Igor Gonzales

T.SMT, Igor GonzalesMr. Gonzales is from Cusco, Peru and has more than 30 years of experience in the mining industry. He was with Barrick Gold Corporation from 1998 to 2013, most recently as Executive Vice President and Chief Operating Officer. Between 1980 and 1996, Mr. Gonzales served in various roles with Southern Peru Copper Corporation. Mr. Gonzales has a Bachelor of Science degree in Chemical Engineering from the University of San Antonio Abad in Cusco, Peru, and was a Fulbright Scholar at the New Mexico Institute of Mining and Technology, where he earned a Master of Science degree in Extractive Metallurgy.

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T.SMT, Sierra Metals

Sierra Metals Reports 2017 Production Results and Announces 2018 Production, Cost, and Capex Guidance

Sierra Metals Inc. (TSX: SMT) (BVL: SMT) (NYSE AMERICAN: SMTS) (“Sierra Metals” or “the Company”) is pleased to report fourth quarter 2017 and full year 2017 production results, as well as 2018 production, cost, and capex guidance. 

Results are from Sierra Metals’ three underground mines in Latin America: The Yauricocha polymetallic mine in Peru, and the Bolivar copper and Cusi silver mines in Mexico.

2017 Consolidated Production Highlights

  • Silver equivalent production of 14.9 million ounces; a 26% increase from 2016
  • Copper equivalent production of 90.4 million pounds; a 1% decrease from 2016
  • Zinc equivalent production of 193.2 million pounds; a 9% decrease from 2016
  • Total of 2.0 million tonnes processed; a 2% decrease from 2016
  • Completion of key aspects of operational improvements and turnaround plan in Mexico

Fourth Quarter 2017 Production Highlights

  • Silver equivalent production of 4.1 million ounces; a 15% increase from Q4 2016
  • Copper equivalent production of 21.9 million pounds; a 12% decrease from Q4 2016
  • Zinc equivalent production of 47.3 million pounds; an 8% decrease from Q4 2016
  • Total of 498,199 tonnes processed; a 4% decrease from Q4 2016
  • Tonnage at Bolivar and Cusi increased during Q4 2017 as key components of the operational improvement and turnaround plan were completed

During 2017, silver equivalent production increased by 26%, copper equivalent production decreased 1%, and zinc equivalent production decreased by 9% compared to 2016. During Q4 2017, silver equivalent production increased by 15%, copper equivalent production decreased 12%, and zinc equivalent production decreased by 8% compared to Q4 2016. The decrease in metal production was due to lower production in Mexico, partially offset by record throughput, which led to an increase in production, in Peru.  The temporary decrease in metal production in Q4 2017 compared to Q4 2016 was primarily due to lower throughput, head grades, and recoveries at the Bolivar Mine, and decreases in throughput and recoveries at the Cusi Mine.  Similar to the successful program at Yauricocha in Peru, which began in 2015, the Company has engaged in an operation turnaround program in Mexico to modernize operations, improve production, and lower costs.  The Company has already realized a 2% increase in throughput at Bolivar and a 23% increase at Cusi in Q4 2017 compared to Q3 2017, and further throughput increases are expected to continue during the first half of 2018. Equivalent metal production variances are partially the result of differences in realized metal prices used in the equivalent metal calculations for both periods.

Igor Gonzales, President and CEO of Sierra Metals, commented: “The Company ended 2017 with sound production due to a very strong performance at Yauricocha, where we continue to reap the benefits of a successful operational improvements program resulting in higher tonnages, in addition to higher-grade material discovered through our successful brownfield exploration programs.

Mexican operations have seen a quarter over quarter improvement compared to Q3 2017. At Bolivar, there have been increases in tonnages as a result of new equipment purchases, which have allowed more minable stopes to be incorporated into the mine plan. At Cusi, the Company has changed its focus from mining the existing narrow vein structures to the recently discovered Santa Rosa de Lima zone, which has significantly larger widths and higher grades. Cusi reported a significant improvement in metal recoveries, and the 2018 guidance is based on projections which reflect the potential for record silver production and lower costs, as a result of the restructuring program performed during the second half of 2017, which focused on the mining of the Santa Rosa de Lima structure. Both mines have also benefitted from successful improvement efforts in metallurgical recoveries, which have increased during Q4 2017 compared to previous quarters.”

He concluded, “The groundwork has been set for an important year at Sierra in 2018. The modernizing and implementation of best operational practices should allow the Company to increase metal production and EBITDA to new highs. Our ongoing aggressive brownfield exploration programs at all mines should also lead to further significant growth in reserves and resources, and add to the value of our assets during the year ahead.”  

Consolidated Production Results

Consolidated Production 

3 Months Ended

12 Months Ended

 

Q4 2017

Q4 2016

% Var.

Q4 2017

Q4 2016

% Var.

       

Tonnes processed (mt)

498,199

517,705

-4%

1,998,738

2,034,465

-2%

 

Daily throughput

5,694

5,917

-4%

5,711

5,813

-2%

       

Silver ounces (000’s)

496

789

-37%

2,317

2,979

-22%

Copper pounds (000’s)

7,471

6,153

21%

26,775

23,390

14%

Lead pounds (000’s)

5,736

9,990

-43%

29,704

40,551

-27%

Zinc pounds (000’s)

19,545

17,039

15%

76,088

56,610

34%

Gold ounces

1,591

1,867

-15%

6,197

8,604

-28%

       

Silver equivalent ounces (000’s)(1)

4,078

3,533

15%

14,865

11,798

26%

Copper equivalent pounds (000’s)(1)

21,856

24,969

-12%

90,354

91,398

-1%

Zinc equivalent pounds (000’s)(1)

47,287

51,229

-8%

193,152

211,583

-9%

       

(1) Silver equivalent ounces and copper and zinc equivalent pounds for Q4 2017 were calculated using the following realized prices: $16.77/oz Ag, $3.13/lb Cu, $1.11/lb Pb, $1.45/lb Zn, $1,282/oz Au. Silver equivalent ounces and copper and zinc equivalent pounds for Q4 2016 were calculated using the following realized prices: $16.82/oz Ag, $2.38/lb Cu, $0.95/lb Pb, $1.16/lb Zn, $1,210/oz Au. Silver equivalent ounces and copper and zinc equivalent pounds for 12M 2017 were calculated using the following realized prices: $17.14/oz Ag, $2.82/lb Cu, $1.06/lb Pb, $1.32/lb Zn, $1,265/oz Au. Silver equivalent ounces and copper and zinc equivalent pounds for 12M 2016 were calculated using the following realized prices: $17.08/oz Ag, $2.21/lb Cu, $/0.85lb Pb, $0.95/lb Zn, $1,254/oz Au. 

Yauricocha Mine, Peru

The Yauricocha Mine processed a total of 1,023,491 tonnes during 2017, representing a 14% increase from 2016.  The mine processed a total of 254,933 tonnes in Q4 2017, representing an 8% increase compared to Q4 2016. Higher metal production was driven by increased throughput, higher copper and zinc head grades, and higher recoveries of all metals, except gold, which were a consequence of higher head grades in the ore sources available to be mined, as the Esperanza Zone and Cuerpos Chicos continued to contribute to the metal production.

Year over year zinc equivalent production was 4% higher in 2017 compared to the prior year. Copper Production was 87% higher and zinc production 37% higher. This was offset by a 10% decrease in silver production, a 23% decrease in lead production and a 38% decrease in gold production from 2016. The Company continued to see positive improvements from the restructuring at Yauricocha with increased throughput; however, slightly lower grades were noted with increased contribution from the Esperanza zone into the production schedule in Q4 2017, as evidenced a 3% decrease in zinc equivalent production over Q4 2016. During Q4 2017, the Company saw a significant 107% increase in the production of copper and a 16% increase in the production of zinc, offset by decreases in production of silver (40%), lead (42%) and gold (20%) compared to Q4 2016.

A summary of production from the Yauricocha Mine for Q4 2017 has been provided below:

Yauricocha Production

3 Months Ended

12 Months Ended

 

Q4 2017

Q4 2016

% Var.

Q4 2017

Q4 2016

% Var.

       

Tonnes processed (mt)

254,933

236,650

8%

1,023,491

897,169

14%

 

Daily throughput

2,914

2,705

8%

2,924

2,563

14%

       
 

Silver grade (g/t)

53.57

100.37

-47%

67.13

97.69

-31%

 

Copper grade

0.80%

0.51%

58%

0.79%

0.54%

48%

 

Lead grade

1.19%

2.18%

-45%

1.48%

2.52%

-41%

 

Zinc grade

3.91%

3.63%

8%

3.74%

3.18%

18%

 

Gold Grade (g/t)

0.55

0.59

-7%

0.54

0.64

-16%

       
 

Silver recovery

75.13%

72.05%

4%

74.82%

65.34%

15%

 

Copper recovery

78.86%

64.75%

22%

65.45%

59.26%

10%

 

Lead recovery

81.32%

81.72%

0%

83.64%

73.07%

14%

 

Zinc recovery

88.25%

88.49%

0%

89.14%

87.18%

2%

 

Gold Recovery

16.02%

20.06%

-20%

16.30%

25.19%

-35%

       

Silver ounces (000’s)

330

550

-40%

1,653

1,841

-10%

Copper pounds (000’s)

3,567

1,720

107%

11,719

6,281

87%

Lead pounds (000’s)

5,431

9,295

-42%

27,934

36,440

-23%

Zinc pounds (000’s)

19,393

16,776

16%

75,151

54,805

37%

Gold ounces

723

908

-20%

2,894

4,664

-38%

       

Zinc equivalent pounds (000’s)(1)

35,758

36,841

-3%

146,816

140,928

4%

       

(1) Zinc equivalent pounds for Q4 2017 were calculated using the following realized prices: $16.77/oz Ag, $3.13/lb Cu, $1.11/lb Pb, $1.45/lb Zn, $1,282/oz Au. Zinc equivalent pounds for Q4 2016 were calculated using the following realized prices: $16.82/oz Ag, $2.38/lb Cu, $0.95/lb Pb, $1.16/lb Zn, $1,210/oz Au. Zinc equivalent pounds for 12M 2017 were calculated using the following realized prices: $17.14/oz Ag, $2.82/lb Cu, $1.06/lb Pb, $1.32/lb Zn, $1,265/oz Au. Zinc equivalent pounds for 12M 2016 were calculated using the following realized prices: $17.08/oz Ag, $2.21/lb Cu, $/0.85lb Pb, $0.95/lb Zn, $1,254/oz Au. 

Bolivar Mine, Mexico

The Bolivar Mine processed 887,237 tonnes in 2017, representing a 7% decrease over 2016. Q4 2017 throughput was 226,986 tonnes, which was 7% lower when compared to Q4 2016. The lower throughput and recoveries, along with lower head grades encountered, resulted in a 16% decrease in copper equivalent production in Q4 2017 compared to Q4 2016. The decrease in throughput was due to the lack of availability of equipment required to mine current production stopes and minable ore zones, as well as a lack of development within the mine. The focus remains on increasing tonnage at Bolivar through the commissioning of the newly acquired equipment, all of which has arrived was commissioned during Q4 2017. We continue to define higher grade ore sources through further development, which are expected to come into the mine plan in the future.

Metal production at the Bolivar Mine decreased in 2017 compared to 2016 with copper production 12% lower, silver production 18% lower and gold production 4% lower.  In Q4 2017, copper production decreased by 12% to 3,904,000 pounds, silver production decreased 15% to 84,000 ounces, and gold production decreased 1% to 791 ounces compared to Q4 2016. The 16% decrease in metal production was driven by lower throughput, lower head grades and lower recoveries for all metals, with the exception of gold recoveries.

A summary of production for the Bolivar Mine for Q4 2017 has been provided below:

Bolivar Production

3 Months Ended

12 Months Ended

 

Q4 2017

Q4 2016

% Var.

Q4 2017

Q4 2016

% Var.

       

Tonnes processed (mt)

226,986

245,000

-7%

887,237

950,398

-7%

 

Daily throughput

2,594

2,800

-7%

2,535

2,715

-7%

       
 

Copper grade

0.94%

0.99%

-5%

0.96%

1.00%

-3%

 

Silver grade (g/t)

14.67

15.53

-6%

14.93

16.72

-11%

 

Gold grade (g/t)

0.16

0.18

-13%

0.17

0.19

-12%

       
 

Copper recovery

83.03%

83.03%

0%

79.82%

81.73%

-2%

 

Silver recovery

78.35%

80.42%

-3%

76.88%

77.84%

-1%

 

Gold recovery

68.42%

55.62%

23%

59.50%

50.55%

18%

       

Copper pounds (000’s)

3,904

4,433

-12%

15,056

17,109

-12%

Silver ounces (000’s)

84

98

-15%

327

398

-18%

Gold ounces

791

801

-1%

2,880

2,986

-4%

       

Copper equivalent pounds (000’s)(1)

4,677

5,536

-16%

18,338

21,889

-16%

       

(1) Copper equivalent pounds for Q4 2017 were calculated using the following realized prices: $16.77/oz Ag, $3.13/lb Cu, $1.11/lb Pb, $1.45/lb Zn, $1,282/oz Au. Copper equivalent pounds for Q4 2016 were calculated using the following realized prices: $16.82/oz Ag, $2.38/lb Cu, $0.95/lb Pb, $1.16/lb Zn, $1,210/oz Au. Copper equivalent pounds for 12M 2017 were calculated using the following realized prices: $17.14/oz Ag, $2.82/lb Cu, $1.06/lb Pb, $1.32/lb Zn, $1,265/oz Au. Copper equivalent pounds for 12M 2016 were calculated using the following realized prices: $17.08/oz Ag, $2.21/lb Cu, $/0.85lb Pb, $0.95/lb Zn, $1,254/oz Au. 

Cusi Mine, Mexico

Annual production at the Cusi Mine was 88,011 tonnes in 2017, which was 53% lower than 2016. Total ore processed decreased 55% to 16,280 tonnes during Q4 2017 compared to Q4 2016.  The lower throughput was partially offset by increased head grades for gold and silver and increased recoveries of all metals except gold, and resulted in a 42% decrease in silver equivalent production in Q4 2017 compared to Q4 2016. Recovery improvements at Cusi also helped, with metallurgical recoveries increasing in Q4 2017 compared to previous quarters.

Metal production decreased in 2017 compared to 2016 for all metals including silver (54%), gold (56%), lead (57%) and zinc (48%). Silver production decreased 41% to 82,000 ounces, gold production decreased 51% to 77 ounces, lead production decreased 56% to 305,000 pounds and zinc production decreased 42% to 152,000 pounds during Q4 2017 compared to Q4 2016.

The lower throughput was the result of the Company refocusing its efforts away from the existing structures to the recently discovered Santa Rosa de Lima structure, which is wider and has higher silver grades compared to the narrow veins currently being mined.  The Company remains focused on the development of the Santa Rosa de Lima zone, developing drifts to mine this area and with production ramping up from this area, which is expected to continually increase into Q2 2018 when full mill feed capacity will come from this new zone.

A summary of production for the Cusi Mine for Q4 2017 has been provided below:

Cusi Production

3 Months Ended

12 Months Ended

 

Q4 2017

Q4 2016

% Var.

Q4 2017

Q4 2016

% Var.

       

Tonnes processed (mt)

16,280

36,055

-55%

88,011

186,898

-53%

 

Daily throughput

186

412

-55%

251

534

-53%

       
 

Silver grade (g/t)

178.60

172.70

3%

164.93

171.78

-4%

 

Gold grade (g/t)

0.25

0.23

8%

0.26

0.26

0%

 

Lead grade

0.97%

1.13%

-14%

1.12%

1.21%

-7%

 

Zinc grade

1.00%

1.04%

-4%

1.13%

1.16%

-2%

       
 

Silver recovery

88.15%

70.04%

26%

72.17%

71.66%

1%

 

Gold recovery

58.09%

58.16%

0%

58.40%

61.82%

-6%

 

Lead recovery

87.65%

77.43%

13%

81.26%

82.24%

-1%

 

Zinc recovery

42.50%

31.86%

33%

42.56%

37.72%

13%

       

Silver ounces (000’s)

82

140

-41%

337

740

-54%

Gold ounces

77

158

-51%

423

954

-56%

Lead pounds (000’s)

305

695

-56%

1,769

4,110

-57%

Zinc pounds (000’s)

152

263

-42%

937

1,804

-48%

       

Silver equivalent ounces (000’s)(1)

122

209

-42%

549

1,114

-51%

       

(1) Silver equivalent ounces for Q4 2017 were calculated using the following realized prices: $16.77/oz Ag, $3.13/lb Cu, $1.11/lb Pb, $1.45/lb Zn, $1,282/oz Au. Silver equivalent ounces for Q4 2016 were calculated using the following realized prices: $16.82/oz Ag, $2.38/lb Cu, $0.95/lb Pb, $1.16/lb Zn, $1,210/oz Au. Silver equivalent ounces for 12M 2017 were calculated using the following realized prices: $17.14/oz Ag, $2.82/lb Cu, $1.06/lb Pb, $1.32/lb Zn, $1,265/oz Au. Silver equivalent ounces for 12M 2016 were calculated using the following realized prices: $17.08/oz Ag, $2.21/lb Cu, $/0.85lb Pb, $0.95/lb Zn, $1,254/oz Au. 

