart or keep production under the new regulation. We believe it can result in another year of market debts (ph) and therefore, pushing the price even lower.

Second, concentrate balance, it is expected to be at the surplus as the smelter consumption remains low and new mine operations are expected to ramp up during the year. There's a positive trend for treatment charge that are already increased in the spot market. This is positive for Nexa as we are still new buyers of concentrates. It's important to say that we do not believe, as some experts, mining production in China will grow in 2019 because of the same environmental restrictions we mentioned before.

Third, the behavior of zinc price will be directly related to the development of the US-China trade talks and in the Fed's indications of a slower increase in interest rates.

About copper and led price, they had similar behaviors as zinc price along the fourth quarter of 2018. Volatility was mainly caused by the uncertainties related to the trading war.

Now I'm going to pass to Mario Bertoncini who will discuss our results. Mario, please.

Mario Antonio Bertoncini -- Senior Vice President Finance and Chief Financial Officer

Thank you, Tito. (ph)

Turning on to page six, we discuss our mining performance in the fourth quarter and full year of 2018. As usual, let me remind you that we convert our production by metal to a zinc equivalent basis using full year 2018 LME prices in order to present comparable figures. As we had anticipated at the beginning of last year, our mining production in 2018 would increase throughout the quarters, given our plans on mining development, particularly in Cerro Lindo mine. The zinc equivalent production in Nexa's mining operations totaled 150,000 tons in fourth quarter of '18, 10% higher compared to the previous quarter. As mentioned, in Cerro Lindo the mine development program supported higher production in the last quarter of '18 with higher treated ore and zinc concentrate.

When comparing our mining production throughout this year, we have consistently increased our zinc equivalent production since first quarter of this year having reached a new level of production that's prepared us to achieve our guidance for this year that will be discussed later. Production on a zinc equivalent basis totaled 556,000 tons during 2018 as a whole, down 2.6% compared to 571,000 tons recorded in 2017. At the bottom right part of this page, we have our mining cash cost after by-product credits that increased by $0.15 (ph) to $0.31 per pound in the fourth quarter of '18. Taking a more careful look on this $0.15 (ph) of delta, we will note that $0.17 is due to lower credit of by-products given the decrease on LME prices during this period and $0.03 per pound from higher operating costs, mainly in Peru, primarily driven by higher development cost. Out of these two factors, our cost performance was as planned and efficient.

Please let's move on to the slide seven where we present our smelting performance. Our smelters performed very well in 2018, having growing production on the second half of the year compared to the first half, stabilizing production at full capacity in practical terms. The sales of metallic zinc and zinc oxide in 2018 were 4% higher than the previous year, totaling 617,000 tons, driven by this stable production during the year. Cajamarquilla that was impacted in 2017 by that unusual rains and floods in Peru sold 88,000 tons in the strong fourth quarter of last year with sales 4% up from the last quarter of '17 and also the third quarter of '18. In the full year, Cajamarquilla sold 333,000 tons of metallic zinc, 6% higher than the previous year '17.

Tres Marias and Juiz de Fora maintained that performance close to full capacity. Cash cost net of by-product credits decreased by 18% to $1.10 per pound, a delta of $0.24 in the fourth quarter of '18 compared to the same period of the previous year. This delta in cost is mainly due to lower raw material costs driven by lower zinc prices and the Brazilian currency devaluation that in this case impacted positively our smelters in Brazil.

Moving on to slide eight. Here on the slide eight, we present our revenues and EBITDA per segment. As usual, please note that these segmented sales -- only sales, not EBITDA -- includes intersegment revenues or some overlap that will be offset on a consolidated sales presented on the following page. Revenues for the Mining segment was down 24% in the fourth quarter of '18 versus the same quarter in the previous year, mainly due to lower metal prices and reduced volumes in Cerro Lindo. These impacted our adjusted mining EBITDA, which fell 52% year-over-year reaching $88 million in the fourth quarter of '18. In addition to lower revenues, we incurred higher costs driven by development costs as already mentioned bringing EBITDA margin for mining to 31%.

