Despite losing 12 days of production to an illegal strike at the Yauricocha mine, in Peru, and reporting a slower-than-expected ramp up of throughput at its Mexico mines, Sierra Metals still expects to achieve its 2019 production guidance, CEO Igor Gonzales said on Tuesday.
The TSX-listed miner produced 700 000 oz of silver, 16.4-million pounds of zinc, 7-million pounds of lead and 7.7-million pounds of copper, as well as 1 986 oz of gold, in the quarter ended March 31. Compared with the first quarter of 2018, silver production increased by 16%, zinc output fell by 10%, lead production was up 10%, copper output fell 4% and gold production increased by 2%.
“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. 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,” said CEO and president Igor Gonzales.
He said that the Mexican mines’ production should increase late in the second quarter and that production remained within its yearly guidance.
Gonzales added that the company-wide ongoing brownfield exploration programmes should lead to further significant growth in reserves and resources.
Sierra Metals generated revenue of $49-million and adjusted earnings before interest, taxes, depreciation and amortisation of $12-million, allowing the company to fund its capital expenditure programmes and repay some debt obligations, despite “a challenging metal price environment”.
The miner posted a net loss of $1.7-million for the quarter, compared with profit of $8.73-million a year earlier.
The 2019 guidance for the company is silver-equivalent production of between 19.5-million and 21.8-million ounces, copper equivalent production of between 107-million and 119.9-million pounds, and zinc equivalent production of between 261.5-million and 292.9-million pounds.Creamer Media Senior Researcher and Deputy Editor Online