VANCOUVER, March 31, 2015 /PRNewswire/ - Sierra Metals
Inc. (TSX:SMT)(BVL:SMT) ("Sierra Metals" or the "Company") is
pleased to announce that Yauricocha's combined Measured and
Indicated Mineral Resources have been increased by over 5,270,000
tonnes, representing an 86% increase over the previously reported
mineral resource. Over the same period, Mineral Reserves have
been reduced by approximately 1,017,000 tonnes following mine
depletion, the exclusion of brownfields zones (Victoria and Ipillo
Mines) and the application of current metal prices and smelter
terms.
Press Release Highlights:
- Total Proven and Probable Mineral Reserves for Yauricocha are
5,377,000 tonnes averaging 75.5 g/t silver, 1.41% lead, 0.80%
copper, 2.34% zinc and 0.92 g/t gold; down from 6,394,000 tonnes at
October 1, 2013.
- Total Measured and Indicated Mineral Resources for Yauricocha,
inclusive of the Mineral Reserves, are 11,411,000 tonnes averaging
55.4 g/t silver, 0.85% lead, 0.83% copper, 1.73% zinc and 0.76 g/t
gold; up from 6,139,000 tonnes at October 1,
2013.
- The 16% reduction in reserve tonnage is due to several factors
including the change in modelling methodology, the exclusion of
350,000 tonnes from Victoria and Ipillo Mines, the application of
the current metal price and concentrate sales environments, and the
elevated depletion of relatively higher grade reserves from the
Mascota ore body since
October 1, 2013.
- The 86% increase in resource tonnage is predominantly in the
Indicated category of polymetallic mineralization and is the result
of the successful exploration programs that have extended ore
bodies at depth in the Central Mine area.
- The updated silver equivalent grade ("AgEq") for the Proven and
Probable Reserves is 338.6 g/t. Although this cannot be
directly compared with the previous AgEq estimate of 360.6 g/t, the
reduction is indicative of the change to the current reserves based
upon the existing metal prices and concentrate sales terms.
"The latest estimate of resources and reserves for Yauricocha
reflects several significant advances for Sierra and continues a
4-year track record of resource growth since we bought the
Yauricocha Mine in 2011," said Ms Audra
Walsh, the Company's President and CEO. "Resources at
the time of the acquisition were less than 4 million tonnes and
they have increased to 11 million tonnes by the end of 2014.
Our investment in exploration drilling has been complemented with
investment in technical systems and training of our
personnel. Together with our independent consultant we have
improved the resource estimation methodology in line with best
industry practice. With this change we are confident that our
model better reflects the reality of the mineralization and that we
have a reliable predictive tool for future business
evaluation."
"The resource and reserve grades have also been impacted by
the focused production from the high grade Mascota ore body over the last year.
Although we have exploration drilling that indicates its extension
at depth, sufficient drilling was not performed prior to the
cut-off date of this resource estimate. Our expectation is
that the Mascota ore body will
contribute positively to future resource and reserve
estimates."
"The exclusion of the reserve tonnages from Mina Ipillo and
Mina Victoria is a conservative
measure at this time and is deemed to be temporary, although
Indicated Resources remain at Mina Ipillo. Additional
evaluation of their associated operating and capital costs is
required to consider them to be at the same level of confidence as
our other reserves. We are in the enviable position of not
relying on these deposits for business success in the foreseeable
future, but will prioritize them relative to the other
opportunities currently before us."
"Yauricocha's reserves continue to provide strong cash flow
even under the current metal price environment and concentrate
sales terms. This provides a great deal of stability to
Sierra, enables us to strengthen our balance sheet and beneficially
situates us for future growth – organic or external."
Ms Walsh added, "as outlined in the recent press release
updating exploration activities (December
23, 2014) Yauricocha presents abundant, high value targets
and many of those would have short lead time to production if
warranted. This gives us great confidence in the belief that
Yauricocha will continue operating far beyond the life of the
current reserve estimate."
