07:41:00 EDT Thu 28 Mar 2024
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or Name
USA
CA



Sierra Metals Inc
Symbol SMT
Shares Issued 163,427,335
Close 2018-12-04 C$ 3.05
Market Cap C$ 498,453,372
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Sierra Metals optimistic despite stumble at Yauricocha

2018-12-05 07:13 ET - News Release

Mr. Igor Gonzales reports

SIERRA METALS REPORTS DELAY TO YAURICOCHA MINE ENVIRONMENTAL IMPACT ASSESSMENT FOR THE EXPANSION OF THE TAILINGS DEPOSITION FACILTY

Sierra Metals Inc.'s subsidiary in Peru (Sociedad Minera Corona SA) has received a response from SENACE (National Environmental Certification Service) which is the evaluator for natural resources and production projects in Peru with respect to its recent environmental impact assessment (EIA) study for the expansion of the tailings deposition facility at the Yauricocha mine.

Although the authorities did not approve the EIA study at this time, the company has 15 business days to provide a re-evaluation to the authorities to initiate a review process. As it stands today, this will result in a delay in the company receiving an approved EIA study, which would enable the company to proceed with a construction permit for the next three phases of the tailings damn extension and for the final submission of the ITS document, which, upon approval, would allow the company to expand mine output 20 per cent to 3,600 tonnes per day.

Sierra Metals firmly believes that all of the required documentation was submitted, demonstrating complete fulfilment of all the requirements for the EIA study approval. The company will now proceed to present a new proof of response to these requirements.

Management is optimistic that this decision will be reviewed in a different and positive context as the company's legal team pursues the review process. This delay, in management's view, may not significantly impact the future production plans at the Yauricocha mine operations.

The impact of this delay on a consolidated company level, considering all of its production expansion plans at its Mexican and Peruvian operations, could represent up to a 7-per-cent temporary shortfall in Sierra Metals' total daily ore production compared with projections that would not include an EIA permit delay.

Igor Gonzales, president and chief executive officer of Sierra Metals, commented: "While we are disappointed, we do not believe this decision was made with all the facts. This decision was preliminary and not based upon or including all the information submitted. Key members of the management team are going to meet with authorities to provide and demonstrate full compliance with the requirements. Management believes that once all the correct information is reviewed, we will receive a positive response from authorities.

"The expansion plans in Mexico to 3,600 tpd at Bolivar and to 1,200 tpd at Cusi are not affected by this decision and they are still on track, and on budget to be completed in Q1 2019. The company is committed to strict compliance with regulatory permits in Peru and Mexico in the development and organic growth of all its operating mines. We are confident that the current permit delay in Peru will be resolved as we are in compliance with the permit requirements."

About Sierra Metals Inc.

Sierra Metals is Canadian-based growing polymetallic mining company with production from its Yauricocha mine in Peru, and its 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.

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