Sierra Metals Reports Third Quarter 2024 Consolidated Financial Results
Q3 2024 Highlights:
-
Based on operating performance to date and anticipated production for the remainder of 2024,
expects to exceed its consolidated annual production guidance.Sierra Metals - Yauricocha averaged throughput of 3,050 tonnes per day in Q3 2024, as development below the 1120 Level at Yauricocha remains on schedule to achieve full production of 3,600 tonnes per day in Q4 2024.
-
Revenues of
$70.9 million in Q3 2024 were 23% and 25% higher than in Q2 2024 and Q3 2023, respectively. -
Adjusted EBITDA(1) of
$20.4 million in Q3 2024 was 57% and 152% higher than in Q2 2024 and Q3 2023, respectively. -
Cash flow generated from operating activities before movements in working capital of
$22.1 million for Q3 2024 was 48% and 268% higher than in Q2 2024 and Q3 2023, respectively.
Management will host a conference call and webcast at
All dollar figures are in USD.
(1) This is a non-IFRS performance measure, see non-IFRS Performance Measures section of this press release
Conference Call & Webcast
Management will host a conference call and webcast at
Q3 2024 CONSOLIDATED OPERATING AND FINANCIAL HIGHLIGHTS
(In thousands of dollars, except per share and cash cost amounts, consolidated figures unless noted otherwise) |
Nine months ended |
||||||||||||||
Q3 2024 | Q2 2024 | Q3 2023 |
2024 |
2023 |
|||||||||||
Operating | |||||||||||||||
Ore Processed / Tonnes Milled |
|
668,647 |
|
|
627,015 |
|
|
622,622 |
|
|
1,934,578 |
|
|
1,791,086 |
|
Copper Pounds Produced (000's) |
|
11,009 |
|
|
8,531 |
|
|
9,477 |
|
|
30,787 |
|
|
28,221 |
|
Zinc Pounds Produced (000's) |
|
11,184 |
|
|
11,272 |
|
|
11,176 |
|
|
32,588 |
|
|
33,983 |
|
Silver Ounces Produced (000's) |
|
503 |
|
|
387 |
|
|
458 |
|
|
1,317 |
|
|
1,370 |
|
Gold Ounces Produced |
|
3,973 |
|
|
3,438 |
|
|
3,651 |
|
|
11,916 |
|
|
11,753 |
|
Lead Pounds Produced (000's) |
|
2,537 |
|
|
3,053 |
|
|
4,084 |
|
|
8,639 |
|
|
10,792 |
|
Cash Cost per CuEqLb (Yauricocha)1,2 |
$ |
3.25 |
|
$ |
3.44 |
|
$ |
3.05 |
|
$ |
3.28 |
|
$ |
3.11 |
|
AISC per CuEqLb (Yauricocha)1,2 |
$ |
3.75 |
|
$ |
3.79 |
|
$ |
3.58 |
|
$ |
3.67 |
|
$ |
3.49 |
|
Cash Cost per CuEqLb (Bolivar)1,2 |
$ |
2.42 |
|
$ |
2.76 |
|
$ |
2.93 |
|
$ |
2.56 |
|
$ |
2.56 |
|
AISC per CuEqLb (Bolivar)1,2 |
$ |
3.23 |
|
$ |
3.53 |
|
$ |
3.51 |
|
$ |
3.30 |
|
$ |
3.18 |
|
Financial | |||||||||||||||
Revenues |
$ |
70,934 |
|
$ |
57,524 |
|
$ |
56,963 |
|
$ |
191,598 |
|
$ |
168,911 |
|
Net income (loss) | |||||||||||||||
- Continuing operations |
$ |
6,544 |
|
$ |
4,912 |
|
$ |
(2,758 |
) |
$ |
13,086 |
|
$ |
4,699 |
|
- Discontinued Operations |
$ |
(2,679 |
) |
$ |
(810 |
) |
$ |
(6,608 |
) |
$ |
(4,354 |
) |
$ |
(10,853 |
) |
Net income (loss) attributable to shareholders, including discontinued operations |
$ |
3,766 |
|
$ |
4,115 |
|
$ |
(9,301 |
) |
$ |
9,040 |
|
$ |
(5,610 |
) |
Adjusted EBITDA1 from continuing operations |
$ |
20,391 |
|
