(All $ figures reported in USD)
- Revenue from metals payable of $62.7 million in Q2 2023, a 25%
increase from Q2 2022.
- Adjusted EBITDA(1) of $13.5 million in Q2 2023, significantly
higher than the Adjusted EBITDA(1) of $1.4 million in Q2 2022.
- Operating cash flows before movements in working capital(1) of
$11.6 million in Q2 2023, compared to $(1.6) million Q2 2022.
- Net income attributable to shareholders in Q2 2023 was $1.6
million versus a loss of $15.3 million in Q2 2022.
- Copper equivalent production of 21.7 million pounds in Q2 2023;
a 22% increase from Q2 2022.
- Consolidated cash costs per copper equivalent payable pound(1)
in Q2 2023 of $2.11 and consolidated All-In Sustaining Costs per
equivalent payable pound (“AISC”)(1) of $3.64 were 15% and
8% lower, respectively, than the same quarter of 2022.
(1) This is a non-IFRS performance measure. See the Non-IFRS
Performance Measures section of the press release.
Management will host a conference call and webcast to discuss
Q2 2023 Results today, August 14, 2023, at 11:00 AM (EDT).
Click here to register.
Sierra Metals Inc. (TSX: SMT | OTC: SMTSF) ("Sierra
Metals" or "the Company") today reported financial
results for the three-month (“Q2”) and six-month (“H1”) period
ended June 30, 2023, showing total revenues of $62.7 million and
adjusted EBITDA(1) of $13.5 million on throughput of 702,052 tonnes
and metal production of 21.7 million copper equivalent pounds in Q2
2023.
Ernesto Balarezo Valdez, CEO of Sierra Metals, commented, “The
second quarter of 2023 delivered strong operating and financial
performance. Our Bolivar mine had record copper equivalent
production for the quarter and far exceeded our expectations on
costs. Our other core operation, the Yauricocha mine, continued its
positive trend of quarter-over-quarter production increases. Both
operations still have room for improvements, especially at
Yauricocha where we are on track to obtain, by year-end, all
required permits needed to operate below the 1120 level, which will
allow us to mine in a larger ore body. As a result of our strong
first half of 2023, we are well on our way to meeting our 2023
production guidance. Overall, we are very encouraged with the
momentum we are building across our business.”
(1) This is a non-IFRS performance measure. See the Non-IFRS
Performance Measures section of the press release.
Q2 2023 Consolidated Financial
Summary
The information provided below are excerpts from the Company’s
Q2 2023 financial statements and Management’s Discussion and
Analysis, which are available on the Company's website
(www.SierraMetals.com) and on SEDAR (www.sedar.com) under the
Company’s profile.
(In thousands of dollars, except per share and cash cost amounts,
consolidated figures unless noted otherwise)
Var% Var% Six months
ended June 30, Q2 2023 Q1 2023 Q2 2022
vs Q2 2022 vs Q1 2023
2023
2022
Operating
Ore Processed / Tonnes Milled
702,052
577,284
640,181
10%
22%
1,279,336
1,230,911
Silver Ounces Produced (000's)
740
622
608
22%
19%
1,362
1,342
Copper Pounds Produced (000's)
10,459
8,285
8,334
25%
26%
18,744
14,658
Lead Pounds Produced (000's)
4,256
3,060
3,333
28%
39%
7,316
7,549
Zinc Pounds Produced (000's)
12,228
10,579
10,426
17%
16%
22,807
20,918
Gold Ounces Produced
4,442
3,910
2,622
69%
14%
8,352
4,545
Copper Equivalent Pounds Produced (000's)1
21,705
18,009
17,794
22%
21%
39,729
33,670
Cash Cost per Tonne Processed