In Mining, when comparing full year of '18 against '17, adjusted EBITDA fell 18% to $430 million reaching a 37% EBITDA margin. For the Smelting division, despite the 17% drop in revenues in the fourth quarter of '18, compared to the same quarter in the previous year, our adjusted EBITDA increased 31%, driven by higher sales volumes, lower operating costs, and tax credits recorded in Brazil. In the fourth quarter, the adjusted EBITDA margin for Smelting was up 300 basis points to 9% year-over-year. Smelting revenues for the full year of '18 increased 4%, while adjusted EBITDA was up 14% compared to 2017. In 2018, Mining accounted for 71% of our EBITDA and Smelting for the remaining 29%.

Let's move on to page nine where we talk about our financial results. Our consolidated revenues totaled $2.5 billion in the full year of '18, up 2% compared to previous year. In last quarter of '18, sales went down 17% compared to the same quarter of previous year impacted by lower base metals prices only partially offset by higher metal sales as already presented. During the full year of '18, adjusted EBITDA was down 9% as a result of higher costs as explained before resulting on a consolidated EBITDA margin of 24% compared to 27% of the previous year. On the last quarter, our consolidated EBITDA went down 41% particularly given the impact on net revenues of that quarter. On the upper right part of this slide we present our CapEx breakdown. We spent $137 million in the CapEx in the last quarter of last year totaling $300 million in the full year of '18. All the details on the CapEx will be explained in our guidance section. On the bottom right part of this page is our sound operational free cash flow before debt, principal, and distribution, resulting in 13% of cash conversion before expansion CapEx.

As we announced it last month, we are in a smooth transition where I'm transferring my responsibilities as Nexa CFO to Rodrigo Menck by the end of this month. Menck is fully engaged in our process, priorities, and agenda and I'm sure Nexa financial team is in very good hands. I ask Menck now to present our considerations on capital structure and guidance, and would like to thank you all for the trust, opportunity to interact and work together. Wish you the best for Menck, Nexa, and all of you. Thank you.

Rodrigo Nazareth Menck -- Incoming Senior VicePresident of Finance and Chief Financial Officer

Thank you, Mario. Regarding our debt profile and cash position, we continue to report a healthy balance sheet with extended debt profile and low leverage. The average maturity of our total debt was 6.1 years with an average cost of 4.8% per annum in US dollar terms. We have continued to implement initiatives in 2018 in order to reduce debt cost and extend maturities.

On the pie chart, you can see the debt breakdown, both in terms of modality and currency. Almost three-fourths come from debt and capital markets being the remaining amount compounded by banks, ECAs, and BNDES. In terms of currency, 91% of our total debt is denominated in US dollars and 9% in reais. We have reported a net debt balance of $303 million as a result of a cash balance of $1.1 billion versus a total debt of $1.4 billion, resulting in a net leverage of 0.5 times net debt to EBITDA, a comfortable position to move ahead with our higher CapEx plan guided for 2019. On the next slides, we will discuss guidance for production and CapEx in more details.

Please move to slide 11. I would like to start reiterating that we met our 2018 mining production guidance for all metals, driven by a production recovery in the fourth quarter '18 as planned and our Smelting segment had a strong performance throughout the year reaching the top of the range of our sales volume guidance.

For 2019, as Tito mentioned before, we expect zinc mining production to expand approximately 3% versus 2018, considering the mid-range of the guidance presented herein. Nexa's main assumptions for such increase are: first, higher treated ore volumes compensating lower grades already forecasted by technical reports; second, stabilized production throughout 2019 at levels achieved in the fourth quarter of '18 in the Cerro Lindo operation, which operates now close to its 21,000 ton per day processing capacity as a benefit from mining development initiatives carried out during 2018; third, stabilization of Cerro Pasco mines production after changes in processes and additional safety procedures that were implemented along 2018; and finally, productivity gains in Brazil, mainly with the implementation of an additional shift in Vazante increasing operating hours in the mine.