Mineral Resource Estimate
The effective date of this resource estimate is December 31, 2014 and was completed by Gustavson
Associates, LLC. Thomas
Matthews, MMSA QP, Principal Resource Geologist with
Gustavson, is the Qualified Person responsible for this resource
estimate. Gustavson Associates validated the database used
for resource estimation, created domain wireframes corresponding to
the main mineralized zones, interpolated grade into block models
within these mineralized bodies, and reviewed the mine-mill
reconciliation results. Gustavson considers the resource to
meet industry standard practices, and to be CIM and NI 43-101
compliant.
For all mineralization types, resources are presented at a
cut-off which corresponds to the value of recoverable metal of
$37 per tonne; this value being the
approximate value of direct mining and processing costs at
Yauricocha. Metal prices used in this determination were
$18.10/oz silver, $0.95/lb lead, $3.02/lb copper, $0.91/lb zinc and $1,241/oz gold. Metal recovery was set at
historical performance for each mineralization type.
Resource Estimate Effective Date December 31, 2014
Table 1: Measured Resources
|
|
|
|
|
|
Grades
|
Contained
Metal
|
Mineralization
Type
|
Tonnes
(t)
|
AgEq
(gpt)
|
Ag
(gpt)
|
Pb
(%)
|
Cu
(%)
|
Zn
(%)
|
Au
(gpt)
|
Ag
koz
|
Pb
(T)
|
Cu
(T)
|
Zn
(T)
|
Au
oz
|
Polymetallic
|
1,675,000
|
330.9
|
62.2
|
1.02
|
0.73
|
2.77
|
0.81
|
3,350
|
17,037
|
12,211
|
46,347
|
43,550
|
Copper
|
10,000
|
567.5
|
102.6
|
0.70
|
3.50
|
1.61
|
0.73
|
31
|
67
|
334
|
154
|
224
|
Copper
Oxides
|
16,000
|
614.5
|
108.6
|
2.40
|
4.99
|
5.00
|
0.48
|
56
|
385
|
800
|
802
|
247
|
Oxides
|
67,000
|
962.7
|
344.1
|
10.43
|
0.67
|
2.69
|
2.37
|
745
|
7,020
|
453
|
1,808
|
5,135
|
Mina Ipillo
(Polymetallic)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Total
|
1,767,000
|
359.0
|
73.6
|
1.39
|
0.78
|
2.78
|
0.87
|
4,182
|
24,509
|
13,798
|
49,110
|
49,156
|
Table 2: Indicated Resources
|
|
|
|
|
|
Grades
|
Contained
Metal
|
Mineralization
Type
|
Tonnes
(t)
|
AgEq
(gpt)
|
Ag
(gpt)
|
Pb
(%)
|
Cu
(%)
|
Zn
(%)
|
Au
(gpt)
|
Ag
koz
|
Pb
(T)
|
Cu
(T)
|
Zn
(T)
|
Au
oz
|
Polymetallic
|
9,056,000
|
222.1
|
36.0
|
0.31
|
0.82
|
1.46
|
0.69
|
10,489
|
28,246
|
74,248
|
132,268
|
200,236
|
Copper
|
8,000
|
571.0
|
118.3
|
0.83
|
3.40
|
1.80
|
0.83
|
30
|
66
|
272
|
144
|
214
|
Copper
Oxides
|
26,000
|
1,368.7
|
693.4
|
8.39
|
5.53
|
1.36
|
0.26
|
584
|
2,199
|
1,449
|
