Sierra Metals Reports First Quarter 2025 Consolidated Financial Results
Q1 2025 Highlights:
-- Revenues of $86.1 million, 36% higher than in Q1 2024
-- Adjusted EBITDA(1) of $33.9 million, 114% higher than in Q1 2024
-- Operating cash flows before changes in working capital of $31.7 million,
122% higher than Q1 2024
-- Higher copper, zinc and silver production than in Q1 2024
All dollar figures are in USD.
TORONTO--(BUSINESS WIRE)--May 07, 2025--
Sierra Metals Inc. (TSX: SMT | OTCQX: SMTSF | BVL: SMT) ("Sierra Metals" or the "Company") reports consolidated financial results for the three months ending March 31, 2025 ("Q1 2025"). The information provided below are excerpts from the Company's Q1 2025 financial statements and Management's Discussion and Analysis ("MD&A"), which are available on the Company's website (www.SierraMetals.com) and on SEDAR+ (www.sedarplus.ca) under the Company's profile. Consolidated results include results from the Company's Yauricocha Mine ("Yauricocha") in Peru and the Bolivar Mine ("Bolivar") in Mexico.
Q1 2025 Consolidated Operating and Financial Highlights
(In thousands of
dollars, except per
share and cash cost
amounts, consolidated
figures unless noted
otherwise) Q1 2025 Q4 2024 Q1 2024
------------------------- ------------------ -------- -----------
Operating
------------------------- ----------------- ------- -------
Ore Processed /
Tonnes Milled 752,771 797,774 638,916
Copper Pounds
Produced (000's) 12,783 13,533 11,247
Zinc Pounds Produced
(000's) 10,831 12,301 10,132
Silver Ounces
Produced (000's) 548 544 427
Gold Ounces Produced 4,014 4,009 4,505
Lead Pounds Produced
(000's) 2,787 2,381 3,049
Cash Cost per CuEqLb
(Yauricocha)(1,2,3) $ 2.32 $ 3.17 $ 3.55
AISC per CuEqLb
(Yauricocha)(1,2,3) $ 2.82 $ 3.57 $ 3.97
Cash Cost per CuEqLb
(Bolivar)(1,2) $ 2.51 $ 2.43 $ 2.34
AISC per CuEqLb
(Bolivar)(1,2) $ 3.16 $ 3.06 $ 3.02
Financial
------------------------- ----------------- ------- -------
Revenues $ 86,078 $ 81,036 $ 63,140
Net income (loss)
- Continuing
operations(3) $ 10,370 $ 8,153 $ 82
- Discontinued
Operations $ - $ 1,351 $ (865)
Net income (loss)
attributable to
shareholders,
including
discontinued
operations(3) $ 7,942 $ 6,740 $ (389)
Adjusted EBITDA(1,2)
from continuing
operations $ 33,911 $ 26,563 $ 15,826
Operating cash flows
before movements in
working capital $ 31,655 $ 16,004 $ 14,275
Adjusted net income
(loss) attributable
to shareholders(1)
- Continuing
operations(3) $ 10,808 $ 23,537 $ 3,750
- Discontinued
Operations $ - $ 1,351 $ (865)
Cash and cash
equivalents $ 22,363 $ 19,826 $ 11,220
------------------------- ----------------- ------- -------
(1) This is a non-IFRS performance measure, see Non-IFRS Performance
Measures section of this press release
(2) Copper equivalent payable pounds used for the cash cost and AISC
calculations were calculated at the following prices:
Q1 2025 - $4.25/lb Cu, $1.29/lb Zn, $31.86/oz Ag, $0.90/lb Pb,
$2,868/oz Au. Q4 2024 - $4.14/lb Cu, $1.38/lb Zn, $31.32/oz Ag,
$0.91/lb Pb, $2,654/oz Au. Q1 2024 - $3.84/lb Cu, $1.12/lb Zn,
$23.41/oz Ag, $0.94/lb Pb, $2,069/oz Au.
(3) During Q4 2024, management identified certain inventory
transactions that were incorrectly recorded starting in Q4 2023 and
the previous quarters of 2024. Previously reported Q1 2024 results
have been adjusted accordingly to correct these errors. The revised
inventory balances impacted the related cost of sales and net
income. Adjusted EBITDA and Adjusted net income (loss) attributable
to shareholders are also revised to reflect the corresponding
impacts.
Q1 2025 Consolidated Operating Highlights
Consolidated ore throughput increased by 18% in Q1 2025 compared to Q1 2024, reflecting stronger performance at both Yauricocha and Bolivar. When compared to Q4 2024, consolidated throughput was lower due to adverse weather conditions and a planned two-day mill shutdown, which impacted Q1 2025 production at Bolivar.
Consolidated copper production rose by 14% year-over-year, driven primarily by higher output at Yauricocha.
