VANCOUVER, July 31, 2014 /PRNewswire/ - Sierra Metals
Inc. (TSX:SMT) (BVL:SMT) ("Sierra Metals" or the "Company")
announces the filing of Sociedad Minera Corona S.A.'s ("Corona")
unaudited Financial Statements and Management Discussion and
Analysis ("MD&A") for the second quarter of 2014. The Company
holds an 81.8% interest in Corona.
All amounts are presented in thousands of US dollars unless
otherwise stated and have not been adjusted for the 18.2%
non-controlling interest.
Audra Walsh, Sierra's new
President and CEO, stated: "Corona has achieved higher production levels
and lower cash cost per ounce, which resulted in higher operating
cash flows, adjusted EBITDA and profit levels for the second
quarter of 2014. The main drivers for these positive results have
been the measures that the Company has been implementing since the
second half of 2013 to increase operational efficiencies and reduce
costs. Corona is committed to meet
its production guidance for 2014. I look forward to working with
the team at Corona in their
continual efforts to be a low cost producer."
The following table sets out select unaudited financial
information for the three and six months ended June 30, 2014 and 2013:
|
|
|
|
|
|
|
|
|
3 Months
Ended
|
6 Months
Ended
|
|
(In thousands of
US dollars, unless otherwise stated)
|
June 30,
2014
|
June 30,
2013
|
June 30,
2014
|
June 30,
2013
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
31,003
|
27,269
|
58,911
|
60,554
|
|
Adjusted
EBITDA
|
|
15,377
|
11,384
|
28,274
|
28,600
|
|
Cash Flow from
continuing operations
|
|
10,495
|
2,679
|
19,337
|
3,488
|
|
Gross
profit
|
|
14,899
|
10,686
|
27,865
|
26,444
|
|
Income
Taxes
|
|
(4,237)
|
(3,252)
|
(7,724)
|
(7,567)
|
|
Net
Income
|
|
6,973
|
1,825
|
13,165
|
10,989
|
|
Cash Cost per oz of
Ag (Yauricocha)
|
|
|
$
|
(19.67)
|
(10.11)
|
(20.33)
|
(14.29)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands of
US dollars, unless otherwise stated)
|
June 30,
2014
|
Dec 31,
2013
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
33,915
|
36,242
|
|
|
|
Assets
|
|
113,573
|
117,583
|
|
|
|
Liabilities
|
|
56,277
|
58,831
|
|
|
|
Equity
|
|
57,295
|
58,752
|
|
|
|
|
|
|
|
|
|
|
1Adjusted EBITDA is defined by
management as EBITDA adjusted for non-cash and non recurring items
including foreign exchange gain (loss).
|
|
|
|
2Cash
costs include cost of sales, treatment and refining charges, and
selling expense, and exclude workers' profit sharing, depreciation
and
|
other non-cash
provisions.
|
|
|
|
|
|
|
Corona's Financial
Highlights
- Net income of US$ 7.0 million or
US$ 0.194 per share for the second
quarter of 2014 compared to US$ 1.8
million or US$ 0.051 per share
for the same period in 2013. Net income of US$ 13.2 million or US$
0.366 per share and US$ 11.0
million or US$ 0.305 per share
for the six months ended June 30,
2014 and 2013, respectively.
- Adjusted EBITDA of US$ 15.4
million for the second quarter of 2014 compared to
US$ 11.4 million for the same period
in 2013. Adjusted EBITDA of US$ 28.3
million and US$ 28.6 million
for the six months ended June 30,
2014 and 2013, respectively. The increase in adjusted EBITDA
for the second quarter of 2014 compared to the second quarter of
2013 is mainly due to the increase in revenues and higher gross
margins recorded during the period. This has been the result of the
measures taken by the Company to increase operating efficiencies
and reduce costs and which it has been implementing since the
second half of 2013.
- Operating cash flow of US$ 10.5
million for the second quarter of 2014 compared to
US$ 2.7 million for the same period
in 2013. Operating cash flow of US$ 19.3
million and US$ 3.5 million
for the six month period ended June 30,
2014 and 2013, respectively. The increase in operating cash
flow is mainly the result of the higher revenues and gross margins
and a US$ 8.5 million positive impact
on working capital driven by lower payments of workers' profit
sharing and taxes in 2014.
- Income taxes of US$ 4.2 million
for the second quarter of 2014 compared to US$ 3.3 million in the same period of 2013.
Income taxes of US$ 7.7 million and
US$ 7.6 million for the six month
period ended June 30, 2014 and 2013,
respectively.
