TSX: SMT
BVL: SMT
NYSE AMERICAN: SMTS
- Major changes in the Corporate Team, which is now strengthened
in Mexico to better support and
improve operations
- Metallurgical recovery levels have increased to above 80% at
both mills in Mexico from the low
60% range at Cusi and low 70% range at Bolivar
- 13 new pieces of equipment commissioned at Bolivar Mine to
maximize ore delivery
- Drift development underway on four sub-levels on the planned
pilot sub level longhole stoping area in the Santa de Rosa de Lima
structure at the Cusi Mine. This development is
increasing the mill campaigns with higher grade ore. This trend is
expected to continue until full mill capacity from Santa Rosa de Lima is reached targeted for Q2
2018
TORONTO, Oct. 24, 2017 /CNW/ - Sierra Metals Inc.
(TSX: SMT) (NYSE AMERICAN: SMTS) (BVL: SMT) ("Sierra Metals" or
"the Company") is pleased to provide an update on the operational
improvement program currently taking place at its Bolivar and
Cusi Mines in Mexico, focusing on modernizing operations,
improving production, and reducing unit costs. A similar program
was successfully implemented at the Yauricocha Mine starting in
late 2015. The program to date has focused on strengthening the
corporate team, adding technical expertise at the projects,
improvements to production capacity through mine design, planning
and sequencing, and improving metals production through
improvements to the metallurgical recovery process and ore
throughput.
Igor Gonzales, President, and CEO
of Sierra Metals commented: "Management is committed to
improving operations in Mexico and
to increase the profitability of both the Bolivar and Cusi Mines. We have undertaken efforts to
appoint experienced and qualified personnel to run the operational
improvements program and improve the efficiency and operations at
both mines. We expect that our program efforts should be more
apparent in the latter part of 2017 and we will continue working
toward completion of the improvements scheduled for the end of Q1
2018. We are optimistic about the outcome and expect to see
higher cash flow from our Mexican operations starting in Q2
2018."
Strengthening the Corporate Team in Mexico
Strengthening the corporate team with professionals experienced
in projects and metallurgy, planning and scoping, organization
restructuring, as well as continuous improvement capabilities, are
key to providing better support to the operations. Additionally,
technical expertise in the areas of long and short-term planning,
ventilation and geomechanics have been incorporated and assigned to
the Mexican operations. Simultaneously, the Mexican management team
has been reinforced with a new general manager, operations manager
and site managers, to improve the performance of our assets in
Mexico.
Metallurgical and Metal Recovery Improvements
The Company has been focused on improving metallurgical
recoveries at both mills in Mexico
and has been able to achieve consistently higher metallurgical
recovery levels to an average level of 82% at the Piedras Verdes
Mill located at the Bolivar Mine and to an average level of 83% at
the Malpaso Mill located near the Cusi Mine. This has been
accomplished through a reduction in the grind size of the ore
processed to a particle size distribution level of P80 allowing for
the optimal release of mineralization, and milling throughput.
Additionally, at the Cusi Mine recoveries have been increased
through the identification, classification and individual treatment
of separated ore types. The separated ore types are then
processed through individual campaigns, and through the addition of
lime, recoveries are increased. Figures 1 and 2 below
demonstrate the process and timeline for metal recoveries at
Bolivar and Cusi. Furthermore, at Cusi the Company has also
implemented a comprehensive cost analysis for each campaign sent to
the mill to ensure that only economic ore is processed which also
helps to control mill expenses and improve operating margins.
Studies are underway to define capital requirements to expand both
Cusi and Bolivar mines in the following areas: New tailings
facilities, mine development and plant expansions by Q3-2018.
Bolivar Mine Improvement Plans
The Company continues to define higher grade ore sources at
Bolivar West and Bolivar Northwest which are expected to come into
the mine plan by the second half of 2019. However, as a
short-term planning strategy, the Bolivar Mine continues to focus
on developing and mining the El Gallo Inferior zone to centralize
operations, optimize equipment usage and to improve productivity.
Bolivar production for 2018 is expected to reach 3,000 tonnes per
day in Q1 2018. Metallurgical recoveries are expected to remain at
current levels for 2018. The Company continues to work to increase
tonnage at Bolivar through the commissioning of 13 new pieces of
equipment. The new equipment along with the best use of existing
mine infrastructure and equipment will help to maximize ore
delivery to the processing plant. Reducing costs is also very
important to the Company and efforts have been put in place to
optimize capital expenditures on access development at Bolivar.
Cusi Mine Improvement Plans
At the Cusi Mine, the Company is focused on completing access,
development and production of the Santa
Rosa de Lima zone which has wider structures and higher
silver grades than the narrow veins currently being mined. The
Company has reached the Santa Rosa de
Lima structure and is currently developing drifts to mine
this area.
The Company is currently mining selected higher grade structures
at the old mine in addition to campaigning development ore from the
Santa Rosa de Lima structure
containing improved head grades to the mill at Cusi. The
Company expects to gradually increase tonnage from the Santa Rosa de Lima zone until the mill is
operating at its capacity of 650 tonnes per day using only ore from
the Santa Rosa de Lima zone.
It is expected that the main supply of ore in-terms of tonnage and
grade will come from Santa Rosa de
Lima starting in Q2 2018.
The change in focus at Cusi is the result of a geological
reinterpretation and the Company's successful completion of 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. Additionally, structural development at the Santa Rosa de Lima zone will be completed
using long hole mining versus the existing cut and fill methodology
which should result in lower costs going forward.
A prefeasibility study and capex estimate study to define
economic options for potential new Cusi plant are targeted by
Q3-2018.
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 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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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 asme 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.