2018 Production and Cost Guidance

The Company anticipates that 2018 silver equivalent production will range between 13.9 and 16.2 million ounces, copper equivalent production will range between 89.2 and 104.0 million pounds, and zinc equivalent production will range between 183.8 and 214.5 million pounds.  The forecasted range is a result of increased throughput, production, and higher recoveries at Bolivar and Cusi.  Yauricocha will see consistently strong, albeit flat levels of throughput in 2018 due to a rehabilitation of the lower part of the Mascota shaft in Q2 2018, which will slightly lower throughput rates during that time period.

A summary of realized metal pricing for Q4 2017 has been provided below:

Realized Prices

3 Months Ended

12 Months Ended

 

Q4 2017

Q4 2016

% Var.

Q4 2017

Q4 2016

% Var.

Ag $/oz

16.77

16.82

0%

17.14

17.08

0%

Cu $/lb

3.13

2.38

31%

2.82

2.21

28%

Pb $/lb

1.11

0.95

17%

1.06

0.85

25%

Zn $/lb

1.45

1.16

25%

1.32

0.95

38%

Au $/oz

1,282

1,210

6%

1,265

1,254

1%

A table summarizing 2018 production guidance has been provided below:

2018 Guidance

2017

 

Low

High

Actual

Silver ounces (000’s)

2,474

2,886

2,317

Copper pounds (000’s)

32,700

38,100

26,775

Lead pounds (000’s)

19,100

22,300

29,704

Zinc pounds (000’s)

62,900

73,400

76,088

Gold ounces 

6,700

7,800

6,197

Silver equivalent ounces (000’s)(1)

13,900

16,210

14,865

Copper equivalent pounds (000’s)(1)

89,184

104,005

90,354

Zinc equivalent pounds (000’s)(1)

183,830

214,468

193,152

(1) Silver equivalent ounces, copper and zinc equivalent pounds for 2018 were calculated using the following metal prices: $18.25/oz Ag, $3.00/lb Cu, $1.38/lb Pb, $1.05/lb Zn, $1,291/oz Au. Silver equivalent ounces, copper and zinc equivalent pounds for 12M 2017 were calculated using the following realized prices: $17.14/oz Ag, $2.82/lb Cu, $1.06/lb Pb, $1.32/lb Zn, $1,265/oz Au.

A mine by mine breakdown of 2018 production guidance, cash costs and all-in sustaining costs (“AISC”) are included in the table below.  Cash costs and AISC guidance is shown per payable zinc equivalent pound at Yauricocha, copper equivalent pound at Bolivar, and silver equivalent ounce at Cusi.

Mine

 

Equivalent
Production Range 

Cash Costs per
ZnEqLb or
CuEqLb or
AgEqOz Sold

AISC ($)* per
ZnEqLb or
CuEqLb or
AgEqOz Sold

Yauricocha 

 Zinc Eq Lbs (000’s)

123,897 – 144,546

$0.62/lb

$0.78/lb

Bolivar

Copper Eq Lbs (000’s)

21,986 – 25,651

$1.60/lb

$1.96/lb

Cusi 

Silver Eq Ozs (000’s)

1,205 – 1,406

$11.12/oz

$14.28/oz

*AISC includes Treatment and Refining Charges, Selling Costs, G&A Costs and Sustaining Capex

 

(1) 2018 Silver equivalent ounces, copper and zinc equivalent pounds were calculated using the following metal prices: $18.25/oz Ag, $3.00/lb Cu, $1.05/lb Pb, $1.38/lb Zn, $1,291/oz Au

2018 Capital Expenditures

In 2018, the Company plans to invest a total of $49 million on capital expenditures, including $13.1 million for sustaining capital requirements and $35.7 million for expansion, growth projects and exploration expenses.  These capital expenditures will allow Sierra Metals to continue to significantly grow mineral resources and increase production, which will provide increased cash flow and lower cash costs. This program will be funded by operating cash flow.

The 2018 budget includes several capital investments for property, plant and equipment; underground development; exploration; and corporate projects including tunnel completion, shaft deepening and rehabilitation at the Yauricocha Mine, and improvements to existing tailings deposition facilities at the Bolivar and Cusi Mines.  Management will continue to review metal prices and retains the option to adjust the 2018 budget should metal prices experience any dramatic changes within the year.

A breakdown by mine of the throughput and planned capital investments is shown below:

The Yauricocha Mine in Peru plans to process up to 1.0 million tonnes (3,000 tpd) in 2018. Sustaining capex will be approximately $8.4 million and growth capex will be approximately $19.3 million.

2018 major capital investments include:

  • $6.0 million for deepening of the Yauricocha Shaft
  • $1.8 million for rehabilitation of the lower portion of Mascota Shaft
  • $2.7 million for the completion of the Yauricocha Tunnel
  • $3.2 million ventilation
  • $6.0 million for brownfield exploration and existing definition drilling and development
  • $1.1 million for concentrator plant
  • $1.0 million for mine camp
  • $3.3 million for equipment

The Bolivar Mine in Mexico plans to process up to 1.2 million tonnes, with initial production at 3,000 tpd with an objective to reach 3,500 tpd by year end in 2018.  Sustaining capex will be approximately $2.8 million and growth capex will be approximately $9.0 million.

2018 major capital investments include:

  • $1.0 million for tailings deposition facility expansion
  • $5.1 million for brownfield exploration and existing definition drilling and development
  • $3.0 million for concentrator plant
  • $2.7 million for equipment

The Cusi Mine in Mexico plans to process up to 201,540 tonnes, ramping up from 300 tpd with an objective to reach 650 tpd in Q2 2018.  Sustaining capex will be approximately $1.9 million and growth capex will be $7.4 million.

2018 major capital investments include:

  • $1.5 million for tailings deposition facility
  • $4.3 million for brownfield exploration and existing definition drilling and development
  • $1.4 million for equipment
  • $1.9 million for concentrator plant

Update to the Yauricocha Capex included in the recently published NI 43-101 Technical Report

The technical report filed on SEDAR on November 10, 2017 noted the inclusion in reserves of 9M tonnes. As indicated in the report, during the years 2018, 2019 and 2020, capital expenditures would have amounted to approximately $70 million, and this estimate had the shaft sinking down to the 1400 level.

Management has revised some of the estimated capex, and the related activity program for the expenditures was reduced to 2 years from the 3-year timeline set out in the November 2017 technical report.

The capital expenditures included in the technical report has been reduced by $18M, to $52M (capex expected to be spent in 2018 is $28M). This reduction resulted in the elimination of 130 meters of shaft sinking, the elimination of the proposed 1370 level station, and the elimination of the 1400 level loading and spill pocket. This program does not compromise the ability to access the 9M tonnes of reserves delineated in the technical report. This revised capex estimate reflects the necessary capital required to mine the existing 9M tonnes of reserves included in the technical report.

Quality Control

All 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.

Americo Zuzunaga, MAusIMM CP (Mining Engineer) and Vice President of Corporate Planning is a Qualified Person and chartered professional qualifying as a Competent Person under the Joint Ore Reserves Committee (JORC) Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.

Augusto Chung, FAusIMM CP (Metallurgist) and Consultant to Sierra Metals is a Qualified Person and chartered professional qualifying as a Competent Person on metallurgical processes.

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 is focused on increasing production volume and growing mineral resources. Sierra Metals has recently had several new key discoveries and still has many more exciting brownfield exploration opportunities at all three Mines in Peru and Mexico that are within close proximity to the existing mines. Additionally, the Company also has large land packages at all three mines with several prospective regional targets providing longer term exploration upside and mineral resource growth potential.

The Company’s Common Shares trade on the Bolsa de Valores de Lima and on the Toronto Stock Exchange under the symbol “SMT” and on the NYSE American Exchange under the symbol “SMTS”.

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Forward-Looking Statements

This press release contains “forward-looking information” and “forward-looking statements” within the meaning of Canadian and U.S. securities laws related to the Company (collectively, “forward-looking information”). Forward-looking information includes, but is not limited to, statements with respect to the Company’s operations, including anticipated developments in the Company’s operations in future periods, the Company’s planned exploration activities, the adequacy of the Company’s financial resources, and other events or conditions that may occur in the future. Statements concerning mineral reserve and resource estimates may also be considered to constitute forward-looking statements to the extent that they involve estimates of the mineralization that will be encountered if and when the properties are developed or further developed. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “expects”, “anticipates”, “plans”, “projects”, “estimates”, “assumes”, “intends”, “strategy”, “goals”, “objectives”, “potential” or variations thereof, or stating that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking information.

Forward-looking information is subject to a variety of risks and uncertainties, which could cause actual events or results to differ from those reflected in the forward-looking information, including, without limitation, risks inherent in the mining industry including environmental hazards, industrial accidents, unusual or unexpected geological formations, floods, labour disruptions, explosions, cave-ins, weather conditions and criminal activity; commodity price fluctuations; higher operating and/or capital costs; lack of available infrastructure; the possibility that future exploration, development or mining results will not be consistent with the Company’s expectations; risks associated with the estimation of mineral resources and the geology, grade and continuity of mineral deposits and the inability to replace reserves; fluctuations in the price of commodities used in the Company’s operations; risks related to foreign operations; changes in laws or policies, foreign taxation, delays or the inability to obtain necessary governmental permits; risks relating to outstanding borrowings; issues regarding title to the Company’s properties; risks related to environmental regulation; litigation risks; risks related to uninsured hazards; the impact of competition; volatility in the price of the Company’s securities; global financial risks; inability to attract or retain qualified employees; potential conflicts of interest; risks related to a controlling group of shareholders; dependence on third parties; differences in U.S. and Canadian reporting of mineral reserves and resources; potential dilutive transactions; foreign currency risks; risks related to business cycles; liquidity risks; reliance on internal control systems; credit risks, including risks related to the Company’s compliance with covenants with respect to its BCP Facility; uncertainty of production and cost estimates for the Yauricocha Mine, the Bolivar Mine and the Cusi Mine; and other risks identified in the Company’s filings with Canadian securities regulators and the U.S. Securities and Exchange Commission, which filings are available at www.sedar.com and www.sec.gov, respectively.

This list is not exhaustive of the factors that may affect any of the Company’s forward-looking information. Forward looking information includes statements about the future and are inherently uncertain, and the Company’s actual achievements or other future events or conditions may differ materially from those reflected in the forward-looking information due to a variety of risks, uncertainties and other factors. The Company’s statements containing forward-looking information are based on the beliefs, expectations and opinions of management on the date the statements are made, and the Company does not assume any obligation to update forward-looking information if circumstances or management’s beliefs, expectations or opinions should change, other than as required by applicable law. For the reasons set forth above, one should not place undue reliance on forward-looking information.

Note Regarding Reserve and Resource Estimates

All reserve and resource estimates reported by the Company were calculated in accordance with the Canadian National Instrument 43-101 and the Canadian Institute of Mining and Metallurgy Classification system. These standards differ significantly from the requirements of the U.S. Securities and Exchange Commission (“SEC”). The differences between these standards are discussed in our SEC filings. Mineral resources which are not mineral reserves do not have demonstrated economic viability.

SOURCE Sierra Metals Inc.

For further information: regarding Sierra Metals, please visit www.sierrametals.com or contact: Mike McAllister, V.P., Corporate Development, Sierra Metals Inc., +1 (416) 366-7777, Email: info@sierrametals.com; Gordon Babcock, Chief Operating Officer, Sierra Metals Inc., + 1 (416) 366-7777; Igor Gonzales, President & CEO, Sierra Metals Inc., +1(416) 366-7777

Related Links

www.sierrametals.com

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Sierra Metals Significantly Increases Mineral Resource Estimate for Cusi Silver Mine, Mexico

  • Total Measured and Indicated Resources increased 129% to 4,557,000 tonnes from 1,990,000 tonnes previously reported; and Total Inferred Resources increased 36% to 1,633,000 tonnes from 1,200,000 tonnes previously reported
  • Total Measured Mineral Resources for Cusi are 362,000 tonnes averaging 225g/t silver, 0.55% lead, 0.68% zinc, 0.13 g/t gold for a total 268 g/t Ag Eq
  • Total Indicated Mineral Resources for Cusi are 4,195,000 tonnes averaging 217 g/t silver, 0.64% lead, 0.66% zinc, 0.21 g/t gold and 267 g/t AgEq
  • Total Inferred Mineral Resources for Cusi are 1,633,000 tonnes averaging 158 g/t silver, 0.54% lead, 0.84% zinc, 0.16 g/t gold and 207 g/t AgEq
  • The updated Resource Estimate varies from the previous 2017 Technical Report due to a variety of factors, including the use of silver equivalent cut-off grade and depletion by production since the previous Report was completed
  • The updated Resource Estimate has incorporated new exploration drilling, sampling, and underground mapping information into the geologic interpretation and grade estimations providing more refined resource models in the areas of San Nicolas and Promontorio

TORONTODec. 29, 2017 /CNW/ – Sierra Metals Inc. (TSX: SMT) (BVL: SMT) (NYSE AMERICAN: SMTS) (“Sierra Metals” or “the Company”) has updated its Mineral Resource Estimate at the Company’s Cusi Mine, located in Chihuahua State, Mexico.

The updated Mineral Resource Estimate disclosed herein is the result of drilling programs completed between January 2014 and August 2017. Subsequent to the cut-off date of August 31, 2017 the updated Resource statement includes additional 48,684 metre drilling program that was focused on the high-grade Santa Rosa de Lima zone and Promontorio.

The Company believes that the Santa Rosa de Lima zone demonstrates strong potential for further structural extensions of high-grade zones at the Company’s Cusi Mine. Conversion of some of the higher grade to measured and indicated resources has been the priority for the Cusi exploration efforts.

A Technical Report prepared by SRK Consulting (U.S.) Inc. in accordance with NI 43-101 standards of disclosure has been completed and will be filed on SEDAR within 45 days of this news release.

“Sierra’s management team is extremely pleased with the significant increases realized in the measured and indicated resource, and the increase in inferred resources reported in this resource estimate for the Cusi Mine” stated Igor Gonzales, President and CEO of Sierra Metals Inc. “When compared to the previous estimate from January 2017, the Company saw a 129% increase to the measured and indicated resource tonnage and a 36% increase in the inferred resource tonnage. These increases represent a significant amount of additional drilling and mine exploration development work completed at the Cusi Mine which included the Santa Rosa de Lima Zone which has strong potential for further structural extensions of high-grade zones. Furthermore, the increased resource tonnage volume is a result of wider, higher-grade silver zones which are the foundation for the Company’s new operating plan which should significantly improve the cashflow prospects for Cusi in 2018 and beyond.”

He continued, “The Company remains committed to resource growth through brownfield exploration and this resource estimate confirms the presence of additional high-quality tonnage at the Cusi Mine allowing the Company to study the potential for production increases going forward.  We remain committed to brownfield exploration programs at the Cusi mine over the next year with the aim of further mineral resource expansions.”

Mineral Resource Estimate

The update of the Mineral Resource Estimations have been conducted by Giovanny Ortiz of SRK Consulting (U.S.) Inc., a Qualified Person under National Instrument 43-101 – Standards of Disclosure for Mineral Projects, using Maptek Vulcan™ and Leapfrog Geo™ software.

This release features mineral resources reported from models reviewed and estimated by SRK using criteria determined by the Company and SRK to be reasonable for reporting of these resources.

SRK has worked with the Company’s personnel to review the geology models, and independently estimated and reported the mineral resources for Cusi. Geology models were developed internally by the Company’s geologists and were reviewed by SRK. In all, there are thirty-eight individual mineralized bodies identified through drilling and mine development. These were used as hard boundaries for the purposes of the estimation. The resource is supported by a database featuring over 233,750m of drilling and over 23,800m of channel sampling in mine development. The block models were created by SRK, and have been estimated using inverse distance squared methods. SRK has validated the estimation for each model using a variety of methods considered to be industry standard. These include a visual comparison of the blocks versus the composites, an assessment of the quality of the estimate, and comparative statistics of block estimates vs. composites. The models have been depleted for previous production and reported within the boundaries of Sierra Metal’s mineral titles. The mineral resources have been estimated and reported in conformity with generally accepted CIM “Estimation of Mineral Resource and Mineral Reserves Best Practices” guidelines.

The August 31, 2017, consolidated mineral resource statement for the Cusi Mine area is presented in Table 1.

Table 1: Consolidated Cusi Mineral Resource Estimate as at August 31, 2017 – SRK Consulting (U.S.), Inc.

Category

Tonnes
(000’s)

Ag
(g/t)

Au
(g/t)

Pb (%)

Zn (%)

AgEq
(g/t)

Ag
Moz

Au
Koz

Pb Mlb

Zn Mlb

AgEq
Moz

Measured

362

225

0.13

0.55

0.68

268

2.6

1.5

4.4

5.4

3.1

Category

Tonnes
(000’s)

Ag
(g/t)

Au
(g/t)

Pb (%)

Zn (%)

AgEq
(g/t)

Ag
Moz

Au
Koz

Pb Mlb

Zn Mlb

AgEq
Moz

Indicated

4,195

217

0.21

0.64

0.66

267

29.2

28.7

59.0

60.8

36.0

Category

Tonnes
(000’s)

Ag
(g/t)

Au
(g/t)

Pb (%)

Zn (%)

AgEq
(g/t)

Ag
Moz

Au
Koz

Pb Mlb

Zn Mlb

AgEq
Moz

Inferred

1,633

158

0.16

0.54

0.84

207

8.3

8.3

19.6

30.4

10.87

(1)

Mineral resources are reported inclusive of ore reserves. Mineral resources are not ore reserves and do not have demonstrated economic viability. All figures rounded to reflect the relative accuracy of the estimates. Gold, silver, lead and zinc assays were capped where appropriate.

