Sierra Metals Reports 2021 Consolidated Financial Results and Announces 2022 Guidance
Sierra Metals reported a 2021 revenue of $272 million, a 10% increase from 2020. The adjusted EBITDA also rose by 2% to $104.7 million. However, the company faced a net loss of $27.4 million or $(0.17) per share, compared to a net income of $23.4 million in 2020, driven by a $35 million impairment charge. Despite a 3% increase in ore throughput, copper equivalent production fell by 24%. Looking ahead, the company expects operational improvements, especially at the Bolivar Mine, targeting enhanced production by Q3 2022.
- Revenue increased by 10% to $272 million in 2021.
- Adjusted EBITDA rose by 2% to $104.7 million.
- Operating cash flows before working capital changes were $93.4 million.
- Ore throughput grew by 3% to 2,902,220 tonnes.
- Net loss of $27.4 million, compared to net income of $23.4 million in 2020.
- Copper equivalent production decreased by 24% year-over-year.
- Impairment charge of $35 million related to the Cusi Mine.
- Cash and cash equivalents fell from $71.5 million to $34.9 million.
CONFERENCE CALL
(All $ figures reported in USD)
-
Revenue from metals payable of
$272.0 million 10% from 2020 annual revenue of$246.9 million -
Adjusted EBITDA(1) of
$104.7 million 2% increase from the adjusted EBITDA of$102.8 million -
Net loss attributable to shareholders for 2021 was
$27.4 million $(0.17) $23.4 million $0.14 $35 million -
Adjusted net income attributable to shareholders of
$21.6 million $0.13 -
Operating cash flows before movements in working capital of
$93.4 million 4% decrease from$97.8 million -
2021 consolidated annual ore throughput of 2,902,220 tonnes, an increase of
3% over 2020, mainly driven by the higher throughputs from the Yauricocha and Cusi mines, offset by a decline in the Bolivar annual throughput due to a reduced workforce; -
Consolidated copper equivalent production of 90 million pounds, a decrease of
24% as compared to 2020, due to a combination of production issues at Bolivar and lower grades at Yauricocha, where a12% increase in annual throughput at Yauricocha, did not compensate for the lower grades: -
Consolidated All-In sustaining costs ("AISC") (1) per copper equivalent pound (2) sold of
$3.40 60% higher than AISC in 2020, driven by higher sustaining capital and the27% decrease in copper equivalent payable pounds in 2021 compared to 2020; -
$34.9 million December 31, 2021 ; -
Net Debt of
$45.9 million December 31, 2021 . -
A shareholder conference call to be held
Thursday, March 17, 2022 , at11:00 AM (EDT)
(1) This is a non-IFRS performance measure, see Non-IFRS Performance Measures section of the MD&A. (2) Copper equivalent pounds and silver equivalent ounces for Q4 2021 were calculated using the following realized prices:$23.41 $4.40 $1.55 $1.06 $1,795 $24.30 $3.32 $1.22 $0.89 $1,859 $25.21 $4.23 $1.37 $1.00 $1,796 $20.59 $2.80 $1.03 $0.83 $1,771
Image 1: Jumbo in operation underground at
The following table displays selected financial and operational information for the three months and year ended
| Three Months Ended | Year Ended | ||||||||||
| (In thousands of dollars, except per share and cash cost amounts, consolidated figures unless noted otherwise) | |||||||||||
| Operating | |||||||||||
| Ore Processed / Tonnes Milled |
|
590,057 |
|
|
778,236 |
|
2,902,220 |
|
|
2,828,877 |
|
| Silver Ounces Produced (000's) |
|
805 |
|
|
922 |
|
3,527 |
|
|
3,465 |
|
| Copper Pounds Produced (000's) |
|
6,071 |
|
|
10,626 |
|
31,757 |
|
|
44,262 |
|
| Lead Pounds Produced (000's) |
|
6,011 |
|
|
7,630 |
|
30,816 |
|
|
32,972 |
|
| Zinc Pounds Produced (000's) |
|
14,913 |
|
|
21,612 |
|
79,281 |
|
|
81,868 |
|
| Gold Ounces Produced |
|
1,863 |
|
|
3,363 |
|
9,572 |
|
|
13,771 |
|
| Copper Equivalent Pounds Produced (000's)1 |
|
17,841 |
|
|
29,267 |
|
89,926 |
|
|
118,214 |
|
| Cash Cost per Tonne Processed | $ |
58.21 |
|
$ |
44.42 |
$ |
48.69 |
|
$ |
40.81 |
|
| Cash Cost per CuEqLb2 | $ |
2.29 |
|
$ |
1.31 |
$ |
1.81 |
|
$ |
1.13 |
|
| AISC per CuEqLb2 | $ |
4.13 |
|
$ |
2.56 |
$ |
3.40 |
|
$ |
2.12 |
|
| Cash Cost per CuEqLb (Yauricocha)2 | $ |
1.61 |
|
$ |
1.16 |
$ |
1.46 |
|
$ |
1.01 |
|
| AISC per CuEqLb (Yauricocha)2 | $ |
3.09 |
|
$ |
2.47 |
$ |
2.77 |
|
$ |
2.11 |
|
| Cash Cost per CuEqLb (Bolivar)2 | $ |
5.29 |
|
$ |