$
60.78
$
61.60
$
65.21
-7%
-1%
$
61.15
$
63.34
Cash Cost per CuEqLb2
$
2.11
$
2.12
$
2.47
-15%
-1%
$
2.11
$
2.92
AISC per CuEqLb2
$
3.64
$
3.28
$
3.94
-8%
11%
$
3.48
$
4.71
Cash Cost per CuEqLb (Yauricocha)2
$
2.29
$
2.05
$
2.06
11%
12%
$
2.16
$
2.12
AISC per CuEqLb (Yauricocha)2
$
3.97
$
3.12
$
3.39
17%
27%
$
3.54
$
3.53
Cash Cost per CuEqLb (Bolivar)2
$
1.62
$
1.85
$
3.39
-52%
-12%
$
1.71
$
3.87
AISC per CuEqLb (Bolivar)2
$
3.02
$
3.10
$
5.49
-45%
-2%
$
3.06
$
6.26
Cash Cost per AgEqOz (Cusi)2
$
29.17
$
23.02
$
24.84
17%
27%
$
25.91
$
17.83
AISC per AgEqOz (Cusi)2
$
38.83
$
29.80
$
33.83
15%
30%
$
34.05
$
25.25
Financial
Revenues
$
62,665
$
58,526
$
49,941
25%
7%
$
121,191
$
107,182
Adjusted EBITDA2
$
13,526
$
15,205
$
1,413
857%
-11%
$
28,731
$
17,401
Operating cash flows before movements in working capital
$
11,588
$
12,851
$
(1,630
)
811%
-10%
$
24,439
$
9,071
Adjusted net income (loss) attributable to shareholders2
$
4,308
$
4,746
$
(11,631
)
137%
-9%
$
9,054
$
(5,686
)
Net income (loss) attributable to shareholders
$
1,638
$
2,053
$
(15,266
)
111%
-20%
$
3,691
$
(14,897
)
Cash and cash equivalents
$
4,393
$
3,864
$
16,404
-73%
14%
$
4,393
$
16,404
Working capital 3
$
(88,431
)
$
(83,001
)
$
(6,426
)
-1276%
7%
$
(88,431
)
$
(6,426
)
(1) Copper equivalent pounds were
calculated using the following realized prices:
Q2 2023: $24.17/oz Ag, $3.99/lb Cu,
$1.16/lb Zn, $0.96/lb Pb, $1,977/oz Au.
Q1 2023: $22.57/oz Ag, $4.06/lb Cu,
$1.42/lb Zn, $0.97/lb Pb, $1,891/oz Au.
Q2 2022: $22.65/oz Ag, $4.30/lb Cu,
$1.79/lb Zn, $1.00/lb Pb, $1,872/oz Au.
H1 2023: $23.37/oz Ag, $4.02/lb Cu,
$1.29/lb Zn, $0.96/lb Pb, $1,934/oz Au.
H1 2022: $23.30/oz Ag, $4.42/lb Cu,
$1.74/lb Zn, $1.03/lb Pb, $1,873/oz Au.
(2) This is a non-IFRS performance
measure, see Non-IFRS Performance Measures section of this press
release.
(3) Despite the successful refinancing of
part of the corporate credit facility and improved operational
performance, the Company continues to be in breach of some of its
debt covenants, since these are calculated on a rolling
four-quarter basis. Hence the working capital continues to be
negative due to the result of the reclassification of the long-term
portion of the corporate facility and term loan to current.
Revenue from metals payable was $62.7 million in Q2 2023,
representing an increase of 25% over the revenue in Q2 2022 of
$49.9 million and a 7% increase over the revenue in Q1 2023 of
$58.5 million. The increase in revenue was largely driven by higher
metal sales at the Bolivar mine, which recorded a 151% increase in
copper equivalent sales compared to Q2 2022 and a 45% increase over
Q1 2023.
The Yauricocha Mine had a cash cost per copper equivalent
payable pound1 of $2.29 (Q2 2022 - $2.06), and an AISC per copper
equivalent payable pound1 of $3.97 (Q2 2022 - $3.39) for Q2 2023.
The increase in unit cash costs and AISC was mainly due to the 27%
decrease in copper equivalent payable pounds as compared to Q2
2022.
(1) This is a non-IFRS performance measure. See the Non-IFRS
Performance Measures section of the press release.
Bolivar’s cash cost per copper equivalent payable pound1 was
$1.62 (Q2 2022 - $3.39), and AISC per copper equivalent payable
pound1 was $3.02 (Q2 2022 - $5.49) for Q2 2023 due to a 25%
decrease in operating costs per tonne combined with a 151% increase
in copper equivalent payable pounds during the quarter as compared
to Q2 2022.
