TORONTO, Oct. 16, 2017
/CNW/ - Sierra Metals Inc. (TSX: SMT) (NYSE AMERICAN: SMTS)
(BVL: SMT) ("Sierra Metals" or "the Company") is pleased to report
third quarter 2017 production results featuring the highest quarter
of throughput and second highest quarter of metal production to
date from the Yauricocha Mine.
Results are from Sierra Metals' three underground mines in
Latin America: the Yauricocha
polymetallic Mine in Peru and the
Bolivar copper and Cusi silver Mines in Mexico.
Third Quarter 2017 Production Highlights
- Silver equivalent production of 2.7 million ounces; an 8%
decrease from Q3 2016
- Copper equivalent production of 23.5 million pounds; an 8%
decrease from Q3 2016
- Total tonnes processed of 504,751; a 6% decrease from Q3
2016
- Increase of 3% in silver equivalent production and 13%
increase in throughput at Yauricocha during Q3 2017 vs Q3
2016
During the third quarter of 2017, consolidated metal production
decreased 8% compared to Q3 2016. The decrease in metal production
was due to lower production in Mexico which was partially offset by record
throughput in Peru. The temporary
decline in production in Mexico
was mainly due to the implementation of a new plan to improve
operational performance and produce profitable silver ounces at
Cusi and improve efficiencies at our Bolivar copper mine. Like
the successful program at Yauricocha in Peru, the Company has engaged in an operation
turnaround program in Mexico to
modernize operations, improve production and lower costs. We
expect to see the results from this program become more apparent in
the latter part of 2017 and early 2018.
Igor Gonzales, President and CEO
of Sierra Metals commented "The Company continues to see solid
metal production and tonnage processed at our flagship Yauricocha
Mine, reporting a 3% increase in silver equivalent production, and
a 13% increase in throughput during Q3 versus Q3 2016. We continue
to work to increase tonnage at Bolivar through the commissioning of
newly acquired equipment, which has arrived and been commissioned,
and expect the remaining 3 underground loaders to arrive and be
commissioned in Q4 2017. We continued to define higher grade ore
sources through further development which are expected to come into
the mine plan next year."
He continued, "At Cusi, weaker production continued as the
Company continued its refocused efforts on completing access,
development and production from the Santa
Rosa de Lima zone which contains wider structures and higher
silver grades. The Company has reached the structure and is
currently developing drifts to mine this area. We are currently
campaigning development ore and expect to gradually increase the
tonnage from this area until we are operating the mill at capacity
using only ore from Santa Rosa de
Lima zone. The Company has successfully completed two
sequential drill campaigns totaling 29,500 meters at the
Santa Rosa de Lima zone which saw
average silver equivalent grades of 372 grams per tonne and average
widths of 3.8 meters. These results will be included in a mineral
resource update for the Cusi Mine expected in the fourth quarter of
2017."
He concluded "We continue working at all of our mines
to improve grade, operations, and best practices, as well as
introduce newer equipment. Management are optimistic that these
changes will serve to increase production and improve grade for the
latter part of 2017 and for the years to come."
Consolidated Production Results
|
|
|
|
Consolidated
Production
|
3 Months
Ended
|
9 Months
Ended
|
2017
Guidance
|
|
Q3
2017
|
Q3
2016
|
%
Var.
|
Q3
2017
|
Q3
2016
|
%
Var.
|
Low
|
High
|
|
|
|
|
|
|
|
|
|
Tonnes processed
(mt)
|
504,751
|
536,553
|
-6%
|
1,489,251
|
1,516,760
|
-2%
|
|
|
|
Daily
throughput
|
5,769
|
6,132
|
-6%
|
5,684
|
5,778
|
-2%
|
|
|
|
|
|
|
|
|
|
|
|
Silver ounces
(000's)
|
507
|
812
|
-38%
|
1,821
|
2,179
|
-16%
|
2,987
|
3,485
|
Copper pounds
(000's)
|
6,700
|
6,156
|
9%
|
19,305
|
17,238
|
12%
|
31,050
|
36,200
|
Lead pounds
(000's)
|
6,358
|
11,650
|
-45%
|
23,968
|
30,561
|
-22%
|
31,100
|
36,300
|
Zinc pounds
(000's)
|
19,877
|
14,435
|
38%
|
56,543
|
39,571
|
43%
|
61,800
|
72,100
|
Gold
ounces
|
1,517
|
2,305
|
-34%
|
4,606
|
6,737
|
-32%
|
7,800
|
9,100
|
|
|
|
|
|
|
|
|
|
Silver equivalent
ounces (000's)(1)
|
2,744
|
2,978
|
-8%
|
8,490
|
8,131
|
4%
|
11,534
|
13,454
|
Copper equivalent
pounds (000's)(1)
|
23,472
|
25,473
|
-8%
|
72,616
|
69,540
|
4%
|
98,642
|
115,066
|
(1) Silver equivalent
ounces & copper equivalent pounds were calculated using the
following metal prices: $19.50/oz Ag, $2.28/lb Cu, $0.85/lb Pb,
$1.05/lb Zn, $1,369/oz Au.
