Sierra Metals’ Consolidated Financial
Results Will Be Released on May 6, 2021
(All Metal Prices Reported in USD)
Sierra Metals Inc. (TSX: SMT) (BVL: SMT) (NYSE AMERICAN:
SMTS) ("Sierra Metals" or "the Company") announces the filing of
Sociedad Minera Corona S.A.'s ("Corona") unaudited Financial
Statements and the Management Discussion and Analysis ("MD&A")
for the first quarter of 2021 ("Q1 2021").
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Image 1: Yauricocha Mine, Chumpe Plant
Flotation Cells (Photo: Business Wire)
The Company holds an 81.8% interest in Corona. All amounts are
presented in US dollars unless otherwise stated and have not been
adjusted for the 18.2% non-controlling interest.
Corona's Highlights for the Three
Months Ended March 31, 2021
- Revenues of US$41.9 million, a 24% increase from Q1 2020.
- Adjusted EBITDA of US$16.2 million, a 65% increase from Q1
2020.
- Total tonnes processed of 326,211, a 14% increase from Q1
2020.
- Net production revenue per tonne of ore milled increased by 8%
to US$128.10.
- Cash Cost per copper equivalent payable pound higher by 26% to
US$1.48.
- Cash cost per zinc equivalent payable pound higher by 9% to
US$0.47.
- All-in sustaining cost ("AISC") per copper equivalent payable
pound higher by 18% to US$2.65.
- All-in sustaining cost ("AISC") per zinc equivalent payable
pound higher by 4% to US$0.85.
- Copper equivalent pounds production decreased 21% to 15.9
million pounds.
- Zinc equivalent pounds production decreased 9% to 49.9 million
pounds.
- $68.0 million of cash and cash equivalents as at March 31,
2021.
- $93.7 million of working capital as at March 31, 2021.
The Yauricocha Mine achieved 14% higher ore throughput in Q1
2021 compared to Q1 2020, despite continuing to face various
COVID-19 related operational challenges during the quarter. Metal
production declined (except zinc and silver) as ore grades fell due
to a decline of tonnage contributions from the high-grade cuerpos
chicos zones. The copper-rich Esperanza zone also had some
operational issues that have since been resolved. Revenues for Q1
2021 increased driven by the higher realized metal prices,
resulting in an increase in operating cash flows and adjusted
EBITDA generated during Q1 2021. AISC per copper equivalent and
zinc equivalent pounds increased due to 21% decline in the copper
equivalent payable pounds and a 9% decline in the zinc equivalent
payable pounds as compared to the same quarter of 2020.
Luis Marchese, CEO of Sierra Metals, commented, "The safety of
our workforce and the communities in which we operate is paramount.
The COVID-19 pandemic has imposed various direct and indirect
challenges which have affected our ability to operate as
effectively as expected. Despite these challenges, we still had
solid revenue and adjusted EBITDA tempered by higher costs due to a
decline in ore grades. We continue to work through the challenges
and issues, and we expect to see improvement as we progress
throughout the year."
He continued, "Looking ahead, we anticipate the receipt of the
ITM permit in the coming months, which will allow us to increase
throughput by 20% and operate at a yearly permitted increased rate
of 3,600 tonnes per day. We also continue advancing the completion
of a Preliminary Feasibility Study, which examines an increase in
throughput to 5,500 tonnes per day starting in 2024. Furthermore,
we continue with our brownfield and greenfield exploration
programs. We have had recent success in the area between the
Esperanza and Cachi Cachi zones with the discovery of high-grade
copper silver and zinc oxide material as reported in a press
release dated April 13, 2020."
He concluded, "Minera Corona and the Yauricocha Mine continues
to have a strong balance sheet to support the Company's capital
expenditures and growth initiatives, and while we are facing
challenges from COVID-19 currently, the mid-term plans remain in
place."
