(All $ figures reported in USD)
- Consolidated mill throughput increased 3% mainly due to higher
throughput at Yauricocha and Cusi. Lower throughput at
Bolivar.
- Copper equivalent production decreased 24% in 2021 compared to
2020, due to lower grades and COVID-19 related operational
difficulties during the year.
Sierra Metals Inc. (TSX: SMT) (BVL: SMT) (NYSE AMERICAN:
SMTS) (“Sierra Metals” or “the Company”) is pleased to report
fourth quarter 2021 and full year 2021 production results, which
include results from Sierra Metals’ three underground mines: The
Yauricocha polymetallic mine in Peru, and the Bolivar copper and
Cusi silver mines in Mexico.
Luis Marchese, CEO of Sierra Metals, commented: “2021 has been
quite a difficult year for the company. Declining grades were
coupled with unprecedented COVID-related operational difficulties
at our three operations. For 2022, although Cusi and Yauricocha are
approaching normalized operations and staffing, Bolivar needs to
accelerate infill drilling and mine development in order to
increase the availability of ore during the first six months of
2022.”
As stated during Q3 2021 financial results, there were several
operational issues at the Bolivar Mine, including lack of equipment
and decreased workforce availability which impacted mine
development, infill drilling and head grades. Bolivar’s fourth
quarter production reflects the continued challenges due to these
temporary factors and consequently, consolidated production was
below guidance for the year. While efforts are underway to
normalize operations, we maintain our expectation that it will take
at least until the end of Q2 2022 to catch up. Additionally, we
recognize that Sierra Metals is currently experiencing the early
effects of the latest wave of COVID-19 infections. While it is too
soon to determine the impact of this latest wave, we anticipate
reduced workforce levels at our operations in both Peru and Mexico
during Q1 and potentially into Q2.”
He concluded, “For these reasons, Sierra Metals has decided to
postpone the issuance of its 2022 production and cost guidance
until March 16, 2022 at the time of publishing our year-end
financial results. It is our intention to provide guidance when we
are able to provide accurate and more meaningful targets. At this
time, our focus remains the health and safety of our employees and
communities. We will continue to overcome the obstacles presented
due to the lagging effect of COVID-19 on our workforce, community,
suppliers and service providers; which has had an impact both
directly and indirectly on our operations. We remain confident that
once these challenges are behind us, we can look forward to making
progress on exploration initiatives as well as projects to advance
our efficiencies and take full advantage of growth opportunities
across each of our operations.”
2021 Consolidated Production
Highlights
- Copper production of 31.8 million pounds; a 28% decrease from
2020
- Zinc production of 79.3 million pounds; a 3% decrease from
2020
- Lead production of 30.8 million pounds; a 7% decrease from
2020
- Silver production of 3.5 million ounces; a 2% increase from
2020
- Gold production of 9,572 ounces; a 30% decrease from 2020
- Total of 2.9 million ore tonnes processed; a 3% increase from
2020
- Consolidated copper equivalent production of 89.9 million
pounds; a decrease of 24% from 2020
The Company achieved annual throughput that was 3% higher than
the 2020 annual throughput.
Fourth Quarter 2021 Production
Highlights
- Copper production of 6.1 million pounds; a 43% decrease from Q4
2020
- Zinc production of 14.9 million pounds; a 31% decrease from Q4
2020
- Lead production of 6.0 million pounds; a 21% decrease from Q4
2020
- Silver production of 0.8 million ounces; a 13% decrease from Q4
2020
- Gold production of 1,863 ounces; a 45% decrease from Q4
2020
Consolidated quarterly ore throughput of 590,057 tonnes
decreased by 24% over Q4 2020, mainly due to the 41% decline in the
Bolivar Q4 2021 throughput, as the mine continued to face the
residual issues of the COVID restrictions. Quarterly throughput at
the Yauricocha mine declined 11% as compared to Q4 2020. The 2021
average annual permitted capacity for Yauricocha is calculated as a
weighted average of the original capacity of 3,000 tonnes per day
(“tpd) and the increased capacity of 3,600 tpd (as of June 16,
2021). Operating at a rate of more than 3,700 tpd for the first
nine months of the year, the mine attained this maximum annual
permitted capacity before the end of the year. Mine operations were
halted a few days before year end resulting in Q4 2021 Yauricocha
production being lower than Q4 2020.
