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Sierra Metals achieved record quarterly throughput from its Cusi base and precious metals asset in Mexico during Q1 2019.
In spite of a slower than expected ramp up, Sierra Metals (TSX:SMT) achieved record quarterly throughput at its Cusi base and precious metals asset in Mexico during Q1 2019.
In a quarterly report on the company’s financial and production results, Sierra touted production results of 7.7 million pounds of copper, 16.4 million pounds of zinc, 7 million pounds of lead, 0.7 million ounces of silver and 1,986 ounces of gold.
Respectively, this represents a 4 percent decrease in copper, a 10 percent decrease in zinc, a 10 percent increase in lead, a 16 percent increase in silver and a 2 percent increase in gold compared to Q1 2018.
The results come following an illegal 12 day strike in March at the company’s Yauricocha mine in Peru, which produces all of the aforementioned commodities. However, in spite of the strike, Sierra Metals President and CEO Igor Gonzales stated that Yauricocha managed to increase its zinc equivalent metal production over the last quarter.
“The first quarter has presented us with several challenges, including an illegal strike at Yauricocha, as well as slower than expected ramp up of throughput at Bolivar and Cusi with lower head grades and recoveries,” Gonzales said in a statement.
“I want to assure shareholders that management remains focused on the expansions in Mexico and improving tonnage, head grades and recovery rates, which in turn will help to lower costs.”
On the financial side, revenue from metals payable dropped from Q1 2018’s US$61.7 million to US$49.2 million in Q1 2019, which the company attributed to lower throughput and lower realized metal prices.
The company’s adjusted earnings before interest, tax, depreciation and amortization also came in lower this quarter, reaching US$12 million; Q1 2018’s numbers rested at US$27.4 million.
According to Gonzales, Sierra is still on track to meet its annual production guidance, as the Bolivar and Cusi mines in Mexico are due to reach higher throughput rates by the end of Q2 2019. He added that positive preliminary economic assessment studies have demonstrated “robust growth opportunities” at all of the company’s mines, with life-of-mine plans set to be completed by mid-2019.
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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.
