Sierra Metals Inc. (TSX: SMT) (BVL: SMT) (NYSE AMERICAN:
SMTS) ("Sierra Metals" or "the Company") is pleased to report
third-quarter 2021 production results.
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Image 1 - Yauricocha Mine, Peru (Photo:
Business Wire)
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.
Third Quarter 2021 Consolidated
Production Results
- Copper production of 8.3 million pounds; a 32% decrease from
Q3 2020
- Zinc production of 19.1 million pounds; a 23% decrease from
Q3 2020
- Silver production of 0.8 million ounces; a 21% decrease from
Q3 2020
- Lead production of 7.8 million pounds; a 20% decrease from
Q3 2020
- Gold production of 2,261 ounces; a 43% decrease from Q3
2020
- Copper equivalent production of 21.9 million pounds; a 38%
decrease from Q3 2020
Luis Marchese, CEO of Sierra Metals, commented: "The third
quarter has been particularly difficult for the Company. It has
presented us with tough challenges arising from sequencing issues
due to the COVID-19 limitations over the last year, as well as
unexpected equipment availability issues that impacted throughput,
head grades and recoveries, particularly at the Bolivar Mine.
Additionally, during the quarter, Cusi presented operational
limitations caused by high temperatures at the available mineable
areas. However, these issues are temporary in nature, and we expect
to meet the lower end of the revised annual production
guidance.
He continued, "With the strategic review now completed, we can
now focus all of our efforts on stabilizing our operations to their
full potential. We see improved workforce and contractor
availability which should allow us to catch up on the development
and preparation of higher grade stopes for inclusion into the mine
plan in the coming quarters. We have reinitiated work on a backlog
of accumulated sustaining infrastructure projects as well as on
exploration from our brownfield drilling programs which are
expected to improve the quality and tonnage of our mineral
resources. We also expect to publish the Preliminary Feasibility
Study for Bolivar by year end, followed by Q1 2022 for Yauricocha
and Cusi by Q2 2022, which support planned throughput growth at the
mines."
He concluded, "Despite the difficult challenges encountered this
year, the quality of the resource base at our three mines underpins
an improved outlook for the Company. With a renewed focus and
refined strategy, we expect to continue on a path of striving for
production growth while optimizing and improving operations with a
goal of cost reduction as we complete this year and continue into
2022, which will benefit all stakeholders in the Company."
Consolidated Production
Results
Consolidated Production Three Months Ended September
30, Nine Months Ended September 30,
2021
2020
% Var.
2021
2020
% Var. Tonnes processed
750,208
798,458
-6%
2,312,163
2,050,641
13%
Daily throughput
8,574
9,125
-6%
8,808
7,812
13%
Silver production (000 oz)
807
1,023
-21%
2,722
2,543
7%
Copper production (000 lb)
8,256
12,153
-32%
25,686
33,636
-24%
Lead production (000 lb)
7,841
9,855
-20%
24,805
25,340
-2%
Zinc production (000 lb)
19,112
24,869
-23%
64,368
60,256
7%
Gold Production (oz)
2,261
3,989
-43%
7,709
10,408
-26%
Silver equivalent ounces (000's)(1)
3,842
4,193
-8%
11,622
12,119
-4%
Copper equivalent pounds (000's)(1)(2)
21,870
35,170
-38%
71,966
89,100
-19%
Zinc equivalent pounds (000's)(1)
68,489
96,867
-29%
228,824
242,563
-6%
(1) Silver equivalent ounces and copper and zinc equivalent
pounds for Q3 2021 were calculated using the following realized
prices: $24.20/oz Ag, $4.25/lb Cu, $1.36/lb Zn, $1.07/lb Pb,
$1,790/oz Au. Silver equivalent ounces and copper and zinc
equivalent pounds for Q3 2020 were calculated using the following
realized prices: $24.89/oz Ag, $2.97/lb Cu, $1.08/lb Zn, $0.85/lb
Pb, $1,916/oz Au. Silver equivalent ounces and copper and zinc
equivalent pounds for 9M 2021 were calculated using the following
realized prices: $25.81/oz Ag, $4.17/lb Cu, $1.31/lb Zn, $0.99/lb
Pb, $1,796/oz Au. Silver equivalent ounces and copper and zinc
equivalent pounds for 9M 2020 were calculated using the following
realized prices: $19.35/oz Ag, $2.63/lb Cu, $0.97/lb Zn, $0.80/lb
Pb, $1,742/oz Au. (2) In August 2021, the Company revised its
annual production guidance to 110 million to 115 million copper
equivalent pounds, using the following budgeted metal prices:
$25.15/oz Ag, $3.12/lb Cu, $1.09/lb Zn, $0.90/lb Pb and $1,936/oz
Au. For direct comparison, the 9-month copper equivalent production
calculated at same metal prices is 82 million pounds . As such, the
anticipated annual production is expected to be in the guidance
range.