Q1 2025 Consolidated Financial Highlights
-- Consolidated revenue from metals payable amounted to $86.1 million in Q1
2025, which is a 36% increase from the $63.1 million recorded in Q1 2024,
mainly driven by the increased metal production in Yauricocha and higher
metal prices.
-- Adjusted EBITDA(1) of $33.9 million for Q1 2025 was a 114% increase over
Q1 2024 and a 28% increase over Q4 2024, mainly driven by the higher
revenue and increased gross margins.
-- Adjusted net income attributable to shareholders(1) of $10.8 million, or
$0.05 per share, for Q1 2025 as compared to the adjusted net income of
$3.8 million, or $0.01 per share for Q1 2024. Adjusted net income
attributable to shareholders was lower than Q4 2024, as there was
recognition of a deferred tax recovery of $22.5 million related to the
loss of sale of discontinued operations in Q4 2024.
-- Cash flow generated from operations before movements in working capital
of $31.7 million for Q1 2025 increased compared to $14.3 million in Q1
2024.
-- Cash and cash equivalents of $22.4 million as at March 31, 2025 compared
to $19.8 million at the end of 2024. Cash and cash equivalents increased
during Q1 2025 as a result of cash generated from operating activities of
$27.2 million offset by cash used in investing activities of $20.1
million and cash used in financing activities of $4.6 million.
(1) This is a non-IFRS performance measure, see non-IFRS Performance Measures
section of this press release
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 ended March 31, 2025 and 2024:
Three months ended March 31,
2025 2024 (revised)(1)
---------------------------------- ----------------- ---------------------
Net income (loss) $ 10,370 $ (783)
Adjusted for:
Depletion and depreciation 13,010 9,634
Interest expense and other finance
costs 3,704 2,405
Reorganizational and other
non-recurring expenses 355 124
Share-based payments 158 634
Foreign currency exchange and
other provisions 1,831 2,164
Income taxes 4,483 783
---------------------------------- ---- ----------- --- -------------
Adjusted EBITDA $ 33,911 $ 14,961
---------------------------------- ---- ----------- --- -------------
Less: Adjusted EBITDA from
discontinued operations - (865)
Adjusted EBITDA from continuing
operations 33,911 15,826
(1) During Q4 2024, management identified certain inventory transactions
that were incorrectly recorded starting in Q4 2023 and the previous quarters
of 2024. Previously reported Q1 2024 Adjusted EBITDA has been adjusted
accordingly to correct this error.
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 ended March 31, 2025 and 2024:
Three months ended March 31,
(In thousands of United States
dollars) 2025 2024 (revised)(1)
--------------------------------- -------------------- ---------------------
Net income (loss) attributable to
shareholders $ 7,942 $ (389)
Non-cash depletion charge on
Corona's acquisition 804 1,045
Deferred tax recovery on Corona's
acquisition depletion charge (282) (693)
Reorganizational and other
non-recurring expenses 355 124
Share-based compensation 158 634
Foreign currency exchange loss
(gain) 1,831 2,164
--------------------------------- ------------ --- -------------
Adjusted net income attributable
to shareholders $ 10,808 $ 2,885
--------------------------------- ------------ --- -------------
Less: Adjusted net loss from
discontinued operations - (865)
Adjusted net income from
continuing operations 10,808 3,750
(1) During Q4 2024, management identified certain inventory transactions that
were incorrectly recorded starting in Q4 2023 and the previous quarters of
2024. Previously reported Q1 2024 Adjusted net income has been adjusted
accordingly to correct this error.
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
All--In Sustaining Cost ("AISC") is a non--IFRS measure and is calculated based on guidance provided by the World Gold Council ("WGC"). WGC is not a regulatory industry organization and does not have the authority to develop accounting standards for disclosure requirements. Other mining companies may calculate AISC differently as a result of differences in underlying accounting principles and policies applied, as well as differences in definitions of sustaining versus development capital expenditures.
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 silver and 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 silver and 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 ended March 31, 2025 and 2024:
Three months ended Three months ended
(In thousand of
US dollars,
unless stated) March 31, 2025 March 31, 2024
----------------- ----- -------------------- ------------------------
Yauricocha Bolivar Yauricocha Bolivar
----------------- ----- ---------- -------- ------------ ----------
(revised)(1)
Cash Cost per Tonne of
Processed Ore
------------------------
Cost of Sales 30,897 22,818 26,075 22,187
Reverse: Workers
Profit Sharing - (198) - 392
Reverse: D&A/Other
adjustments (7,238) (5,946) (5,991) (4,140)
Reverse: Variation in
Inventory (1,041) 661 (1,906) 326
------------------------ --------- ------- ----------- -------
Total Cash Cost 22,618 17,335 18,178 18,765
Tonnes Processed 329,363 423,408 240,686 398,230
Cash Cost per
Tonne Processed US$ 68.67 40.94 75.53 47.12
----------------- ----- --------- ------- ----------- -------
(1) During Q4 2024, management identified certain inventory transactions
that were incorrectly recorded starting in Q4 2023 and the previous
quarters of 2024. Previously reported Q1 2024 cost of sales has been
adjusted accordingly to correct this error.