(2)

Mineral resources are reported at a single cut-off grade of 105 g/t AgEq based on metal price assumptions*, metallurgical recovery assumptions, mining costs (US$29.41/t), processing costs (US$18.3/t), and general and administrative costs (US$3.74/t).

Metal price assumptions considered for the calculation of the cut-off grade and equivalency are: Silver (Ag): US$/oz 18.30, Lead (US$/LB 0.93), Zinc (US$/lb 1.15) and Gold (US$/oz 1,283.00).
The resources were estimated by SRK. Giovanny Ortiz, B.Sc., PGeo, FAusIMM #304612 of SRK, a Qualified Person, performed the resource calculations for the Cusi Mine.

**

Based on the historical production information of Cusi, the metallurgical recovery assumptions are: 84% Ag, 57% Au, 86% Pb, 51% Zn.

Quality Control

All 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.

Americo Zuzunaga, MAusIMM CP (Mining Engineer) and Vice President of Corporate Planning is a Qualified Person and chartered professional qualifying as a Competent Person under the Joint Ore Reserves Committee (JORC) Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.

Augusto Chung, FAusIMM CP (Metallurgist) and Consultant to Sierra Metals is a Qualified Person and chartered professional qualifying as a Competent Person on metallurgical processes.

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 is focused on increasing production volume and growing mineral resources. Sierra Metals has recently had several new key discoveries and still has many more exciting brownfield exploration opportunities at all three Mines in Peru and Mexico that are within close proximity to the existing mines. Additionally, the Company also has large land packages at all three mines with several prospective regional targets providing longer term exploration upside and mineral resource growth potential.

The Company’s Common Shares trade on the Bolsa de Valores de Lima and on the Toronto Stock Exchange under the symbol “SMT” and on the NYSE American Exchange under the symbol “SMTS”.

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Forward-Looking Statements

This press release contains “forward-looking information” and “forward-looking statements” within the meaning of Canadian and U.S. securities laws related to the Company (collectively, “forward-looking information”). Forward-looking information includes, but is not limited to, statements with respect to the Company’s operations, including anticipated developments in the Company’s operations in future periods, the Company’s planned exploration activities, the adequacy of the Company’s financial resources, and other events or conditions that may occur in the future. Statements concerning mineral reserve and resource estimates may also be considered to constitute forward-looking statements to the extent that they involve estimates of the mineralization that will be encountered if and when the properties are developed or further developed. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “expects”, “anticipates”, “plans”, “projects”, “estimates”, “assumes”, “intends”, “strategy”, “goals”, “objectives”, “potential” or variations thereof, or stating that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking information.

Forward-looking information is subject to a variety of risks and uncertainties, which could cause actual events or results to differ from those reflected in the forward-looking information, including, without limitation, risks inherent in the mining industry including environmental hazards, industrial accidents, unusual or unexpected geological formations, floods, labour disruptions, explosions, cave-ins, weather conditions and criminal activity; commodity price fluctuations; higher operating and/or capital costs; lack of available infrastructure; the possibility that future exploration, development or mining results will not be consistent with the Company’s expectations; risks associated with the estimation of mineral resources and the geology, grade and continuity of mineral deposits and the inability to replace reserves; fluctuations in the price of commodities used in the Company’s operations; risks related to foreign operations; changes in laws or policies, foreign taxation, delays or the inability to obtain necessary governmental permits; risks relating to outstanding borrowings; issues regarding title to the Company’s properties; risks related to environmental regulation; litigation risks; risks related to uninsured hazards; the impact of competition; volatility in the price of the Company’s securities; global financial risks; inability to attract or retain qualified employees; potential conflicts of interest; risks related to a controlling group of shareholders; dependence on third parties; differences in U.S. and Canadian reporting of mineral reserves and resources; potential dilutive transactions; foreign currency risks; risks related to business cycles; liquidity risks; reliance on internal control systems; credit risks, including risks related to the Company’s compliance with covenants with respect to its BCP Facility; uncertainty of production and cost estimates for the Yauricocha Mine, the Bolivar Mine and the Cusi Mine; and other risks identified in the Company’s filings with Canadian securities regulators and the U.S. Securities and Exchange Commission, which filings are available at www.sedar.com and www.sec.gov, respectively.

This list is not exhaustive of the factors that may affect any of the Company’s forward-looking information. Forward looking information includes statements about the future and are inherently uncertain, and the Company’s actual achievements or other future events or conditions may differ materially from those reflected in the forward-looking information due to a variety of risks, uncertainties and other factors. The Company’s statements containing forward-looking information are based on the beliefs, expectations and opinions of management on the date the statements are made, and the Company does not assume any obligation to update forward-looking information if circumstances or management’s beliefs, expectations or opinions should change, other than as required by applicable law. For the reasons set forth above, one should not place undue reliance on forward-looking information.

Note Regarding Reserve and Resource Estimates

All reserve and resource estimates reported by the Company were calculated in accordance with the Canadian National Instrument 43-101 and the Canadian Institute of Mining and Metallurgy Classification system. These standards differ significantly from the requirements of the U.S. Securities and Exchange Commission (“SEC”). The differences between these standards are discussed in our SEC filings. Mineral resources which are not mineral reserves do not have demonstrated economic viability.

SOURCE Sierra Metals Inc.

For further information: regarding Sierra Metals, please visit www.sierrametals.com or contact: Mike McAllister, V.P., Corporate Development, Sierra Metals Inc., +1 (416) 366-7777, Email: info@sierrametals.com; Gordon Babcock, Chief Operations Officer, Sierra Metals Inc., + 1 (416) 366-7777; Igor Gonzales, President & CEO, Sierra Metals Inc., +1(416) 366-7777

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Sierra Metals Announces the Appointment of Alberto Beeck as Advisor and Alejandro Perellón as Observer to its Board of Directors

Sierra Metals Inc. (TSX: SMT) (NYSE American: SMTS) (BVL: SMT) (“Sierra Metals” or the “Company”) is pleased to announce the appointment of Mr. Alberto Beeck as an Adviser to its Board of Directors and Mr. Alejandro Perellón as an Observer to its Board of Directors, both effective immediately. 

Alberto Beeck is an investor and entrepreneur who combines his time between different businesses and social impact activities in the education sector. He is Managing Partner of Cranley Investments Holdings, Managing Partner of VH Properties, and Chairman of Lumni (a company that invests in human capital) and of Sin Limites (a company that promotes the work of social leaders through media). Mr. Beeck also serves on the boards of Virgin Hotels, Largo Resources Ltd., Industria Works, DB Andean Towers, WE Family Offices Holdings, and Endeavor Miami. He is a member of the board of trustees of Georgetown University, founder and chairman of Georgetown’s Beeck Center for Social Impact and Innovation, and founder and former chairman of Georgetown’s Latin American Board. Mr. Beeck is a member of the Group of 50 and of the Young Presidents Organization. Until 2008, Alberto was president of Cementos Pacasmayo, a Peruvian cement production and distribution company, and executive director of Hochschild Mining Plc., a UK-listed precious metals company, with activities in several countries in Latin America and Canada. Mr. Beeck started his career in investment banking at Lehman Brothers and subsequently worked at Dillon Read, Barings, and ING Barings in New York and London, where he headed the Latin American Investment Banking Group. Mr. Beeck received his B.S. in mechanical engineering from Purdue University in 1978 and an MBA from Columbia University in 1982. He was born in Lima, Perú.

Alejandro Perellón is a Vice President with the private equity firm Arias Resource Capital Management LP (“ARCM”). Prior to joining ARCM, Mr. Perellón worked within the Latin America Investment Banking team at UBS in New York, where he focused on the metals and mining industry and advised on mergers and acquisitions, equity and debt related transactions. Mr. Perellón earned his BBA in finance from Emory University’s Goizueta Business School.

About Sierra Metals

Sierra Metals Inc. is a Canadian-based growing polymetallic mining company with production from its Yauricocha Mine in Peru, and its Bolivar and Cusi Mines in Mexico. The Company is focused on increasing production volume and growing mineral resources. Sierra Metals has recently had several new discoveries and still has additional brownfield exploration opportunities at all three mines in Peru and Mexico that are within or close proximity to the existing mines. Additionally, the Company has large land packages at all three mines with several prospective regional targets providing longer term exploration upside and mineral resource growth potential.

The Company’s Common Shares trade on the Bolsa de Valores de Lima and on the Toronto Stock Exchange under the symbol “SMT” and on the NYSE American Exchange under the symbol “SMTS”.

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Sierra Metals reports positive drilling results on wide high-grade structures from the Cuye Zone at the Yauricocha Mine, Peru

  • Current Drilling program at the Cuye Zone reflects high grade Polymetallic and Copper mineralization which continue and remain open to depth
  • 11 holes have been completed to date from the 1070 level in the Cuye area
  • Copper sulphide mineralized areas have been defined containing widths of more than 45 meters which remain open at depth
  • Mineralized areas noted in core identified large dioritic intrusive inclusions which suggest wider orebodies exist
  • Drill hole 10 intercepted over 75 meters of continued high grade polymetallic and copper mineralization and included a 15-meter intercept of polymetallic mineralization followed by a 44-meter copper sulphide intercept
  • Drilling program also intercepted low-grade disseminated copper mineralization in the intrusive formation, which opens a new exploration concept not explored or known before at Yauricocha

 

___________________________________________________________________

<!– assetTag:

–> <!– image and imageTag: Figure 1 - Yauricocha Mine (CNW Group/Sierra Metals Inc.) –> <!– assetTag:

–> <!– image and imageTag: Figure 2 - Plan View – Yauricocha Mine (Cuye Zone) (CNW Group/Sierra Metals Inc.) –> <!– assetTag:

–> <!– image and imageTag: Figure 3 – Cross Section View 1 – Drill holes 1, 4 and 5 (CNW Group/Sierra Metals Inc.) –> <!– assetTag:

–> <!– image and imageTag: Figure 4 – Cross Section View 2 – Drill holes 6, 7 and 8 (CNW Group/Sierra Metals Inc.) –> <!– assetTag:

–> <!– image and imageTag: Figure 5 – Cross Section View 3 – Drill holes 9, 10 and 11 (CNW Group/Sierra Metals Inc.) –>

Drill hole highlights include:

Hole No.

From

m

To

m

Width

Ag

g/t

Pb

%

Cu

%

Zn

%

Au

g/t

CUY 17-17-07

251.0

268.0

over 15 m

17

0.01

1.68

0.35

0.46

CUY 17-17-09

307.6

374.0

over 66 m

11

0.01

1.85

0.05

0.28

CUY 17-17-10

191.8

207.4

over 15 m

91

0.59

0.41

4.39

0.13

CUY 17-17-10

234.0

249.0

over 15 m

13

0.03

0.56

3.15

0.46

CUY 17-17-10

249.0

293.0

over 44 m

9

0.00

1.43

0.10

0.61

TORONTO, Dec. 19, 2017 /CNW/ – Sierra Metals Inc. (TSX: SMT) (BVL: SMT) (NYSE AMERICAN: SMTS) (“Sierra Metals” or “the Company”) today announced drilling results demonstrating new limestone replacement mineralization at the Cuye Zone extension located within the Central Mine at Yauricocha.

To date, 11 holes have been executed from the 1070 level of the Yauricocha Mine in the Cuye area. These holes have intercepted polymetallic sulphide mineralization containing high-grade silver, zinc, copper and lead zones over significant widths. These results demonstrate the potential for high grade mineralization within the reported area, and more importantly indicate the continued existence of extensive mineralization at depth.  These results come as part of an ongoing brownfield drilling program testing priority targets at the Yauricocha Mine, which is located 150 kilometers east-southeast of Lima in the Yauricocha Mining District (Cordillera Occidental), Peru.

Igor Gonzales, President and CEO of Sierra Metals stated: “Today’s results represent the existence of high-grade polymetallic mineralization at the Northern extension of Cuye, and suggest the possibility of even further mineralization at depth specifically from the copper sulphide orebodies which contain significant widths as shown in figure 5.” He continued, “The Central Mine area contains several high-grade mineralized areas opening the possibility for further discovery of additional orebodies along the Yauricocha fault. The Company has made a strong commitment to brownfield exploration in 2017 and results such as the ones released today continue to demonstrate that this investment is paying off with the potential to further grow our mineral resources and add high value tonnage. Brownfield drilling will continue into 2018 focusing on new discoveries and the expansion of areas within close proximity to our existing operations.”

Alonso Lujan, Vice President, Exploration of Sierra Metals commented: “The results reported from Cuye demonstrate high-grade, sulphide mineralized sectors containing primarily silver, copper, lead and zinc as show in table 1 below.  The potential still exists for further extensions, within the Cuye zone which remains open at depth.The exploration completed at depth demonstrates considerable widths and high-grade nature of these orebodies.” He added, “It is important to mention that the current drill holes extended into the intrusive formation which was assayed for the first time and led to the identification of low-grade disseminated mineralization on the intrusive. (see the intercepts on Figures 4, and 5) where we intercepted 14 meters with 0.67% Cu, 14.6 meters with 0.27% Cu and 19 meters with 0.18% Cu. The significance of this information is that prior exploration programs at Yauricocha have not typically assayed the intrusive rocks, as the mineralization was considered to occur in the contact of the intrusive and the volcanics.  The existence of disseminated copper mineralization in the intrusive rock formation opens a new exploration horizon previously unknown and a new interpretation of the sources of copper mineralization in the Yauricocha district.”

All reported intercepts are core length as further drilling is required to determine true thicknesses.

A map of the Yauricocha Mine 1070 level (Central Mine) is shown in Figure 1. Figure 2 shows the location of the area explored and figures 3, 4 and 5 show the cross sections of the drill holes (Please note in figure 5 the width of the Copper sulphide orebody is more than 25 meters).

Table 1

Hole N°

 From

 To

 Width
(m)

 Ag
(g/t)

 Pb
(%)

 Cu
(%)

 Zn
(%)

 Au
(g/t)

Description

CUY-17-17-05

165.90

175.00

9.10

18

0.02

1.08

0.13

0.75

Copper Sulphide

CUY-17-17-06

232.00

238.00

6.00

81

0.09

1.48

8.05

0.40

Polymetallic Sulphide

256.00

259.60

3.60

7

0.01

0.24

3.78

0.23

Polymetallic Sulphide

262.00

265.40

3.40

7

0.01

0.20

2.05

0.13

Polymetallic Sulphide

271.00

273.00

2.00

10

0.01

0.15

1.49

0.18

Polymetallic Sulphide

276.30

277.80

1.50

5

0.02

0.11

1.29

0.13

Polymetallic Sulphide

287.20

290.85

3.65

32

0.31

0.21

6.40

0.15

Polymetallic Sulphide

292.90

293.90

1.00

48

0.19

0.10

1.04

0.16

Polymetallic Sulphide

302.60

305.00

2.40

38

0.00

2.27

0.11

0.90

Copper Sulphide

CUY-17-17-07

251.00

268.00

15.50

17

0.01

1.68

0.35

0.46

Copper Sulphide

CUY-17-17-08

188.00

191.00

3.00

16

0.03

0.36

3.49

0.65

Polymetallic Sulphide

193.00

194.90

1.90

16

0.06

0.45

0.64

0.32

Polymetallic Sulphide

194.90

195.45

0.55

48

0.11

0.01

0.52

0.43

Pyrite

195.45

205.00

6.05

15

0.02

0.92

0.41

0.25

Copper Sulphide

CUY-17-17-09

282.00

289.40

6.50

93

1.66

0.45

5.18

0.35

Polymetallic Sulphide

290.70

290.90

0.20

155

1.98

0.72

9.01

0.11

Polymetallic Sulphide

299.00

303.00

4.00

35

0.04

1.80

0.38

0.73

Copper Sulphide

305.00

307.60

2.60

60

0.08

2.44

7.04

0.66

Polymetallic Sulphide

307.60

374.00

66.40

11

0.01

1.85

0.05

0.28

Copper Sulphide

375.00

382.00

4.00

75

1.52

1.04

5.25

0.06

Polymetallic Sulphide

CUY-17-17-10

157.40

158.00

0.60

315

4.28

0.10

3.10

0.38

Polymetallic Sulphide

         

175.10

183.50

8.40

65

0.79

0.07

1.36

0.22

Polymetallic Sulphide

191.80

207.40

15.60

91

0.59

0.41

4.39

0.13

Polymetallic Sulphide

215.40

216.30

0.90

21

0.04

0.15

21.50

0.15

Polymetallic Sulphide

234.00

249.00

15.00

13

0.03

0.56

3.15

0.46

Polymetallic Sulphide

249.00

293.00

44.00

9

0.00

1.43

0.10

0.61

Copper Sulphide

CUY-17-17-11

103.80

104.50

0.70

16

0.02

0.12

14.75

0.18

Polymetallic Sulphide

173.50

178.10

4.60

27

0.02

1.35

0.12

0.74

Copper Sulphide

 

Quality Control

All samples were dried, crushed and pulverized by the Chumpe Lab at site, pulp samples were shipped by ALS Peru S.A. Lab Chemex) to their laboratory in Lima, Peru.