$ |
12,949 |
|
$ |
8,080 |
|
$ |
51,253 |
|
$ |
38,056 |
|
Operating cash flows before movements in working capital |
$ |
22,129 |
|
$ |
14,923 |
|
$ |
6,013 |
|
$ |
53,537 |
|
$ |
30,452 |
|
Adjusted net income (loss) attributable to shareholders1 | |||||||||||||||
- Continuing operations |
$ |
4,546 |
|
$ |
5,022 |
|
$ |
(2,137 |
) |
$ |
14,742 |
|
$ |
9,388 |
|
- Discontinued Operations |
$ |
(2,679 |
) |
$ |
(810 |
) |
$ |
(1,774 |
) |
$ |
(4,354 |
) |
$ |
(4,245 |
) |
Cash and cash equivalents |
$ |
18,599 |
|
$ |
22,477 |
|
$ |
18,165 |
|
$ |
18,599 |
|
$ |
18,165 |
|
(1) This is a non-IFRS performance measure, see Non-IFRS Performance Measures section of the MD&A. |
|||||||||||||||
(2) Copper equivalent payable pounds for the purpose of cash cost and AISC were calculated using the following realized prices: |
|||||||||||||||
Copper equivalent payable pounds were calculated using the following realized prices: |
|||||||||||||||
Q3 2024: |
|||||||||||||||
Q2 2024: |
|||||||||||||||
Q3 2023: |
|||||||||||||||
9M 2024: |
|||||||||||||||
9M 2023: |
Q3 2024 Highlights
Revenue from payable metals of
Adjusted EBITDA(1) increased to
Yauricocha throughput averaged more than 3,000 tpd in Q3 2024; the mine is on track to achieve full capacity production of 3,600 tpd in Q4 2024.
Yauricocha doubled its copper production in Q3 2024 versus Q2 2024 due to the consistent increased throughput throughout the quarter and higher grades realized from the ramp up of production below the 1120 level.
Cash flow generated from operating activities before movements in working capital of
Cash and cash equivalents of
Sale of the
COMPARISON TO 2024 GUIDANCE
Given operating performance for the first nine months of the year and expected performance in Q4 2024, the Company expects to exceed metal production guidance for the year 2024.
The tables below compare the 9M 2024 production versus 2024 annual production guidance from the Yauricocha and the Bolivar mines.
Production Guidance
Consolidated | 2024 Guidance |
9M 2024 |
||||
Low | High | Actual | ||||
Copper (000 lbs) |
37,500 |
43,300 |
30,787 |
|||
Zinc (000 lbs) |
38,600 |
44,500 |
32,588 |
|||
Silver (000 oz) |
1,500 |
1,750 |
1,317 |
|||
Gold (oz) |
10,100 |
11,600 |
11,916 |
|||
Lead (000 lbs) |
10,200 |
11,800 |
8,639 |
By Mine
Yauricocha | 2024 Guidance |
9M 2024 |
||||
Low | High | Actual | ||||
Copper (000 lbs) |
13,600 |
15,700 |
10,366 |
|||
Zinc (000 lbs) |
38,600 |
44,500 |
32,588 |
|||
Silver (000 oz) |
850 |
1,000 |
701 |
|||
Gold (oz) |
2,100 |
2,400 |
1,548 |
|||
Lead (000 lbs) |
10,200 |
11,800 |
8,639 |
Bolivar | 2024 Guidance |
9M 2024 |
||||
Low | High | Actual | ||||
Copper (000 lbs) |
23,900 |
27,600 |
20,421 |
|||
Silver (000 oz) |
650 |
750 |
616 |
|||
Gold (oz) |
8,000 |
9,200 |
10,368 |
2024 Cost Guidance
Based on operating performance for the first nine months of the year and expected performance in Q4 2024, the Company expects to meet cost guidance for the year 2024.
