Sierra Metals Reports Q3 2021 Consolidated Financial Results And Provides Revised Ebitda Guidance For 2021

 

CONFERENCE CALL NOVEMBER 9, 2021, AT 10:30 AM (EST)

___________________________________________________________________

(All $ figures reported in USD)

• Revenue from metals payable of $60.7 million in Q3 2021 decreased by 17% from $73.2 million in Q3 2020, largely due to the lower grades at the Yauricocha and Bolivar mines combined with operational challenges at the Cusi mine
• Adjusted EBITDA⁽¹⁾ of $17.4 million for Q3 2021 decreased by 53% compared to $37.2 million in Q3 2020 due to the decrease in revenues realized
• Revised EBITDA Guidance for 2021 ($105M-$110M) primarily due to temporary operating restrictions at Bolivar Mine resulting from residual effect of COVID-19. Yauricocha and Cusi Mines are operating at near nameplate capacity levels.
• Operating cash flows before movements in working capital of $16.5 million in Q3 2021 decreased from $37.9 million in Q3 2020
• $58.3 million of cash and cash equivalents as at September 30, 2021
• $38.1 million of working capital as at September 30, 2021
• A shareholder conference call to be held Tuesday, November 9, 2021, at 10:30 AM (EST)

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

TORONTO–(BUSINESS WIRE)– Sierra Metals Inc. (TSX: SMT) (BVL: SMT) (NYSE AMERICAN: SMTS) (“Sierra Metals” or “the Company”) today reported revenue of $60.7 million and adjusted EBITDA of $17.4 million on the throughput of 750,208 tonnes and metal production of 21.9 million copper equivalent pounds, for the quarter ended September 30, 2021.

Consolidated production of copper equivalent pounds decreased 38% to 21.9 million pounds. The Company earned revenues of $60.7 million, Adjusted EBITDA of $17.4 million, and operating cash flows before movements in working capital of $16.5 million. Lower revenues, despite higher base metal prices compared to Q3 2020, are primarily attributable to the decrease in throughput and head grades at our Mexican operations primarily at the Bolivar Mine.

Luis Marchese, CEO of Sierra Metals, commented, “The third quarter was exceptionally difficult for the Company as we encountered sequencing issues at our Mexican operations. The Bolivar Mine has had limitations on mine development, infill drilling, equipment availability over the last year which have heavily impacted throughput, head grades and recoveries.While we believe these issues to be temporary in nature, we are currently conducting a comprehensive review of all operational processes at the Bolivar Mine, from Geology to Mine to Mill. We aim to incorporate the findings into the Bolivar Mine operations to allow for a return to a normal, steady, and profitable state of operations at the Mine. The early findings of this review will be incorporated into the 2022 Bolivar Mine budget, currently being prepared, to provide an updated projection of the Bolivar Mine’s capabilities and operations potential going forward. The Cusi Mine has also experienced operational limitations caused by high temperatures at the available mineable areas, which have been overcome by the installation of a new raise bore and upgraded pumping system. Stronger metal prices have supported revenue. After reviewing the nature of this limitations moving forward, and issued revised production guidance, we felt it was prudent to lower EBITDA and Capex guidance and increase cost guidance for Bolivar to better reflect the expected outcome for 2021.”

He continued, “Looking ahead at the remainder of 2021 and into 2022, we see normal operations at Yauricocha and Cusi. Bolivar still has a backlog of development and infill drilling that will affect its production. This issue is being addressed with additional internal and external resources. Also, we have reinitiated work on a backlog of accumulated sustaining infrastructure projects as well as on exploration from our brownfield drilling programs which are expected to improve the quality and tonnage of our mineral resources.”

He concluded, “The Company despite the challenges faced this year still has a strong balance sheet. We are focused on improving operations and we continue to push for production growth while optimizing operations at all three mines, with cost reductions being a priority. These efforts are expected to benefit all stakeholders in the Company.”

Quarterly revenues at Yauricocha were in line with the third quarter of 2020, as the increase in average realized sale prices and lower treatment and refining costs were offset by lower payable metals, except zinc and silver, as compared to Q3 2020. Operating at an average daily throughput rate of 3,705 tpd, the Yauricocha Mine processed 324,196 tonnes during Q3 2021, representing a 2% increase compared to Q3 2020, despite continuing to face various operational challenges related to COVID-19. The negative variances in the head grades from the polymetallic zones are due to regulatory limitations. The negative variances in the copper sulfide head grades were mainly due to the delay in the contribution of the Esperanza zone due to ground conditions, which have since been corrected. Metal production in the third quarter of 2021 was 25%, 23%, 14% and 13% lower for lead, zinc, copper, and silver, respectively, while gold production was 9% higher compared to the third quarter of 2020

Revenue from the Bolivar mine declined 52% as compared to Q3 2020 as the increase in copper price was not enough to offset the decrease in production attributable to lower throughput and grades. The Bolivar Mine processed 364,941 tonnes in Q3 2021, or a decrease of 11% from the 410,468 tonnes processed in Q3 2020, due to the low availability of equipment, including mining scoops during the quarter. The average daily ore throughput realized during the quarter was approximately 4,171 tpd. Head grades were impacted by a COVID-induced lag on development and infill drilling, which resulted in changes of the mining sequence, as well as dilution issues, which are being corrected.

Revenue from the Cusi mine were 5% lower due to a decline in average realized prices for gold and silver, and higher treatment and refining costs for the quarter as compared to Q3 2020. The Cusi mine processed 61,071 tonnes during Q3 2021, which is a 13% decrease as compared to Q3 2020. Silver equivalent production for Q3 2021 was 306 thousand ounces or a 7% decline from Q3 2020, resulting from lower throughput and 5% lower silver head grades partially offset by 3% higher recoveries as compared to Q3 2020. The decline in silver grades resulted from the inability to operate in some of the targeted higher-grade zones due to issues related to excessive underground water and heat. A newly driven raise bore and upgraded pumping system were installed during the quarter allowing access to these areas.

The following table displays selected unaudited financial information for the three months and nine months (“9M 2021”) ended September 30, 2021:

Q3 2021 Financial Highlights

Revenue from metals payable of $60.7 million in Q3 2021 decreased by 17% from $73.2 million in Q3 2020. Revenues in Q3 2021 from the Yauricocha Mine in Peru were $44.4 million, in line with $44.6 million in Q3 2020, as the increase in average realized sale prices and lower treatment and refining costs were offset by lower payable metals, except zinc and silver, as compared to Q3 2020. Revenue from the Bolivar mine was $11.3 million or a decline of 52% as compared to Q3 2020 as the increase in copper price was not enough to offset the decrease in production attributable to lower throughput and grades. Revenue from the Cusi mine were 5% lower due to a decline in average realized prices for gold and silver, and higher treatment and refining costs for the quarter as compared to Q3 2020.

