Consolidated Financial Results for Sierra
Metals to Be Released on March 16, 2022
(All metal prices and amounts 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 fourth
quarter of 2021 ("Q4 2021").
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Image 1 Concentrate Truck being loaded at
Yauricocha (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. Sierra Metals
consolidated financial results will be released on March 16,
2022.
Corona's Highlights for the Three
Months Ended December 31, 2021
- Revenues of $43.5 million vs. $45.2 million in Q4
2020
- Adjusted EBITDA of $19.1 million vs. $22.5 million in Q4
2020
- Total tonnes processed decreased by 11% to 277,531 vs.
311,946 in Q4 2020
- Net production revenue per tonne of ore milled increased by
2% to $151.25
- Cash cost per copper equivalent payable pound increased by
39% at $1.61 in Q4 2021
- All-in sustaining cost ("AISC") per copper equivalent
payable increased 25% to $3.09 in Q4 2021
- Copper equivalent production of 12.6 million pounds vs. 18.4
million pounds in Q4 2020
- $32.9 million of cash and cash equivalents as at December
31, 2021
- $58.8 million of working capital as at December
31,2021
Luis Marchese, CEO of Sierra Metals, commented, "Despite the
reduced production this quarter, on a year over year basis, the
Mine’s performance reached its throughput targets. Although grades
were lower, a 12% increase in annual throughput along with higher
realized metal prices and lower treatment and refining charges,
resulted in a 23% increase in revenue and a 33% increase in
adjusted EBITDA.
He continued, “Production at Yauricocha was halted before the
quarter’s end when the Mine achieved its annual permitted
throughput of 1,256,450 tonnes. An 11% decrease in quarterly
production, coupled with lower grades resulted in a 4% decrease in
revenue and 15% decrease in adjusted EBITDA compared to Q4 2020. In
2022 we will have the benefit of a full year of consistent
production at our higher permitted rate of 3,600 tonnes per
day”.
He concluded, "As we resume normalized operations and staffing,
the Mine will benefit from a reduction in operating expenditures
which were temporarily higher due to the COVID-19 pandemic. In
addition, overall efficiencies and performance should improve.
Management remains committed on this continuous improvement path
and looks forward to the advancement of important projects and
exploration at Yauricocha during the year."
The following table displays selected financial information for
the three months and year ended December 31, 2021:
(In thousands of US dollars, except cash cost and revenue
Three Months Ended December
31,
Twelve Months Ended December
31,
per tonne metrics)
2021
2020
Var %
2021
2020
Var %
Revenue
$
43,490
45,238
-4%
180,598
146,941
23%
Adjusted EBITDA (1)
19,107
22,496
-15%
88,003
66,306
33%
Cash Flow from operations
19,253
23,335
-17%
83,471
64,899
29%
Gross profit
20,879
21,785
-4%
84,262
62,826
34%
Income Tax Expense
(4,506)
(5,939)
-24%
(29,319)
(21,115)
39%
Net Income
9,479
10,686
-11%
34,967
27,350
28%
Net production revenue per tonne of ore milled (2)
151.25
148.13
2%
142.39
131.17
9%
Cash cost per tonne of ore milled (2)
64.54
62.44
3%
61.51
57.61
7%
Cash cost per copper equivalent payable pound (2)
1.61
1.16
39%
1.46
1.01
45%
All-In Sustaining Cost per copper equivalent payable pound (2)
3.09
2.47
25%
2.77
2.11
31%
(In thousands of US dollars, unless otherwise stated)
December 31, 2021
December 31, 2020
Cash and cash equivalents
$
32,870
65,027
Assets
232,868
235,263
Liabilities
66,111
53,473
Equity
166,757
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 Cash cost per copper equivalent payable pound and All-In
Sustaining Cost per copper equivalent pound sold are non-IFRS
performance measures and include 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 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 Months and Year Ended December 31, 2021
- Revenue of $43.5 million for Q4 2021, lower than the revenue of
$45.2 million for the same quarter of 2020 mainly due to lower
throughput and grades. Revenue of $180.6 million for the
twelve-month period ended December 31, 2021 compared to $146.9
million for the same period of 2020. Annual revenue increased 23%
due to combined impact of higher realized metal prices and 22%
decrease in treatment and refining charges, which more than
compensated for lower quantities of metal sales compared to
2020.
- Adjusted EBITDA of $19.1 million for Q4 2021 compared to $22.5
million for Q4 2020 and $88.0 million for the year ended December
31, 2021, compared to $66.3 million for the same period in 2020.
