Digging Deeper Into Gold Investments – Understanding Royalty Companies

Investors have many options to gain exposure to gold. They may purchase gold bullion, gold coins, gold exchange-traded funds (ETF) and mutual funds, gold mining companies, or gold futures and options. Publicly traded equities of gold producers and royalty companies may offer an attractive way to invest given the disproportionate percentage impact higher commodity prices may have on a company’s bottom line and valuation for a given percentage increase in the commodity itself. While most investors are likely familiar with mining companies and how they operate, royalty companies may be less familiar.

Advantages of Owning Equity Shares of a Royalty
Company

Compared with investing in gold production companies, royalty businesses generally benefit from low overhead costs, geographically diversified asset portfolios, and exposure to multiple operators.  Additionally, they avoid costly exploration expense which is borne by operators while sharing the benefit and upside of exploration investment in properties where they retain a royalty interest.  Like mining companies, royalty businesses offer greater leverage to changes in gold prices than investing in bullion.  Lastly, royalty businesses generally seek to build portfolios of producing royalties that support dividend payments to shareholders.  It is important to keep in mind that revenues increase with rising gold prices, increasing production on its royalty properties, and a growing royalty portfolio, while costs remain relatively fixed and stable. This scenario positions royalty companies to thrive in good markets and weather more challenging sets of circumstances.

As a royalty company grows, it offers the potential for multiple expansion, dividend payments, and the ability to execute larger transactions which could accelerate its growth. Junior royalty companies generally perform well in their early years since they can grow rapidly based on an increasing capacity to transact larger deals. Additionally, junior royalty companies may become attractive acquisition candidates for a larger royalty company seeking to enlarge its royalty portfolio.

Allegiant Gold (AUXXF) Thursday March 25 @ 1:00pm EST Virtual Road Show (Learn More) Peter Gianulis – CEO Register Now

What is a Gold Royalty?

A gold royalty is a contract that gives the owner the right to a percentage of gold production or revenue. Since royalties typically cover the life of a mine, gold royalty companies benefit from the exploration upside that may extend the life of a mine and thus increase the amount of gold or revenue they receive from the mining company at no additional cost.

There are several ways to generate royalties. First, royalty businesses may help finance a development project in exchange for a royalty. Second, a royalty business may purchase existing royalties from third parties, and 3) a royalty company may take a property that they already own, sell it to a mining company, and retain a royalty on the property. 

There are several types of royalties. The two most common are NSR and NPI royalties. A net smelter returns (NSR) royalty is an agreement where the mining company agrees to pay the royalty owner a percentage of the revenue, less refining and smelting costs. A net profit interest (NPI) royalty entitles the royalty owner to a percentage of the profit from a mine.

A stream is a purchase agreement that provides the owner of the stream, in exchange for an upfront payment, the right to purchase all or a portion of one or more metals produced from a mine at a negotiated price for the life of the agreement. The negotiated price is generally at a significant discount to the spot price.

Investor Considerations:

It is important for investors to keep several factors in mind when conducting due diligence on prospective royalty company investments. These include: 1) management, 2) asset portfolio, 3) asset quality, 4) jurisdiction, and 5) valuation. 

Management. Should you bet on the horse or the jockey? It is important to evaluate management’s history and track record of creating value for shareholders. Does the management team reflect a balance of technical, financial, legal, and capital markets expertise? Is the board of directors comprised mostly of independent directors who provide a diversity of relevant experience and perspectives? Do they articulate clear objectives, and is their business model sound? Most importantly, do they focus on areas they know and employ a disciplined growth strategy, or are they seeking growth at any price?

Asset Portfolio. How is the company’s asset portfolio balanced between royalties that are producing cash flow streams versus royalties that are expected to produce cash flow within five years and/or longer? 

Asset Quality. Because royalty companies have little control over the decisions of the mining companies that control the properties on which the royalty interest is held, it is important for investors to evaluate the operators associated with the properties in the royalty portfolio. Are they well-capitalized major mining companies or small start-ups? Additionally, it is helpful to evaluate mineral resource estimates associated with properties in the portfolio and the operators’ plans for development.      

Jurisdiction. While geographic diversity is a selling point for most royalty companies, it is often helpful to consult the Fraser Institute’s Annual Survey of Mining Companies to check if royalty interests are in favorable mining jurisdictions versus high-risk areas.