Copper equivalent production at Yauricocha declined 32% during
Q4 2021 due to a 11% decrease in quarterly throughput combined with
lower head grades and recoveries, except for gold and copper.
Bolivar Q4 2021 throughput, which was significantly impacted by
COVID and its impact on mine development, was 41% lower than Q4
2020. Lower throughput combined with negative variances in grades
resulted in 65% lower copper equivalent production from Bolivar in
Q4 2021 as compared to Q4 2020.
Q4 2021 silver equivalent production at the Cusi mine was 21%
higher than Q4 2020, driven by the 3% higher throughput and higher
grades for all metals during the quarter as compared to Q4
2020.
Consolidated Production
Results
Consolidated Production Three Months Ended December
31, Twelve Months Ended December 31,
2021
2020
% Var.
2021
2020
% Var.
Tonnes processed
590,057
778,236
-24%
2,902,220
2,828,877
3%
Daily throughput
6,743
8,894
-24%
8,292
8,083
3%
Silver production (000 oz)
805
922
-13%
3,527
3,465
2%
Copper production (000 lb)
6,071
10,626
-43%
31,757
44,262
-28%
Lead production (000 lb)
6,011
7,630
-21%
30,816
32,972
-7%
Zinc production (000 lb)
14,913
21,612
-31%
79,281
81,868
-3%
Gold Production (oz)
1,863
3,363
-45%
9,572
13,771
-30%
Copper equivalent pounds (000's)(1)(2)
17,841
29,267
-39%
89,926
118,214
-24%
(1) Copper equivalent pounds for Q4 2021 were calculated
using the following realized prices: $23.41/oz Ag, $4.40/lb Cu,
$1.55/lb Zn, $1.06/lb Pb, $1,795/oz Au. Copper equivalent pounds
for Q4 2020 were calculated using the following realized prices:
$24.30/oz Ag, $3.32/lb Cu, $1.22/lb Zn, $0.89/lb Pb, $1,859/oz Au.
Copper equivalent pounds for full year 2021 were calculated using
the following realized prices: $25.21/oz Ag, $4.23/lb Cu, $1.37/lb
Zn, $1.00/lb Pb, $1,796/oz Au. Copper equivalent pounds for full
year 2020 were calculated using the following realized prices:
$20.59/oz Ag, $2.80/lb Cu, $1.03/lb Zn, $0.83/lb Pb, $1,771/oz Au.
(2) In August 2021, the Company revised its annual production
guidance to 110 million to 115 million copper equivalent pounds,
using the following budgeted metal prices: $25.15/oz Ag, $3.12/lb
Cu, $1.09/lb Zn, $0.90/lb Pb and $1,936/oz Au. For direct
comparison, the full year 2021 copper equivalent production
calculated at same metal prices is 102.7 million pounds.
Yauricocha Mine, Peru
The Yauricocha mine Q4 2021 production was 11% lower than Q4
2020, as the 3,700 tpd throughput rate in the first nine months of
the year allowed the mine to achieve its annual permitted capacity
during December causing the mine to halt operations before the end
of the year. The mine received its Informe Tecnico Minero (“ITM”)
permit in June 2021, allowing for an operating capacity of 3,600
tpd. Copper equivalent metal production in Q4 2021 decreased by 32%
due to lower throughput and lower head grades, due to the inability
to mine in the higher-grade zones.
Yauricocha’s annual throughput was 1,256,847 tonnes,
representing an increase of 12% as compared to the 2020 annual
production. While the mine’s operational flexibility allowed for an
increase in the throughput, accessing targeted grades remained a
challenge throughout the year due to the regulatory limitations to
access some of the high-grade ore bodies. Metal production declined
as the higher throughput partially compensated for lower grades.
Year over year copper equivalent production decreased 21% in 2021
compared to the prior year. 2021 annual production of silver,
copper, lead, zinc and gold declined by 5%, 25%, 8%, 3% and 5%
respectively compared to 2020 annual production.
A summary of production from the Yauricocha Mine for Q4 2021 has
been provided below:
Yauricocha Production Three Months Ended December 31,
Twelve Months Ended December 31,
2021
2020
% Var.
2021
2020
% Var.
