Falling metal prices and falling production in Sierra Metals: have led to a decline in Q1 revenue from the same period last year, but are bullish on future production

Published: May 15, 2019 10:47

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Sierra Metals reported revenue of $49.2 million in copper, zinc, lead, gold and silver in the first quarter of this year, higher than the market forecast of $38.23 million, but down from $61.7 million in the same period last year. Pre-tax profit before interest and depreciation before amortization (EBITDA) was $12 million, down from $27.4 million in the same period last year. Operating cash flow also shrank to $11.8 million from $27.4 million in the first three months of 2018.

SMM5, March 15:, Sierra Metals reported revenue of $49.2 million in copper, zinc, lead, gold and silver in the first quarter of this year, higher than the market forecast of $38.23 million, but down from $61.7 million in the same period last year, according to the Mining Journal website.

Profit before interest, depreciation and amortization before tax (EBITDA) was $12 million, down from $27.4 million in the same period last year

Operating cash flow also shrank to $11.8 million from $27.4 million in the first three months of 2018.

The main reasons were lower metal prices, a 12-day strike on the Yauricocha project in Peru and a lower-than-expected decline in production due to the lower-than-expected rate of increase in the Bolivar and Cusi projects in Mexico.

In terms of production, the company produced 7.7 million pounds of copper in the first quarter of this year, down 4 percent from a year earlier; silver production was 700000 ounces, up 16 percent from a year earlier; zinc production was 16.4 million pounds, down 10 percent from a year earlier; lead production was 7 million pounds, up 10 percent from a year earlier. Gold production was 1986 ounces, up 2 per cent from a year earlier.

Igor Gonzales, chief executive and president of Sierra, said that despite the challenges faced in the first quarter, Yauricocha's zinc equivalent production increased, Cusi production reached an all-time high, and Bolivar production increased by 1 per cent from the first quarter of 2018.

The company expects production to continue to increase in the second half of this year.

The company's goal for 2019 is to produce between 1950 and 21.8 million ounces of silver, 1.07 to 119.9 million pounds of copper and 2.615 to 292.9 million pounds of zinc.

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