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Sierra Metals boosts net income in second quarter, revises 2021 guidance

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(Kitco News) - Sierra Metals (TSX: SMT) yesterday announced revenue of $79.4 million and an adjusted EBITDA of $37.7 million on the throughput of 787,534 tonnes and metal production of 24.8 million copper equivalent pounds in Q2 2021 (Q2 2020 production: 22.7 million pounds).

The company said it saw increased metals production of all individual metals except copper in Q2 2021, with record quarterly throughput at the Yauricocha mine in Peru.

Sierra Metals’ Q2 2021 consolidated production includes 9.5 million pounds of copper, a 2% decrease; 1.0 million ounces of silver, a 67% increase; 21.1 million pounds of zinc, a 54% increase; 8.0 million pounds of lead, a 24% increase; and 2,812 ounces of gold, a 2% increase respectively, compared to Q2 2020. Copper production decreased due to mining of lower-grade zones in Yauricocha and Bolivar.

Revenue from metals payable of $69.6 million in Q2 2021 increased by 25% from $55.6 million in Q2 2020. The increase in revenues was primarily driven by the increase in realized metal prices, which more than compensated for the decrease in metal payable, except zinc and lead.

Adjusted EBITDA increased 173% to $37.7 million for Q2 2021 from $12.6 million in the same quarter of 2020. Net income attributable to shareholders for Q2 2021 was $9.1 million (Q2 2020: $0.2 million) or $0.06 per share (basic and diluted) (Q2 2020: $0.00).

The company said that production and financial results of the company in the first half of 2021 were impacted by COVID-19 and operational challenges. Therefore, the company noted it has reviewed its guidance for 2021, with copper equivalent production is now expected to fall between 110 to 115 million pounds from the original guidance of between 130 to 141 million pounds.

Sierra Metals is a diversified Canadian mining company focused on the production and development of precious and base metals from its polymetallic Yauricocha mine in Peru and Bolivar and Cusi mines in Mexico.

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