|
Yauricocha Mine, Peru
The Yauricocha Mine processed the highest quarterly throughput
in the mine's history of 268,178 tonnes in Q3 2017, representing a
13% increase compared to Q3 2016. The 3% increase in metal
production in Q3 2017 was driven by higher plant throughput, higher
copper and zinc head grades, and higher recoveries of all metals,
except gold. The Company continues to see improvements in metal
production as a result of the installation of a higher capacity
hoist and the positive exploration and infill drilling results
achieved during the last year.
Continued production from higher grade ore zones, including the
Esperanza Zone and the Cuerpos Chicos, has allowed the Company to
continue to increase throughput and improve head grades, resulting
in higher silver and copper equivalent metal production. The
Company also saw an increase in the production of copper (83%) and
zinc (40%), while production of silver, lead and gold decreased due
to higher copper head grades in the polymetallic ore and fewer lead
oxides being processed during Q3 2017 compared to the previous
year. Management believes throughput and metal production will
remain stable throughout the remainder of the year.
A summary of production from the Yauricocha Mine for Q3 2017 has
been provided below:
|
|
|
Yauricocha
Production
|
3 Months
Ended
|
9 Months
Ended
|
|
Q3
2017
|
Q3
2016
|
%
Var.
|
Q3
2017
|
Q3
2016
|
%
Var.
|
|
|
|
|
|
|
|
Tonnes processed
(mt)
|
268,178
|
237,429
|
13%
|
757,270
|
660,519
|
15%
|
|
Daily
throughput
|
3,065
|
2,713
|
13%
|
2,890
|
2,516
|
15%
|
|
|
|
|
|
|
|
|
Silver grade
(g/t)
|
58.94
|
106.80
|
-45%
|
71.76
|
96.73
|
-26%
|
|
Copper
grade
|
0.79%
|
0.51%
|
55%
|
0.76%
|
0.55%
|
40%
|
|
Lead grade
|
1.26%
|
2.69%
|
-53%
|
1.60%
|
2.64%
|
-39%
|
|
Zinc grade
|
3.73%
|
3.06%
|
22%
|
3.73%
|
3.02%
|
24%
|
|
Gold Grade
(g/t)
|
0.56
|
0.70
|
-21%
|
0.53
|
0.66
|
-19%
|
|
|
|
|
|
|
|
|
Silver
recovery
|
73.99%
|
66.81%
|
11%
|
75.72%
|
62.84%
|
20%
|
|
Copper
recovery
|
68.07%
|
65.33%
|
4%
|
63.84%
|
57.43%
|
11%
|
|
Lead
recovery
|
81.82%
|
75.75%
|
8%
|
84.22%
|
70.51%
|
19%
|
|
Zinc
recovery
|
89.40%
|
87.73%
|
2%
|
89.45%
|
86.61%
|
3%
|
|
Gold
Recovery
|
17.27%
|
27.25%
|
-37%
|
16.68%
|
26.85%
|
-38%
|
|
|
|
|
|
|
|
Silver ounces
(000's)
|
376
|
545
|
-31%
|
1,323
|
1,291
|
2%
|
Copper pounds
(000's)
|
3,178
|
1,740
|
83%
|
8,152
|
4,561
|
79%
|
Lead pounds
(000's)
|
6,112
|
10,652
|
-43%
|
22,503
|
27,145
|
-17%
|
Zinc pounds
(000's)
|
19,717
|
14,040
|
40%
|
55,758
|
38,030
|
47%
|
Gold
ounces
|
827
|
1,458
|
-43%
|
2,171
|
3,756
|
-42%
|
|
|
|
|
|
|
|
Silver equivalent
ounces (000's)(1)
|
2,134
|
2,071
|
3%
|
6,412
|
5,319
|
21%
|
Copper equivalent
pounds (000's)(1)
|
18,248
|
17,710
|
3%
|
54,838
|
45,491
|
21%
|
(1) Silver equivalent
ounces & copper equivalent pounds were calculated using the
following metal prices: $19.50/oz Ag, $2.28/lb Cu, $0.85/lb Pb,
$1.05/lb Zn, $1,369/oz Au.