356
|
219
|
Oxides
|
553,000
|
731.6
|
283.9
|
7.62
|
0.87
|
2.76
|
1.67
|
5,050
|
42,164
|
4,828
|
15,272
|
29,639
|
Mina Ipillo
(Polymetallic)
|
168,900
|
662.2
|
140.8
|
1.33
|
1.32
|
6.34
|
1.30
|
765
|
2,246
|
2,229
|
10,708
|
7,059
|
Total
|
9,812,000
|
261.7
|
53.6
|
0.75
|
0.84
|
1.54
|
0.74
|
16,153
|
74,922
|
83,027
|
158,750
|
230,308
|
Table 3: Measured and Indicated Resources
|
|
|
|
|
|
Grades
|
Contained
Metal
|
Mineralization
Type
|
Tonnes
(t)
|
AgEq
(gpt)
|
Ag
(gpt)
|
Pb
(%)
|
Cu
(%)
|
Zn
(%)
|
Au
(gpt)
|
Ag
koz
|
Pb
(T)
|
Cu
(T)
|
Zn
(T)
|
Au
oz
|
Polymetallic
|
10,731,000
|
239.1
|
40.1
|
0.42
|
0.81
|
1.66
|
0.71
|
13,838
|
45,284
|
86,459
|
178,615
|
243,786
|
Copper
|
18,000
|
569.1
|
109.7
|
0.76
|
3.45
|
1.70
|
0.78
|
62
|
133
|
606
|
298
|
438
|
Copper
Oxides
|
42,000
|
1,082.4
|
471.4
|
6.12
|
5.33
|
2.74
|
0.34
|
640
|
2,584
|
2,249
|
1,158
|
467
|
Oxides
|
621,000
|
756.7
|
290.4
|
7.93
|
0.85
|
2.75
|
1.74
|
5,795
|
49,184
|
5,281
|
17,080
|
34,774
|
Mina Ipillo
(Polymetallic)
|
168,900
|
662.2
|
140.8
|
1.33
|
1.32
|
6.34
|
1.30
|
765
|
2,246
|
2,229
|
10,708
|
7,059
|
Total
|
11,411,000
|
280.7
|
57.5
|
0.85
|
0.83
|
1.73
|
0.76
|
20,335
|
99,431
|
96,825
|
207,860
|
279,464
|
Table 4: Inferred Resources
|
|
|
|
|
|
Grades
|
Contained
Metal
|
Mineralization
Type
|
Tonnes
(t)
|
AgEq
(gpt)
|
Ag
(gpt)
|
Pb
(%)
|
Cu
(%)
|
Zn
(%)
|
Au
(gpt)
|
Ag
koz
|
Pb
(T)
|
Cu
(T)
|
Zn
(T)
|
Au
oz
|
Polymetallic
|
1,871,000
|
1,209.2
|
203.0
|
1.52
|
4.33
|
8.48
|
3.26
|
12,214
|
28,357
|
81,022
|
158,644
|
196,206
|
Copper
|
30
|
470.0
|
135.5
|
0.74
|
2.46
|
2.95
|
1.41
|
0
|
0
|
1
|
1
|
1
|
Copper
Oxides
|
4,500
|
1,353.8
|
649.7
|
10.96
|
5.10
|
0.94
|
1.31
|
93
|
489
|
228
|
42
|
188
|
Oxides
|
278,000
|
774.8
|
339.5
|
7.48
|
0.92
|
2.46
|
1.57
|
3,030
|
20,765
|
2,554
|
6,829
|
14,013
|
Mina Ipillo
(Polymetallic)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Total
|
2,153,000
|
1,153.7
|
221.5
|
2.30
|
3.89
|
7.69
|
3.04
|
15,337
|
49,611
|
83,804
|
165,516
|
210,407
|
The mineral reserves are included within these mineral
resources. Quality and grade are estimates and are rounded to
reflect the fact that the resource estimate is an approximation.
Mineral resources are not mineral reserves and do not demonstrate
economic viability. There is no certainty that all or any
part of the mineral resource will be converted to mineral reserves.
Quantities may not sum due to rounding.