On the smelter side, we expect relatively stable sales volumes year-over-year considering the mid-range of our guidance, with a 1% increase in production available for sale.

Key points for 2019 are: first a potential slowdown of the Cajamarquilla plant during the implementation of the Jarosite process conversion during the third quarter of '19. Despite this potential short-term production slowdown, we expect a 3% gain in recovery rates once the process is fully implemented. And second, productivity gains in Tres Marias from increased use of silicate mix as well as in Juiz de Fora with higher participation of secondary feed materials.

Please move to page 12 where we talk about CapEx and OpEx. Here on slide 12, we present our guidance for CapEx and expenses on mineral exploration and project development. 2018 CapEx reached $300 million in 2018, as already mentioned, including $137 million invested in the fourth quarter of '18. CapEx was overall $40 million above our 2018 guidance of $260 million as we decided to expedite some investments in the end of the year, being approximately $8 million related to Magistral and $7 million related to Vazante, in addition to $14 million of operating expenses related to the Atacocha and El Porvenir integration which were reclassified as CapEx, as well as higher sustaining CapEx in Cerro Lindo due to mine development initiatives.

In 2019, we are increasing our CapEx guidance to $420 million. This includes initial investments in the Aripuana project in the amount of $140 million. We estimate spending approximately 35% of the total $392 million of the projects this year. Excluding Aripuana, our planned investments amounts approximately $280 million, similar to last year. Therefore, nearly half of the $420 million will be directed to expansion, continuously focusing on brownfield life of mine extension and our greenfield projects pipeline.

Aside from Aripuana just mentioned, main projects in 2019 are Vazante mine deepening with $24 million and the Jarosite conversion process at the Cajamarquilla smelter with $24 million as well. Both projects have been extensively discussed in the past years. In mineral exploration, we continue our efforts to increase reserves and resources, aiming an average life of mine of 12 years for our current operations. Our minerals exploration expense guidance of $75 million considers $36 million to brownfield and $33 million to greenfield exploration. Our project development expense guidance of $53 million includes projects in FEL1 and FEL2 stages of which $23 million is related to greenfields. Although impacting EBITDA, this type of expense is key to develop projects that will support Nexa's growth in the coming years.

Finally, Tito will address our main initiatives for the year.

Tito Botelho Martins Junior -- President and Chief Executive Officer

Thank you, Menck. Please move to slide 13 where we highlight some key initiatives for 2019. Our operations are always working on improving its efficiency, productivity, and lower costs. This allows us to operate in different market scenarios.

With the conclusion of Vazante's dry stacking project along the year, Nexa's major mines, Cerro Lindo and Vazante, which represent 70% of our total production, we will be adopting the dry stacking method, a process that is much safer and environmental friendly. We'll keep working on our greenfield pipeline, primarily with the advance of the construction of Aripuana's mine and plant, which includes contracting main equipment and servicing among others. In addition to Aripuana, we intend to conclude in 2019 FEL2 for the Magistral and Pukaqaqa projects. Along the year we intend to deliver an updated mineral reserves and resource simulations for Vazante, Atacocha, El Porvenir, Morro Agudo, and Shalipayco.

At our Mine segments, the main objective is to maintain Cerro Lindo production stable at full capacity, in other words, 21,000 tons of run of mine per day. Vazante also should some improvement in production along the year. As it was mentioned before, we estimate to reach 97% of zinc recovery rate in Cajamarquilla by the end of the year as well as increased usage of secondary raw material in Juiz de Fora production and increase silicate concentrates in Tres Marias resulting in a higher productivity in our smelters.

Before we go to the Q&A session, I would like to say a few words about Mario Bertoncini. Mario is leaving us for a new professional challenge, and I'm sure he will be very successful. Without Mario's contribution and work, we would not be at the point we are today. He had an important role in our IPO as well as in the structuring of our company. And I'm sure we would not be where we are today without his efforts and contribution.

Thank you, Mario. I wish you good luck and I welcome Menck in his new position. Let's move to the questions.