2024 Guidance | 9M 2024 Actual | |||||||||
Cash costs range | AISC range | Cash costs | AISC | |||||||
Mine | per CuEqLb | per CuEqLb | per CuEqLb | per CuEqLb | ||||||
Yauricocha | Per Copper Payable Eq Lbs ('000) |
|
|
|
|
|
|
|
||
Bolivar | Per Copper Payable Eq Lbs ('000) |
|
|
|
|
|
|
|
||
(1) This is a non-IFRS performance measure, see Non-IFRS Performance Measures section of the MD&A. Cash Cost comprise of: operating costs, selling expenses, administrative expenses, commercial terms and discounts. AISC is comprised of cash costs and sustaining capex. |
||||||||||
(2) Copper equivalent payable pounds for guidance AISC were calculated using the following metal prices: |
NON-IFRS PERFORMANCE MEASURES
The non-IFRS performance measures presented do not have any standardized meaning prescribed by IFRS and are therefore unlikely to be directly comparable to similar measures presented by other issuers.
Non-IFRS reconciliation of adjusted EBITDA
EBITDA is a non-IFRS measure that represents an indication of the Company’s continuing capacity to generate earnings from operations before taking into account management’s financing decisions and costs of consuming capital assets, which vary according to their vintage, technological currency, and management’s estimate of their useful life. EBITDA comprises revenue less operating expenses before interest expense (income), property, plant and equipment amortization and depletion, and income taxes. Adjusted EBITDA has been included in this document. Under IFRS, entities must reflect in compensation expense the cost of share-based payments. In the Company’s circumstances, share-based payments involve a significant accrual of amounts that will not be settled in cash but are settled by the issuance of shares in exchange for cash. As such, the Company has made an entity specific adjustment to EBITDA for these expenses. The Company has also made an entity-specific adjustment to the foreign currency exchange (gain)/loss. The Company considers cash flow before movements in working capital to be the IFRS performance measure that is most closely comparable to adjusted EBITDA.
The following table provides a reconciliation of adjusted EBITDA to the condensed interim consolidated financial statements for the three months and nine months ended
Three months ended |
|
Nine months ended |
||||||||||||||
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||||
Net income |
$ |
3,865 |
|
$ |
(9,366 |
) |
$ |
8,732 |
|
$ |
(6,154 |
) |
||||
Adjusted for: | ||||||||||||||||
Depletion and depreciation |
|
10,206 |
|
|
9,580 |
|
|
28,034 |
|
|
26,390 |
|
||||
Interest expense and other finance costs |
|
3,868 |
|
|
2,641 |
|
|
9,015 |
|
|
7,628 |
|
||||
NRV adjustments on inventory |
|
- |
|
|
2,647 |
|
|
- |
|
|
4,202 |
|
||||
Share-based compensation |
|
635 |
|
|
460 |
|
|
2,069 |
|
|
648 |
|
||||
Foreign currency exchange and other provisions |
|
(3,126 |
) |
|
(1,164 |
) |
|
(2,271 |
) |
|
897 |
|
||||
Impairment charges |
|
- |
|
|
2,500 |
|
|
- |
|
|
2,500 |
|
||||
Income taxes |
|
2,264 |
|
|
(484 |
) |
|
1,320 |
|
|
(566 |
) |
||||
Adjusted EBITDA |
$ |
17,712 |
|
$ |
6,814 |
|
$ |
46,899 |
|
$ |
35,545 |
|
||||
Less: Adjusted EBITDA from discontinued operations |
|
(2,679 |
) |
|
(1,266 |
) |
|
(4,354 |
) |
|
(2,511 |
) |
||||
Adjusted EBITDA from continuing operations |
|
20,391 |
|
|
8,080 |
|
|
51,253 |
|
|
38,056 |
|
Non-IFRS reconciliation of adjusted net income
The Company has included the non-IFRS financial performance measure of adjusted net income, defined by management as the net income attributable to shareholders shown in the statement of earnings plus the non-cash depletion charge due to the acquisition of Corona and the corresponding deferred tax recovery and certain non-recurring or non-cash items such as share-based compensation and foreign currency exchange (gains) losses. The Company believes that, in addition to conventional measures prepared in accordance with IFRS, certain investors may want to use this information to evaluate the Company’s performance and ability to generate cash flows. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance in accordance with IFRS.