Silver Equivalency is represented as a recovery-adjusted value
for silver, lead, copper, and zinc, represented as
silver-equivalent grade according to the formula:
AgEq =
Ag +
(Pb*Ppb*Rpb*22.05)+(Cu*Pcu*Rcu*22.05)+(Zn*Pzn*Rzn*22.05)+(Au*Pau*Rau/31.1035)
(Pag* Rag/31.1035)
Where the symbols represent:
Table 5: Silver Equivalent Calculation Values
Metal
|
Symbol
|
Grade
Units
|
Price
|
Price
Symbol
|
Recovery
Symbol
|
Silver
|
Ag
|
g/t
|
18.10
$/ozt
|
Pag
|
Rag
|
Lead
|
Pb
|
%
|
0.96 $/lb
|
Ppb
|
Rpb
|
Copper
|
Cu
|
%
|
3.02 $/lb
|
Pcu
|
Rcu
|
Zinc
|
Zn
|
%
|
0.91 $/lb
|
Pzn
|
Rzn
|
Gold
|
Au
|
g/t
|
1,241
$/ozt
|
Pau
|
Rau
|
Recovery
|
Polymetallics
|
Copper
|
Oxides
|
Cu
Oxides
|
Rag
|
59.76%
|
63.90%
|
31.98%
|
49.71%
|
Rpb
|
80.32%
|
0.00%
|
54.20%
|
28.38%
|
Rcu
|
69.65%
|
89.86%
|
0.00%
|
39.20%
|
Rzn
|
88.65%
|
0.00%
|
0.00%
|
0.00%
|
Rau
|
13.90%
|
7.50%
|
52.57%
|
10.01%
|
Metals price assumptions are based on 6-month trailing averages
as of the effective date of the resource estimation. Six
month averages were used as a proxy for spot prices, because the
3-year averages which Gustavson typically employs are significantly
higher and might overstate the resource and economics.
Recovery assumptions are based on 2-year trailing average
production recoveries for the Chumpe plant.
The reader is advised that the silver equivalency stated here is
based upon updated price and recovery factors; therefore a direct
comparison with previous resource and reserve estimates should not
be made.
Mineral Reserve Estimate
The effective date of this reserves estimate is December 31, 2014. The mineral reserve was
estimated by applying modifying factors to the mineral
resources. Yauricocha is an operating mine, with significant
production history. Because of this, the primary basis for
the modifying factors applied for reserves definition is actual
historic cost, recovery, and mine planning data. Gustavson
considers the reserves to meet industry standard practices, and to
be CIM and NI 43-101 compliant.
Mineral reserves are defined as that portion of mineral
resources which are economically extractable, and for which there
is mining access planned. The stated reserves include
factors for dilution, ore loss, and mine-mill reconciliation.
Therefore the grades are somewhat less than the resources, and the
tonnages are somewhat higher. Reserves are presented at a NSR
cut-off based on value of recoverable metal, less an allowance for
refining costs. Cutoffs vary by zone, include all operating
costs and G&A, and reflect mining cost assumptions for each
zone. Cutoffs vary from $42 to
$87 per tonne depending on mining
method. However due to bulk mining methods employed, some marginal
value blocks inside of stope shapes are included as reserves.