The Cusi Mine, which the Company has classified as non-core, had
Q2 2023 cash cost per silver equivalent payable ounce1 increase to
$29.17 from $24.84 in Q2 2022 as a result of higher operating costs
per tonne, largely attributable to lower throughput. Silver
equivalent payable ounces declined 22% to 203 thousand ounces
further impacting cash costs, and AISC per silver equivalent
payable ounce1, which was $38.83 for Q2 2023 or 15% higher than Q2
2022.
Adjusted EBITDA(1) increased to $13.5 million for Q2 2023 from
$1.4 million in the same quarter of 2022, driven by higher
revenues, attributable to higher production and improved operating
costs at the Bolivar Mine during Q2 2023.
Net income attributable to shareholders for Q2 2023 was $1.6
million (Q2 2022: a loss of $15.3 million) or $0.01 per share
(basic and diluted) (Q2 2022: $0.00).
Cash flow generated from operating activities before movements
in working capital of $11.6 million for Q2 2023 as compared to $1.6
million of cash used in operating activities in Q2 2022. The
increase resulted from higher revenues during the quarter.
Cash and cash equivalents of $4.4 million and working capital of
$(88.4) million as at June 30, 2023 compared to $5.1 million and
$(84.4) million, respectively, at the end of 2022. Cash and cash
equivalents decreased during H1 2023 as the $21.8 million used in
investing activities and $6.9 million of cash used in financing
activities exceeded the cash generated from operating activities of
$27.9 million.
(1) This is a non-IFRS performance measure. See the Non-IFRS
Performance Measures section of the press release.
The following table displays average realized metal prices
information for Q2 2023 and H1 2023 in comparison the same periods
of 2022:
Realized Metal Prices Six months ended June 30,
(In US dollars) Q2 2023 Q2 2022 Variance
%
2023
2022
Variance %
Silver (oz)
$
24.17
$
22.65
7%
$
23.37
$
23.30
0
%
Copper (lb)
$
3.99
$
4.30
-7%
$
4.02
$
4.42
-9
%
Zinc (lb)
$
1.16
$
1.79
-35%
$
1.29
$
1.74
-26
%
Lead (lb)
$
0.96
$
1.00
-4%
$
0.96
$
1.03
-7
%
Gold (oz)
$
1,977
$
1,872
6%
$
1,934
$
1,873
3
%
Outlook 2023
The Company is on-track to meet its 2023 production guidance,
and has amended Yauricocha’s cost guidance for the remainder of the
year (previously announced on March 28, 2023). Most notably, the
Company expects slightly higher AISC costs at Yauricocha to be
partially compensated by better than expected costs at Bolivar for
the remainder of 2023. The table below summarizes the updated 2023
guidance from the Yauricocha and Bolivar mines as the Cusi mine has
been classified as non-core and has been excluded from
guidance.
Production
2023 Guidance (1)
2023 H1 (1)
Low High Actual Silver (000 oz)
1,500
1,700
912
Copper (000 lbs)
37,300
42,400
18,744
Lead (000 lbs)
14,000
15,400
6,708
Zinc (000 lbs)
46,000
50,500
22,807
Gold (oz)
13,500
15,400
8,102
Copper equivalent pounds (000's) (2)
74,300
83,300
38,536
(1) 2023 Production guidance and actual
production for H1 2023 exclude production from the Cusi mine, which
the Company considers as a non-core asset. (2) 2023 metal
equivalent guidance was calculated using the following prices:
$21.03/oz Ag, $3.55/lb Cu, $1.35/lb Zn, $0.93/lb Pb and $1,741/oz
Au. Actual copper equivalent pounds produced have been recalculated
using the same price for comparison purposes
Cost Guidance
Actual for H1 2023
Equivalent Production Cash costs range
AISC(2) range Copper Eq Lbs Cash costs
AISC(2) Mine Range (1)
per CuEqLb per CuEqLb ('000)
per CuEqLb per CuEqLb
Yauricocha Copper Eq Lbs
('000) 40,000 - 44,000 $1.81 - $1.88 $3.50 - $3.60
20,153
$2.16
$3.54
Bolivar Copper Eq Lbs ('000) 34,500 - 39,500 $1.92 - $2.05 $3.02 -
$3.25
18,383
$1.71
$3.06
(1) 2023
metal equivalent guidance was calculated using the following
prices: $21.03/oz Ag, $3.55/lb Cu, $1.35/lb Zn, $0.93/lb Pb and
$1,741/oz Au. Actual copper equivalent pounds produced have been
recalculated using the same price for comparison purposes. (2) AISC
includes treatment and refining charges, selling costs, G&A
costs and sustaining capital expenditure
Management continues to review performance throughout the year,
while exploring value enhancing opportunities.
