Mr. Mike McAllister reports
SIERRA METALS REPORTS 2015 PRODUCTION AND ANNOUNCES 2016 PRODUCTION OUTLOOK
Sierra Metals Inc. has released fourth quarter production results, including an increase in copper equivalent production and record throughput at its Bolivar mine, and an increase in silver equivalent production at its Cusi mine, while the restructuring process at its Yauricocha mine continued to temporarily depress throughput and grades resulting in lower production for the three-month period ended Dec. 31, 2015.
Total consolidated tonnes processed increased by 9 per cent; however, silver equivalent and copper equivalent production both decreased by 7 per cent, respectively, for the 12-month period. Results are from Sierra Metal's three underground mines in Latin America: the Yauricocha polymetallic mine in Peru and the Bolivar copper and Cusi silver mines in Mexico.
Fourth quarter production highlights:
- Total tonnes processed of 456,842;
- A 7-per-cent increase over fourth quarter 2014 silver equivalent production of 2.3 million ounces;
- A 23-per-cent decrease from fourth quarter 2014 copper equivalent production of 15.6 million pounds;
- A 23-per-cent decrease from fourth quarter 2014.
Fourth quarter consolidated metal production declined as a result of reduced plant throughput of 14 per cent and lower ore grades at the Yauricocha mine in Peru, which was partially offset by the increase in throughput at both the Bolivar and Cusi mines. The decrease in throughput at the Yauricocha mine continues to be attributable to the continuing restructuring that has addressed the management of water control issues, and is focused on the improvement of mine sequencing and implementation of best practices and mechanization of the mine.
"While we anticipate improved consolidated results in the current year, we are extremely pleased to see increased copper equivalent production at Bolivar and growth in silver equivalent production at Cusi," commented Mark Brennan, president and chief executive officer of Sierra Metals. "We continue to focus on the restructuring and rehabilitation at the Yauricocha mine with the implementation of best practices and the introduction of modern methodologies. Management is optimistic that these beneficial changes that have resulted in lower production in the near term will serve to increase production in the coming years."
He continued, "Further success in brownfields exploration such as the recent discovery of the Esperanza zone at our Yauricocha mine, combined with our production optimization program, shall enable Sierra Metals to continue on a solid path of increased production and resource growth for the foreseeable future."
Production guidance for 2016
The company is pleased to announce consolidated production guidance for 2016.
GUIDANCE FOR 2016
Low High
Silver ounces 2,600,000 3,200,000
Copper pounds (000s) 24,400 30,100
Lead pounds (000s) 26,700 32,900
Zinc pounds (000s) 43,200 53,400
Gold ounces 9,100 11,200
Silver equivalent ounces (000s) 10,400 12,800
Copper equivalent pounds (000s) 69,100 85,300
All metals have a higher production guidance for 2016 than compared with 2015 production with the exception of lead. Production of lead at the Yauricocha mine is forecasted to be lower due to required stope development, which has yet to be completed, as well as anticipated lower grades at depth in the central mine zone. Replacement of higher-grade lead zones is expected to come from the recently discovered Esperanza zone in the future.
Consolidated production results
CONSOLIDATED PRODUCTION
Three months ended Twelve months ended Guidance for 2015
Dec. 31, Dec. 31, Dec. 31, Dec. 31, Low High
2015 2014 2015 2014
Tonnes processed (mt) 456,842 428,859 1,864,706 1,706,715 18,050,000 2,105,000
Daily throughput 5,221 4,901 5,328 4,892
Silver ounces 603,114 875,400 3,104,952 3,148,145 31,440,000 3,668,000
Copper pounds (000s) 5,493 5,908 23,197 22,643 21,000 24,300
Lead pounds (000s) 7,920 12,096 42,177 48,834 44,300 51,800
Zinc pounds (000s) 9,265 13,399 42,077 54,256 41,900 48,900
Gold ounces 2,201 2,329 9,066 9,457 11,200 13,000
Silver equivalent ounces (000s) 2,341 3,058 10,943 11,788 10,800 12,600
Copper equivalent pounds (000s) 15,609 20,385 72,946 78,588 72,400 84,300
Yauricocha mine, Peru
The Yauricocha mine processed a total of 193,710 tonnes in fourth quarter 2015, representing a 14-per-cent decrease compared with fourth quarter 2014.
Lower metal production was driven by lower plant throughput and lower head grades from the polymetallic and lead-oxide concentrates.
Lower recoveries of lead and silver were a consequence of lower head grades in the ore sources available to be mined in 2015 versus 2014.
A summary of production from the Yauricocha mine for fourth quarter 2015 has been provided in the attached Yauricocha production table.
