Welcome!

News Feed Item

Sierra Announces Strong Second Quarter 2014 Financial Results

VANCOUVER, Aug. 12, 2014 /PRNewswire/ - Sierra Metals Inc. (TSX:SMT) (BVL:SMT) ("Sierra Metals" or the "Company") is pleased to report the filing of its unaudited Financial Statements and Management Discussion and Analysis ("MD&A") for the second quarter of 2014. All amounts are presented in US dollars unless otherwise stated. For the complete Financial Statements and/or MD&A please visit the Company's website www.sierrametals.com or SEDAR at www.sedar.com.

Audra Walsh, President and CEO of Sierra Metals, commented: "Sierra continued reporting strong financial results during the second quarter of 2014. Main drivers include solid ore production growth, especially in Mexico. In addition, the Company has increased operating efficiencies and has continued implementing cost reduction measures to further increase its operating cash flow generation. On current metal prices, we expect to maintain strong financial results during the second half of 2014."

The following table sets out select unaudited financial information for the three and six months ended June 30, 2014 and 2013:







3 Months Ended 

6 Months Ended 

(In thousands of dollars, except per share and cash cost amounts)

June 30, 2014

June 30, 2013

June 30, 2014

June 30, 2013







Revenue


$        45,578

$         36,203

$        87,252

$        77,766

Adjusted EBITDA1


21,340

12,923

38,520

31,352

Cash flow from operations


10,728

5,754

21,502

7,608

Adjusted net income attributable to shareholders1


9,466

3,645

16,626

11,430

Non-cash depletion charge on Corona's acquisition


(9,104)

(16,748)

(17,404)

(33,116)

Gross profit 


12,070

(5,403)

22,223

(3,350)

Income tax recovery (expense)


(1,575)

2,532

(2,251)

3,604

Net income (loss) attributable to shareholders


2,382

(9,821)

4,469

(13,056)

Basic earnings (loss) per share ($)


0.01

(0.06)

0.03

(0.08)

Diluted earnings (loss) per share ($)


0.01

(0.06)

0.03

(0.08)


By-product cash cost per oz of Ag (Yauricocha)1

 US$ 

(19.67)

(10.01)

(20.33)

(14.29)


By-product cash cost per lb of Cu (Bolivar)1

 US$ 

1.51

1.77

1.54

1.62


By-product cash cost per oz of Ag (Cusi)1

 US$ 

5.29

17.10

7.96

16.89





(In thousands of dollars)


June 30, 2014

December 31, 2013





Cash and cash equivalents


$        42,100

$         44,930

Assets


430,057

441,029

Liabilities


197,766

210,287

Equity


232,291

230,742





1An explanatory note regarding non-GAAP measures is included in section 13 of the Company's MD&A.

 

Financial Events

  • Revenues of $45.6 million for the three months ended June 30, 2014 compared to $36.2 million for the same period in 2013. Revenues of $87.3 million for the six months ended June 30, 2014 compared to $77.8 million for the six months ended June 30, 2013. Sierra has achieved stronger revenues during the first half of 2014 despite lower prices mainly due to higher lead and silver grades and recoveries, higher throughput capacity at Bolivar and Cusi, and higher volume of concentrate sold at Yauricocha.



Average Realized Prices

3 Months Ended

6 Months Ended

(In US dollars)

June 30, 2014

June 30, 2013

% Var.

June 30, 2014

June 30, 2013

% Var.








Silver Price (oz)

19.87

21.86

-9%

20.02

25.86

-23%

Copper Price (lb)

3.14

3.19

-2%

3.12

3.40

-8%

Lead Price (lb)

0.96

0.94

2%

0.95

0.98

-3%

Zinc Price (lb)

0.96

0.84

14%

0.94

0.88

7%

Gold Price (oz)

1,289.56

1,372.19

-6%

1,288.91

1,499.43

-14%








 

 