Questions and Answers:

Operator

Thank you, sir. We will now begin the question-and-answer session. (Operator Instructions) Our first question today will come from Carlos de Alba with Morgan Stanley. Please go ahead with your question.

Carlos de Alba -- Morgan Stanley & Co. LLC -- Analyst

Good morning, everyone, and good afternoon for you guys. Mario, first of all, all the best in the new challenges and thank you very much for these few years of working together. It was a very good experience. So all the best in the future. If I may ask about 2019, Tito or the rest of the team, is there any special sequence in terms of output and I guess cost performance? Your last year obviously, as you just pointed out, the second half of the year, particularly the fourth quarter was really strong. So in order to avoid any surprises, are there any comments on the sequence for this year that you may point out?

And then on Brazil, given the tragic accident on the tailing dam there, do you expect any potential impact in Nexa's operations or production? Clearly Vazante moving to dry stacking is a major initiative. And I guess the Company anticipates to where the industry may be moving forward. But are there any comments or considerations that we need to be aware given what happened in Brazil tragically? Thank you.

Tito Botelho Martins Junior -- President and Chief Executive Officer

Thank you, Carlos. I'm going to leave to Mario to answer the first part of the question about the costs and then I'll answer your question about how we see the future of operations in Brazil -- I mean short-term in Brazil after the accident of Brumadinho. Mario please.

Mario Antonio Bertoncini -- Senior Vice President Finance and Chief Financial Officer

Carlos, thanks for your message. Regarding production and costs, a different from last year. What we are planning for this year is a more flat production throughout the quarters. We don't see that pattern that we had in these two previous years. We are prepared with Cerro Lindo at full capacity, and although that mine is in very good shape, we're prepared now to have a more flat production throughout the quarter.

Regarding costs, will keep investing in mine development. We should expect pattern costs -- kind of pattern that we saw last year. For a while I think a fair assumption is to consider that cost structure. Since we'll keep investing in mining development, particularly in Cerro Lindo, Atacocha well and El Porvenir.

Tito Botelho Martins Junior -- President and Chief Executive Officer

I would add to that, if we have -- if everything goes as we expect, we should have some gains in productivity as well, right. So comparing this year with the previous one, probable performance will be a little bit better, mostly also because we are increasing production in our mines and we should have a slight growth also in our smelters.

Answering the second question about Brazil, how we see our production being affected or not in 2019. I don't see anything actually directly impacting us. You have to remember that our dams in Brazil are all of them -- the operating dams, all of them are downstream dams. So we do not have any issue about the new regulation that was released at the beginning of this week actually about the upstream dams not being allowed to stay in operations.

About the dry stacking at Vazante, we're expecting to have this being ready to be used on the second half, which is very positive for us. It's positive for our -- not only for our operations but also for our reputation I would say. It's good to be perceived as a company that is actually moving on with a different approach in terms of disposal of (inaudible) cadence. Thank you.

Carlos de Alba -- Morgan Stanley & Co. LLC -- Analyst

Thank you.

Operator

And our next question will come from Caio Ribeiro of Credit Suisse. Please go ahead. Mr. Ribeiro, your line may be muted. Your line is open, sir.

Caio Ribeiro -- Credit Suisse (Brasil) SA CTVM -- Analyst

Yes. Hi, good morning, everyone, and thank you for the opportunity. My first question is regarding your expansion projects other than Aripuana. I just wanted to ask if the timing has changed at all in regards to those other projects? And after Aripuana, what would you envision today to be the project that would be the next priority? And whether you would consider carrying out investments in two projects at the same time or wait until Aripuana starts up before kicking off investments in another project?

And then my second question in regards to dividends, the latest announcement that Nexa made in regards to the $70 million dividend payout for March, it comes well above the 2% minimum dividend yield policy that the Company has in place right now. So I just wanted to see if you would consider revising this dividend policy upwards given the low leverage that the Company has right now? Those are my two questions. And also, Mario, I just wanted to wish you the best of luck in your new challenge. Thanks.

