Sierra Metals Reports 2021 Consolidated Financial Results And Announces 2022 Guidance

Research, News, and Market Data on Sierra Metals

 

CONFERENCE CALL MARCH 17, 2022 – NEW TIME – NOW AT 11:00 AM (EDT)

(All $ figures reported in USD)

• Revenue from metals payable of $272.0 million in 2021, an increase of 10% from 2020 annual revenue of $246.9 million, largely a result of the increase in realized prices for all metals as compared to 2020;
• Adjusted EBITDA⁽¹⁾ of $104.7 million for 2021, which is a 2% increase from the adjusted EBITDA of $102.8 million for 2020. The increase in adjusted EBITDA is due to the increase in gross margins at the Yauricocha and Cusi mines;
• Net loss attributable to shareholders for 2021 was $27.4 million or of $(0.17) per share compared to a net income of $23.4 million or $0.14 per share in 2020. Net losses for the year ended 2021 include a non-cash impairment charge of $35 million related to the Cusi mine;
• Adjusted net income attributable to shareholders of $21.6 million or $0.13 per share for 2021;
• Operating cash flows before movements in working capital of $93.4 million for 2021, a 4% decrease from $97.8 million in 2020, due to higher G&A costs in 2021;
• 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 a 12% 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 in 2021, or 60% higher than AISC in 2020, driven by higher sustaining capital and the 27% decrease in copper equivalent payable pounds in 2021 compared to 2020;
• $34.9 million of cash and cash equivalents as at December 31, 2021;
• Net Debt of $45.9 million as at December 31, 2021.
• A shareholder conference call to be held Thursday, March 17, 2022, at 11:00 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/oz Ag, $4.40/lb Cu, $1.55/lb Zn, $1.06/lb Pb, $1,795/oz Au. Copper equivalent pounds and silver equivalent ounces 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. Copper equivalent pounds and silver equivalent ounces for full year 2021 were calculated using the following realized prices: $25.21/oz Ag, $4.23/lb Cu, $1.37/lb Zn, $1.00/lb Pb, $1,796/oz Au. Copper equivalent pounds and silver equivalent ounces 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.

TORONTO–(BUSINESS WIRE)– Sierra Metals Inc. (TSX:SMT)(BVL:SMT)(NYSE American:SMTS) (“Sierra Metals” or the “Company”) today reported revenue of $272.0 million and an adjusted EBITDA of $104.7 million on the throughput of 2.9 million tonnes and metal production of 89.9 million copper equivalent pounds for the year ended December 31, 2021.

The following table displays selected financial and operational information for the three months and year ended December 31, 2021:

Luis Marchese, CEO of Sierra Metals, stated:“Despite the unprecedented difficulties of 2021, the Company reported a slight increase to Adjusted EBTIDA of $104.7 million. While consolidated annual ore throughput increased, Yauricocha and Cusi metal production did not fully compensate for the lower throughput and grades at Bolivar, resulting in a marked decline in consolidated copper equivalent production of 24% year over year. We are taking significant steps to improve operations at our Bolivar Mine, including a substantial allocation of 2022 budgeted capital expenditures toward reducing backlog of infill drilling and mine development, improved availability of equipment and controls, detailed review of processes and a thorough review of the current organization. We are focused on Bolivar’s operational turnaround so that it can deliver on its potential, by H2 2022.“

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 Yauricocha Mine include the expansion of the tailings dam and sinking of the Yauricocha shaft. At the Bolivar mine, growth will be focused around the expansion of plant capacity and the integration tunnel which will link the mine to the mill, creating efficiencies and cost reduction by eliminating truck haulage of ore to the mill. Both projects are planned for completion by the end of Q4 2022. Additionally, we are committed to continuing to grow our reserve and resource base. An intense infill drilling program is planned for the year and we expect to complete MRMR updates and include the Technical Reports for the Yauricocha and Bolivar Mines in 2022. We are optimistic that these updated reports will provide for expanded reserves and resources at the mines.”

12M 2021 Operating Highlights

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.

The Yauricocha mine received its Informe Tecnico Minero (“ITM”) permit in June 2021, allowing for an operating capacity of 3,600 tpd. Achieving the maximum annual permitted capacity, throughput at Yauricocha was 1,256,847 tonnes, or an increase of 12% from the 2020 annual production.

Annual throughput of 295,771 tonnes at Cusi was 28% higher as the mine operated throughout the year, as compared to the year 2020, when almost four months of production was lost during the care and maintenance period resulting from the government mandated shutdown.

