In 2019, we met expectations for metal production and sales, in line with the projections we released throughout the year.
The production of zinc contained in the concentrate totaled 361 thousand tonnes, 3% below the volume produced in 2018, due to the lower average zinc grade, from 3.3% in 2018 to 3.2% in 2019, and to lower treated ore volume in the mines in Peru. Copper and lead production followed the same trend and decreased by 2.2% and 1.8%, to 38 thousand and 51 thousand tonnes, respectively. Our total production of metals, calculated in zinc equivalent, corresponded to 564 thousand tonnes, a decrease of 1.9% over the previous year.
During the year, our smelters continued to deliver positive performances with sales of metallic zinc and zinc oxide reaching 621 thousand tonnes, 1% higher than that recorded in 2018. This result was driven mainly by the higher sales volume at the Cajamarquilla and Juiz de Fora units, which increased by 2.4% and 9.4%, respectively.
Production of metal contained in the concentrate (2019)
Sale of Smelter products (2019)
In 2019, net revenue from our operations totaled US$ 2.3 billion, 6% lower than the US$ 2.5 billion recorded in the previous year, mainly due to lower metal prices in the London Metal Exchange (LME), which were partially offset by higher metal sales volumes. LME average zinc, copper and lead prices decreased by 13%, 8% and 11%, respectively.
We recorded a loss of US$ 159 million compared to a net gain of US$ 91 million obtained in 2018, mainly due to the US$142 million non-cash impairment loss recognition in 3Q19 related to Cerro Pasco.
During the second half of 2019, we implemented initiatives in The Nexa Way program, which we expect to generate US$120 million in annualized EBITDA improvements throughout 2020 and 2021 at a non-recurring cost of approximately US$41 million, which is included in our general and administrative expenses in the period.
Our adjusted EBITDA, which considers non-recurring expenses, totaled US$ 349 million, with a margin of 15% (US$ 605 million in 2018, with a margin of 24.3%, including the positive effect of US$34 million from tax credit recognition). Excluding non-recurring expenses for both periods, adjusted EBITDA was US$402 million, a result 30% lower than the US$ 571 million achieved in 2018. The year-over-year reduction was mainly explained by lower LME prices, higher operating costs; partially offset by the U.S dollar appreciation against Brazilian real, and increase in by-products credits.
The cost of sales in 2019 was increased by 3% yearover- year (US$ 1.8 billion), reflecting the higher operating costs in the mines (maintenance and third-party services), partially offset by lower raw material costs and better recovery rates in the smelters.
Financial Results (US$ Million)
13 Data published in 2018 has been revised. GRI 102-48 GRI 102-48
Liquidity and indebtedness GRI 102-7
As of December 31, 2019, our consolidated gross debt amounted to US$ 1.5 billion, 5.9% higher compared to the balance of December 31, 2018 (US$ 1.4 billion), mainly due to the 5-year export credit note agreement contracted in October. Net debt stood at US$ 783.6 million (US$ 221.6 million in 2018). At the end of the period, 92.1% (or US$ 1,389 million) of the gross debt was denominated in US dollars and 7.9% (or R$ 119 million), in Brazilian reais.
Only 2.2% (US$ 33 million) of the total debt matures in 2020, while 40.7% (US$ 614 million) matures between 2021 and 2023 and 47.2%, after 2026. The average maturity of our debt is 5.2 years (at an average interest rate of 4.6% per year), and the total cash is sufficient to cover the payment of all obligations in the next five years. Our financial leverage, which is measured by the ratio of net debt to adjusted EBITDA for the last 12 months, ended 2019 at 2.26x, due to the lower adjusted EBITDA in the period and the increase in net debt.
Our cash position as of December 31, 2019 was US$ 757 million, considering cash and cash equivalents plus financial investments. This represented a decline in cash flow of US$ 334 million, mainly explained by dividend payments in the first quarter of 2019, capital investments, especially in the Aripuanã project (US$ 124 million), and the payment for the acquisition of Karmin.
Our investments in operations (Capex) totaled US$ 410 million in the year. Of this amount, 30% was related to the Aripuanã project (US$ 124 million) and 7% to the Vazante mine deepening project (US$ 28 million), our main investments in the period. The larger volume of investments was already foreseen since we obtained the installation license for Aripuanã, in December 2018.
CAPEX Investments (US$ Thousand)
Our shares are traded on the New York Exchange (NYSE), United States, and Toronto Stock Exchange (TSX), Canada. The shares ended 2019 at US$ 8.15 on NYSE, versus US$ 11.90 at the end of December 2018. The daily trading average was 133,500 transactions, totaling 33.6 million in the year.
Through the share buyback program authorized by the Board of Directors in 2018, we repurchased 881,902 common shares, at an average price of US$ 10.7 per share, for a total of US$ 9 million. The repurchased common shares represent 2% of the free float and were held in Treasury. Our last stock repurchase activity took place on June 21 and the program expired on November 6, 2019.