(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 2022 ("Q1 2022").
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the full release here:
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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 Q1-2022 financial statements have not been reviewed by
the Sierra Metals Board. The Company will be releasing its Q1-2022
consolidated financial statements on May 11th, 2022 with an
investor conference call taking place on May 12th, 2022.
Corona's Highlights for the Three
Months Ended March 31, 2022
- Revenues of US$35.8 million, a 15% decrease from Q1
2021.
- Adjusted EBITDA of US$14.8 million, an 8% decrease from Q1
2021.
- Total tonnes processed of 315,250, a 3% decrease from Q1
2021.
- Net production revenue per tonne of ore milled decreased by
5% to US$121.34.
- Cash Cost per copper equivalent payable pound higher by 48%
to US$2.19.
- All-in sustaining cost ("AISC") per copper equivalent
payable pound higher by 40% to US$3.70.
- Copper equivalent pounds production decreased 32% to 10.9
million pounds.
- $17.0 million of cash and cash equivalents as at March 31,
2022.
- $70.3 million of working capital as at March 31,
2022.
The Yauricocha mine processed 315,250 tons during the Q1 2022,
which represents a decrease of 3% compared Q1 2021. Labor shortages
were experienced in development and mining areas due to the impact
of COVID-19 in January and February.
The delays in preparation of the polymetallic mining zones
forced the mine to focus on copper sulfides during the quarter,
which resulted in higher copper head grades, but negatively
impacted grades for all other metals, except gold. Q1 2022 copper
and gold production was 60% and 19% higher, while silver, lead and
zinc production were 43%, 56% and 57% lower respectively as
compared to Q1 2021. Copper equivalent production for Q1 2022 from
Yauricocha was 10,876 pounds or 32% lower than the same quarter of
2021. This reflects the decrease in average ore grade on current
permitted mining areas.
Luis Marchese, CEO of Sierra Metals, commented, "During Q1 2022,
Yauricocha metal production was negatively impacted due to
decreasing ore grades in the currently permitted mining areas, and
Covid related labour shortages in the early part of the year."
He continued, "Looking ahead, our priority is to treat ore at
full plant capacity and incorporate the newly discovered high-grade
areas in order to maximize metal production at current prices.”
He concluded, "We expect that we will be able to make up for the
delay in production at Yauricocha, and with improved grades, we are
optimistic about our progress in the Mine’s performance going
forward.”
The following table displays selected unaudited financial
information for the three months ended March 31, 2022:
Press Release Selected Financial Results
(In thousands of US dollars, except cash cost and revenue
Three Months Ended per tonne metrics)
March 31, 2022
March 31, 2021 Var % Revenue
$
35,794
41,925
-15%
Adjusted EBITDA (1)
14,803
16,173
-8%
Cash Flow from operations
11,080
16,496
-33%
Gross profit
13,268
16,149
-18%
Income Tax Expense
1,268
(6,842)
-119%
Net Income
10,497
5,175
103%
Net production revenue per tonne of ore milled (2)
121.34
128.10
-5%
Cash cost per tonne of ore milled (2)
59.19
60.43
-2%
Cash cost per copper equivalent payable pound (2)
2.19
1.48
48%
All-In Sustaining Cost per copper equivalent payable pound (2)
3.70
2.65
40%
(In thousands of US dollars, unless otherwise stated)
March 31, 2022 December 31, 2021 Cash and cash
equivalents
$
17,041
32,870
Assets
235,267
232,868
Liabilities
58,013
66,111
Equity
177,254
166,757
(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)
Net production revenue per tonne, cash
cost per tonne, cash cost per copper equivalent payable pound and
All-In Sustaining Cost per copper (‘AISC’) equivalent pound are
non-IFRS performance measures. AISC includes 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; 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, 2022 vs March 31,
2021:
Average realized
prices
Quarter ended March 31
Increase
In US$
2022
2021
(%)
Silver ($/oz)
23.95
26.44
-9%
Copper ($/lb)
4.53
3.88
17%
Zinc ($/lb)
1.69
1.24
36%
Lead ($/lb)
1.06
0.92
15%
Gold ($/oz)
1,875
1,778
5%
Corona's Financial Highlights for the
Three Months Ended March 31, 2022
- Revenue from metals payable at the Yauricocha Mine in Peru of
$35.8 million for Q1 2022 decreased by 15% compared to $41.9
million of revenues in Q1 2021. Despite higher metal prices,
revenues decreased during Q1 2022 mainly due to lower metal
production attributable to lower grades except copper. Copper
equivalent payable pounds dropped 51% due to lower quantities of
metals sold as compared to Q1 2021.
