Q1 2019 Results Webcast & Conference Call May 14, 2019 - - PowerPoint PPT Presentation
TSX: SMT | BVL: SMT | NYSE American: SMTS sierrametals.com Q1 2019 Results Webcast & Conference Call May 14, 2019 Yauricocha Mine, Peru Bolivar Mine, Mexico Cusi Mine, Mexico Management Team Speakers on Todays Webcast &
May 14, 2019
TSX: SMT | BVL: SMT | NYSE American: SMTS sierrametals.com Yauricocha Mine, Peru Bolivar Mine, Mexico Cusi Mine, Mexico
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Certain statements in this presentation constitute forward-looking information within the meaning of Canadian and United States 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. These include estimates of future production levels; expectations regarding mine production costs; expected trends in mineral prices; changes in general economic conditions and financial markets; changes in prices for silver and other metals; technological and operational hazards in Sierra's mining and mine development activities; risks inherent in mineral exploration; uncertainties inherent in the estimation of mineral reserves, mineral resources, and metal recoveries; the timing and availability of financing; governmental and other approvals; political unrest or instability in countries where Sierra is active; labor relations and other risk factors disclosed in Sierra's Annual Information Form, which is available on SEDAR at www.sedar.com and which is incorporated by reference into the prospectus forming part of the Company’s registration statement on Form F-10, filed with the SEC and available at www.sec.gov. Although Sierra has attempted to identify important factors that could cause actual performance to differ materially from that described in forward-looking information, there may be other factors that cause its performance not to be as anticipated. Sierra neither intends nor assumes any obligation to update these statements containing forward-looking information to reflect changes in assumptions or circumstances other than as required by applicable law. There can be no assurance that forward-looking information will prove to be accurate as actual results and future events could differ materially from those currently anticipated. Accordingly, readers should not place undue reliance on forward-looking information. This presentation uses the terms "measured resources", "indicated resources" and "inferred resources" as such terms are recognized under National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101") adopted by the Canadian Securities Administrators. Readers are cautioned not to assume that any part or all of the mineral deposits in these categories will ever be converted into reserves. In addition, "inferred resources" have a great amount of uncertainty as to their existence and economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian securities rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, or economic studies, except for a "preliminary assessment" as defined under NI 43-101. Investors are cautioned not to assume that part or all of an inferred resource exists, or is economically or legally mineable. Gordon Babcock B.Sc., P.Eng., is the qualified person as defined in NI 43-101 and Chief Operating Officer for Sierra Metals supervised the preparation of the operational scientific and technical information for Sierra Metals included in this presentation. Cautionary Note to U.S. Investors: While the terms “measured resources”, “indicated resources”, and “inferred resources” are defined in and required to be disclosed by NI 43-101 these terms are not defined under SEC Industry Guide 7 and are normally not permitted to be used in reports and registration statements filed with the SEC. Investors are cautioned not to assume that all or any part of a mineral deposit in these categories will ever be converted into reserves. Accordingly, information concerning mineral deposits contained in or referred to in this presentation may not be comparable to similar information made public by U.S. companies subject to the reporting and disclosure requirements under the United States federal securities laws and the rules and regulations thereunder. Use of Non-IFRS Financial Measures: This presentation contains “Non-IFRS” financial measures including all in-sustaining costs, EBITDA, Free Cash Flow and Net Debt. Sierra uses these Non-IFRS performance measures and ratios in managing its business. Sierra believes that these measures assist investors in understanding the company’s performance. Non-IFRS financial measures should be viewed in addition to, and not as an alternative for, the reported operating results or cash flow from operations or any other measures prepared in accordance with IFRS. In addition, the presentation of these measures may not be comparable to similarly situated titled measures that other companies use. Please see Reconciliation of IFRS to Non-IFRS Financial Measures in the Appendix to this presentation for a reconciliation to the most comparable IFRS financial measure. Additional Information: Sierra Metals Inc. has filed a base prospectus and a prospectus supplement with the Canadian Securities Commission and a registration statement (including a prospectus and prospectus supplement) with the SEC for an “at the market” offering of its Common Shares (“ATM offering”). Investors considering a purchase of shares in this offering should read the prospectus, prospectus supplement and documents incorporated into that registration statement and other documents that Sierra Metals has filed with the SEC for more information concerning the ATM offering and the issuer. These documents are available without charge from the SEC’s EDGAR database at www.sec.com and on SEDAR at www.sedar.ca.