The Bolivar mine achieved annual throughput of 1,349,602 tonnes, which was 9% lower than the 2020 throughput, as the mine continued to face manpower issues such as reduced workforce due to COVID and high turnover in middle and senior management.

Consolidated copper equivalent production dropped 24% as compared to 2020 due to the aforementioned production issues at Bolivar and as higher throughput at Yauricocha could not compensate from lower grades during the year. Metal production was higher at Cusi, driven by higher throughput and grades.

Yauricocha’s cash cost per copper equivalent payable pound was $1.46 (2020 – $1.01), and AISC per copper equivalent payable pound of $2.77 (2020 – $2.11).

Bolivar’s cash cost per copper equivalent payable pound was $2.18 (2020 – $1.13), and AISC per copper equivalent payable pound was $4.22 (2020 – $1.88).

Cusi’s cash cost per silver equivalent payable ounce was $16.71 (2020 – $16.62), and AISC per silver equivalent payable ounce was $28.59 (2020 – $25.26).

Click here to review the full details of the Q4 2021 production highlights.

Q4 and 12M 2021 Financial Highlights

Revenue from metals payable of $272.0 million in 2021, an increase of 10% from 2020 annual revenue of $246.9 million. Higher revenue was largely a result of the increase in realized prices for all metals as compared to 2020;

Adjusted EBITDA⁽¹⁾ of $104.7 million for 2021, which is a 2% increase from the adjusted EBITDA of $102.8 million for 2020;

Net loss attributable to shareholders for 2021 was $27.4 million (2020: $23.4 million) or $(0.17) per share (basic and diluted) (2020: $0.14) Net losses for Q4 and the year ended 2021 included an impairment charge of $35.0 million related to the Cusi mine;

Adjusted net income attributable to shareholders (1) of $21.6 million, or $0.13 per share, for 2021 was lower than the adjusted net income of $30.8 million, or $0.19 per share for 2020;

Cash flow generated from operations before movements in working capital of $93.4 million for 2021 was lower than the $97.8 million in 2020, mainly due to higher G&A costs in 2021; and

Cash and cash equivalents of $34.9 million and working capital of $17.3 million as at December 31, 2021 compared to $71.5 million and $70.9 million, respectively, at the end of 2020. Cash and cash equivalents decreased during 2021 as the $70.9 million used in investing activities and $36.9 million used in financing activities exceeded cash generated from operating activities of $71.4 million.

Project Development

On August 16, 2021, the Company reported the inclusion of iron ore production in the 10,000 tonnes per day (“tpd”) Preliminary Economic Assessment (“PEA”) for its Bolivar Mine. The updated PEA indicated an incremental benefit of after-tax NPV (@8%) of $78.2 million and IRR of 69.0% versus the NPV of $57.4 million and IRR of 27.9% reported in the original PEA. A National Instrument 43-101 (“NI 43-101”) technical report was filed on SEDAR and with the U.S. Securities and Exchange Commission on September 29, 2021. Click here to review the press release containing highlights of the Bolivar PEA.

After the close of the year, the Company announced positive results of the updated PEA on expansion of its Yauricocha Mine. This updated PEA included the last reported resource dated March 31, 2021 and revised Prefeasibility Study (“PFS”) level operating and capital expenditure. The Technical Report was filed on March 3, 2022. Click here to review the press release containing highlights of the updated Yauricocha PEA.

Exploration Highlights

Peru:

• During the year, 9,719 meters of surface exploration using diamond drills were carried out in the Kilkasca, El Estacion, Yauricocha Medio, Fortuna and Exito zones. Further, 18,509 meters of underground exploration was completed with the aim of replacing and increasing the mineral resources exploited during the year.

Mexico:

   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 at San Juan, San Antonio and Gallo 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 Cusi Mine in Mexico. As part of this process, the carrying value of Cusi was reviewed. As a result, a non-cash impairment charge of $35 million was recognized for the year ended December 31, 2021.

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:

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.

2022 EBITDA Guidance

Consolidated EBITDA Guidance including corporate expenses, at consensus prices⁽¹⁾, is expected to be between $90.0 million and $105.0 million, which is broken down as follows:

2022 Capital Expenditures

A breakdown by mine of the throughput and planned capital investments is shown in the following table:

Total sustaining capital for 2022 is expected to be $41.0 million, mainly comprising of mine development ($5.3 million), ventilation infrastructure ($2.5 million) and mine camp ($1.3 million) in Yauricocha, and infill drilling ($5.5 million), mine development ($7.2 million) and tailings dam ($6.9 million) at the Bolivar mine. The intensive infill drilling program of approximately 80,000 meters is planned for the year with the objective of increasing the reserves. Sustaining capital at Cusi is expected to be $6.0 million, including $3.0 million for mine development and the remainder for equipment replacement and tailings dam.

