TORONTO -- (Business Wire)
Sierra Metals Inc. (TSX: SMT) (BVL: SMT) (NYSE AMERICAN: SMTS)
(“Sierra Metals” or “the Company”) is pleased to report 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 0.7 million ounces; a 16% increase from Q1 2018
- Lead production of 7.0 million pounds; a 10% increase from Q1 2018
- Gold production of 1,986 ounces; a 2% increase from Q1 2018
- Copper production of 7.7 million pounds; a 4% decrease from Q1 2018
- Zinc production of 16.4 million pounds; a 10% decrease from Q1 2018
- Zinc equivalent production of 50.6 million pounds; a 7% 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% to 0.7 million ounces,
copper declined 4% to 7.7 million pounds, lead increased 10% to 7.0
million pounds, zinc declined 10% to 16.4 million pounds, and gold
increased 2% to 1,986 ounces compared to Q1 2018.
The Yauricocha Mine experienced a 14% reduction in throughput during Q1
2019 compared to 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% increase in zinc equivalent pounds
produced during Q1 2019 compared to Q1 2018.
At Bolivar, a 14% 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 an 7% decrease in copper
equivalent pounds produced during Q1 2019 compared to Q1 2018. At Cusi,
throughput reached approximately 815 tonnes per day (“tpd”) during Q1
2019, and the Company continues to work towards reaching the 1,200 tpd
mark during Q2 2019. The 165% increase in throughput realized during Q1
2019 resulted in a 64% increase in silver equivalent ounces produced,
despite lower head grades and recoveries for all metals as we continue
to develop deeper into the Santa Rosa de Lima zone which has higher head
grades.
Igor Gonzales, President and CEO 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 mid-year 2019
to analyze future operational production increases and continue
development at all three Mines. We are also working to update the NI
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
Consolidated Production |
|
| 3 Months Ended |
|
| 2019 Guidance |
|
|
| Q1 2019 |
|
| Q1 2018 |
|
| % Var. |
|
|
| Low |
|
| High |
| | | |
|
| |
|
| |
| | | | | |
|
| |
Tonnes processed (mt) | | | 568,401 | | | 557,710 | | | 2% | | | | | | | | | |
Daily throughput
| | |
6,496
| | |
6,374
| | | 2% | | | | | | | | | |
|
|
|
|
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|
|
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|
|
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|
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|
|
|
|
| | | | | | | | | | | | | | | | | |
|
Silver ounces (000's) | | | 691 | | | 594 | | | 16% | | | | | | 3,730 | | | 4,176 |
Copper pounds (000's) | | | 7,732 | | | 8,090 | | | -4% | | | | | | 45,000 | | | 50,400 |
Lead pounds (000's) | | | 6,954 | | | 6,312 | | | 10% | | | | | | 25,500 | | | 28,600 |
Zinc pounds (000's) | | | 16,421 | | | 18,214 | | | -10% | | | | | | 72,400 | | | 81,100 |
Gold ounces | | | 1,986 | | | 1,952 | | | 2% | | | | | | 8,100 | | | 9,000 |
|
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| | | | | | | | | | | | | | | | | |
|
Silver equivalent ounces (000's)(1) | | | 3,988 | | | 4,394 | | | -9% | | | | | | 19,478 | | | 21,812 |
Copper equivalent pounds (000's)(1) | | | 21,767 | | | 23,445 | | | -7% | | | | | | 107,035 | | | 119,858 |
Zinc equivalent pounds (000's)(1) | | | 50,562 | | | 47,209 | | | 7% | | | | | | 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/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.
|
Yauricocha Mine, Peru
The Yauricocha Mine processed 233,814 tonnes during Q1 2019,
representing a 14% 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% increase in zinc equivalent
metal production compared to 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% increase in silver ounces produced, a 4%
increase in copper pounds produced, and a 9% 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
below:
Yauricocha Production |
|
| 3 Months Ended |
|
|
| Q1 2019 |
|
| Q1 2018 |
|
| % Var. |
| | | |
|
| |
|
| |
Tonnes processed (mt) | | | 233,814 | | | 271,389 | | | -14% |
Daily throughput
| | |
2,672
| | |
3,102
| | | -14% |
|
|
|
|
|
|
|
|
|
|
| | | | | | | | |
|
Silver grade (g/t)
| | |
63.51
| | |
59.52
| | | 7% |
Copper grade
| | |
1.00%
| | |
0.89%
| | | 13% |
Lead grade
| | |
1.45%
| | |
1.24%
| | | 17% |
Zinc grade
| | |
3.56%
| | |
3.45%
| | | 3% |
Gold Grade (g/t)
| | |
0.55
| | |
0.61
| | | -9% |
| | | | | | | | |
|
Silver recovery
| | |
77.23%
| | |
70.50%
| | | 10% |
Copper recovery
| | |
74.80%
| | |
70.22%
| | | 7% |
Lead recovery
| | |
88.19%
| | |
81.51%
| | | 8% |
Zinc recovery
| | |
89.51%
| | |
87.94%
| | | 2% |
Gold Recovery
| | |
18.09%
| | |
15.77%
| | | 15% |
|
|
|
|
|
|
|
|
|
|
| | | | | | | | |
|
Silver ounces (000's) | | | 369 | | | 366 | | | 1% |
Copper pounds (000's) | | | 3,863 | | | 3,727 | | | 4% |
Lead pounds (000's) | | | 6,605 | | | 6,069 | | | 9% |
Zinc pounds (000's) | | | 16,421 | | | 18,144 | | | -9% |
Gold ounces | | | 753 | | | 835 | | | -10% |
|
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|
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|
|
Zinc equivalent pounds (000's)(1) | | | 35,911 | | | 34,767 | | | 3% |
(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.