|
Bolivar Mine, Mexico
Bolivar saw a reduction in throughput during the quarter with
223,339 tonnes processed which was an 11% decrease when compared to
Q3 2016. The lower throughput was due to reduced equipment
availability as the Company was awaiting the final deliveries of
equipment purchases made during the year. Lower metal
production was a result of lower head grades and recoveries which
have been slightly lower due to higher antimony levels which have
required some blending with lower grade ore stopes. Copper
production of 3.5 million pounds decreased 20%, silver production
of 76,000 ounces decreased 20% and gold production of 629 ounces
increased 8% in Q3 2017 compared to Q3 2016.
The Company's focus at Bolivar during the remainder of 2017 will
be on improving production volume through the procurement of new
equipment including Jumbos, Scoops and Trucks which arrived near
the end of the quarter, with the intention of moving more material
from available production stopes within the mine.
A summary of production for the Bolivar Mine for Q3 2017 has
been provided below:
|
|
|
Bolivar
Production
|
3 Months
Ended
|
9 Months
Ended
|
|
Q3
2017
|
Q3
2016
|
%
Var.
|
Q3
2017
|
Q3
2016
|
%
Var.
|
|
|
|
|
|
|
|
Tonnes processed
(mt)
|
223,339
|
250,260
|
-11%
|
660,250
|
705,398
|
-6%
|
|
Daily
throughput
|
2,552
|
2,860
|
-11%
|
2,520
|
2,687
|
-6%
|
|
|
|
|
|
|
|
|
Copper
grade
|
0.92%
|
0.96%
|
-4%
|
0.97%
|
1.00%
|
-3%
|
|
Silver grade
(g/t)
|
14.23
|
14.76
|
-4%
|
15.02
|
17.13
|
-12%
|
|
Gold grade
(g/t)
|
0.14
|
0.13
|
9%
|
0.17
|
0.20
|
-12%
|
|
|
|
|
|
|
|
|
Copper
recovery
|
77.89%
|
83.52%
|
-7%
|
78.76%
|
81.28%
|
-3%
|
|
Silver
recovery
|
74.52%
|
80.31%
|
-7%
|
76.39%
|
77.03%
|
-1%
|
|
Gold
recovery
|
61.62%
|
55.34%
|
11%
|
56.70%
|
48.91%
|
16%
|
|
|
|
|
|
|
|
Copper pounds
(000's)
|
3,522
|
4,417
|
-20%
|
11,152
|
12,676
|
-12%
|
Silver ounces
(000's)
|
76
|
95
|
-20%
|
244
|
299
|
-19%
|
Gold
ounces
|
629
|
583
|
8%
|
2,089
|
2,185
|
-4%
|
|
|
|
|
|
|
|
Silver equivalent
ounces (000's)(1)
|
532
|
653
|
-18%
|
1,694
|
1,935
|
-12%
|
Copper equivalent
pounds (000's)(1)
|
4,551
|
5,582
|
-18%
|
14,490
|
16,549
|
-12%
|
(1) Silver equivalent
ounces & copper equivalent pounds were calculated using the
following metal prices: $19.50/oz Ag, $2.28/lb Cu, $0.85/lb Pb,
$1.05/lb Zn, $1,369/oz Au.
|
Cusi Mine, Mexico
Total ore processed of 13,234 tonnes during Q3 2017 decreased
73% compared to Q3 2016. Lower head grades and recoveries for all
metals, except zinc head grades and recoveries, contributed to the
70% decrease in silver equivalent production.
Silver production of 55,000 ounces decreased 68%, gold
production of 61 ounces decreased 77%, lead production of 0.3
million pounds decreased 75%, and zinc production of 0.1 million
pounds decreased 69% compared to Q3 2016.
Despite the decreases in tonnage and metal production at Cusi it
is important to note that Cusi only represents approximately 5% of
Sierra Metals current total production. Cusi's contribution to the
Company's overall production is expected to increase in the future
as the Company continues with the reinterpretation of geology and
development of the Santa Rosa de
Lima zone. The Company has reached the actual structure via
a ramp and is currently developing and planning mining methods to
be used in order to include the material in future mill feed, as
early as Q1 2018.
