Sierra Metals Reports Consolidated Financial Results for the First Quarter Of 2022
Sierra Metals reported Q1 2022 revenue of $57.2 million, reflecting an 18% decrease year-over-year and an 8% dip from Q4 2021. Adjusted EBITDA was $16.0 million, down 43% from Q1 2021. Net income fell to $0.4 million, or $0.00 per share. Production saw a significant decline, with copper equivalent production down 38% year-over-year. Cash costs increased dramatically, notably at Bolivar with cash costs up 187%. Cash and cash equivalents decreased to $19.5 million as of March 31, 2022. The company anticipates improved production later in 2022 with ongoing drilling efforts.
- Adjusted net income attributable to shareholders increased to $5.9 million or $0.04 per share, up from $4.7 million in Q1 2021.
- The Cusi Mine achieved a 15% increase in throughput and met production guidance for the year.
- The company expects improved production in the second half of 2022 due to ongoing development at Bolivar and Yauricocha.
- Revenue decreased by 18% compared to Q1 2021 due to lower production and grades.
- Adjusted EBITDA fell 43% from Q1 2021, attributed to lower revenues and gross margins.
- Copper equivalent production decreased by 38% compared to Q1 2021.
- Cash costs per copper equivalent payable pound increased significantly, notably at Bolivar, where cash costs rose 187%.
Conference Call
______________________________________________________________________
(All $ figures reported in USD)
-
Revenue from metals payable of
in Q1 2022, an$57.2 million 18% decrease from in Q1 2021 and an$69.6 million 8% decrease from Q4, 2021. -
Adjusted EBITDA of
in Q1 2022, a$16.0 million 43% decrease from in Q1 2021 and a$27.9 million 15% decrease from Q4, 2021. -
Operating cash flows before movements in working capital of
in Q1 2022, a$10.7 million 58% decrease from in Q1 2021 and a$25.3 million 31% decrease of from Q4, 2021. -
Copper equivalent production of 15.9 million pounds; a
38% decrease from Q1 2021 and an11% decrease from Q4, 2021. -
Cash costs and AISC per copper equivalent payable pound compared to Q1 2021 increased at Yauricocha
48% and41% respectively; at Bolivar cash costs and AISC per copper equivalent payable pound increased by187% and152% , respectively, driven by higher costs and lower copper equivalent pounds payable; and at Cusi cash costs per silver equivalent payable ounce decreased by28% and34% , respectively. -
Net income attributable to shareholders for Q1 2022 was
(Q1 2021:$0.4 million ) or$3.1 million per share (basic and diluted) (Q1 2021:$0.00 );$0.02 -
Adjusted net income attributable to shareholders (1) of
, or$5.9 per share, for Q1 2022 as compared to the adjusted net income of$0.04 , or$4.7 million per share for Q1 2021;$0.03 - After reaching the Bolivar Northwest orebody at the end of Q1 2022, a continued focus on meeting maximum permitted throughput at Yauricocha and an increase in throughput with higher grades at Cusi, production is on track to reach the Company’s H1 guidance of 34.0 to 39.5 million copper equivalent pounds.
-
of cash and cash equivalents as at$19.5 million March 31, 2022 . -
in net debt as at$61.6 million March 31, 2022 .
A shareholder conference call to be held
He continued, “Our turnaround program continues at Bolivar. With close to 20,000 meters in exploration drilling completed, we have now accessed the Bolivar NorthWest zone, which is expected to provide ore for the next several quarters. As previously stated, production at the Mine is expected to improve for the balance of the year as we ramp up production to full capacity. Additionally, with the discovery of the new Fortuna zone at Yauricocha, we expect to see an improvement in throughput and grades during the second half of the year. Continued drilling will help us better understand the patterns within the high grade orebody and provide potential to find additional high value targets. Meanwhile, we are pleased with Cusi’s performance during the first quarter. As a result of increased throughput and higher grades, the Mine is on track to meet production guidance for the year and continue its positive contribution to the Company’s EBITDA. Mine development at Cusi will continue with the goal of targeting a throughput increase to 1,200 tonnes per day.”