Q2 2023 Operating
Highlights
The Company reported Q2 2023 production results on July 25,
2023. A summary follows below:
Yauricocha Mine, Peru
Throughput at the Yauricocha Mine for Q2 2023 was 244,315
tonnes, 11% higher than in Q1 2023, given that the Company has been
able to maximize the extraction above 1120 level. However, when
compared to Q2 2022, throughput is 23% lower. This anticipated
decline was due to the continued depletion of the ore above the
1120 level. Copper equivalent pound production for Q2 2023 was 21%
lower than Q2 2022 as the reduced throughput was partially offset
by higher grades of lead, zinc and silver coming from the
high-grade small ore bodies. Copper and gold grades declined due to
the lower contribution from the Esperanza zone.
When compared to Q1 2023, there was a 6% increase in the copper
equivalent production during Q2 2023, as the higher throughput was
partially offset by the impact of lower copper grades, and
recoveries for copper and silver.
Bolivar Mine, Mexico
Operating at 4,640 tonnes per day during Q2 2023, the Bolivar
Mine achieved 405,987 tonnes of throughput, an increase of 36% and
58% over Q1 2023 and Q2 2022 respectively, attributable to
substantial improvements in ventilation and drainage, which allowed
for more meters of production drilling and better access to the
mining zones. Grades were higher for all metals in comparison with
Q1 2023 and Q2 2022, except for a slight decrease in gold grades as
compared to Q1 2023. The increase in grades was effectively the
direct result of mining in the Bolivar NW zone.
In Q2 2023, copper equivalent production was a record 10.7
million pounds, as the mine recorded an increased production for
all metals. Copper, silver and gold production for Q2 2023 was up
139%, 149% and 187%, respectively, as compared to Q2 2022.
Cusi Mine, Mexico
The non-core Cusi Mine had lower Q2 2023 throughput and was
negatively impacted by the availability of mining equipment and
floodings during the quarter. Operating at 591 tonnes per day, the
Cusi mine processed 51,750 tonnes, which was 12% lower than Q1 2023
and 22% lower than Q2 2022. Higher silver and lead grades combined
with improved gold recoveries partially offset the impact of lower
throughput resulting in silver equivalent production of 241
thousand ounces during Q2 2023, which was 5% and 15% below the
silver equivalent production achieved in Q1 2023 and Q2 2022
respectively.
Conference Call and
Webcast
Sierra Metals' senior management will host a conference call and
webcast to discuss the Company's financial and operating results
for the three months ended June 30, 2023. Details are as
follows:
Date:
August 14, 2023
Time:
11:00 am (Eastern)
Webcast:
https://services.choruscall.ca/links/sierrametalsq22023.html
Telephone: Canada/USA (toll free): 1-800-319-4610
Other: 1-416-915-3239
The webcast, along with presentation slides, will be archived
for 180 days on www.sierrametals.com.
Non-IFRS Performance
Measures
The non-IFRS performance measures presented do not have any
standardized meaning prescribed by IFRS and are therefore unlikely
to be directly comparable to similar measures presented by other
issuers.
Non-IFRS reconciliation of Adjusted EBITDA
EBITDA is a non-IFRS measure that represents an indication of
the Company’s continuing capacity to generate earnings from
operations before taking into account management’s financing
decisions and costs of consuming capital assets, which vary
according to their vintage, technological currency, and
management’s estimate of their useful life. EBITDA comprises
revenue less operating expenses before interest expense (income),
property, plant and equipment amortization and depletion, and
income taxes.
