Sierra Metals Reports 2015 Production and Announces 2016 Production Outlook
- INCREASE IN PRODUCTION OF 32% AT ITS BOLIVAR MINE AND 18% AT ITS CUSI MINE OFFSET BY TEMPORARY DECLINE of 14% AT ITS YAURICOCHA MINE IN THE FOURTH QUARTER 2015
TORONTO, Feb. 9, 2016 /CNW/ - Sierra Metals Inc. (TSX: SMT) (BVL: SMT) ("Sierra Metals" or "the Company") reports fourth quarter production results including an increase in copper equivalent production and record throughput at its Bolivar Mine, and an increase in silver equivalent production at its Cusi Mine, while the restructuring process at its Yauricocha Mine continued to temporarily depress throughput and grades resulting in lower production for the three-month period ended December 31, 2015 ("Q4 2015").
Total consolidated tonnes processed increased by 9%, however silver equivalent and copper equivalent production both decreased by 7% respectively for the twelve-month period. Results are from Sierra Metal's three underground mines in Latin America: the Yauricocha polymetallic Mine in Peru and the Bolivar copper and Cusi silver Mines in Mexico.
Fourth Quarter Production Highlights
- Total tonnes processed of 456,842; a 7% increase over Q4 2014
- Silver equivalent production of 2.3 million ounces; a 23% decrease from Q4 2014
- Copper equivalent production of 15.6 million pounds; a 23% decrease from Q4 2014
Fourth Quarter consolidated metal production declined as a result of reduced plant throughput of 14% and lower ore grades at the Yauricocha Mine in Peru which was partially offset by the increase in throughput at both the Bolivar and Cusi Mines. The decrease in throughput at the Yauricocha Mine continues to be attributable to the ongoing restructuring that has addressed the management of water control issues, and is focused on the improvement of mine sequencing and implementation of best practices and mechanization of the Mine.
"While we anticipate improved consolidated results in the current year, we are extremely pleased to see increased copper equivalent production at Bolivar and growth in silver equivalent production at Cusi." commented Mark Brennan, President and CEO of Sierra Metals. "We continue to focus on the restructuring and rehabilitation at the Yauricocha Mine with the implementation of best practices and the introduction of modern methodologies. Management is optimistic that these beneficial changes that have resulted in lower production in the near term will serve to increase production in the coming years."
He continued, "Further success in brownfields exploration such as the recent discovery of the Esperanza Zone at our Yauricocha Mine, combined with our production optimization program shall enable Sierra Metals to continue on a solid path of increased production and resource growth for the foreseeable future."
Production Guidance for 2016
The company is pleased to announce consolidated production guidance for 2016.
| 2016 Guidance | ||
| Low | High | |
| Silver ounces | 2,600,000 | 3,200,000 |
| Copper pounds (000's) | 24,400 | 30,100 |
| Lead pounds (000's) | 26,700 | 32,900 |
| Zinc pounds (000's) | 43,200 | 53,400 |
| Gold ounces | 9,100 | 11,200 |
| Silver equivalent ounces (000's)(1) | 10,400 | 12,800 |
| Copper equivalent pounds (000's)(1) | 69,100 | 85,300 |
| (1) 2016 Silver equivalent ounces & copper equivalent pounds were calculated using the following metal prices: $14.96/oz Ag, $2.25/lb Cu, $0.75/lb Pb, $0.73/lb Zn, $1,112/oz Au. |
All metals have a higher production guidance for 2016 than compared to 2015 production with the exception of lead. Production of lead at the Yauricocha Mine is forecasted to be lower due to required stope development which has yet to be completed as well as anticipated lower grades at depth in the central mine zone. Replacement of Higher grade lead zones are expected to come from the recently discovered Esperanza zone in the future.
Consolidated Production Results
| Consolidated Production | 3 Months Ended | 12 Months Ended | 2015 Guidance | ||||||
| Dec 31, 2015 | Dec 31, 2014 | % Var. | Dec 31, 2015 | Dec 31, 2014 | % Var. | Low | High | ||
| Tonnes processed (mt) | 456,842 | 428,859 | 7% | 1,864,706 | 1,706,715 | 9% | 1,805,000 | 2,105,000 | |
| Daily throughput | 5,221 | 4,901 | 7% | 5,328 | 4,892 | 9% | |||
| Silver ounces | 603,114 | 875,400 | -31% | 3,104,952 | 3,148,145 | -1% | 3,144,000 | 3,668,000 | |
| Copper pounds (000's) | 5,493 | 5,908 | -7% | 23,197 | 22,643 | 2% | 21,000 | 24,300 | |
| Lead pounds (000's) | 7,920 | 12,096 | -35% | 42,177 | 48,834 | -14% | 44,300 | 51,800 | |
| Zinc pounds (000's) | 9,265 | 13,399 | -31% | 42,077 | 54,256 | -22% | 41,900 | 48,900 | |
| Gold ounces | 2,201 | 2,329 | -6% | 9,066 | 9,457 | -4% | 11,200 | 13,000 | |
| Silver equivalent ounces (000's)(1) | 2,341 | 3,058 | -23% | 10,943 | 11,788 | -7% | 10,800 | 12,600 | |
| Copper equivalent pounds (000's)(1) | 15,609 | 20,385 | -23% | 72,946 | 78,588 | -7% | 72,400 | 84,300 | |
| (1) Silver equivalent ounces & copper equivalent pounds were calculated using the following metal prices: $20/oz Ag, $3.00/lb Cu, $0.85/lb Pb, $0.95/lb Zn, $1,250/oz Au. |
Yauricocha Mine, Peru
The Yauricocha Mine processed a total of 193,710 tonnes in Q4 2015 representing a 14% decrease compared to Q4 2014.