Tito Botelho Martins Junior -- President and Chief Executive Officer

Thank you for the questions. About expansions, what happened is Aripuana is going well. We started up at the end of last year. We are on track on our contractors -- with the contractors' equipment has already been ordered. So we're confident we should finish the construction by the end of 2020 and starting up 2021. What happened about other projects is the following. We until a few months ago, we were expecting to finish FEL3 for Shalipayco assuming that we will use the ore mined in Shalipayco in the facility in El Porvenir. So we work most of the time with the concept that we had only to open up the mine and not building the plant -- the beneficiation plant. What happened is when we conclude the FEL1, we came to the conclusion that it was much better actually to increase the capacity of the mine in Shalipayco and actually work with the possibility to build a new plant there.

So we are moving on with the FEL 2 of Shalipayco looking at two possibilities: the first one is, OK, we're going to have an independent project, a larger plant -- a larger mine with a larger plant, and it's dependent on El Porvenir. And there is an variation of those studies where we look at the possibility that before we start production in the Shalipayco site, we trucked some ore to be used in Atacocha. It implied a reschedule of Shalipayco for at least 10 months, which means that we were planning to have the FEL3 of Shalipayco by sometime 2020, and we are moving to the end of 2020 and beginning of 2021, which means that when we finish the studies of Shalipayco, we will be finishing Magistral studies at the same time.

If you ask me today what I think about that since we do not want to stockpile the projects, we have been saying that for as far as I remember, we should actually have to choose in between the development of the Shalipayco as a full project -- I mean mine and plant or Magistral as a full project. My guess today is that probably Magistral will be the preferred one for two reasons: the numbers in Magistral have been showing much more traction than the Shalipayco as an independent project.

And secondly, we've been saying all the time that we want to have more production of copper. So we have to wait and see. I think this is going to be a good problem for us to have to choose between the two projects sometimes in the second half of 2020 or the beginning of 2021.

In terms of the dividends, Mario, you want to mention something?

Mario Antonio Bertoncini -- Senior Vice President Finance and Chief Financial Officer

Regarding dividends, I think, first, we have paid more than we had announced as a policy, but at the same time keeping consistency I think is quite important. What we did in this dividend is not that much different from what we did last year when we paid in 2018, right. From now on we should keep more or less the same consistency, I would say, respecting not only the market cap and dividend yield, but also the capacity of cash generation, the EBITDA, and the obligations ahead. I would say quite well that at this point, keeping the track record and building this consistent with the market is even more important than the policy per se.

Tito Botelho Martins Junior -- President and Chief Executive Officer

And as I like to say all the time, we are sticking with our concept of paying 2%. What is wrong with the market cap? Thank you.

Caio Ribeiro -- Credit Suisse (Brasil) SA CTVM -- Analyst

Perfect. That's very clear. If I might just have one quick follow-up, Tito. I imagine that these developments with Shalipayco they might impact the returns of the project as a whole. But when you run the analysis, do you still view the implied IRR of this project above the minimum return that you would establish for a new project and above your cost of capital?

Tito Botelho Martins Junior -- President and Chief Executive Officer

Yes, yes. All the projects will be analyzed based on the minimum hurdle rate of 15%.

Mario Antonio Bertoncini -- Senior Vice President Finance and Chief Financial Officer

Yeah.

Tito Botelho Martins Junior -- President and Chief Executive Officer

Yeah. We have not changed anything. And actually when you talk about Shalipayco, we're saying that we're seeing a different project because it's going to be larger than the one we were talking before. Thank you.

Caio Ribeiro -- Credit Suisse (Brasil) SA CTVM -- Analyst

Perfect. Understood. Thank you.

Operator

Our next question will come from Orest Wowkodaw of Scotiabank. Please go ahead.

Orest Wowkodaw -- Scotia Capital, Inc. -- Analyst

Hi, good morning, everybody. Two questions for me. First of all, can you provide any cost guidance for 2019? Obviously costs were very good on a per pound basis in 2018. I'm just wondering whether you anticipate those unit costs to move up in 2019. And then secondly, just wondering if there was any impact from the recent truck drivers' strike in Peru and whether that had any impact on your operations? Thanks.