The following table provides a reconciliation of adjusted net income to the condensed interim consolidated financial statements for the three months and nine months ended
Three months ended |
|
Nine months ended |
||||||||||||||
(In thousands of |
2024 |
|
2023 |
|
2024 |
|
2023 |
|||||||||
Net income attributable to shareholders |
$ |
3,766 |
|
$ |
(9,301 |
) |
$ |
9,040 |
|
$ |
(5,610 |
) |
||||
Non-cash depletion charge on Corona's acquisition |
|
893 |
|
$ |
1,362 |
|
|
2,393 |
|
|
3,607 |
|
||||
Deferred tax recovery on Corona's acquisition depletion charge |
|
(301 |
) |
$ |
(415 |
) |
|
(843 |
) |
|
(1,101 |
) |
||||
NRV adjustments on inventory |
|
- |
|
$ |
2,647 |
|
|
- |
|
|
4,202 |
|
||||
Share-based compensation |
|
635 |
|
$ |
460 |
|
|
2,069 |
|
|
648 |
|
||||
Foreign currency exchange loss (gain) |
|
(3,126 |
) |
$ |
(1,164 |
) |
|
(2,271 |
) |
|
897 |
|
||||
Impairment charges |
|
- |
|
$ |
2,500 |
|
|
- |
|
|
2,500 |
|
||||
Adjusted net income (loss) attributable to shareholders |
$ |
1,867 |
|
$ |
(3,911 |
) |
$ |
10,388 |
|
$ |
5,143 |
|
||||
Less: Adjusted net loss from discontinued operations |
|
(2,679 |
) |
|
(1,774 |
) |
|
(4,354 |
) |
|
(4,245 |
) |
||||
Adjusted net income (loss) from continuing operations |
|
4,546 |
|
|
(2,137 |
) |
|
14,742 |
|
|
9,388 |
|
Cash cost per copper equivalent payable pound
The Company uses the non-IFRS measure of cash cost per copper equivalent payable pound to manage and evaluate operating performance. The Company believes that, in addition to conventional measures prepared in accordance with IFRS, certain investors use this information to evaluate the Company’s performance and ability to generate cash flows. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. The Company considers cost of sales per copper equivalent payable pound to be the most comparable IFRS measure to cash cost per copper equivalent payable pound and has included calculations of this metric in the reconciliations within the applicable tables to follow.
All-in sustaining cost per copper equivalent payable pound
AISC is a non‐IFRS measure and is calculated based on guidance provided by the
AISC is a more comprehensive measure than cash cost per pound for the Company’s consolidated operating performance by providing greater visibility, comparability and representation of the total costs associated with producing copper from its current operations.
The Company defines sustaining capital expenditures as, “costs incurred to sustain and maintain existing assets at current productive capacity and constant planned levels of productive output without resulting in an increase in the life of assets, future earnings, or improvements in recovery or grade. Sustaining capital includes costs required to improve/enhance assets to minimum standards for reliability, environmental or safety requirements. Sustaining capital expenditures excludes all expenditures at the Company’s new projects and certain expenditures at current operations which are deemed expansionary in nature.”
Consolidated AISC includes total production cash costs incurred at the Company’s mining operations, including treatment and refining charges and selling costs, which forms the basis of the Company’s total cash costs. Additionally, the Company includes sustaining capital expenditures and corporate general and administrative expenses. AISC by mine does not include certain corporate and non‐cash items such as general and administrative expense and share-based payments. The Company believes that this measure represents the total sustainable costs of producing copper from current operations and provides the Company and other stakeholders of the Company with additional information of the Company’s operational performance and ability to generate cash flows. As the measure seeks to reflect the full cost of copper production from current operations, new project capital and expansionary capital at current operations are not included. Certain other cash expenditures, including tax payments, dividends and financing costs are also not included.