YAURICOCHA PRODUCTION
Three months ended Twelve months ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2015 2014 2015 2014
Tonnes processed (mt) 193,710 224,986 832,225 885,495
Daily throughput 2,214 2,571 2,378 2,545
Silver grade (g/t) 86.13 116.78 102.62 112.95
Copper grade 0.38% 0.71% 0.49% 0.59%
Lead grade 2.46% 3.09% 2.93% 3.20%
Zinc grade 2.48% 3.07% 2.57% 3.14%
Gold grade (g/t) 0.63 0.71 0.70 0.78
Silver recovery 53.53% 70.48% 65.23% 65.97%
Copper recovery 64.94% 65.52% 61.68% 66.70%
Lead recovery 64.98% 75.85% 73.28% 74.70%
Zinc recovery 87.45% 88.08% 89.38% 88.54%
Gold recovery 26.38% 26.41% 26.74% 25.69%
Silver ounces 287,140 595,340 1,791,056 2,121,565
Copper pounds (000s) 1,047 2,304 5,567 7,697
Lead pounds (000s) 6,814 11,632 39,430 46,714
Zinc pounds (000s) 9,265 13,399 42,077 54,256
Gold ounces 1,041 1,360 5,018 5,683
Silver equivalent ounces (000s) 1,239 2,157 6,614 8,194
Copper equivalent pounds (000s) 8,259 14,378 44,094 54,625
Bolivar mine, Mexico
Bolivar had an exceptional quarter in fourth quarter 2015, with a 22-per-cent increase in copper equivalent production and record quarterly plant throughput of 211,311 tonnes, a 32-per-cent increase compared with fourth quarter 2014. Copper production of 4.4 million pounds increased 23 per cent, silver production of 102,894 ounces increased 11 per cent and gold production of 833 ounces increased 25 per cent compared with fourth quarter 2014. The increase in copper, silver and gold production was driven by higher plant throughput, higher gold head grades and higher recoveries of copper compared with fourth quarter 2014.
A summary of production for the Bolivar mine for fourth quarter 2015 has been provided in the attached Bolivar production table.
BOLIVAR PRODUCTION
Three months ended Twelve months ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2015 2014 2015 2014
Tonnes processed (mt) 211,311 159,904 830,447 665,951
Daily throughput 2,415 1,827 2,373 1,903
Copper grade 1.13% 1.25% 1.15% 1.22%
Silver grade (g/t) 19.37 22.03 20.57 22.54
Gold grade (g/t) 0.31 0.29 0.30 0.23
Copper recovery 84.29% 82.10% 84.02% 83.28%
Silver recovery 78.18% 81.85% 80.18% 82.15%
Gold recovery 40.04% 45.32% 40.49% 49.38%
Copper pounds (000s) 4,447 3,604 17,629 14,946
Silver ounces 102,894 92,689 440,401 396,421
Gold ounces 833 665 3,216 2,485
Silver equivalent ounces (000s) 822 675 3,286 2,794
Copper equivalent pounds (000s) 5,480 4,499 21,904 18,624
Cusi mine, Mexico
Total ore processed of 51,821 tonnes during fourth quarter 2015 increased 18 per cent compared with fourth quarter 2014, and the average daily throughput of 597 tonnes per day was the highest ever achieved in a quarter at Cusi. Silver production of 213,080 ounces increased 14 per cent, while gold production of 327 ounces and lead production of 1.1 million pounds increased by 8 per cent and 138 per cent, respectively, compared with fourth quarter 2014. The increase in metal production during fourth quarter 2015 was due to higher plant throughput, higher silver and lead head grades, and higher gold and lead recoveries.
A summary of production for the Cusi mine for fourth quarter 2015 has been provided in the attached Cusi production table.
CUSI PRODUCTION
Three months ended Twelve months ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2015 2014 2015 2014
Tonnes processed (mt) 51,821 43,969 202,033 155,269
Daily throughput 592 503 577 444
Silver grade (g/t) 175.20 173.13 175.88 166.69
Gold grade (g/t) 0.29 0.33 0.22 0.42
Lead grade 1.19% 0.62% 0.78% 0.78%
Silver recovery 73.00% 76.56% 76.46% 75.70%
Gold recovery 67.91% 66.08% 57.22% 61.89%
Lead recovery 81.10% 77.06% 79.08% 79.06%
Silver ounces 213,080 187,371 873,496 630,159
Gold ounces 327 304 831 1,289
Lead pounds (000s) 1,106 464 2,747 2,120
Silver equivalent ounces (000s) 281 226 1,043 801
Copper equivalent pounds (000s) 1,870 1,507 6,948 5,339
Quality control
All technical data contained in this news release have been reviewed and approved by Gordon Babcock, PEng, chief operating officer, a qualified person under National Instrument 43-101 (standards of disclosure for mineral projects).
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