TORONTO, May 29, 2013 /CNW/ - Sierra Metals Inc.
(TSX-V:SMT) (BVL:SMT) ("Sierra Metals" or the "Company" previously
Dia Bras Exploration) is pleased to report the filing of its
unaudited Financial Statements and Management Discussion and
Analysis ("MD&A") for the first quarter of 2013. All amounts
are presented in Canadian dollars unless otherwise stated. For the
full Financial Statements or MD&A please visit the Company's
website www.sierrametals.com or SEDAR at www.sedar.com.
Daniel Tellechea,
President and CEO of Sierra Metals, commented: "We are
pleased with Sierra Metals' results for the first quarter of 2013.
The Company announced commercial production at its Cusi Mine in
Mexico during the period and
continues to increase its production profile in 2013. Additionally,
we are very excited to announce the conditional approval to be
listed on the TSX from the TSX Venture. This marks a substantial
milestone for the Company as we continue to strive towards our
objective of becoming one of Latin
America's premier, low-cost precious and base metals
producers".
The following table sets out the selected first quarter
financial results
|
|
Three months ended |
(In thousands of dollars, unless
stated) |
|
March 31, 2013 |
March 31, 2012 |
Revenue |
|
$ 41,895 |
$ 46,288 |
EBITDA |
|
18,510 |
24,540 |
Cash Flow from continuing
operations |
|
2,359 |
7,217 |
Adjusted net income attribuitable
to shareholders1 |
13,148 |
14,593 |
Non-cash charge on Corona
acquisition |
|
16,503 |
18,485 |
Net loss attributable to
shareholders |
|
(3,355) |
(3,892) |
Basic and diluted earnings (loss) per
share ($) |
|
|
|
|
From continuing operations |
|
(0.02) |
(0.02) |
|
Cash Cost per oz of Ag (Yauricocha) |
US$ |
(21.50) |
(31.99) |
|
Cash Cost per lb of Cu (Bolivar) |
US$ |
1.62 |
1.73 |
|
Cash Cost per oz of Ag (Cusi) |
US$ |
15.52 |
N/A |
|
|
|
|
(In thousands of
dollars) |
|
March 31, 2013 |
March 31, 2012 |
Cash and cash equivalents |
|
$ 67,589 |
$ 79,835 |
Assets |
|
493,261 |
505,064 |
Liabilities |
|
216,623 |
221,574 |
Equity |
|
276,638 |
283,490 |
1 Adjustable net income
attributable to shareholders is defined by management as net income
attributable to
shareholders shown in the financials statements plus
non-cash depletion charges due to the acquisition of
Corona. |
Financial Events
- Net loss attributable to shareholders of $3.4 million or $0.02 per share for the three months ended
March 31, 2013 compared to a loss of
$3.9 million ($0.02 per share) for the same period in 2012
- A large component of the net loss for every quarter is the
non-cash depletion charge in Peru,
which for the three months ended March 31,
2013 was $16.5 million (2012-
$18.5 million). The units of
production depletion charge is based on aggregate fair value of the
Yauricocha mineral property at the date of acquisition of Corona of
$363.9 million amortized over the
total proven and probable reserves of the mine. In the event
that additional reserves and resources are identified, this
depletion charge will be prospectively adjusted in future
periods.
- Notwithstanding lower metal prices in the quarter, the Company
generated adjusted net income attributable to shareholders
(excluding the non-cash depletion charge described above) of
$13.1 million or $0.09 per share for the three months ended
March 31, 2013 compared to
$14.6 million or $0.10 per share for the same period in 2012.
- EBITDA of $18.5 million for the
three months ended March 31, 2013
compared to $24.5 million for the
same period in 2012.
- Cash flow generated from continuing operations of $2.4 million for the three months ended
March 31, 2013 compared to
$7.2 million for the same period in
2012.
- Cash and cash equivalents of $67.6
million as at March 31, 2013
compared to $79.8 million at the end
of 2012.
- Revenues of $41.9 million for the
three months ended March 31, 2013
compared to $46.3 million for the
same period in 2012.
- Silver cash cost1 after by-product credits of
US$(21.50) per ounce ("oz") in
Yauricocha, silver cash cost after by-product credits of
US$15.52 per oz in Cusi and copper
cash cost after by-product credits of US$1.62 per pound ("lb") at Bolivar for the three
months ended March 31, 2013 compared
to silver cash cost of US$(31.99)/oz
and US$1.73 /lb for the same period
of 2012 in Yauricocha and Bolivar, respectively.