Management plans to focus on improving head grades and
maintaining production at a rate of approximately 400 tpd, while
stockpiling ore at the plant and producing it in batches. The
Company is ramping down to the Santa Rosa
de Lima zone in an effort to improve head grades as well as
focus on the reinterpretation of geology at Cusi.
A summary of production for the Cusi Mine for Q3 2017 has been
provided below:
|
|
|
Cusi
Production
|
3 Months
Ended
|
9 Months
Ended
|
|
Q3
2017
|
Q3
2016
|
%
Var.
|
Q3
2017
|
Q3
2016
|
%
Var.
|
|
|
|
|
|
|
|
Tonnes processed
(mt)
|
13,234
|
48,863
|
-73%
|
71,730
|
150,842
|
-52%
|
|
Daily
throughput
|
151
|
558
|
-73%
|
274
|
575
|
-52%
|
|
|
|
|
|
|
|
|
Silver grade
(g/t)
|
153.72
|
158.08
|
-3%
|
161.83
|
171.56
|
-6%
|
|
Gold grade
(g/t)
|
0.26
|
0.27
|
-3%
|
0.26
|
0.26
|
-2%
|
|
Lead grade
|
1.01%
|
1.11%
|
-9%
|
1.16%
|
1.23%
|
-6%
|
|
Zinc grade
|
1.08%
|
1.04%
|
4%
|
1.17%
|
1.19%
|
-2%
|
|
|
|
|
|
|
|
|
Silver
recovery
|
84.10%
|
69.10%
|
22%
|
66.67%
|
70.81%
|
-6%
|
|
Gold
recovery
|
55.71%
|
62.84%
|
-11%
|
58.47%
|
62.61%
|
-7%
|
|
Lead
recovery
|
83.51%
|
83.83%
|
0%
|
80.05%
|
83.29%
|
-4%
|
|
Zinc
recovery
|
50.90%
|
35.27%
|
44%
|
42.57%
|
38.95%
|
9%
|
|
|
|
|
|
|
|
Silver ounces
(000's)
|
55
|
172
|
-68%
|
254
|
589
|
-57%
|
Gold
ounces
|
61
|
265
|
-77%
|
346
|
796
|
-56%
|
Lead pounds
(000's)
|
247
|
999
|
-75%
|
1,465
|
3,415
|
-57%
|
Zinc pounds
(000's)
|
160
|
394
|
-59%
|
785
|
1,541
|
-49%
|
|
|
|
|
|
|
|
Silver equivalent
ounces (000's)(1)
|
79
|
255
|
-69%
|
384
|
877
|
-56%
|
Copper equivalent
pounds (000's)(1)
|
673
|
2,180
|
-69%
|
3,288
|
7,500
|
-56%
|
(1) Silver equivalent
ounces & copper equivalent pounds were calculated using the
following metal prices: $19.50/oz Ag, $2.28/lb Cu, $0.85/lb Pb,
$1.05/lb Zn, $1,369/oz Au.
|
Guidance Update.
The Company would like to provide guidance that the annual
production levels may be closer to the lower end of the 2017
guidance range provided (please see press release dated
January 18, 2017). This is
primarily due to lower tonnage at the Cusi Mine as a result of the
Company's refocused efforts to the Santa
Rosa de Lima zone and due to lower head grades, recoveries
and throughput levels at the Bolivar Mine. However, lower
production levels should not significantly affect revenue and cash
flow for the Company due to the strong metal prices environment
which we have experienced in 2017.
Quality Control
The technical content of this news release has been reviewed and
approved by Gordon Babcock P.Eng.,
Chief Operating Officer and a Qualified Person under National
Instrument 43-101 Standards of Disclosure for Mineral
Projects.
Americo Zuzunaga, MAusIMM
CP(Mining Engineer) and Vice President of Corporate Planning is a
Qualified Person and chartered professional qualifying as a
Competent Person under the Joint Ore Reserves Committee (JORC)
Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves.
Augusto Chung, FAusIMM
CP(Metallurgist) and Consultant to Sierra Metals is a Qualified
Person and chartered professional qualifying as a Competent Person
on metallurgical processes.
About Sierra Metals
Sierra Metals Inc. is Canadian based growing polymetallic mining
company with production from its Yauricocha Mine in Peru, and its Bolivar and Cusi Mines in Mexico. The Company is focused on increasing
production volume and growing mineral resources. Sierra Metals has
recently had several new discoveries and still has additional
brownfield exploration opportunities at all three mines in
Peru and Mexico that are within or in close proximity
to the existing mines. Additionally, the Company has large land
packages at all three mines with several prospective regional
targets providing longer term exploration upside and mineral
resource growth potential.
