Sierra Metals Inc.

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Sierra Metals is a premier Latin American precious and base metals producer with significant resource growth potential. The Company owns and operates three mines in commercial production: the Yauricocha Mine in Peru, the Bolivar and Cusi mines in Mexico.

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Sierra Metals Inc.

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Sierra Metals is a premier Latin American precious and base metals producer with significant resource growth potentia......

people7 Members       (0)


Sierra Metals Reports Solid Consolidated Financial Results for the Third Quarter of 2019, Including an 18% Increase in Adjusted EBITDA Conference Call November 14, 2019 at 10:30 AM (EST)


Sierra Metals Reports Solid Consolidated Financial Results for the Third Quarter of 2019, Including an 18% Increase in Adjusted EBITDA Conference Call November 14, 2019 at 10:30 AM (EST)

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(All $ figures reported in USD)



  • Revenue from metals payable of $64.6 million in Q3 2019 increased 22% from $53.0 million in Q3 2018 due to higher throughput and metal production from all three mines;



  • Adjusted EBITDA of $21.6 million in Q3 2019 increased 18% from $18.2 million in Q3 2018, primarily due to increased revenues realized from all three mines;



  • Operating cash flows before movements in working capital of $21.8 million in Q3 2019 increased from $18.1 million in Q3 2018



  • Q3 2019 consolidated copper production of 11.1 million pounds, consolidated silver production of 1.0 million ounces, consolidated zinc production of 22.5 million pounds, consolidated lead production of 10.5 million pounds, and consolidated gold production of 3,490 ounces; a 34% increase, 34% increase, 8% increase, 65% increase, and an 83% increase respectively, compared to Q3 2018, and management expects that annual production guidance will still be met(1)



  • Q3 2019 revenues as a percentage of metals sold represent 35% from copper, 27% from silver, 23% from zinc, 14% from lead and 1% from gold



  • Record consolidated quarterly equivalent metal production and throughput, and record quarterly equivalent metal production and throughput at the Yauricocha and Bolivar Mines



  • $40.4 million of cash and cash equivalents as at September 30, 2019



  • $50.9 million of working capital as at September 30, 2019



  • Net Debt of $58.8 million as at September 30, 2019



  • A shareholder conference call to be held Thursday, November 14, 2019, at 10:30 AM (EST)



(1) Silver equivalent ounces and copper and zinc equivalent pounds for Q3 2019 were calculated using the following realized prices: $17.28/oz Ag, $2.63/lb Cu, $0.94/lb Pb, $1.06/lb Zn, $1,481/oz Au. Silver equivalent ounces and copper and zinc equivalent pounds for Q3 2018 were calculated using the following realized prices: $14.85/oz Ag, $2.79/lb Cu, $0.94/lb Pb, $1.14/lb Zn, $1,206/oz Au. Silver equivalent ounces and copper and zinc equivalent pounds for 9M 2019 were calculated using the following realized prices: $15.91/oz Ag, $2.74/lb Cu, $0.91/lb Pb, $1.16/lb Zn, $1,370/oz Au. Silver equivalent ounces and copper and zinc equivalent pounds for 9M 2018 were calculated using the following realized prices: $15.99/oz Ag, $3.02/lb Cu, $/1.06lb Pb, $1.36/lb Zn, $1,279/oz Au.


Sierra Metals Inc. (TSX:SMT)(BVL:SMT)(NYSE American:SMTS) (“Sierra Metals” or the “Company”) today reported revenue of $64.6 million and adjusted EBITDA of $21.6 million on throughput of 709,461 tonnes and metal production of 4.9 million silver equivalent ounces, or 32.3 million copper equivalent pounds, or 80.4 million zinc equivalent pounds for the three month period ended September 30, 2019.


The Company achieved record quarterly consolidated equivalent metal production and ore throughput, as well as record quarterly ore throughput and equivalent metal production from the Yauricocha and Bolivar Mines. The Company has continued to build on its successful plant expansions, and mine production increases in Mexico over the last three quarters. This has resulted in record quarterly metal production, as the Company is approaching its 2019 target of 4,250 tonnes per day (TPD) at Bolivar, and 1,200 TPD at Cusi.


