VANCOUVER, March 26, 2015 /PRNewswire/ - Sierra
Metals Inc. (TSX:SMT) (BVL:SMT) ("Sierra Metals" or the
"Company") today reported its financial and operating results for
the fourth quarter ("Q4") and year ended December 31, 2014. This press release should be
read in conjunction with the Company's audited Financial Statements
and Management's Discussion and Analysis ("MD&A") for the year
ended December 31, 2014, as available
on the Company's website at www.sierrametals.com and on SEDAR at
www.sedar.com. All monetary figures are presented in US dollars
unless otherwise stated.
Audra Walsh, President and CEO of
Sierra Metals, commented: "2014 was an exceptional year for the
Company, as reflected in this year's financial and operational
results. Revenues and operating cash flows in 2014 increased by 20%
and 124%, respectively, despite a 19% and 7% decline in annual
realized silver and copper prices, respectively. The increase in
revenues in 2014 was driven mainly by higher throughput at our
three operating mines and higher lead grades and higher lead and
silver recoveries at the Yauricocha Mine, which resulted in higher
volumes of concentrates sold." Ms. Walsh continued: "The Company
expects to continue expanding and upgrading the mineral reserves
and resources at all three mines through mine development and
exploration, and continue to deliver solid production and financial
results during 2015 and beyond."
2014 Operating and
Financial Highlights
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Three Months
Ended
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Year
Ended
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(In thousands of
dollars, except per share and cash cost amounts)
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31-Dec-14
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31-Dec-13
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31-Dec-14
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31-Dec-13
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Operating
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Ore Processed /
Tonnes Milled
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428,859
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390,781
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1,706,715
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1,321,781
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Silver Ounces
Produced
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875,400
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653,705
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3,148,145
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2,560,467
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Copper pounds
produced (000's)
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5,908
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4,819
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22,643
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15,905
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Lead pounds produced
(000's)
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12,096
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11,278
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48,834
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37,957
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Zinc pounds produced
(000's)
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13,399
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13,382
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54,256
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51,747
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Gold ounces
produced
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2,329
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1,665
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9,457
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6,736
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Silver Equivalent
Ounces Produced (000's)1
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3,058
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2,596
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11,788
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9,439
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Cash Cost per Tonne
Processed
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$
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40.48
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$
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43.46
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$
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40.55
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$
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49.21
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Cash Cost (recovery)
per silver payable ounce (Yauricocha)2
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$
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(19.98)
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$
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(8.53)
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$
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(21.25)
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$
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(12.04)
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Cash Cost per copper
payable pound (Bolivar)2
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$
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1.85
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$
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1.69
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$
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1.65
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$
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1.70
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Cash Cost per silver
payable ounce (Cusi)2
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$
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12.07
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$
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14.25
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$
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8.92
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$
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15.70
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Financial
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Revenues
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$
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40,857
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$
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36,417
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$
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172,614
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$
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143,538
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Adjusted
EBITDA2
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$
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13,404
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$
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12,941
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$
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72,597
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$
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54,502
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Operating Cash
Flows
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$
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12,142
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$
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12,418
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$
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60,067
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$
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26,749
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Adjusted Net Income
Attributable to Shareholders2
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$
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5,583
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$
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1,195
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$
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30,496
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$
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16,277
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Net income (loss)
attributable to shareholders
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$
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3,366
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$
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(14,330)
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$
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9,300
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$
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(33,973)
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Cash and Cash
Equivalents
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$
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41,273
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$
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44,930
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$
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41,273
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$
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44,930
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Working
Capital
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$
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23,186
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$
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40,997
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$
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23,186
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$
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40,997
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Shareholders
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Earnings (loss) per
Share ("EPS") - Basic
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$
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0.03
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$
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(0.09)
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$
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0.06
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$
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(0.22)
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Adjusted
EPS2
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$
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0.04
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$
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0.01
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$
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0.19
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$
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0.10
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Weighted Average
Shares Outstanding for the Periods
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159,764
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157,949
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159,302
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157,836
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(1)Silver equivalent ounces were
calculated using the following metal prices: $20/oz Ag, $3.00/lb
Cu, $0.85/lb Pb, $0.95/lb Zn, $1,250/oz Au.
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(2)This
is a non-IFRS performance measure, see Non-IFRS Performance
Measures section of the MD&A.