Reserve Estimate Effective Date December 31, 2014
Table 6: Yauricocha Proven Mineral Reserves
|
|
|
|
|
|
Grades
|
Contained
Metal
|
Mineralization
Type
|
Tonnes
(t)
|
AgEq
(gpt)
|
Ag
(gpt)
|
Pb
(%)
|
Cu
(%)
|
Zn
(%)
|
Au
(gpt)
|
Ag
koz
|
Pb
(T)
|
Cu
(T)
|
Zn
(T)
|
Au
oz
|
Polymetallic
|
1,108,000
|
348.5
|
65.2
|
1.17
|
0.68
|
3.07
|
0.81
|
2,320
|
13,014
|
7,493
|
33,963
|
28,749
|
Copper
|
10,000
|
444.5
|
80.3
|
0.58
|
2.74
|
1.34
|
0.57
|
27
|
60
|
283
|
138
|
189
|
Copper
Oxides
|
18,000
|
523.1
|
88.8
|
1.96
|
4.31
|
4.32
|
0.39
|
50
|
346
|
760
|
762
|
221
|
Oxides
|
72,000
|
775.1
|
276.1
|
8.41
|
0.59
|
2.30
|
1.91
|
638
|
6,047
|
422
|
1,655
|
4,427
|
Total
|
1,207,000
|
377.6
|
78.2
|
1.61
|
0.74
|
3.02
|
0.87
|
3,036
|
19,467
|
8,958
|
36,518
|
33,586
|
Table 7: Yauricocha Probable Mineral Reserves
|
|
|
|
|
|
Grades
|
Contained
Metal
|
Mineralization
Type
|
Tonnes
(t)
|
AgEq
(gpt)
|
Ag
(gpt)
|
Pb
(%)
|
Cu
(%)
|
Zn
(%)
|
Au
(gpt)
|
Ag
koz
|
Pb
(T)
|
Cu
(T)
|
Zn
(T)
|
Au
oz
|
Polymetallic
|
3,607,000
|
270.4
|
43.3
|
0.48
|
0.78
|
2.24
|
0.86
|
5,017
|
17,465
|
28,093
|
80,871
|
99,942
|
Copper
|
9,000
|
447.3
|
92.6
|
0.69
|
2.66
|
1.50
|
0.65
|
26
|
60
|
230
|
130
|
181
|
Copper
Oxides
|
32,000
|
1,111.3
|
538.3
|
6.97
|
4.69
|
1.12
|
0.46
|
559
|
2,250
|
1,514
|
362
|
478
|
Oxides
|
522,000
|
671.0
|
263.5
|
7.00
|
0.76
|
1.55
|
1.47
|
4,422
|
36,516
|
3,982
|
8,089
|
24,731
|
Total
|
4,170,000
|
327.4
|
74.8
|
1.35
|
0.81
|
2.15
|
0.93
|
10,024
|
56,291
|
33,819
|
89,452
|
125,332
|
Table 8: Yauricocha Proven and Probable Mineral
Reserves
|
|
|
|
|
|
Grades
|
Contained
Metal
|
Mineralization
Type
|
Tonnes
(t)
|
AgEq
(gpt)
|
Ag
(gpt)
|
Pb
(%)
|
Cu
(%)
|
Zn
(%)
|
Au
(gpt)
|
Ag
koz
|
Pb
(T)
|
Cu
(T)
|
Zn
(T)
|
Au
oz
|
Polymetallic
|
4,714,000
|
288.7
|
48.4
|
0.65
|
0.75
|
2.44
|
0.85
|
7,338
|
30,479
|
35,586
|
114,834
|
128,691
|
Copper
|
19,000
|
445.8
|
86.0
|
0.63
|
2.71
|
1.41
|
0.61
|
52
|
119
|
513
|
268
|
370
|
Copper
Oxides
|
50,000
|
903.5
|
379.5
|
5.20
|
4.56
|
2.25
|
0.44
|
609
|
2,596
|
2,274
|
1,124
|
699
|
Oxides
|
594,000
|
683.6
|
265.0
|
7.17
|
0.74
|
1.64
|
1.53
|
5,060
|
42,564
|
4,404
|
9,744
|
29,158
|
Total
|
5,377,000
|
338.6
|
75.5
|
1.41
|
0.80
|
2.34
|
0.92
|
13,059
|
75,758
|
42,778
|
125,970
|
158,918
|
Quality and grade are estimates and are rounded to reflect the
fact that the reserve estimate is an approximation. Quantities may
not sum due to rounding.
Quality Control
The quality assurance-quality control (QA-QC) program employed
by Sierra Metals has been reviewed by Gustavson. Gustavson
considers that the QA-QC program meets industry standards, and to
be CIM and NI 43-101 compliant.
Mining and Economics
Yauricocha is an underground mine which has been in continuous
operation for over 60 years. Mining at Yauricocha is
accomplished by various extraction methods, principally sublevel
caving and overhand cut and fill stoping. Ore is processed at
the Chumpe plant, which operates three process streams,
Polymetallic, Copper, and Oxide, to produce as many as five
marketable concentrates.