The increase in adjusted EBITDA for the full year 2021 was driven
mainly by the higher contribution per tonne of ore processed,
attributable to higher metal prices as compared to 2020.
- Operating cash flows before movements in working capital was
$19.3 million for Q4 2021, compared to $23.3 million for Q4 2020,
and $83.5 million for the year ended December 31, 2021, compared to
$64.9 million for the same period in 2020. The increase in
operating cash flows resulted from the afore-mentioned improved
gross margins due to higher realized metal prices compared to
2020.
- Cash and cash equivalents of $32.9 million as at December 31,
2021, compared to $65.0 million as at December 31, 2020. The
decrease in cash and cash equivalents resulted from cash used in
investing activities $37.9 million, payment of dividends of $49.9
million and intercompany advances of $5.0 million offset by
operating cash flows of $60.7 million (after movement in working
capital).
- Net income of $9.5 million, or $0.27 per share for Q4 2021,
compared to net income of $10.7 million, or $0.30 per share for Q4
2020. Net income of $35.0 million, or $0.97 per share, for the year
ended December 31, 2021, compared to $27.4 million, or $0.76 per
share, for the same period in 2020.
Corona's Operational Highlights for the
Three Months and Year Ended December 31, 2021
The following table displays the production results for the
three months and year ended December 31, 2021. For further
production details please refer the Company's Q4 production press
release dated January 24, 2022:
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.
- The Yauricocha mine processed 277,531 tons during Q4 2021, a
decrease of 11% compared to Q4 2020, as mine operations were halted
a few days before year-end to avoid exceeding the maximum permitted
capacity1 for 2021. It may be noted that the mine operated at a
high throughput for the first nine months of the year, which
resulted in attaining the maximum annual permitted capacity before
the end of the year.
- 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 higher targeted grades
remained a challenge throughout the year. The negative variations
in the polymetallic ore resulted from the regulatory limitations to
access some of the high-grade ore bodies. Also, copper sulfide
grades were lower mainly due to the delays in the contribution of
the Esperanza body due to ground conditions, which were controlled
and corrected.
- Although higher throughput partially compensated for lower
grades, metal production declined. 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.
- Cash cost per copper equivalent payable pounds of $1.61 for Q4
2021 compared to $1.16 for Q4 2020, due to the 28% decrease in
copper equivalent pounds sold in Q4 2021 compared to the same
quarter of 2020. For the twelve-month period ended December 31,
2021, cash costs per copper equivalent payable pound increased to
$1.46 from $1.01 for the same period in 2020. The annual increase
in cash costs was a combined result of higher operating costs,
mainly related to additional contractors at higher costs, and the
21% decrease in copper equivalent pounds sold as compared to the
year 2020.
- All-in sustaining cost ("AISC") per copper equivalent payable
pound of $3.09 for Q4 2021 compared to $2.47 for Q4 2020 and $2.77
for the year ended December 31, 2021, compared to $2.11 for the
same period in 2020. The increase in the AISC per copper equivalent
payable pound for Q4 2021 and full year 2021 compared to the same
periods in 2020 was a combined result of higher cash costs and
sustaining capital expenditure, offset by the anticipated decrease
in treatment and refining charges during 2021.
1. Maximum annual capacity of 1,256,850 tonnes calculated using
permitted capacity of 3,000 tpd until June 15, 2021 and 3,600
thereafter on receipt of permit.
Sierra Metals to release Q4/YE 2021
Financial Results on March 16, 2022
The Company will release Q4-2021 financial results on Wednesday
March 16, 2022, after the Market close. Senior Management will also
host a webcast and conference call on Thursday March 17, 2022, at
10:30am EDT. Details of the Conference Call and Webcast are as
follows:
Via Webcast:
A live audio webcast of the meeting will be available on the
Company's website. Please register at:
https://event.on24.com/wcc/r/3574382/FCCE4F2A0F9D10DD9ADA273BDF220BF7
The webcast, along with presentation slides, will be archived
for 180 days on www.sierrametals.com.
Via phone:
For those who prefer to listen by phone, dial-in instructions
are below. To ensure your participation, please call approximately
five minutes prior to the scheduled start time of the call.
US/CAN dial-in number (Toll Free): 1 844 200 6205 US dial-in
number (Local): 1 646 904 5544 Canada dial-in number (Local): 1 226
828 7575 All other locations: +1 929 526 1599 Participant access
code: 017137
Press *1 to ask a question, *2 to withdraw your question, or *0
for operator assistance.
Quality Control
All technical data contained in this news release has been
reviewed and approved by:
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.
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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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 2021 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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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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