PR Newswire
TORONTO, Feb. 15, 2017
TORONTO, Feb. 15, 2017 /PRNewswire/ - Sierra Metals Inc. (TSX:SMT, BVL:SMT) ("Sierra Metals" or the "Company") announces the filing of Sociedad Minera Corona S.A.'s ("Corona") audited Financial Statements and Management Discussion and Analysis ("MD&A") for the fourth quarter of 2016 ("Q4 2016").
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 December 31, 2016
Sierra Metals continues to see a positive impact from the operational improvements program with significant improvements in Revenue and adjusted EBITDA combined with lower costs in the fourth quarter at its Yauricocha mine in Peru. The Company completed key aspects of the operational improvements program this quarter including the transitioning to a higher capacity hoist at the Mascota shaft and has returned to normalized operations. Sierra Metals achieved remarkable year over year improvements in the fourth quarter with revenue up 164%, adjusted EBITDA up 1,093% and the all in sustaining cost ("ASIC") per silver equivalent payable ounce lower by 25% to US$12.51. The Company's continued emphasis at Yauricocha will be to focus on the production of higher value ore, further cost reductions where possible and optimization to improve the Company's production, operating margins and cash flow generation.
"I am extremely pleased with the very successful operational improvements program completed at the Yauricocha Mine and how that has translated into near record production levels in the fourth quarter complimented by remarkable improvements to revenues, adjusted EBITDA and cashflow for the Mine." stated Mark Brennan, President and CEO of Sierra Metals. "Corona's operating margins and cash flows have been positively impacted by the Company's focus on the processing of higher value ore. This can be seen by an increase of 69% in silver equivalent production year over year which has led to significant increases in revenue and adjusted EBITDA and a lower AISC per silver equivalent payable ounce. Corona's Q4 near record production level was the second highest in the 68-year history of the Mine. This was still accomplished despite a planned 25-day shutdown in November, to complete the transition to a new, higher capacity hoist located on the 720 level at the Mascota shaft (please see press release dated September 12, 2016).
He continued, "Corona's balance sheet continues to improve and the Company has strong liquidity. Management is optimistic that we will realize continued mineral resource growth from our brownfield exploration programs including the Esperanza zone, the Cuye-Mascota zone as well as several other high value targets within the mine complex. When combined with significant operational improvements already completed at Yauricocha, we expect this will provide for substantial growth generation in the future."
The following table displays selected unaudited financial information for the three months and year ended December 31, 2016:
(In thousands of US dollars, except cash cost and revenue |
Three Months Ended |
Year Ended |
|||||
per tonne metrics) |
December 31, 2016 |
December 31, 2015 |
Var % |
December 31, 2016 |
December 31, 2015 |
Var % | |
Revenue |
$ |
31,849 |
12,140 |
162% |
97,290 |
80,113 |
21% |
Adjusted EBITDA (1) |
14,905 |
(1,453) |
-1126% |
34,991 |
24,901 |
41% | |
Cash Flow from operations |
14,830 |
(5,075) |
-392% |
25,124 |
14,645 |
72% | |
Gross profit |
13,765 |
(272) |
-5161% |
35,773 |
27,611 |
30% | |
Income Tax (Expense) Recovery |
(4,302) |
364 |
-1282% |
(8,550) |
(7,953) |
8% | |
Net Income (loss) |
8,009 |
(4,441) |
-280% |
17,234 |
7,532 |
129% | |
Net production revenue per tonne of ore milled (2) |
132.66 |
62.26 |
113% |
107.95 |
96.20 |
12% | |
Cash cost per tonne of ore milled (2) |
56.15 |
54.55 |
3% |
55.78 |
52.03 |
7% | |
Cash cost per silver equivalent payable ounce (2) |
7.29 |
9.45 |
-23% |
7.77 |
7.01 |
10% | |
All-In Sustaining Cost per silver equivalent payable ounce (2) |
12.51 |
16.70 |
-25% |
13.11 |
13.17 |
0% | |
Cash cost per copper equivalent payable pound (2) |
1.10 |
1.42 |
-23% |
1.17 |
1.06 |
10% | |
All-In Sustaining Cost per copper equivalent payable pound (2) |
$ |
1.88 |
2.51 |
-25% |
1.97 |
1.98 |
0% |
(In thousands of US dollars, unless otherwise stated) |
December 31, 2016 |
December 31, 2015 |
|||||
Cash and cash equivalents |
$ |
36,877 |
21,818 |
||||
Assets |
128,769 |
105,605 |
|||||
Liabilities |
62,254 |
53,599 |
|||||
Equity |
66,515 |
52,006 |