Adjusted EBITDA has been included in this document. Under IFRS,
entities must reflect in compensation expense the cost of
share-based payments. In the Company’s circumstances, share-based
payments involve a significant accrual of amounts that will not be
settled in cash but are settled by the issuance of shares in
exchange for cash. As such, the Company has made an entity specific
adjustment to EBITDA for these expenses. The Company has also made
an entity-specific adjustment to the foreign currency exchange
(gain)/loss. The Company considers cash flow before movements in
working capital to be the IFRS performance measure that is most
closely comparable to adjusted EBITDA.
The following table provides a reconciliation of Adjusted EBITDA
to the condensed interim consolidated financial statements for the
three and six months ended June 30, 2023 and 2022:
Three months ended June 30, Six months ended June 30,
2023
2022
2023
2022
Net
income
$
1,073
$
(15,740
)
$
3,212
$
(13,610
)
Adjusted for:
Depletion and
depreciation
9,267
9,453
16,810
18,616
Interest expense and other finance costs
2,788
950
4,987
1,717
NRV adjustments on inventory
1,079
2,677
1,555
5,218
Share-based payments
86
131
188
326
Costs related to COVID
-
273
-
1,584
Foreign currency exchange and other provisions
689
(301
)
2,061
1,562
Income taxes
(1,456
)
3,970
(82
)
1,988
Adjusted EBITDA
$
13,526
$
1,413
$
28,731
$
17,401
Non-IFRS reconciliation of Adjusted Net Income
The Company has included the non-IFRS financial performance
measure of Adjusted Net Income, defined by management as the net
income attributable to shareholders shown in the statement of
earnings plus the non-cash depletion charge due to the acquisition
of Corona and the corresponding deferred tax recovery and certain
non-recurring or non-cash items such as share-based compensation
and foreign currency exchange (gains) losses. The Company believes
that, in addition to conventional measures prepared in accordance
with IFRS, certain investors may want to use this information to
evaluate the Company’s performance and ability to generate cash
flows. Accordingly, it is intended to provide additional
information and should not be considered in isolation or as a
substitute for measures of performance in accordance with IFRS.
The following table provides a reconciliation of Adjusted Net
Income to the condensed interim consolidated financial statements
for the three and six months ended June 30, 2023 and 2022:
Three months ended June 30, Six months ended June 30,
(In thousands of United States dollars)
2023
2022
2023
2022
Net
income attributable to shareholders
$
1,638
$
(15,266
)
$
3,691
$
(14,897
)
Non-cash depletion charge on Corona's acquisition
1,175
1,696
2,245
3,100
Deferred tax recovery on Corona's acquisition depletion charge
(359
)
(568
)
(686
)
(995
)
NRV adjustments on inventory
1,079
2,677
1,555
5,218
Share-based compensation
86
131
188
326
Foreign currency exchange loss
689
(301
)
2,061
1,562
Adjusted net income attributable to shareholders
$
4,308
$
(11,631
)
$
9,054
$
(5,686
)
Cash cost per silver equivalent payable ounce and copper
equivalent payable pound
The Company uses the non-IFRS measure of cash cost per silver
equivalent ounce and copper equivalent payable pound to manage and
evaluate operating performance. The Company believes that, in
addition to conventional measures prepared in accordance with IFRS,
certain investors use this information to evaluate the Company’s
performance and ability to generate cash flows. Accordingly, it is
intended to provide additional information and should not be
considered in isolation or as a substitute for measures of
performance prepared in accordance with IFRS.
AISC per silver equivalent payable ounce and copper
equivalent payable pound
AISC is a non‐IFRS measure and was calculated based on guidance
provided by the World Gold Council (“WGC”) in June 2013. WGC is not
a regulatory industry organization and does not have the authority
to develop accounting standards for disclosure requirements. Other
mining companies may calculate AISC differently as a result of
differences in underlying accounting principles and policies
applied, as well as differences in definitions of sustaining versus
development capital expenditures.
