Sierra Metals' Consolidated Financials to Be
Reported on November 8, 2021
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 third quarter of 2021 (“Q3 2021”).
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Image 1: Train emerging from Yauricocha
Tunnel loaded with ore (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 September 30, 2021
- Revenues of $44.4 million vs. $44.6 million in Q3 2020
- Adjusted EBITDA of $22.7 million vs. $26.2 million in Q3
2020
- Total tonnes processed of 324,196 vs. 318,155 in Q3 2020
- Net production revenue per tonne of ore milled decreased to
$139.94 from $147.59 in Q3 2020
- Copper equivalent pounds production decreased 30% to 15.6
million pounds.
- Cash cost per copper equivalent payable pound increased to
$1.37. All in sustaining cost (“AISC”) per copper equivalent
payable pound increased to $2.83
- $44.1 million of cash and cash equivalents as at September 30,
2021
- $69.8 million of working capital as at September 30, 2021
The Yauricocha mine processed 324,196 tonnes during the third
quarter of 2021, representing a 2% increase over the third quarter
of 2020, despite continuing to face various operational challenges
related to COVID-19. During the third quarter of 2021, the
treatment capacity in the concentrator plant was increased. The
negative variances in the copper sulfide head grades were mainly
due to the delay in the contribution of the Esperanza zone due to
ground conditions, which have since been corrected. The negative
variances in the head grades from the polymetallic zones are due to
the regulatory limitations to access mineral below the 1120 level.
Metal production in the third quarter of 2021 was 25%, 23%, 14% and
13% lower for lead, zinc, copper, and silver, respectively, while
gold production was 9% higher compared to the third quarter of
2020.
Luis Marchese, CEO of Sierra Metals, commented, "The third
quarter was difficult for the Company as we faced difficult
challenges because of sequencing issues due to the COVID-19
limitations carrying over from 2020 and continuing into this year.
Improved metal prices, lower treatment and refining charges, and a
favourable exchange rate have helped offset increased costs while
maintaining the revenue levels recorded in the same quarter last
year. We continue to see improvements in revenue, cashflow and
EBITDA on a 9-month basis over 2020 and expect this to continue
going forward."
He continued, "Looking ahead to the fourth quarter and next
year, we continue to work on the completion of a Preliminary
Feasibility Study to support the planned expansion to 5,500 tonnes
per day, which is expected to be released by Q2 2022. Additionally,
we are also progressing on exploration plans of the near-mine
opportunities at Kilcasca and Tucumachay having recently received
drilling permits for these areas."
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 we continue to work to
improve operations and production and the per share value for all
shareholders."
The following table displays selected unaudited financial
information for the three months and nine months (“9M 2021”) ended
September 30, 2021:
(In thousands of US dollars, except cash cost and revenue
Three Months Ended Nine
Months Ended per tonne metrics)
September 30, 2021 September 30, 2020
Var %
September 30, 2021 September 30, 2020
Var %
Revenue
$
44,353
44,580
-1%
137,108
101,703
35%
Adjusted EBITDA (1)
22,685
26,227
-14%
68,896
43,810
57%
Cash Flow from operations
22,102
24,245
-9%
64,218
41,564
55%
Gross profit
21,460
23,511
-9%
63,383
41,041
54%
Income Tax Expense
(8,860)
(7,467)
19%
(24,813)
(15,176)
64%
Net Income
7,759
12,755
-39%
25,488
16,664
53%
Net production revenue per tonne of ore milled (2)
139.94
147.59
-5%
139.89
126.88
10%
Cash cost per tonne of ore milled (2)
60.18
50.09
20%
60.66
55.75
9%
-
Cash cost per copper equivalent payable pound (2)
1.37
0.82
67%
1.42
0.97
46%
All-In Sustaining Cost per copper equivalent payable pound (2)
2.83
1.93
47%
2.69
2.00
34%
Cash cost per zinc equivalent payable pound (2)
0.44
0.30
47%
0.45
0.36
26%
All-In Sustaining Cost per zinc equivalent payable pound (2)
$
0.91
0.70
30%
0.84
0.73
15%
(In thousands of
US dollars, unless otherwise stated)
September 30,
2021 December 31, 2020 Cash and cash
equivalents
$
44,086
65,027
Assets
239,667
235,263
Liabilities
67,389
53,473
Equity
172,278
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/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 per copper/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.
Corona's Financial Highlights for the
Three and Nine Months Ended September 30, 2021
- Sales revenue of $44.4 million for the third quarter of 2021
compared to $44.6 million for the same period in 2020. Sales
revenue of $137.1 million for the nine-month period ended September
30, 2021, compared to $101.7 million for the same period in 2020.
Sales for the nine-month period have increased due to the reduction
of the treatment and refining costs and the steady rise in metal
prices during the year.