He concluded, "The outlook for a full recovery at our largest mines is encouraging. With the first quarter behind us, we continue to proceed in a disciplined manner. Our goal is to ensure that our current guidance is met and that we are making the right decisions now for future performance at our mines, so that we can deliver improved value for our shareholders going forward."
Image 1: Raptor Drill at Bolivar (Photo: Business Wire)
Q1 2022 Consolidated Operating Highlights
Consolidated production of silver decreased
Q1 2022 Consolidated Financial Highlights
Revenue from metals payable of
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
Adjusted EBITDA(1) of
Net income attributable to shareholders for Q1 2022 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
The Company has access to an available credit line with a
(1) This is a non-IFRS performance measure. See the Non-IFRS Performance Measures section of the MD&A.
The following table displays selected financial and operational information for the three months ended
Three Months Ended | ||||||
(In thousands of dollars, except per share and cash cost amounts, consolidated figures unless noted otherwise) | ||||||
Operating | ||||||
Ore Processed / Tonnes Milled |
|
590,730 |
|
774,421 |
||
Silver Ounces Produced (000's) |
|
734 |
|
|
961 |
|
Copper Pounds Produced (000's) |
|
6,324 |
|
|
7,895 |
|
Lead Pounds Produced (000's) |
|
4,216 |
|
|
9,004 |
|
Zinc Pounds Produced (000's) |
|
10,492 |
|
|
24,123 |
|
Gold Ounces Produced |
|
1,923 |
|
|
2,636 |
|
Copper Equivalent Pounds Produced (000's)1 |
|
15,896 |
|
|
25,496 |
|
Cash Cost per Tonne Processed | $ |
61.32 |
|
$ |
47.54 |
|
Cash Cost per CuEqLb2 | $ |
2.73 |
|
$ |
1.62 |
|
AISC per CuEqLb2 | $ |
4.48 |
|
$ |
2.88 |
|
Cash Cost per CuEqLb (Yauricocha)2 | $ |
2.19 |
|
$ |
1.48 |
|
AISC per CuEqLb (Yauricocha)2 | $ |
3.73 |
|
$ |
2.65 |
|
Cash Cost per CuEqLb (Bolivar)2 | $ |
4.55 |
|
$ |
1.58 |
|
AISC per CuEqLb (Bolivar)2 | $ |
7.33 |
|
$ |
2.91 |
|
Cash Cost per AgEqOz (Cusi)2 | $ |
13.48 |
|
$ |
18.72 |
|
AISC per AgEqOz (Cusi)2 | $ |
19.94 |
|
$ |
30.28 |
|
Financial | ||||||
Revenues | $ |
57,241 |
|
$ |
69,624 |
|
Adjusted EBITDA2 | $ |
15,988 |
|
$ |
27,946 |
|
Operating cash flows before movements in working capital | $ |
10,702 |
|
$ |
25,270 |
|
Adjusted net income (loss) attributable to shareholders2 | $ |
5,945 |
|
$ |
4,739 |
|
Net income (loss) attributable to shareholders | $ |
369 |
|
$ |
3,084 |
|
Cash and cash equivalents | $ |
19,511 |
|
$ |
74,329 |
|
Working capital | $ |
12,433 |
|
$ |
64,704 |
|
(1) Silver equivalent ounces and copper equivalent pounds for Q1 2022 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. |
The following table displays average realized metal prices information for the three months ended
Realized Metal Prices | % | |||||||
(In US dollars) | Q1 2022 | Q1 2021 | Variance | |||||
Silver (oz) | $ |
23.95 |
$ |
26.44 |
-9 |
% |
||
Copper (lb) | $ |
4.53 |
|
$ |
3.88 |
|
17 |
% |
Lead (lb) | $ |
1.06 |
|
$ |
0.92 |
|
15 |
% |
Zinc (lb) | $ |
1.69 |
|
$ |
1.24 |
|
36 |
% |
Gold (oz) | $ |
1,875 |
|
$ |
1,778 |
|
5 |
% |
Outlook 2022
Yauricocha:
- Lost production during Q1/2022 is expected to be recovered in the coming quarters by making use of spare capacity at the plant, with increased throughput. Our drilling campaign remains focused on the upper areas of the mine to identify new mineable areas within the permitted levels.