The quality assurance-quality control (QA-QC) program employed by Sierra Metals has been described in detail in the NI-43-101 report for Yauricocha dated December 9, 2016, prepared by SRK Consulting in Denver, which is available for review on Sedar. Standards and blanks are inserted into the sample stream and duplicate samples are sent to the ALS Peru S.A. lab (Chemex) in Lima as per internal quality control procedures.

Qualified Persons

The technical content of 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.

Americo Zuzunaga, MAusIMM CP (Mining Engineer) and Vice President of Corporate Planning is a Qualified Person and chartered professional qualifying as a Competent Person under the Joint Ore Reserves Committee (JORC) Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.

Augusto Chung, FAusIMM CP (Metallurgist) and Consultant to Sierra Metals is a Qualified Person and chartered professional qualifying as a Competent Person on metallurgical processes.

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 is focused on increasing production volume and growing mineral resources. Sierra Metals has recently had several new key discoveries and still has many more exciting brownfield exploration opportunities at all three Mines in Peru and Mexico that are within close proximity to the existing mines. Additionally, the Company also has large land packages at all three mines with several prospective regional targets providing longer term exploration upside and mineral resource growth potential.

The Company’s Common Shares trade on the Bolsa de Valores de Lima and on the Toronto Stock Exchange under the symbol “SMT” and on the NYSE American Exchange under the symbol “SMTS”.

Continue to Follow, Like and Watch our progress:

Web: www.sierrametals.com | Twitter: sierrametals | Facebook: SierraMetalsInc | LinkedIn: Sierra Metals Inc

Forward-Looking Statements

This press release contains “forward-looking information” and “forward-looking statements” within the meaning of Canadian and U.S. securities laws related to the Company (collectively, “forward-looking information”). Forward-looking information includes, but is not limited to, statements with respect to the Company’s operations, including the anticipated developments in the Company’s operations in future periods, the Company’s planned exploration activities, the adequacy of the Company’s financial resources, and other events or conditions that may occur in the future. Statements concerning mineral reserve and resource estimates may also be considered to constitute forward-looking statements to the extent that they involve estimates of the mineralization that will be encountered if and when the properties are developed or further developed. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “expects”, “anticipates”, “plans”, “projects”, “estimates”, “assumes”, “intends”, “strategy”, “goals”, “objectives”, “potential” or variations thereof, or stating that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking information.

Forward-looking information is subject to a variety of risks and uncertainties, which could cause actual events or results to differ from those reflected in the forward-looking information, including, without limitation, risks inherent in the mining industry including environmental hazards, industrial accidents, unusual or unexpected geological formations, floods, labour disruptions, explosions, cave-ins, weather conditions and criminal activity; commodity price fluctuations; higher operating and/or capital costs; lack of available infrastructure; the possibility that future exploration, development or mining results will not be consistent with the Company’s expectations; risks associated with the estimation of mineral resources and the geology, grade and continuity of mineral deposits and the inability to replace reserves; fluctuations in the price of commodities used in the Company’s operations; risks related to foreign operations; changes in laws or policies, foreign taxation, delays or the inability to obtain necessary governmental permits; risks relating to outstanding borrowings; issues regarding title to the Company’s properties; risks related to environmental regulation; litigation risks; risks related to uninsured hazards; the impact of competition; volatility in the price of the Company’s securities; global financial risks; inability to attract or retain qualified employees; potential conflicts of interest; risks related to a controlling group of shareholders; dependence on third parties; differences in U.S. and Canadian reporting of mineral reserves and resources; potential dilutive transactions; foreign currency risks; risks related to business cycles; liquidity risks; reliance on internal control systems; credit risks, including risks related to the Company’s compliance with covenants with respect to its BCP Facility; uncertainty of production and cost estimates for the Yauricocha Mine, the Bolivar Mine and the Cusi Mine; and other risks identified in the Company’s filings with Canadian securities regulators and the U.S. Securities and Exchange Commission (“SEC”), which filings are available at www.sedar.com and www.sec.gov, respectively.

This list is not exhaustive of the factors that may affect any of the Company’s forward-looking information. Forward-looking information includes statements about the future and are inherently uncertain, and the Company’s actual achievements or other future events or conditions may differ materially from those reflected in the forward-looking information due to a variety of risks, uncertainties and other factors. The Company’s statements containing forward-looking information are based on the beliefs, expectations, and opinions of management on the date the statements are made, and the Company does not assume any obligation to update forward-looking information if circumstances or management’s beliefs, expectations or opinions should change, other than as required by applicable law. For the reasons set forth above, one should not place undue reliance on forward-looking information.

Note Regarding Reserve and Resource Estimates

All reserve and resource estimates reported by the Company are calculated in accordance with the Canadian National Instrument 43-101 –  Standards of Disclosure for Mineral Projects and the Canadian Institute of Mining and Metallurgy Classification system. These standards differ significantly from the requirements of the SEC. The differences between these standards are discussed in our SEC filings. Mineral resources which are not mineral reserves do not have demonstrated economic viability.

SOURCE Sierra Metals Inc.

For further information: regarding Sierra Metals, please visit www.sierrametals.com or contact: Mike McAllister, V.P., Corporate Development, Sierra Metals Inc., +1 (416) 366-7777, Email: info@sierrametals.com; Alonso Lujan, V.P., Exploration, Sierra Metals Inc., +(51) 630-3100, +(52) 614-4260211; Igor Gonzales, President & CEO, Sierra Metals Inc., +1(416) 366-7777

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Sierra Metals Announces Filing of NI 43-101 Technical Report on the Yauricocha Mine in Peru

Sierra Metals Inc. (TSX: SMT) (BVL: SMT) (NYSE AMERICAN: SMTS) (“Sierra Metals” or “the Company”) has filed a technical report prepared in accordance with National Instrument 43-101 (“NI 43-101”) on the Yauricocha Mine (the “Report”).  The Report supports the disclosure made by the Company in its news releases dated September 28, 2017 entitled “Sierra Metals Significantly Increases Mineral Resource Estimate for Yauricocha Mine, Peru.” and dated October 26, 2017 entitled “Sierra Metals Significantly Increases Mineral Reserve Estimate for Yauricocha Mine, Peru.”  There are no material differences in the mineral reserves and resources contained in the Report from those disclosed in the news releases.

The Report included Reserves and Resources for the Yauricocha Mine with:

  • Total Proven and Probable Contained Metal has significantly increased by 86% silver, 237% copper, 58% lead, 96% zinc, and 97% gold as compared to the previous reserve estimate.

  • Total Measured and Indicated Contained Metal has significantly increased by 72% silver, 128% copper, 74% zinc, 64% lead and 61% gold.

  • Total Inferred Contained Metal has significantly increased by 55% silver, 59% copper, 105% zinc, 42% lead and 83% gold.

  • Mineral Reserves for Yauricocha are 8,917,000 tonnes averaging 48.3 g/t silver, 1.2% copper, 0.8% lead, 2.4% zinc and 0.5 g/t gold representing a 135% tonnage increase compared to the previous Reserve Estimate. This new Reserve Estimate more than doubles the previous mine life at current throughput levels when compared to the previous reserve Estimate.

  • Mineral Resources for Yauricocha are 13,206,000 tonnes averaging 62.3 g/t silver, 1.5% copper, 0.9% lead, 2.8% zinc and 0.6 g/t gold representing a 68% tonnage increase from the previous resource estimate.

  • Total Inferred Mineral Resources for Yauricocha are 6,632,000 tonnes averaging 43.0 g/t silver, 1.2% copper, 0.5% lead, 2.2% zinc and 0.5 g/t gold representing a 77% tonnage increase from the previous resource estimate.

  • Increases to contained copper reflect the discovery and delineation of new Cu-rich zones in Cuye, Mascota, and Esperanza as well as a 14% increase in Copper Price compared to the previous estimate.

  • Metal pricing, metallurgical recoveries, costs, and other modifying factors have been updated to reflect July 31, 2017 actuals and assumptions.

The Report dated November 10, 2017 with and effective date of July 31, 2017 is entitled “NI 43-101 Technical Report on Resources and Reserves Yauricocha Mine Yauyos Province, Peruand was prepared by independent SRK Consulting (U.S.), Inc.

Signed by Qualified Persons:
Matthew Hastings, MSc Geology, MAusIMM (CP), SRK Principal Consultant (Resource Geology)
Shannon L. Rhéaume, BASc Mining and Mineral Processing, PEng, SRK Senior Consultant (Mining Engineer)
Daniel H. Sepulveda, BSc, SME-RM, SRK Associate Consultant (Metallurgy)
Jeff Osborn, BEng Mining, MMSAQP, SRK Principal Consultant (Mining Engineer)
John Tinucci, PhD, PE, ISRM, SRK President/Practice Leader/Principal Consultant (Geotechnical Engineer)

Reviewed by:
Erik C. Ronald, MEng, PG, MAusIMM, SRK Principal Consultant (Resource Geology)
John Tinucci, PhD, PE, ISRM, SRK President/Practice Leader/Principal Consultant (Geotechnical Engineer)
Peter Clarke, BSc Mining, MBA, PEng, SRK Principal Consultant (Mining Engineer)

Notes on Reserve Estimate

The procedures and methods supporting the mineral reserve estimations have been developed in conjunction with Sierra Metals mine planning personnel. The reserve estimates presented herein have been conducted by Sierra Metals and reviewed by SRK using supporting data generated by the site. SRK notes that the methods and procedures are reasonable and consistent with industry best practice. Each mining area was evaluated using reasonable mining block shapes based on the mining method applicable to the zone. Data and information supporting the mining recovery, mining dilution, reconciliation-based grade adjustments, metallurgical recoveries, consensus commodity pricing, and treatment and refining charges have been provided by Sierra Metals and reviewed by SRK. These factors are used to calculate unit values for the blocks in the models. Historic and expected direct and indirect mining, processing, and general and administrative costs were provided by Sierra Metals. To be considered economic, the Net Smelter Return (NSR) value of the mining block must be greater than the economic cutoff. Blocks below the economic cutoff but above the marginal cutoff are, in some cases, included in the reserve where they are in between or immediately adjacent to an economic block, and it is reasonable to expect that no significant additional development would be required to extract the marginal block. Isolated blocks, defined as blocks with no defined access, have been excluded from the reserve. Mined out areas were provided by Sierra Metals personnel.

SRK is of the opinion that the reserve estimations are suitable for public reporting and are a fair representation of the mill feed tonnes, grade, and metal for the Yauricocha deposit.

Notes on the Resource Estimate

The procedures and methods supporting the mineral resource estimation have been developed in conjunction with Minera Corona geological personnel. The understanding of the geology and mineralization at Yauricocha is based on a large volume of geologic data as well as a robust history of production. SRK has reviewed the methods and procedures for data collection methods supporting the estimate, and notes that they are reasonable and consistent with industry best practice. Geology models were generated by Minera Corona geologists using Datamine Studio or Leapfrog Geo, and locally vary significantly from those used in previous reports. A combination of diamond drilling, channel sampling, and mine mapping have been used to inform these models, and SRK is of the opinion that they are an accurate interpretation of the mineralization at Yauricocha. These models, presented as 3D wireframes, are used to constrain block models, which are flagged with variables such as bulk density, mine area, depletion, unit value, etc.

The resource estimations presented herein have been conducted or reviewed by independent consultants using supporting data generated by the site. SRK conducted independent estimations for the Mina Central area, Esperanza, Mascota, and the majority of the Cuerpos Pequenos Area. Cachi Cachi estimations and select Cuerpos Pequenos estimations were conducted by Minera Corona personnel and reviewed by SRK. Grade for the five primary commodities (Ag, Au, Cu, Pb, Zn) is estimated into the block models using both drilling and channel samples, applying industry-standard estimation methodology. Interpolation methods were generally via ordinary kriging or inverse distance depending on quantities of data. Mineral resources estimated by the independent consultants are categorized in a manner consistent with industry best practice, and are reported above reasonable unit value cut-offs based on actual marginal production costs to satisfy public reporting criteria.

SRK is of the opinion that the resource estimations are suitable for public reporting and are a fair representation of the in-situ contained metal for the Yauricocha deposit.

The Report is available for review on both SEDAR (www.sedar.com) and the Company’s website (www.sierrametals.com).

Qualified Persons

The technical content of 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.

Americo Zuzunaga, MAusIMM CP (Mining Engineer) and Vice President of Corporate Planning is a Qualified Person and chartered professional qualifying as a Competent Person under the Joint Ore Reserves Committee (JORC) Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.

Augusto Chung, FAusIMM CP (Metallurgist) and Consultant to Sierra Metals is a Qualified Person and chartered professional qualifying as a Competent Person on metallurgical processes.

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 is focused on increasing production volume and growing mineral resources. Sierra Metals has recently had several new key discoveries and still has many more exciting brownfield exploration opportunities at all three Mines in Peru and Mexico that are within close proximity to the existing mines. Additionally, the Company also has large land packages at all three mines with several prospective regional targets providing longer term exploration upside and mineral resource growth potential.

The Company’s Common Shares trade on the Bolsa de Valores de Lima and on the Toronto Stock Exchange under the symbol “SMT” and on the NYSE American Exchange under the symbol “SMTS”.

Continue to Follow, Like and Watch our progress:

Web: www.sierrametals.com | Twitter: sierrametals | Facebook: SierraMetalsInc | LinkedIn: Sierra Metals Inc

Forward-Looking Statements

This press release contains “forward-looking information” and “forward-looking statements” within the meaning of Canadian and U.S. securities laws related to the Company (collectively, “forward-looking information”). Forward-looking information includes, but is not limited to, statements with respect to the Company’s operations, including the anticipated developments in the Company’s operations in future periods, the Company’s planned exploration activities, the adequacy of the Company’s financial resources, and other events or conditions that may occur in the future. Statements concerning mineral reserve and resource estimates may also be considered to constitute forward-looking statements to the extent that they involve estimates of the mineralization that will be encountered if and when the properties are developed or further developed. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “expects”, “anticipates”, “plans”, “projects”, “estimates”, “assumes”, “intends”, “strategy”, “goals”, “objectives”, “potential” or variations thereof, or stating that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking information.

Forward-looking information is subject to a variety of risks and uncertainties, which could cause actual events or results to differ from those reflected in the forward-looking information, including, without limitation, risks inherent in the mining industry including environmental hazards, industrial accidents, unusual or unexpected geological formations, floods, labour disruptions, explosions, cave-ins, weather conditions and criminal activity; commodity price fluctuations; higher operating and/or capital costs; lack of available infrastructure; the possibility that future exploration, development or mining results will not be consistent with the Company’s expectations; risks associated with the estimation of mineral resources and the geology, grade and continuity of mineral deposits and the inability to replace reserves; fluctuations in the price of commodities used in the Company’s operations; risks related to foreign operations; changes in laws or policies, foreign taxation, delays or the inability to obtain necessary governmental permits; risks relating to outstanding borrowings; issues regarding title to the Company’s properties; risks related to environmental regulation; litigation risks; risks related to uninsured hazards; the impact of competition; volatility in the price of the Company’s securities; global financial risks; inability to attract or retain qualified employees; potential conflicts of interest; risks related to a controlling group of shareholders; dependence on third parties; differences in U.S. and Canadian reporting of mineral reserves and resources; potential dilutive transactions; foreign currency risks; risks related to business cycles; liquidity risks; reliance on internal control systems; credit risks, including risks related to the Company’s compliance with covenants with respect to its BCP Facility; uncertainty of production and cost estimates for the Yauricocha Mine, the Bolivar Mine and the Cusi Mine; and other risks identified in the Company’s filings with Canadian securities regulators and the U.S. Securities and Exchange Commission (“SEC”), which filings are available at www.sedar.com and www.sec.gov, respectively.

This list is not exhaustive of the factors that may affect any of the Company’s forward-looking information. Forward-looking information includes statements about the future and are inherently uncertain, and the Company’s actual achievements or other future events or conditions may differ materially from those reflected in the forward-looking information due to a variety of risks, uncertainties and other factors. The Company’s statements containing forward-looking information are based on the beliefs, expectations, and opinions of management on the date the statements are made, and the Company does not assume any obligation to update forward-looking information if circumstances or management’s beliefs, expectations or opinions should change, other than as required by applicable law. For the reasons set forth above, one should not place undue reliance on forward-looking information.

Note Regarding Reserve and Resource Estimates

All reserve and resource estimates reported by the Company are calculated in accordance with the Canadian National Instrument 43-101 –  Standards of Disclosure for Mineral Projects and the Canadian Institute of Mining and Metallurgy Classification system. These standards differ significantly from the requirements of the SEC. The differences between these standards are discussed in our SEC filings. Mineral resources which are not mineral reserves do not have demonstrated economic viability.