Growth capital for 2022 is projected at $28.0 million. Major growth projects at the Yauricocha mine include tailings dam expansion ($7.7 million), Yauricocha shaft and related integration access ($5.8 million) and exploration ($3.0 million). At the Bolivar mine, growth capital is mainly focused around the afore-mentioned expansion of plant capacity ($6.2 million) and the integration tunnel ($3.5 million), with planned completion of both projects by the end of Q3 2022.

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 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 Thursday, March 17, 2022, at 11:00 AM (EDT) to discuss the Company’s financial and operating results for the three months and year ended December 31, 2021.

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
Canada dial-in number (Local): 1 226 828 7575
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

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.

About Sierra Metals

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.

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 or contact:

Continue to Follow, Like and Watch our progress:

Web: www.sierrametals.com | Twitter: sierrametals | Facebook: SierraMetalsInc | LinkedIn: Sierra Metals Inc | Instagram: sierrametals

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 16, 2022 for its fiscal year ended December 31, 2021 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.

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.

Sierra Metals Reports 2021 Consolidated Financial Results And Announces 2022 Guidance

Research, News, and Market Data on Sierra Metals

 

CONFERENCE CALL MARCH 17, 2022 – NEW TIME – NOW AT 11:00 AM (EDT)

(All $ figures reported in USD)

• Revenue from metals payable of $272.0 million in 2021, an increase of 10% from 2020 annual revenue of $246.9 million, largely a result of the increase in realized prices for all metals as compared to 2020;
• Adjusted EBITDA⁽¹⁾ of $104.7 million for 2021, which is a 2% increase from the adjusted EBITDA of $102.8 million for 2020. The increase in adjusted EBITDA is due to the increase in gross margins at the Yauricocha and Cusi mines;
• Net loss attributable to shareholders for 2021 was $27.4 million or of $(0.17) per share compared to a net income of $23.4 million or $0.14 per share in 2020. Net losses for the year ended 2021 include a non-cash impairment charge of $35 million related to the Cusi mine;
• Adjusted net income attributable to shareholders of $21.6 million or $0.13 per share for 2021;
• Operating cash flows before movements in working capital of $93.4 million for 2021, a 4% decrease from $97.8 million in 2020, due to higher G&A costs in 2021;
• 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 a 12% 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 in 2021, or 60% higher than AISC in 2020, driven by higher sustaining capital and the 27% decrease in copper equivalent payable pounds in 2021 compared to 2020;
• $34.9 million of cash and cash equivalents as at December 31, 2021;
• Net Debt of $45.9 million as at December 31, 2021.
• A shareholder conference call to be held Thursday, March 17, 2022, at 11:00 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/oz Ag, $4.40/lb Cu, $1.55/lb Zn, $1.06/lb Pb, $1,795/oz Au. Copper equivalent pounds and silver equivalent ounces 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. Copper equivalent pounds and silver equivalent ounces for full year 2021 were calculated using the following realized prices: $25.21/oz Ag, $4.23/lb Cu, $1.37/lb Zn, $1.00/lb Pb, $1,796/oz Au. Copper equivalent pounds and silver equivalent ounces 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.

TORONTO–(BUSINESS WIRE)– Sierra Metals Inc. (TSX:SMT)(BVL:SMT)(NYSE American:SMTS) (“Sierra Metals” or the “Company”) today reported revenue of $272.0 million and an adjusted EBITDA of $104.7 million on the throughput of 2.9 million tonnes and metal production of 89.9 million copper equivalent pounds for the year ended December 31, 2021.

The following table displays selected financial and operational information for the three months and year ended December 31, 2021:

Luis Marchese, CEO of Sierra Metals, stated:“Despite the unprecedented difficulties of 2021, the Company reported a slight increase to Adjusted EBTIDA of $104.7 million. While consolidated annual ore throughput increased, Yauricocha and Cusi metal production did not fully compensate for the lower throughput and grades at Bolivar, resulting in a marked decline in consolidated copper equivalent production of 24% year over year. We are taking significant steps to improve operations at our Bolivar Mine, including a substantial allocation of 2022 budgeted capital expenditures toward reducing backlog of infill drilling and mine development, improved availability of equipment and controls, detailed review of processes and a thorough review of the current organization. We are focused on Bolivar’s operational turnaround so that it can deliver on its potential, by H2 2022.“

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 Yauricocha Mine include the expansion of the tailings dam and sinking of the Yauricocha shaft. At the Bolivar mine, growth will be focused around the expansion of plant capacity and the integration tunnel which will link the mine to the mill, creating efficiencies and cost reduction by eliminating truck haulage of ore to the mill. Both projects are planned for completion by the end of Q4 2022. Additionally, we are committed to continuing to grow our reserve and resource base. An intense infill drilling program is planned for the year and we expect to complete MRMR updates and include the Technical Reports for the Yauricocha and Bolivar Mines in 2022. We are optimistic that these updated reports will provide for expanded reserves and resources at the mines.”