  • Adjusted EBITDA of $21.3 million for the three months ended June 30, 2014 compared to $12.9 million for the same period in 2013. Adjusted EBITDA of $38.5 million for the six months ended June 30, 2014 compared to $31.4 million for the same period in 2013. The increase in adjusted EBITDA for 2014 compared to 2013 is mainly due to the increase in revenues as a result of the production ramp up in Bolivar from 1,000 tpd to 2,000 tpd since late in 2013, the higher silver and lead head grades and recoveries at Cusi, and the higher lead head grades and higher silver and lead recoveries at Yauricocha.  In addition, the Company recorded higher gross margins during the period as a result of the measures taken to increase operating efficiencies and reduce costs. Moreover, the Company has improved its EBITDA results over the last quarters in Peru due to higher metal production and lower operating costs, and in Mexico due to higher throughput levels and economies of scale.
  • Cash flow generated from operations of $10.7 million for the three months ended June 30, 2014 compared to $5.8 million for the same period in 2013. Cash flow generated from operations of $21.5 million for the six months ended June 30, 2014 compared to $7.6 million for the same period in 2013.  The increase in cash flow is mainly the result of higher revenues generated, higher gross margins and lower payments of workers' profit sharing and taxes during 2014.
  • Adjusted net income attributable to shareholders of $9.5 million or $0.06 per share for the three months ended June 30, 2014 compared to $3.6 million or $0.02 per share for the same period in 2013. Adjusted net income attributable to shareholders of $16.6 million or $0.10 per share for the six months ended June 30, 2013 compared to $11.4 million or $0.07 per share for the same period in 2013.
  • Net income attributable to shareholders of $2.4 million or $0.01 per share for the three months ended June 30, 2014 compared to a loss of $9.8 million ($0.06 per share) for the same period in 2013. Net income attributable to shareholders of $4.5 million or $0.03 per share for the six months ended June 30, 2014 compared to a loss of $13.1 million ($0.08 per share) for the same period in 2013. The increase in net income attributable to shareholders is mainly due to the measures that the Company has been implementing since the second half of 2013 in Mexico and Peru to increase operating efficiencies and reduce costs, the decrease in the non-cash depletion charge on Corona's acquisition, and the increase in concentrate sold.
  • A factor depressing ‎reported net income to shareholders is the non-cash depletion charge in Peru, which for the three months ended June 30, 2014 was $9.1 million (2013 - $16.7 million) and the six months ended June 30, 2014 was $17.4 million (2013- $33.1 million). The non-cash depletion charge is based on the aggregate fair value of the Yauricocha mineral property at the date of acquisition of Corona of $371.0 million amortized over the total proven and probable reserves and measured and indicated resources of the mine. The Company has been successful in reducing the depletion expense year over year as a result of the increase in the mineral reserves at Yauricocha based on the NI 43-101 reports dated October 2012 and November 2013.
  • By-product cash cost per ounce of silver of a negative US$ 19.67 at Yauricocha, by-product cash cost per ounce of silver of US$ 5.29 at Cusi and by-product cash cost per pound of copper of US$ 1.51 at Bolivar for the three months ended June 30, 2014 compared to a by-product cash cost per ounce of silver of negative US$ 10.01 at Yauricocha, by-product cash cost per ounce of silver of US$ 17.10 at Cusi and by-product cash cost per pound of copper of US$ 1.77 at Bolivar for the same period of 2013.
  • Cash and cash equivalents of $42.1 million as at June 30, 2014 compared to $44.9 million at the end of 2013. Cash and cash equivalents have decreased by $2.8 million during the six months ended June 30, 2014 mainly due to the capital expenditures incurred in Mexico and Peru of $14.5 million, repayment of loans and credit facilities including interest of $5.8 million, and dividends paid to shareholders and non-controlling interest totaling $4.2 million, partially offset by $21.5 million of operating cash flow.

Exploration Events

  • On April 16, 2014, the Company announced that development was proceeding along the Monaco shoot of the Milagro vein at its Cusi property, Mexico. The Monaco shoot contains high grades of gold and silver, and has been developed along a 170 m strike length.  The shoot is open to depth and a ramp is being driven to reach deeper levels of the shoot.
  • On April 24, 2014, the Company announced that development in the Gallo Superior Magnetita ore body of its Bolivar mine in Mexico was started and mining of this body began in June.  In addition, The Company initiated an aggressive exploration program on the Bolivar property, outside the main mine area. The focus of the program will be to test several precious metals targets that have been identified by the Company's geologists over several years, which are, La Lilly, Veta Piedras Verde, La Sidra, La Cilica and Reyna de Oro.
  • On May 6, 2014, the Company announced that drilling to depth at the Central Mine Area of its Yauricocha Property, Peru, demonstrated that the Catas orebody extends at least an additional 130 meters to depth.  On June 20, 2014, the Company also announced that drilling of three additional holes in the Central Mine Area demonstrated that the Antacaca orebody extends at least an additional 250 meters to depth.

Production Results





3 Months Ended

6 Months Ended


June 30, 2014

June 30, 2013

% Var.

June 30, 2014

June 30, 2013

% Var.








Silver production (oz)

750,283

669,620

12%

1,478,495

1,280,028

16%

Copper production (000 lb)

5,697

3,755

52%

11,426

7,816

46%

Lead production (000 lb)

12,005

9,559

26%

24,185

18,087

34%

Zinc production (000 lb)

13,457

12,776

5%

26,189

26,080

0%

Gold Production (oz)

2,499

1,800

39%

4,984

3,398

47%








 

Corporate Events

  • On June 17, 2014, the Company announced the results of its Annual and Special Meeting of shareholders held on June 12, 2014 in Lima, Peru.

About Sierra Metals

Sierra Metals Inc. is a Canadian mining company focused on precious and base metals from its Yauricocha Mine in Peru, its Bolivar Mine and Cusi Mine 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, and La Verde (gold) at the Batopilas Property in the state of Chihuahua.

The Company's shares trade on the Bolsa de Valores de Lima and the Toronto Stock Exchange under the symbol "SMT".

For further information regarding Sierra Metals, please visit http://www.sierrametals.com or contact:

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.