The Company earned revenues of $64.6 million, Adjusted EBITDA of $21.6 million, and operating cash flows before movements in working capital of $21.8 million. Higher revenues are primarily attributable to the 8% increase in throughput, higher head grades and recoveries of all metals, except zinc recoveries, at Yauricocha; a 46% increase in throughput, and higher silver and gold head grades, and higher copper and silver recoveries at Bolivar; and the 28% increase in throughput, higher gold head grades and silver and gold recoveries, higher silver prices, and the sale of concentrate inventory built-up during H1 2019 at Cusi. Quarterly revenues at Yauricocha increased by 16%, and Bolivar increased by 23% compared to Q3 2018, despite decreases in the prices of copper (6%) and zinc (7%), and higher treatment and refining charges incurred on the zinc and copper concentrates sold.


Despite the decrease in copper prices over the last nine months, the Bolivar Mine was able to generate $0.9 million of Adjusted EBITDA during Q3 2019, helped by record quarterly throughput. The Company hopes to increase throughput at Bolivar to 4,250 TPD during Q4 2019, and then to 5,000 TPD during Q4 2020, while modestly improving copper grades to approximately 0.95% due to an expected blend of 40% of ore sourced from Bolivar West, and 60% from El Gallo Inferior.


At Cusi, an increased silver price and the sale of approximately 1,000 tonnes of stockpiled concentrate resulted in Adjusted EBITDA of $1.5 million in Q3 2019. Ore throughput reached approximately 805 TPD during Q3 2019, and the Company continues to work towards reaching the 1,200 TPD mark during Q4 2019. The 28% increase in throughput realized during Q3 2019 resulted in a 15% increase in silver equivalent ounces produced, despite lower head grades for all metals, except gold, as we continue to develop deeper into the Santa Rosa de Lima zone which has higher silver head grades.


Currently, the Company remains focused on increasing the efficiency of mining the mineralized silver structures using selective mining techniques with the objective to reduce dilution. A significant infill drilling program is expected to be initiated on the Santa Rosa de Lima orebody during Q4 2019, targeting improved resource classification, while also improving mine planning and selective mining methods to reduce the dilution of high-grade minable stopes. Additionally, development work is being accelerated to provide access to more minable stopes, which should help with grade control and dilution control. The orebodies within the Santa Rosa de Lima zone have strong rock structures that should allow for sub-level stoping and sub-level caving mining methods to be implemented. The Company believes that this strategy can be successful, given the higher-grade ore available on the 1704 and 1720 levels of the Santa Rosa de Lima zone, and the substantial investment that has been made to ramp to and develop these areas for mining.


Igor Gonzales, President, and CEO of Sierra Metals stated: “I am proud of the Company’s achievements in the third quarter. We were able to generate one of the Company’s highest quarters of operating cash flows of $21.8 million, with free cash flow of $1.9 million despite lower metal prices as a result of record quarterly consolidated equivalent metal production and throughput. Additionally, we have consistently used operating cash flows for significant growth capital investments at all three mines, which have proven to be value-creating for the Company, given the cost-efficient growth realized. The capital was allocated to significant plant expansions, successful brownfield exploration programs, and rigorous infill drilling campaigns to maximize production and resource definition. Furthermore, we are continuing with our efforts to modernize and improve all our mines while implementing best operational practices.”


He continued, “Management continually monitor and modify projects and capital allocation and have decided at the end of Q3 2019, to further reduce our capital expenditures from $70 million to $55 million for 2019. The Company’s decision to defer $11 million of growth capital expenditures in Peru was due to project delays caused by the strike at Yauricocha, equipment procurement and contractor hiring difficulties, as well as poor ground conditions at the areas proposed for the new ventilation raise bores. Additionally, $4 million of growth capital at Bolivar was deferred due to the postponed equipment purchases, plant improvement costs and development costs previously planned to push throughput to 5,000 tonne per day level. Despite the Capex deferral for 2019, the Company remains committed to its growth plans and the prudent use of capital to achieve its objectives at Yauricocha, regardless of whether these expenditures are made during 2019, or postponed until 2020 or 2021. I am also happy to state that the Company is nearing completion of the Yauricocha and Bolivar NI 43-101 Reserve and Resource Updates, which are expected to be released during December 2019.”


He concluded, “Our balance sheet remains strong with the liquidity needed to meet our operational and growth expenditure requirements. These efforts are expected to allow the Company to continue to increase metal production over the coming year. Additionally, our Company-wide ongoing brownfield exploration programs should also lead to further discoveries and growth in reserves and resources, which will add to the value of our assets during the year ahead.”