Tonnes processed
277,531
311,946
-11%
1,256,847
1,117,860
12%
Daily throughput
3,172
3,565
-11%
3,591
3,194
12%
Silver grade (g/t)
51.34
53.74
-4%
55.01
61.55
-11%
Copper grade
0.82%
0.95%
-14%
0.74%
1.08%
-31%
Lead grade
1.03%
1.15%
-10%
1.18%
1.45%
-19%
Zinc grade
2.82%
3.59%
-21%
3.23%
3.77%
-14%
Gold Grade (g/t)
0.53
0.57
-7%
0.48
0.61
-21%
Silver recovery
72.26%
79.80%
-9%
77.21%
81.53%
-5%
Copper recovery
76.44%
72.69%
5%
72.92%
74.20%
-2%
Lead recovery
86.55%
88.82%
-3%
88.76%
88.63%
0%
Zinc recovery
86.53%
87.62%
-1%
88.59%
88.13%
1%
Gold Recovery
20.24%
19.34%
5%
21.03%
19.72%
7%
Silver production (000 oz)
331
430
-23%
1,716
1,803
-5%
Copper production (000 lb)
3,836
4,759
-19%
14,856
19,726
-25%
Lead production (000 lb)
5,430
7,040
-23%
29,113
31,605
-8%
Zinc production (000 lb)
14,913
21,612
-31%
79,281
81,868
-3%
Gold Production (oz)
957
1,112
-14%
4,059
4,292
-5%
Copper equivalent pounds (000's)(1)
12,567
18,373
-32%
59,470
75,079
-21%
(1) Copper equivalent pounds for Q4 2021 were calculated
using the following realized prices: $23.41/oz Ag, $4.40/lb Cu,
$1.55/lb Zn, $1.06/lb Pb, $1,795/oz Au. Copper equivalent pounds
for Q4 2020 were calculated using the following realized prices:
$24.30/oz Ag, $3.32/lb Cu, $1.22/lb Zn, $0.89/lb Pb, $1,859/oz Au.
Copper equivalent pounds for full year 2021 were calculated using
the following realized prices: $25.21/oz Ag, $4.23/lb Cu, $1.37/lb
Zn, $1.00/lb Pb, $1,796/oz Au. Copper equivalent pounds for full
year 2020 were calculated using the following realized prices:
$20.59/oz Ag, $2.80/lb Cu, $1.03/lb Zn, $0.83/lb Pb, $1,771/oz Au.
Bolivar Mine, Mexico
During the year 2021, the impacts of COVID-19 have been more
noticeable at the Bolivar mine. A reduced workforce resulted in
delays in infill drilling, mine development and services. The mine
also faced high turnover in middle management and senior management
personnel during the year, which impacted production
performance.
The Bolivar mine processed 227,722 tonnes of ore in Q4 2021, a
41% decrease as compared to the Q4 2020 throughput. Grades were
also negatively impacted by the lack of development and limited
infill drilling information, which necessitated the launch of an
upgraded new infill drilling and mine development program in Q4
2021. Copper equivalent production declined 65% as compared to Q4
2020.
Annual throughput at Bolivar was 1,349,602 tonnes, or a 9%
decrease from the 2020 annual throughput, due to the
afore-mentioned reasons. Copper equivalent production for the full
year 2021 declined 38% as compared to full year 2020.
A summary of production for the Bolivar Mine for Q4 2021 has
been provided below:
Bolivar Production Three Months Ended December 31,
Twelve Months Ended December 31,
2021
2020
% Var.
2021
2020
% Var.