Yauricocha Mine, Peru
Operating at an average daily ore throughput rate of 3,705 tpd
(calculated for the number of operating days) during Q3 2021, the
Yauricocha mine processed 324,196 tonnes which is a 2% increase
compared to Q3 2020.
Grades for all metals were lower for the quarter due to the
sequencing of mining with more ore coming from the Esperanza and
Cachi Cachi zone, which are concentrated copper sulphide zones
versus polymetallic zones, which contain more zinc and lead. As a
result, during Q3 2021, mining operations focused on these larger
but lower-grade ore bodies. As a result, recoveries for all metals,
except gold, were negatively impacted by the lower head grades.
A summary of production from the Yauricocha Mine for Q3 2021 is
provided below:
Yauricocha Production Three Months Ended September
30, Nine Months Ended September 30,
2021
2020
% Var.
2021
2020
% Var. Tonnes processed
324,196
318,155
2%
979,316
805,914
22%
Daily throughput
3,705
3,636
2%
3,731
3,070
22%
Silver grade (g/t)
56.84
61.32
-7%
56.04
64.19
-13%
Copper grade
0.87%
1.01%
-14%
0.71%
1.11%
-36%
Lead grade
1.14%
1.52%
-25%
1.23%
1.56%
-21%
Zinc grade
3.06%
4.00%
-24%
3.35%
3.84%
-13%
Gold Grade (g/t)
0.51
0.55
-7%
0.46
0.61
-25%
Silver recovery
76.11%
82.93%
-8%
79.70%
82.56%
-3%
Copper recovery
74.61%
76.20%
-2%
69.84%
76.19%
-8%
Lead recovery
87.33%
89.53%
-2%
90.15%
88.58%
2%
Zinc recovery
87.39%
88.63%
-1%
89.82%
88.32%
2%
Gold Recovery
21.96%
19.19%
14%
20.91%
19.19%
9%
Silver production (000 oz)
451
520
-13%
1,385
1,373
1%
Copper production (000 lb)
4,641
5,419
-14%
11,020
14,967
-26%
Lead production (000 lb)
7,146
9,550
-25%
23,683
24,564
-4%
Zinc production (000 lb)
19,112
24,869
-23%
64,368
60,256
7%
Gold Production (oz)
1,169
1,076
9%
3,102
3,180
-2%
Silver equivalent ounces (000's)(1)
2,740
2,652
3%
7,554
7,727
-2%
Copper equivalent pounds (000's)(1)
15,596
22,245
-30%
46,775
56,809
-18%
Zinc equivalent pounds (000's)(1)
48,840
61,269
-20%
148,727
154,655
-4%
(1) Silver equivalent ounces and copper and zinc equivalent
pounds for Q3 2021 were calculated using the following realized
prices: $24.20/oz Ag, $4.25/lb Cu, $1.36/lb Zn, $1.07/lb Pb,
$1,790/oz Au. Silver equivalent ounces and copper and zinc
equivalent pounds for Q3 2020 were calculated using the following
realized prices: $24.89/oz Ag, $2.97/lb Cu, $1.08/lb Zn, $0.85/lb
Pb, $1,916/oz Au. Silver equivalent ounces and copper and zinc
equivalent pounds for 9M 2021 were calculated using the following
realized prices: $25.81/oz Ag, $4.17/lb Cu, $1.31/lb Zn, $0.99/lb
Pb, $1,796/oz Au. Silver equivalent ounces and copper and zinc
equivalent pounds for 9M 2020 were calculated using the following
realized prices: $19.35/oz Ag, $2.63/lb Cu, $0.97/lb Zn, $0.80/lb
Pb, $1,742/oz Au.