SOURCE Sierra Metals Inc.

For further information: regarding Sierra Metals, please visit www.sierrametals.com or contact: Mike McAllister, V.P., Corporate Development, Sierra Metals Inc., +1 (416) 366-7777, Email: info@sierrametals.com; Alonso Lujan, V.P., Exploration, Sierra Metals Inc., +(51) 630-3100, +(52) 614-4260211; Igor Gonzales, President & CEO, Sierra Metals Inc., +1(416) 366-7777

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Sierra Metals Reports Consolidated Results for the Third Quarter of 2017

(All $ figures reported in USD)

  • Adjusted EBITDA of $18.8 million in Q3 2017 increased from $16.3 million in Q3 2016

  • Operating cash flows before movements in working capital of $21.8 million in Q3 2017 increased from $16.9 million in Q3 2016

  • Revenue from metals payable of $50.9 million in Q3 2017 increased by 25% from $40.8 million in Q3 2016

  • Q3 2017 silver equivalent production of 3.7 million ounces or copper equivalent production of 21.9 million pounds; a 29% increase and 17% decrease, respectively, from Q3 2016 and close to production guidance(1)

  • Change in Metal Prices Used to Calculate Silver Equivalent Ounces and Copper Equivalent Pounds from Budgeted Prices to Realized Quarterly Prices

  • $28.6 million of cash and cash equivalents as at September 30, 2017

  • Net Debt of $39.9 million as at September 30, 2017

  • Shareholder conference call to be held Monday November 13, 2017 at 10:30 AM (EST)

 (1) Silver equivalent ounces and copper equivalent pounds for Q3 2017 were calculated using the following realized metal prices: $16.86/oz Ag, $2.93/lb Cu, $1.08/lb Pb, $1.36/lb Zn, $1,280/oz Au. Silver equivalent ounces and copper equivalent pounds for Q3 2016 were calculated using the following realized metal prices: $19.17/oz Ag, $2.16/lb Cu, $0.85/lb Pb, $1.02/lb Zn, $1,347/oz Au. Silver equivalent ounces and copper equivalent pounds for 9M 2017 were calculated using the following realized metal prices: $17.31/oz Ag, $2.70/lb Cu, $1.03/lb Pb, $1.28/lb Zn, $1,253/oz Au. Silver equivalent ounces and copper equivalent pounds for 9M 2016 were calculated using the following realized metal prices: $17.61/oz Ag, $2.15/lb Cu, $0.82/lb Pb, $0.90/lb Zn, $1,276/oz Au.

TORONTO, Nov. 10, 2017 /CNW/ – Sierra Metals Inc. (TSX:SMT)(BVL:SMT) (“Sierra Metals” or the “Company”) today reported revenue of $50.9 million and adjusted EBITDA of $18.8 million on throughput of 504,751 tonnes and metal production of 3.8 million silver equivalent ounces or 21.9 million copper equivalent pounds for the three month period ended September 30, 2017.

During the third quarter of 2017, silver equivalent production increased 29%, and copper equivalent production decreased 17% compared to Q3 2016. This was partially a result of differences in realized metal prices during both periods. Normalizing the metal pricing used in the equivalent metal calculations, there was a decrease in metal production which was due to lower production in Mexico which was partially offset by record throughput in Peru. The temporary decline in production in Mexico was mainly due to the implementation of a new plan to improve operational performance and produce profitable silver ounces at Cusi and improve efficiencies at our Bolivar copper mine.  Similar to the successful program at Yauricocha in Peru, which began at the start of Q2 2015, the Company has engaged in an operation turnaround program in Mexico to modernize operations, improve production and lower costs.  We expect to see the results from this program become more apparent in the latter part of 2017 and early 2018.

Igor Gonzales, President and CEO of Sierra Metals stated, “The Company continues to see solid metal production and tonnage processed at the Yauricocha Mine, reporting a 44% increase in silver equivalent production, and a 13% increase in throughput during Q3 versus Q3 2016. Work continues to increase tonnage at Bolivar through the commissioning of newly acquired equipment, which has arrived and been commissioned, and we expect the remaining three underground loaders to arrive and be commissioned in Q4 2017. We continue to define higher grade ore sources through further development which are expected to come into the mine plan next year.”

He continued “At Cusi, lower than planned production continued as the Company remained focused on its efforts of completing ramp access, development, and production from the Santa Rosa de Lima zone which contains structures that are more than two times the width, and nearly twice the silver head grades than what has been previously mined closer to surface. The Company has reached the structure and is currently developing drifts to mine this area. We are currently campaigning development ore and expect to gradually increase the tonnage from this area until we are operating the mill at capacity using ore exclusively from Santa Rosa de Lima zone. The Company has successfully completed two sequential drill campaigns totaling 29,500 meters at the Santa Rosa de Lima zone which saw average silver equivalent grades of 372 grams per tonne and average widths of 3.8 meters. These results will be included in a mineral resource update for the Cusi Mine expected in the fourth quarter of 2017.”

He added: “Sierra Metals continues to have a very strong balance sheet with the liquidity that allows for continued operational successes, growth opportunities and development that has been planned for this year. Brownfield exploration programs remains a key aspect at all three of our mines and we are very optimistic that they will continue to add high value tonnage going forward.  Examples of this can be seen at Yauricocha with the Esperanza, Cuye-Mascota zones, at Bolivar with the Bolivar West and Northwest zones as well as at Cusi with the recently announced Santa Rosa de Lima Zone. When combined with our continued production optimization program, it should result in substantial growth, not only in production with lower costs, but most importantly in shareholder value.”

The following table displays selected financial and operational information for the three and nine months ended September 30, 2017:

(In thousands of dollars, except per share and cash cost amounts,consolidated
figures unless noted otherwise)

Three Months Ended

Nine Months Ended

September 30,
2017

September 30,
2016

September 30,
2017

September 30,

 2016

Operating

     
 

Ore Processed / Tonnes Milled

 

504,751

536,553

1,489,251

1,516,760

 

Silver Ounces Produced (000’s)

 

507

812

1,821

2,179

 

Copper Pounds Produced (000’s)

 

6,700

6,156

19,305

17,238

 

Lead Pounds Produced (000’s)

 

6,358

11,650

23,968

30,561

 

Zinc Pounds Produced (000’s)

 

19,877

14,435

56,543

39,571

 

Gold Ounces Produced

 

1,517

2,305

4,606

6,737

 

Copper Equivalent Pounds Produced (000’s)1

 

21,851

26,198

69,065

67,309

 

Silver Equivalent Ounces Produced (000’s)1

 

3,797

2,951

10,862

8,218

      
 

Cash Cost per Tonne Processed

 

$

48.01

$

39.87

$

45.60

$

40.61

 

Cost of sales per AgEqOz

 

$

7.88

$

7.73

$

7.72

$

8.59

 

Cash Cost per AgEqOz2

 

$

7.56

$

7.43

$

7.39

$

8.45

 

AISC per AgEqOz2

 

$

13.11

$

13.90

$

12.36

$

14.87

 

Cost of sales per CuEqLb2

 

$

1.37

$

0.88

$

1.20

$

1.06

 

Cash Cost per CuEqLb2

 

$

1.31

$

0.84

$

1.15

$

1.05

 

AISC per CuEqLb2

 

$

2.28

$

1.58

$

1.93

$

1.84

      
 

Cash Cost per AgEqOz (Yauricocha)2

 

$

6.55

$

7.02

$

6.49

$

8.21

 

AISC per AgEqOz (Yauricocha)2

 

$

10.35

$

12.64

$

9.99

$

13.76

 

Cash Cost per CuEqLb (Bolivar)2

 

$

1.69

$

0.89

$

1.41

$

1.13

 

AISC per CuEqLb (Bolivar)2

 

$

3.32

$

1.81

$

2.56

$

2.09

 

Cash Cost per AgEqOz (Cusi)2

 

$

21.95

$

9.86

$

14.72

$

8.51

 

AISC per AgEqOz (Cusi)2

 

$

51.93

$

19.59

$

33.59

$

17.21

Financial

      
 

Revenues

 

$

50,859

$

40,757

$

153,948

$

101,355

 

Adjusted EBITDA2

 

$

18,845

$

16,264

$

61,826

$

25,902

 

Operating cash flows before movements in working capital

 

$

21,818

$

16,870

$

61,973

$

28,106

 

Adjusted net income attributable to shareholders2

 

$

4,993

$

5,003

$

20,241

$

3,490

 

Net income (loss) attributable to shareholders

 

$

(6,523)

$

1,367

$

(6,763)

$

(7,189)

 

Cash and cash equivalents

 

$

28,607

$

27,166

$

28,607

$

27,166

 

Restricted cash

 

$

$

3,069

$

$

3,069

 

Working capital

 

$

(233)

$

9,064

$

(233)

$

9,064

(1)Silver equivalent ounces and copper equivalent pounds for Q3 2017 were calculated using the following realized metal prices: $16.86/oz Ag, $2.93/lb Cu, $1.08/lb Pb, $1.36/lb Zn, $1,280/oz Au. Silver equivalent ounces and copper equivalent pounds for Q3 2016 were calculated using the following realized metal prices: $19.17/oz Ag, $2.16/lb Cu, $0.85/lb Pb, $1.02/lb Zn, $1,347/oz Au. Silver equivalent ounces and copper equivalent pounds for 9M 2017 were calculated using the following realized metal prices: $17.31/oz Ag, $2.70/lb Cu, $1.03/lb Pb, $1.28/lb Zn, $1,253/oz Au. Silver equivalent ounces and copper equivalent pounds for 9M 2016 were calculated using the following realized metal prices: $17.61/oz Ag, $2.15/lb Cu, $0.82/lb Pb, $0.90/lb Zn, $1,276/oz Au.

(2)This is a non-IFRS performance measure, see Non-IFRS Performance Measures section of the MD&A.

  

Q3 2017 Financial Highlights

Revenue from metals payable of $50.9 million in Q3 2017 increased by 25% from $40.8 million in Q3 2016. Higher revenues are primarily attributable to the 13% increase in throughput, the increase in copper, and zinc head grades, and higher recoveries for all metals, except gold, at Yauricocha; and the increase in the prices of copper (36%), lead (27%), and zinc (33%) in Q3 2017 compared to Q3 2016; this was partially offset by an 11% decrease in throughput and lower head grades and recoveries for all metals, except gold head grades and recoveries, at Bolivar; and a 73% decrease in throughput and lower head grades for all metals, except zinc, and gold recoveries at Cusi.

Yauricocha’s cash cost per silver equivalent payable ounce was $6.55 (Q3 2016 – $7.02), and all-in sustaining cash cost (“AISC”) per silver equivalent payable ounce was $10.35 (Q3 2016 – $12.64) for Q3 2017 compared to the same period in 2016. The increase in realized metal prices used to calculate silver equivalent payable ounces in Q3 2017 vs Q3 2016 was the reason for the decrease in the AISC per silver equivalent ounce for these periods. Using consistent realized metal prices results in a 14% increase in the AISC per silver equivalent ounce relative to Q3 2016 is a result of increased Capex, including a substantial amount of infill drilling, infrastructure improvements including ramp and shaft development, ventilation improvements, equipment, as well as plant improvements that were completed.  The increase was also a result of Opex including infill drilling and drift development that will be utilized within one year.

Bolivar’s cash cost per copper equivalent payable pound was $1.69 (Q3 2016 – $0.89), and AISC per copper equivalent payable pound was $3.32 (Q3 2016 – $1.81) for Q3 2017 compared to the same period in 2016. The increase in the AISC per copper equivalent payable pound during Q3 2017 was due to a decrease in copper equivalent payable pounds as a result of 11% lower throughput, as well as an increase in sustaining capital expenditures related to the various equipment purchases made by the Company during the quarter in an effort to improve equipment availability and increase tonnage.

Cusi’s cash cost per silver equivalent payable ounce was $21.95 (Q3 2016 – $9.86), and AISC per silver equivalent payable ounce was $51.93 (Q3 2016 – $19.59) for Q3 2017 compared to the same period in 2016. AISC per silver equivalent payable ounce increased due to the decline in throughput which resulted in fewer silver equivalent payable ounces as the Company continued its refocused efforts on completing access, development and production from the Santa Rosa de Lima zone which contains wider structures and higher silver grades.

Adjusted EBITDA (1) of $18.8 million for Q3 2017 increased compared to $16.2 million in Q3 2016. The increase in adjusted EBITDA in Q3 2017 was primarily due to the $10.1 million increase in revenues at Yauricocha, discussed previously.

Cash flow generated from operations before movements in working capital of $21.8 million for Q3 2017 increased compared to $16.9 million in Q3 2016. The increase in operating cash flow is mainly the result of higher revenues generated and higher gross margins realized.

Cash and cash equivalents of $28.6 million and working capital of $(0.2) million as at September 30, 2017 compared to $42.1 million and $9.6 million, respectively, at the end of 2016. Cash and cash equivalents have decreased by $13.5 million during 9M 2017 due to $39.4 million of operating cash flows being offset by capital expenditures incurred in Mexico and Peru of $(38.3) million, repayment of loans, credit facilities and interest of $(42.9) million, dividends paid to non-controlling interest shareholders of $(1.7) million, and proceeds from issuances of loans and credit facilities of $29.8 million. Included in the $39.4 million of operating cash flows were negative changes in non-cash working capital items of $10.2 million due to the increase accounts receivable and decrease in deferred revenue as at September 30, 2017.

(1) This is a non-IFRS performance measure, see Non-IFRS Performance Measures section of the MD&A.            

 

Change in Metal Prices Used to Calculate Silver Equivalent Ounces and Copper Equivalent Pounds

During Q3 2017 the Company decided to change the method for calculating silver equivalent ounces (“AgEqOz”) and copper equivalent pounds (“CuEqLb”) due to the continued upswing in base metal prices which resulted in the generation of cost performance outputs that were not representative of actual performance. For the past three years the Company has calculated AgEqOz and CuEqOz based on budgeted prices and has used these prices consistently for each quarter during the year in order to provide clarity and reduce the complexity within the calculations. However, due to the continued increase in the prices of copper, lead, and zinc, the Company has decided to start using quarterly realized metal prices to calculate these metrics as the budgeted prices used for the first two quarters of 2017 were not providing accuracy and clarity to our equivalent metal, cash cost, and all-in sustaining cost (“AISC”) metrics. The Company has revised all previous quarters AgEqOz and CuEqLb calculations, which in turn have affected all of the cash cost and AISC metrics. In the table above, the Company has used realized metal prices for 9M 2017 and 9M 2016 to calculate the AgEqOz and CuEqLb, cash cost, and AISC metrics which differ from the metal prices used to calculate the quarterly metrics for the Company’s MD&A in respect of the three months ended March 31, 2017 and the six months ended June 30, 2017 previously disclosed by the Company. The Company will continue to update these metrics each quarter based on the realized metal prices for each quarter going forward. See the Company’s MD&A section entitled “Non-IFRS Performance Measures – Change in Metal Prices Used to Calculate Silver Equivalent Ounces and Copper Equivalent Pounds” in this MD&A for details on the impact of this change for each of the three month periods ended March 31, 2017, June 30, 2017 and September 30, 2017 as well as the nine month period ended September 30, 2017.

Project Development

The Company provided an updated Mineral Reserve Estimate at the Company’s Yauricocha Mine (press release dated October 26, 2017). Previously the Company had also provided an updated Mineral Resource Estimate at the Company’s Yauricocha Mine (press release dated September 28, 2017). An NI 43-101 Technical Report will be filed within 45 days of the September 28, 2017 news release, which will be prepared by SRK Consulting (U.S.) Inc.

Mine development at Bolívar during Q3 2017 totaled 942 meters. Most of these meters (797) were developed to prepare stopes for mine production. The remainder of the meters (145) were related to the deepening of ramps and developing service ramps to be used for ventilation and pumping.

During Q3 2017, at the Cusi property, mine development totaled 1,033 meters, and 1,164 meters of infill drilling was carried out inside the Mine.

Exploration Update

Exploration Highlights

Peru:

During Q3 2017, the Company drilled 106 holes totaling 13,918 meters at Yauricocha. The drilling included the following:

Exploration Drilling:

  • Cuye (Levels 1270, 1370 & 1170): 10 holes totaling 2,805 meters have intercepted the mineralized structure and economic mineral;
  • Yauricocha South Fault (Level 920 Mina Central): 4 holes totaling 1,181 meters to explore new mineralized zones;
  • Antacaca (Level 970): 12 holes totaling 1,532 meters to explore the continuity of the mineralization of the Antacaca orebody. Gap zones have been defined with polymetallic mineralization in the central mine zone;
  • Karlita (870 level): 1 hole totaling 139 meters to explore the orebody below the 870 level;
  • Elissa (Level 870): 14 holes totaling 2,041 meters which have intercepted economic polymetallic mineral in the sectors from the 920 level;
  • During Q3 2017 the Titan 24 geophysical survey was completed with 20 lines totaling 54 kilometers being surveyed;

Definition Drilling:

  • Antacaca (Level 970): 2 holes totaling 167 meters to define level 1020 of the orebody;
  • Butz (1070 level): 9 horizontal holes with a length of 692 meters of definition drilling to define the orebody;
  • Esperanza (920 & 970 levels): 30 horizontal holes totaling 3,454 meters to determine the continuity of the orebody;
  • Esperanza North (920 level): 6 holes totaling 443 meters to determine the continuity of the orebody from the 920 level to floor 8 on the 870 level;
  • Mascota (1120 level): 6 holes totaling 675 meters which have intercepted copper oxides, lead and silver and small structures with polymetallic mineral.