Lower metal production was driven by lower plant throughput and lower head grades from the polymetallic and lead-oxide concentrates.
Lower recoveries of lead and silver were a consequence of lower head grades in the ore sources available to be mined in 2015 versus 2014.
A summary of production from the Yauricocha Mine for Q4 2015 has been provided below:
| Yauricocha Production | 3 Months Ended | 12 Months Ended | |||||
| Dec 31, 2015 | Dec 31, 2014 | % Var. | Dec 31, 2015 | Dec 31, 2014 | % Var. | ||
| Tonnes processed (mt) | 193,710 | 224,986 | -14% | 832,225 | 885,495 | -6% | |
| Daily throughput | 2,214 | 2,571 | -14% | 2,378 | 2,545 | -6% | |
| Silver grade (g/t) | 86.13 | 116.78 | -26% | 102.62 | 112.95 | -9% | |
| Copper grade | 0.38% | 0.71% | -47% | 0.49% | 0.59% | -17% | |
| Lead grade | 2.46% | 3.09% | -21% | 2.93% | 3.20% | -8% | |
| Zinc grade | 2.48% | 3.07% | -19% | 2.57% | 3.14% | -18% | |
| Gold Grade (g/t) | 0.63 | 0.71 | -11% | 0.70 | 0.78 | -10% | |
| Silver recovery | 53.53% | 70.48% | -24% | 65.23% | 65.97% | -1% | |
| Copper recovery | 64.94% | 65.52% | -1% | 61.68% | 66.70% | -8% | |
| Lead recovery | 64.98% | 75.85% | -14% | 73.28% | 74.70% | -2% | |
| Zinc recovery | 87.45% | 88.08% | -1% | 89.38% | 88.54% | 1% | |
| Gold Recovery | 26.38% | 26.41% | 0% | 26.74% | 25.69% | 4% | |
| Silver ounces | 287,140 | 595,340 | -52% | 1,791,056 | 2,121,565 | -16% | |
| Copper pounds (000's) | 1,047 | 2,304 | -55% | 5,567 | 7,697 | -28% | |
| Lead pounds (000's) | 6,814 | 11,632 | -41% | 39,430 | 46,714 | -16% | |
| Zinc pounds (000's) | 9,265 | 13,399 | -31% | 42,077 | 54,256 | -22% | |
| Gold ounces | 1,041 | 1,360 | -23% | 5,018 | 5,683 | -12% | |
| Silver equivalent ounces (000's)(1) | 1,239 | 2,157 | -43% | 6,614 | 8,194 | -19% | |
| Copper equivalent pounds (000's)(1) | 8,259 | 14,378 | -43% | 44,094 | 54,625 | -19% | |
| (1) Silver equivalent ounces & copper equivalent pounds were calculated using the following metal prices: $20/oz Ag, $3.00/lb Cu, $0.85/lb Pb, $0.95/lb Zn, $1,250/oz Au. |
Bolivar Mine, México
Bolivar had an exceptional quarter in Q4, 2015 with a 22% increase in copper equivalent production and record quarterly plant throughput of 211,311 tonnes, a 32% increase compared to Q4 2014. Copper production of 4.4 million pounds increased 23%, silver production of 102,894 ounces increased 11% and gold production of 833 ounces increased 25% compared to Q4 2014. The increase in copper, silver and gold production was driven by higher plant throughput, higher gold head grades and higher recoveries of copper compared to Q4 2014.