|
Bolivar Mine, Mexico
The Bolivar Mine processed 263,238 tonnes in Q1 2019, representing a 1%
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% 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 an 7%
decrease in copper equivalent pounds produced during Q1 2019 compared to
Q1 2018. In Q1 2019, copper production decreased by 11% to 3,869,000
pounds, silver production increased 8% to 130,000 ounces, and gold
production increased 5% to 1,100 ounces compared to 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
below:
Bolivar Production |
|
| 3 Months Ended |
|
|
| Q1 2019 |
|
| Q1 2018 |
|
| % Var. |
| | | |
|
| |
|
| |
Tonnes processed (mt) | | | 263,238 | | | 259,375 | | | 1% |
Daily throughput
| | |
3,008
| | |
2,964
| | | 1% |
|
|
|
|
|
|
|
|
|
|
| | | | | | | | |
|
Copper grade
| | |
0.81%
| | |
0.95%
| | | -14% |
Silver grade (g/t)
| | |
19.47
| | |
17.85
| | | 9% |
Gold grade (g/t)
| | |
0.19
| | |
0.18
| | | 8% |
| | | | | | | | |
|
Copper recovery
| | |
82.24%
| | |
80.65%
| | | 2% |
Silver recovery
| | |
79.14%
| | |
80.91%
| | | -2% |
Gold recovery
| | |
67.87%
| | |
70.94%
| | | -4% |
|
|
|
|
|
|
|
|
|
|
| | | | | | | | |
|
Copper pounds (000's) | | | 3,869 | | | 4,363 | | | -11% |
Silver ounces (000's) | | | 130 | | | 120 | | | 8% |
Gold ounces | | | 1,100 | | | 1,048 | | | 5% |
|
|
|
|
|
|
|
|
|
|
Copper equivalent pounds (000's)(1) | | | 5,083 | | | 5,450 | | | -7% |
| | |
| | |
| | |
|
(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.
|
Cusi Mine, Mexico
At Cusi, throughput reached approximately 815 tonnes per day (“tpd”)
during Q1 2019, and the Company continues to work towards reaching the
1,200 tpd mark during Q2 2019. The 165% increase in throughput realized
during Q1 2019 resulted in a 64% increase in silver equivalent ounces
produced, despite lower head grades and recoveries for all metals as we
continue to develop deeper into the Santa Rosa de Lima zone which has
higher head grades.
Silver production of 192,000 ounces increased 78%, gold production of
133 ounces increased 94%, and lead production of 349,000 pounds
increased 44% in Q1 2019 compared to Q1 2018.