Mexico:

Bolivar

  • At Bolívar during Q3 2017, 14,082 meters were drilled in the following areas: 992 meters in the El Gallo area with the objective of finding the continuation of the El Gallo Inferior orebody between the Mina de Fierro and the Bolivar Mine; 7,168 meters were drilled at Bolivar Northwest; 418 meters were drilled in Chimney 2; and 5,504 meters were drilled at Bolivar West.

Cusi:

  • The Company drilled 1,164 meters inside the mines to verify the continuity of the orebodies and support development work on the various veins;
  • 9,682 meters were drilled on the Santa Rosa de Lima orebody during Q3 2017.

Conference Call Webcast

Sierra Metals’ senior management will host a conference call on Monday November 13, 2017 at 10:30 AM (EST) to discuss the Company’s financial and operating results for the three-month period ended September 30, 2017.

Via Webcast:

A live audio webcast of the meeting will be available on the Company’s website at:

https://event.on24.com/wcc/r/1472066/0BA7512FE35C5A3A2F4AC01DA53FD731

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, dial-in instructions are below. To ensure your participation, please call approximately five minutes prior to the scheduled start time of the call.

Participant Number (Toll Free Peru): 0800-71-470
Participant Number (Toll Free North America): (844) 579-6824
Participant Number (International): (763) 488-9145
Conference ID: 7199439

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.

Americo Zuzunaga, MAusIMM CP (Mining Engineer) and Vice President of Corporate Planning is a Qualified Person and chartered professional qualifying as a Competent Person under the Joint Ore Reserves Committee (JORC) Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.

Augusto Chung, FAusIMM CP (Metallurgist) and Consultant to Sierra Metals is a Qualified Person and chartered professional qualifying as a competent person on metallurgical processes.

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 is focused on increasing production volume and growing mineral resources. Sierra Metals has recently had several new discoveries and still has additional brownfield exploration opportunities at all three mines in Peru and Mexico that are within or close proximity to the existing mines. Additionally, the Company has large land packages at all three mines with several prospective regional targets providing longer term exploration upside and mineral resource growth potential.

The Company’s Common Shares trade on the Bolsa de Valores de Lima and on the Toronto Stock Exchange under the symbol “SMT” and on the NYSE American Exchange under the symbol “SMTS”.

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Forward-Looking Statements

This press release contains “forward-looking information” and “forward-looking statements” within the meaning of Canadian and U.S. securities laws related to the Company (collectively, “forward-looking information”). Forward-looking information includes, but is not limited to, statements with respect to the Company’s operations, including the anticipated developments in the Company’s operations in future periods, the Company’s planned exploration activities, the adequacy of the Company’s financial resources, and other events or conditions that may occur in the future. Statements concerning mineral reserve and resource estimates may also be considered to constitute forward-looking statements to the extent that they involve estimates of the mineralization that will be encountered if and when the properties are developed or further developed. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “expects”, “anticipates”, “plans”, “projects”, “estimates”, “assumes”, “intends”, “strategy”, “goals”, “objectives”, “potential” or variations thereof, or stating that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking information.

Forward-looking information is subject to a variety of risks and uncertainties, which could cause actual events or results to differ from those reflected in the forward-looking information, including, without limitation, risks inherent in the mining industry including environmental hazards, industrial accidents, unusual or unexpected geological formations, floods, labour disruptions, explosions, cave-ins, weather conditions and criminal activity; commodity price fluctuations; higher operating and/or capital costs; lack of available infrastructure; the possibility that future exploration, development or mining results will not be consistent with the Company’s expectations; risks associated with the estimation of mineral resources and the geology, grade and continuity of mineral deposits and the inability to replace reserves; fluctuations in the price of commodities used in the Company’s operations; risks related to foreign operations; changes in laws or policies, foreign taxation, delays or the inability to obtain necessary governmental permits; risks relating to outstanding borrowings; issues regarding title to the Company’s properties; risks related to environmental regulation; litigation risks; risks related to uninsured hazards; the impact of competition; volatility in the price of the Company’s securities; global financial risks; inability to attract or retain qualified employees; potential conflicts of interest; risks related to a controlling group of shareholders; dependence on third parties; differences in U.S. and Canadian reporting of mineral reserves and resources; potential dilutive transactions; foreign currency risks; risks related to business cycles; liquidity risks; reliance on internal control systems; credit risks, including risks related to the Company’s compliance with covenants with respect to its BCP Facility; uncertainty of production and cost estimates for the Yauricocha Mine, the Bolivar Mine and the Cusi Mine; and other risks identified in the Company’s filings with Canadian securities regulators and the U.S. Securities and Exchange Commission (“SEC”), which filings are available at www.sedar.com and www.sec.gov, respectively.

This list is not exhaustive of the factors that may affect any of the Company’s forward-looking information. Forward-looking information includes statements about the future and are inherently uncertain, and the Company’s actual achievements or other future events or conditions may differ materially from those reflected in the forward-looking information due to a variety of risks, uncertainties and other factors. The Company’s statements containing forward-looking information are based on the beliefs, expectations, and opinions of management on the date the statements are made, and the Company does not assume any obligation to update forward-looking information if circumstances or management’s beliefs, expectations or opinions should change, other than as required by applicable law. For the reasons set forth above, one should not place undue reliance on forward-looking information.

Note Regarding Reserve and Resource Estimates

All reserve and resource estimates reported by the Company are calculated in accordance with the Canadian National Instrument 43-101 –  Standards of Disclosure for Mineral Projects and the Canadian Institute of Mining and Metallurgy Classification system. These standards differ significantly from the requirements of the SEC. The differences between these standards are discussed in our SEC filings. Mineral resources which are not mineral reserves do not have demonstrated economic viability.

SOURCE Sierra Metals Inc.

For further information: please visit www.sierrametals.com or contact: Mike McAllister, VP, Corporate Development, Sierra Metals Inc., +1 (416) 366-7777, info@sierrametals.com; Ed Guimaraes, CFO, Sierra Metals Inc., +1 (416) 366-7777; Igor Gonzales, President & CEO, Sierra Metals Inc., +1 (416) 366-7777

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Sierra Metals Strengthens Board of Directors with the Appointment of Jose Alberto Vizquerra-Benavides

Sierra Metals Inc. (TSX: SMT) (NYSE American: SMTS) (BVL: SMT) (“Sierra Metals” or the “Company”) is pleased to announce the appointment of Mr. Jose Alberto Vizquerra-Benavides to its Board of Directors effective immediately.  Mr. Vizquerra will also join the Sierra Metals Audit Committee effective immediately replacing Igor Gonzales who is stepping down from the Audit Committee.

Mr. Vizquerra is currently the Executive Vice President of Strategic Development and a Director at Osisko Mining Inc. Previously, Mr. Vizquerra served as the President & CEO of Oban Mining Corp. (“Oban”), where he led the successful change of business strategy that resulted in Oban’s acquisition of Corona Gold, Eagle Hill Exploration Corp. and Ryan Gold to form what is now Osisko Mining. Mr. Vizquerra previously worked as Head of Business Development for Compania de Minas Buenaventura, prior to which he worked as a production and exploration geologist at the Red Lake gold mine. He is currently a board member of Alio Gold Inc. Mr. Vizquerra holds a M.Sc. from Queens University in MINEX, and is a Qualified Person (AIGP).

J. Alberto Arias, Chairman of Sierra Metals, commented: “We are extremely pleased to have Jose join Sierra Metals Board of Directors. Jose’s experience in Canadian and Latin American Mining Industries makes him a valuable addition to our board.  We believe that Jose’s knowledge contribution will help Sierra Metals realize the considerable growth and strategic opportunities that the Company currently has available at all of its properties.”

About Sierra Metals

Sierra Metals Inc. is a Canadian-based growing polymetallic mining company with production from its Yauricocha Mine in Peru, and its Bolivar and Cusi Mines in Mexico. The Company is focused on increasing production volume and growing mineral resources. Sierra Metals has recently had several new discoveries and still has additional brownfield exploration opportunities at all three mines in Peru and Mexico that are within or close proximity to the existing mines. Additionally, the Company has large land packages at all three mines with several prospective regional targets providing longer term exploration upside and mineral resource growth potential.

The Company’s Common Shares trade on the Bolsa de Valores de Lima and on the Toronto Stock Exchange under the symbol “SMT” and on the NYSE American Exchange under the symbol “SMTS”.

Continue to Follow, Like and Watch our progress:

Web: www.sierrametals.com | Twitter: sierrametals | Facebook: SierraMetalsInc | LinkedIn: Sierra Metals Inc

Forward-Looking Statements

This press release contains “forward-looking information” and “forward-looking statements” within the meaning of Canadian and U.S. securities laws related to the Company (collectively, “forward-looking information“). Forward-looking information includes, but is not limited to, statements with respect to the Company’s operations, including anticipated developments in the Company’s operations in future periods, the Company’s planned exploration activities, the adequacy of the Company’s financial resources, and other events or conditions that may occur in the future. Statements concerning mineral reserve and resource estimates may also be considered to constitute forward-looking statements to the extent that they involve estimates of the mineralization that will be encountered if and when the properties are developed or further developed. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “expects”, “anticipates”, “plans”, “projects”, “estimates”, “assumes”, “intends”, “strategy”, “goals”, “objectives”, “potential” or variations thereof, or stating that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking information.

Forward-looking information is subject to a variety of risks and uncertainties, which could cause actual events or results to differ from those reflected in the forward-looking information, including, without limitation, risks inherent in the mining industry including environmental hazards, industrial accidents, unusual or unexpected geological formations, floods, labour disruptions, explosions, cave-ins, weather conditions and criminal activity; commodity price fluctuations; higher operating and/or capital costs; lack of available infrastructure; the possibility that future exploration, development or mining results will not be consistent with the Company’s expectations; risks associated with the estimation of mineral resources and the geology, grade and continuity of mineral deposits and the inability to replace reserves; fluctuations in the price of commodities used in the Company’s operations; risks related to foreign operations; changes in laws or policies, foreign taxation, delays or the inability to obtain necessary governmental permits; risks relating to outstanding borrowings; issues regarding title to the Company’s properties; risks related to environmental regulation; litigation risks; risks related to uninsured hazards; the impact of competition; volatility in the price of the Company’s securities; global financial risks; inability to attract or retain qualified employees; potential conflicts of interest; risks related to a controlling group of shareholders; dependence on third parties; differences in U.S. and Canadian reporting of mineral reserves and resources; potential dilutive transactions; foreign currency risks; risks related to business cycles; liquidity risks; reliance on internal control systems; credit risks, including risks related to the Company’s compliance with covenants with respect to its BCP Facility; uncertainty of production and cost estimates for the Yauricocha Mine, the Bolivar Mine and the Cusi Mine; and other risks identified in the Company’s filings with Canadian securities regulators and the U.S. Securities and Exchange Commission, which filings are available at www.sedar.com and www.sec.gov, respectively.

This list is not exhaustive of the factors that may affect any of the Company’s forward-looking information. Forward looking information includes statements about the future and are inherently uncertain, and the Company’s actual achievements or other future events or conditions may differ materially from those reflected in the forward-looking information due to a variety of risks, uncertainties and other factors. The Company’s statements containing forward-looking information are based on the beliefs, expectations and opinions of management on the date the statements are made, and the Company does not assume any obligation to update forward-looking information if circumstances or management’s beliefs, expectations or opinions should change, other than as required by applicable law. For the reasons set forth above, one should not place undue reliance on forward-looking information.

Note Regarding Reserve and Resource Estimates

All reserve and resource estimates reported by the Company are calculated in accordance with the Canadian National Instrument 43-101 –  Standards of Disclosure for Mineral Projects and Canadian Institute of Mining and Metallurgy Classification system. These standards differ significantly from the requirements of the SEC. The differences between these standards are discussed in our SEC filings. Mineral resources which are not mineral reserves do not have demonstrated economic viability.

SOURCE Sierra Metals Inc.

For further information: regarding Sierra Metals, please visit www.sierrametals.com or contact: Mike McAllister, Vice President, Corporate Development, Sierra Metals Inc., Tel: +1 (416) 366-7777, Email: info@sierrametals.com; Igor Gonzales, President & CEO, Sierra Metals Inc., Tel: +1 (416) 366-7777

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Sierra Metals Reports Strong Q3-2017 Financial Results at its Sociedad Minera Corona Subsidiary in Peru

Increased production of higher value ore, improved recoveries and improved metal pricing has positively impacted financial results

  • Q3 production second highest in the Yauricocha mine 69 year history

 

TORONTO, Nov. 1, 2017 /CNW/ – 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 third quarter of 2017 (“Q3 2017”).

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 September 30, 2017

  • Revenues of US$39.6 million vs US$29.5 million in Q3 2016
  • Adjusted EBITDA of US$ 18.8 million vs US$13.9 million in Q3 2016
  • Total tonnes processed of 268,178 vs 237,429 in Q3 2016
  • Net production revenue per tonne of ore milled increased by 23% to US$147.65
  • Cash cost per silver equivalent payable ounce higher by 36% to US$9.24
  • All in sustaining cost (“AISC”) per silver equivalent payable ounce higher by 19% to US$14.60
  • Silver equivalent production of 2.1 million ounces vs 2.1 million ounces in Q3 2016
  • Copper equivalent production of 18.2 million pounds vs 17.7 million pounds in Q3 2016
  • $24.5 million of cash and cash equivalents as at September 30, 2017
  • $31.0 million of working capital as at September 30, 2017

Sierra Metals continues to see a positive impact from the operational improvements program at Yauricocha and has successfully focused on increasing the production of higher value ore, improving recoveries, while benefiting from an improved metals price environment resulting in significant increases to revenue and adjusted EBITDA. The Company’s continued emphasis at Yauricocha will be to focus on the production of higher value ore, cost reductions where possible, and optimization to improve the Company’s production, operating margins and cash flow generation.

“I am very pleased with the continued operational and exploration successes at the Yauricocha Mine” stated Igor Gonzales, President, and CEO of Sierra Metals.  “With our quarterly increase in revenues, adjusted EBITDA and cashflow over Q3-2016, we continue to reap the benefits of the operational improvements program at Yauricocha. The 19% increase in the AISC per silver equivalent ounce relative to Q3-2016 is a result of Capex and Opex, including drilling, plant and equipment and infrastructure improvements. These are investments in the Mine and should continue to provide a promising future for Yauricocha. While the AISC per silver equivalent ounce has increased, the benefit of this spending can be seen with a 134% increase to our mineral reserve estimates, a doubling of mine life at current throughput levels at Yauricocha in addition to an increase of net production revenue per tonne of ore milled by 23% to US$147.65.”

He continued “With an ongoing focus on processing higher value ore, the company has seen a 3% increase in silver equivalent production compared to Q3 2016 which in turn, positively impacted operating margins and cash flow at the Mine. Corona continues to have a solid balance sheet and strong liquidity. Management remains optimistic about continued operational efficiencies and future operational and resource growth at Yauricocha.”