Yauricocha’s cost of sales per copper equivalent payable pound was $1.44 (Q3 2020 – $0.92), cash cost per copper equivalent payable pound was $1.37 (Q3 2020 – $0.82), and AISC per copper equivalent payable pound of $2.83 (Q3 2020 – $1.93). Cash costs per pound were driven higher by the combined impact of 16% higher operating costs per tonne and 30% lower copper equivalent payable pounds during Q3 2021 as compared to Q3 2020. The increase in the AISC per copper equivalent payable pound for Q3 2021 compared to Q3 2020 was mainly due to the lower copper equivalent payable pounds as the increase in operating costs and sustaining capital was partially offset by the decrease in treatment and refining costs.

Bolivar’s cost of sales per copper equivalent payable pound was $2.90 (Q3 2020 – $1.02), cash cost per copper equivalent payable pound was $2.02 (Q3 2020 – $1.01), and AISC per copper equivalent payable pound was $4.34 (Q3 2020 – $1.72) for Q3 2021. The increase in the AISC per copper equivalent payable pound was due to higher operating costs per tonne, sustaining capital, general and administrative costs and treatment and refining costs as compared to Q3 2020. Additionally, copper equivalent payable pounds declined 52% during Q3 2021 as compared to the same quarter of 2020.

Cusi’s cost of sales per silver equivalent payable ounce was $22.49 (Q3 2020 – $13.53), cash cost per silver equivalent payable ounce was $17.06 (Q3 2020 – $11.56), and AISC per silver equivalent payable ounce was $28.93 (Q3 2020 – $16.47) for Q3 2021. AISC per silver equivalent payable ounce increased despite 19% higher silver equivalent ounces payable due to higher operating cost per tonne combined with the increase in treatment and refining costs during Q3 2021 as compared to Q3 2020. Sustaining capital increased as compared to Q3 2020 due to timing of development activities.

Adjusted EBITDA⁽¹⁾ of $17.4 million for Q3 2021 decreased by 53% compared to $37.2 million in Q3 2020. Adjusted EBITDA declined in Q3 2021 due to the decrease in revenues realized and increase in operating costs at all three mines.

Cash flow generated from operations before movements in working capital of $16.5 million for Q3 2021 decreased compared to $37.9 million in Q3 2020. The decrease in operating cash flow is mainly the result of lower revenues generated.

Net loss attributable to Shareholders of the Company for Q3 2021 was $(4.8) million (Q3 2020: net income of $17.5 million) or $(0.03) per share (basic and diluted) (Q3 2020: $0.11).

Cash and cash equivalents of $58.3 million and working capital of $38.1 million as at September 30, 2021 compared to $71.5 million and $70.1 million, respectively, at the end of 2020. Cash and cash equivalents decreased during 9M 2021 as the cash used in investing activities of $53.9 million and cash used in financing activities ($15.0 million used for repayment of the credit facility and interest, and $6.4 million of dividends to minority shareholders) exceeded the cash generated from operating activities of $62.2 million. The decrease in working capital resulted from lower cash and cash equivalents combined with the increase in current liabilities.

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

Project Development

Mine development at Bolivar during Q3 2021 totaled 2,550 meters, which included 1,162 meters of development to prepare stopes for mine production. Of the remainder, 588 meters were related to the integration tunnel connecting Bolivar West and the Piedras Verdes plant, and 800 meters to development of ramps. During Q3 2021, at the Cusi property, mine development totaled 1,541 meters, which was targeted towards achieving the planned throughput of 1,100 tpd.

Exploration Update

Peru:

During Q3 2021, surface exploration using diamond drills continued in the Kilkasca, El Estacion and Yauricocha Medio zones. A total of 2,341 meters were drilled during the quarter. Further, 3,306 meters of underground exploration was completed with the aim of replacing and increasing the mineral resources exploited during the year.

Mexico:

Bolivar
At Bolívar during Q3 2021, 9,768 meters were drilled, including 3,151 meters of brownfield exploration and 6,617 meters of infill drilling, with the objective of converting inferred and indicated resources to reserves. Major exploration targets include Bolivar West and Mina de Fierro zones.

Cusi
During Q3 2021, a total of 7,262 meters of infill drilling was completed in Cusi to support the definition of San Antonio, San Nicolas, Gallo, Bajo Promontorio and the high-grade NE-SW veins.

Revised Guidance

The production and financial results of the Company in the first 9 months of 2021 were impacted by COVID-19 and operational challenges. While the Company has tried to manage the COVID related challenges and achieve normal production levels, our sites have faced other operational challenges particularly during Q3 2021. At Yauricocha, regulatory restrictions have limited production to come from lower grade, higher tonnage areas to reach production targets. Bolivar is impacted by delays in mine development, infill drilling and high personnel turnover. Further, excessive underground water and heat conditions at Cusi impacted its ability to mine some of the targeted high-grade zones, hence reduced throughput and head grade.

While the Management believes that these issues are temporary in nature and will not affect the Company’s results in the medium to longer term time frame, these require an adjustment to the 2021 EBITDA and cost guidance primarily related to the Bolivar Mine. Appropriate actions are being taken to return to full operational efficiency at Bolivar, while continuing to manage the outstanding risks related to COVID-19 at all Mines.

The Company had previously lowered its production guidance for 2021 copper equivalent production to fall between 110 – 115 million pounds. However, EBITDA guidance is now being lowered primarily due to operational issues at our Mexican operations and is now expected to range between $105 – $110M this year (previously $130M – $140M). The lower range is largely because of lower EBITDA projected at Bolivar which is now expected to range between $22M – $26M for that Mine (previously $44M – $48M). Capex guidance for 2021 is also being lowered and is now expected to range between $75M – $80M (previously $100M). The lower Capex guidance is primarily due to the deferral of the magnetite iron ore project at the Bolivar Mine until 2022 as detailed engineering on the project is completed and the bulk freight market normalizes. Cost guidance at Bolivar is also being revised to include higher than previously guided costs for the 2021 year as seen in the table below:

Conference Call Webcast

Sierra Metals’ senior management will host a conference call on Tuesday, November 9, 2021, at 10:30 AM (EST) to discuss the Company’s financial and operating results for the three and nine months ended September 30, 2021.

Due to the expected number or participants on the call, and in the interest of timing, callers are asked to limit their questions to two each. Additional questions will be answered through Investor Relations after the completion of the call.

Via Webcast:

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

https://event.on24.com/wcc/r/3408832/5D1D447434FB0425E6DE1CDA1E5662AF

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.

Canada dial-in number (Toll Free): 1 833 950 0062
Canada dial-in number (Local): 1 226 828 7575
United States: 1 844 200 6205
United States (Local): 1 646 904 5544
All other locations: +1 929 526 1599

Access code: 049437

Press *1 to ask a question, *2 to withdraw your question, or *0 for operator assistance.