Sierra Metals believes AISC is a more comprehensive measure than
cash cost per ounce/pound for the Company’s consolidated operating
performance by providing greater visibility, comparability and
representation of the total costs associated with producing silver
and copper from its current operations.
The Company defines sustaining capital expenditures as, “costs
incurred to sustain and maintain existing assets at current
productive capacity and constant planned levels of productive
output without resulting in an increase in the life of assets,
future earnings, or improvements in recovery or grade. Sustaining
capital includes costs required to improve/enhance assets to
minimum standards for reliability, environmental or safety
requirements. Sustaining capital expenditures excludes all
expenditures at the Company’s new projects and certain expenditures
at current operations which are deemed expansionary in nature.”
Consolidated AISC includes total production cash costs incurred
at the Company’s mining operations, including treatment and
refining charges and selling costs, which forms the basis of the
Company’s total cash costs. Additionally, the Company includes
sustaining capital expenditures and corporate general and
administrative expenses. AISC by mine does not include certain
corporate and non‐cash items such as general and administrative
expenses and share-based payments. The Company believes that this
measure represents the total sustainable costs of producing silver
and copper from current operations and provides the Company and
other stakeholders of the Company with additional information of
the Company’s operational performance and ability to generate cash
flows. As the measure seeks to reflect the full cost of silver and
copper production from current operations, new project capital and
expansionary capital at current operations are not included.
Certain other cash expenditures, including tax payments, dividends
and financing costs are also not included.
The following table provides a reconciliation of cash costs to
cost of sales, as reported in the Company’s condensed interim
consolidated statement of income for the three and six months ended
June 30, 2023 and 2022:
Three months ended Three months ended
(In thousand of US dollars, unless stated)
June 30,
2023 June 30, 2022 Yauricocha
Bolivar Cusi
Consolidated
Yauricocha Bolivar Cusi
Consolidated
Cash Cost per Tonne of Processed
Ore
Cost of Sales
24,630
19,439
6,534
50,603
29,779
16,722
7,435
53,936
Reverse: Workers Profit Sharing
-
-
-
-
(617
)
-
-
(617
)
Reverse: D&A/Other adjustments
(5,648
)
(3,414
)
(624
)
(9,686
)
(5,664
)
(3,346
)
(1,001
)
(10,011
)
Reverse: Variation in Inventory
718
850
186
1,754
(1,522
)
823
(862
)
(1,561
)
Total Cash Cost
19,700
16,875
6,096
42,671
21,976
14,199
5,572
41,747
Tonnes Processed
244,315
405,987
51,750
702,052
317,087
256,372
66,721
640,180
Cash Cost per Tonne Processed US$
80.63
41.57
117.80
60.78
69.31
55.38
83.51
65.21
Six months ended Six months
ended (In thousand of US dollars, unless stated)
June 30, 2023 June 30, 2022
Yauricocha
Bolivar
Cusi
Consolidated
Yauricocha
Bolivar
Cusi
Consolidated
Cash Cost per Tonne of Processed
Ore
Cost of Sales
46,522
34,371
12,346
93,239
53,709
32,717
14,108
100,534
Reverse: Workers Profit Sharing
-
-
-
-
(617
)
-
-
(617
)
Reverse: D&A/Other adjustments
(10,771
)
(5,715
)
(1,233
)
(17,719
)
(10,444
)
(6,527
)
(2,090
)
(19,061
)
Reverse: Variation in Inventory
1,126
1,374
211
2,711
(2,013
)
(583
)
(292
)
(2,888
)
Total Cash Cost
36,877
30,030
11,324
78,231
40,635
25,607
11,726
77,968
Tonnes Processed
463,460
705,004
110,872
1,279,336
632,337
443,928
154,645
1,230,910
Cash Cost per Tonne Processed US$
79.57
42.60
102.14
61.15
64.26
57.68
75.83
63.34
The following table provides detailed information on
Yauricocha’s cash cost and all-in sustaining cost per copper
equivalent payable pound for the three and six months ended June
30, 2023 and 2022:
YAURICOCHA Three months ended Six months