The following table displays selected unaudited financial
information for the three months ended March 31, 2021:
(In thousands of US dollars, except cash cost and revenue
Three
Months Ended
per tonne metrics)
March 31, 2021 March 31, 2020
Var %
Revenue
$
41,925
33,718
24%
Adjusted EBITDA (1)
16,173
9,778
65%
Cash Flow from operations
16,496
10,056
64%
Gross profit
16,149
8,968
80%
Income Tax Expense
(6,842)
(4,770)
43%
Net Income
5,175
2,060
151%
Net production revenue per tonne of ore milled (2)
128.10
118.22
8%
Cash cost per tonne of ore milled (2)
60.43
70.20
-14%
-
Cash cost per copper equivalent payable pound (2)
1.48
1.17
26%
All-In Sustaining Cost per copper equivalent payable pound (2)
2.65
2.24
18%
Cash cost per zinc equivalent payable pound (2)
0.47
0.43
9%
All-In Sustaining Cost per zinc equivalent payable pound (2)
$
0.85
0.82
4%
(In thousands of US dollars, unless otherwise stated)
March 31,
2021 December 31, 2020
Cash and cash equivalents
$
68,039
65,027
Assets
244,013
235,263
Liabilities
57,048
53,473
Equity
186,965
181,790
(1) Adjusted EBITDA includes adjustments for depletion and
depreciation, interest expense and other financing costs, interest
income, share-based compensation, Foreign Exchange (gain) loss and
income taxes; see non-IFRS Performance Measures section of the
Company's MD&A.
(2) All-In Sustaining Cost per copper equivalent pound and
All-In Sustaining Cost per zinc equivalent pound sold are non-IFRS
performance measures and include the cost of sales, treatment and
refining charges, sustaining capital expenditures, general and
administrative expense, and selling expense, and exclude workers'
profit sharing, depreciation, and other non-cash provisions; Cash
cost copper equivalent pound sold and cash cost per zinc equivalent
pound sold, net production revenue per tonne of ore milled, and
cash cost per tonne of ore milled are non-IFRS performance
measures; see non-IFRS Performance Measures section of the
Company’s MD&A.
The following table displays average realized metal prices
information for the quarter ended March 31, 2021 vs March 31,
2020:
Average realized prices
Quarter ended March 31
Increase In US$
2021
2020
(%)
Silver ($/oz)
26.44
16.57
60%
Copper ($/lb)
3.88
2.53
53%
Zinc ($/lb)
1.24
0.93
33%
Lead ($/lb)
0.92
0.80
15%
Gold ($/oz)
1,778
1,585
12%
Corona's Financial Highlights for the
Three Months Ended March 31, 2021
- Revenues of $41.9 million for Q1 2021 compared to $33.7 million
in Q1 2020. Revenues increased largely as a result of higher
realized metal prices and lower treatment and refining costs in Q1
2021 as compared to the same quarter of 2020. Metal sales
quantities declined during Q1 2021 due to lower production
resulting from lower head grades during the quarter. Copper, gold
and silver sales declined by 52%, 29% and 9% as compared to Q1
2020, while zinc and lead sales increased by 10% and 6%
respectively. Copper equivalent payable pounds for Q1 2021
decreased by 21%, whereas Zinc equivalent payable pounds for Q1
2021 decreased by 9% as compared to the same quarter of 2020.
- Cash cost per copper equivalent payable pound was $1.48 for Q1
2021 compared to $1.17 for Q1 2020. Cash cost per zinc equivalent
payable pound sold was $0.47 for Q1 2021 compared to $0.43 for Q1
2020 at the Yauricocha Mine.
- All-in sustaining cost ("AISC") per copper equivalent payable
pound increased to $2.65 for Q1 2021 compared to $2.24 for Q1 2020.
AISC per zinc equivalent payable pound sold was $0.85 for Q1 2021
compared to $0.82 for Q1 2020. The increase in AISC during Q1 2021
was mainly due to the 21% decline in the copper equivalent pounds
sold and 9% decline in the zinc equivalent pounds sold as compared
to the same quarter of 2020.
- Adjusted EBITDA of $16.2 million for Q1 2021 as compared to
$9.8 million for the same quarter of 2020, higher primarily due to
increased net income from higher metal prices.
- Operating cash flows before movements in working capital of
$16.5 million for Q1 2021, compared to US$10.1 million for Q1 2020.