Tito Botelho Martins Junior -- President and Chief Executive Officer

Hi, Orest. Thanks for your questions. Starting from the second one, no, no impact at all on the drivers' strike in Peru. We haven't had any impact, and we don't see any impact for us.

Orest Wowkodaw -- Scotia Capital, Inc. -- Analyst

Great.

Tito Botelho Martins Junior -- President and Chief Executive Officer

Regarding the cost to guidance, we haven't provided the cost guidance for Nexa. But what I can tell you is, first, if we divide cost in three main fronts. Let's assume first the operating costs per se, right, referring particular on mining here. We should expect a flat operating costs for the Company on a per unit basis. Some productivity gains we should expect as we grow in production (technical difficulty). As we produce more we should (technical difficulty) total costs or kind of half of that total cost.

The second aspect is that costs that are not operational per se, and related particularly on the development cost, mining development, and we are budgeting and expecting to spend in mine development pretty much the same amounts we spent last year. We'll keep developing the mining fronts of particularly Cerro Lindo and Pasco and also Vazante.

Orest Wowkodaw -- Scotia Capital, Inc. -- Analyst

Okay.

Tito Botelho Martins Junior -- President and Chief Executive Officer

And the third aspect in costs that we have to pay attention is exogenous one (ph) is the impact on foreign exchange rate on our costs. This is a low impact in Peru since we are much more exposed to US dollars. As you know, there we pay in salaries only -- salaries on wages, the workforce accounted for 17%, 18% of our total costs. But in Brazil it's different. In Brazil, 80%, 83% of our costs are in BRL, Brazilian reais, and based on how we evolve, FX can have impact on our cost side.

Orest Wowkodaw -- Scotia Capital, Inc. -- Analyst

Okay. Thank you very much, Mario, and good luck.

Operator

The next question will come from Thiago Lofiego of Bradesco BBI. Please go ahead with your question.

Thiago Lofiego -- Bradesco SA CTVM -- Analyst

Hi, thank you. First of all, Mario, best of luck in this new career phase. Wish you all the best. I have two questions. The first one on capital allocation. What's the rationale behind the canceling of the Atacocha delisting, especially considering your low level of debt? Does it mean that we should not expect this delisting to happen, let's say, in the next year or so, or even new projects eventually delisting, should we not wait -- expect that to happen?

The second question about the zinc market, what's your view on concentrate prices from here? And also we've seen TCs pressured by some logistics difficulties at Townsville Port. So what's your outlook for treatment charges from here as well? Thank you.

Tito Botelho Martins Junior -- President and Chief Executive Officer

Thank you for your questions. About the capital location, on why we gave up the delisting of Atacocha has much more to do with the volatility we were seeing at the end of the year, at the beginning of this year, meaning that we should -- we would come back as soon as we feel comfortable about that. It's a priority for us, but it's not a primary item in the -- first item in our list. So we have been very conservative in terms of allocation of capital. Our main priority has to do with the development of our CapEx, our projects, and seemed to us to that when we announced that we'll start a process of this was a good opportunity, but given this volatility, we've decided to stop it, which doesn't mean that depending how the market behaves the next few months, we will come back to that, OK. It's just a tactical decision, let's put this way.

In terms of the zinc market, we haven't seen many differences in between what we would say three to four months ago and what we are seeing today. Even when you mention that we may see China is slowing down a little bit in terms of the general market. Demand for zinc is still there and supply is not there at all. Metal stocks were dropping along the last three months and actually recovered a little bit the last two weeks -- two to three weeks which has to do with the holidays in China. So we need to wait and see what's going to happen in the next two to three weeks.