ended (In thousand of US dollars, unless stated)
June
30, 2023 June 30, 2022 June 30, 2023 June 30,
2022 Cash Cost per zinc equivalent payable pound
Total Cash Cost
19,700
21,975
36,877
40,635
Variation in Finished inventory
(718
)
1,523
(1,126
)
2,013
Total Cash Cost of Sales
18,982
23,498
35,751
42,648
Treatment and Refining Charges
6,697
7,677
11,438
14,529
Selling Costs
803
911
1,418
1,630
G&A Costs
2,477
2,840
4,910
4,523
Sustaining Capital Expenditures
3,897
3,750
4,941
7,718
All-In Sustaining Cash Costs
32,856
38,676
58,458
71,048
Copper Equivalent Payable Pounds (000's)
8,279
11,410
16,516
20,100
Cash Cost per Copper Equivalent Payable Pound
2.29
2.06
2.16
2.12
All-In Sustaining Cash Cost per Copper Equivalent Payable
Pound
3.97
3.39
3.54
3.53
The following table provides detailed information on Bolivar’s
cash cost, and all-in sustaining cost per copper equivalent payable
pound for the three and six months ended June 30, 2023 and
2022:
BOLIVAR Three months ended Six months
ended (In thousand of US dollars, unless stated)
June 30, 2023 June 30, 2022 June 30, 2023
June 30, 2022
Cash Cost per copper
equivalent payable pound
Total Cash Cost
16,875
14,199
30,030
25,607
Variation in Finished inventory
(850
)
(823
)
(1,374
)
583
Total Cash Cost of Sales
16,025
13,376
28,656
26,190
Treatment and Refining Charges
2,819
2,537
4,984
4,585
Selling Costs
2,335
1,126
3,871
2,089
G&A Costs
1,437
1,115
2,754
1,930
Sustaining Capital Expenditures
7,350
3,545
10,898
7,557
All-In Sustaining Cash Costs
29,966
21,699
51,163
42,351
Copper Equivalent Payable Pounds (000's)
9,908
3,951
16,726
6,761
Cash Cost per Copper Equivalent Payable Pound (US$)
1.62
3.39
1.71
3.87
All-In Sustaining Cash Cost per Copper Equivalent Payable
Pound (US$)
3.02
5.49
3.06
6.26
The following table provides detailed information on Cusi’s cash
cost, and all-in sustaining cost per silver equivalent payable
ounce for the three and six months ended June 30, 2023 and
2022:
CUSI Three months ended Six months
ended (In thousand of US dollars, unless stated)
June 30, 2023 June 30, 2022 June 30, 2023
June 30, 2022
Cash Cost per silver
equivalent payable ounce
Total Cash Cost
6,096
5,572
11,324
11,726
Variation in Finished inventory
(186
)
862
(211
)
292
Total Cash Cost of Sales
5,910
6,434
11,113
12,018
Treatment and Refining Charges
173
341
323
845
Selling Costs
252
245
496
616
G&A Costs
128
550
412
1,245
Sustaining Capital Expenditures
1,405
1,191
2,259
2,297
All-In Sustaining Cash Costs
7,868
8,761
14,603
17,021
Silver Equivalent Payable Ounces (000's)
203
259
429
674
Cash Cost per Silver Equivalent Payable Ounce (US$)
29.17
24.84
25.91
17.83
All-In Sustaining Cash Cost per Silver Equivalent Payable
Ounce (US$)
38.83
33.83
34.05
25.25
The following table provides detailed information on the
Company’s consolidated cash cost, and all-in sustaining cost per
copper equivalent payable pound for the three and six months ended
June 30, 2023 and 2022:
CONSOLIDATED Three months ended Six months
ended (In thousand of US dollars, unless stated)
June 30, 2023 June 30, 2022 June 30, 2023
June 30, 2022 Total Cash Cost of Sales
40,917
43,308
75,520
80,856
All-In Sustaining Cash Costs
70,690
69,136
124,224
130,420
Copper Equivalent Payable Pounds (000's)
19,414
17,551
35,736
27,707
Cash Cost per Copper Equivalent Payable Pound (US$)
2.11
2.47
2.11
2.92
All-In Sustaining Cash Cost per Copper Equivalent Payable
Pound (US$)
3.64
3.94
3.48
4.71
Additional non-IFRS measures
The Company uses other financial measures, the presentation of
which is not meant to be a substitute for other subtotals or totals
presented in accordance with IFRS, but rather should be evaluated
in conjunction with such IFRS measures. This includes:
- Operating cash flows before movements in working capital -
excludes the movement from period-to-period in working capital
items including trade and other receivables, prepaid expenses,
deposits, inventories, trade and other payables and the effects of
foreign exchange rates on these items.