The increase in operating cash flows before movements in working
capital for Q1 2021 was primarily due to the increase in revenues,
discussed previously.
- Cash and cash equivalents of $68.0 million as at March 31,
2021, compared to $65.0 million as at December 31, 2020. Cash and
cash equivalents increased due to $10.4 million of cash generated
from operating activities offset by $6.4 million of cash used in
investing activities and $1.0 million used in financing
activities.
- Net income of $5.2 million, or $0.144 per share for Q1 2021
compared to net income of $2.1 million, or $0.057 per share for Q1
2020.
Corona's Operational Highlights for the
Three Months Ended March 31, 2021:
The following table displays the production results for the
three months ended March 31, 2021:
Yauricocha Production Q1 2021 Q1 2020 %
Var. Tonnes processed
326,211
285,225
14%
Daily throughput
3,728
3,260
14%
Silver grade (g/t)
54.34
65.86
-17%
Copper grade
0.56%
1.14%
-51%
Lead grade
1.34%
1.56%
-14%
Zinc grade
3.71%
3.91%
-5%
Gold Grade (g/t)
0.43
0.69
-38%
Silver recovery
79.05%
82.01%
-4%
Copper recovery
66.26%
75.42%
-12%
Lead recovery
90.16%
87.91%
3%
Zinc recovery
90.34%
87.96%
3%
Gold Recovery
19.77%
19.89%
-1%
Silver production (000 oz)
451
495
-9%
Copper production (000 lb)
2,682
5,384
-50%
Lead production (000 lb)
8,706
8,608
1%
Zinc production (000 lb)
24,123
21,646
11%
Gold Production (oz)
890
1,254
-29%
Copper equivalent pounds (000's)(1)
15,937
20,147
-21%
Zinc equivalent pounds (000's)(1)
49,867
54,605
-9%
(1) Copper and zinc equivalent pounds for Q1 2020 were
calculated using the following realized prices: $26.44/oz Ag,
$3.88/lb Cu, $1.24/lb Zn, $0.92/lb Pb, $1,778/oz Au. Copper and
zinc equivalent pounds for Q1 2019 were calculated using the
following realized prices: $16.57/oz Ag, $2.53/lb Cu, $0.93/lb Zn,
$0.80/lb Pb, $1,585/oz Au.
(2) The decrease in copper equivalent
pounds was higher than the decrease in zinc equivalents due to the
53% increase in realized prices for copper ($3.88/lb in Q1 2021
versus $2.53/lb in Q1 2020) as compared to the 34% increase in
realized prices for zinc ($1.24/lb in Q1 2021 versus $0.93/lb in Q1
2020)
Quality Control
Américo Zuzunaga, FAusIMM CP (Mining Engineer) and Vice
President of Corporate Planning, is a Qualified Person under
National Instrument 43-101 – Standards of Disclosure for Mineral
Projects.
Augusto Chung, FAusIMM CP (Metallurgist) and Vice President of
Metallurgy and Projects, is a Qualified Person under National
Instrument 43-101 – Standards of Disclosure for Mineral
Projects.
About Sierra Metals
Sierra Metals Inc. is a diversified Canadian mining company
focused on the production and development of precious and base
metals from its polymetallic Yauricocha Mine in Peru, and 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 Toronto Stock Exchange
and the Bolsa de Valores de Lima under the symbol "SMT" and on the
NYSE American Exchange under the symbol "SMTS".
For further information regarding Sierra Metals, please visit
www.sierrametals.com.
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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 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, the risks described under the heading "Risk
Factors" in our Annual Information Form dated March 18, 2021 in
respect of the year ended December 31, 2020 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.
The risk factors referred to above 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.
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version on businesswire.com: https://www.businesswire.com/news/home/20210503005346/en/
Mike McAllister V.P., Investor Relations Sierra Metals
Inc. +1 (416) 366-7777 Email: info@sierrametals.com
Ed Guimaraes CFO Sierra Metals Inc. +1(416) 366-7777
Luis Marchese CEO Sierra Metals Inc. +1(416) 366-7777
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