Valuation. Royalty companies are often valued based on price to net asset value. Net asset value is the net present value (NPV) or discounted cash flow (DCF) of all future cash flow of a mining asset, less any debt plus cash. Price to net asset value is the company’s market capitalization divided by the net present value of all mining assets minus net debt. For those that pay a dividend, investors may also compare dividend growth rates and yield. Larger companies generally trade at higher valuation multiples which generally increase with scale due to lower perceived risk due to greater asset diversification and a proven track record of growth. As royalty companies grow, they may be able to establish and grow dividends to shareholders, offer greater liquidity due to listings on major exchanges, and benefit from broader research. Some may also benefit from their inclusion in stock indices. For those that pay a dividend, it is important to know whether the dividend is paid from operating cash flow or whether the company is borrowing to pay the dividend.

Company Spotlight: Ely Gold Royalties (ELY:CA)

Ely Gold Royalties Inc. is an emerging gold royalty company with a growing asset portfolio that includes 12 key assets with four producing royalties and eight that are expected to go into production by the end of 2025. Additionally, the company has 26 development assets, of which 15 are located at, or near, producing mines, and 7 are part of permitted projects or in the permitting process. With respect to the company’s 40 exploration projects, 12 are currently being drilled by junior exploration companies, and Ely is receiving option payments associated with 26 exploration properties. Option payments are generated through the company’s option/sales program, where properties are sold to third-party mining companies on a 100% basis, generally under four-year option payment agreements. Lastly, Ely Gold has a portfolio of 20 properties available for sale under its option/sale program. The company’s shares trade on the Toronto Venture Exchange under the ticker ELY, the OTCQX Best Market under the symbol ELYGF, and the Frankfurt Exchange under the ticker I4U.F.

The company’s asset portfolio is focused mainly on properties in the state of Nevada, a mining jurisdiction that ranked 1^st in terms of investment attractiveness among 77 mining jurisdictions in the 2020 Fraser Institute’s Annual Survey of Mining Companies and an area for which management is intimately familiar. Ely tends to increase its exposure to projects where it already owns royalty interests and is familiar with the project and operator. Ely Gold takes a focused asset-level approach. As they get to know a property, they may seek to increase exposure by trying to secure other royalty agreements linked to the same property. Additionally, the company has a portfolio of royalty interests that should support long-term growth.

Ely Gold differentiates itself among junior royalty companies with its royalty generation program. While many of its competitors focus on purchasing exploration and longer-term royalties, Ely Gold is developing projects to generate a revenue stream with its royalty sale portfolio. Properties are sold to third-party mining companies on a 100% basis, generally under four-year option payment agreements. Once payments are completed, and the property is sold, Ely retains a royalty interest. If payments are not completed, Ely gets the property back.  This approach has enabled Ely Gold to aggressively grow its portfolio with minimal dilution to shareholders.

Ely Gold’s management team has a unique combination of mining industry and capital markets experience.  They have a successful track record of generating projects, with a focus on and specialized knowledge of the Nevada market. While the company has largely focused its efforts on Nevada, it could consider other favorable mining jurisdictions, including in Latin America, where it has familiarity.

Take-Away

Investors have many options to gain exposure to gold. Royalty companies may be worth considering as a vehicle for exposure to gold. However, it is important for investors to understand their risk tolerance and return objective. The universe of royalty and streaming companies represents a broad range of market capitalizations, and many differences exist among their asset portfolios. Channelchek offers a starting point for investors to conduct due diligence and dig deeper.

Suggested Content:

Sources:

4
Reasons Why We Believe in Royalty Companies, Slideshow, U.S. Global Investors, 2021

How
Precious Metals Royalty and Streaming Companies Create Value, Visual Capitalist, February 25, 2021.

Streaming
& Royalty Companies: Mutually Beneficial Arrangements for Everyone,
including Investors, ResourceWorld, Ellsworth Dickson, 2020

Photo Credit: Gold Nuggets, Dave
Bazaire, No Changes Made  

Friday, March 19, 2021

Palladium One Mining Inc. (NKORF)(PDM:CA)
Methodical Approach to Exploration Yielding Positive Outcomes

Palladium One Mining Inc is a palladium dominant, PGE, nickel, copper exploration and development company. Its assets consist of the Lantinen Koillismaa and Kostonjarvi PGE-Cu-Ni projects, located in north-central Finland and the Tyko Ni-Cu-PGE and Disraeli PGE-Ni-Cu properties in Ontario, Canada. LK is targeting disseminated sulphide along 38 kilometers of favorable basal contact. The KS project is targeting massive sulphide within a 20,000-hectare land package covering a regional scale gravity and magnetic geophysical anomaly. Tyko is a 13,000-hectare project targeting disseminated and massive sulphide in a highly metamorphosed Archean terrain. Disraeli is a 2,500-hectare project targeting PGE-rich disseminated and massive sulphide in a highly productive Proterozoic mid-continent rift.