12M 2021 Operating Highlights

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.

The Yauricocha mine received its Informe Tecnico Minero (“ITM”) permit in June 2021, allowing for an operating capacity of 3,600 tpd. Achieving the maximum annual permitted capacity, throughput at Yauricocha was 1,256,847 tonnes, or an increase of 12% from the 2020 annual production.

Annual throughput of 295,771 tonnes at Cusi was 28% higher as the mine operated throughout the year, as compared to the year 2020, when almost four months of production was lost during the care and maintenance period resulting from the government mandated shutdown.

The Bolivar mine achieved annual throughput of 1,349,602 tonnes, which was 9% lower than the 2020 throughput, as the mine continued to face manpower issues such as reduced workforce due to COVID and high turnover in middle and senior management.

Consolidated copper equivalent production dropped 24% as compared to 2020 due to the aforementioned production issues at Bolivar and as higher throughput at Yauricocha could not compensate from lower grades during the year. Metal production was higher at Cusi, driven by higher throughput and grades.

Yauricocha’s cash cost per copper equivalent payable pound was $1.46 (2020 – $1.01), and AISC per copper equivalent payable pound of $2.77 (2020 – $2.11).

Bolivar’s cash cost per copper equivalent payable pound was $2.18 (2020 – $1.13), and AISC per copper equivalent payable pound was $4.22 (2020 – $1.88).

Cusi’s cash cost per silver equivalent payable ounce was $16.71 (2020 – $16.62), and AISC per silver equivalent payable ounce was $28.59 (2020 – $25.26).

Click here to review the full details of the Q4 2021 production highlights.

Q4 and 12M 2021 Financial Highlights

Revenue from metals payable of $272.0 million in 2021, an increase of 10% from 2020 annual revenue of $246.9 million. Higher revenue was largely a result of the increase in realized prices for all metals as compared to 2020;

Adjusted EBITDA⁽¹⁾ of $104.7 million for 2021, which is a 2% increase from the adjusted EBITDA of $102.8 million for 2020;

Net loss attributable to shareholders for 2021 was $27.4 million (2020: $23.4 million) or $(0.17) per share (basic and diluted) (2020: $0.14) Net losses for Q4 and the year ended 2021 included an impairment charge of $35.0 million related to the Cusi mine;

Adjusted net income attributable to shareholders (1) of $21.6 million, or $0.13 per share, for 2021 was lower than the adjusted net income of $30.8 million, or $0.19 per share for 2020;

Cash flow generated from operations before movements in working capital of $93.4 million for 2021 was lower than the $97.8 million in 2020, mainly due to higher G&A costs in 2021; and

Cash and cash equivalents of $34.9 million and working capital of $17.3 million as at December 31, 2021 compared to $71.5 million and $70.9 million, respectively, at the end of 2020. Cash and cash equivalents decreased during 2021 as the $70.9 million used in investing activities and $36.9 million used in financing activities exceeded cash generated from operating activities of $71.4 million.

Project Development

On August 16, 2021, the Company reported the inclusion of iron ore production in the 10,000 tonnes per day (“tpd”) Preliminary Economic Assessment (“PEA”) for its Bolivar Mine. The updated PEA indicated an incremental benefit of after-tax NPV (@8%) of $78.2 million and IRR of 69.0% versus the NPV of $57.4 million and IRR of 27.9% reported in the original PEA. A National Instrument 43-101 (“NI 43-101”) technical report was filed on SEDAR and with the U.S. Securities and Exchange Commission on September 29, 2021. Click here to review the press release containing highlights of the Bolivar PEA.

After the close of the year, the Company announced positive results of the updated PEA on expansion of its Yauricocha Mine. This updated PEA included the last reported resource dated March 31, 2021 and revised Prefeasibility Study (“PFS”) level operating and capital expenditure. The Technical Report was filed on March 3, 2022. Click here to review the press release containing highlights of the updated Yauricocha PEA.

