Mr. Igor Gonzales reports
SIERRA METALS REPORTS FIRST QUARTER 2019 PRODUCTION RESULTS
Sierra Metals Inc. has provided first quarter
2019 production results featuring the highest level of quarterly
throughput to date at its Cusi mine in Mexico.
Results are from Sierra Metals' three underground mines in Latin
America: the Yauricocha polymetallic mine in Peru, and the Bolivar
copper and Cusi silver mines in Mexico.
First quarter 2019 production highlights
-
Silver production of 700,000 ounces; a 16-per-cent increase from Q1 2018;
-
Lead production of 7.0 million pounds; a 10-per-cent increase from Q1 2018;
-
Gold production of 1,986 ounces; a 2-per-cent increase from Q1 2018;
-
Copper production of 7.7 million pounds; a 4-per-cent decrease from Q1 2018;
-
Zinc production of 16.4 million pounds; a 10-per-cent decrease from Q1 2018;
-
Zinc equivalent production of 50.6 million pounds; a 7-per-cent increase
from Q1 2018;
-
Record quarterly throughput at the Cusi mine in Mexico;
-
Production lost during the illegal strike action at Yauricocha
should not materially affect the company's annual production guidance.
The company achieved record quarterly throughput from the Cusi mine, and
the third highest quarterly throughput from the Bolivar mine, continuing
the successful production increases realized in Mexico during 2018.
Consolidated production of silver increased 16 per cent to 700,000 ounces,
copper declined 4 per cent to 7.7 million pounds, lead increased 10 per cent to 7.0
million pounds, zinc declined 10 per cent to 16.4 million pounds and gold
increased 2 per cent to 1,986 ounces compared with Q1 2018.
The Yauricocha mine experienced a 14-per-cent reduction in throughput during Q1
2019 compared with Q1 2018 due to the illegal strike action initiated by
members of the Union of the Mine and Metallurgical Workers of Minera
Corona on March 19, 2019. This illegal strike was resolved on April 12,
2019, however, resulted in a total of 12 days of lost production during
March, 2019. Regular operations at the mine and mill resumed on April 14,
2019, and management believes that any production lost during this
strike action should not materially affect the company's annual
production guidance. Despite the reduction in throughput, higher head
grades and recoveries for all metals, except gold head grades, realized
at Yauricocha resulted in a 3-per-cent increase in zinc equivalent pounds
produced during Q1 2019 compared with Q1 2018.
At Bolivar, a 14-per-cent decline in copper head grades, and slightly lower
silver and gold recoveries, offset the increase in silver and gold head
grades, and copper recoveries, and resulted in a 7-per-cent decrease in copper
equivalent pounds produced during Q1 2019 compared with Q1 2018. At Cusi,
throughput reached approximately 815 tonnes per day (tpd) during Q1
2019, and the company continues to work toward reaching the 1,200 tpd
mark during Q2 2019. The 165-per-cent increase in throughput realized during Q1
2019 resulted in a 64-per-cent increase in silver equivalent ounces produced,
despite lower head grades and recoveries for all metals as the company continues
to develop deeper into the Santa Rosa de Lima zone which has higher head
grades.
Igor Gonzales, president and chief executive officer of Sierra Metals, commented: "The
company has started 2019 with solid production results despite an
illegal strike action which occurred at our Yauricocha mine. This can be
attributed to in part to stronger performance from our Mexican mines
including record production at the Cusi mine where we are reaping the
benefits of operational improvement programs and the initial stage of
mill expansion at both the Cusi and Bolivar mines.
The company
has also initiated scoping studies which are expected by midyear 2019
to analyze future operational production increases and continue
development at all three mines. The company is also working to update the National Instrument 43-101 technical reports with an updated report expected at the end of
Q2 2019 for the Yauricocha mine, and at the end of Q4 2019 for the
Bolivar and Cusi mines.
Yauricocha, as noted above, did experience an illegal strike action
which impacted production in Q1 2019, however, on an annualized basis
any production lost during should not materially affect the company's
annual production guidance. Additionally, the company is working with
experts from SRK on new sublevel cave and block cave technique plans
which are expected to optimize operations and continue to improve the
whole asset moving forward.