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 ended March 31, 2025 and 2024:
YAURICOCHA Three months ended
(In thousand of US
dollars, unless March 31, 2024
stated) March 31, 2025 (revised)(2)
------------------------ ------ -------------- --------------------------
Cash Cost per copper equivalent
payable pound
--------------------------------
Total Cash Cost 22,618 18,178
Variation in Finished
inventory 1,041 1,906
Treatment and Refining
Charges 2,831 5,625
Selling Costs 930 640
G&A Costs 2,049 1,520
-------------------------------- -------------- ------------------------
Total Cash Cost of Sales 29,469 27,869
Sustaining Capital
Expenditures 6,365 3,318
-------------------------------- -------------- ------------------------
All-In Sustaining Cash Costs 35,834 31,187
Copper Equivalent Payable
Pounds (000's)(1) 12,701 7,856
-------------------------------- -------------- ------------------------
Cash Cost per Copper
Equivalent Payable
Pound (US$) 2.32 3.55
------------------------ ------ -------------- ------------------------
All-In Sustaining Cash
Cost per Copper
Equivalent Payable
Pound (US$) 2.82 3.97
------------------------ ------ -------------- ------------------------
(1) Copper equivalent payable pounds were calculated at the following
prices:
Q1 2025 - $4.25/lb Cu, $1.29/lb Zn, $31.86/oz Ag, $0.90/lb Pb,
$2,868/oz Au. Q1 2024 - $3.84/lb Cu, $1.12/lb Zn, $23.41/oz Ag,
$0.94/lb Pb, $2,069/oz Au.
(2) During Q4 2024, management identified certain inventory transactions
that were incorrectly recorded starting in Q4 2023 and the previous quarters of 2024. Previously reported Q1 2024 cost of sales has been adjusted accordingly to correct this error.
The following table provides detailed information on Bolivar's cash cost, and all-in sustaining cost per copper equivalent payable pound for the three months ended March 31, 2025 and 2024:
BOLIVAR Three months ended
(In thousand of US
dollars, unless
stated) March 31, 2025 March 31, 2024 (revised)(2)
----------------------- ------ ---------------- ---------------------------
Cash Cost per copper
equivalent payable pound
-------------------------------
Total Cash Cost 17,335 18,765
Variation in Finished
inventory (661) (326)
Treatment and Refining
Charges 1,925 2,854
Selling Costs 2,180 2,639
G&A Costs 1,538 1,557
------------------------------- ------------ ---------------------- ---
Total Cash Cost of Sales 22,317 25,489
Sustaining Capital
Expenditures 5,855 7,383
------------------------------- ------------ ---------------------- ---
All-In Sustaining Cash Costs 28,172 32,872
Copper Equivalent Payable
Pounds (000's)(1) 8,908 10,880
------------------------------- ------------ ---------------------- ---
Cash Cost per Copper
Equivalent Payable
Pound (US$) 2.51 2.34
----------------------- ------ ------------ ---------------------- ---
All-In Sustaining Cash
Cost per Copper
Equivalent Payable
Pound (US$) 3.16 3.02
----------------------- ------ ------------ ---------------------- ---
(1) Copper equivalent payable pounds were calculated at the following prices:
Q1 2025 - $4.25/lb Cu, $1.29/lb Zn, $31.86/oz Ag, $0.90/lb Pb, $2,868/oz
Au. Q1 2024 - $3.84/lb Cu, $1.12/lb Zn, $23.41/oz Ag, $0.94/lb Pb,
$2,069/oz Au.
(2) G&A costs updated to exclude corporate allocations for consistency with
Yauricocha calculations.
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.
About Sierra Metals
Sierra Metals is a Canadian mining company focused on copper production with additional base and precious metals by-product credits at its Yauricocha Mine in Peru and Bolivar Mine in Mexico. The Company is intent on safely increasing production volume and growing mineral resources. Sierra Metals has recently had several new key discoveries and still has many more exciting brownfield exploration opportunities in Peru and Mexico that are within close proximity to the existing mines. Additionally, the Company has large land packages at each of its mines with several prospective regional targets providing longer-term exploration upside and mineral resource growth potential.
For further information regarding Sierra Metals, please visit www.sierrametals.com.
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 March 26, 2025 for its fiscal year ended December 31, 2024 and other risks identified in the Company's filings with Canadian securities regulators, which are available at www.sedarplus.ca.
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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20250507731321/en/
CONTACT: Investor Relations
Sierra Metals Inc.
+1 (866) 721-7437
info@sierrametals.com
(END) Dow Jones Newswires
May 07, 2025 18:00 ET (22:00 GMT)
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.