Quality Control

The contents of this press release have been reviewed by Américo Zuzunaga, FAusIMM CP (Mining Engineer) and Vice President of Corporate Planning, who 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.”

Continue to Follow, Like and Watch our progress:

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

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 18, 2021 for its fiscal year ended December 31, 2020 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.

For further information regarding Sierra Metals, please visit www.sierrametals.com.

Mike McAllister
VP, Investor Relations
Sierra Metals Inc.
+1 (416) 366-7777
info@sierrametals.com

Ed Guimaraes
CFO
Sierra Metals Inc.
+1 (416) 366-7777

Luis Marchese
CEO
Sierra Metals Inc.
+1 (416) 366-7777

Source: Sierra Metals Inc.

Tuesday, November 09, 2021

FenixOro Gold (FDVXF)
Drilling Activity Expected to Accelerate into 2022

FenixOro Gold Corp is a Toronto based company acquiring and exploring high grade gold projects in Colombia. The company’s flagship Abriaqui Project is the nearest exploration project to Continental Gold’s Buritica Mine.

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.

Private placement. FenixOro expects to raise gross proceeds in the amount of C$3,000,000 with the private placement of units priced at C$0.31 per unit and consisting of one common share and one whole common share purchase warrant. For a period of two years from the date of issuance, each warrant is exercisable at a price of C$0.34 for one common share. All securities issued are subject to a hold period of four months and one day. Closing is expected to be completed on or about November 15, 2021. In our view, the placement is priced on favorable terms considering the full purchase warrant.


Momentum building.  Financially, both the company’s August 2021 quarter expenses and the sizing and terms of the private placement terms were in line with previous assumptions. The company will use the net proceeds to expand and accelerate its Phase 2 drilling program at the Abriaqui gold project by adding one or two drill rigs, identifying and drilling new discovery targets, and accelerating …

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. 

 

Endeavour Silver Reports Financial Results for the Third Quarter 2021; Earnings Conference Call at 10am PST (1pm EST) Today

 

VANCOUVER, British Columbia, Nov. 09, 2021 (GLOBE NEWSWIRE) — Endeavour Silver Corp. (NYSE: EXK; TSX: EDR) released its financial results today for the three and nine months ended September 30, 2021. The Company operates two silver-gold mines in Mexico: the Guanaceví mine in Durango state and the Bolañitos mine in Guanajuato state and has recently suspended operations at the El Compas mine in Zacatecas state. All amounts reported are in United States (US) dollars.

Dan Dickson, CEO, commented, “Since our Q2 reporting, our operating costs have decreased to levels that are closer to our 2021 guidance. We continued to withhold metals sales in Q3, which has dampened our financial performance and Q3 earnings. At quarter end, we held over 1 million ounces of silver and 1,200 ounces of gold bullion. We expect to sell this inventory in the coming months, which will ensure a strong finish to the year.”

“As of the beginning of November, approximately 90% of our workforce is fully or partially vaccinated. Our operations are running at steady state and we are pleased with the overall performance. Our focus is also on our growth plan, and we have expanded our project development team and commenced preparations for construction at Terronera.”

2021 Third Quarter Highlights

• Metal Production: 1,305,399 ounces (oz) of silver and 10,541 oz of gold for 2.1 million oz silver equivalent (AgEq) at an 80:1 silver:gold ratio, totaling 6.1 million AgEq oz for the 9 months ended September 30, 2021.
• Net Revenue: $34.6 million from the sale of 699,539 oz silver and 9,925 oz gold at average realized prices of $24.56 per oz silver and $1,791 per oz gold. Management withheld metal sales during the quarter and continues to carry higher metal inventory totaling 1,030,304 oz silver and 1,211 oz gold of bullion inventory and 37,100 oz silver and 2,028 oz gold in concentrate inventory.
• Operating Costs: Cash costs⁽¹⁾ of $8.16 per oz payable silver and all-in sustaining costs (AISC)⁽¹⁾ of $17.46 per oz payable silver, net of gold credits.
• Cash Flow: $7.7 million in cash flow from operations before working capital changes. The Company continued to hold significant finished goods, increased deposits for equipment purchases, invested in exploration activities and advanced the Terronera project.
• Earnings: Realized loss of $4.5 million or $0.03 loss per share. The loss is due to the fact that the finished goods inventory was carried at a cost of $18.3 million compared to the estimated fair market value of $29.2 million at quarter end.
• Strong Balance Sheet: Cash position of $101.1 million and working capital $128.7 million. Cash decreased this quarter, as funds were spent to acquire the $10 million Bruner Gold Project and to prepare for construction at Terronera including advancing initial earthworks, site clearing, temporary camp and ordering of long lead items. Withheld sales also impacted the cash balance at quarter end.
• Acquired the Bruner Gold Project: A strategic acquisition for an advanced stage exploration property in Nevada, a favorable jurisdiction. The transaction closed on August 31, 2021 for $10.0 million in cash.
• Suspended Operations at El Compas: Management is currently evaluating its alternatives for the assets, with temporary closure estimated to cost $0.3 million in Q4, 2021.

(1)   Mine operating cash flow, cash costs and all-in sustaining costs are non-IFRS measures. Please refer to the definitions in the Company’s Management Discussion & Analysis.

Financial Overview (Consolidated Statement of Operations Appended Below)

For the three months ended September 30, 2021, the Company generated net revenue of $34.6 million a decrease of 3% compared to $35.6 million in the same period in 2020 due to withholding metal sales during the quarter, which significantly increased finished goods inventory. Earnings and financial metrics including mine operating cash flows, operating cash flows and EBITDA were also impacted by the increased holding of production inventory.

Gross sales of $35.0 million in Q3, 2021 represented a 3% decrease over the $36.1 million for the same period in 2020.

There was a 6% decrease in silver ounces sold and a 2% decrease in the realized silver price resulting in an 8% decrease to silver sales. There was a 10% increase in gold ounces with an 8% decrease in the realized gold price resulting in a 2% increase in gold sales. During the period, the Company sold 699,539 oz silver and 9,925 oz gold, for realized prices of $24.56 and $1,791 per oz, respectively, compared to sales of 741,262 oz silver and 8,997 oz gold, for realized prices of $25.08 and $1,952 per oz, respectively, in the same period of 2020. For the three months ended September 30, 2021, silver and gold spot prices averaged $24.36 and $1,790 respectively.

The Company significantly increased its finished goods silver and gold inventory to 1,067,404 oz and 3,239 oz, respectively at September 30, 2021 compared to 459,659 oz silver and 2,835 oz gold at June 30, 2021. The cost allocated to these finished goods was $18.3 million at September 30, 2021, compared to $10.1 million at June 30, 2021. At September 30, 2021, the finished goods inventory estimated fair market value was $29.2 million, compared to $17.3 million at June 30, 2021.