Tonnes processed (t)
227,722
383,607
-41%
1,349,602
1,480,588
-9%
Daily throughput
2,603
4,384
-41%
3,856
4,230
-9%
Copper grade
0.55%
0.79%
-30%
0.72%
0.87%
-17%
Silver grade (g/t)
9.52
14.50
-34%
15.49
19.61
-21%
Gold grade (g/t)
0.11
0.25
-56%
0.16
0.29
-45%
Copper recovery
80.79%
88.21%
-8%
79.28%
86.76%
-9%
Silver recovery
82.34%
83.44%
-1%
81.95%
82.73%
-1%
Gold recovery
78.32%
64.41%
22%
68.88%
64.07%
8%
Copper production (000 lb)
2,235
5,867
-62%
16,901
24,536
-31%
Silver production (000 oz)
57
149
-62%
551
772
-29%
Gold production (oz)
634
2,017
-69%
4,751
8,860
-46%
Copper equivalent pounds (000's)(1)
2,800
8,091
-65%
22,207
35,804
-38%
(1) Copper equivalent pounds for Q4 2021 were calculated
using the following realized prices: $23.41/oz Ag, $4.40/lb Cu,
$1.55/lb Zn, $1.06/lb Pb, $1,795/oz Au. Copper equivalent pounds
for Q4 2020 were calculated using the following realized prices:
$24.30/oz Ag, $3.32/lb Cu, $1.22/lb Zn, $0.89/lb Pb, $1,859/oz Au.
Copper equivalent pounds for full year 2021 were calculated using
the following realized prices: $25.21/oz Ag, $4.23/lb Cu, $1.37/lb
Zn, $1.00/lb Pb, $1,796/oz Au. Copper equivalent pounds for full
year 2020 were calculated using the following realized prices:
$20.59/oz Ag, $2.80/lb Cu, $1.03/lb Zn, $0.83/lb Pb, $1,771/oz Au.
Cusi Mine, Mexico
Q4 2021 throughput at the Cusi mine was 84,804 tonnes or 3%
higher than the Q4 2020 throughput. Grades for Q4 2021 were higher
for all metals, as the mine continued to operate in the high-grade
Northeast Southwest vein system.
Annual production at the Cusi Mine was 295,771 tonnes in 2021,
which was 28% higher than 2020, as the mine operated for the full
twelve months in 2021 as compared to 2020, when Cusi lost more than
a quarter’s production due to the COVID-driven care and
maintenance. Higher throughput and grades resulted in silver
equivalent production which was 21% higher for Q4 2021 and 38%
higher for the full year 2021, as compared to the corresponding
periods of the prior year.
A summary of production for the Cusi Mine for Q4 2021 has been
provided below:
Cusi Production Three Months Ended December 31,
Twelve Months Ended December 31,
2021
2020
% Var.
2021
2020
% Var.
Tonnes processed (t)
84,804
82,683
3%
295,771
230,429
28%
Daily throughput(2)
969
945
3%
845
658
28%
Silver grade (g/t)
179.07
160.62
11%
159.74
149.62
7%
Gold grade (g/t)
0.21
0.19
11%
0.18
0.18
0%
Lead grade
0.39%
0.28%
39%
0.32%
0.29%
10%
Silver recovery (flotation)
85.52%
80.37%
6%
82.98%
80.32%
3%
Gold recovery (lixiviation)
47.29%
46.73%
1%
45.05%
45.75%
-2%
Lead recovery
80.69%
82.79%
-3%
81.78%
82.40%
-1%
Silver production (000 oz)
417
343
22%
1,260
890
42%
Gold production (oz)
272
234
16%
762
619
23%
Lead production (000 lb)
581
590
-2%
1,703
1,367
25%
Silver equivalent ounces (000's)(1)
465
383
21%
1,382
998
38%
(1) Silver equivalent ounces for Q4 2021 were calculated
using the following realized prices: $23.41/oz Ag, $4.40/lb Cu,
$1.55/lb Zn, $1.06/lb Pb, $1,795/oz Au. Silver equivalent ounces
for Q4 2020 were calculated using the following realized prices:
$24.30/oz Ag, $3.32/lb Cu, $1.22/lb Zn, $0.89/lb Pb, $1,859/oz Au.
Silver equivalent ounces for full year 2021 were calculated using
the following realized prices: $25.21/oz Ag, $4.23/lb Cu, $1.37/lb
Zn, $1.00/lb Pb, $1,796/oz Au. Silver equivalent ounces for full
year 2020 were calculated using the following realized prices:
$20.59/oz Ag, $2.80/lb Cu, $1.03/lb Zn, $0.83/lb Pb, $1,771/oz Au.
Quality Control
All technical data contained in this news release has been
reviewed and approved by:
Americo 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.
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 its 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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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 (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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Investor relations Sierra Metals Inc. +1 (416) 366-7777
info@sierrametals.com
Luis Marchese CEO Sierra Metals Inc. +1 (416)
366-7777
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