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Operational Highlights
- The Company's metal production exceeded the high end of the
2014 production guidance for silver, lead, zinc and gold while
copper production was within the guidance range;
- For 2014, the Company achieved the highest recorded annual
throughput of 1,706,715 tonnes, which resulted in increased
contained metal production for all metals;
- Annual silver production of 3,148,145 ounces (''oz'') in 2014
increased by 29% compared to 2,560,467 oz in 2013. The increase in
silver production was due to higher plant throughput at all three
mines and higher recoveries at Yauricocha and Cusi;
- Annual copper production of 22.6 million pounds (''lb'') in
2014 increased by 42% compared to 15.9 million lb in 2013. The
increase in copper production was due to the ramp up from 1,000
tonnes per day ("tpd") to 2,000 tpd at Bolivar during Q4 2013,
which resulted in higher throughput during 2014;
- Annual lead production of 48.8 million lb in 2014 increased by
29% compared to 38.0 million lb in 2013. Higher lead head grades at
Yauricocha contributed to the increase in lead production in
2014;
- Annual zinc production of 54.3 million lb in 2014 increased by
5% compared to 51.7 million lb in 2013. The increase in zinc
production was due to the increase in throughput at Yauricocha as
the zinc head grades and recoveries in 2014 were consistent with
those achieved in 2013; and
- Annual gold production of 9,457 oz in 2014 increased by 40%
compared to 6,736 oz in 2013. The increase in gold production
during 2014 was due to higher head grades and recoveries realized
at the Bolivar and Cusi mines.
Financial Highlights
- Revenue from metals payable of $172.6
million in 2014, increased by 20% from $143.5 million in 2013. The increase in revenues
was due to higher head grades and recoveries for silver, lead and
copper at Yauricocha and higher plant throughput at the Yauricocha,
Bolivar and Cusi Mines;
- Cash costs (recovery) per silver payable ounce was $(21.25) (2013: $(12.04)) at Yauricocha, cash cost per copper
payable pound was $1.65 (2013:
$1.70) at Bolivar and cash cost per
silver payable ounce was $8.92 (2013:
$15.70) at Cusi for the year ended
December 31, 2014. The decrease at
Yauricocha was due to higher plant throughput, an increase in
by-product credits and continued success with the cost reduction
measures implemented in Q3 2013. Bolivar's cash costs remained
consistent with 2013 as the increase in the copper payable pounds
offset the decrease in by-product credits due to the decline in
silver prices. The decrease in cash costs at Cusi was due to higher
silver payable ounces and by-product credits due to higher plant
throughput;
- Net income attributable to shareholders of $9.3 million or $0.06 per share for the year ended December 31, 2014 compared to a net loss of
$(34.0) million ($(0.22) per share) in 2013. The increase in net
income attributable to shareholders is due to the increase in
revenues and decrease in costs described above, as well as the
decrease in the non-cash depletion charge on the Yauricocha mineral
property arising from the original acquisition of Sociedad Minera
Corona S.A. ("Corona");
- Adjusted EBITDA of $72.6 million
for the year ended December 31, 2014
increased 33% compared to $54.5
million in 2013. The increase in adjusted EBITDA in 2014 is
due to the increase in revenues and decrease in costs described
above;
- Adjusted net income attributable to shareholders of
$30.5 million or $0.21 per share for the year ended December 31, 2014 increased 87% compared to
$16.3 million or $0.10 per share for 2013;
- A large component of the net income (loss) for every period is
the non-cash depletion charge in Peru, which was $33.9
million (2013: $57.3 million)
for the year ended December 31, 2014.
The non-cash depletion charge is based on the aggregate fair value
of the Yauricocha mineral property at the date of acquisition of
Corona of $371.0 million amortized
over the total proven and probable reserves and measured and
indicated resources of the mine. The Company has been successful in
reducing the depletion expense year over year as a result of the
54% increase in the mineral reserves at Yauricocha based on the NI
43-101 reports dated October 2012 and
November 2013;
- Cash flow generated from operations of $60.1 million for the year ended December 31, 2014 compared to $26.7 million in 2013. The increase in cash flow
is mainly the result of higher revenues generated and higher gross
margins achieved; and
- Cash and cash equivalents of $41.3
million as at December 31,
2014 compared to $44.9 million
at the end of 2013. Cash and cash equivalents have decreased by
$3.6 million during 2014 due to the
capital expenditures incurred in Mexico and Peru of $(40.0)
million, repayment of loans and credit facilities of
$(14.8) million, and dividends paid
to shareholders of $(1.5) million and
non-controlling interests of $(7.1)
million, offset by $60.1
million of operating cash flow.