After cost of sales of $26.3 million (Q3, 2020 – $29.3 million), mine operating earnings amounted to a $8.3 million (Q3, 2020 –$6.3 million) from mining and milling operations in Mexico. The decrease in cost of sales was primarily related to the 6% decrease in silver ounces sold offset by higher royalty costs, labour costs and additional costs attributed to global supply constraints. Royalties increased 33% from $2.0 million to $2.7 million due to higher production and realized prices and the increased mining of the high grade Porvenir Cuatro extensions at the Guanaceví operation, which are subject to the higher royalty rates.

Excluding depreciation and depletion of $4.8 million (Q3, 2020 – $8.1 million) and stock-based compensation of $0.1 million (Q3, 2020- $0.1 million) mine operating cash flow before taxes was $13.2 million in Q3, 2021 (Q3, 2020 – $15.1 million) with Q3, 2020 also including a write-down of inventory of $0.6 million. Operating earnings were $3.0 million (Q3, 2020 –$0.4 million) after exploration and evaluation expenditures of $4.7 million (Q3, 2020 – $1.7 million), general and administrative expense recovery of $0.5 million (Q3, 2020 – expense of $3.7 million), severance costs of $0.7 million (Q3, 2020 – $Nil) and care and maintenance costs of $0.4 million (Q3, 2020 – $.6 million). The general and administrative expense recovery was primarily due to mark-to-market fluctuations for director’s cash settled deferred share units, with a $2.8 million recovery in Q3 2021 versus a $1.5 million expense in Q3, 2020.

Net loss was $4.5 million ($0.03 loss per share) compared to net earnings of $0.5 million (loss of $0.00 per share) in Q3, 2020. Compared to Q3, 2020, the Company increased its investment in exploration and evaluation activities by $3.4 million, experienced a $1.2 million loss in foreign exchange and incurred a $3.0 million unrealized loss on marketable securities.

Current income tax expense increased to $0.7 million (Q32 2020 – $0.6 million) due to increased profitability impacting special mining duty, while deferred income tax expense of $3.0 million was recognized due to the estimated use of loss carry forwards to reduce taxable income primarily at Guanacevi (Q3 2020 – $0.6 million).

Direct operating costs per tonne in Q3, 2021 increased 15%, to $115.57 compared with Q3, 2020 due to higher operating costs at all operations. The operations have seen a strengthening of the Mexican Peso, increased labour costs and, increased third party ore purchased Guanaceví compared to prior year and budgeted. Including royalties and special mining duty, direct costs per tonne increased 16% to $130.38. Royalties increased 33% to $2.7 million as increased production from the El Curso and El Porvenir concessions at Guanaceví with higher prices substantially increasing the royalty expense. The improved profitability increased special mining duty expense to $0.6 million for Q3, 2021 compared to $0.4 million for Q3, 2020.

Consolidated cash costs per ounce, net of by-product credits (a non-IFRS measure and a standard of the Silver Institute) increased to $8.16 due to the increased direct costs per tonne. All-in sustaining costs per ounce (also a non-IFRS measure) remained relatively flat at $17.46. In Q3, 2021 corporate general and administrative included a $2.8 million mark-to-market expense recovery for deferred share units whereas the mark to market expense was $1.5 million in Q3, 2020.

The Condensed Consolidated Interim Financial Statements and Management’s Discussion & Analysis can be viewed on the Company’s website at www.edrsilver.com, on SEDAR at www.sedar.com and EDGAR at www.sec.gov.

Conference Call

A conference call to discuss these results will be held today, Tuesday, November 9 at 10am PST (1pm EST). To participate in the conference call, please dial the numbers below. No passcode is necessary.

Toll-free in Canada and the US: 1-800-319-4610
Local Vancouver: 604-638-5340
Outside of Canada and the US: +-604-638-5340
        
A replay of the conference call will be available by dialing 1-800-319-6413 in Canada and the US (toll-free) or +604-638-9010 outside of Canada and the US. The required passcode is 7870 #. The replay will also be available on the Company’s website at www.edrsilver.com.

About Endeavour Silver – Endeavour Silver Corp. is a mid-tier precious metals mining company that owns three and operates two high-grade, underground, silver-gold mines in Mexico. Endeavour is currently advancing the Terronera mine project towards a development decision, pending financing and final permits and exploring its portfolio of exploration and development projects in Mexico, Chile and the United States to facilitate its goal to become a premier senior silver producer.  Our philosophy of corporate social integrity creates value for all stakeholders.

SOURCE Endeavour Silver Corp.

Contact Information:
Galina Meleger, Vice President, Investor Relations
Toll free: (877) 685-9775
Tel: (604) 640-4804
Email: gmeleger@edrsilver.com  
Website: www.edrsilver.com

Follow Endeavour Silver on Facebook, Twitter, Instagram and LinkedIn

Cautionary Note Regarding Forward-Looking Statements

This news release contains “forward-looking statements” within the meaning of the United States private securities litigation reform act of 1995 and “forward-looking information” within the meaning of applicable Canadian securities legislation. Such forward-looking statements and information herein include but are not limited to statements regarding Endeavour’s anticipated performance in 2021 including changes in mining operations and production levels, the timing and results of various activities and the impact of the COVID 19 pandemic on operations. The Company does not intend to and does not assume any obligation to update such forward-looking statements or information, other than as required by applicable law.

Forward-looking statements or information involve known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, production levels, performance or achievements of Endeavour and its operations to be materially different from those expressed or implied by such statements. Such factors include but are not limited to the ultimate impact of the COVID 19 pandemic on operations and results, changes in production and costs guidance, national and local governments, legislation, taxation, controls, regulations and political or economic developments in Canada and Mexico; financial risks due to precious metals prices, operating or technical difficulties in mineral exploration, development and mining activities; risks and hazards of mineral exploration, development and mining; the speculative nature of mineral exploration and development, risks in obtaining necessary licenses and permits, and challenges to the Company’s title to properties; as well as those factors described in the section “risk factors” contained in the Company’s most recent form 40F/Annual Information Form filed with the S.E.C. and Canadian securities regulatory authorities.

Forward-looking statements are based on assumptions management believes to be reasonable, including but not limited to: the continued operation of the Company’s mining operations, no material adverse change in the market price of commodities, mining operations will operate and the mining products will be completed in accordance with management’s expectations and achieve their stated production outcomes, and such other assumptions and factors as set out herein. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or information, there may be other factors that cause results to be materially different from those anticipated, described, estimated, assessed or intended. There can be no assurance that any forward-looking statements or information will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements or information. Accordingly, readers should not place undue reliance on forward-looking statements or information.

ENDEAVOUR SILVER CORP.
COMPARATIVE HIGHLIGHTS

The above highlights are key measures used by management, however they should not be the sole measures used in determining the performance of the Company’s operations. The related definitions and reconciliations are contained in the Management Discussion and Analysis.

 

This statement should be read in conjunction with the condensed consolidated interim financial statements for the period ended September 30, 2021 and the related notes contained therein.

