Sierra Metals Inc. (TSX: SMT) (BVL: SMT) (NYSE AMERICAN:
SMTS) (“Sierra Metals” or “the Company”) is pleased to report first
quarter 2019 production results featuring the highest level of
quarterly throughput to date at its Cusi Mine in Mexico.
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.
First Quarter 2019 Production
Highlights
- Silver production of 0.7 million
ounces; a 16% increase from Q1 2018
- Lead production of 7.0 million
pounds; a 10% increase from Q1 2018
- Gold production of 1,986 ounces; a
2% increase from Q1 2018
- Copper production of 7.7 million
pounds; a 4% decrease from Q1 2018
- Zinc production of 16.4 million
pounds; a 10% decrease from Q1 2018
- Zinc equivalent production of 50.6
million pounds; a 7% increase from Q1 2018
- Record quarterly throughput at the
Cusi Mine in Mexico
- Production lost during the illegal
strike action at Yauricocha should not materially affect the
Company’s annual production guidance
The Company achieved record quarterly throughput from the Cusi
Mine, and the third highest quarterly throughput from the Bolivar
Mine, continuing the successful production increases realized in
Mexico during 2018. Consolidated production of silver increased 16%
to 0.7 million ounces, copper declined 4% to 7.7 million pounds,
lead increased 10% to 7.0 million pounds, zinc declined 10% to 16.4
million pounds, and gold increased 2% to 1,986 ounces compared to
Q1 2018.
The Yauricocha Mine experienced a 14% reduction in throughput
during Q1 2019 compared to Q1 2018 due to the illegal strike action
initiated by members of the Union of the Mine and Metallurgical
Workers of Minera Corona on March 19, 2019. This illegal strike was
resolved on April 12, 2019, however, resulted in a total of 12 days
of lost production during March 2019. Regular operations at the
mine and mill resumed on April 14, 2019, and management believes
that any production lost during this strike action should not
materially affect the Company’s annual production guidance. Despite
the reduction in throughput, higher head grades and recoveries for
all metals, except gold head grades, realized at Yauricocha
resulted in a 3% increase in zinc equivalent pounds produced during
Q1 2019 compared to Q1 2018.
At Bolivar, a 14% decline in copper head grades, and slightly
lower silver and gold recoveries, offset the increase in silver and
gold head grades, and copper recoveries, and resulted in an 7%
decrease in copper equivalent pounds produced during Q1 2019
compared to Q1 2018. At Cusi, throughput reached approximately 815
tonnes per day (“tpd”) during Q1 2019, and the Company continues to
work towards reaching the 1,200 tpd mark during Q2 2019. The 165%
increase in throughput realized during Q1 2019 resulted in a 64%
increase in silver equivalent ounces produced, despite lower head
grades and recoveries for all metals as we continue to develop
deeper into the Santa Rosa de Lima zone which has higher head
grades.
Igor Gonzales, President and CEO of Sierra Metals, commented:
“The Company has started 2019 with solid production results despite
an illegal strike action which occurred at our Yauricocha Mine.
This can be attributed to in part to stronger performance from our
Mexican Mines including record production at the Cusi Mine where we
are reaping the benefits of operational improvement programs and
the initial stage of mill expansion at both the Cusi and Bolivar
Mines. The Company has also initiated scoping studies which are
expected by mid-year 2019 to analyze future operational production
increases and continue development at all three Mines. We are also
working to update the NI 43-101 Technical Reports with an updated
report expected at the end of Q2-2019 for the Yauricocha Mine, and
at the end of Q4-2019 for the Bolivar and Cusi Mines.
Yauricocha, as noted above did experience an illegal strike
action which impacted production in Q1-2019, however, on an
annualized basis any production lost during should not materially
affect the Company’s annual production guidance. Additionally, the
Company is working with experts from SRK on new sublevel cave and
block cave technique plans which are expected to optimize
operations and continue to improve the whole asset moving
forward.
Consolidated Production
Results
Consolidated Production 3 Months Ended
2019 Guidance Q1
2019 Q1 2018 % Var.
Low High
Tonnes processed
(mt) 568,401 557,710 2% Daily throughput
6,496 6,374 2%
Silver ounces (000's) 691
594 16% 3,730 4,176 Copper pounds
(000's) 7,732 8,090 -4% 45,000
50,400 Lead pounds (000's) 6,954 6,312
10% 25,500 28,600 Zinc pounds (000's)
16,421 18,214 -10% 72,400 81,100
Gold ounces 1,986 1,952 2% 8,100
9,000
Silver equivalent ounces
(000's)(1)
3,988 4,394 -9% 19,478
21,812 Copper equivalent pounds (000's)(1)
21,767 23,445 -7% 107,035
119,858 Zinc equivalent pounds (000's)(1)
50,562 47,209 7% 261,545 292,880
(1) Silver equivalent ounces and copper
and zinc equivalent pounds for Q1 2019 were calculated using
the following realized prices: $15.57/oz
Ag, $2.85/lb Cu, $0.94/lb Pb, $1.23/lb Zn, $1,305/oz Au.
