SYS-CON MEDIA Authors: Roberto Medrano, Dmitriy Stepanov, Gilad Parann-Nissany, Srinivasan Sundara Rajan, Sean Houghton

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
"There is a natural synchronization between the business models, the IoT is there to support ,” explained Brendan O'Brien, Co-founder and Chief Architect of Aria Systems, in this SYS-CON.tv interview at the 15th International Cloud Expo®, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
The term culture has had a polarizing effect among DevOps supporters. Some propose that culture change is critical for success with DevOps, but are remiss to define culture. Some talk about a DevOps culture but then reference activities that could lead to culture change and there are those that talk about culture change as a set of behaviors that need to be adopted by those in IT. There is no question that businesses successful in adopting a DevOps mindset have seen departmental culture change, ...
The Internet of Things promises to transform businesses (and lives), but navigating the business and technical path to success can be difficult to understand. In his session at @ThingsExpo, Sean Lorenz, Technical Product Manager for Xively at LogMeIn, demonstrated how to approach creating broadly successful connected customer solutions using real world business transformation studies including New England BioLabs and more.
The security devil is always in the details of the attack: the ones you've endured, the ones you prepare yourself to fend off, and the ones that, you fear, will catch you completely unaware and defenseless. The Internet of Things (IoT) is nothing if not an endless proliferation of details. It's the vision of a world in which continuous Internet connectivity and addressability is embedded into a growing range of human artifacts, into the natural world, and even into our smartphones, appliances, a...
SYS-CON Media announced that Centrify, a provider of unified identity management across cloud, mobile and data center environments that delivers single sign-on (SSO) for users and a simplified identity infrastructure for IT, has launched an ad campaign on Cloud Computing Journal. The ads focus on security: how an organization can successfully control privilege for all of the organization’s identities to mitigate identity-related risk without slowing down the business, and how Centrify provides ...
SYS-CON Events announced today Isomorphic Software, the global leader in high-end, web-based business applications, will exhibit at SYS-CON's DevOps Summit 2015 New York, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Isomorphic Software is the global leader in high-end, web-based business applications. We develop, market, and support the SmartClient & Smart GWT HTML5/Ajax platform, combining the productivity and performance of traditional desktop software ...
DevOps Summit 2015 New York, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that it is now accepting Keynote Proposals. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long development cycles that produce software that is obsolete...
"Matrix is an ambitious open standard and implementation that's set up to break down the fragmentation problems that exist in IP messaging and VoIP communication," explained John Woolf, Technical Evangelist at Matrix, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
The 3rd International @ThingsExpo, co-located with the 16th International Cloud Expo – to be held June 9-11, 2015, at the Javits Center in New York City, NY – is now accepting Hackathon proposals. Hackathon sponsorship benefits include general brand exposure and increasing engagement with the developer ecosystem. At Cloud Expo 2014 Silicon Valley, IBM held the Bluemix Developer Playground on November 5 and ElasticBox held the DevOps Hackathon on November 6. Both events took place on the expo fl...
We are reaching the end of the beginning with WebRTC, and real systems using this technology have begun to appear. One challenge that faces every WebRTC deployment (in some form or another) is identity management. For example, if you have an existing service – possibly built on a variety of different PaaS/SaaS offerings – and you want to add real-time communications you are faced with a challenge relating to user management, authentication, authorization, and validation. Service providers will w...
The Internet of Things is tied together with a thin strand that is known as time. Coincidentally, at the core of nearly all data analytics is a timestamp. When working with time series data there are a few core principles that everyone should consider, especially across datasets where time is the common boundary. In his session at Internet of @ThingsExpo, Jim Scott, Director of Enterprise Strategy & Architecture at MapR Technologies, discussed single-value, geo-spatial, and log time series dat...
There's Big Data, then there's really Big Data from the Internet of Things. IoT is evolving to include many data possibilities like new types of event, log and network data. The volumes are enormous, generating tens of billions of logs per day, which raise data challenges. Early IoT deployments are relying heavily on both the cloud and managed service providers to navigate these challenges. In her session at Big Data Expo®, Hannah Smalltree, Director at Treasure Data, discussed how IoT, Big D...
The Internet of Things will put IT to its ultimate test by creating infinite new opportunities to digitize products and services, generate and analyze new data to improve customer satisfaction, and discover new ways to gain a competitive advantage across nearly every industry. In order to help corporate business units to capitalize on the rapidly evolving IoT opportunities, IT must stand up to a new set of challenges. In his session at @ThingsExpo, Jeff Kaplan, Managing Director of THINKstrateg...
Fundamentally, SDN is still mostly about network plumbing. While plumbing may be useful to tinker with, what you can do with your plumbing is far more intriguing. A rigid interpretation of SDN confines it to Layers 2 and 3, and that's reasonable. But SDN opens opportunities for novel constructions in Layers 4 to 7 that solve real operational problems in data centers. "Data center," in fact, might become anachronistic - data is everywhere, constantly on the move, seemingly always overflowing. Net...
DevOps Summit 2015 New York, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that it is now accepting Keynote Proposals. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long development cycles that produce software that is obsolete...