 

This statement should be read in conjunction with the condensed consolidated interim financial statements for the period ended September 30, 2021 and the related notes contained therein.

 

This statement should be read in conjunction with the condensed consolidated interim financial statements for the period ended September 30, 2021 and the related notes contained therein.

Source: Endeavour Silver Corporation

 

Endeavour Silver Reports Financial Results for the Third Quarter 2021; Earnings Conference Call at 10am PST (1pm EST) Today

 

VANCOUVER, British Columbia, Nov. 09, 2021 (GLOBE NEWSWIRE) — Endeavour Silver Corp. (NYSE: EXK; TSX: EDR) released its financial results today for the three and nine months ended September 30, 2021. The Company operates two silver-gold mines in Mexico: the Guanaceví mine in Durango state and the Bolañitos mine in Guanajuato state and has recently suspended operations at the El Compas mine in Zacatecas state. All amounts reported are in United States (US) dollars.

Dan Dickson, CEO, commented, “Since our Q2 reporting, our operating costs have decreased to levels that are closer to our 2021 guidance. We continued to withhold metals sales in Q3, which has dampened our financial performance and Q3 earnings. At quarter end, we held over 1 million ounces of silver and 1,200 ounces of gold bullion. We expect to sell this inventory in the coming months, which will ensure a strong finish to the year.”

“As of the beginning of November, approximately 90% of our workforce is fully or partially vaccinated. Our operations are running at steady state and we are pleased with the overall performance. Our focus is also on our growth plan, and we have expanded our project development team and commenced preparations for construction at Terronera.”

2021 Third Quarter Highlights

• Metal Production: 1,305,399 ounces (oz) of silver and 10,541 oz of gold for 2.1 million oz silver equivalent (AgEq) at an 80:1 silver:gold ratio, totaling 6.1 million AgEq oz for the 9 months ended September 30, 2021.
• Net Revenue: $34.6 million from the sale of 699,539 oz silver and 9,925 oz gold at average realized prices of $24.56 per oz silver and $1,791 per oz gold. Management withheld metal sales during the quarter and continues to carry higher metal inventory totaling 1,030,304 oz silver and 1,211 oz gold of bullion inventory and 37,100 oz silver and 2,028 oz gold in concentrate inventory.
• Operating Costs: Cash costs⁽¹⁾ of $8.16 per oz payable silver and all-in sustaining costs (AISC)⁽¹⁾ of $17.46 per oz payable silver, net of gold credits.
• Cash Flow: $7.7 million in cash flow from operations before working capital changes. The Company continued to hold significant finished goods, increased deposits for equipment purchases, invested in exploration activities and advanced the Terronera project.
• Earnings: Realized loss of $4.5 million or $0.03 loss per share. The loss is due to the fact that the finished goods inventory was carried at a cost of $18.3 million compared to the estimated fair market value of $29.2 million at quarter end.
• Strong Balance Sheet: Cash position of $101.1 million and working capital $128.7 million. Cash decreased this quarter, as funds were spent to acquire the $10 million Bruner Gold Project and to prepare for construction at Terronera including advancing initial earthworks, site clearing, temporary camp and ordering of long lead items. Withheld sales also impacted the cash balance at quarter end.
• Acquired the Bruner Gold Project: A strategic acquisition for an advanced stage exploration property in Nevada, a favorable jurisdiction. The transaction closed on August 31, 2021 for $10.0 million in cash.
• Suspended Operations at El Compas: Management is currently evaluating its alternatives for the assets, with temporary closure estimated to cost $0.3 million in Q4, 2021.

(1)   Mine operating cash flow, cash costs and all-in sustaining costs are non-IFRS measures. Please refer to the definitions in the Company’s Management Discussion & Analysis.

Financial Overview (Consolidated Statement of Operations Appended Below)

For the three months ended September 30, 2021, the Company generated net revenue of $34.6 million a decrease of 3% compared to $35.6 million in the same period in 2020 due to withholding metal sales during the quarter, which significantly increased finished goods inventory. Earnings and financial metrics including mine operating cash flows, operating cash flows and EBITDA were also impacted by the increased holding of production inventory.

Gross sales of $35.0 million in Q3, 2021 represented a 3% decrease over the $36.1 million for the same period in 2020.

There was a 6% decrease in silver ounces sold and a 2% decrease in the realized silver price resulting in an 8% decrease to silver sales. There was a 10% increase in gold ounces with an 8% decrease in the realized gold price resulting in a 2% increase in gold sales. During the period, the Company sold 699,539 oz silver and 9,925 oz gold, for realized prices of $24.56 and $1,791 per oz, respectively, compared to sales of 741,262 oz silver and 8,997 oz gold, for realized prices of $25.08 and $1,952 per oz, respectively, in the same period of 2020. For the three months ended September 30, 2021, silver and gold spot prices averaged $24.36 and $1,790 respectively.

The Company significantly increased its finished goods silver and gold inventory to 1,067,404 oz and 3,239 oz, respectively at September 30, 2021 compared to 459,659 oz silver and 2,835 oz gold at June 30, 2021. The cost allocated to these finished goods was $18.3 million at September 30, 2021, compared to $10.1 million at June 30, 2021. At September 30, 2021, the finished goods inventory estimated fair market value was $29.2 million, compared to $17.3 million at June 30, 2021.

After cost of sales of $26.3 million (Q3, 2020 – $29.3 million), mine operating earnings amounted to a $8.3 million (Q3, 2020 –$6.3 million) from mining and milling operations in Mexico. The decrease in cost of sales was primarily related to the 6% decrease in silver ounces sold offset by higher royalty costs, labour costs and additional costs attributed to global supply constraints. Royalties increased 33% from $2.0 million to $2.7 million due to higher production and realized prices and the increased mining of the high grade Porvenir Cuatro extensions at the Guanaceví operation, which are subject to the higher royalty rates.

Excluding depreciation and depletion of $4.8 million (Q3, 2020 – $8.1 million) and stock-based compensation of $0.1 million (Q3, 2020- $0.1 million) mine operating cash flow before taxes was $13.2 million in Q3, 2021 (Q3, 2020 – $15.1 million) with Q3, 2020 also including a write-down of inventory of $0.6 million. Operating earnings were $3.0 million (Q3, 2020 –$0.4 million) after exploration and evaluation expenditures of $4.7 million (Q3, 2020 – $1.7 million), general and administrative expense recovery of $0.5 million (Q3, 2020 – expense of $3.7 million), severance costs of $0.7 million (Q3, 2020 – $Nil) and care and maintenance costs of $0.4 million (Q3, 2020 – $.6 million). The general and administrative expense recovery was primarily due to mark-to-market fluctuations for director’s cash settled deferred share units, with a $2.8 million recovery in Q3 2021 versus a $1.5 million expense in Q3, 2020.