Bolivar Mine, Mexico
The Bolivar Mine processed 364,941 tonnes in Q3 2021, or a
decrease of 11% from the 410,468 tonnes processed in Q3 2020, due
to the low availability of equipment, including mining scoops
during the quarter. The average daily ore throughput realized
during the quarter was approximately 4,171 tpd. Head grades were
impacted by a COVID-induced lag on development and infill drilling,
which resulted in changes of the mining sequence, as well as
dilution issues, which are being corrected. The 11% decrease in
throughput combined with lower head grades and recoveries for all
metals resulted in a 55% decrease in copper equivalent pounds
produced during Q3 2021 compared to Q3 2020. In Q3 2021, copper
production decreased by 46% to 3.6 million pounds, silver
production decreased 52% to 95 thousand ounces, and gold production
decreased 67% to 899 ounces compared to Q3 2020.
A summary of production for the Bolivar Mine for Q3 2021 is
provided below:
Bolivar Production Three Months Ended September 30,
Nine Months Ended September 30,
2021
2020
% Var.
2021
2020
% Var. Tonnes processed (t)
364,941
410,468
-11%
1,121,880
1,096,981
2%
Daily throughput
4,171
4,691
-11%
4,274
4,179
2%
Copper grade
0.61%
0.86%
-29%
0.75%
0.89%
-16%
Silver grade (g/t)
11.18
18.20
-39%
16.70
21.39
-22%
Gold grade (g/t)
0.10
0.32
-67%
0.17
0.30
-43%
Copper recovery
73.06%
86.07%
-15%
79.06%
86.31%
-8%
Silver recovery
71.97%
82.89%
-13%
81.91%
82.56%
-1%
Gold recovery
73.23%
64.17%
14%
67.62%
63.97%
6%
Copper production (000 lb)
3,615
6,734
-46%
14,666
18,669
-21%
Silver production (000 oz)
95
199
-52%
494
623
-21%
Gold production (oz)
899
2,740
-67%
4,117
6,843
-40%
Silver equivalent ounces (000's)(1)
796
1,213
-34%
3,148
3,778
-17%
Copper equivalent pounds (000's)(1)
4,531
10,173
-55%
19,495
27,776
-30%
Zinc equivalent pounds (000's)(1)
14,190
28,019
-49%
61,987
75,617
-18%
(1) Silver equivalent ounces and copper and zinc equivalent
pounds for Q3 2021 were calculated using the following realized
prices: $24.20/oz Ag, $4.25/lb Cu, $1.36/lb Zn, $1.07/lb Pb,
$1,790/oz Au. Silver equivalent ounces and copper and zinc
equivalent pounds for Q3 2020 were calculated using the following
realized prices: $24.89/oz Ag, $2.97/lb Cu, $1.08/lb Zn, $0.85/lb
Pb, $1,916/oz Au. Silver equivalent ounces and copper and zinc
equivalent pounds for 9M 2021 were calculated using the following
realized prices: $25.81/oz Ag, $4.17/lb Cu, $1.31/lb Zn, $0.99/lb
Pb, $1,796/oz Au. Silver equivalent ounces and copper and zinc
equivalent pounds for 9M 2020 were calculated using the following
realized prices: $19.35/oz Ag, $2.63/lb Cu, $0.97/lb Zn, $0.80/lb
Pb, $1,742/oz Au.
Cusi Mine, Mexico
The Cusi mine processed 61,071 tonnes during Q3 2021, which is a
13% decrease as compared to Q3 2020. Silver equivalent production
for Q3 2020 was 306 thousand ounces or a 7% decline from Q3 2020,
resulting from lower throughput and 5% lower silver head grades
partially offset by 3% higher recoveries as compared to Q3 2020.