Mark Reichman, Senior Research Analyst of Natural Resources, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Phase II drilling program. In November 2020, the company began its 17,500-meter Phase II resource definition drilling program at its palladium-dominant Lantinen Koillismaa (LK) project in Finland. To date, 34 holes, representing 6,404 meters of drilling, have been completed at Kaukua South. Results for 22 drill holes have been released, while 12 are pending. Drilling has focused on defining mineralization to a depth of 200 meters and continues to affirm continuity of near surface open pit grades and widths at Kaukua South.


Defining Kaukua South’s expanding potential.  Induced polarization (IP) surveys have commenced to expand the 4-kilometer Kaukua South strike length by up to 3 kilometers. Based on the existing NI 43-101 pit constrained resource, favorable drill results to date, and the potential to increase the Kaukua South strike length to 7 kilometers, Palladium One has made significant progress toward advancing …

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary.  Proper due diligence is required before making any investment decision. 

Sierra Metals Reports 2020 Consolidated Financial Results Including A 49% Increase In Adjusted Ebitda To $97.0 Million

TORONTO–(BUSINESS WIRE)– Sierra Metals Inc. (TSX:SMT) (BVL:SMT) (NYSE American:SMTS):

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20210318005988/en/

Conference Call March 19, 2021 at 10:30 AM (EDT)

(All $ figures reported in USD)

• Revenue from metals payable of $246.9 million in 2020 increased by 8% from $229.0 million in 2019;
• Adjusted EBITDA of $97.0 million in 2020 increased 49% from $65.3 million in 2019 due to higher consolidated revenues and lower operating costs at Yauricocha and Bolivar;
• Operating cash flows before movements in working capital of $99.0 million in 2020 increased 49% from $66.4 million in 2019;
• 2020 consolidated copper production of 44.3 million pounds an 11% increase, consolidated silver production of 3.5 million ounces a 3% increase, consolidated zinc production of 81.9 million pounds a 1% increase, consolidated lead production of 33.0 million pounds a 7% decrease, and consolidated gold production of 13,771 ounces an 18% increase respectively compared to 2019;
• Consolidated All-In sustaining costs (“AISC”) ⁽¹⁾ per copper equivalent pound ⁽²⁾ sold of $2.12 in 2020, or 8% lower than AISC in 2019, driven by lower cash costs and the increase in copper equivalent pounds sold in 2020 compared to 2019;
• $71.5 million of cash and cash equivalents as at December 31, 2020;
• Net Income attributable to shareholders of $0.14 per share;
• Net Debt of $27.9 million as at December 31, 2020
• A shareholder conference call to be held Friday, March 19, 2021, at 10:30 AM (EDT)

(1) This is a non-IFRS performance measure, see Non-IFRS Performance Measures section of the MD&A.
(2) Silver equivalent ounces and copper and zinc equivalent pounds for Q4 2020 were calculated using the following realized prices: $24.30/oz Ag, $3.32/lb Cu, $1.22/lb Zn, $0.89/lb Pb, $1,859/oz Au. Silver equivalent ounces and copper and zinc equivalent pounds for Q4 2019 were calculated using the following realized prices: $17.42/oz Ag, $2.69/lb Cu, $1.07/lb Zn, $0.92/lb Pb, $1,506/oz Au. Silver equivalent ounces and copper and zinc equivalent pounds for full year 2020 were calculated using the following realized prices: $20.59/oz Ag, $2.80/lb Cu, $1.03/lb Zn, $0.83/lb Pb, $1,771/oz Au. Silver equivalent ounces and copper and zinc equivalent pounds for full year 2019 were calculated using the following realized prices: $16.29/oz Ag, $2.73/lb Cu, $/1.14lb Zn, $0.91/lb Pb, $1,404/oz Au.

Sierra Metals Inc. (TSX:SMT) (BVL:SMT) (NYSE American:SMTS) (“Sierra Metals” or the “Company”) today reported revenue of $246.9 million and an adjusted EBITDA of $97.0 million on the throughput of 2.8 million tonnes and metal production of 118.2 million copper equivalent pounds (or 16.1 million silver equivalent ounces or 321.6 million zinc equivalent pounds), for the year ended December 31, 2020.

The Company achieved annual throughput that was 6% higher than the 2019 annual throughput despite the various COVID-19 related operational challenges, including government-mandated shutdowns in the second quarter of the year. Annual 2020 consolidated silver, copper, zinc, and gold production increased 3%, 11%, 1%, and 18%, respectively, while lead production decreased by 7% compared to 2019.