The following table provides a reconciliation of cash costs to cost of sales, as reported in the Company’s condensed interim consolidated statement of income for the three months and nine months ended
Three months ended | Three months ended | |||||||||||||
(In thousand of US dollars, unless stated) |
|
|
||||||||||||
Yauricocha | Bolivar | Yauricocha | Bolivar | |||||||||||
Cash Cost per Tonne of Processed Ore | ||||||||||||||
Cost of Sales |
28,199 |
|
19,746 |
|
25,754 |
|
22,860 |
|
||||||
Reverse: Workers Profit Sharing |
- |
|
513 |
|
- |
|
(906 |
) |
||||||
Reverse: D&A/Other adjustments |
(5,900 |
) |
(3,554 |
) |
(5,958 |
) |
(3,414 |
) |
||||||
Reverse: Variation in Inventory |
(858 |
) |
172 |
|
(84 |
) |
(1,295 |
) |
||||||
Total Cash Cost |
21,441 |
|
16,877 |
|
19,712 |
|
17,245 |
|
||||||
Tonnes Processed |
266,917 |
|
401,731 |
|
259,732 |
|
362,890 |
|
||||||
Cash Cost per Tonne Processed | US$ |
80.33 |
|
42.01 |
|
75.89 |
|
47.52 |
|
Nine months ended | Nine months ended | ||||||||||||
(In thousand of US dollars, unless stated) |
|
|
|||||||||||
Yauricocha | Bolivar | Yauricocha | Bolivar | ||||||||||
Cash Cost per Tonne of Processed Ore | |||||||||||||
Cost of Sales |
73,463 |
|
62,780 |
|
72,276 |
|
57,232 |
|
|||||
Reverse: Workers Profit Sharing |
- |
|
16 |
|
- |
|
(906 |
) |
|||||
Reverse: D&A/Other adjustments |
(17,579 |
) |
(10,158 |
) |
(16,729 |
) |
(9,109 |
) |
|||||
Reverse: Variation in Inventory |
4,766 |
|
(175 |
) |
1,042 |
|
79 |
|
|||||
Total Cash Cost |
60,650 |
|
52,463 |
|
56,589 |
|
47,296 |
|
|||||
Tonnes Processed |
760,751 |
|
1,173,828 |
|
723,192 |
|
1,067,894 |
|
|||||
Cash Cost per Tonne Processed | US$ |
79.72 |
|
44.69 |
|
78.25 |
|
44.29 |
|
The following table provides detailed information on Yauricocha’s cash cost and all-in sustaining cost per copper equivalent payable pound for the three months and nine months ended
YAURICOCHA | Three months ended | Nine months ended | ||||||||||
(In thousand of US dollars, unless stated) |
|
|
|
|
||||||||
Cash Cost per Copper equivalent payable pound | ||||||||||||
Total Cash Cost |
21,441 |
19,712 |
60,650 |
|
56,589 |
|
||||||
Variation in Finished inventory |
858 |
84 |
(4,766 |
) |
(1,042 |
) |
||||||
Treatment and Refining Charges |
7,868 |
6,661 |
17,502 |
|
18,099 |
|
||||||
Selling Costs |
924 |
816 |
2,274 |
|
2,235 |
|
||||||
G&A Costs(1) |
2,820 |
1,787 |
5,956 |
|
4,914 |
|
||||||
Total Cash Cost of Sales |
33,911 |
29,060 |
81,616 |
|
80,795 |
|
||||||
Sustaining Capital Expenditures |
5,301 |
5,005 |
9,492 |
|
9,946 |
|
||||||
All-In Sustaining Cash Costs |
39,212 |
34,065 |
91,108 |
|
90,741 |
|
||||||
Copper Equivalent Payable Pounds (000's)(2) |
10,448 |
9,520 |
24,857 |
|
25,994 |
|
||||||
Cash Cost per Copper Equivalent Payable Pound | (US$) |
3.25 |
3.05 |
3.28 |
|
3.11 |
|
|||||
All-In Sustaining Cash Cost per Copper Equivalent Payable Pound | (US$) |
3.75 |
3.58 |
3.67 |
|
3.49 |
|
|||||
(1) G&A Costs for the three months and nine months ended |
||||||||||||
(2) Copper equivalent payable pounds were calculated using the following realized prices: |
||||||||||||
Q3 2024: |
||||||||||||
Q3 2023: |
||||||||||||
9M 2024: |
||||||||||||
9M 2023: |
The following table provides detailed information on Bolivar’s cash cost, and all-in sustaining cost per copper equivalent payable pound for the three months and nine months ended
BOLIVAR | Three months ended | Nine months ended | |||||
(In thousand of US dollars, unless stated) |
|
|
|
|
|||
Cash Cost per copper equivalent payable pound | |||||||
Total Cash Cost |
16,877 |
|
17,245 |
52,463 |
47,296 |
|
|
Variation in Finished inventory |
(172 |
) |
1,295 |
175 |
(79 |
) |
|
Treatment and Refining Charges |
2,512 |
|
3,064 |
7,222 |
8,048 |
|
|
Selling Costs |
2,627 |
|
2,067 |
7,242 |
5,938 |
|
|
G&A Costs(1) |
1,564 |
|
1,706 |
5,509 |
3,579 |
|
|
Total Cash Cost of Sales |
23,408 |
|
25,377 |
72,611 |
64,782 |
|
|
Sustaining Capital Expenditures |
7,764 |
|
5,025 |
21,137 |
15,923 |
|
|
All-In Sustaining Cash Costs |
31,172 |
|
30,402 |
93,748 |
80,705 |
|
|