Silver equivalent ounces and copper and
zinc equivalent pounds for Q1 2018 were calculated
using the following realized prices:
$16.75/oz Ag, $3.14/lb Cu, $1.15/lb Pb, $1.56/lb Zn, $1,334/oz
Au.
Yauricocha Mine, Peru
The Yauricocha Mine processed 233,814 tonnes during Q1 2019,
representing a 14% decrease from Q1 2018. The decline in throughput
was due to the illegal strike action initiated by members of the
Union of the Mine and Metallurgical Workers of Minera Corona on
March 19, 2019. This illegal strike was resolved on April 12, 2019,
however, resulted in a total of 12 days of lost production during
March 2019. Regular operations at the mine and mill will resume on
April 14, 2019, and management believes that any production lost
during this strike action should not materially affect the
Company’s annual production guidance.
Despite the decrease in throughput realized at Yauricocha during
Q1 2019, higher head grades and recoveries of all metals, except
gold head grades, were realized which resulted in a 3% increase in
zinc equivalent metal production compared to Q1 2018. The higher
lead head grades and lead production realized during Q1 2019 was
the result of increased production from the cuerpos chicos that
contained higher lead grades during the quarter. Higher copper head
grades resulted from the inclusion of certain copper-enriched zones
at Esperanza, polymetallic ore from the Central Mine Zone, and a
small inclusion of polymetallic ore from the cuerpos chicos.
The significant increases in silver, copper and lead head grades
and recoveries resulted in a 1% increase in silver ounces produced,
a 4% increase in copper pounds produced, and a 9% increase in lead
pounds produced in Q1 2019, despite the lower throughput.
A summary of production from the Yauricocha Mine for Q1 2019 is
provided below:
Yauricocha Production 3 Months Ended
Q1 2019 Q1 2018
% Var. Tonnes
processed (mt) 233,814 271,389 -14% Daily
throughput 2,672 3,102 -14%
Silver grade (g/t) 63.51
59.52 7% Copper grade 1.00% 0.89% 13% Lead grade 1.45% 1.24% 17%
Zinc grade 3.56% 3.45% 3% Gold Grade (g/t) 0.55 0.61 -9%
Silver recovery 77.23% 70.50% 10% Copper recovery 74.80% 70.22% 7%
Lead recovery 88.19% 81.51% 8% Zinc recovery 89.51% 87.94% 2% Gold
Recovery 18.09% 15.77% 15%
Silver ounces
(000's) 369 366 1% Copper pounds
(000's) 3,863 3,727 4% Lead pounds
(000's) 6,605 6,069 9% Zinc pounds
(000's) 16,421 18,144 -9% Gold
ounces 753 835 -10%
Zinc equivalent
pounds (000's)(1)
35,911 34,767 3%
(1) Silver equivalent ounces and copper
and zinc equivalent pounds for Q1 2019 were calculated
using the following realized prices:
$15.57/oz Ag, $2.85/lb Cu, $0.94/lb Pb, $1.23/lb Zn, $1,305/oz
Au.
Silver equivalent ounces and copper and
zinc equivalent pounds for Q1 2018 were calculated using the
following realized prices:
$16.75/oz Ag, $3.14/lb Cu, $1.15/lb Pb,
$1.56/lb Zn, $1,334/oz Au.
Bolivar Mine, Mexico
The Bolivar Mine processed 263,238 tonnes in Q1 2019,
representing a 1% increase over Q1 2018. Average daily throughput
realized during the quarter was approximately 3,000 tpd, and the
Company expects to reach 3,600 tpd during Q2 2019. The 14% decline
in copper head grades, and slightly lower silver and gold
recoveries, offset the increase in silver and gold head grades, and
copper recoveries, and resulted in an 7% decrease in copper
equivalent pounds produced during Q1 2019 compared to Q1 2018. In
Q1 2019, copper production decreased by 11% to 3,869,000 pounds,
silver production increased 8% to 130,000 ounces, and gold
production increased 5% to 1,100 ounces compared to Q1 2018.
Development and infrastructure improvements continue in the
effort to push throughput at Bolivar to 4,000 tpd during the second
half of 2019. During the rest of 2019, target mining areas will be
the Gallo Inferior, Mina de Fierro, Chimneys, Breccias and Gallo
Superior orebodies. Infill drilling will continue on the Bolivar
West and Gallo Inferior areas, while mine development will focus on
the Gallo Inferior and Breccia zones. This work will allow the
Company to increase the number of minable stopes available in order
to increase throughput at the plant.