SOURCE Sierra Metals Inc.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
"DevOps is set to be one of the most profound disruptions to hit IT in decades," said Andi Mann. "It is a natural extension of cloud computing, and I have seen both firsthand and in independent research the fantastic results DevOps delivers. So I am excited to help the great team at @DevOpsSUMMIT and CloudEXPO tell the world how they can leverage this emerging disruptive trend."
In this presentation, you will learn first hand what works and what doesn't while architecting and deploying OpenStack. Some of the topics will include:- best practices for creating repeatable deployments of OpenStack- multi-site considerations- how to customize OpenStack to integrate with your existing systems and security best practices.
Security, data privacy, reliability and regulatory compliance are critical factors when evaluating whether to move business applications from in-house client hosted environments to a cloud platform. In her session at 18th Cloud Expo, Vandana Viswanathan, Associate Director at Cognizant, In this session, will provide an orientation to the five stages required to implement a cloud hosted solution validation strategy.
Business professionals no longer wonder if they'll migrate to the cloud; it's now a matter of when. The cloud environment has proved to be a major force in transitioning to an agile business model that enables quick decisions and fast implementation that solidify customer relationships. And when the cloud is combined with the power of cognitive computing, it drives innovation and transformation that achieves astounding competitive advantage.
Everyone wants the rainbow - reduced IT costs, scalability, continuity, flexibility, manageability, and innovation. But in order to get to that collaboration rainbow, you need the cloud! In this presentation, we'll cover three areas: First - the rainbow of benefits from cloud collaboration. There are many different reasons why more and more companies and institutions are moving to the cloud. Benefits include: cost savings (reducing on-prem infrastructure, reducing data center foot print, redu...
DXWorldEXPO LLC announced today that "IoT Now" was named media sponsor of CloudEXPO | DXWorldEXPO 2018 New York, which will take place on November 11-13, 2018 in New York City, NY. IoT Now explores the evolving opportunities and challenges facing CSPs, and it passes on some lessons learned from those who have taken the first steps in next-gen IoT services.
Founded in 2000, Chetu Inc. is a global provider of customized software development solutions and IT staff augmentation services for software technology providers. By providing clients with unparalleled niche technology expertise and industry experience, Chetu has become the premiere long-term, back-end software development partner for start-ups, SMBs, and Fortune 500 companies. Chetu is headquartered in Plantation, Florida, with thirteen offices throughout the U.S. and abroad.
DXWorldEXPO LLC announced today that ICC-USA, a computer systems integrator and server manufacturing company focused on developing products and product appliances, will exhibit at the 22nd International CloudEXPO | DXWorldEXPO. DXWordEXPO New York 2018, colocated with CloudEXPO New York 2018 will be held November 11-13, 2018, in New York City. ICC is a computer systems integrator and server manufacturing company focused on developing products and product appliances to meet a wide range of ...
René Bostic is the Technical VP of the IBM Cloud Unit in North America. Enjoying her career with IBM during the modern millennial technological era, she is an expert in cloud computing, DevOps and emerging cloud technologies such as Blockchain. Her strengths and core competencies include a proven record of accomplishments in consensus building at all levels to assess, plan, and implement enterprise and cloud computing solutions. René is a member of the Society of Women Engineers (SWE) and a m...
SYS-CON Events announced today that DatacenterDynamics has been named “Media Sponsor” of SYS-CON's 18th International Cloud Expo, which will take place on June 7–9, 2016, at the Javits Center in New York City, NY. DatacenterDynamics is a brand of DCD Group, a global B2B media and publishing company that develops products to help senior professionals in the world's most ICT dependent organizations make risk-based infrastructure and capacity decisions.
The technologies behind big data and cloud computing are converging quickly, offering businesses new capabilities for fast, easy, wide-ranging access to data. However, to capitalize on the cost-efficiencies and time-to-value opportunities of analytics in the cloud, big data and cloud technologies must be integrated and managed properly. Pythian's Director of Big Data and Data Science, Danil Zburivsky will explore: The main technology components and best practices being deployed to take advantage...
Nicolas Fierro is CEO of MIMIR Blockchain Solutions. He is a programmer, technologist, and operations dev who has worked with Ethereum and blockchain since 2014. His knowledge in blockchain dates to when he performed dev ops services to the Ethereum Foundation as one the privileged few developers to work with the original core team in Switzerland.
Andi Mann, Chief Technology Advocate at Splunk, is an accomplished digital business executive with extensive global expertise as a strategist, technologist, innovator, marketer, and communicator. For over 30 years across five continents, he has built success with Fortune 500 corporations, vendors, governments, and as a leading research analyst and consultant.
Most DevOps journeys involve several phases of maturity. Research shows that the inflection point where organizations begin to see maximum value is when they implement tight integration deploying their code to their infrastructure. Success at this level is the last barrier to at-will deployment. Storage, for instance, is more capable than where we read and write data. In his session at @DevOpsSummit at 20th Cloud Expo, Josh Atwell, a Developer Advocate for NetApp, will discuss the role and value...
"When you think about the data center today, there's constant evolution, The evolution of the data center and the needs of the consumer of technology change, and they change constantly," stated Matt Kalmenson, VP of Sales, Service and Cloud Providers at Veeam Software, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.