Exploration Highlights

Peru:

• During the year, 9,719 meters of surface exploration using diamond drills were carried out in the Kilkasca, El Estacion, Yauricocha Medio, Fortuna and Exito zones. Further, 18,509 meters of underground exploration was completed with the aim of replacing and increasing the mineral resources exploited during the year.

Mexico:

   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 at San Juan, San Antonio and Gallo 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 Cusi Mine in Mexico. As part of this process, the carrying value of Cusi was reviewed. As a result, a non-cash impairment charge of $35 million was recognized for the year ended December 31, 2021.

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:

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.

2022 EBITDA Guidance

Consolidated EBITDA Guidance including corporate expenses, at consensus prices⁽¹⁾, is expected to be between $90.0 million and $105.0 million, which is broken down as follows:

2022 Capital Expenditures

A breakdown by mine of the throughput and planned capital investments is shown in the following table:

Total sustaining capital for 2022 is expected to be $41.0 million, mainly comprising of mine development ($5.3 million), ventilation infrastructure ($2.5 million) and mine camp ($1.3 million) in Yauricocha, and infill drilling ($5.5 million), mine development ($7.2 million) and tailings dam ($6.9 million) at the Bolivar mine. The intensive infill drilling program of approximately 80,000 meters is planned for the year with the objective of increasing the reserves. Sustaining capital at Cusi is expected to be $6.0 million, including $3.0 million for mine development and the remainder for equipment replacement and tailings dam.

Growth capital for 2022 is projected at $28.0 million. Major growth projects at the Yauricocha mine include tailings dam expansion ($7.7 million), Yauricocha shaft and related integration access ($5.8 million) and exploration ($3.0 million). At the Bolivar mine, growth capital is mainly focused around the afore-mentioned expansion of plant capacity ($6.2 million) and the integration tunnel ($3.5 million), with planned completion of both projects by the end of Q3 2022.

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 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 Thursday, March 17, 2022, at 11:00 AM (EDT) to discuss the Company’s financial and operating results for the three months and year ended December 31, 2021.

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
Canada dial-in number (Local): 1 226 828 7575
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

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.

About Sierra Metals

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.

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 or contact:

Continue to Follow, Like and Watch our progress:

Web: www.sierrametals.com | Twitter: sierrametals | Facebook: SierraMetalsInc | LinkedIn: Sierra Metals Inc | Instagram: sierrametals

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 16, 2022 for its fiscal year ended December 31, 2021 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.

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.

AMC is Thinking Outside the Box Office and Diversifying

 

AMC Entertainment (AMC) has just taken business diversification in a surprising direction. The company known for movie theatres announced that it has taken a 22% stake in a gold and silver mining company. The company, Hycroft Mining Holdings (HYMC), has a 71,000-acre gold mine in Northern Nevada. AMC’s announcement explains that an equal and simultaneous stake in Hycroft was also taken by Eric Sprott. Sprott is a major investment player in gold, silver, and other metals.

 

The Deal

AMC will invest $27.9 million in cash in Hycroft in exchange for 23.4 million warrant units, with each unit consisting of one common share of Hycroft and one common share purchase warrant. The units are priced at $1.193 a share, while each purchase warrant is priced at about $1.07 a share and carries a five-year term. HYMC had been trading in the $0.30 to $0.33 range during the first week of March. As of 10 am the day after the announcement (March 17), HYMC is trading at $1.40 per share.

AMC also was granted the right to appoint someone to Hycroft’s board.

Eric Sprott’s investment was made through a holding company for Sprott, not the alternative investment manager owned by Mr. Sprott, Sprott Inc. The holding company will make an equal investment in Hycroft with the same terms.

Together, AMC and Sprott are investing $56 million in the mining company.

The chairman and CEO of AMC said “Our investment to buy 22% of Hycroft Mining Holding Corporation, and to receive an additional 23.4 million warrants in Hycroft at $1.07 per share is a truly terrific opportunity to potentially strengthen and enrich our company, and thereby create significant value for AMC Entertainment shareholders.It is appealing that the investment requires the commitment of only a nominal amount of AMC cash.”

Diane Garrett, President, CEO and Acting Chairman of Hycroft, commented, “We couldn’t be more

pleased to announce this transformational investment in the future of Hycroft, anchored by Eric Sprott,

one of the world’s leading precious metals investors, and AMC Entertainment Holdings, which has proven its expertise and ability to address liquidity challenges and to raise capital to optimize the value of significant underlying assets.