Despite the continued COVID-19 related operational challenges in Q4 2020, consolidated quarterly ore throughput of 778,236 tonnes increased by 6% over Q4 2019, as higher throughput from the Mexican operations was partially offset by a 3% decline in throughput from the Yauricocha mine.

Copper equivalent production at Yauricocha declined 20% during Q4 2020 due to a 3% decrease in quarterly throughput combined with lower head grades and recoveries. At Bolivar, 10% higher ore throughput and higher recoveries were partially offset by lower head grades resulting in Q4 2020 copper equivalent pounds production that was in line with Q4 2019. Q4 2020 silver equivalent production at the Cusi mine was 83% higher than Q4 2019 due to 35% higher throughput realized, in addition to higher silver and gold head grades as well as 65% higher gold recoveries as compared to Q4 2019.

Luis Marchese, CEO of Sierra Metals, stated:“Sierra Metals had a solid performance in 2020 with a marked increase in adjusted EBITDA as well as solid production despite the exceptionally challenging year we had while dealing with the COVID-19 pandemic. Overall, the Company did a great job of managing and improving operations while controlling and maintaining costs. I want to thank all of our employees for their significant efforts in helping the Company achieve these remarkable results.”

He continued, “Looking ahead, we expect this year to be an exciting one for the Company. We continue advancing important projects, completing operational improvements, and advancing exploration at all three mines. We hope to receive the final permit required to increase throughput by 20% to the 3,600 tonne per day level at Yauricocha in the second quarter of the year. Furthermore, we recently completed and published Preliminary Economic Assessments with favorable economics for expansions at all three mines, examining an increase in throughput starting in 2024. We continue to work toward the completion of Preliminary Feasibility Studies for all mines. COVID-19 is still challenging us, and case counts remain high in Mexico and Peru. However, policies and practices are in place to manage these issues while prioritizing the health of our employees and surrounding communities.”

He concluded, “The Company continues to have a strong balance sheet, and liquidity with metal prices expected to remain strong this year. These strengths should benefit the Company as we continue with our growth and improvement plans. Management also remains optimistic that we can find further operational efficiencies with the larger scale of the Company operations.”

The following table displays selected financial and operational information for the three months and year ended December 31, 2020:

Q4 and 12M 2020 Financial Highlights

Revenue from metals payable of $246.9 million in 2020 increased by 8% from $229.0 million in 2019. Higher revenue was primarily a result of higher copper sales from the Bolivar mine attributable to increased throughput and higher average realized prices for copper, gold and silver compared to 2019.

Yauricocha’s cash cost per copper equivalent payable pound was $1.01 (2019 – $1.12), and AISC per copper equivalent payable pound of $2.11 (2019 – $1.91). Lower cash costs resulted from a decrease in cost per tonne attributable to lower labour and contractor costs due to operational challenges related to COVID-19. Cash costs for the year were 10% lower despite the $4.8 million of charges related to the COVID-19, such as the cost of cleaning supplies, medical tests and costs related to quarantine employees and contractors. The increase in the AISC per copper equivalent payable pound for 2020 compared to 2019 was a result of lower copper equivalent pounds sold and higher treatment and refining costs. Other sustaining costs were in-line with these costs incurred in 2019.

Bolivar’s cash cost per copper equivalent payable pound was $1.13 (2019 – $1.73), and AISC per copper equivalent payable pound was $1.88 (2019 – $2.86). Lower unit costs at Bolivar were a result of the 48% increase in copper equivalent pounds sold during 2020 as compared to 2019.

Cusi’s cash cost per silver equivalent payable ounce was $16.62 (2019 – $21.38), and AISC per silver equivalent payable ounce was $25.26 (2019 – $30.89). Costs were lower during the year due to lower contractor costs related to underground development. Silver equivalent ounces sold during 2020 were 5% higher than 2019, despite the production lost due to the care and maintenance period, as silver and gold grades increased in Q4 2020.

Adjusted EBITDA⁽¹⁾ of $97.0 million for 2020 is a 49% increase from the adjusted EBITDA of $65.3 million for 2019. This increase was a combined result of the higher consolidated revenue and lower operating costs per tonne at Yauricocha and Bolivar.

Cash flow generated from operations before movements in working capital of $99.0 million for 2020 increased compared to $66.4 million in 2019. The increase in operating cash flow is mainly the result of higher revenues generated and lower operating costs, as mentioned earlier.

Net Income attributable to shareholders for 2020 was $23.4 million (2019: $4.4 million) or $0.14 per share (basic and diluted) (2019: $0.03).