This term does not have a standardized meaning prescribed by
IFRS, and therefore the Company’s definition is unlikely to be
comparable to similar measures presented by other companies. The
Company’s management believes that their presentation provides
useful information to investors because cash flows generated from
operations before changes in working capital excludes the movement
in working capital items. This, in management’s view, provides
useful information of the Company’s cash flows from operations and
is considered to be meaningful in evaluating the Company’s past
financial performance or its future prospects. The most comparable
IFRS measure is cash flows from operating activities.
Qualified Persons
Ricardo Salazar Milla, Corporate Manager of Mineral Resources is
a member of the Australian Institute of Geoscientist and is a
Qualified Person under National Instrument 43-101 – Standards of
Disclosure for Mineral Projects. Mr. Salazar has reviewed and
approved the scientific and technical content of this news
release.
About Sierra Metals
Sierra Metals is a diversified Canadian mining company with
green metal exposure including copper, zinc and lead production
with precious metals byproduct credits, focused on the production
and development of its Yauricocha Mine in Peru and its Bolivar Mine
in Mexico. The Company is focused on the safety and productivity of
its producing mines. The Company also has large land packages with
several prospective regional targets providing longer-term
exploration upside and mineral resource growth potential.
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Forward-Looking
Statements
This press release contains forward-looking information within
the meaning of Canadian securities legislation. Forward-looking
information relates to future events or the anticipated performance
of Sierra and reflect management's expectations or beliefs
regarding such future events and anticipated performance based on
an assumed set of economic conditions and courses of action,
including the accuracy of the Company’s current mineral resource
estimates; that the Company’s activities will be conducted in
accordance with the Company’s public statements and stated goals;
that there will be no material adverse change affecting the
Company, its properties or its production estimates (which assume
accuracy of projected ore grade, mining rates, recovery timing, and
recovery rate estimates and may be impacted by unscheduled
maintenance, labour and contractor availability and other operating
or geo-political uncertainties on the Company’s production,
workforce, business, operations and financial condition); the
expected trends in mineral prices, inflation and currency exchange
rates; that all required approvals will be obtained for the
Company’s business and operations on acceptable terms and on the
timelines that are currently anticipated by management; that there
will be no significant disruptions affecting the Company's
operations. In certain cases, statements that contain
forward-looking information can be identified by the use of words
such as "plans", "expects", "is expected", "budget", "scheduled",
"estimates", "forecasts", "intends", "anticipates", "believes" or
variations of such words and phrases or statements that certain
actions, events or results "may", "could", "would", "might", or
"will be taken", "occur" or "be achieved" or the negative of these
words or comparable terminology. Forward-looking statements include
those relating to the Company’s guidance on the timing and amount
of future production and its expectations regarding the results of
operations; expected costs; permitting requirements and timelines
(including receipt of all requisite permits to mine below the 1120
level at Yauricocha); the grades of the ore bodies below the 1120
level at Yauricocha. By its very nature forward-looking information
involves known and unknown risks, uncertainties and other factors
that may cause actual performance of Sierra to be materially
different from any anticipated performance expressed or implied by
such 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 28,
2023 for its fiscal year ended December 31, 2022 and other risks
identified in the Company's filings with Canadian securities
regulators, which filings are available at www.sedar.com.
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.
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For further information regarding Sierra Metals, please visit
www.sierrametals.com or contact: Investor Relations Sierra
Metals Inc. +1 (416) 366-7777 info@sierrametals.com
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