CONSOLIDATED PRODUCTION RESULTS
Three months ended 2019 guidance
Consolidated production Q1 2019 Q1 2018 Low High
Tonnes processed (mt) 568,401 557,710
Daily throughput 6,496 6,374
Silver ounces (000s) 691 594 3,730 4,176
Copper pounds (000s) 7,732 8,090 45,000 50,400
Lead pounds (000s) 6,954 6,312 25,500 28,600
Zinc pounds (000s) 16,421 18,214 72,400 81,100
Gold ounces 1,986 1,952 8,100 9,000
Silver equivalent ounces (000s) (1) 3,988 4,394 19,478 21,812
Copper equivalent pounds (000s) (1) 21,767 23,445 107,035 119,858
Zinc equivalent pounds (000s) (1) 50,562 47,209 261,545 292,880
(1) Silver equivalent ounces and copper and zinc equivalent pounds for Q1
2019 were calculated using the following realized prices: $15.57/ounce
Ag, $2.85/pound Cu, 94 cents/lb Pb, $1.23/lb Zn, $1,305/oz Au. Silver
equivalent ounces and copper and zinc equivalent pounds for Q1 2018
were calculated using the following realized prices: $16.75/oz Ag,
$3.14/lb Cu, $1.15/lb Pb, $1.56/lb Zn and $1,334/oz Au.
Yauricocha mine, Peru
The Yauricocha mine processed 233,814 tonnes during Q1 2019,
representing a 14-per-cent decrease from Q1 2018. The decline in throughput was
due to the illegal strike action initiated by members of the Union of
the Mine and Metallurgical Workers of Minera Corona on March 19, 2019.
This illegal strike was resolved on April 12, 2019, however, resulted in
a total of 12 days of lost production during March, 2019. Regular
operations at the mine and mill will resume on April 14, 2019, and
management believes that any production lost during this strike action
should not materially affect the company's annual production guidance.
Despite the decrease in throughput realized at Yauricocha during Q1
2019, higher head grades and recoveries of all metals, except gold head
grades, were realized which resulted in a 3-per-cent increase in zinc equivalent
metal production compared with Q1 2018. The higher lead head grades and
lead production realized during Q1 2019 was the result of increased
production from the cuerpos chicos that contained higher lead grades
during the quarter. Higher copper head grades resulted from the
inclusion of certain copper-enriched zones at Esperanza, polymetallic
ore from the Central mine zone, and a small inclusion of polymetallic
ore from the cuerpos chicos.
The significant increases in silver, copper and lead head grades and
recoveries resulted in a 1-per-cent increase in silver ounces produced, a 4-per-cent
increase in copper pounds produced and a 9-per-cent increase in lead pounds
produced in Q1 2019, despite the lower throughput.
A summary of production from the Yauricocha mine for Q1 2019 is provided
in the table.
Three months ended
Yauricocha production Q1 2019 Q1 2018
Tonnes processed (mt) 233,814 271,389
Daily throughput 2,672 3,102
Silver grade (g/t) 63.51 59.52
Copper grade 1.00% 0.89%
Lead grade 1.45% 1.24%
Zinc grade 3.56% 3.45%
Gold grade (g/t) 0.55 0.61
Silver recovery 77.23% 70.50%
Copper recovery 74.80% 70.22%
Lead recovery 88.19% 81.51%
Zinc recovery 89.51% 87.94%
Gold recovery 18.09% 15.77%
Silver ounces (000s) 369 366
Copper pounds (000s) 3,863 3,727
Lead pounds (000s) 6,605 6,069
Zinc pounds (000s) 16,421 18,144
Gold ounces 753 835
Zinc equivalent pounds (000s) (1) 35,911 34,767
(1) Silver equivalent ounces and copper and zinc
equivalent pounds for Q1 2019 were calculated
using the following realized prices: $15.57/oz
Ag, $2.85/lb Cu, 94 cents/lb Pb, $1.23/lb Zn,
$1,305/oz Au. Silver equivalent ounces and copper
and zinc equivalent pounds for Q1 2018 were
calculated using the following realized prices:
$16.75/oz Ag, $3.14/lb Cu, $1.15/lb Pb, $1.56/lb
Zn and $1,334/oz Au.
Bolivar mine, Mexico
The Bolivar mine processed 263,238 tonnes in Q1 2019, representing a 1-per-cent
increase over Q1 2018. Average daily throughput realized during the
quarter was approximately 3,000 tpd, and the company expects to reach
3,600 tpd during Q2 2019. The 14-per-cent decline in copper head grades, and
slightly lower silver and gold recoveries, offset the increase in silver
and gold head grades, and copper recoveries, and resulted in a 7-per-cent
decrease in copper equivalent pounds produced during Q1 2019 compared with Q1 2018. In Q1 2019, copper production decreased by 11 per cent to 3,869,000
pounds, silver production increased 8 per cent to 130,000 ounces and gold
production increased 5 per cent to 1,100 ounces compared with Q1 2018.
Development and infrastructure improvements continue in the effort to
push throughput at Bolivar to 4,000 tpd during the second half of 2019.