Copper Equivalent Payable Pounds (000's)(2) |
9,666 |
|
8,650 |
28,418 |
25,350 |
|
|
Cash Cost per Copper Equivalent Payable Pound | (US$) |
2.42 |
|
2.93 |
2.56 |
2.56 |
|
All-In Sustaining Cash Cost per Copper Equivalent Payable Pound | (US$) |
3.23 |
|
3.51 |
3.30 |
3.18 |
|
(1) G&A Costs for the three months and nine months ended |
|||||||
(2) Copper equivalent payable pounds were calculated using the following realized prices: |
|||||||
Q3 2024: |
|||||||
Q3 2023: |
|||||||
9M 2024: |
|||||||
9M 2023: |
Additional non-IFRS measures
The Company uses other financial measures, the presentation of which is not meant to be a substitute for other subtotals or totals presented in accordance with IFRS, but rather should be evaluated in conjunction with such IFRS measures. The following other financial measures are used:
- Operating cash flows before movements in working capital - excludes the movement from period-to-period in working capital items including trade and other receivables, prepaid expenses, deposits, inventories, trade and other payables and the effects of foreign exchange rates on these items.
The terms described above do not have a standardized meaning prescribed by IFRS, and therefore the Company’s definitions are unlikely to be comparable to similar measures presented by other companies. The Company’s management believes that their presentation provides useful information to investors because cash flows generated from operations before changes in working capital excludes the movement in working capital items. This, in management’s view, provides useful information of the Company’s cash flows from operations and are considered to be meaningful in evaluating the Company’s past financial performance or its future prospects. The most comparable IFRS measure is cash flows from operating activities.
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Forward-Looking Statements
This press release contains forward-looking information within the meaning of Canadian securities legislation. Forward-looking information relates to future events or the anticipated performance of Sierra and reflect management's expectations or beliefs regarding such future events and anticipated performance based on an assumed set of economic conditions and courses of action. In certain cases, statements that contain forward-looking information can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", "believes" or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might", or "will be taken", "occur" or "be achieved" or the negative of these words or comparable terminology. By its very nature forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual performance of Sierra to be materially different from any anticipated performance expressed or implied by such forward-looking information.
Forward-looking information is subject to a variety of risks and uncertainties, which could cause actual events or results to differ from those reflected in the forward-looking information, including, without limitation, the risks described under the heading "Risk Factors" in the Company's annual information form dated
The risk factors referred to above are not an exhaustive list of the factors that may affect any of the Company's forward-looking information. Forward-looking information includes statements about the future and is inherently uncertain, and the Company's actual achievements or other future events or conditions may differ materially from those reflected in the forward-looking information due to a variety of risks, uncertainties and other factors. The Company's statements containing forward-looking information are based on the beliefs, expectations, and opinions of management on the date the statements are made, and the Company does not assume any obligation to update such forward-looking information if circumstances or management's beliefs, expectations or opinions should change, other than as required by applicable law. For the reasons set forth above, one should not place undue reliance on forward-looking information.
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