Cash and cash equivalents of $71.5 million and working capital of $70.9 million as at December 31, 2020, compared to $43.0 million and $49.9 million, respectively, at the end of 2019. Cash and cash equivalents increased during 2020 due to $67.0 million of operating cash flows after taxes and changes in working capital, offset by cash used in investing activities in Mexico and Peru of $34.2 million and interest payment of $4.1 million on the senior secured credit facility.

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

Project Development

In October 2020, the Company reported positive results of a Preliminary Economic Assessment (“PEA”) for doubling its output at the Bolivar Mine to 10,000 tonnes per day (“tpd”). The PEA results indicated an incremental benefit of after-tax NPV (@8%) of $57.4 million and an IRR of 27.9%. A National Instrument 43-101 (“NI 43-101”) technical report was filed on SEDAR and with the U.S. Securities and Exchange Commission on November 5, 2020;

In November 2020, the Company announced an update on the Cusi Mineral Resource Estimate, which included an 18% increase in the Measured and Indicated Resources and a 200% increase in the Inferred Resources. This update was followed up by a NI 43-101 technical report on December 22, 2020;

In December 2020, the Company filed a NI 43-101 PEA technical report for the Yauricocha Mine with favourable economics including an incremental after-tax NPV (@8%) of $28.4 million and an IRR of 35.7% to increase the production to 5,500 tpd from 3,780 tpd. The technical report also contained an increase in the Mineral Resource estimate for the Yauricocha Mine. The update included a 26% increase in the Measured and Indicated Mineral Resources and a 79% increase in the Inferred Resource estimate; and;

In December 2020, the Company reported the results of a PEA for doubling its output at the Cusi Mine to 2,400 tpd, which indicated an after-tax incremental NPV (@8%) of $28.1 million and IRR of 46.8%. A 43-101 technical report for this PEA was filed on January 6, 2021.

Exploration Highlights

Peru:

• Exploration activities at the Yauricocha mine were suspended between March 16, 2020, to October 31, 2020, due to restrictions related to COVID-19; and

• Of the planned 25,000 meters of drilling planned for the year, only 10,120 meters could be completed, which included 5,088 meters of underground drilling and 5,032 meters of brownfield surface exploration.

Mexico:

Bolivar

• The Infill Drilling program was carried in the El Gallo and Bolivar West. 6,971 meters of drilling was completed, including 6,413 meters at Bolivar West and 558 meters at El Gallo; and

• Brownfield exploration drilling program was completed for 19,372 meters, which included mainly 11,184 meters at Bolivar West and 7,222 meters at La Montura (El Salto) zone, with the remaining meters drilled in the copper porphyry.

Cusi

• The Infill Drilling program was carried in the NorthEast System, with the objective to define the continuity and the grades of this system. 9,752 meters of drilling was completed, including 1,884 meters of definition drilling into this system; and

• Brownfield exploration drilling program started at Promontorio vein, and La Gloria Vein and 3,975 meters of drilling were completed during the year.

Annual SEC Filing completed by Sierra Metals

Sierra Metals has completed its annual SEC filing. Copies of these documents can be found at www.sierrametals.com on the Investors Page under Financial Information. Shareholders may request a hard copy of the complete audited financial statements free of charge upon request.

Conference Call Webcast

Sierra Metals’ senior management will host a conference call on Friday, March 19, 2021, at 10:30 AM (EDT) to discuss the Company’s financial and operating results for the three months and year ended December 31, 2020.

Via Webcast:

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

https://event.on24.com/wcc/r/2947459/6CFF80ECA94506BA22260486A6292C76

The webcast, along with presentation slides, will be archived for 180 days on www.sierrametals.com.

Via phone:

To register for this conference call, please use the link provided below. A confirmation will be sent through email, including dial-in details and unique conference call codes for entry after registering.

Registration is open throughout the live call; however, to ensure you are connected for the entire call, we suggest registering a day in advance or at minimum 10 minutes before the start of the call.

Conference Call Registration Link

http://www.directeventreg.com/registration/event/4514269

Quality Control

Américo Zuzunaga, FAusIMM CP (Mining Engineer) and Vice President of Corporate Planning, is a Qualified Person under National Instrument 43-101 – Standards of Disclosure for Mineral Projects.

Augusto Chung, FAusIMM CP (Metallurgist) and Vice President of Metallurgy and Projects, is a Qualified Person under National Instrument 43-101 – Standards of Disclosure for Mineral Projects.

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.

Mike McAllister
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

Source: Sierra Metals Inc.