During the rest of 2019, target mining areas will be the Gallo Inferior,
Mina de Fierro, Chimneys, Breccias and Gallo Superior orebodies. Infill
drilling will continue on the Bolivar West and Gallo Inferior areas,
while mine development will focus on the Gallo Inferior and Breccia
zones. This work will allow the company to increase the number of
minable stopes available in order to increase throughput at the plant.
A summary of production for the Bolivar mine for Q1 2019 is provided
in the attached table.
BOLIVAR PRODUCTION
Three months ended
Q1 2019 Q1 2018
Tonnes processed (mt) 263,238 259,375
Daily throughput 3,008 2,964
Copper grade 0.81% 0.95%
Silver grade (g/t) 19.47 17.85
Gold grade (g/t) 0.19 0.18
Copper recovery 82.24% 80.65%
Silver recovery 79.14% 80.91%
Gold recovery 67.87% 70.94%
Copper pounds (000s) 3,869 4,363
Silver ounces (000s) 130 120
Gold ounces 1,100 1,048
Copper equivalent pounds (000s) (1) 5,083 5,450
(1) Silver equivalent ounces and copper and zinc
equivalent pounds for Q1 2019 were calculated
using the following realized prices: $15.57/oz Ag,
$2.85/lb Cu, $0.94/lb Pb, $1.23/lb Zn, $1,305/oz Au.
Silver equivalent ounces and copper and zinc
equivalent pounds for Q1 2018 were calculated using
the following realized prices: $16.75/oz Ag,
$3.14/lb Cu, $1.15/lb Pb, $1.56/lb Zn and $1,334/oz
Au.
Cusi mine, Mexico
At Cusi, throughput reached approximately 815 tonnes per day (tpd)
during Q1 2019, and the company continues to work toward reaching the
1,200 tpd mark during Q2 2019. The 165-per-cent increase in throughput realized
during Q1 2019 resulted in a 64-per-cent increase in silver equivalent ounces
produced, despite lower head grades and recoveries for all metals as the company continues to develop deeper into the Santa Rosa de Lima zone which has
higher head grades.
Silver production of 192,000 ounces increased 78 per cent, gold production of
133 ounces increased 94 per cent and lead production of 349,000 pounds
increased 44 per cent in Q1 2019 compared with Q1 2018.
A revised life-of-mine plan is nearing completion at Cusi, and the company expects to have
an updated NI 43-101 report completed during Q4 2019, which will include
a maiden reserve estimate for the mine. The company continues to
increase mill feed from the Santa Rosa de Lima zone, while mining
selected structures in the older part of the mine.
A summary of production for the Cusi mine for Q1 2019 is provided in the attached table.
CUSI PRODUCTION
Three months ended
Q1 2019 Q1 2018
Tonnes processed (mt) 71,349 26,945
Daily throughput 815 308
Silver grade (g/t) 105.27 143.47
Gold grade (g/t) 0.15 0.18
Lead grade 0.30% 0.48%
Zinc grade 0.32% 0.51%
Silver recovery 79.53% 86.69%
Gold recovery 37.53% 45.26%
Lead recovery 75.21% 84.21%
Zinc recovery 0.00% 23.44%
Silver ounces (000s) 192 108
Gold ounces 133 69
Lead pounds (000s) 349 243
Zinc pounds (000s) 0 71
Silver equivalent ounces (000s) (1) 224 136
(1) Silver equivalent ounces and copper and zinc
equivalent pounds for Q1 2019 were calculated using
the following realized prices: $15.57/oz Ag, $2.85/lb
Cu, $0.94/lb Pb, $1.23/lb Zn, $1,305/oz Au. Silver
equivalent ounces and copper and zinc equivalent
pounds for Q1 2018 were calculated using the following
realized prices: $16.75/oz Ag, $3.14/lb Cu, $1.15/lb
Pb, $1.56/lb Zn, $1,334/oz Au.
Quality control
All technical data contained in this news release have been reviewed and
approved by Gordon Babcock, PEng, chief operating officer and a
qualified person under National Instrument 43-101 -- Standards of
Disclosure for Mineral Projects.
Americo Zuzunaga, MAusIMM CP (mining engineer) and vice-president of
corporate planning, is a qualified person and chartered professional
qualifying as a competent person under the Joint Ore Reserves Committee
(JORC) Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves.
Augusto Chung, FAusIMM CP (metallurgist) and consultant to Sierra Metals,
is a qualified person and chartered professional qualifying as a
competent person on metallurgical processes.
About Sierra Metals Inc.
Sierra Metals is a 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.
We seek Safe Harbor.
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