A revised LOM plan is nearing completion at Cusi, and we expect 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 below:
Cusi Production |
|
|
| 3 Months Ended |
|
| |
|
|
|
| Q1 2019 |
|
|
| Q1 2018 |
|
|
| %Var. | | | |
| | | | |
|
|
| |
|
|
| | | | |
Tonnes processed (mt) | | | | 71,349 | | | | 26,945 | | | | 165% | | | |
Daily throughput
| | | |
815
| | | |
308
| | | | 165% | | | |
|
|
|
|
|
|
|
|
|
|
|
|
| | | |
| | | | | | | | | | | | | | |
|
Silver grade (g/t)
| | | |
105.27
| | | |
143.47
| | | | -27% | | | |
Gold grade (g/t)
| | | |
0.15
| | | |
0.18
| | | | -12% | | | |
Lead grade
| | | |
0.30%
| | | |
0.48%
| | | | -39% | | | |
Zinc grade
| | | |
0.32%
| | | |
0.51%
| | | | -38% | | | |
| | | | | | | | | | | | | | |
|
Silver recovery
| | | |
79.53%
| | | |
86.69%
| | | | -8% | | | |
Gold recovery
| | | |
37.53%
| | | |
45.26%
| | | | -17% | | | |
Lead recovery
| | | |
75.21%
| | | |
84.21%
| | | | -11% | | | |
Zinc recovery
| | | |
0.00%
| | | |
23.44%
| | | | -100% | | | |
|
|
|
|
|
|
|
|
|
|
|
|
| | | |
| | | | | | | | | | | | | | |
|
Silver ounces (000's) | | | | 192 | | | | 108 | | | | 78% | | | |
Gold ounces | | | | 133 | | | | 69 | | | | 94% | | | |
Lead pounds (000's) | | | | 349 | | | | 243 | | | | 44% | | | |
Zinc pounds (000's) | | | | 0 | | | | 71 | | | | -100% | | | |
|
|
|
|
|
|
|
|
|
|
|
|
| | | |
Silver equivalent ounces (000's)(1) | | | | 224 | | | | 136 | | | | 64% | | | |
|
|
|
|
|
|
|
|
|
|
|
|
| | | |
| | | |
(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 has been reviewed and
approved by Gordon Babcock, P.Eng., 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
Sierra Metals Inc. 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.
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 related to the Company (collectively, “forward-looking
information”). Forward-looking information includes, but is not limited
to, statements with respect to the Company’s operations, including
anticipated developments in the Company’s operations in future periods,
the Company’s planned exploration activities, the adequacy of the
Company’s financial resources, and other events or conditions that may
occur in the future. Statements concerning mineral reserve and resource
estimates may also be considered to constitute forward-looking
statements to the extent that they involve estimates of the
mineralization that will be encountered if and when the properties are
developed or further developed. These statements relate to analyses and
other information that are based on forecasts of future results,
estimates of amounts not yet determinable and assumptions of management.
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, risks inherent in the mining industry including
environmental hazards, industrial accidents, unusual or unexpected
geological formations, floods, labour disruptions, explosions, cave-ins,
weather conditions and criminal activity; commodity price fluctuations;
higher operating and/or capital costs; lack of available infrastructure;
the possibility that future exploration, development or mining results
will not be consistent with the Company’s expectations; risks associated
with the estimation of mineral resources and the geology, grade and
continuity of mineral deposits and the inability to replace reserves;
fluctuations in the price of commodities used in the Company’s
operations; risks related to foreign operations; changes in laws or
policies, foreign taxation, delays or the inability to obtain necessary
governmental permits; risks relating to outstanding borrowings; issues
regarding title to the Company’s properties; risks related to
environmental regulation; litigation risks; risks related to uninsured
hazards; the impact of competition; volatility in the price of the
Company’s securities; global financial risks; inability to attract or
retain qualified employees; potential conflicts of interest; risks
related to a controlling group of shareholders; dependence on third
parties; differences in U.S. and Canadian reporting of mineral reserves
and resources; potential dilutive transactions; foreign currency risks;
risks related to business cycles; liquidity risks; reliance on internal
control systems; credit risks, including risks related to the Company’s
compliance with covenants with respect to its BCP Facility; uncertainty
of production and cost estimates for the Yauricocha Mine, the Bolivar
Mine and the Cusi Mine; and other risks identified in the Company’s
filings with Canadian securities regulators and the U.S. Securities and
Exchange Commission, which filings are available at www.sedar.com
and www.sec.gov,
respectively.
This list is not exhaustive of the factors that may affect any of the
Company’s forward-looking information. Forward looking information
includes statements about the future and are 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 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.
Note Regarding Reserve and Resource Estimates
All reserve and resource estimates reported by the Company were
calculated in accordance with the Canadian National Instrument 43-101
and the Canadian Institute of Mining and Metallurgy Classification
system. These standards differ significantly from the requirements of
the U.S. Securities and Exchange Commission (“SEC”). The differences
between these standards are discussed in our SEC filings. Mineral
resources which are not mineral reserves do not have demonstrated
economic viability.
View source version on businesswire.com: https://www.businesswire.com/news/home/20190415005341/en/
Contacts:
For further information regarding Sierra Metals, please visit www.sierrametals.com
or contact:
Mike McAllister
V.P., Corporate Development
Sierra
Metals Inc.
+1 (416) 366-7777
Email: info@sierrametals.com
or
Gordon
Babcock
Chief Operating Officer
Sierra Metals Inc.
+
1 (416) 366-7777
or
Igor Gonzales
President & CEO
Sierra
Metals Inc.
+1(416) 366-7777
Source: Sierra Metals
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