All reserves will be processed at the operation's current
flotation plant with resultant concentrates of copper, lead oxides,
lead sulfides and zinc transported off-site under processing
contracts with the operation's customers. Mining is all
underground, with processing and tailings storages nearby.
There is no IRR or payback period, as the mine is in operation,
therefore there is no initial capital required for start-up.
The production decision was not based on a feasibility study of
Mineral Reserves demonstrating economic viability. There is
an increased uncertainty and economic and technical risks of
failure associated with this production decision. Production and
economic variables may vary considerably, due to the absence of a
complete and detailed site analysis according to and in compliance
with NI 43-101 Standards of Disclosure specific risk analysis.
The mineral resource and reserve estimate was prepared by
Thomas Matthews, MMSA QP, Principal
Resource Geologist with Gustavson Associates, LLC. Mr. Matthews
is a qualified person as defined by NI 43-101 and has
reviewed and approved the contents of this press release with
respect to the mineral resource and reserve estimate at the
Yauricocha Mine.
A NI 43-101 compliant technical report supporting the disclosure
of the mineral resource and reserve estimate will be filed on SEDAR
within 45 days of this press release.
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".
Cautionary Statement Regarding Forward-Looking
Information
Except for statements of historical fact, the statements in this
press release contain certain "forward-looking information" within
the meaning of Canadian securities laws. Forwardlooking information
is frequently characterized by words such as "plan", "expect",
"project", "intend", "believe", "anticipate", "estimate" and other
similar words, or statements that certain events or conditions
"may" or "will" occur. Forward-looking statements include, but are
not limited to, statements regarding the Company's estimation of
mineral reserves and resources and the realization of mineral
reserve estimates (including all assumptions), the prospectivity of
the Yauricocha Project, the ability to identify new resources and
convert resources and exploration potential into reserves, the
timing, nature and success of exploration activities.
Forwardlooking statements are based on the opinions and estimates
of management at the date the statements are made, and are subject
to a variety of risks and uncertainties and other factors that
could cause actual events or results to differ materially from
those anticipated in the forwardlooking statements, including,
among others, the accuracy of mineral grades and related
assumptions, inherent operating risks, planned expenditures,
proposed exploration and development at the Yaurichocha Project,
operating and economic aspects of the Yaurichocha Project, as well
as those risk factors identified in the Company's Annual
Information Form filed under the Company's SEDAR profile. Such
statements are based on a number of assumptions which may prove to
be incorrect, including assumptions about: business and economic
conditions; commodity prices and the price of key inputs such as
labour, fuel and electricity; credit market conditions and
conditions in financial markets generally; revenue and cash flow
estimates, production levels, development schedules and the
associated costs; ability to procure equipment and supplies and on
a timely basis; the timing of the receipt of permits and other
approvals for projects and operations; the ability to attract and
retain skilled employees and contractors for the operations; the
accuracy of reserve and resource estimates; the impact of changes
in currency exchange rates on costs and results; interest rates;
taxation; and ongoing relations with employees and business
partners. Should one or more of the foregoing risks and
uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those described
in the 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.
Cautionary Note to U.S. Investors Concerning Measured,
Indicated and Inferred Resources
This press release uses the terms "measured," "indicated" and
"inferred" resources. We advise investors that while those terms
are recognized and required by Canadian regulations, the United
States Securities and Exchange Commission does not recognize them.
"Inferred" resources" have a great amount of uncertainty as to
their existence and as to their economic and legal feasibility. It
cannot be assumed that all or any part of an inferred resource will
ever be upgraded to a higher category. Under Canadian rules,
estimates of inferred mineral resources may not form the basis of
feasibility or other economic studies. United States investors are cautioned not to
assume that all or any part of measured or indicated mineral
resources will ever be converted into mineral reserves.
United States investors are also
cautioned not to assume that all or any part of an inferred mineral
resource exists, or is economically or legally mineable.
SOURCE Sierra Metals Inc.