Operational Events
- Total tonnes processed of 317,637 in the first quarter of 2013
compared to 286,022 tonnes in the same period of 2012. This
represents an 11% increase year-over-year.
- Total silver production of 610,407 oz in the first quarter of
2013 compared to 584,284 oz for the same period of 2012. This
represents a 4% increase year-over-year.
- Total copper production of 4.1 million lb in the first quarter
of 2013 compared to 3.9 million lb for the same period of 2012. A
5% increase year-over-year.
- Total lead production of 8.6 million lb in the first quarter of
2013 compared to 7.9 million lb for the same period of 2012. An 8%
increase year-over-year.
- Total zinc production of 13.3 million lb in the first quarter
of 2013 compared to 13.6 million lb for the same period of 2012. A
2% decrease year-over-year.
- Total gold production from the Yauricocha Mine was 1,598 oz in
the first quarter 2013 compared to 3,025 oz for the same period of
2012. A 47% decrease year-over-year.
- Cusi mine achieved commercial production on January 1, 2013 and during the first quarter of
2013 processed a total of 28,315 tonnes of ore at the Malpaso Mill
representing a 133% increase year-over-year. This marks a
substantial milestone as it is Sierra's third mine in commercial
production.
The following table sets out consolidated
production results for the quarter ended March 31, 2013 and 2012. Please note that the
production figures presented below include 100% of Yauricocha's
figures for that period. No adjustments have been made for the
portion applicable to the non-controlling interest.
|
3 Months Ended |
Consolidated
Production |
March 31, 2013 |
March 31, 2012 |
% Var. |
Silver (oz) |
610,407 |
584,284 |
4% |
Copper (000 lb) |
4,060 |
3,878 |
5% |
Lead (000 lb) |
8,528 |
7,930 |
8% |
Zinc (000 lb) |
13,304 |
13,622 |
-2% |
Gold (oz) |
1,598 |
3,025 |
-47% |
Exploration Events
- During the first quarter of 2013 a total of 22,163 meters of
drilling were completed on the following properties:
-
- Yauricocha Mine, Peru: 8,175
meters of drilling completed at the Central Mine Area and regional
targets.
- Bolivar Mine, Mexico: 8,362
meters of drilling that focused on upgrading resources to reserves
and expanding skarn mineralization at the Bolivar Mine.
- Cusi Mine, Mexico: 5,625
meters of definition drilling was completed to delineate the extent
of mineralization at the Promontorio, San
Juan, Minerva and La India mines.
- On January 9, 2013 the Company
announced that drilling at the Central Mine Area of the Yauricocha
mine in Peru expanded
mineralization at depth. Drill results show that mineralization of
the Rosaura and Antacaca Sur ore bodies extend 150 meters to depth
and the Antacaca and Catas ore bodies have increased mineralization
at depth. These bodies are open to depth.
Corporate Events
- On January 25, 2013, the State
Court of Chihuahua, Mexico (the
"State Court") overturned a previously announced resolution of the
8th Civil Court of the Judicial District of Morelos in Chihuahua (the "8th Civil Court"),
which absolved the Company from the claims brought against it by
Polo y Ron Minerals, S.A. de C.V. ("P&R"). The original claim
brought by P&R only included the San
Jose properties, which are not located in any areas where
Dia Bras Mexicana, S.A. de C.V
currently operates, or in areas included in any resource estimates
of the Company. However, the State Court ordered the Company to:
(i) transfer to P&R 17 mining concessions relating to its
Bolivar project including the mining concessions where mine
operations are located; and (ii) pay US$422,674 to P&R. In February 2013, the Federal Court in the
State of Chihuahua ("Federal
Court") granted the Company a temporary suspension of the adverse
resolution issued by the State Court. A final verdict by the
Federal Court is pending. The Company will continue to vigorously
defend this claim by applying the proper legal resources necessary
to defend its position.
- On February 12, 2013, the Company
announced the adoption of a dividend policy whereby it will pay
cash dividends on a quarterly basis of approximately $10 million per annum. The Company completed the
first quarterly cash dividend payment of $2.5 million or $0.016 per common share ("Common Share") to
shareholders on April 30, 2013.
