TORONTO, April 30, 2013 /CNW/ - Sierra Metals Inc.
(TSX-V:SMT) (BVL:SMT) ("Sierra") ("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 first 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 "The results of
our subsidiary in Peru reflect
cost pressures mainly driven by more aggressive mine development at
the Yauricocha mine during the first quarter of 2013 and the
appreciation of the Peruvian Sol relative to the US Dollar. The
former will enable the mine to reduce its operating costs during
the next 12 months. The acquisition of Yauricocha has continued to
add substantial value to the Company in 2013, as the mine through
its local corporate entity (Sociedad Minera Corona) paid a
US$ 40 million dividend in first
quarter of 2013. The Yauricocha property shows strong upside
potential and the Company has started the development of a new
shaft in the Central Mine Area. This project, combined with an
aggressive exploration program to increase reserves and resources,
will improve the production profile in Peru in the medium term".
The following table sets out select unaudited
financial information for the first quarter of 2013 and 2012:
|
|
|
|
|
Three months
ended |
(In thousands of US dollars, unless
stated) |
|
Mar 31, 2013 |
Mar 31, 2012 |
Revenue |
|
33,285 |
40,054 |
EBITDA |
|
17,225 |
21,624 |
Cash Flow from continuing operations |
|
701 |
6,127 |
Income Taxes 1 |
|
(4,315) |
(5,622) |
Non-recurring gain on asset sale 1 |
|
- |
9,954 |
Net Income |
|
9,164 |
24,642 |
Cash Cost per oz of Ag (Yauricocha) |
US$ |
(21.50) |
(31.99) |
Exchange Rate (PEN / US$) 2 |
|
2.574 |
2.683 |
|
|
|
|
|
|
|
|
(In thousands of US dollars) |
|
Mar 31, 2013 |
Dec 31, 2012 |
Cash and cash equivalents |
|
29,581 |
72,071 |
Assets |
|
103,017 |
141,826 |
Liabilities |
|
43,808 |
52,231 |
Net Debt 3 |
|
(18,581) |
(61,071) |
Equity |
|
59,209 |
89,595 |
1
Includes a US$ 3.9 million reclassification from income taxes to
gain on asset sale. |
2 Peruvian Soles (PEN) per US Dollar
(US$). |
|
|
|
3 Consolidated debt minus cash and
cash equivalents. |
|
|
|
Corona's
Financial Highlights
- Net income of US$ 9.1 million or
US$0.255 per share for the first
quarter of 2013 compared to US$ 24.6
million or US$ 0.685 per share
for the same period in 2012. Note that the first quarter of 2012
results include a US$ 10.0 million
non-recurring gain associated with the sale of the Huanchor
hydroelectric asset.
- EBITDA of US$ 17.2 million for
the first quarter of 2013 compared to US$
21.6 million for the same period in 2012. The main drivers
for the decline in EBITDA include: a decrease in revenue per tonne
due to lower prices of copper, silver and gold, higher cash costs
resulting from increases from higher costs of labor, consumables
and third party services, especially in exploration activities, and
the appreciation of the Peruvian sol relative to the US
Dollar.
- Operating cash flows of US$ 0.7
million for the first quarter of 2013 compared to
US$ 6.1 million for the same period
in 2012. Lower EBITDA levels mainly drive the decrease in operating
cash flow in the first quarter of 2013 compared to the same period
in 2012. It is important to highlight that Corona's operating cash flows during the first
quarter are usually lower than in the rest of the year. The main
reason is working capital. During the first quarter of 2013 the
Company paid US$ 7.8 million in
profit sharing and US$ 2.0 million in
tax adjustments. These two payments were provisioned as expenses
during the 2012 fiscal year but were paid in the first quarter of
2013. Accordingly, the Company will provision these expenses during
2013 but will not make these payments again until the first quarter
of 2014.
- Income taxes of US$ 4.3 million
for the first quarter of 2013 compared to US$ 5.6 million in the same period of 2012.
Income taxes in the first quarter of 2012 were $1.7 million and include a $3.9 million one-time deferred tax adjustment
related to the sale of Huanchor hydroelectric asset. We have
reclassified this one-time $3.9
million adjustment from income taxes to gain on asset sale
on the table above.
- Revenues of US$ 33.3 million in
the first quarter of 2013 compared to US$
40.1 million for the same period in 2012. The main drivers
include lower copper and silver prices, change in the production
mix of the Company, and lower metal content in concentrates due to
lower head grades.
- Cash and cash equivalents of US$ 29.6
million as of March 31, 2013
compared to US$ 72.1 million as of
March 31, of 2012. The US$ 40.0 dividend paid during the first quarter
of 2013 mainly drives the decrease in cash and cash
equivalents.
- A negative silver ("Ag") cash cost of US$ 21.50 per ounce ("oz") at Yauricocha in the
first quarter of 2013 compared to a negative cash cost of
US$ 31.99 in the same period of
2012.
Corona's
Operational Highlights
- Silver ("Ag") production of 474,601 oz in the first quarter of
2013 compared to 492,432 oz for the same period in 2012.
- Copper ("Cu") production of 2.2 million pounds ("lb") in the
first quarter of 2013 compared to 2.6 million lb for the same
period in 2012.
- Lead ("Pb") production of 8.4 million lb in the first quarter
of 2013 compared to 7.8 million lb for the same period in
2012.
- Zinc ("Zn") production of 13.0 million lb in the first quarter
of 2013 compared to 10.5 million lb for the same period in
2012.
- Gold ("Au") production from the Yauricocha Mine was 1,598 oz in
the first quarter of 2013 and 3,025 oz for the same period in
2012.
The following table sets out production results for the first
quarter ended March 31, 2013 and
2012:
|
|
|
|
|
|
|
|
Three months ended |
|
|
Mar 31, 2013 |
|
Mar 31, 2012 |
|
% Var. |
Silver (oz) |
|
476,601 |
|
492,432 |
|
-3% |
Copper (000 lb) |
|
2,175 |
|
2,634 |
|
-17% |
Lead (000 lb) |
|
8,379 |
|
7,846 |
|
7% |
Zinc (000 lb) |
|
13,045 |
|
10,485 |
|
24% |
Gold (000 lb) |
|
1,598 |
|
3,025 |
|
-47% |
|
|
|
|
|
|
|
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
Head of 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, 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 TSXV 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 TSXV 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.
SOURCE Sierra Metals Inc.