Sierra Metals Inc. (TSX: SMT) (BVL: SMT) (NYSE AMERICAN: SMTS)
("Sierra Metals" or "the Company") announces today that its Board
of Directors (the "Board") has completed its previously announced
review of strategic alternatives.
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Image 1: Raptor Drill at Bolivar (Photo:
Business Wire)
Based on an extensive review of various alternatives, the Board
has determined, in consultation with its financial and legal
advisors, that maximum value for shareholders will be delivered
through the pursuit by the Company of various strategic
value-enhancing opportunities.
Within its current assets and diversified extensive resource
base, the Company will continue to focus its efforts on growing the
production of the metals expected to feed into the anticipated
global infrastructure supply demands. The increased focus will
apply specifically to copper and steel-making products (zinc and
iron ore), with the production of the precious metals as a valuable
cost-credit byproduct.
Furthermore, the Company has completed an actionable review of
its assets and will consider appropriate further action over the
Company's portfolio of assets. This action could take the form of
divestments, joint ventures ("JVs") or partnerships, and it could
include assets such as the Cusi Silver Mine or exploration targets
which lie outside the current operating areas.
Sierra Metals believes in the importance of Environmental,
Social and Corporate Governance and will proceed with a heightened
focus on these matters with a view to maintaining the best
applicable practices in each of these areas. We strive for
excellence in fulfilling our environmental and social duties and
responsibilities, ultimately sharing increased wellbeing with our
workforce and in the communities where we operate.
The Company will continue with a disciplined capital allocation
approach and the use of funds on sustaining and growth projects,
using a stringent stage-gate process with a close follow-up on
implementation and delivery of projects which include:
- Delivery of current Prefeasibility Studies for mine expansion
at our 3 operations, starting with Bolivar Mine, followed by
Yauricocha and Cusi.
- Advancing with the inclusion into the Company's mine plans of
certain near-term underground and brownfield mine opportunities
with the aim of increasing the return at the Yauricocha and Bolivar
Mines.
Following COVID restrictions that limit the Company on its
exploration activities, greenfield exploration on our extensive
110,000-hectare land packages will be reactivated in due course to
develop new and expanded mineral resource opportunities. The
Company will be open to JVs and partnerships for these
opportunities.
Jose Vizquerra-Benavides, Chairman of the Board of Sierra
Metals, said, "We have reached the end of the strategic review
process announced early this year. This process, which has taken
longer than usual due to COVID, has been instrumental in
highlighting the value of our current operations and the
value-enhancing opportunities that are available for development.
The process has allowed us to develop a strategy that will guide
our efforts for the coming years, including a renewed focus on
green and steel-related metals, the inclusion of added value from
our current extensive land holdings and shared wellbeing with our
stakeholders."
Luis Marchese, CEO of Sierra Metals, said: "The Company expects
to have more robust EBITDA and free cash flow starting next year
and carrying on into the coming years. This is a benefit of the
recent throughput expansions, which are expected to increase
production across our suite of metals, hand in hand with
strengthened metal prices based on current consensus metal price
projections. Our newly instituted dividend policy has been
inaugurated on the back of these positive developments and speaks
to our belief in Company and our ability to deliver on our growth
initiatives. Over the past several years, we have made significant
changes across the organization, streamlining our business,
strengthening our team, optimizing our operations, and driving
much-improved financial performance. Our operations have not only
proven themselves to be quite resilient in these uncertain times,
but we also expect to emerge from the pandemic and the strategic
review process as a significantly stronger Company with a strong
focus on growth and value creation for all shareholders as we
execute our strategy."
Annual Dividend
In addition, the Board has authorized the payment of an annual
dividend to consist of a base dividend of US$5 million or US$0.03
per share plus an additional amount based on available cash flows
generated each year after accounting for planned capital spending,
distributions to non-controlling interests, greenfield exploration
and mandatory debt service. The initial dividend is expected to be
declared in November 2021 and paid to shareholders in December
2021. Additional details of this dividend will be provided in a
subsequent press release.
Appointment of New
Directors
The Board is also pleased to announce the appointment of Carlos
E. Santa Cruz and Oscar M. Cabrera to the Board, effective
immediately. Messrs. Cabrera and Santa Cruz have been appointed
following the resignation of two directors earlier this year.
Mr. Santa Cruz is a Mining Engineer with over 40 years of
experience of strong international managerial background in mining
operations at a senior level. He held positions with major mining
companies, including Senior Vice-President of Australian and New
Zealand Operations and Senior Vice-President of South American
Operations for Newmont. He currently sits as Chairman of the Board
for BISA Ingenieria de Proyectos S.A.. and Director for JRC
Ingeniería y Construcción S.A.C. Mr. Santa Cruz is an Independent
Mining Consultant and Part-time Professor at Pontificia Universidad
Católica and is a member of Industry Advisory Committees at Penn
State and Piura University. Chairman of the Board for CIMADE, NGO
oriented to promote sustainable mining and infrastructure
megaprojects. Mr. Santa Cruz holds a Ph.D., Mining Engineering and
M Eng., Industrial Engineering from Penn State University, as well
as the Advanced Management Program from Harvard University. Mr.
Santa Cruz is a Peruvian Citizen.
Mr. Cabrera is a Senior equity analyst with over 20 years of
experience covering the metals and mining industry for bulge
bracket investment banks and Canadian financial institutions,
including Goldman Sachs, Merrill Lynch Canada and CIBC World
Markets. He obtained recognition for industry thought leadership,
fundamental commodity analysis and strong industry relationships,
which has led to advisory roles for public mining companies,
including Nexa Resources S.A. He also participated in the vetting
of and advising on primary and secondary offerings in Canada, the
U.S. and Europe. Mr. Cabrera holds a MBA from York University, a M
Eng. in Structural Engineering from the University of Toronto and a
B. Sc in Civil Engineering from the Instituto Tecnológico y de
Estudios Superiores de Monterrey. Mr. Cabrera is a Canadian
Citizen, originally from Mexico.
Jose Vizquerra-Benavides commented, "We are extremely pleased to
have Carlos and Oscar join the Board of Sierra. Their extensive
knowledge of mining operations and projects both in Peru and Mexico
as well as commodity analysis and capital markets will benefit the
Company as we progress on a plan of growth and value creation for
all stakeholders."
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 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".
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 (collectively, "forward-looking
information"). Forward-looking information includes, but is not
limited to, statements with respect to the date of the 2020
Shareholders' Meeting and the anticipated filing of the
Compensation Disclosure. 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 the Company's annual information form dated March 30,
2020 for its fiscal year ended December 31, 2019 and other risks
identified in the Company's filings with Canadian securities
regulators and the United States Securities and Exchange
Commission, which filings are available at www.sedar.com and
www.sec.gov, respectively.
The risk factors referred to above are not an exhaustive list of
the factors that may affect any of the Company's forward-looking
information. Forward-looking information includes statements about
the future and is 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 such 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/20211007005386/en/
Mike McAllister, CPIR Vice President, Investor Relations
Sierra Metals Inc. Tel: +1 (416) 366-7777 Email:
info@sierrametals.com
Luis Marchese CEO Sierra Metals Inc. Tel: +1 (416)
366-7777
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