The Company's Common Shares trade on the Bolsa de Valores de Lima and on the Toronto Stock
Exchange under the symbol "SMT" and on the NYSE American Exchange
under the symbol "SMTS".
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progress:
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Inc
Forward-Looking Statements
This press release contains "forward-looking information" and
"forward-looking statements" within the meaning of Canadian and
U.S. securities laws related to the Company (collectively,
"forward-looking information"). Forward-looking information
includes, but is not limited to, statements with respect to the
Company's operations, including the anticipated developments in the
Company's operations in future periods, the Company's planned
exploration activities, the adequacy of the Company's financial
resources, and other events or conditions that may occur in the
future. Statements concerning mineral reserve and resource
estimates may also be considered to constitute forward-looking
statements to the extent that they involve estimates of the
mineralization that will be encountered if and when the properties
are developed or further developed. These statements relate to
analyses and other information that are based on forecasts of
future results, estimates of amounts not yet determinable and
assumptions of management. Any statements that express or involve
discussions with respect to predictions, expectations, beliefs,
plans, projections, objectives, assumptions or future events or
performance (often, but not always, using words or phrases such as
"expects", "anticipates", "plans", "projects", "estimates",
"assumes", "intends", "strategy", "goals", "objectives",
"potential" or variations thereof, or stating that certain actions,
events or results "may", "could", "would", "might" or "will" be
taken, occur or be achieved, or the negative of any of these terms
and similar expressions) are not statements of historical fact and
may be forward-looking information.
Forward-looking information is subject to a variety of risks and
uncertainties, which could cause actual events or results to differ
from those reflected in the forward-looking information, including,
without limitation, risks inherent in the mining industry including
environmental hazards, industrial accidents, unusual or unexpected
geological formations, floods, labour disruptions, explosions,
cave-ins, weather conditions and criminal activity; commodity price
fluctuations; higher operating and/or capital costs; lack of
available infrastructure; the possibility that future exploration,
development or mining results will not be consistent with the
Company's expectations; risks associated with the estimation of
mineral resources and the geology, grade and continuity of mineral
deposits and the inability to replace reserves; fluctuations in the
price of commodities used in the Company's operations; risks
related to foreign operations; changes in laws or policies, foreign
taxation, delays or the inability to obtain necessary governmental
permits; risks relating to outstanding borrowings; issues regarding
title to the Company's properties; risks related to environmental
regulation; litigation risks; risks related to uninsured hazards;
the impact of competition; volatility in the price of the Company's
securities; global financial risks; inability to attract or retain
qualified employees; potential conflicts of interest; risks related
to a controlling group of shareholders; dependence on third
parties; differences in U.S. and Canadian reporting of mineral
reserves and resources; potential dilutive transactions; foreign
currency risks; risks related to business cycles; liquidity risks;
reliance on internal control systems; credit risks, including risks
related to the Company's compliance with covenants with respect to
its BCP Facility; uncertainty of production and cost estimates for
the Yauricocha Mine, the Bolivar Mine and the Cusi Mine; and other
risks identified in the Company's filings with Canadian securities
regulators and the U.S. Securities and Exchange Commission ("SEC"),
which filings are available at www.sedar.com and www.sec.gov,
respectively.
This list is not exhaustive of the factors that may affect any
of the Company's forward-looking information. Forward looking
information includes statements about the future and are inherently
uncertain, and the Company's actual achievements or other future
events or conditions may differ materially from those reflected in
the forward-looking information due to a variety of risks,
uncertainties and other factors. The Company's statements
containing forward-looking information are based on the beliefs,
expectations and opinions of management on the date the statements
are made, and the Company does not assume any obligation to update
forward-looking information if circumstances or management's
beliefs, expectations or opinions should change, other than as
required by applicable law. For the reasons set forth above, one
should not place undue reliance on forward-looking information.
Note Regarding Reserve and Resource Estimates
All reserve and resource estimates reported by the Company are
calculated in accordance with the Canadian National Instrument
43-101 - Standards of Disclosure for Mineral Projects and
Canadian Institute of Mining and Metallurgy Classification system.
These standards differ significantly from the requirements of the
SEC. The differences between these standards are discussed in our
SEC filings. Mineral resources which are not mineral reserves do
not have demonstrated economic viability.
SOURCE Sierra Metals Inc.