 

The following table displays selected financial and operational information for the three and nine months ended September 30, 2019:



Read more here: https://www.quotemedia.com/portal/quote/?qm_symbol=SMT%3ACC&qmodStoryID=6630120310010485 

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8020 ADMIN
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TORONTO
(All $ figures reported in USD)
  • Revenue from metals payable of $64.6 million in Q3 2019 increased 22% from $53.0 million in Q3 2018 due to higher throughput and metal production from all three mines;
  • Adjusted EBITDA of $21.6 million in Q3 2019 increased 18% from $18.2 million in Q3 2018, primarily due to increased revenues realized from all three mines;
  • Operating cash flows before movements in working capital of $21.8 million in Q3 2019 increased from $18.1 million in Q3 2018
  • Q3 2019 consolidated copper production of 11.1 million pounds, consolidated silver production of 1.0 million ounces, consolidated zinc production of 22.5 million pounds, consolidated lead production of 10.5 million pounds, and consolidated gold production of 3,490 ounces; a 34% increase, 34% increase, 8% increase, 65% increase, and an 83% increase respectively, compared to Q3 2018, and management expects that annual production guidance will still be met(1)
  • Q3 2019 revenues as a percentage of metals sold represent 35% from copper, 27% from silver, 23% from zinc, 14% from lead and 1% from gold
  • Record consolidated quarterly equivalent metal production and throughput, and record quarterly equivalent metal production and throughput at the Yauricocha and Bolivar Mines
  • $40.4 million of cash and cash equivalents as at September 30, 2019
  • $50.9 million of working capital as at September 30, 2019
  • Net Debt of $58.8 million as at September 30, 2019
  • A shareholder conference call to be held Thursday, November 14, 2019, at 10:30 AM (EST)
(1) Silver equivalent ounces and copper and zinc equivalent pounds for Q3 2019 were calculated using the following realized prices: $17.28/oz Ag, $2.63/lb Cu, $0.94/lb Pb, $1.06/lb Zn, $1,481/oz Au. Silver equivalent ounces and copper and zinc equivalent pounds for Q3 2018 were calculated using the following realized prices: $14.85/oz Ag, $2.79/lb Cu, $0.94/lb Pb, $1.14/lb Zn, $1,206/oz Au. Silver equivalent ounces and copper and zinc equivalent pounds for 9M 2019 were calculated using the following realized prices: $15.91/oz Ag, $2.74/lb Cu, $0.91/lb Pb, $1.16/lb Zn, $1,370/oz Au. Silver equivalent ounces and copper and zinc equivalent pounds for 9M 2018 were calculated using the following realized prices: $15.99/oz Ag, $3.02/lb Cu, $/1.06lb Pb, $1.36/lb Zn, $1,279/oz Au.

Sierra Metals Inc. (TSX:SMT)(BVL:SMT)(NYSE American:SMTS) (“Sierra Metals” or the “Company”) today reported revenue of $64.6 million and adjusted EBITDA of $21.6 million on throughput of 709,461 tonnes and metal production of 4.9 million silver equivalent ounces, or 32.3 million copper equivalent pounds, or 80.4 million zinc equivalent pounds for the three month period ended September 30, 2019.

The Company achieved record quarterly consolidated equivalent metal production and ore throughput, as well as record quarterly ore throughput and equivalent metal production from the Yauricocha and Bolivar Mines. The Company has continued to build on its successful plant expansions, and mine production increases in Mexico over the last three quarters. This has resulted in record quarterly metal production, as the Company is approaching its 2019 target of 4,250 tonnes per day (TPD) at Bolivar, and 1,200 TPD at Cusi.

The Company earned revenues of $64.6 million, Adjusted EBITDA of $21.6 million, and operating cash flows before movements in working capital of $21.8 million. Higher revenues are primarily attributable to the 8% increase in throughput, higher head grades and recoveries of all metals, except zinc recoveries, at Yauricocha; a 46% increase in throughput, and higher silver and gold head grades, and higher copper and silver recoveries at Bolivar; and the 28% increase in throughput, higher gold head grades and silver and gold recoveries, higher silver prices, and the sale of concentrate inventory built-up during H1 2019 at Cusi. Quarterly revenues at Yauricocha increased by 16%, and Bolivar increased by 23% compared to Q3 2018, despite decreases in the prices of copper (6%) and zinc (7%), and higher treatment and refining charges incurred on the zinc and copper concentrates sold.