 

About the Mine

Hycroft Mining Holding Corporation is a US-based gold and silver development company that owns the Hycroft Mine. This is a well-established asset located 54 miles West of Winnemucca, Nevada. The 71,000-acre property (Manhattan, NY is 15,000 acres) is an open-pit leach operation.

According to the company website, the Hycroft mine is one of the world’s largest precious metals deposits. The mineral resources include:

• Gold – 9.65 million ounces M&I / 5.0 million ounces inferred
• Silver – 456 million ounces M&I / 150.4 million ounces inferred
• Gold equivalent – 15.3 million ounces M&I / 6.9 million ounces inferred

Permits are in place for both heap leach and milling operations. There is substantial equipment and infrastructure in place.

Management is focused on transforming Hycroft into a large-scale mining operation by developing a process capable of extracting the large sulfide gold and silver mineral resources on site, in addition to existing oxide processing capabilities.

 

Thinking Outside the Box Office

“To state the obvious, one would not normally think that a movie theatre company’s core competency includes gold or silver mining,” said AMC CEO Adam Aron. The company is using the capital acquired during the meme stock short squeeze climb to strategically help a company in an uncorrelated industry navigate liquidity issues.

This is not the first time AMC has taken an untraditional step. In August of 2021, AMC made the business decision that its theatres would
accept
bitcoin and three other cryptocurrencies for online ticket sales and concessions.

During the big meme stock trading frenzy, silver had a significant rally that lasted a few days, otherwise precious metals producers have been ignored by the retail investors embracing the r/wallstreetbets style. This announcement may put the significant opportunities in small miners on their radar at a time when resources are top performers.

Channelchek has a wealth of data and in-depth research on small publicly traded companies in the mining sector. Following this link then clicking “Metals & Mining” is an excellent way to become acquainted with North American mining companies and their underlying fundamentals.

Paul Hoffman

Managing Editor, Channelchek

 

Suggested Content

Metals and Mining Industry Report

Aurania Resources C-Suite Interview (Video)

Newrange Gold C-Suite Interview (Video)

Sierra Metals Virtual Roadshow (Video)

 

Sources

http://www.hycroftmining.com/wp-content/uploads/03-14-2022-Hycroft-Investment-by-Sprott-and-AMC.pdf

https://investor.amctheatres.com/newsroom/news-details/2022/AMC-Entertainment-Holdings-Inc.-Announces-Significant-Investment-Buying-22-of-Hycroft-Mining-Holding-Corporation/default.aspx

 

Stay up to date. Follow us:

Element79 Gold to Provide Further Insight and Analysis on High-Grade Peruvian Gold Portfolio

News and Market Data on Element79 Gold

 

VANCOUVER, BC / ACCESSWIRE / March 17, 2022 / Element79 Gold Corp. (CSE:ELEM)(OTC PINK:ELMGF)(FSE:7YS) (“Element79 Gold“, the “Company“) is pleased to present further insight and analysis on its recently acquired high-grade Peruvian gold portfolios. In a news release dated March 10^th, 2022 (or the “Prior Release“), The Company announced it signed a Letter of Intent (“LOI“) to acquire all of the issued and outstanding securities of Calipuy Resources Inc. (“Calipuy”) and all of its assets and undertakings. Calipuy holds 100% interest in two past-producing high-grade gold-silver mines: The past-producing Lucero Mine (“Lucero”), one of the highest-grade underground mines in Peru’s history⁽¹⁾ at grades averaging 19.0g/t Au Equivalent (“Au Eq”) (14.0 g/t gold and 373 g/t silver)⁽²⁾, as well as the past-producing Machacala Mine (“Machacala”) which averaged production grades of 10.5 g/t Au Eq (6.0 g/t gold and 340 g/t silver)⁽⁵⁾. Operations were suspended in 2005 at Lucero and 1991 at Machacala due to the persistence of low gold and silver prices at the time.

The purpose of this corporate update is to provide a comprehensive discussion and analysis on the strategic reasoning behind the acquisition of the Lucero and Machacala projects, and why Element79 Gold believes that the integration of this new portfolio will help elevate the Company amongst its junior resource exploration peers. Details of the LOI and NSR can be found in the Prior Release. The Prior Release additionally highlights material and technical details of the Lucero and Machacala properties, including a recent 43-101 report on Lucero compiled by Mining Plus.

Diversification of Element79 Gold

Having a portfolio of previously-producing assets that have the near-term potential to be brought back into production provides the Company with a pathway to revenue, which would fund day-to-day administration and offset future exploration and development plans. In completing this acquisition Element79 Gold would now have a well-diversified portfolio of assets including greenfield, advanced 43-101 resource stage, and historic high-grade past- producing mines that have the potential to become producers again in the near term. The cycle of self-reliance and cash flow generation will continue to elevate Element79 Gold to a premiere resource exploration company.