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Adjusted EBITDA $12.0 M
17% Operating Cash Flows Before Movements in Working Capital $11.8 M
Revenue $49.2 M
Cash $23.9M
As at March 31, 2019
Realized Metal Prices 2019 (In US dollars) Q1 Q4 Q3 Q2 Q1 Silver (oz) 15.57 $ 14.63 $ 14.85 $ 16.36 $ 16.75 $ Copper (lb) 2.85 $ 2.77 $ 2.79 $ 3.12 $ 3.14 $ Lead (lb) 0.94 $ 0.89 $ 0.94 $ 1.09 $ 1.15 $ Zinc (lb) 1.23 $ 1.16 $ 1.14 $ 1.38 $ 1.56 $ Gold (oz) 1,305 $ 1,238 $ 1,206 $ 1,296 $ 1,334 $ 2018
15% Ag 3% Au 37% Cu 11% Pb 34% Zn
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March 31, 2019 March 31, 2018 Operating Ore Processed / Tonnes Milled 568,401 557,710 Silver Ounces Produced (000's) 691 594 Copper Pounds Produced (000's) 7,732 8,090 Lead Pounds Produced (000's) 6,954 6,312 Zinc Pounds Produced (000's) 16,421 18,214 Gold Ounces Produced 1,986 1,952 Copper Equivalent Pounds Produced (000's)1 21,767 23,445 Zinc Equivalent Pounds Produced (000's)1 50,562 47,209 Silver Equivalent Ounces Produced (000's)1 3,988 4,394 Cash Cost per Tonne Processed 51.77 $ 46.66 $ Cost of sales per AgEqOz 8.48 $ 7.15 $ Cash Cost per AgEqOz2 8.30 $ 6.77 $ AISC per AgEqOz
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13.71 $ 9.85 $ Cost of sales per CuEqLb
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1.55 $ 1.34 $ Cash Cost per CuEqLb2 1.52 $ 1.27 $ AISC per CuEqLb2 2.51 $ 1.85 $ Cost of sales per ZnEqLb
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0.67 $ 0.67 $ Cash Cost per ZnEqLb
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0.66 $ 0.63 $ AISC per ZnEqLb2 1.08 $ 0.92 $ Cash Cost per ZnEqLb (Yauricocha)2 0.54 $ 0.57 $ AISC per ZnEqLb (Yauricocha)
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0.85 $ 0.82 $ Cash Cost per CuEqLb (Bolivar)2 2.04 $ 1.29 $ AISC per CuEqLb (Bolivar)2 3.59 $ 1.94 $ Cash Cost per AgEqOz (Cusi)
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16.53 $ 18.34 $ AISC per AgEqOz (Cusi)
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30.57 $ 28.33 $ Financial Revenues 49,180 $ 61,675 $ Adjusted EBITDA2 12,041 $ 27,403 $ Operating cash flows before movements in working capital 11,804 $ 27,348 $ Adjusted net income attributable to shareholders2 886 $ 11,187 $ Net income (loss) attributable to shareholders (1,724) $ 8,703 $ Cash and cash equivalents 23,937 $ 25,514 $ Working capital (19,795) $ (1,576) $ (In thousands of dollars, except per share and cash cost amounts, consolidated figures unless noted otherwise) Three Months Ended
Notes (1)Silver equivalent ounces and copper and zinc equivalent pounds for Q1 2019 were calculated using the following realized prices: $15.57/oz Ag, $2.85/lb Cu, $0.94/lb Pb, $1.23/lb Zn, $1,305/oz Au. Silver equivalent ounces and copper and zinc equivalent pounds for Q1 2018 were calculated using the following realized prices: $16.75/oz Ag, $3.14/lb Cu, $1.15/lb Pb, $1.56/lb Zn, $1,334/oz Au. (2) This is a non-IFRS performance measure, see Non-IFRS Performance Measures section of the MD&A. (3) The decrease in working capital was due to the Corona Acquisition Facility with BCP being classified as a current liability, as it was repaid in full during May 2019.
Revenue Mix by Metal
(Trailing 12 months ending March 31, 2019)
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Yauricocha Production Q1 2019 Q1 2018 % Var. Tonnes processed (mt) 233,814 271,389
Daily throughput 2,672 3,102
Silver grade (g/t) 63.51 59.52 7% Copper grade 1.00% 0.89% 13% Lead grade 1.45% 1.24% 17% Zinc grade 3.56% 3.45% 3% Gold Grade (g/t) 0.55 0.61
Silver recovery 77.23% 70.50% 10% Copper recovery 74.80% 70.22% 7% Lead recovery 88.19% 81.51% 8% Zinc recovery 89.51% 87.94% 2% Gold Recovery 18.09% 15.77% 15% Silver ounces (000's) 369 366 1% Copper pounds (000's) 3,863 3,727 4% Lead pounds (000's) 6,605 6,069 9% Zinc pounds (000's) 16,421 18,144
Gold ounces 753 835
Zinc equivalent pounds (000's)(1) 35,911 34,767 3% 3 Months Ended
(1) Silver equivalent ounces and copper and zinc equivalent pounds for Q1 2019 w ere calculated using the follow ing realized prices: $15.57/oz Ag, $2.85/lb Cu, $0.94/lb Pb, $1.23/lb Zn, $1,305/oz
calculated using the follow ing realized prices: $16.75/oz Ag, $3.14/lb Cu, $1.15/lb Pb, $1.56/lb Zn, $1,334/oz Au.