- Revenues of US$ 31.0 million for
the second quarter of 2014 compared to US$
27.3 million for the same period in 2013. Revenues of
US$ 58.9 million and US$ 60.6 million for the six month period ended
June 30, 2014 and 2013, respectively.
The increase in revenues for the second quarter of 2014 compared to
the second quarter of 2013 is mainly as a result of the higher lead
head grades, higher silver and lead recoveries and a higher volume
of mineral sold. This was partially offset by the decrease in the
commodity prices compared to 2013.
- Cash and cash equivalents of US$ 33.9
million as at June 30, 2014
compared to US$ 36.2 million as of
December 31, 2013. Cash and cash
equivalents decreased by US$ 2.3
million mainly driven by US$ 19.3
million of operating cash flow, offset by US$ 14.6 million of dividend payments,
US$ 6.4 million of capital
expenditures and US$ 0.6 million of
financing activities.
- Negative by-product cash cost per ounce of silver of
US$ 19.67 at Yauricocha for the
second quarter of 2014 compared to a negative by-product cash cost
per ounce of silver of US$ 10.01 for
the same period of 2013. Negative by-product cash cost per ounce of
silver of US$ 20.33 and US$ 14.29 at Yauricocha for the six month period
ended June 30, 2014 and 2013,
respectively. Lower cash cost per ounce of silver during the first
half of 2014 compared to 2013 is driven by lower cash cost per
tonne processed and higher by-product credits. This is the result
of the measures that the Company has been implementing since the
second half of 2013 and which have resulted in operating
efficiencies and cost savings.
Corona's Operational
Highlights
- Silver ("Ag") production of 479,254 oz in the second quarter of
2014 compared to 481,058 oz for the same period in 2013. Silver
("Ag") production of 973,548 oz and 955,660 oz for the six month
period ended June 30, 2014 and 2013,
respectively.
- Copper ("Cu") production of 1.8 million pounds ("lb") in the
second quarter of 2014 compared to 1.7 million lb for the same
period in 2013. Copper ("Cu") production of 3.5 million pounds
("lb") and 3.9 million pounds ("lb") for the six month period ended
June 30, 2014 and 2013,
respectively.
- Lead ("Pb") production of 11.2 million lb in the second quarter
of 2014 compared to 9.4 million lb for the same period in 2013.
Lead ("Pb") production of 22.9 million pounds ("lb") and 17.8
million pounds ("lb") for the six month period ended June 30, 2014 and 2013, respectively.
- Zinc ("Zn") production of 13.5 million lb in the second quarter
of 2014 compared to 12.1 million lb for the same period in 2013.
Zinc ("Zn") production of 26.2 million pounds ("lb") and 25.2
million pounds ("lb") for the six month period ended June 30, 2014 and 2013, respectively.
- Gold ("Au") production from the Yauricocha Mine was 1,480 oz in
the second quarter of 2014 and 1,800 oz for the same period in
2013. Gold ("Au") production of 2,954 oz and 3,398 oz for the six
month period ended June 30, 2014 and
2013, respectively.
The following table sets out production results for the three
and six months ended June 30, 2014
and 2013:
|
|
|
|
|
|
|
Yauricocha
Production
|
3 Months
Ended
|
6 Months
Ended
|
|
Jun 30,
2014
|
Jun 30,
2013
|
%
Var.
|
Jun 30,
2014
|
Jun 30,
2013
|
%
Var.
|
|
|
|
|
|
|
|
Silver production
(oz)
|
479,254
|
481,058
|
0%
|
973,548
|
955,660
|
2%
|
Copper production
(000 lb)
|
1,755
|
1,714
|
2%
|
3,494
|
3,889
|
-10%
|
Lead production
(000 lb)
|
11,206
|
9,382
|
19%
|
22,888
|
17,761
|
29%
|
Zinc production
(000 lb)
|
13,457
|
12,121
|
11%
|
26,189
|
25,167
|
4%
|
Gold Production
(oz)
|
1,480
|
1,800
|
-18%
|
2,954
|
3,398
|
-13%
|
|
|
|
|
|
|
|
About Sierra Metals
Sierra Metals Inc. is a Canadian mining company focused on
precious and base metals from its Yauricocha Mine in Peru, 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 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. Other
than statements of historical fact, all statements are
"forward-looking statements", which involve various known and
unknown risk and uncertainties and other factors, including market
conditions that may affect the Company's ability to execute its
current business plan. 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.