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
Join Impiger for their featured webinar: ‘Cloud Computing: A Roadmap to Modern Software Delivery’ on November 10, 2016, at 12:00 pm CST. Very few companies have not experienced some impact to their IT delivery due to the evolution of cloud computing. This webinar is not about deciding whether you should entertain moving some or all of your IT to the cloud, but rather, a detailed look under the hood to help IT professionals understand how cloud adoption has evolved and what trends will impact th...
Traditional on-premises data centers have long been the domain of modern data platforms like Apache Hadoop, meaning companies who build their business on public cloud were challenged to run Big Data processing and analytics at scale. But recent advancements in Hadoop performance, security, and most importantly cloud-native integrations, are giving organizations the ability to truly gain value from all their data. In his session at 19th Cloud Expo, David Tishgart, Director of Product Marketing ...
More and more brands have jumped on the IoT bandwagon. We have an excess of wearables – activity trackers, smartwatches, smart glasses and sneakers, and more that track seemingly endless datapoints. However, most consumers have no idea what “IoT” means. Creating more wearables that track data shouldn't be the aim of brands; delivering meaningful, tangible relevance to their users should be. We're in a period in which the IoT pendulum is still swinging. Initially, it swung toward "smart for smar...
Internet of @ThingsExpo, taking place June 6-8, 2017 at the Javits Center in New York City, New York, is co-located with the 20th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. @ThingsExpo New York Call for Papers is now open.
"ReadyTalk is an audio and web video conferencing provider. We've really come to embrace WebRTC as the platform for our future of technology," explained Dan Cunningham, CTO of ReadyTalk, in this SYS-CON.tv interview at WebRTC Summit at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
Everyone knows that truly innovative companies learn as they go along, pushing boundaries in response to market changes and demands. What's more of a mystery is how to balance innovation on a fresh platform built from scratch with the legacy tech stack, product suite and customers that continue to serve as the business' foundation. In his General Session at 19th Cloud Expo, Michael Chambliss, Head of Engineering at ReadyTalk, discussed why and how ReadyTalk diverted from healthy revenue and mor...
In an era of historic innovation fueled by unprecedented access to data and technology, the low cost and risk of entering new markets has leveled the playing field for business. Today, any ambitious innovator can easily introduce a new application or product that can reinvent business models and transform the client experience. In their Day 2 Keynote at 19th Cloud Expo, Mercer Rowe, IBM Vice President of Strategic Alliances, and Raejeanne Skillern, Intel Vice President of Data Center Group and G...
When it comes to cloud computing, the ability to turn massive amounts of compute cores on and off on demand sounds attractive to IT staff, who need to manage peaks and valleys in user activity. With cloud bursting, the majority of the data can stay on premises while tapping into compute from public cloud providers, reducing risk and minimizing need to move large files. In his session at 18th Cloud Expo, Scott Jeschonek, Director of Product Management at Avere Systems, discussed the IT and busin...
Extracting business value from Internet of Things (IoT) data doesn’t happen overnight. There are several requirements that must be satisfied, including IoT device enablement, data analysis, real-time detection of complex events and automated orchestration of actions. Unfortunately, too many companies fall short in achieving their business goals by implementing incomplete solutions or not focusing on tangible use cases. In his general session at @ThingsExpo, Dave McCarthy, Director of Products...
"Qosmos has launched L7Viewer, a network traffic analysis tool, so it analyzes all the traffic between the virtual machine and the data center and the virtual machine and the external world," stated Sebastien Synold, Product Line Manager at Qosmos, in this SYS-CON.tv interview at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
You have great SaaS business app ideas. You want to turn your idea quickly into a functional and engaging proof of concept. You need to be able to modify it to meet customers' needs, and you need to deliver a complete and secure SaaS application. How could you achieve all the above and yet avoid unforeseen IT requirements that add unnecessary cost and complexity? You also want your app to be responsive in any device at any time. In his session at 19th Cloud Expo, Mark Allen, General Manager of...
Data is the fuel that drives the machine learning algorithmic engines and ultimately provides the business value. In his session at Cloud Expo, Ed Featherston, a director and senior enterprise architect at Collaborative Consulting, discussed the key considerations around quality, volume, timeliness, and pedigree that must be dealt with in order to properly fuel that engine.
The 20th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held June 6-8, 2017, at the Javits Center in New York City, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Containers, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportunity. Submit your speaking proposal ...
Regulatory requirements exist to promote the controlled sharing of information, while protecting the privacy and/or security of the information. Regulations for each type of information have their own set of rules, policies, and guidelines. Cloud Service Providers (CSP) are faced with increasing demand for services at decreasing prices. Demonstrating and maintaining compliance with regulations is a nontrivial task and doing so against numerous sets of regulatory requirements can be daunting task...
Fact: storage performance problems have only gotten more complicated, as applications not only have become largely virtualized, but also have moved to cloud-based infrastructures. Storage performance in virtualized environments isn’t just about IOPS anymore. Instead, you need to guarantee performance for individual VMs, helping applications maintain performance as the number of VMs continues to go up in real time. In his session at Cloud Expo, Dhiraj Sehgal, Product and Marketing at Tintri, sha...