- Yauricocha’s cash cost per copper equivalent payable pound was
$2.19 (Q1 2021 - $1.48), and AISC per copper equivalent payable
pound of $3.70 (Q1 2021 - $2.65). Higher unit costs resulted from a
36% decrease in copper equivalent payable pounds.
- Adjusted EBITDA of US$14.8 million for the first quarter of
2022 compared to US$16.2 million for the same period of 2021. The
decrease in Adjusted EBITDA for the first quarter of 2022 compared
to the same period of the year 2021 was due to lower revenues from
the Company, explained above.
- Operating cash flow before movements in working capital of
US$11.1 million for the first quarter of 2022 compared to US$16.5
million in the same period of 2021.
- Cash and cash equivalents of $17.0 million as at March 31,
2022, compared to $32.9 million as at December 31, 2021. Cash and
cash equivalents decreased as cash used in investing activities
($6.2 million) and financing activities ($10.5 million) exceeded
cash flow of $0.8 million generated from operating activities.
- Net income of $10.5 million, or $0.292 per share for Q1 2022
compared to net income of $5.2 million, or $0.144 per share for Q1
2021. The increase in net income during Q1 2022 resulted from the
recovery of deferred taxes and no current taxes as there was no
taxable income during the quarter.
Corona's Operational Highlights for the
Three Months Ended March 31, 2022:
The following table displays the production results for the
three months ended March 31, 2022:
Yauricocha Production Three Months Ended March 31,
2022
2021
% Var.
Tonnes processed
315,250
326,211
-3%
Daily throughput
3,603
3,728
-3%
Silver grade (g/t)
39.40
54.35
-28%
Copper grade
0.79%
0.56%
41%
Lead grade
0.66%
1.34%
-51%
Zinc grade
1.83%
3.71%
-51%
Gold Grade (g/t)
0.52
0.43
21%
Silver recovery
63.99%
79.05%
-19%
Copper recovery
77.22%
66.26%
17%
Lead recovery
82.50%
90.16%
-8%
Zinc recovery
82.09%
90.34%
-9%
Gold Recovery
20.06%
19.77%
1%
Silver production (000 oz)
256
451
-43%
Copper production (000 lb)
4,279
2,682
60%
Lead production (000 lb)
3,828
8,706
-56%
Zinc production (000 lb)
10,492
24,123
-57%
Gold Production (oz)
1,057
890
19%
Copper equivalent pounds (000's)(1)
10,876
15,937
-32%
(1)
Copper equivalent pounds for Q1 2022 were
calculated using the following realized prices: $23.95/oz Ag,
$4.53/lb Cu, $1.69/lb Zn, $1.06/lb Pb, $1,875/oz Au. Copper
equivalent pounds for Q1 2021 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.
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.
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 Toronto Stock Exchange
and the Bolsa de Valores de Lima under the symbol "SMT" and on the
NYSE American Exchange under the symbol "SMTS".
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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 16,
2022 for its fiscal year ended December 31, 2021 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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For further information regarding Sierra Metals, please visit
www.sierrametals.com
Investor Relations CEO Sierra Metals Inc. Tel: +1 (416)
366-7777 Email: info@sierrametals.com
Luis Marchese Sierra Metals Inc. Tel: +1 (416)
366-7777
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