The decline in silver grades resulted from the inability to operate
in some of the targeted higher grade zones due to issues related to
excessive underground water and heat. A newly driven raise bore and
upgraded pumping system were installed during the quarter allowing
access to these areas.
Silver production decreased 14% to 261 thousand ounces, gold
production increased 12% to 193 ounces, and lead production
increased 128% to 0.7 million pounds in Q3 2021 compared to Q3
2020.
A summary of production for the Cusi Mine for Q3 2021 is
provided below:
Cusi Production Three Months Ended September 30,
Nine Months Ended September 30,
2021
2020
% Var.
2021
2020
% Var. Tonnes processed (t)
61,071
69,835
-13%
210,967
147,746
43%
Daily throughput(2)
698
1,074
-35%
804
969
-17%
Silver grade (g/t)
161.03
168.65
-5%
151.98
143.46
6%
Gold grade (g/t)
0.18
0.18
0%
0.16
0.18
-11%
Lead grade
0.62%
0.25%
148%
0.29%
0.29%
0%
Silver recovery (flotation)
82.63%
80.36%
3%
81.77%
80.29%
2%
Gold recovery (lixiviation)
55.89%
43.61%
28%
43.90%
45.17%
-3%
Lead recovery
82.64%
79.30%
4%
82.36%
82.18%
0%
Silver production (000 oz)
261
304
-14%
843
547
54%
Gold production (oz)
193
173
12%
490
385
27%
Lead production (000 lb)
695
305
128%
1,122
776
45%
Silver equivalent ounces (000's)(1)
306
328
-7%
920
614
50%
(1) Silver equivalent ounces and copper and zinc equivalent
pounds for Q3 2021 were calculated using the following realized
prices: $24.20/oz Ag, $4.25/lb Cu, $1.36/lb Zn, $1.07/lb Pb,
$1,790/oz Au. Silver equivalent ounces and copper and zinc
equivalent pounds for Q3 2020 were calculated using the following
realized prices: $24.89/oz Ag, $2.97/lb Cu, $1.08/lb Zn, $0.85/lb
Pb, $1,916/oz Au. Silver equivalent ounces and copper and zinc
equivalent pounds for 9M 2021 were calculated using the following
realized prices: $25.81/oz Ag, $4.17/lb Cu, $1.31/lb Zn, $0.99/lb
Pb, $1,796/oz Au. Silver equivalent ounces and copper and zinc
equivalent pounds for 9M 2020 were calculated using the following
realized prices: $19.35/oz Ag, $2.63/lb Cu, $0.97/lb Zn, $0.80/lb
Pb, $1,742/oz Au.
(2) Cusi remained in care & maintenance throughout Q2 2020 and
part of Q3 2020. Hence daily throughput for Q3 2020 and 9M 2020 has
been calculated for 65 days and 152 days only.
Quality Control
All technical data contained in this news release has been
reviewed and approved by Americo Zuzunaga, FAusIMM 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.
About Sierra Metals
Sierra Metals Inc. is a diversified Canadian mining company
focused on the production and development of precious and base
metals from its polymetallic Yauricocha Mine in Peru, and 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".
For further information regarding Sierra Metals, please visit
www.sierrametals.com.
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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 (collectively, "forward-looking
information"). Forward-looking information includes, but is not
limited to, statements with respect to the date of the 2020
Shareholders' Meeting and the anticipated filing of the
Compensation Disclosure. 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, the risks described under the heading "Risk
Factors" in the Company's annual information form dated March 30,
2020 for its fiscal year ended December 31, 2019 and other risks
identified in the Company's filings with Canadian securities
regulators and the United States Securities and Exchange
Commission, which filings are available at www.sedar.com and
www.sec.gov, respectively.
The risk factors referred to above are not an exhaustive list of
the factors that may affect any of the Company's forward-looking
information. Forward-looking information includes statements about
the future and is 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 such 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211018005310/en/
Mike McAllister, CPIR Vice President, Investor Relations
Sierra Metals Inc. Tel: +1 (416) 366-7777 Email:
info@sierrametals.com
Luis Marchese CEO Sierra Metals Inc. Tel: +1 (416)
366-7777
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