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 silver equivalent ounce sold and 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 silver equivalent ounce sold and 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, 2016
Corona's Operational Highlights for the Three Months and Year Ended December 31, 2016:
The following table displays the production results for the three months and year ended December 31, 2016:
Yauricocha Production |
3 Months Ended |
Year Ended | |||||
Dec 31, 2016 |
Dec 31, 2015 |
% Var. |
Dec 31, 2016 |
Dec 31, 2015 |
% Var. | ||
Tonnes processed (mt) |
236,650 |
193,710 |
22% |
897,169 |
832,225 |
8% | |
Daily throughput |
2,705 |
2,214 |
22% |
2,563 |
2,378 |
8% | |
Silver grade (g/t) |
100.37 |
86.13 |
17% |
97.69 |
102.62 |
-5% | |
Copper grade |
0.51% |
0.38% |
35% |
0.54% |
0.49% |
9% | |
Lead grade |
2.18% |
2.46% |
-11% |
2.52% |
2.93% |
-14% | |
Zinc grade |
3.63% |
2.48% |
46% |
3.18% |
2.57% |
24% | |
Gold Grade (g/t) |
0.59 |
0.63 |
-6% |
0.64 |
0.70 |
-8% | |
Silver recovery |
72.05% |
53.53% |
35% |
65.34% |
65.23% |
0% | |
Copper recovery |
64.75% |
64.94% |
0% |
59.26% |
61.68% |
-4% | |
Lead recovery |
81.72% |
64.98% |
26% |
73.07% |
73.28% |
0% | |
Zinc recovery |
88.49% |
87.45% |
1% |
87.18% |
89.38% |
-2% | |
Gold Recovery |
20.06% |
26.38% |
-24% |
25.19% |
26.74% |
-6% | |
Silver ounces (000's) |
550 |
287 |
92% |
1,841 |
1,791 |
3% | |
Copper pounds (000's) |
1,720 |
1,047 |
64% |
6,281 |
5,567 |
13% | |
Lead pounds (000's) |
9,295 |
6,814 |
36% |
36,440 |
39,430 |
-8% | |
Zinc pounds (000's) |
16,776 |
9,265 |
81% |
54,805 |
42,077 |
30% | |
Gold ounces |
908 |
1,041 |
-13% |
4,664 |
5,018 |
-7% | |
Silver equivalent ounces (000's)(1) |
2,170 |
1,319 |
65% |
7,656 |
7,037 |
9% | |
Copper equivalent pounds (000's)(1) |
14,425 |
8,768 |
65% |
50,903 |
46,788 |
9% | |
(1) Silver equivalent ounces & copper equivalent pounds were calculated using the following metal prices: $14.96/oz Ag, $2.25/lb |
Quality Control
All production technical data contained in this news release has been reviewed and approved by Gordon Babcock, P.Eng., Chief Operating Officer and a Qualified Person under National Instrument 43-101 – Standards of Disclosure for Mineral Projects.
About Sierra Metals
Sierra Metals Inc. is Canadian based growing polymetallic mining company with production from its Yauricocha Mine in Peru, and its Bolivar and Cusi Mines in Mexico. The company recently completed a very successful operational improvements program at it Yauricocha mine and is now focused on completing a similar program at its Mexican operations to increase production volume, recoveries and modernize operations. Sierra continues to grow its mineral resources with several exciting brownfield opportunities such as the Esperanza Zone at the Yauricocha Mine which went from first discovery to mining in less than one year. The Company has several other brownfield exploration opportunities at all three Mines in Peru and Mexico within or very close to the existing mines which its actively exploring and hopes to daylight in the short-term. The company has large land packages at all three Mines with several regional highly prospective targets providing longer term exploration upside and mineral resource growth potential.
The Company's shares trade on the Bolsa de Valores de Lima and the Toronto Stock Exchange under the symbol "SMT".
Forward-Looking Statements
Except for statements of historical fact contained herein, the information in this press release may constitute "forward-looking information" within the meaning of Canadian securities law. Statements containing forward-looking information express, as at the date of this news release, the Company's plans, estimates, forecasts, projections, expectations or beliefs as to future events or results. These statements reflect the Company's current views with respect to future events and are necessarily based upon a number of assumptions and estimates that, while considered reasonable by the Company, are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Actual results might differ materially from results suggested in any forward-looking statements. The Company assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward-looking statements unless and until required by securities laws applicable to the Company. Additional information identifying risks and uncertainties is contained in filings by the Company with the Canadian securities regulators, which filings are available at www.sedar.com.
Continue to watch our progress at:
Web: www.sierrametals.com
Twitter: sierrametals
Facebook: SierraMetalsInc
LinkedIn: Sierra Metals Inc
SOURCE Sierra Metals Inc.