Quantcast
Last updated on April 18, 2014 at 7:49 EDT

Sierra Metals announces third quarter 2013 financial results of its subsidiary Sociedad Minera Corona in Peru

October 31, 2013

VANCOUVER, Oct. 31, 2013 /PRNewswire/ – Sierra Metals Inc. (TSX:SMT)(BVL:SMT) (“Sierra Metals” or the “Company”) announces the
filing of Sociedad Minera Corona S.A.’s (“Corona”) unaudited Financial
Statements and Management Discussion and Analysis (“MD&A”) for the
third quarter of 2013. The Company holds an interest of 81.8% in
Corona. All amounts are presented in thousands of US dollars unless
otherwise stated and have not been adjusted for the 18.2%
non-controlling interest.

Daniel Tellechea, President and CEO of Sierra Metals, commented: “Corona’s results for the third quarter of 2013 decreased revenues were
attributed to both lower commodity prices and lower metal production
relative to the same period in 2012. However, Corona has achieved solid
progress on the implementation of cost reduction measures during the
quarter that have partially mitigated the effect of a less favorable
commodity price environment. Corona is a mature and profitable
operation that has maintained strong net income margins across several
price cycles
.”

The following table sets out select unaudited financial information as
of September 30, 2013 and 2012:


                             3 Months Ended           9 Months Ended

    (In thousands        Sep 30,
    of dollars,             2013 Sep 30, 2012 Sep 30, 2013 Sep 30, 2012
    unless stated)

    Revenue           $   21,923       40,022       82,477      113,577

    EBITDA                 9,595       23,784       38,201       67,598

    Cash Flow from
    continuing             4,198       17,601        7,750       35,981
    operations

    Gross profit           8,251       22,699       34,695       66,091

    Income Taxes         (2,295)     (11,539)      (9,862)     (17,958)

    Net Income
    attributable           3,916        6,664       14,905       44,094
    to
    shareholders

      Cash Cost
      per oz of Ag  US$  (11.25)      (17.64)      (13.37)      (21.44)
      (Yauricocha)

    (In thousands        Sep 30, Sep 30, 2012
    of dollars)             2013

    Cash and cash     $   22,419       72,071
    equivalents

    Assets               100,087      141,826                          

    Liabilities           39,637       52,231                          

    Equity                60,450       89,595                          

Corona’s Financial Highlights

        --  Net income of US$3.9 million or US$0.109 per share for the
            third quarter of 2013 compared to US$6.7 million or US$0.185
            per share for the same period in 2012. Net income of US$14.9
            million or US$0.414 per share for the first nine months of 2013
            compared to US$44.1 million or US$1.226 per share for the same
            period in 2012.
        --  Adjusted EBITDA of US$9.6 million for the third quarter of 2013
            compared to US$23.8 million for the same period in 2012.
            Adjusted EBITDA of US$38.2 million for the first nine months of
            2013 compared to US$67.6 million for the same period in 2012.
            The adjusted EBITDA generated by Corona during 2013 was
            negatively impacted by the decrease in the commodity prices and
            lower metal production driven by higher dilution in head grades
            at Yauricocha.
        --  Operating cash flow of US$4.2 million for the third quarter of
            2013 compared to US$17.6 million for the same period in 2012.
            Operating cash flow of US$7.8 million for the first nine months
            of 2013 compared to US$36.0 million for the same period in
            2012. The main drivers of operating cash flow on the first nine
            months of 2013 were EBITDA of US$38.2 million, uses of working
            capital for US$17.8 million and payment of taxes for US$16.7
            million. The uses of working capital include the payment of a
            2012 profit sharing liability for US$7.8 million. No other
            payments for profit sharing obligations are due during 2013.
            The rest of working capital items are expected to reverse over
            the next few quarters.
        --  Income taxes of US$2.3 million for the third quarter of 2013
            compared to US$11.5 million in the same period of 2012. Income
            taxes of US$9.9 million for the first nine months of 2013
            compared to US$18.0 million in the same period of 2012.
        --  Revenues of US$21.9 million in the third quarter of 2013
            compared to US$40.0 million for the same period in 2012.
            Revenues of US$82.5 million in the first nine months of 2013
            compared to US$113.6 million for the same period in 2012.
        --  Cash and cash equivalents of US$22.4 million as of September
            30, 2013 compared to US$72.1 million as of December 31, 2012.
            Cash and cash equivalents have decreased during the first nine
            months of 2013 mainly as a result of the dividend paid by
            Corona of US$43.3 million and capital expenditures of US$13.5
            million.
        --  A negative silver cash cost of US$11.25 per ounce ("oz") at
            Yauricocha in the third quarter of 2013 compared to a negative
            cash cost of US$17.46 in the same period of 2012. A negative
            silver cash cost of US$13.37 per oz at Yauricocha in the first
            nine months of 2013 compared to a negative cash cost of US$
            21.44 in the same period of 2012.

Corona’s Operational Highlights

        --  Silver production of 447,145 oz in the third quarter of 2013
            compared to 559,719 oz for the same period in 2012. Silver
            production of 1,402,805 oz in the first nine months of 2013
            compared to 1,596,858 oz for the same period in 2012.
        --  Copper production of 1.5 million pounds ("lb") in the third
            quarter of 2013 compared to 2.0 million lb for the same period
            in 2012. Copper production of 5.3 million lb in the first nine
            months of 2013 compared to 6.9 million lb for the same period
            in 2012.
        --  Lead production of 8.3 million lb in the third quarter of 2013
            compared to 9.8 million lb for the same period in 2012. Lead
            production of 26.1 million lb in the first nine months of 2013
            compared to 26.6 million lb for the same period in 2012.
        --  Zinc production of 12.3 million lb in the third quarter of 2013
            compared to 14.1 million lb for the same period in 2012. Zinc
            production of 37.4 million lb in the first nine months of 2013
            compared to 36.1 million lb for the same period in 2012.
        --  Gold production from the Yauricocha Mine was 1,673 oz in the
            third quarter of 2013 and 2,409 oz for the same period in 2012.
            Gold production from the Yauricocha Mine was 5,071 oz in the
            first nine months of 2013 and 8,301 oz for the same period in
            2012.

The following table sets out production results for the third quarter
ended September 30, 2013 and 2012:


    Yauricocha        3 Months Ended                9 Months Ended
    Production

                Sep 30, Sep 30, % Var. Sep 30, 2013 Sep 30, 2012 % Var.
                   2013    2012

    Silver
    production  447,145 559,719   -20%    1,402,805    1,596,858   -12%
    (oz)

    Copper
    production    1,458   2,043   -29%        5,347        6,889   -22%
    (000 lb)

    Lead
    production    8,338   9,825   -15%       26,099       26,629    -2%
    (000 lb)

    Zinc
    production   12,268  14,135   -13%       37,435       36,085     4%
    (000 lb)

    Gold
    Production    1,673   2,409   -31%        5,071        8,310   -39%
    (oz)

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, 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 the
Toronto Stock Exchange under the symbol “SMT”.

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.


Source: PR Newswire