Net loss was $4.5 million ($0.03 loss per share) compared to net earnings of $0.5 million (loss of $0.00 per share) in Q3, 2020. Compared to Q3, 2020, the Company increased its investment in exploration and evaluation activities by $3.4 million, experienced a $1.2 million loss in foreign exchange and incurred a $3.0 million unrealized loss on marketable securities.

Current income tax expense increased to $0.7 million (Q32 2020 – $0.6 million) due to increased profitability impacting special mining duty, while deferred income tax expense of $3.0 million was recognized due to the estimated use of loss carry forwards to reduce taxable income primarily at Guanacevi (Q3 2020 – $0.6 million).

Direct operating costs per tonne in Q3, 2021 increased 15%, to $115.57 compared with Q3, 2020 due to higher operating costs at all operations. The operations have seen a strengthening of the Mexican Peso, increased labour costs and, increased third party ore purchased Guanaceví compared to prior year and budgeted. Including royalties and special mining duty, direct costs per tonne increased 16% to $130.38. Royalties increased 33% to $2.7 million as increased production from the El Curso and El Porvenir concessions at Guanaceví with higher prices substantially increasing the royalty expense. The improved profitability increased special mining duty expense to $0.6 million for Q3, 2021 compared to $0.4 million for Q3, 2020.

Consolidated cash costs per ounce, net of by-product credits (a non-IFRS measure and a standard of the Silver Institute) increased to $8.16 due to the increased direct costs per tonne. All-in sustaining costs per ounce (also a non-IFRS measure) remained relatively flat at $17.46. In Q3, 2021 corporate general and administrative included a $2.8 million mark-to-market expense recovery for deferred share units whereas the mark to market expense was $1.5 million in Q3, 2020.

The Condensed Consolidated Interim Financial Statements and Management’s Discussion & Analysis can be viewed on the Company’s website at www.edrsilver.com, on SEDAR at www.sedar.com and EDGAR at www.sec.gov.

Conference Call

A conference call to discuss these results will be held today, Tuesday, November 9 at 10am PST (1pm EST). To participate in the conference call, please dial the numbers below. No passcode is necessary.

Toll-free in Canada and the US: 1-800-319-4610
Local Vancouver: 604-638-5340
Outside of Canada and the US: +-604-638-5340
        
A replay of the conference call will be available by dialing 1-800-319-6413 in Canada and the US (toll-free) or +604-638-9010 outside of Canada and the US. The required passcode is 7870 #. The replay will also be available on the Company’s website at www.edrsilver.com.

About Endeavour Silver – Endeavour Silver Corp. is a mid-tier precious metals mining company that owns three and operates two high-grade, underground, silver-gold mines in Mexico. Endeavour is currently advancing the Terronera mine project towards a development decision, pending financing and final permits and exploring its portfolio of exploration and development projects in Mexico, Chile and the United States to facilitate its goal to become a premier senior silver producer.  Our philosophy of corporate social integrity creates value for all stakeholders.

SOURCE Endeavour Silver Corp.

Contact Information:
Galina Meleger, Vice President, Investor Relations
Toll free: (877) 685-9775
Tel: (604) 640-4804
Email: gmeleger@edrsilver.com  
Website: www.edrsilver.com

Follow Endeavour Silver on Facebook, Twitter, Instagram and LinkedIn

Cautionary Note Regarding Forward-Looking Statements

This news release contains “forward-looking statements” within the meaning of the United States private securities litigation reform act of 1995 and “forward-looking information” within the meaning of applicable Canadian securities legislation. Such forward-looking statements and information herein include but are not limited to statements regarding Endeavour’s anticipated performance in 2021 including changes in mining operations and production levels, the timing and results of various activities and the impact of the COVID 19 pandemic on operations. The Company does not intend to and does not assume any obligation to update such forward-looking statements or information, other than as required by applicable law.

Forward-looking statements or information involve known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, production levels, performance or achievements of Endeavour and its operations to be materially different from those expressed or implied by such statements. Such factors include but are not limited to the ultimate impact of the COVID 19 pandemic on operations and results, changes in production and costs guidance, national and local governments, legislation, taxation, controls, regulations and political or economic developments in Canada and Mexico; financial risks due to precious metals prices, operating or technical difficulties in mineral exploration, development and mining activities; risks and hazards of mineral exploration, development and mining; the speculative nature of mineral exploration and development, risks in obtaining necessary licenses and permits, and challenges to the Company’s title to properties; as well as those factors described in the section “risk factors” contained in the Company’s most recent form 40F/Annual Information Form filed with the S.E.C. and Canadian securities regulatory authorities.

Forward-looking statements are based on assumptions management believes to be reasonable, including but not limited to: the continued operation of the Company’s mining operations, no material adverse change in the market price of commodities, mining operations will operate and the mining products will be completed in accordance with management’s expectations and achieve their stated production outcomes, and such other assumptions and factors as set out herein. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or information, there may be other factors that cause results to be materially different from those anticipated, described, estimated, assessed or intended. There can be no assurance that any forward-looking statements or information will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements or information. Accordingly, readers should not place undue reliance on forward-looking statements or information.

ENDEAVOUR SILVER CORP.
COMPARATIVE HIGHLIGHTS

The above highlights are key measures used by management, however they should not be the sole measures used in determining the performance of the Company’s operations. The related definitions and reconciliations are contained in the Management Discussion and Analysis.

 

This statement should be read in conjunction with the condensed consolidated interim financial statements for the period ended September 30, 2021 and the related notes contained therein.

 

This statement should be read in conjunction with the condensed consolidated interim financial statements for the period ended September 30, 2021 and the related notes contained therein.

 

This statement should be read in conjunction with the condensed consolidated interim financial statements for the period ended September 30, 2021 and the related notes contained therein.

Source: Endeavour Silver Corporation

Sierra Metals Reports Q3 2021 Consolidated Financial Results And Provides Revised Ebitda Guidance For 2021

 

CONFERENCE CALL NOVEMBER 9, 2021, AT 10:30 AM (EST)

___________________________________________________________________

(All $ figures reported in USD)

• Revenue from metals payable of $60.7 million in Q3 2021 decreased by 17% from $73.2 million in Q3 2020, largely due to the lower grades at the Yauricocha and Bolivar mines combined with operational challenges at the Cusi mine
• Adjusted EBITDA⁽¹⁾ of $17.4 million for Q3 2021 decreased by 53% compared to $37.2 million in Q3 2020 due to the decrease in revenues realized
• Revised EBITDA Guidance for 2021 ($105M-$110M) primarily due to temporary operating restrictions at Bolivar Mine resulting from residual effect of COVID-19. Yauricocha and Cusi Mines are operating at near nameplate capacity levels.
• Operating cash flows before movements in working capital of $16.5 million in Q3 2021 decreased from $37.9 million in Q3 2020
• $58.3 million of cash and cash equivalents as at September 30, 2021
• $38.1 million of working capital as at September 30, 2021
• A shareholder conference call to be held Tuesday, November 9, 2021, at 10:30 AM (EST)

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

TORONTO–(BUSINESS WIRE)– Sierra Metals Inc. (TSX: SMT) (BVL: SMT) (NYSE AMERICAN: SMTS) (“Sierra Metals” or “the Company”) today reported revenue of $60.7 million and adjusted EBITDA of $17.4 million on the throughput of 750,208 tonnes and metal production of 21.9 million copper equivalent pounds, for the quarter ended September 30, 2021.