Unique Features of the Lucero and Machacala Past-Producing Mines

Formerly operated as the Shila mine from 1989 to 2005, Lucero consists of 10,805 hectares located in the Shila range of southern Peru, which contains several historic high grade gold-silver mines⁽¹⁾. Lucero consistently delivered high grades during 16 years of operations, and between 1998 and 2004 reported production averaging approximately 18,800 ounces of gold and 435,000 ounces of silver per year at grades of 19.0 g/t Au Eq (14.0 g/t gold and 373 g/t silver),⁽²⁾ with recoveries at the ore processing facility averaging 94.5% for gold and 85.5% for silver⁽¹⁾.

Infrastructure highlights for the past-producing Lucero Mine include three-phase electrical energy from the national grid that’s available in the town of Chachas 40km from the property. Subject to permitting, surface water is available in streams and small lakes throughout the year. Structures endowed with precious metals have been exploited at Lucero and surrounding areas by artisanal and formal miners over many years. Mining activity targeting high-grade veins is thought to date back to the Inca period⁽²⁾.

“Lucero offers a rare opportunity to explore for not only an underground high-grade low sulphidation system but potentially an open pit-able high sulphidation system as well,” commented Neil Pettigrew, M.Sc., P.Geo, Director of Element79 Gold. “This past-producing mine has never experienced modern exploration techniques and I am very confident that significant gold-silver resources are to be found.”

The past-producing Machacala mine was first commercially mined in the 1950s before being acquired and operated by Minera Santa Isabel, S.A. from 1979 to 1991 which mined 230,000 metric tonnes averaging 10.5 g/t Au Eq (6.0 g/t Au and 340 g/t Ag) representing 78,000 Au Eq ounces.⁽⁶⁾ Operations were suspended in 1991 due to the persistence of a low gold ($360/oz) and silver ($3.81/oz) price.. Machacala hosts multiple low-sulphidation epithermal Au-Ag veins, of which only four have been only modestly exploited.⁽⁴⁾

In addition, Machacala includes 200,000 tonnes of historic, non-43-101 compliant tailings, which were estimated in 1997 by Gold Hawk to contain grades of 1.26 g/t gold and 74 g/t silver.⁽⁸⁾ Previous metallurgical studies by Gold Hawk show 87% recoveries of gold and 50%+ recovery of silver in 24 hours of leaching of un-milled tailings, with re-milling able to increase recoveries to 90% of gold and 73% of silver in 24 hours of leaching.⁽⁹⁾

ESG Initiatives

Element79 Gold is committed to the highest levels of corporate governance, and continues to make improvements towards social responsibilities. The Company believes it’s their duty as a global company to be a pioneer in relation to their ESG policies. Over the past few decades, the resource exploration sector has been met with some well-warranted environmental and social criticisms. Our goal is to stop the stigmatization that all resource exploration companies are the same, and that the Company can actually do some “net good”.

Examples of new initiatives is the onboarding of a community ambassador. This person will act as a liaison between the neighbouring communities that the Company will be operating in, and Element79 Gold. This individual will ensure that all local concerns are addressed, and that they will always feel like they have a voice at the table.

Another example will be the hiring of local geologists and operating companies. The purpose of this will be to not only stimulate the local economy and provide jobs for the communities, but to also consider their professional insights as these groups have a lifetime of knowledge to offer Element79 Gold areas that they’re well-familiarized in.

Lastly the Company will look towards commencing philanthropic initiatives such as donating to clean drinking water and other giveback programs in late 2022. These programs will be designed to ensure that Element79 Gold is well integrated to the communities they’ll be working beside.

All gold Equivalent calculations were performed using $1,650/oz gold, and $22/oz silver in line with the Company’s Maverick Springs 43-101 resource estimate, (see news release January 31st, 2022).

Qualified Person

The technical information in this release has been reviewed and verified by Neil Pettigrew, M.Sc., P. Geo., Director of Element79 Gold and a “qualified person” as defined by National Instrument 43-101.