- Expect to access the newly discovered high grade Fortuna orebody as early as Q3, 2022.
-
Yauricocha Mine remains on track to achieve copper equivalent production guidance of 45 to 49 million copper equivalent pounds.
Bolivar:
- Expect improved production for the balance of 2022, in particular, during the second half of the year, due to the full turn-around effort currently underway. Mining started in the Bolivar NW zone, which is expected to support the bulk of the production for the coming quarters.
- Infill drilling and development will continue.
-
Bolivar Mine is expected to meet copper equivalent production guidance of 23.8 to 29.9 million copper equivalent pounds.
Cusi:
- Focus on development to target throughput of 1,200 TPD.
-
Cusi Mine is on track to meet production guidance of 1.75 million to 1.85 million silver equivalent ounces.
Exploration Update
During the first quarter, 2,053 meters of surface exploration was completed in the Yauricocha Medio (1,095 meters), Kilcasca (449 meters),
Underground exploration continued during Q1 2022 with the aim to replace and increase mineral resources. Approximately 4,213 meters of drilling was completed mainly in
Drilling during the first quarter allowed for the recent discovery of the Fortuna zone, which belongs to system of high-grade polymetallic bodies associated with structural traps. A structural analysis of the area as well as further drilling is required, to understand the patterns for the presence of this type of orebody. A program of at least 1,500 meters of additional drilling is proposed.
An analysis of the structural patterns within the Fortuna orebody with a review of geophysical information to look for correlations, can allow for important targets for future additional drilling.
Bolivar
At Bolivar during Q1 2022, 19,739 meters were drilled from surface including 780 meters drilled in the Bolivar West, 13,353 meters in the Bolivar North-West and 441 meters in the Gallo Inferior encountering skarn intersections with mineralization in all the zones. Additionally, infill drilling of 2,078 meters was completed in the Bolivar West zone and 3,087 meters in the Gallo Inferior (
Additional exploration will focus on 2 areas:
Cusi
During Q1 2022, the Company completed 7,092 meters of infill drilling to support the development of the
The exploration focus in the short term is to continue investigating the NE SW system as it has significant potential, both laterally and at depth.
Covid-19 Update
The COVID-19 pandemic has impacted the Company’s operations, and this is reflected in delays in mine development and preparation of areas for mining and consequent lower head grades. Lower volume of sales is a result of decrease in concentrate production attributable to lower grades. Costs are also negatively impacted mainly due to indirect fixed costs which have to be incurred, despite lower production. The Company continues to take proactive and reactive mitigation measures to minimize any potential impacts COVID-19 may have on its employees, communities, operations, supply chain, and finances.
During the quarter ended
Due to the current vaccination efforts at Yauricocha,
In
Conference Call and Webcast
Via Webcast:
A live audio webcast of the meeting will be available on the Company's website:
https://event.on24.com/wcc/r/3724262/ABA56A91A50DA5A991E18125DC207388
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
Access code: 020167
Press *1 to ask a question, *2 to withdraw your question, or *0 for operator assistance.
Qualified Persons
Américo Zuzunaga, FAusIMM CP (
About
The Company's Common Shares trade on the Bolsa de
Continue to Follow, Like and Watch our progress:
Web: www.sierrametals.com | Twitter: sierrametals | Facebook: SierraMetalsInc | LinkedIn:
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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20220511005888/en/
For further information regarding
Investor Relations
+1 (416) 366-7777
Email: info@sierrametals.com
CEO
+1(416) 366-7777
Source:
FAQ
What was Sierra Metals' revenue for Q1 2022?
How much did Sierra Metals' adjusted EBITDA decrease in Q1 2022?
What is the outlook for Sierra Metals production in 2022?