Consolidated production of copper equivalent pounds decreased 38% to 21.9 million pounds. The Company earned revenues of $60.7 million, Adjusted EBITDA of $17.4 million, and operating cash flows before movements in working capital of $16.5 million. Lower revenues, despite higher base metal prices compared to Q3 2020, are primarily attributable to the decrease in throughput and head grades at our Mexican operations primarily at the Bolivar Mine.

Luis Marchese, CEO of Sierra Metals, commented, “The third quarter was exceptionally difficult for the Company as we encountered sequencing issues at our Mexican operations. The Bolivar Mine has had limitations on mine development, infill drilling, equipment availability over the last year which have heavily impacted throughput, head grades and recoveries.While we believe these issues to be temporary in nature, we are currently conducting a comprehensive review of all operational processes at the Bolivar Mine, from Geology to Mine to Mill. We aim to incorporate the findings into the Bolivar Mine operations to allow for a return to a normal, steady, and profitable state of operations at the Mine. The early findings of this review will be incorporated into the 2022 Bolivar Mine budget, currently being prepared, to provide an updated projection of the Bolivar Mine’s capabilities and operations potential going forward. The Cusi Mine has also experienced operational limitations caused by high temperatures at the available mineable areas, which have been overcome by the installation of a new raise bore and upgraded pumping system. Stronger metal prices have supported revenue. After reviewing the nature of this limitations moving forward, and issued revised production guidance, we felt it was prudent to lower EBITDA and Capex guidance and increase cost guidance for Bolivar to better reflect the expected outcome for 2021.”

He continued, “Looking ahead at the remainder of 2021 and into 2022, we see normal operations at Yauricocha and Cusi. Bolivar still has a backlog of development and infill drilling that will affect its production. This issue is being addressed with additional internal and external resources. Also, we have reinitiated work on a backlog of accumulated sustaining infrastructure projects as well as on exploration from our brownfield drilling programs which are expected to improve the quality and tonnage of our mineral resources.”

He concluded, “The Company despite the challenges faced this year still has a strong balance sheet. We are focused on improving operations and we continue to push for production growth while optimizing operations at all three mines, with cost reductions being a priority. These efforts are expected to benefit all stakeholders in the Company.”

Quarterly revenues at Yauricocha were in line with the third quarter of 2020, as the increase in average realized sale prices and lower treatment and refining costs were offset by lower payable metals, except zinc and silver, as compared to Q3 2020. Operating at an average daily throughput rate of 3,705 tpd, the Yauricocha Mine processed 324,196 tonnes during Q3 2021, representing a 2% increase compared to Q3 2020, despite continuing to face various operational challenges related to COVID-19. The negative variances in the head grades from the polymetallic zones are due to regulatory limitations. The negative variances in the copper sulfide head grades were mainly due to the delay in the contribution of the Esperanza zone due to ground conditions, which have since been corrected. Metal production in the third quarter of 2021 was 25%, 23%, 14% and 13% lower for lead, zinc, copper, and silver, respectively, while gold production was 9% higher compared to the third quarter of 2020

Revenue from the Bolivar mine declined 52% as compared to Q3 2020 as the increase in copper price was not enough to offset the decrease in production attributable to lower throughput and grades. The Bolivar Mine processed 364,941 tonnes in Q3 2021, or a decrease of 11% from the 410,468 tonnes processed in Q3 2020, due to the low availability of equipment, including mining scoops during the quarter. The average daily ore throughput realized during the quarter was approximately 4,171 tpd. Head grades were impacted by a COVID-induced lag on development and infill drilling, which resulted in changes of the mining sequence, as well as dilution issues, which are being corrected.

Revenue from the Cusi mine were 5% lower due to a decline in average realized prices for gold and silver, and higher treatment and refining costs for the quarter as compared to Q3 2020. The Cusi mine processed 61,071 tonnes during Q3 2021, which is a 13% decrease as compared to Q3 2020. Silver equivalent production for Q3 2021 was 306 thousand ounces or a 7% decline from Q3 2020, resulting from lower throughput and 5% lower silver head grades partially offset by 3% higher recoveries as compared to Q3 2020. The decline in silver grades resulted from the inability to operate in some of the targeted higher-grade zones due to issues related to excessive underground water and heat. A newly driven raise bore and upgraded pumping system were installed during the quarter allowing access to these areas.

The following table displays selected unaudited financial information for the three months and nine months (“9M 2021”) ended September 30, 2021:

Q3 2021 Financial Highlights

Revenue from metals payable of $60.7 million in Q3 2021 decreased by 17% from $73.2 million in Q3 2020. Revenues in Q3 2021 from the Yauricocha Mine in Peru were $44.4 million, in line with $44.6 million in Q3 2020, as the increase in average realized sale prices and lower treatment and refining costs were offset by lower payable metals, except zinc and silver, as compared to Q3 2020. Revenue from the Bolivar mine was $11.3 million or a decline of 52% as compared to Q3 2020 as the increase in copper price was not enough to offset the decrease in production attributable to lower throughput and grades. Revenue from the Cusi mine were 5% lower due to a decline in average realized prices for gold and silver, and higher treatment and refining costs for the quarter as compared to Q3 2020.

Yauricocha’s cost of sales per copper equivalent payable pound was $1.44 (Q3 2020 – $0.92), cash cost per copper equivalent payable pound was $1.37 (Q3 2020 – $0.82), and AISC per copper equivalent payable pound of $2.83 (Q3 2020 – $1.93). Cash costs per pound were driven higher by the combined impact of 16% higher operating costs per tonne and 30% lower copper equivalent payable pounds during Q3 2021 as compared to Q3 2020. The increase in the AISC per copper equivalent payable pound for Q3 2021 compared to Q3 2020 was mainly due to the lower copper equivalent payable pounds as the increase in operating costs and sustaining capital was partially offset by the decrease in treatment and refining costs.

Bolivar’s cost of sales per copper equivalent payable pound was $2.90 (Q3 2020 – $1.02), cash cost per copper equivalent payable pound was $2.02 (Q3 2020 – $1.01), and AISC per copper equivalent payable pound was $4.34 (Q3 2020 – $1.72) for Q3 2021. The increase in the AISC per copper equivalent payable pound was due to higher operating costs per tonne, sustaining capital, general and administrative costs and treatment and refining costs as compared to Q3 2020. Additionally, copper equivalent payable pounds declined 52% during Q3 2021 as compared to the same quarter of 2020.