What is reflecting in the market right now is the fact that the TCs has to do with the lack of supply of concentrate in the Chinese market, which is making actually the TCs moving up. I'll tell you what, we've seen deals done in between $200 and $220 in Peru in the last three weeks. Some people mentioned that there were deals done around $250. But it seems to us that the TCs the benchmark should be remain around in between $210, $220, which is really good when you compare with last year's which was around $140 per ton.

One thing that's important to observe, the zinc price being where they are today in between $2,600 and $2,700 is still a very strong price showing that what we've been saying along the year. The two years is there, it is still there. We have to regret the fact that the potential trade war and the commercial -- the trade factors, the perception about the global economy being affected trade war affected mostly the prices along the last year. But if we see this situation changing based on the negotiations that are being carried out by the US and China, we may actually see price coming back again as we saw in the first quarter of last year. We have to just wait and see, but we're still very confident about that.

Thank you.

Thiago Lofiego -- Bradesco SA CTVM -- Analyst

Thank you.

Operator

The next question will come from Alex Hacking of Citi. Please go ahead.

Alexander Hacking -- Citigroup Global Markets, Inc. -- Analyst

Hi. Yes, good morning. I just wanted to follow up on the TC/RCs. I got a little confused on the answer. Are you saying that the TC/RCs you expect to move up this year or to stay relatively stable? And then I guess second question, any change to the terms of the TC/RCs in terms of payables and escalators and things like that? And then thirdly, just again related to the smelting business, has there been any change to the regional premiums that you see locally in Latin America in terms of the zinc price? Thank you.

Tito Botelho Martins Junior -- President and Chief Executive Officer

Thank you for your questions. Let me clarify the TCs. We were seeing the reference price for the last year was around $140 per ton. Spot market was around it as well. In the last month or so, spot price went up to $200, $220, and we are seeing the possibility for the benchmark be around $220 as well without any changes in the free zinc and any changes in the escalation. So we would not see anything different from that.

Alexander Hacking -- Citigroup Global Markets, Inc. -- Analyst

Okay. Thanks for that clarification.

Tito Botelho Martins Junior -- President and Chief Executive Officer

Thank you.

Alexander Hacking -- Citigroup Global Markets, Inc. -- Analyst

And then on the regional, any changes on the regional premiums?

Tito Botelho Martins Junior -- President and Chief Executive Officer

No, no, actually premiums have been very flat. I mean if you see it up and down around $10 to $15, which is not relevant at all.

Alexander Hacking -- Citigroup Global Markets, Inc. -- Analyst

Okay. Thank you.

Tito Botelho Martins Junior -- President and Chief Executive Officer

They're stable. They have been stable for I would say the last nine months. Until then they were going up. So they've been stable for the last nine months, yes. Thank you.

Alexander Hacking -- Citigroup Global Markets, Inc. -- Analyst

Thank you.

Operator

(Operator Instructions) Our next question today will come from Oscar Cabrera with CIBC. Please go ahead.

Oscar Cabrera -- CIBC World Markets, Inc. -- Analyst

Thank you, operator, and good morning, everyone. I'd also like to echo my thanks to Mario for all his help during our initiation of coverage. Mario, thank you very much and all the best in the new challenge. And then also like to welcome Rodrigo into the team. We look forward to working with you. And so in terms of the questions, your mineral exploration budget of $75 million, I know you want to increase your reservoir's life, but how many more years do you think we have to be at these levels to achieve that? And then along the same line, on your project development CapEx of $53 million, how should we think about this number as we move to 2020, 2021? Do you need to keep it at those levels to maintain the cost on the operations?

Tito Botelho Martins Junior -- President and Chief Executive Officer

Oscar, thank you for your questions. Very good ones. I would say about the exploration expenses, I would say the following. What happened is we have spent a lot of money and we know that mostly in trying to extend the life of our mines, and the results have been very positive ones. So we've set a target for us. We want to reach a minimum 12 years reserves for each of our mines, which implies that we should be spending enough capital until we reach this point. But we are not too far from that. If you look at our track record along the last three years, you will see that it's possible to be achievable in the couple of years. So we are confident we will do it.