Despite the decrease in copper prices over the last nine months, the Bolivar Mine was able to generate $0.9 million of Adjusted EBITDA during Q3 2019, helped by record quarterly throughput. The Company hopes to increase throughput at Bolivar to 4,250 TPD during Q4 2019, and then to 5,000 TPD during Q4 2020, while modestly improving copper grades to approximately 0.95% due to an expected blend of 40% of ore sourced from Bolivar West, and 60% from El Gallo Inferior.

At Cusi, an increased silver price and the sale of approximately 1,000 tonnes of stockpiled concentrate resulted in Adjusted EBITDA of $1.5 million in Q3 2019. Ore throughput reached approximately 805 TPD during Q3 2019, and the Company continues to work towards reaching the 1,200 TPD mark during Q4 2019. The 28% increase in throughput realized during Q3 2019 resulted in a 15% increase in silver equivalent ounces produced, despite lower head grades for all metals, except gold, as we continue to develop deeper into the Santa Rosa de Lima zone which has higher silver head grades.

Currently, the Company remains focused on increasing the efficiency of mining the mineralized silver structures using selective mining techniques with the objective to reduce dilution. A significant infill drilling program is expected to be initiated on the Santa Rosa de Lima orebody during Q4 2019, targeting improved resource classification, while also improving mine planning and selective mining methods to reduce the dilution of high-grade minable stopes. Additionally, development work is being accelerated to provide access to more minable stopes, which should help with grade control and dilution control. The orebodies within the Santa Rosa de Lima zone have strong rock structures that should allow for sub-level stoping and sub-level caving mining methods to be implemented. The Company believes that this strategy can be successful, given the higher-grade ore available on the 1704 and 1720 levels of the Santa Rosa de Lima zone, and the substantial investment that has been made to ramp to and develop these areas for mining.

Igor Gonzales, President, and CEO of Sierra Metals stated: “I am proud of the Company’s achievements in the third quarter. We were able to generate one of the Company’s highest quarters of operating cash flows of $21.8 million, with free cash flow of $1.9 million despite lower metal prices as a result of record quarterly consolidated equivalent metal production and throughput. Additionally, we have consistently used operating cash flows for significant growth capital investments at all three mines, which have proven to be value-creating for the Company, given the cost-efficient growth realized. The capital was allocated to significant plant expansions, successful brownfield exploration programs, and rigorous infill drilling campaigns to maximize production and resource definition. Furthermore, we are continuing with our efforts to modernize and improve all our mines while implementing best operational practices.”

He continued, “Management continually monitor and modify projects and capital allocation and have decided at the end of Q3 2019, to further reduce our capital expenditures from $70 million to $55 million for 2019. The Company’s decision to defer $11 million of growth capital expenditures in Peru was due to project delays caused by the strike at Yauricocha, equipment procurement and contractor hiring difficulties, as well as poor ground conditions at the areas proposed for the new ventilation raise bores. Additionally, $4 million of growth capital at Bolivar was deferred due to the postponed equipment purchases, plant improvement costs and development costs previously planned to push throughput to 5,000 tonne per day level. Despite the Capex deferral for 2019, the Company remains committed to its growth plans and the prudent use of capital to achieve its objectives at Yauricocha, regardless of whether these expenditures are made during 2019, or postponed until 2020 or 2021. I am also happy to state that the Company is nearing completion of the Yauricocha and Bolivar NI 43-101 Reserve and Resource Updates, which are expected to be released during December 2019.”

He concluded, “Our balance sheet remains strong with the liquidity needed to meet our operational and growth expenditure requirements. These efforts are expected to allow the Company to continue to increase metal production over the coming year. Additionally, our Company-wide ongoing brownfield exploration programs should also lead to further discoveries and growth in reserves and resources, which will add to the value of our assets during the year ahead.”

 

The following table displays selected financial and operational information for the three and nine months ended September 30, 2019:

Read more here: https://www.quotemedia.com/portal/quote/?qm_symbol=SMT%3ACC&qmodStoryID=6630120310010485 


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