Cusi’s cost of sales per silver equivalent payable ounce was $22.49 (Q3 2020 – $13.53), cash cost per silver equivalent payable ounce was $17.06 (Q3 2020 – $11.56), and AISC per silver equivalent payable ounce was $28.93 (Q3 2020 – $16.47) for Q3 2021. AISC per silver equivalent payable ounce increased despite 19% higher silver equivalent ounces payable due to higher operating cost per tonne combined with the increase in treatment and refining costs during Q3 2021 as compared to Q3 2020. Sustaining capital increased as compared to Q3 2020 due to timing of development activities.

Adjusted EBITDA⁽¹⁾ of $17.4 million for Q3 2021 decreased by 53% compared to $37.2 million in Q3 2020. Adjusted EBITDA declined in Q3 2021 due to the decrease in revenues realized and increase in operating costs at all three mines.

Cash flow generated from operations before movements in working capital of $16.5 million for Q3 2021 decreased compared to $37.9 million in Q3 2020. The decrease in operating cash flow is mainly the result of lower revenues generated.

Net loss attributable to Shareholders of the Company for Q3 2021 was $(4.8) million (Q3 2020: net income of $17.5 million) or $(0.03) per share (basic and diluted) (Q3 2020: $0.11).

Cash and cash equivalents of $58.3 million and working capital of $38.1 million as at September 30, 2021 compared to $71.5 million and $70.1 million, respectively, at the end of 2020. Cash and cash equivalents decreased during 9M 2021 as the cash used in investing activities of $53.9 million and cash used in financing activities ($15.0 million used for repayment of the credit facility and interest, and $6.4 million of dividends to minority shareholders) exceeded the cash generated from operating activities of $62.2 million. The decrease in working capital resulted from lower cash and cash equivalents combined with the increase in current liabilities.

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

Project Development

Mine development at Bolivar during Q3 2021 totaled 2,550 meters, which included 1,162 meters of development to prepare stopes for mine production. Of the remainder, 588 meters were related to the integration tunnel connecting Bolivar West and the Piedras Verdes plant, and 800 meters to development of ramps. During Q3 2021, at the Cusi property, mine development totaled 1,541 meters, which was targeted towards achieving the planned throughput of 1,100 tpd.

Exploration Update

Peru:

During Q3 2021, surface exploration using diamond drills continued in the Kilkasca, El Estacion and Yauricocha Medio zones. A total of 2,341 meters were drilled during the quarter. Further, 3,306 meters of underground exploration was completed with the aim of replacing and increasing the mineral resources exploited during the year.

Mexico:

Bolivar
At Bolívar during Q3 2021, 9,768 meters were drilled, including 3,151 meters of brownfield exploration and 6,617 meters of infill drilling, with the objective of converting inferred and indicated resources to reserves. Major exploration targets include Bolivar West and Mina de Fierro zones.

Cusi
During Q3 2021, a total of 7,262 meters of infill drilling was completed in Cusi to support the definition of San Antonio, San Nicolas, Gallo, Bajo Promontorio and the high-grade NE-SW veins.

Revised Guidance

The production and financial results of the Company in the first 9 months of 2021 were impacted by COVID-19 and operational challenges. While the Company has tried to manage the COVID related challenges and achieve normal production levels, our sites have faced other operational challenges particularly during Q3 2021. At Yauricocha, regulatory restrictions have limited production to come from lower grade, higher tonnage areas to reach production targets. Bolivar is impacted by delays in mine development, infill drilling and high personnel turnover. Further, excessive underground water and heat conditions at Cusi impacted its ability to mine some of the targeted high-grade zones, hence reduced throughput and head grade.

While the Management believes that these issues are temporary in nature and will not affect the Company’s results in the medium to longer term time frame, these require an adjustment to the 2021 EBITDA and cost guidance primarily related to the Bolivar Mine. Appropriate actions are being taken to return to full operational efficiency at Bolivar, while continuing to manage the outstanding risks related to COVID-19 at all Mines.

The Company had previously lowered its production guidance for 2021 copper equivalent production to fall between 110 – 115 million pounds. However, EBITDA guidance is now being lowered primarily due to operational issues at our Mexican operations and is now expected to range between $105 – $110M this year (previously $130M – $140M). The lower range is largely because of lower EBITDA projected at Bolivar which is now expected to range between $22M – $26M for that Mine (previously $44M – $48M). Capex guidance for 2021 is also being lowered and is now expected to range between $75M – $80M (previously $100M). The lower Capex guidance is primarily due to the deferral of the magnetite iron ore project at the Bolivar Mine until 2022 as detailed engineering on the project is completed and the bulk freight market normalizes. Cost guidance at Bolivar is also being revised to include higher than previously guided costs for the 2021 year as seen in the table below:

Conference Call Webcast

Sierra Metals’ senior management will host a conference call on Tuesday, November 9, 2021, at 10:30 AM (EST) to discuss the Company’s financial and operating results for the three and nine months ended September 30, 2021.

Due to the expected number or participants on the call, and in the interest of timing, callers are asked to limit their questions to two each. Additional questions will be answered through Investor Relations after the completion of the call.

Via Webcast:

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

https://event.on24.com/wcc/r/3408832/5D1D447434FB0425E6DE1CDA1E5662AF

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.

Canada dial-in number (Toll Free): 1 833 950 0062
Canada dial-in number (Local): 1 226 828 7575
United States: 1 844 200 6205
United States (Local): 1 646 904 5544
All other locations: +1 929 526 1599

Access code: 049437

Press *1 to ask a question, *2 to withdraw your question, or *0 for operator assistance.

Quality Control

The contents of this press release have been reviewed by Américo Zuzunaga, FAusIMM CP (Mining Engineer) and Vice President of Corporate Planning, who 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.”

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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 18, 2021 for its fiscal year ended December 31, 2020 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.

For further information regarding Sierra Metals, please visit www.sierrametals.com.

Mike McAllister
VP, Investor Relations
Sierra Metals Inc.
+1 (416) 366-7777
info@sierrametals.com

Ed Guimaraes
CFO
Sierra Metals Inc.
+1 (416) 366-7777

Luis Marchese
CEO
Sierra Metals Inc.
+1 (416) 366-7777

Source: Sierra Metals Inc.

Sierra Metals Reports Q3-2021 Financial Results for Its Sociedad Minera Corona Subsidiary in Peru

 

 

Sierra Metals’ Consolidated Financials to Be Reported on November 8, 2021

TORONTO–(BUSINESS WIRE)–Sierra Metals Inc. (TSX: SMT) (BVL: SMT) (NYSE AMERICAN: SMTS) (“Sierra Metals” or “the Company”) announces the filing of Sociedad Minera Corona S.A.’s (“Corona”) unaudited Financial Statements and the Management Discussion and Analysis (“MD&A”) for the third quarter of 2021 (“Q3 2021”).