- Adjusted EBITDA of US$22.7 million for the third quarter of
2021 compared to adjusted EBITDA of US$26.2 million for the same
period of 2020. Adjusted EBITDA of US$68.9 million for the nine (9)
month period ended September 30, 2021, compared to US$43.8 million
for the same period in 2020. Adjusted EBITDA for the nine-months
ended September 30, 2021 compared to the same period in 2020 was
higher due primarily to the Company's higher revenues; and the
decrease during the third quarter of 2021 compared to 2020 was due
to lower metal sales.
- Operating cash flow before working capital movements of $22.1
million for the third quarter of 2021 compared to $24.2 million for
the same period in 2020. Operating cash flow before working capital
movements of US$64.2 million for the nine-month period ended
September 30, 2021, compared to US$41.6 million for the same period
in 2020. The variances in the operating cash flow before movements
in working capital for Q3 2021 and for the 9M 2021 compared to the
same periods in 2020 resulted from the level of revenue during the
respective periods.
- Total taxes of $8.9 million for the third quarter of 2021
compared to $7.5 million for the same period in 2020. Total taxes
of US$24.8 million for the nine (9) month period ended September
30, 2020, compared to US$15.2 million for the same period in 2020.
Total taxes have increased in the first nine months of 2021
compared to the same period in 2020 primarily due to higher revenue
earned by the Company.
- Net income of $7.8 million or $0.216 per share for the third
quarter of 2021 compared to net income of $12.8 million or $0.355
per share for the same quarter of 2020. Net income of $25.5 million
or $0.708 per share for the nine months ended September 30, 2021,
compared to net income of $16.7 million or $0.463 per share for the
same period in 2020.
- Cash and cash equivalents of $44.1 million as of September 30,
2021, compared to $65.0 million as of December 31, 2020. Cash and
cash equivalents declined during the nine-month period as the $25.9
million of investment activities and $39.0 million used in
financing activities (mainly related to dividend payments) exceeded
the $44 million generated from operating activities (after working
capital adjustments) during the nine-month period.
Corona's Operational Highlights for the
Three and Nine Months Ended September 30, 2021
Yauricocha Production Three Months Ended September
30, Nine Months Ended September 30,
2021
2020
% Var.
2021
2020
% Var.
Tonnes processed
324,196
318,155
2%
979,316
805,914
22%
Daily throughput
3,705
3,636
2%
3,731
3,070
22%
Silver grade (g/t)
56.84
61.32
-7%
56.04
64.19
-13%
Copper grade
0.87%
1.01%
-14%
0.71%
1.11%
-36%
Lead grade
1.14%
1.52%
-25%
1.23%
1.56%
-21%
Zinc grade
3.06%
4.00%
-24%
3.35%
3.84%
-13%
Gold Grade (g/t)
0.51
0.55
-7%
0.46
0.61
-25%
Silver recovery
76.11%
82.93%
-8%
79.70%
82.56%
-3%
Copper recovery
74.61%
76.20%
-2%
69.84%
76.19%
-8%
Lead recovery
87.33%
89.53%
-2%
90.15%
88.58%
2%
Zinc recovery
87.39%
88.63%
-1%
89.82%
88.32%
2%
Gold Recovery
21.96%
19.19%
14%
20.91%
19.19%
9%
Silver production (000 oz)
451
520
-13%
1,385
1,373
1%
Copper production (000 lb)
4,641
5,419
-14%
11,020
14,967
-26%
Lead production (000 lb)
7,146
9,550
-25%
23,683
24,564
-4%
Zinc production (000 lb)
19,112
24,869
-23%
64,368
60,256
7%
Gold Production (oz)
1,169
1,076
9%
3,102
3,180
-2%
Copper equivalent pounds (000's)(1)
15,596
22,245
-30%
46,775
56,809
-18%
(1) Silver equivalent ounces and copper and zinc equivalent
pounds for Q3 2021 were calculated using the following realized
prices: $24.20/oz Ag, $4.25/lb Cu, $1.36/lb Zn, $1.07/lb Pb,
$1,790/oz Au. Silver equivalent ounces and copper and zinc
equivalent pounds for Q3 2020 were calculated using the following
realized prices: $24.89/oz Ag, $2.97/lb Cu, $1.08/lb Zn, $0.85/lb
Pb, $1,916/oz Au. Silver equivalent ounces and copper and zinc
equivalent pounds for 9M 2021 were calculated using the following
realized prices: $25.81/oz Ag, $4.17/lb Cu, $1.31/lb Zn, $0.99/lb
Pb, $1,796/oz Au. Silver equivalent ounces and copper and zinc
equivalent pounds for 9M 2020 were calculated using the following
realized prices: $19.35/oz Ag, $2.63/lb Cu, $0.97/lb Zn, $0.80/lb
Pb, $1,742/oz Au.
Quality Control
The contents of this press release have been reviewed by Américo
Zuzunaga, FAusIMM CP (Mining Engineer) and Vice President of
Corporate Planning, who 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 with
Green Metal exposure including increasing copper production and
base metal production with precious metals byproduct credits,
focused on the production and development of it’s 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 18,
2021 for its fiscal year ended December 31, 2020 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/20211102006286/en/
Mike McAllister VP, Investor Relations Sierra Metals Inc.
+1 (416) 366-7777 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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