The following table displays selected unaudited financial information for the three and nine months ended September 30, 2017:

(In thousands of US dollars, except cash cost and revenue
per tonne metrics)

 

Three Months Ended

 

Nine Months Ended

 
 

September 30, 2017

September 30, 2016

Var %

September 30, 2017

September 30, 2016

Var %

Revenue

$

39,566

29,532

34%

115,926

65,441

77%

Adjusted EBITDA (1)

 

18,824

13,904

35%

58,245

20,086

190%

Cash Flow from operations

 

18,844

13,774

37%

58,247

20,110

190%

Gross profit

 

18,053

14,335

26%

55,471

22,008

152%

Income Tax (Expense) Recovery

 

(5,223)

(3,924)

33%

(14,965)

(4,248)

252%

Net Income (loss)

 

9,354

7,337

27%

30,997

9,225

236%

        

Net production revenue per tonne of ore milled (2)

 

147.65

119.70

23%

152.63

99.10

54%

Cash cost per tonne of ore milled (2)

 

62.33

56.17

11%

61.55

55.65

11%

        

Cash cost per silver equivalent payable ounce (2)

 

9.24

6.80

36%

8.36

8.23

1%

All-In Sustaining Cost per silver equivalent payable ounce (2)

 

14.60

12.24

19%

12.88

13.80

-7%

Cash cost per copper equivalent payable pound (2)

 

1.08

0.79

37%

0.98

0.96

2%

All-In Sustaining Cost per copper equivalent payable pound (2)

$

1.71

1.43

20%

1.51

1.61

-5%

        

(In thousands of US dollars, unless otherwise stated)

 

September 30, 2017

December 31, 2016

    
        

Cash and cash equivalents

$

24,486

36,877

    

Assets

 

139,137

128,769

    

Liabilities

 

51,191

62,254

    

Equity

 

87,945

66,515

    
        

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 and Nine Months Ended September 30, 2017

  • Revenues of $39.6 million for Q3 2017 compared to $29.5 million in Q3 2016 and revenues of $115.9 million for the nine months ended September 30, 2017 compared to $65.4 million for the same period in 2016. The increase in revenues was due to a 15% increase in tonnes processed, higher head grades for copper and zinc, higher recoveries for all metals, except gold, and the increase in the prices of copper (26%), lead (26%), and zinc (42%).
  • Cash cost per silver equivalent ounce sold at the Yauricocha Mine of $9.24 for Q3 2017 compared to $6.80 for Q3 2016 and $8.36 for the nine months ended September 30, 2017 compared to $8.23 for the same period in 2016. All-in sustaining cost (“AISC”) per silver equivalent ounce sold of $14.60 for Q3 2017 compared to $12.24 for Q3 2016 and $12.88 for the nine months ended September 30, 2017 compared to $13.80 for the same period in 2016. The decrease in AISC during 9M 2017 was due to an increase in silver equivalent payable ounces as a result of higher throughput and ore feed head grades from the increase in available production from higher grade zones in the mine. Also, lower treatment and refining costs incurred during Q3 and 9M 2017 resulting from improved terms within re-negotiated sales contracts with our off-takers.
  • The 19% increase in the AISC per silver equivalent ounce relative to Q3-2016 is a result of increased Capex, including a substantial amount of infill drilling, infrastructure improvements including ramp and shaft development, ventilation improvements, equipment, as well as plant improvements that were completed.  The increase was also a result of Opex including infill drilling and drift development that will be utilized within one year. Pricing used to calculate the AISC on an equivalent silver basis are the Company’s 2017 budgeted metal prices including: $19.50/oz. Ag, $2.28/lb. Cu, $0.85/lb. Pb, $1.05/lb. Zn, $1,369/oz. Au.
  • Adjusted EBITDA of $18.8 million for Q3 2017 compared to $13.9 million for Q3 2016 and $58.2 million for the nine months ended September 30, 2017 compared to $20.1 million for the same period in 2016. The increase in adjusted EBITDA for Q3 and 9M 2017 was due to the increase in plant throughput, metal production and revenues, discussed above.
  • Operating cash flows before movements in working capital of $18.8 million for Q3 2017 compared to US$13.8 million for Q3 2016 and $58.2 million for the nine months ended September 30, 2017 compared to $20.1 million for the same period in 2016. The increase in operating cash flows before movements in working capital for Q3 and 9M 2017 compared to the same period in 2016 was primarily due to the increase in revenues, discussed previously.
  • Cash and cash equivalents of $24.5 million as at September 30, 2017 compared to $36.9 million as at December 31, 2016. Cash and cash equivalents decreased by $12.4 million which was driven by operating cash flows of $42.8 million, offset by capital expenditures of $13.5 million, debt and interest payments of $20.1 million, intercompany loans of $12.0 million, and dividends paid of $9.6 million.
  • Net income of $9.4 million, or $0.26 per share for Q3 2017 compared to net income of $7.3 million, or $0.20 per share for Q3 2016. Net income of $31.0 million, or $0.86 per share, for the nine months ended September 30, 2017 compared to $9.2 million, or $0.26 per share, for the same period in 2016.

Corona’s Operational Highlights for the Three and Nine Months Ended September 30, 2017:

The following table displays the production results for the three and nine months ended September 30, 2017:

Yauricocha Production

3 Months Ended

9 Months Ended

 

Q3 2017

Q3 2016

% Var.

Q3 2017

Q3 2016

% Var.

Tonnes processed (mt)

268,178

237,429

13%

757,270

660,519

15%

 

Daily throughput

3,065

2,713

13%

2,890

2,516

15%

 

Silver grade (g/t)

58.94

106.80

-45%

71.76

96.73

-26%

 

Copper grade

0.79%

0.51%

55%

0.76%

0.55%

40%

 

Lead grade

1.26%

2.69%

-53%

1.60%

2.64%

-39%

 

Zinc grade

3.73%

3.06%

22%

3.73%

3.02%

24%

 

Gold Grade (g/t)

0.56

0.70

-21%

0.53

0.66

-19%

       
 

Silver recovery

73.99%

66.81%

11%

75.72%

62.84%

20%

 

Copper recovery                          

68.07%

65.33%

4%

63.84%

57.43%

11%

 

Lead recovery

81.82%

75.75%

8%

84.22%

70.51%

19%

 

Zinc recovery

89.40%

87.73%

2%

89.45%

86.61%

3%

 

Gold Recovery

17.27%

27.25%

-37%

16.68%

26.85%

-38%

Silver ounces (000’s)

376

545

-31%

1,323

1,291

2%

Copper pounds (000’s)

3,178

1,740

83%

8,152

4,561

79%

Lead pounds (000’s)

6,112

10,652

-43%

22,503

27,145

-17%

Zinc pounds (000’s)

19,717

14,040

40%

55,758

38,030

47%

Gold ounces

827

1,458

-43%

2,171

3,756

-42%

Silver equivalent ounces (000’s)(1)

2,134

2,071

3%

6,412

5,319

21%

Copper equivalent pounds (000’s)(1)

18,248

17,710

3%

54,838

45,491

21%

(1) Silver equivalent ounces & copper equivalent pounds were calculated using the following metal prices:
$19.50/oz Ag, $2.28/lb Cu, $0.85/lb Pb, $1.05/lb Zn, $1,369/oz Au.

Qualified Persons

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.

Americo Zuzunaga, MAusIMM CP (Mining Engineer) and Vice President of Corporate Planning is a Qualified Person and chartered professional qualifying as a Competent Person under the Joint Ore Reserves Committee (JORC) Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.

Augusto Chung, FAusIMM CP (Metallurgist) and Consultant to Sierra Metals is a Qualified Person and chartered professional qualifying as a competent person on metallurgical processes.

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 is focused on increasing production volume and growing mineral resources. Sierra Metals has recently had several new discoveries and still has additional brownfield exploration opportunities at all three mines in Peru and Mexico that are within or close proximity to the existing mines. Additionally, the Company has large land packages at all three mines with several prospective regional targets providing longer term exploration upside and mineral resource growth potential.

The Company’s Common Shares trade on the Bolsa de Valores de Lima and on the Toronto Stock Exchange under the symbol “SMT” and on the NYSE MKT Exchange under the symbol “SMTS”.

Forward-Looking Statements

This press release contains “forward-looking information” and “forward-looking statements” within the meaning of Canadian and U.S. securities laws related to the Company (collectively, “forward-looking information“). Forward-looking information includes, but is not limited to, statements with respect to the Company’s operations, including anticipated developments in the Company’s operations in future periods, the Company’s planned exploration activities, the adequacy of the Company’s financial resources, and other events or conditions that may occur in the future. Statements concerning mineral reserve and resource estimates may also be considered to constitute forward-looking statements to the extent that they involve estimates of the mineralization that will be encountered if and when the properties are developed or further developed. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “expects”, “anticipates”, “plans”, “projects”, “estimates”, “assumes”, “intends”, “strategy”, “goals”, “objectives”, “potential” or variations thereof, or stating that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking information.
Forward-looking information is subject to a variety of risks and uncertainties, which could cause actual events or results to differ from those reflected in the forward-looking information, including, without limitation, risks inherent in the mining industry including environmental hazards, industrial accidents, unusual or unexpected geological formations, floods, labour disruptions, explosions, cave-ins, weather conditions and criminal activity; commodity price fluctuations; higher operating and/or capital costs; lack of available infrastructure; the possibility that future exploration, development or mining results will not be consistent with the Company’s expectations; risks associated with the estimation of mineral resources and the geology, grade and continuity of mineral deposits and the inability to replace reserves; fluctuations in the price of commodities used in the Company’s operations; risks related to foreign operations; changes in laws or policies, foreign taxation, delays or the inability to obtain necessary governmental permits; risks relating to outstanding borrowings; issues regarding title to the Company’s properties; risks related to environmental regulation; litigation risks; risks related to uninsured hazards; the impact of competition; volatility in the price of the Company’s securities; global financial risks; inability to attract or retain qualified employees; potential conflicts of interest; risks related to a controlling group of shareholders; dependence on third parties; differences in U.S. and Canadian reporting of mineral reserves and resources; potential dilutive transactions; foreign currency risks; risks related to business cycles; liquidity risks; reliance on internal control systems; credit risks, including risks related to the Company’s compliance with covenants with respect to its BCP Facility; uncertainty of production and cost estimates for the Yauricocha Mine, the Bolivar Mine and the Cusi Mine; and other risks identified in the Company’s filings with Canadian securities regulators and the U.S. Securities and Exchange Commission, which filings are available at www.sedar.com and www.sec.gov, respectively.

This list is not exhaustive of the factors that may affect any of the Company’s forward-looking information. Forward looking information includes statements about the future and are inherently uncertain, and the Company’s actual achievements or other future events or conditions may differ materially from those reflected in the forward-looking information due to a variety of risks, uncertainties and other factors. The Company’s statements containing forward-looking information are based on the beliefs, expectations and opinions of management on the date the statements are made, and the Company does not assume any obligation to update forward-looking information if circumstances or management’s beliefs, expectations or opinions should change, other than as required by applicable law. For the reasons set forth above, one should not place undue reliance on forward-looking information.

Note Regarding Reserve and Resource Estimates

All reserve and resource estimates reported by the Company are calculated in accordance with the Canadian National Instrument 43-101 –  Standards of Disclosure for Mineral Projects and the Canadian Institute of Mining and Metallurgy Classification system. These standards differ significantly from the requirements of the SEC. The differences between these standards are discussed in our SEC filings. Mineral resources which are not mineral reserves do not have demonstrated economic viability.

Continue to watch our progress at:

Web: www.sierrametals.com
Twitter: sierrametals
Facebook: SierraMetalsInc
LinkedIn: Sierra Metals Inc

SOURCE Sierra Metals Inc.

For further information: regarding Sierra Metals, please visit www.sierrametals.com or contact: Mike McAllister, VP, Corporate Development, Sierra Metals Inc., +1 (416) 366-7777, info@sierrametals.com; Ed Guimaraes, CFO, Sierra Metals Inc., +1 (416) 366-7777; Igor Gonzales, President & CEO, Sierra Metals Inc., +1 (416) 366-7777

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Sierra Metals Significantly Increases Mineral Reserve Estimate For Yauricocha Mine, Peru


  • Mineral Reserves for Yauricocha are 8,917,000 tonnes averaging 48.3 g/t silver, 1.2% copper, 0.8% lead, 2.4% zinc and 0.5 g/t gold representing a 134% increase to the previous Reserve Estimate. This new Reserve Estimate more than doubles the previous mine life at current throughput levels when compares to the previous August 2016 Reserve Estimate.

  • Total Proven and Probable Contained Metal has significantly increased by 86% silver, 237% copper, 58% lead, 96% zinc, and 97% gold as compared to the previous August 2016 reserve estimate.

  • Increases to copper contained metal reflect the discovery and delineation of new Cu-rich zones in Cuye, Mascota, and Esperanza and a 14% increase in Copper Price.

  • The updated Reserve Estimate has incorporated the recent significant increase to Yauricocha’s Mineral Resource (press released on September 28th, 2017). This Reserve Estimate does not include the latest drill intercepts reported from Cuye-Mascota (press released on October 2, 2017) as they were completed after the cut-off date of the current report.

  • In addition, metal pricing, metallurgical recoveries, costs, and other factors have been updated to reflect July 31, 2017 actuals and assumptions.

TORONTO, Oct. 26, 2017 /CNW/ – Sierra Metals Inc. (TSX: SMT) (BVL: SMT) (NYSE AMERICAN: SMTS) (“Sierra Metals” or “the Company”) has updated its Mineral Reserves Estimate at the Company’s Yauricocha Mine, located in Yauyos Province, Peru.

The Reserves Estimate at Yauricocha is the result of the recent significant increase to Mineral Resource stated in the September 28, 2017 press release.

A Technical Report is currently being prepared by SRK Consulting (U.S.) Inc. in accordance with NI 43-101 and will be filed on SEDAR within 45 days of the September 28, 2017 resource update news release.

  • Consolidated Yauricocha Reserve Estimate – July 31, 2017

Reserves – Proven and Probable

Contained Metal

  

Tonnes

Ag

Cu

Pb

Zn

Au

Ag

Cu

Pb

Zn

Au

  

(000’s)

g/t

%

%

%

g/t

M oz

M lb

M lb

M lb

K oz

Yauricocha

            
 

Proven

1,836

46.6

1.1

0.8

2.6

0.6

2.8

43.7

33.8

105.0

37.7

 

Probable

7,081

48.8

1.2

0.8

2.4

0.5

11.1

191.6

117.3

372.2

111.9

 

Proven & Probable

8,917

48.3

1.2

0.8

2.4

0.5

13.9

235.3

151.1

477.2

149.6

 

(1)

All figures rounded to reflect the relative accuracy of the estimates. Total may not sum due to rounding.

(2)

The consolidated Yauricocha Reserve Estimate is comprised of the proven and probable material in the Mina Central, Esperanza, Cach-Cachi, Mascota, Cuye, and Cuerpos Pequenos mining areas.

(3)

Mineral reserves are reported at unit value cut-offs (COG) based on metal price assumptions*, variable metallurgical recovery assumptions (variable metallurgical recoveries** as a function of grade and relative metal distribution in individual concentrates), and variable grade adjustments*** made to the resource model.

  

* Metal price assumptions considered for the calculation of unit values are: Gold (US$/oz 1,255.00), Silver (US$/oz 17.80), Copper (US$/lb 2.60), Lead (US$/lb 1.01), and Zinc (US$/lb 1.25)
** Metallurgical recovery assumptions for the Yauricocha Mine are variable by mineralization style and degree of oxidation. Recovery is a function of grade and relative metal distribution in individual concentrates. The assumptions are built in to the unit values for each area, as a function of the metallurgical recovery multiplied by the metal price.
***Grade adjustment factors are based on historical mine to mill reconciliation and are variable by mining area

(4)

The mining costs are variable by mining method.

(5)

Mining recovery and dilution have been applied and are variable by mining area and proposed mining method.

(6)

The unit value cut-off grades (COG) are variable by mining area and proposed mining method. The economic COG ranges from US$56-63.

Consolidated Yauricocha Resource Estimate – July 31, 2017

Resources – Measured and Indicated

      

Contained Metal

  

Tonnes

Ag

Cu

Pb

Zn

Au

Ag

Cu

Pb

Zn

Au

  

(000’s)

g/t

%

%

%

g/t

M oz

M lb

M lb

M lb

K oz

Yauricocha

            
 

Measured

3,094

70.0

1.7

1.2

3.2

0.8

7.0

117.3

83.7

218.5

78.3

 

Indicated

10,112

59.9

1.5

0.8

2.7

0.6

19.5

326.3

185.4

594.8

195.6

 

Measured & Indicated

13,206

62.3

1.5

0.9

2.8

0.6

26.4

443.6

269.1

813.3

274.0

 

Inferred

6,632

43.0

1.2

0.5

2.2

0.5

9.2

174.7

68.0

315.2

117.0

 

(1)

Mineral resources are reported inclusive of ore reserves. Mineral resources are not ore reserves and do not have demonstrated economic viability. All figures rounded to reflect the relative accuracy of the estimates. Gold, silver, copper lead and zinc assays were capped where appropriate.

(2)

Mineral resources are reported at unit value cut-offs grades (COG) based on metal price assumptions*, variable metallurgical recovery assumptions (variable metallurgical recoveries** as a function of grade and relative metal distribution in individual concentrates), generalized mining/processing costs).

  

* Metal price assumptions considered for the calculation of unit values are: Gold (US$/oz 1,255.00), Silver (US$/oz 17.80), Copper (US$/lb 2.60), Lead (US$/lb 1.01) and Zinc (US$/lb 1.25)

** Metallurgical recovery assumptions for the Yauricocha Mine are variable by mineralization style and degree of oxidation. The assumptions are built in to the unit values for each area, as a function of the metallurgical recovery multiplied by the metal price.

(3)

The unit value COG are variable, by mining area and proposed mining method. The COG ranges from US$41-48.

“Sierra’s management team are extremely pleased with the significant increases in the proven and probable reserves in this Reserve Estimate for the Yauricocha mine.” stated Igor Gonzales, President and CEO of Sierra Metals Inc. “This new reserve more than doubles the previous mine life at current throughput levels and when compared to the previous estimate from August 2016 the Company has realized a 134% increase to the mineral reserves for Yauricocha. The mineral reserves now consist of 8,917,000 tonnes averaging 48.3 g/t silver, 1.2% copper, 0.8% lead, 2.4% zinc and 0.5 g/t gold representing a 134% increase to the previous Reserve Estimate. These increases represent a significant amount of additional drilling and mine exploration development work completed at the Yauricocha Mine.”

He continued, “The Company remains committed to growth through brownfield exploration and todays Reserve Estimate and the September 28, 2017 Resource Estimate confirm the presence of additional high-quality tonnage at the Yauricocha Mine and will allow the Company to look at potential production increases going forward.  We will continue our brownfield exploration programs at the Yauricocha mine over the next year with an aim of further mineral resource expansions.”