About Element79 Gold

Element79 Gold is a mineral exploration company focused on the acquisition, exploration and development of mining properties for gold and associated metals. Element79 Gold has acquired its flagship Maverick Springs Project located in the famous gold mining district of northeastern Nevada, USA, between the Elko and White Pine Counties, where it has recently completed a 43-101-compliant, pit-constrained mineral resource estimate reflecting an Inferred resource of 3.71 million ounces of gold equivalent grading 0.92 Au Eq (0.34 g/t Au and 43.5 g/t Ag) with an effective date of Feb. 4, 2022. The acquisition of the Maverick Springs Project also included a portfolio of 15 properties along the Battle Mountain trend in Nevada, which the Company is analyzing for further merit of exploration, along with the potential for sale or spin-out. In British Columbia, Element79 Gold has executed a Letter of Intent to acquire a private company which holds the option to 100% interest of the Snowbird High-Grade Gold Project, which consists of 10 mineral claims located in Central British Columbia, approximately 20km west of Fort St. James. In Peru, Element79 Gold has signed a letter of intent to acquire the business and assets of Calipuy Resources Inc., which holds 100% interest in the Lucero Mine, one of the highest-grade underground mines to be commercially mined in Peru’s history, as well as the Machacala Mine. The Company also has an option to acquire 100% interest in the Dale Property which consists of 90 unpatented mining claims located approximately 100 km southwest of Timmins, Ontario, Canada in the Timmins Mining Division, Dale Township. For more information about the Company, please visit www.element79.gold or www.element79gold.com

Contact Information

For corporate matters, please contact:

James C. Tworek, Chief Executive Officer
E-mail: jt@element79gold.com

For investor relations inquiries, please contact:

Investor Relations Department
Phone: +1 (604) 200-3608
E-mail: investors@element79gold.com

Cautionary Note Regarding Forward Looking Statements

This press contains “forward?looking information” and “forward-looking statements” under applicable securities laws (collectively, “forward?looking statements”). These statements relate to future events or the Company’s future performance, business prospects or opportunities that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management made in light of management’s experience and perception of historical trends, current conditions and expected future developments. Forward-looking statements include, but are not limited to, statements with respect to the Company’s business strategy; future planning processes; exploration activities; the timing and result of exploration activities; capital projects and exploration activities and the possible results thereof; acquisition opportunities; and the impact of acquisitions, if any, on the Company. Assumptions may prove to be incorrect and actual results may differ materially from those anticipated. Consequently, forward-looking statements cannot be guaranteed. As such, investors are cautioned not to place undue reliance upon forward-looking statements as there can be no assurance that the plans, assumptions or expectations upon which they are placed will occur. All statements other than statements of historical fact may be forward?looking statements. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives or future events or performance (often, but not always, using words or phrases such as “seek”, “anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “predict”, “forecast”, “potential”, “target”, “intend”, “could”, “might”, “should”, “believe” and similar expressions) are not statements of historical fact and may be “forward?looking statements”.

Actual results may vary from forward-looking statements. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause actual results to materially differ from those expressed or implied by such forward-looking statements, including but not limited to: the duration and effects of the coronavirus and COVID-19; risks related to the integration of acquisitions; actual results of exploration activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; commodity prices; variations in ore reserves, grade or recovery rates; actual performance of plant, equipment or processes relative to specifications and expectations; accidents; labour relations; relations with local communities; changes in national or local governments; changes in applicable legislation or application thereof; delays in obtaining approvals or financing or in the completion of development or construction activities; exchange rate fluctuations; requirements for additional capital; government regulation; environmental risks; reclamation expenses; outcomes of pending litigation; limitations on insurance coverage as well as those factors discussed in the Company’s other public disclosure documents, available on www.sedar.com. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. The Company believes that the expectations reflected in these forward?looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward?looking statements included herein should not be unduly relied upon. These statements speak only as of the date hereof. The Company does not intend, and does not assume any obligation, to update these forward-looking statements, except as required by applicable laws.

Sources

1. https://web.archive.org/web/20220308020414/https://condorresources.com/portfolio/lucero/
2. https://web.archive.org/web/20220308020532/https://www.sandstormgold.com/our-royalties/lucero/
3. https://web.archive.org/web/20220308020649/https://www.sec.gov/Archives/edgar/data/1397970/000118374013000409/f8k08162013ex99-2.htm
4. https://web.archive.org/web/20220308020657/https://www.affinitygold.com/machacala-highlights
5. https://www.bnamericas.com/en/news/Gold_Hawk_Buys_Machala_Project
6. Gold Hawk Resources Inc News Release, 2004-04-26
7. https://web.archive.org/web/20220308020657/https://www.affinitygold.com/machacala-highlights
8. Gold Hawk Resources Inc News Release, 2004-06-28
9. Affinity Gold Corp. Corporate Presentation March 2013.

SOURCE: Element79 Gold Corp.