Sierra Metals Provides Financial and Operations Update and Announces Strategic Review Process
October 18 2022 - 5:50AM
Business Wire
Sierra Metals Inc. (TSX: SMT) (NYSE American: SMTS) (BVL
or Bolsa de Valores de Lima: SMT) (“Sierra Metals” or the
“Company”) announced today that a special committee comprised of
its independent directors (the “Special Committee”) has initiated a
process to evaluate and consider the Company’s current financial
and liquidity position, operational challenges and possible
financing and restructuring alternatives that may be available to
the Company.
Financial and Operational
Matters
The Company faces liquidity challenges as a result of the recent
previously announced suspension of operations at the Yauricocha
Mine and operating losses and negative cash flows that have
accumulated, primarily from the Bolivar and Cusi operations.
While mining operations have re-commenced at areas of the
Yauricocha Mine, a majority of the operation remains suspended at
this time. A precise timeline for achieving full plant throughput
has not yet been established.
Absent additional support and increased funding, the Company’s
ability to continue operations in the ordinary course may be
impacted. The Company is monitoring and actively managing its
capital to preserve liquidity to support operations and will
continue to consult with its financial and other stakeholders.
The Company reiterates that the safety and wellbeing of its
employees and contractors remains of utmost importance.
Special Committee
The Special Committee includes all non-management members of the
board of directors of the Company. The mandate of the Special
Committee includes exploring, reviewing and considering options to
optimize the operations of the Company and financing, restructuring
and strategic options in the best interests of the Company. The
Special Committee has a particular focus on liquidity, near term
financing and cash conservation options.
Financial and legal advisors with particular expertise in
turnaround and restructuring matters have been engaged to advise on
this process.
It is the Company’s current intention to not disclose
developments with respect to the Special Committee process unless
and until the board of directors of Sierra Metals has approved a
specific transaction or material steps or otherwise determines that
disclosure is necessary.
The Company cautions that there are no assurances or guarantees
of the results of the Special Committee review process,
management’s efforts to improve the current situation or the impact
that the process and such efforts will have on the Company’s
financial and liquidity position or its operations. The Company has
not set a definitive schedule to complete the evaluation.
About Sierra Metals
Sierra Metals is a diversified Canadian mining company with
Green Metal exposure including 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. The
Company 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".
For further information regarding Sierra Metals, please visit
www.sierrametals.com.
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Forward-Looking
Statements
This press release contains forward-looking information within
the meaning of Canadian and United States securities legislation,
including statements with respect to the ability of the Company to
continue operations in the ordinary course. Forward-looking
information relates to future events or the anticipated performance
of Sierra Metals and reflect management's expectations or beliefs
regarding such future events and anticipated performance based on
an assumed set of economic conditions and courses of action. In
certain cases, statements that contain forward-looking information
can be identified by the use of words such as "plans", "expects",
"is expected", "budget", "scheduled", "estimates", "forecasts",
"intends", "anticipates", "believes" or variations of such words
and phrases or statements that certain actions, events or results
"may", "could", "would", "might", or "will be taken", "occur" or
"be achieved" or the negative of these words or comparable
terminology. The Company has made certain assumptions regarding,
among other things: the strategic alternatives that may be
available to it. By its very nature forward-looking information
involves known and unknown risks, uncertainties and other factors
that may cause actual performance of Sierra Metals to be materially
different from any anticipated performance expressed or implied by
such 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 16, 2022 for its fiscal year
ended December 31, 2021 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.
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Investor Relations Sierra Metals Inc. Tel: +1 (416)
366-7777 Email: info@sierrametals.com
Luis Marchese CEO Sierra Metals Inc. Tel: +1 (416)
366-7777
Ed Guimaraes CFO Sierra Metals Inc. Tel: +1 (416)
366-7777
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