Sierra announced this dividend policy as a result of strong cash
flows from its Yauricocha mine in Peru and operational improvements at the
Bolivar and Cusi mines in Mexico.
- On March 11, 2013, the Company
announced that J. Alberto Arias was
appointed Chairman of the board of directors ("Board of
Directors"), succeeding Mr. Steven
Dean. Mr. Dean will continue to serve as a director of
Sierra Metals while contributing as a member of several committees
including the newly created Corporate Strategy Committee.
Additionally, Mr. John S. Donnelly
was appointed lead director for the Company.
- On March 11, 2013, the Company
also submitted an application to list its common shares on the
Toronto Stock Exchange (the "TSX"), Canada's premier stock exchange. If the
application is accepted by the TSX, the Company's common shares
will graduate to the TSX and such common shares will cease to be
listed for trading on the TSX Venture Exchange ("TSX-V").
- On March 26, 2013, the Company
announced that the Board of Directors has approved a share
repurchase program pursuant to a normal course issuer bid ("NCIB")
in the open market through the facilities of the TSX-V to be
completed over the next twelve months. Haywood Securities will
conduct the NCIB on behalf of the Company. Pursuant to the NCIB,
the Company can repurchase up to of 7,886,873 of its common shares,
which is the maximum number of shares permitted to be purchased
under the TSX rules, and represents 5% of the 157,737,476 issued
and outstanding shares of the Company as of March 26, 2013.
- On May 29, 2013 the Company
announced that it received conditional approval to be listed on the
Toronto Stock Exchange (the "TSX"), Canada's premier stock exchange. Once final
approval has been received by the TSX, the Company's common shares
will be listed in the TSX and such common shares will cease to be
listed for trading on the TSX-V. The Company submitted the original
application to be listed in the TSX on March
11, 2013.
Quality Assurance
The technical content of this news release has
been approved by Thomas L. Robyn,
Ph.D., CPG, RPG, a Qualified Person as defined in NI 43-101 and
Senior Vice President, Exploration, for Sierra Metals Inc.
About Sierra Metals
Sierra Metals Inc. is a Canadian mining company
focused on precious and base metals from its Yauricocha mine in
Peru, and its Bolivar and Cusi
mines in Mexico. In addition,
Sierra Metals is exploring several precious and base metal targets
in Peru and Mexico. Projects in Peru include Adrico (gold), Victoria (copper-silver) and Ipillo
(polymetallic) at the Yauricocha Property in the province of Yauyos
and the San Miguelito gold
properties in Northern Peru.
Projects in Mexico include
Bacerac (silver) in the
state of Sonora, La Verde (gold) at the Batopilas Property in
the state of Chihuahua, and
Las Coloradas (silver) at the
Melchor Ocampo Property in the state of Zacatecas.
The Company's shares trade on the Bolsa de
Valores de Lima and TSX-V under the
symbol "SMT".
This press release does not constitute an
offer to sell or solicitation of an offer to buy the securities in
the United States or any other
jurisdiction. The Common Shares will not be and have not been
registered under the United States Securities Act of 1933, as
amended, and may not be offered or sold in the United States absent registration or an
applicable exemption from the registration requirements.
Neither the TSX-V nor its Regulation Services
Provider (as that term is defined in policies of the TSXV) accepts
responsibility for the adequacy or accuracy of this
release.
Forward-Looking Statements
Except for statements of historical fact
contained herein, the information in this press release may
constitute "forward-looking information" within the meaning of
Canadian securities law. Other than statements of historical fact,
all statements are "forward-looking statements", which involve
various known and unknown risk and uncertainties and other factors,
including market conditions that may affect the Company's ability
to execute its current business plan. Actual results might
differ materially from results suggested in any forward-looking
statements. The Company assumes no obligation to update the
forward-looking statements, or to update the reasons why actual
results could differ from those reflected in the forward-looking
statements unless and until required by securities laws applicable
to the Company. Additional information identifying risks and
uncertainties is contained in filings by the Company with the
Canadian securities regulators, which filings are available at
www.sedar.com.
1 Cash costs are calculated to
include cost of sales, treatment and refining charges, and selling
expenses less depreciation, workers profit sharing and other
non-cash provisions included in cost of sales.
SOURCE Sierra Metals Inc.