VANCOUVER, Oct. 30, 2014 /PRNewswire/ - Sierra Metals
Inc. (TSX:SMT)(BVL:SMT) ("Sierra Metals" or the "Company")
announces the filing of Sociedad Minera Corona S.A.'s ("Corona")
unaudited Financial Statements and Management Discussion and
Analysis ("MD&A") for the third quarter of 2014 (Q3 2014). The
Company holds an 81.8% interest in Corona. All amounts are presented in thousands
of US dollars unless otherwise stated and have not been adjusted
for the 18.2% non-controlling interest.
Corona's Financial
Highlights For The Third Quarter of 2014:
- Net Income of US$ 8.2 million or
US$ 0.228 per share for Q3 2014; a
109% increase over Q3 2013;
- Adjusted EBITDA of US$ 18.6
million for Q3 2014; a 94% increase over Q3 2013;
- Operating cash flow of US$ 18.0
million for Q3 2014; a 214% increase over Q3 2013;
- Revenues of US$ 32.0 million for
Q3 2014; a 46% increase over Q3 2013; and
- Negative by-product cash cost per ounce of silver of
US$ 24.26 at Yauricocha for Q3 2014;
a 115% decrease over Q3 2013.
Audra Walsh, President and CEO
stated: "For the third quarter of 2014 we delivered on our
commitment to increase production while continuing to reduce costs
and improve margins as we remain focused on maximizing cash flows.
Consistent with this focus, Corona's team achieved higher production
levels and lower cash cost per ounce, which resulted in higher
operating cash flows, adjusted EBITDA and profit levels for the
third quarter of 2014. The main drivers for these positive results
have been the measures that the Company has been implementing since
the third quarter of 2013 to increase operational efficiencies and
reduce costs. Corona is committed
and on track to meet its production guidance for 2014 and continues
its efforts to be a low cost producer."
The following table sets out select unaudited financial
information for the three and nine months ended September 30, 2014 and 2013:
|
|
|
|
|
|
|
|
3 Months
Ended
|
9 Months
Ended
|
(In thousands of
US dollars, except cash cost per ounce)
|
30-Sep-14
|
30-Sep-13
|
30-Sep-14
|
30-Sep-13
|
|
|
|
|
|
|
Revenue
|
$
|
32,043
|
21,923
|
90,954
|
82,477
|
Adjusted
EBITDA1
|
|
18,592
|
9,592
|
46,866
|
38,192
|
Cash Flow from
operations
|
|
17,982
|
5,730
|
37,319
|
9,218
|
Gross
profit
|
|
18,286
|
8,251
|
46,150
|
34,695
|
Income
Taxes
|
|
(5,743)
|
(2,295)
|
(13,467)
|
(9,862)
|
Net
Income
|
|
8,201
|
3,916
|
21,366
|
14,905
|
|
Cash Cost per oz of
Ag (Yauricocha)2
|
$
|
(24.26)
|
(11.27)
|
(21.71)
|
(13.38)
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands of
US dollars, unless otherwise stated)
|
30-Sep-14
|
31-Dec-13
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
40,331
|
36,242
|
|
|
Assets
|
|
120,529
|
117,583
|
|
|
Liabilities
|
|
61,232
|
58,831
|
|
|
Equity
|
|
59,297
|
58,752
|
|
|
|
|
|
|
|
|
1Adjusted EBITDA is defined by
management as EBITDA adjusted for non-cash and non-recurring items
including foreign exchange gain (loss).
|
2Cash
costs include cost of sales, treatment and refining charges, and
selling expense, and exclude workers' profit sharing, depreciation
and other non-cash provisions.
Cash costs are calculated based on the ounces of payable silver
sold for each of the reporting periods.
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|
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Corona's Financial
Highlights
- Net income of US$ 8.2 million or
US$ 0.228 per share for the third
quarter of 2014 compared to US$ 3.9
million or US$ 0.109 per share
for the same period in 2013. Net income of US$ 21.4 million or US$
0.594 per share and US$ 14.9
million or US$ 0.414 per share
for the nine months ended September 30,
2014 and 2013, respectively.
- Adjusted EBITDA of US$ 18.6
million for the third quarter of 2014 compared to
US$ 9.6 million for the same period
in 2013. Adjusted EBITDA of US$ 46.9
million and US$ 38.2 million
for the nine months ended September 30,
2014 and 2013, respectively. The increase in adjusted EBITDA
for the third quarter and the nine month period ended September 30, 2014 compared to 2013 is mainly due
to the increase in revenues and higher gross margins recorded
during the period. This has been the result of the measures taken
by the Company to increase operating efficiencies and reduce costs
that has been implementing since the third quarter of
2013.
- Operating cash flow of US$ 18.0
million for the third quarter of 2014 compared to
US$ 5.7 million for the same period
in 2013. Operating cash flow of US$ 37.3
million and US$ 9.2 million
for the nine month period ended September
30, 2014 and 2013, respectively. The increase in operating
cash flow is mainly the result of the higher revenues, higher gross
margins and a US$ 12.0 million
positive impact on working capital driven by workers' profit
sharing and tax adjustments in 2014.