2017 Reserve Estimate % Differences from Prior Estimate (August 2016):

% Change from 2016 Reserve Estimate

Contained Metal

  

Tonnes

Ag

Cu

Pb

Zn

Au

Ag

Cu

Pb

Zn

Au

  

(000’s)

g/t

%

%

%

g/t

M oz

M lb

M lb

M lb

K oz

Yauricocha

            
 

Proven

117%

-34%

84%

-48%

-8%

-2%

43%

299%

14%

100%

113%

 

Probable

141%

-16%

35%

-26%

-19%

-20%

101%

226%

77%

94%

92%

 

Proven &
Probable

135%

-21%

43%

-33%

-17%

-16%

86%

237%

58%

96%

97%

The updated Reserve Estimate varies significantly from the 2016 Technical Report primarily due to the significant increase in Yauricocha’s Mineral Resource.

Mineral Reserve Estimate
Mineral Reserve Estimations have been conducted or reviewed by the following Qualified Persons:

  • Shannon L. Rhéaume of SRK Consulting (Canada) Inc.; Datamine Studio 5DP™ and Enhanced Production Scheduler (EPS)™ Software

The procedures and methods supporting the mineral reserve estimations have been developed in conjunction with Sierra Metals mine planning personnel. The reserve estimates presented herein have been conducted by Sierra Metals and reviewed by SRK using supporting data generated by the site. SRK notes that the methods and procedures are reasonable and consistent with industry best practice. Each mining area was evaluated using reasonable mining block shapes based on the mining method applicable to the zone. Data and information supporting the mining recovery, mining dilution, reconciliation-based grade adjustments, metallurgical recoveries, consensus commodity pricing, and treatment and refining charges have been provided by Sierra Metals and reviewed by SRK. These factors are used to calculate unit values for the blocks in the models. Historic and expected direct and indirect mining, processing, and general and administrative costs were provided by Sierra Metals. To be considered economic, the Net Smelter Return (NSR) value of the mining block must be greater than the economic cutoff. Blocks below the economic cutoff but above the marginal cutoff are, in some cases, included in the reserve where they are in between or immediately adjacent to an economic block, and it is reasonable to expect that no significant additional development would be required to extract the marginal block. Isolated blocks, defined as blocks with no defined access, have been excluded. Mined out areas were provided by Sierra Metals personnel.

SRK is of the opinion that the reserve estimations are suitable for public reporting and are a fair representation of the mill feed tonnes, grade, and metal for the Yauricocha deposit.

Qualified Persons

The technical content of 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.

Americo Zuzunaga, MAusIMM CP(Mining Engineer) and Vice President of Corporate Planning is a Qualified Person and chartered professional qualifying as a Competent Person under the Joint Ore Reserves Committee (JORC) Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.

Augusto Chung, FAusIMM CP(Metallurgist) and Consultant to Sierra Metals is a Qualified Person and chartered professional qualifying as a competent person on metallurgical processes.

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 is focused on increasing production volume and growing mineral resources. Sierra Metals has recently had several new key discoveries and still has many more exciting brownfield exploration opportunities at all three Mines in Peru and Mexico that are within close proximity to the existing mines. Additionally, the Company also has large land packages at all three mines with several prospective regional targets providing longer term exploration upside and mineral resource growth potential.

The Company’s Common Shares trade on the Bolsa de Valores de Lima and on the Toronto Stock Exchange under the symbol “SMT” and on the NYSE American Exchange under the symbol “SMTS”.

Continue to Follow, Like and Watch our progress:

Web: www.sierrametals.com | Twitter: sierrametals | Facebook: SierraMetalsInc | LinkedIn: Sierra Metals Inc.

Forward-Looking Statements

This press release contains “forward-looking information” and “forward-looking statements” within the meaning of Canadian and U.S. securities laws related to the Company (collectively, “forward-looking information”). Forward-looking information includes, but is not limited to, statements with respect to the Company’s operations, including the anticipated developments in the Company’s operations in future periods, the Company’s planned exploration activities, the adequacy of the Company’s financial resources, and other events or conditions that may occur in the future. Statements concerning mineral reserve and resource estimates may also be considered to constitute forward-looking statements to the extent that they involve estimates of the mineralization that will be encountered if and when the properties are developed or further developed. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “expects”, “anticipates”, “plans”, “projects”, “estimates”, “assumes”, “intends”, “strategy”, “goals”, “objectives”, “potential” or variations thereof, or stating that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking information.

Forward-looking information is subject to a variety of risks and uncertainties, which could cause actual events or results to differ from those reflected in the forward-looking information, including, without limitation, risks inherent in the mining industry including environmental hazards, industrial accidents, unusual or unexpected geological formations, floods, labour disruptions, explosions, cave-ins, weather conditions and criminal activity; commodity price fluctuations; higher operating and/or capital costs; lack of available infrastructure; the possibility that future exploration, development or mining results will not be consistent with the Company’s expectations; risks associated with the estimation of mineral resources and the geology, grade and continuity of mineral deposits and the inability to replace reserves; fluctuations in the price of commodities used in the Company’s operations; risks related to foreign operations; changes in laws or policies, foreign taxation, delays or the inability to obtain necessary governmental permits; risks relating to outstanding borrowings; issues regarding title to the Company’s properties; risks related to environmental regulation; litigation risks; risks related to uninsured hazards; the impact of competition; volatility in the price of the Company’s securities; global financial risks; inability to attract or retain qualified employees; potential conflicts of interest; risks related to a controlling group of shareholders; dependence on third parties; differences in U.S. and Canadian reporting of mineral reserves and resources; potential dilutive transactions; foreign currency risks; risks related to business cycles; liquidity risks; reliance on internal control systems; credit risks, including risks related to the Company’s compliance with covenants with respect to its BCP Facility; uncertainty of production and cost estimates for the Yauricocha Mine, the Bolivar Mine and the Cusi Mine; and other risks identified in the Company’s filings with Canadian securities regulators and the U.S. Securities and Exchange Commission (“SEC”), which filings are available at www.sedar.com and www.sec.gov, respectively.

This list is not exhaustive of the factors that may affect any of the Company’s forward-looking information. Forward-looking information includes statements about the future and are inherently uncertain, and the Company’s actual achievements or other future events or conditions may differ materially from those reflected in the forward-looking information due to a variety of risks, uncertainties and other factors. The Company’s statements containing forward-looking information are based on the beliefs, expectations, and opinions of management on the date the statements are made, and the Company does not assume any obligation to update forward-looking information if circumstances or management’s beliefs, expectations or opinions should change, other than as required by applicable law. For the reasons set forth above, one should not place undue reliance on forward-looking information.

Note Regarding Reserve and Resource Estimates

All reserve and resource estimates reported by the Company are calculated in accordance with the Canadian National Instrument 43-101 –  Standards of Disclosure for Mineral Projects and the Canadian Institute of Mining and Metallurgy Classification system. These standards differ significantly from the requirements of the SEC. The differences between these standards are discussed in our SEC filings. Mineral resources which are not mineral reserves do not have demonstrated economic viability.

 

SOURCE Sierra Metals Inc.

For further information: regarding Sierra Metals, please visit www.sierrametals.com or contact: Mike McAllister, V.P., Corporate Development, Sierra Metals Inc., +1 (416) 366-7777, Email: info@sierrametals.com; Alonso Lujan, V.P., Exploration, Sierra Metals Inc., +(51) 630-3100, +(52) 614-4260211; Igor Gonzales, President & CEO, Sierra Metals Inc., +1(416) 366-7777

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Sierra Metals Provides Update Regarding Its Operational Improvements Program at the Mexican Operations

TSX: SMT
BVL: SMT
NYSE AMERICAN: SMTS

  • Major changes in the Corporate Team, which is now strengthened in Mexico to better support and improve operations
  • Metallurgical recovery levels have increased to above 80% at both mills in Mexico from the low 60% range at Cusi and low 70% range at Bolivar
  • 13 new pieces of equipment commissioned at Bolivar Mine to maximize ore delivery
  • Drift development underway on four sub-levels on the planned pilot sub level longhole stoping area in the Santa de Rosa de Lima structure at the Cusi Mine. This development is increasing the mill campaigns with higher grade ore. This trend is expected to continue until full mill capacity from Santa Rosa de Lima is reached targeted for Q2 2018

TORONTO, Oct. 24, 2017 /CNW/ – Sierra Metals Inc. (TSX: SMT) (NYSE AMERICAN: SMTS) (BVL: SMT) (“Sierra Metals” or “the Company”) is pleased to provide an update on the operational improvement program currently taking place at its Bolivar and Cusi Mines in Mexico, focusing on modernizing operations, improving production, and reducing unit costs. A similar program was successfully implemented at the Yauricocha Mine starting in late 2015. The program to date has focused on strengthening the corporate team, adding technical expertise at the projects, improvements to production capacity through mine design, planning and sequencing, and improving metals production through improvements to the metallurgical recovery process and ore throughput.

Igor Gonzales, President, and CEO of Sierra Metals commented: “Management is committed to improving operations in Mexico and to increase the profitability of both the Bolivar and Cusi Mines.  We have undertaken efforts to appoint experienced and qualified personnel to run the operational improvements program and improve the efficiency and operations at both mines.  We expect that our program efforts should be more apparent in the latter part of 2017 and we will continue working toward completion of the improvements scheduled for the end of Q1 2018.  We are optimistic about the outcome and expect to see higher cash flow from our Mexican operations starting in Q2 2018.”

Strengthening the Corporate Team in Mexico

Strengthening the corporate team with professionals experienced in projects and metallurgy, planning and scoping, organization restructuring, as well as continuous improvement capabilities, are key to providing better support to the operations. Additionally, technical expertise in the areas of long and short-term planning, ventilation and geomechanics have been incorporated and assigned to the Mexican operations. Simultaneously, the Mexican management team has been reinforced with a new general manager, operations manager and site managers, to improve the performance of our assets in Mexico.

Metallurgical and Metal Recovery Improvements

The Company has been focused on improving metallurgical recoveries at both mills in Mexico and has been able to achieve consistently higher metallurgical recovery levels to an average level of 82% at the Piedras Verdes Mill located at the Bolivar Mine and to an average level of 83% at the Malpaso Mill located near the Cusi Mine. This has been accomplished through a reduction in the grind size of the ore processed to a particle size distribution level of P80 allowing for the optimal release of mineralization, and milling throughput. Additionally, at the Cusi Mine recoveries have been increased through the identification, classification and individual treatment of separated ore types.  The separated ore types are then processed through individual campaigns, and through the addition of lime, recoveries are increased.  Figures 1 and 2 below demonstrate the process and timeline for metal recoveries at Bolivar and Cusi. Furthermore, at Cusi the Company has also implemented a comprehensive cost analysis for each campaign sent to the mill to ensure that only economic ore is processed which also helps to control mill expenses and improve operating margins. Studies are underway to define capital requirements to expand both Cusi and Bolivar mines in the following areas: New tailings facilities, mine development and plant expansions by Q3-2018.

Bolivar Mine Improvement Plans

The Company continues to define higher grade ore sources at Bolivar West and Bolivar Northwest which are expected to come into the mine plan by the second half of 2019.  However, as a short-term planning strategy, the Bolivar Mine continues to focus on developing and mining the El Gallo Inferior zone to centralize operations, optimize equipment usage and to improve productivity. Bolivar production for 2018 is expected to reach 3,000 tonnes per day in Q1 2018. Metallurgical recoveries are expected to remain at current levels for 2018. The Company continues to work to increase tonnage at Bolivar through the commissioning of 13 new pieces of equipment. The new equipment along with the best use of existing mine infrastructure and equipment will help to maximize ore delivery to the processing plant.  Reducing costs is also very important to the Company and efforts have been put in place to optimize capital expenditures on access development at Bolivar.

Cusi Mine Improvement Plans

At the Cusi Mine, the Company is focused on completing access, development and production of the Santa Rosa de Lima zone which has wider structures and higher silver grades than the narrow veins currently being mined. The Company has reached the Santa Rosa de Lima structure and is currently developing drifts to mine this area.

The Company is currently mining selected higher grade structures at the old mine in addition to campaigning development ore from the Santa Rosa de Lima structure containing improved head grades to the mill at Cusi.  The Company expects to gradually increase tonnage from the Santa Rosa de Lima zone until the mill is operating at its capacity of 650 tonnes per day using only ore from the Santa Rosa de Lima zone.  It is expected that the main supply of ore in-terms of tonnage and grade will come from Santa Rosa de Lima starting in Q2 2018.

The change in focus at Cusi is the result of a geological reinterpretation and the Company’s successful completion of two sequential drill campaigns totaling 29,500 meters at the Santa Rosa de Lima zone which saw average silver equivalent grades of 372 grams per tonne and average widths of 3.8 meters. These results will be included in a mineral resource update for the Cusi Mine expected in the fourth quarter of 2017. Additionally, structural development at the Santa Rosa de Lima zone will be completed using long hole mining versus the existing cut and fill methodology which should result in lower costs going forward.

A prefeasibility study and capex estimate study to define economic options for potential new Cusi plant are targeted by Q3-2018.

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 is focused on increasing production volume and growing mineral resources. Sierra Metals has recently had several new discoveries and still has additional brownfield exploration opportunities at all three mines in Peru and Mexico that are within or close proximity to the existing mines. Additionally, the Company has large land packages at all three mines with several prospective regional targets providing longer-term exploration upside and mineral resource growth potential.

The Company’s Common Shares trade on the Bolsa de Valores de Lima and on the Toronto Stock Exchange under the symbol “SMT” and on the NYSE American Exchange under the symbol “SMTS”.

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Forward-Looking Statements

This press release contains “forward-looking information” and “forward-looking statements” within the meaning of Canadian and U.S. securities laws related to the Company (collectively, “forward-looking information”). Forward-looking information includes, but is not limited to, statements with respect to the Company’s operations, including the anticipated developments in the Company’s operations in future periods, the Company’s planned exploration activities, the adequacy of the Company’s financial resources, and other events or conditions that may occur in the future. Statements concerning mineral reserve and resource estimates may also be considered to constitute forward-looking statements to the extent that they involve estimates of the mineralization that will be encountered if and when the properties are developed or further developed. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “expects”, “anticipates”, “plans”, “projects”, “estimates”, “assumes”, “intends”, “strategy”, “goals”, “objectives”, “potential” or variations thereof, or stating that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking information.

Forward-looking information is subject to a variety of risks and uncertainties, which could cause actual events or results to differ from those reflected in the forward-looking information, including, without limitation, risks inherent in the mining industry including environmental hazards, industrial accidents, unusual or unexpected geological formations, floods, labour disruptions, explosions, cave-ins, weather conditions and criminal activity; commodity price fluctuations; higher operating and/or capital costs; lack of available infrastructure; the possibility that future exploration, development or mining results will not be consistent with the Company’s expectations; risks associated with the estimation of mineral resources and the geology, grade and continuity of mineral deposits and the inability to replace reserves; fluctuations in the price of commodities used in the Company’s operations; risks related to foreign operations; changes in laws or policies, foreign taxation, delays or the inability to obtain necessary governmental permits; risks relating to outstanding borrowings; issues regarding title to the Company’s properties; risks related to environmental regulation; litigation risks; risks related to uninsured hazards; the impact of competition; volatility in the price of the Company’s securities; global financial risks; inability to attract or retain qualified employees; potential conflicts of interest; risks related to a controlling group of shareholders; dependence on third parties; differences in U.S. and Canadian reporting of mineral reserves and resources; potential dilutive transactions; foreign currency risks; risks related to business cycles; liquidity risks; reliance on internal control systems; credit risks, including risks related to the Company’s compliance with covenants with respect to its BCP Facility; uncertainty of production and cost estimates for the Yauricocha Mine, the Bolivar Mine and the Cusi Mine; and other risks identified in the Company’s filings with Canadian securities regulators and the U.S. Securities and Exchange Commission (“SEC”), which filings are available at www.sedar.com and www.sec.gov, respectively.

This list is not exhaustive of the factors that may affect any of the Company’s forward-looking information. Forward-looking information includes statements about the future and are inherently uncertain, and the Company’s actual achievements or other future events or conditions may differ materially from those reflected in the forward-looking information due to a variety of risks, uncertainties and other factors. The Company’s statements containing forward-looking information are based on the beliefs, expectations, and opinions of management on the date the statements are made, and the Company does not asme any obligation to update forward-looking information if circumstances or management’s beliefs, expectations or opinions should change, other than as required by applicable law. For the reasons set forth above, one should not place undue reliance on forward-looking information.

Note Regarding Reserve and Resource Estimates

All reserve and resource estimates reported by the Company are calculated in accordance with the Canadian National Instrument 43-101 –  Standards of Disclosure for Mineral Projects and Canadian Institute of Mining and Metallurgy Classification system. These standards differ significantly from the requirements of the SEC. The differences between these standards are discussed in our SEC filings. Mineral resources which are not mineral reserves do not have demonstrated economic viability.

SOURCE Sierra Metals Inc.

For further information: regarding Sierra Metals, please visit www.sierrametals.com or contact: Mike McAllister, Vice President, Corporate Development, Sierra Metals Inc., Tel: +1 (416) 366-7777, Email: info@sierrametals.com; Igor Gonzales, President & CEO, Sierra Metals Inc., Tel: +1 (416) 366-7777

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