A summary of production for the Bolivar Mine for Q4 2015 has been provided below:
| Bolivar Production | 3 Months Ended | 12 Months Ended | |||||
| Dec 31, 2015 | Dec 31, 2014 | % Var. | Dec 31, 2015 | Dec 31, 2014 | % Var. | ||
| Tonnes processed (mt) | 211,311 | 159,904 | 32% | 830,447 | 665,951 | 25% | |
| Daily throughput | 2,415 | 1,827 | 32% | 2,373 | 1,903 | 25% | |
| Copper grade | 1.13% | 1.25% | -9% | 1.15% | 1.22% | -6% | |
| Silver grade (g/t) | 19.37 | 22.03 | -12% | 20.57 | 22.54 | -9% | |
| Gold grade (g/t) | 0.31 | 0.29 | 6% | 0.30 | 0.23 | 29% | |
| Copper recovery | 84.29% | 82.10% | 3% | 84.02% | 83.28% | 1% | |
| Silver recovery | 78.18% | 81.85% | -4% | 80.18% | 82.15% | -2% | |
| Gold recovery | 40.04% | 45.32% | -12% | 40.49% | 49.38% | -18% | |
| Copper pounds (000's) | 4,447 | 3,604 | 23% | 17,629 | 14,946 | 18% | |
| Silver ounces | 102,894 | 92,689 | 11% | 440,401 | 396,421 | 11% | |
| Gold ounces | 833 | 665 | 25% | 3,216 | 2,485 | 29% | |
| Silver equivalent ounces (000's)(1) | 822 | 675 | 22% | 3,286 | 2,794 | 18% | |
| Copper equivalent pounds (000's)(1) | 5,480 | 4,499 | 22% | 21,904 | 18,624 | 18% | |
| (1) Silver equivalent ounces & copper equivalent pounds were calculated using the following metal prices: $20/oz Ag, $3.00/lb Cu, $0.85/lb Pb, $0.95/lb Zn, $1,250/oz Au. |
Cusi Mine, México
Total ore processed of 51,821 tonnes during Q4, 2015 increased 18% compared to Q4 2014 and the average daily throughput of 597 tonnes per day was the highest ever achieved in a quarter at Cusi. Silver production of 213,080 ounces increased 14%, while gold production of 327 ounces and lead production of 1.1 million pounds increased by 8% and 138% respectively, compared to Q4 2014. The increase in metal production during Q4 2015 was due to higher plant throughput, higher silver and lead head grades and higher gold and lead recoveries.
A summary of production for the Cusi Mine for Q4 2015 has been provided below:
| Cusi Production | 3 Months Ended | 12 Months Ended | |||||
| Dec 31, 2015 | Dec 31, 2014 | % Var. | Dec 31, 2015 | Dec 31, 2014 | % Var. | ||
| Tonnes processed (mt) | 51,821 | 43,969 | 18% | 202,033 | 155,269 | 30% | |
| Daily throughput | 592 | 503 | 18% | 577 | 444 | 30% | |
| Silver grade (g/t) | 175.20 | 173.13 | 1% | 175.88 | 166.69 | 6% | |
| Gold grade (g/t) | 0.29 | 0.33 | -12% | 0.22 | 0.42 | -47% | |
| Lead grade | 1.19% | 0.62% | 93% | 0.78% | 0.78% | 0% | |
| Silver recovery | 73.00% | 76.56% | -5% | 76.46% | 75.70% | 1% | |
| Gold recovery | 67.91% | 66.08% | 3% | 57.22% | 61.89% | -8% | |
| Lead recovery | 81.10% | 77.06% | 5% | 79.08% | 79.06% | 0% | |
| Silver ounces | 213,080 | 187,371 | 14% | 873,496 | 630,159 | 39% | |
| Gold ounces | 327 | 304 | 8% | 831 | 1,289 | -36% | |
| Lead pounds (000's) | 1,106 | 464 | 138% | 2,747 | 2,120 | 30% | |
| Silver equivalent ounces (000's)(1) | 281 | 226 | 24% | 1,043 | 801 | 30% | |
| Copper equivalent pounds (000's)(1) | 1,870 | 1,507 | 24% | 6,948 | 5,339 | 30% | |
| (1) Silver equivalent ounces & copper equivalent pounds were calculated using the following metal prices: $20/oz Ag, $3.00/lb Cu, $0.85/lb Pb, $0.95/lb Zn, $1,250/oz Au. |
Quality Control
All technical data contained in this news release has been reviewed and approved by Gordon Babcock, P.Eng., Chief Operating Officer and a Qualified Person under National Instrument 43-101 – Standards of Disclosure for Mineral Projects.
About Sierra Metals
Sierra Metals Inc. is a Canadian mining company focused on production of precious and base metals from its Yauricocha Mine in Peru, and its Bolivar Mine and Cusi Mine in Mexico. In addition, Sierra Metals is exploring several precious and base metals 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 Lima Stock Exchange (Bolsa de Valores de Lima) and on the TSX 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. Statements containing forward-looking information express, as at the date of this news release, the Company's plans, estimates, forecasts, projections, expectations or beliefs as to future events or results. These statements reflect the Company's current views with respect to future events and are necessarily based upon a number of assumptions and estimates that, while considered reasonable by the Company, are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. 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 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.
Contact
please visit www.sierrametals.com or contact: Mike McAllister, Director, Corporate Development, Sierra Metals Inc., Tel: +1 (416) 366-7777, TF: 1 (866) 493-9646, Email: info@sierrametals.com; Mark Brennan, President & CEO, Sierra Metals Inc., Tel: +1 (416) 366-7777, TF: 1 (866) 493-9646