1.35 |
$ |
2.18 |
|
$ |
1.13 |
|
| AISC per CuEqLb (Bolivar)2 | $ |
8.58 |
|
$ |
2.34 |
$ |
4.22 |
|
$ |
1.88 |
|
| Cash Cost per AgEqOz (Cusi)2 | $ |
11.80 |
|
$ |
15.70 |
$ |
16.71 |
|
$ |
16.62 |
|
| AISC per AgEqOz (Cusi)2 | $ |
21.09 |
|
$ |
28.18 |
$ |
28.15 |
|
$ |
25.26 |
|
| Financial | |||||||||||
| Revenues | $ |
62,240 |
|
$ |
76,218 |
$ |
272,014 |
|
$ |
246,888 |
|
| Adjusted EBITDA2 | $ |
18,843 |
|
$ |
33,725 |
$ |
104,732 |
|
$ |
102,833 |
|
| Operating cash flows before movements in working capital | $ |
15,419 |
|
$ |
32,259 |
$ |
93,405 |
|
$ |
97,757 |
|
| Adjusted net income attributable to shareholders2 | $ |
5,443 |
|
$ |
8,670 |
$ |
21,571 |
|
$ |
30,817 |
|
| Net income (loss) attributable to shareholders3 | $ |
(34,716 |
) |
$ |
7,603 |
$ |
(27,363 |
) |
$ |
23,419 |
|
| Cash and cash equivalents | $ |
34,929 |
|
$ |
71,473 |
$ |
34,929 |
|
$ |
71,473 |
|
| Working capital | $ |
17,321 |
|
$ |
70,885 |
$ |
17,321 |
|
$ |
70,885 |
|
| (1) Copper equivalent pounds and silver equivalent ounces for Q4 2021 were calculated using the following realized prices: |
|||||||||||
| (2) This is a non-IFRS performance measure, see Non-IFRS Performance Measures section of the MD&A. | |||||||||||
| (3) Net loss attributable to shareholders for Q4 and year 2021 includes an impairment charge of |
|||||||||||
He continued, "In addition to an emphasis on operational improvements at Bolivar, the Company is committed to delivering on the goals outlined in its new strategy in Q4 of 2021. A strategic review of Cusi is underway, changes have been made to the organizational structure to better align all operations and achieve goals, and with a heightened focus on ESG, the Company’s inaugural sustainability report is planned for completion in 2022."
He concluded, "We entered 2022 with a renewed motivation to address major challenges and deliver meaningful returns to our shareholders. COVID-19 safety protocols remain in place and with operations returning to normal, the Company expects to be able to fully catch up and meet its operational and growth initiatives in 2022. Major growth projects at the
12M 2021 Operating Highlights
Consolidated annual ore throughput of 2,902,220 tonnes, an increase of
The Yauricocha mine received its Informe Tecnico Minero (“ITM”) permit in
Annual throughput of 295,771 tonnes at Cusi was
The Bolivar mine achieved annual throughput of 1,349,602 tonnes, which was
Consolidated copper equivalent production dropped
Yauricocha’s cash cost per copper equivalent payable pound was
Bolivar’s cash cost per copper equivalent payable pound was
Cusi’s cash cost per silver equivalent payable ounce was
Click here to review the full details of the Q4 2021 production highlights.
Q4 and 12M 2021 Financial Highlights
Revenue from metals payable of
Adjusted EBITDA(1) of
Net loss attributable to shareholders for 2021 was
Adjusted net income attributable to shareholders (1) of
Cash flow generated from operations before movements in working capital of
Cash and cash equivalents of
(1) This is a non-IFRS performance measure, see Non-IFRS Performance Measures section of the MD&A. |
On
After the close of the year, the Company announced positive results of the updated PEA on expansion of its
Exploration Highlights
-
During the year, 9,719 meters of surface exploration using diamond drills were carried out in the Kilkasca,
El Estacion , Yauricocha Medio, Fortuna andExito zones. Further, 18,509 meters of underground exploration was completed with the aim of replacing and increasing the mineral resources exploited during the year.
Bolivar
-
During the year, 19,804 meters of infill drilling program was carried out at Bolivar including 13,072 meters in the
El Gallo zone and 4,422 meters in the Bolivar West zone; and
- 25,260 meters of brownfield exploration was completed in the Bolivar West and La Montura zones.
Cusi
- The Infill Drilling program was carried out in the NorthEast and the North-NorthWest system, with the objective to define the continuity and the grades of both systems. 21,059 meters of drilling was completed, including 4,702 meters of definition drilling into these systems with the termite rig; and
-
Brownfield exploration drilling program started atSan Juan ,San Antonio andGallo Back veins and 4,703 meters of drilling was completed during the year.