Project Development
- Underground drilling has led to expansion and upgrading of
mineralization at Yauricocha's Central Mine and Cachi Cachi areas.
Five mineralized chimneys were discovered within 400 meters of the
Central Mine head frames. Discovery of these chimneys has led to a
new structural interpretation that indicates a similar area of
mineralization may occur west of the Central Mine area.
Reconnaissance drilling is planned for 2015;
- Drilling and exploration during 2014 have demonstrated that the
limits of ore-grade mineralization have not been reached at the
Yauricocha Mine and further expansion of the mine's resources and
reserves is expected;
- Underground development at the Cusi Mine has exposed several
hundred meters of mineralized shoots in Cusi's Promontorio and
Santa Eduwiges mines which has increased the Company's confidence
that further development into areas identified by drilling may
encounter mineralized shoots that are higher-grade and more
extensive than indicated by the historic drilling pattern; and
- Development of both the Promontorio and Santa Eduwiges mines,
on the Company's Cusi property, has progressed significantly during
2014 so that substantially more development ore is being processed
at the Company's Malpaso plant.
Production during Q4 2014 has averaged about 500 tpd and the target
throughput of approximately 600 tpd is expected to be achieved in
Q1 2015.
Exploration Highlights
- Development proceeded along the Monaco shoot of the Milagro vein at the Cusi
property. The Monaco shoot
contains high grades of gold and silver, and has been developed
along a 170 m strike length. The shoot is open to depth and a ramp
is being driven to reach deeper levels of the shoot;
- Development in the Gallo Superior Magnetita ore body of the
Bolivar mine was started and mining began during Q2 2014. An
aggressive exploration program was initiated on the Bolivar
property, outside the main mine area. The focus of the program will
be to test several targets that have been identified by the
Company's geologists over several years, which are: La Lilly
(copper-zinc), Veta Piedras Verde
(silver-gold), La Sidra
(silver-gold), Nathalie Fault and Bolívar NW; and
- Drilling at depth at the Central Mine Area of the Yauricocha
property demonstrated that the Catas orebody extends at least an
additional 130 meters down dip. Drilling of three additional
holes in the Central Mine Area demonstrated that the Antacaca
orebody extends at least an additional 250 meters to depth.
Weblinks
The Company's audited Financial Statements and MD&A for the
year ended December 31, 2014, as
available on the Company's website at
http://sierrametals.com/investors/reports/
Fourth Quarter 2014 Results Conference Call Webcast
Sierra Metals' senior management will host a conference call on
Friday, March 27, 2015 at
10:30 AM (E.S.T.) to discuss the
Company's financial and operating results.
Via Webcast:
A live audio webcast of the meeting will be available on the
Company's website:
http://event.on24.com/r.htm?e=971356&s=1&k=48A8BD32556DAA58378A5B806EB46B2D
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, please use the dial-in
instructions below. We recommend you call in approximately five
minutes prior to the scheduled start time of the call.
Participant Number
(Toll Free
Peru):
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0800-53-840
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Participant Number
(Toll Free North
America):
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1-(888)-231-8191
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Participant Number
(International):
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(647)
427-7450
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Conference
ID:
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10404484
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Reply Archive:
A replay of the conference call will be available until
23:59 PM (E.S.T.) on Friday, April 3, 2015 and can be accessed by
using the following dial-in numbers:
Encore Toll Free Dial
in
Number:
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1-855-859-2056
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Encore Local Dial in
Number:
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(416)
849-0833
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Encore
ID:
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10404484
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About Sierra Metals
Sierra Metals Inc. is a Canadian mining company focused on the
production of precious and base metals from its Yauricocha Mine in
Peru, and its Bolivar Mine and
Cusi Mine in Mexico. In addition,
Sierra Metals is exploring several precious and base metal targets
in Peru and Mexico. Projects in Peru include Adrico (gold), Victoria (copper-silver) and Ipillo
(polymetallic) at the Yauricocha Property in the province of
Yauyos, and the San Miguelito gold
properties in Northern Peru.
Projects in Mexico include
Bacerac (silver) in the
state of Sonora and La Verde (gold) at the Batopilas Property in
the state of Chihuahua.
The Company's shares trade on the Lima Stock Exchange (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.
SOURCE Sierra Metals Inc.