So part of the value we are spending right now the $17 million has to do with that I should say, probably almost half of it. Of course, we want to keep investing in greenfield exploration and some of brownfield as well has not directed to do with life of mine. This has much more to do with the areas that surrounds our current operations.

So my guess is in the short and medium term we should see this number coming down a little bit, not too much, but should come down. And the same applies to the development projects. Why is that? We have a pipeline of seven projects, and all of them -- actually now six because Aripuana is under development -- all of now were pretty much almost at the same stage. So as I said before today, when we reach the point that we have to choose in between, for example, Magistral and Shalipayco, the amount that we will be spending for the products that will be in our shelf will be dramatically reduced.

So I would say that we're in a transition time for the next two years or three years of at most we will be spending more with the projects, but the trends are that we would be able to start to refine the use of capital in new projects. So it's just a transition time. And let's be able -- and we assume that we should be able to enjoy it as long as our cash generation is positive one. Some of the analysts were saying, you are showing a negative free cash flow for the next year. It's true, but you have to consider that first we are still underleveraged, and secondly, we are investing in growth. I think the important thing here has to do we're talking about projects and exploration expense that you bring to us a future growth in the next five years. That's where we want to be. We have a very conservative approach about those expenses. But at the same time, we have a very not say aggressive but consistent brand to grow. Thank you.

Oscar Cabrera -- CIBC World Markets, Inc. -- Analyst

Thank you very much. If I may, a second question. In your presentation on the slide 10, you say that you wanted to continue to analyze opportunities to keep reducing debt cost and extend the average maturity. The maturities that I see here that you disclose are not that great. But can you elaborate a little bit more on this? What are you looking to do with this?

Rodrigo Nazareth Menck -- Incoming Senior VicePresident of Finance and Chief Financial Officer

Hello, Oscar. This is Menck speaking here. Given that our debt is pretty much coming from debt capital markets, the only short tenure debt we have is the Nexa Peru Bond that matures in 2023. At this point in time, we don't see economic advantage in having a liability management transaction on it. But this is always a possibility should the market price covers allow us. Aside from that, only in case we have some project-related financing along the years which come with the larger tenures and then will push this a bit more forward, right. But other than that, the bank market is not lending lines for that longer terms and we also don't have that much for bank lines, only $200 million out of the $1.4 billion. I don't know if I covered what you wanted.

Oscar Cabrera -- CIBC World Markets, Inc. -- Analyst

No, that's it. Thank you very much.

Rodrigo Nazareth Menck -- Incoming Senior VicePresident of Finance and Chief Financial Officer

You are welcome.

Operator

(Operator Instructions) Having no further questions, this will conclude our question-and-answer session. At this time, I'd like to turn the conference back over to Mr. Tito Martins for any closing remarks.

Tito Botelho Martins Junior -- President and Chief Executive Officer

Thank you very much. I would like to thank everybody for being with us here today. And once more I'll say that Nexa is moving in the right direction. I hope the market perceives this. And once more, Mario, I would really like to say good luck to you. I'm going to repeat it and good luck to Menck who is joining us. Have a good day. Thank you. Bye-bye.

Operator

The conference is now concluded. We thank you all for attending today's presentation. You may now disconnect your lines.

Duration: 55 minutes

Call participants:

Tito Botelho Martins Junior -- President and Chief Executive Officer

Mario Antonio Bertoncini -- Senior Vice President Finance and Chief Financial Officer

Rodrigo Nazareth Menck -- Incoming Senior VicePresident of Finance and Chief Financial Officer

Carlos de Alba -- Morgan Stanley & Co. LLC -- Analyst

Caio Ribeiro -- Credit Suisse (Brasil) SA CTVM -- Analyst

Orest Wowkodaw -- Scotia Capital, Inc. -- Analyst

Thiago Lofiego -- Bradesco SA CTVM -- Analyst

Alexander Hacking -- Citigroup Global Markets, Inc. -- Analyst

Oscar Cabrera -- CIBC World Markets, Inc. -- Analyst

More NEXA analysis

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