3 Months Ended March 31, 2019 3 Months Ended March 31, 2018 Cash Cost per ZnEqLb $0.54 $0.57 AISC per ZnEqLb $0.85 $0.82
Highlights:
annual production guidance provided
providing access to further reserves and resources. Loading pockets to be added on the 1210 level and a spill pocket at the 1230 level
the 720 level of the Mine providing for an additional 10,000 tonnes per month of increased capacity
the end of Q2 2019
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Bolivar Production Q1 2019 Q1 2018 % Var. Tonnes processed (mt) 263,238 259,375 1% Daily throughput 3,008 2,964 1% Copper grade 0.81% 0.95%
Silver grade (g/t) 19.47 17.85 9% Gold grade (g/t) 0.19 0.18 8% Copper recovery 82.24% 80.65% 2% Silver recovery 79.14% 80.91%
Gold recovery 67.87% 70.94%
Copper pounds (000's) 3,869 4,363
Silver ounces (000's) 130 120 8% Gold ounces 1,100 1,048 5% Copper equivalent pounds (000's)(1) 5,083 5,450
3 Months Ended
(1) Silver equivalent ounces and copper and zinc equivalent pounds for Q1 2019 w ere calculated using the follow ing realized prices: $15.57/oz Ag, $2.85/lb Cu, $0.94/lb Pb, $1.23/lb Zn, $1,305/oz
calculated using the follow ing realized prices: $16.75/oz Ag, $3.14/lb Cu, $1.15/lb Pb, $1.56/lb Zn, $1,334/oz Au.
3 Months Ended March 31, 2019 3 Months Ended March 31, 2018 Cash Cost per CuEqLb $2.04 $1.29 AISC per CuEqLb $3.59 $1.94
Highlights:
due to lower copper head grade
contractor costs related to stope and ramp development to increase throughput as well as additional equipment purchases
to occur in H2-2019
intercepts of 1.15% Cu (2.09% CuEq) with average true width of 8.2 meters
the end of Q4 2019
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Cusi Production Q1 2019 Q1 2018 % Var. Tonnes processed (mt) 71,349 26,945 165% Daily throughput 815 308 165% Silver grade (g/t) 105.27 143.47
Gold grade (g/t) 0.15 0.18
Lead grade 0.30% 0.48%
Zinc grade
0.32% 0.51%
Silver recovery 79.53% 86.69%
Gold recovery 37.53% 45.26%
Lead recovery 75.21% 84.21%
Zinc recovery 0.00% 23.44%
Silver ounces (000's) 192 108 78% Gold ounces 133 69 94% Lead pounds (000's) 349 243 44% Zinc pounds (000's) 71
Silver equivalent ounces (000's)(1) 224 136 64% 3 Months Ended
(1) Silver equivalent ounces and copper and zinc equivalent pounds for Q1 2019 w ere calculated using the follow ing realized prices: $15.57/oz Ag, $2.85/lb Cu, $0.94/lb Pb, $1.23/lb Zn, $1,305/oz
calculated using the follow ing realized prices: $16.75/oz Ag, $3.14/lb Cu, $1.15/lb Pb, $1.56/lb Zn, $1,334/oz Au.
3 Months Ended March 31, 2019 3 Months Ended March 31, 2018 Cash Cost per AgEqOz $16.53 $18.34 AISC per AgEqOz $30.57 $28.33
Highlights:
increase as Company continues to work towards 1,200 TPD in Q2 2019
grades and recoveries for all metals
zone which has higher head grades
to increase throughput to 1,200 TPD
floatation expected to take place starting in Q3 which are required to push throughput to the 2,400 TPD level in 2020
Q4 2019
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Balance Sheet
(As at March 31, 2019) (USD in millions)
Cash and Cash Equivalents $23.9
Senior Secured Corporate Credit Facility with BCP $20.7 BCP Acquisition Credit Facility (repaid in May 2019) $33.2 BCP Revolving Credit Facility (repaid in May 2019) $15.0
TOTAL DEBT $68.9 NET DEBT $45.0
INV INVESTOR R RE RELA LATIO IONS NS
Sierra Metals Inc. Mike McAllister Vice President, Investor Relations Tel: 1.416.366.7777 TF: 1.866.493.9646 Email: info@sierrametals.com
CO CORPORATE OFFICE
161 Bay Street Suite 4260 Toronto, ON M5J 2S1 Tel: 1.416.366.7777 TF: 1.866.493.9646
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