Friday, May 13, 2022

Sierra Metals (SMTS)
On the Road to Recovery

Sierra Metals Inc. is a diversified Canadian mining company with Green Metal exposure including increasing copper production and base metal production with precious metals byproduct credits, focused on the production and development of its 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.

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

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

First quarter earnings exceed expectations. Sierra Metals reported first quarter adjusted net income of $5.9 million, or $0.04 per share, compared with $4.7 million, or $0.03 per share, during the prior year period and our estimate of $5.5 million, or $0.03 per share. Adjusted EBITDA amounted to $16.0 million compared to $27.9 million during the prior year period. The company appears well on its way toward achieving its 2022 production guidance in the range of 79.5 million to 89.7 million pounds of copper equivalent.

Updating estimates. We have increased our 2022 EPS and EBITDA estimates to $0.23 and $101.9 from $0.21 and $100.8 million, respectively. We expect steady growth in EBITDA throughout the year as Bolivar ramps up production and the company makes up for lost first quarter production at Yauricocha during the remainder of the year. While Yauricocha and Bolivar cash and all in sustaining costs per copper equivalent pound remained elevated during the first quarter, management expects achieve its 2022 cost guidance based on higher levels of production during the balance of the year….

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.