IMPAIRMENT CHARGE
In Q4 2021, the Company announced its increased focus on copper and other steel-making products, including the strategic review process for the silver-producing
2022 Guidance
Production Guidance
The year 2021 was a challenging year for the mining operations of the Company due to the decrease in grades at Yauricocha and Bolivar, and availability of ore, as lack of equipment and decrease in manpower impacted development mainly at the Bolivar mine. Despite the COVID related issues, operations at Yauricocha and Cusi are gradually returning to normalcy. However, the Company anticipates that the backlog of ongoing operational challenges at Bolivar will be overcome during the year, leading to much improved production starting Q3 2022. During this period, the Company’s focus will be on increasing the infill drilling and development and the expansion of the plant facility with the objective to gradually achieve an average Q4 2022 throughput rate at Bolivar of 5,600 tpd, as compared to the 3,000 tpd in Q1 2022. With addressing of these development issues in the mine and plant infrastructure expansion, a much-improved performance is anticipated in the second half of the year. In view of this, full year guidance for the year has been split into H1 and H2 2022.
A table summarizing 2022 production guidance has been provided below:
| H1 2022 | H2 2022 | 2022 Guidance | ||||
| Low | High | Low | High | Low | High | |
| Silver (oz) | 1,490,500 |
1,591,500 |
1,712,000 |
1,769,000 |
3,202,500 |
3,360,500 |
| Gold (oz) | 5,000 |
6,000 |
10,500 |
11,500 |
15,500 |
17,500 |
| Zinc (000 lbs) | 23,500 |
27,500 |
25,500 |
27,000 |
49,000 |
54,500 |
| Lead (000 lbs) | 8,500 |
9,500 |
8,000 |
8,000 |
16,500 |
17,500 |
| Copper (000 lbs) | 13,500 |
16,500 |
21,000 |
24,500 |
34,500 |
41,000 |
| Copper equivalent |
34,000 |
39,500 |
45,500 |
50,100 |
79,500 |
89,700 |
(1) Copper equivalent guidance is calculated using the |
||||||
2022 Cost Guidance
A mine by mine breakdown of 2022 production guidance, cash costs and all-in sustaining costs (“AISC”) are included in the table below. All costs are in USD. Cash costs and AISC guidance is shown per copper equivalent payable pound at Yauricocha and Bolivar, and silver equivalent payable ounce at Cusi.
Equivalent Production |
Cash cost range per |
AISC(2) range per |
||
Range (1) |
CuEqLb or AgEqOz |
CuEqLb or AgEqOz |
||
| Yauricocha | Cu Eq Lbs (000s) |
45,000 - 49,000 | ||
| Bolivar | Cu Eq Lbs (000s) |
23,800 - 29,900 | ||
| Cusi | Ag Eq Oz (000s) |
1,750 - 1,850 | ||
(1) Copper equivalent guidance is calculated using the |
||||
(2) AISC includes treatment and refining charges, selling costs, G&A costs and sustaining capital expenditure. |
||||
2022 EBITDA Guidance
Consolidated EBITDA Guidance including corporate expenses, at consensus prices(1), is expected to be between
| (Amounts in $M) | Low | High | Low | High | Low | High | ||||||
| Yauricocha | 22.1 |
|
26.2 |
|
30.9 |
|
33.8 |
|
53.0 |
|
60.0 |
|
| Bolivar | 3.3 |
|
5.8 |
|
31.7 |
|
36.2 |
|
35.0 |
|
42.0 |
|
| Cusi | 3.0 |
|
3.4 |
|
4.0 |
|
4.6 |
|
7.0 |
|
8.0 |
|
| Corporate | (2.4 |
) |
(2.4 |
) |
(2.6 |
) |
(2.6 |
) |
(5.0 |
) |
(5.0 |
) |
| Total | 26.0 |
|
33.0 |
|
64.0 |
|
72.0 |
|
90.0 |
|
105.0 |
|
(1) |
||||||||||||
2022 Capital Expenditures
A breakdown by mine of the throughput and planned capital investments is shown in the following table:
| Sustaining | Growth | Total | |
| Yauricocha | 12 |
17 |
29 |
| Bolivar | 23 |
10 |
33 |
| Cusi | 6 |
- |
6 |
| Greenfield Exploration | - |
1 |
1 |
| Total | 41 |
28 |
69 |
Total sustaining capital for 2022 is expected to be
Growth capital for 2022 is projected at
Management will continue to review metal prices and its EBITDA performance throughout the year, while continuing to explore value enhancing opportunities. The management also retains the option to adjust the 2022 capital expenditure plan should business conditions experience any dramatic changes within the year.
Annual SEC Filing completed by
Conference Call Webcast
Via Webcast:
A live audio webcast of the meeting will be available on the Company's website:
https://event.on24.com/wcc/r/3574382/FCCE4F2A0F9D10DD9ADA273BDF220BF7
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.
US/CAN dial-in number (Toll Free): 1 844 200 6205
US dial-in number (Local): 1 646 904 5544
All other locations: +1 929 526 1599
Participant access code: 017137
Press *1 to ask a question, *2 to withdraw your question, or *0 for operator assistance.
Quality Control
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Forward-Looking Statements
This press release contains "forward-looking information" and "forward-looking statements" within the meaning of Canadian and
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
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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Investor Relations
Tel: +1 (416) 366-7777
Email: info@sierrametals.com
CEO
Tel: +1 (416) 366-7777
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