A summary of production for the Bolivar Mine for Q1 2019 is
provided below:
Bolivar Production 3 Months Ended
Q1 2019 Q1 2018
% Var. Tonnes
processed (mt) 263,238 259,375 1% Daily
throughput 3,008 2,964 1%
Copper grade 0.81% 0.95% -14%
Silver grade (g/t) 19.47 17.85 9% Gold grade (g/t) 0.19 0.18 8%
Copper recovery 82.24% 80.65% 2% Silver recovery 79.14%
80.91% -2% Gold recovery 67.87% 70.94% -4%
Copper
pounds (000's) 3,869 4,363 -11% Silver
ounces (000's) 130 120 8% Gold
ounces 1,100 1,048 5%
Copper
equivalent pounds (000's)(1)
5,083 5,450
-7%
(1) Silver equivalent ounces and copper
and zinc equivalent pounds for Q1 2019 were calculated
using the following realized prices:
$15.57/oz Ag, $2.85/lb Cu, $0.94/lb Pb, $1.23/lb Zn, $1,305/oz
Au.
Silver equivalent ounces and copper and
zinc equivalent pounds for Q1 2018 were calculated
using the following realized prices:
$16.75/oz Ag, $3.14/lb Cu, $1.15/lb Pb, $1.56/lb Zn, $1,334/oz
Au.
Cusi Mine, Mexico
At Cusi, throughput reached approximately 815 tonnes per day
(“tpd”) during Q1 2019, and the Company continues to work towards
reaching the 1,200 tpd mark during Q2 2019. The 165% increase in
throughput realized during Q1 2019 resulted in a 64% increase in
silver equivalent ounces produced, despite lower head grades and
recoveries for all metals as we continue to develop deeper into the
Santa Rosa de Lima zone which has higher head grades.
Silver production of 192,000 ounces increased 78%, gold
production of 133 ounces increased 94%, and lead production of
349,000 pounds increased 44% in Q1 2019 compared to Q1 2018.
A revised LOM plan is nearing completion at Cusi, and we expect
to have an updated NI 43-101 report completed during Q4 2019, which
will include a maiden reserve estimate for the mine. The Company
continues to increase mill feed from the Santa Rosa de Lima zone,
while mining selected structures in the older part of the mine.
A summary of production for the Cusi Mine for Q1 2019 is
provided below:
Cusi Production
3 Months Ended
Q1 2019
Q1 2018
%Var.
Tonnes processed
(mt) 71,349 26,945 165% Daily throughput
815 308 165%
Silver grade (g/t)
105.27 143.47 -27% Gold grade (g/t) 0.15 0.18 -12% Lead grade 0.30%
0.48% -39% Zinc grade 0.32% 0.51% -38% Silver recovery
79.53% 86.69% -8% Gold recovery 37.53% 45.26% -17% Lead recovery
75.21% 84.21% -11% Zinc recovery 0.00% 23.44% -100%
Silver ounces (000's) 192
108 78% Gold ounces 133 69
94% Lead pounds (000's) 349 243
44% Zinc pounds (000's) 0 71
-100%
Silver equivalent
ounces (000's)(1)
224 136 64%
(1) Silver equivalent ounces and copper
and zinc equivalent pounds for Q1 2019 were calculated
using the following realized prices:
$15.57/oz Ag, $2.85/lb Cu, $0.94/lb Pb, $1.23/lb Zn, $1,305/oz
Au.
Silver equivalent ounces and copper and
zinc equivalent pounds for Q1 2018 were calculated
using the following realized prices:
$16.75/oz Ag, $3.14/lb Cu, $1.15/lb Pb, $1.56/lb Zn, $1,334/oz
Au.
Quality Control
All technical data contained in 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 key discoveries and still has
many more exciting brownfield exploration opportunities at all
three Mines in Peru and Mexico that are within close proximity to
the existing mines. Additionally, the Company also 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”.
Continue to Follow, Like and Watch our 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 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, 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 were
calculated in accordance with the Canadian National Instrument
43-101 and the Canadian Institute of Mining and Metallurgy
Classification system. These standards differ significantly from
the requirements of the U.S. Securities and Exchange Commission
(“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.
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version on businesswire.com: https://www.businesswire.com/news/home/20190415005341/en/
For further information regarding Sierra Metals, please visit
www.sierrametals.com or
contact:Mike McAllisterV.P., Corporate DevelopmentSierra
Metals Inc.+1 (416) 366-7777Email: info@sierrametals.comorGordon
BabcockChief Operating OfficerSierra Metals Inc.+ 1 (416)
366-7777orIgor GonzalesPresident & CEOSierra Metals
Inc.+1(416) 366-7777
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