- Revenues of US$ 32.0 million for
the third quarter of 2014 compared to US$
21.9 million for the same period in 2013. Revenues of
US$ 91.0 million and US$ 82.5 million for the nine month period ended
September 30, 2014 and 2013,
respectively. The increase in revenues for the third quarter and
the nine month period ended September 30,
2014 compared to 2013 is mainly as a result of higher lead
grades, higher silver and lead recoveries and a higher volume of
concentrate sold. This was partially offset by the decrease in
silver and copper commodity prices compared to 2013.
- Cash and cash equivalents of US$ 40.3
million as at September 30,
2014 compared to US$ 36.2
million as of December 31,
2013. Cash and cash equivalents increased by US$ 4.1 million mainly driven by US$ 37.3 million of operating cash flow, offset
by US$ 20.8 million of dividend
payments, US$ 11.5 million of capital
expenditures and US$ 0.8 million of
financing activities.
- Negative by-product cash cost per ounce of silver of
US$ 24.26 at Yauricocha for the third
quarter of 2014 compared to a negative by-product cash cost per
ounce of silver of US$ 11.27 for the
same period of 2013. Negative by-product cash cost per ounce of
silver of US$ 21.71 and US$ 13.38 at Yauricocha for the nine month period
ended September 30, 2014 and 2013,
respectively. Lower cash cost per ounce of silver during the three
and nine month period ended September 30,
2014 compared to 2013 is driven by lower cash cost per tonne
processed and higher by-product credits. This is the result of the
cost reduction measures that the Company has been implementing
since the third quarter of 2013 and which have resulted in
operating efficiencies and cost savings. The largest reductions in
the mining cost for 2014 have been achieved in the cost
of supplies, contractor services and labor costs. The largest
reductions in the plant costs have been achieved in the cost of
supplies (reagents and ball mills) and maintenance costs. Also, the
cost per tonne has decreased due to the higher production levels
achieved in 2014 compared to 2013.
Corona's Operational
Highlights:
- Total tonnes processed of 224,970; an 11% increase over Q3
2013
- Silver production of 552,677 ounces; a 24% increase over Q3
2013
- Copper production of 1.9 million pounds; a 30% increase over Q3
2013
- Lead production of 12.2 million pounds; a 46% increase over Q3
2013
- Zinc production of 14.7 million pounds; a 20% increase over Q3
2013
- Gold production of 1,369 ounces; an 18% decrease over Q3
2013
The following table sets out production results for the three
and nine months ended September 30,
2014 and 2013:
Yauricocha
Production
|
3 Months
Ended
|
9 Months
Ended
|
|
|
Sep 30,
2014
|
Sep 30,
2013
|
%
Var.
|
Sep 30,
2014
|
Sep 30,
2013
|
%
Var.
|
|
|
|
|
|
|
|
|
|
Silver production
(oz)
|
552,677
|
447,145
|
24%
|
1,526,225
|
1,402,805
|
9%
|
|
Copper production
(000 lb)
|
1,899
|
1,458
|
30%
|
5,393
|
5,347
|
1%
|
|
Lead production
(000 lb)
|
12,194
|
8,338
|
46%
|
35,082
|
26,099
|
34%
|
|
Zinc production
(000 lb)
|
14,668
|
12,268
|
20%
|
40,857
|
37,435
|
9%
|
|
Gold Production
(oz)
|
1,369
|
1,673
|
-18%
|
4,323
|
5,071
|
-15%
|
|
|
|
|
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About Sierra Metals
Sierra Metals Inc. is a Canadian mining company focused on
production of precious and base metals from its Yauricocha Mine in
Peru, its Bolivar Mine and Cusi
Mine in Mexico. In addition,
Sierra Metals is exploring several precious and base metal targets
in Peru and Mexico. Projects in Peru include Adrico (gold), Victoria (copper-silver) and Ipillo
(polymetallic) at the Yauricocha Property in the province of Yauyos
and the San Miguelito gold
properties in Northern Peru.
Projects in Mexico include
Bacerac (silver) in the
state of Sonora and La Verde (gold) at the Batopilas Property in
the state of Chihuahua.
The Company's shares trade on the Lima Stock Exchange (Bolsa de
Valores de Lima) and on the TSX
under the symbol "SMT".
Forward-Looking Statements
Except for statements of historical fact contained herein, the
information in this press release may constitute "forward-looking
information" within the meaning of Canadian securities law.
Statements containing forward-looking information express, as at
the date of this news release, the Company's plans, estimates,
forecasts, projections, expectations or beliefs as to future events
or results. These statements reflect the Company's current
views with respect to future events and are necessarily based upon
a number of assumptions and estimates that, while considered
reasonable by the Company, are inherently subject to significant
business, economic, competitive, political and social uncertainties
and contingencies. Actual results might differ materially from
results suggested in any forward-looking statements. The Company
assumes no obligation to update the forward-looking statements, or
to update the reasons why actual results could differ from those
reflected in the forward-looking statements unless required by
securities laws applicable to the Company. Additional information
identifying risks and uncertainties is contained in filings by the
Company with the Canadian securities regulators, which filings are
available at www.sedar.com.
SOURCE Sierra Metals Inc.