News Column

Sierra Metals announces first quarter 2014 financial results of its subsidiary Sociedad Minera Corona in Peru

April 30, 2014

VANCOUVER, April 30, 2014 /CNW/ - Sierra Metals Inc. (TSX:SMT)(BVL:SMT) ("Sierra Metals" or the "Company") announces the filing of Sociedad Minera Corona S.A.'s ("Corona") unaudited Financial Statements and Management Discussion and Analysis ("MD&A") for the first quarter of 2014. The Company holds an 81.8% interest in Corona. All amounts are presented in thousands of US dollars unless otherwise stated and have not been adjusted for the 18.2% non-controlling interest.


Daniel Tellechea, President and CEO of Sierra Metals, commented: "Corona has reported strong financial results during the first quarter despite significantly lower commodity prices versus the first quarter of 2013. The Company has achieved higher production and maintained a low cash cost per tonne as a result of operational efficiencies implemented during second half of 2013 and solid operating cash flow. Corona is on track to meet its production guidance for 2014 and will continue executing aggressive exploration plans during the year".


The following table sets out select unaudited financial information for the three-month periods ended March 31, 2014 and 2013:













3 Months Ended

(In thousands of US dollars, unless otherwise stated)

Mar 31, 2014

Mar 31, 2013









Revenue

$

27,908

33,285

Adjusted EBITDA1



12,913

17,216

Cash Flow from continuing operations



8,842

809

Gross profit



12,966

15,758

Income Taxes



(3,487)

(4,315)

Net Income attributable to shareholders



6,192

9,164



Cash Cost per oz of Ag (Yauricocha)2

$

(21.11)

(18.86)

















(In thousands of US dollars, unless otherwise stated)

Mar 31, 2014

Dec 31, 2013









Cash and cash equivalents

$

31,474

36,242

Assets



111,810

117,583

Liabilities



56,337

58,831

Equity



55,473

58,752









1Adjusted EBITDA is defined by management as EBITDA adjusted for non-cash and non-recurring

   items including share-based compensation, foreign exchange gain (loss), gain (loss) from 

   discounted operations and unrealized gain (loss) on financial instruments held at fair value 

   through profit and loss







2Cash costs include cost of sales, treatment and refining charges, and selling expenses, and







   exclude worker's profit sharing, depreciation and other non-cash provisions










Corona's Financial Highlights


•Net income of US$ 6.2 million or US$ 0.172 per share for the first quarter of 2014 compared to US$ 9.2 million or US$ 0.255 per share for the same period in 2013. •Adjusted EBITDA of US$ 12.9 million for the first quarter of 2014 compared to US$ 17.2 million for the same period in 2013. The decrease in adjusted EBITDA was mainly driven by lower commodity prices. •Operating cash flow of US$ 8.8 million for the first quarter of 2014 compared to US$ 0.8 million for the same period in 2013. The increase in operating cash flow mainly resulted from a US$ 9.2 million positive impact on working capital driven by lower payments of worker's profit sharing and taxes in 2014. •Income taxes of US$ 3.5 million for the first quarter of 2014 compared to US$ 4.3 million in the same period of 2013. •Revenues of US$ 27.9 million for the first quarter of 2014 compared to US$ 33.3 million for the same period in 2013. The decrease was mainly driven by lower commodity prices. •Cash and cash equivalents of US$ 31.5 million as at March 31, 2014 compared to US$ 36.2 million as of December 31, 2013. Cash and cash equivalents decreased by US$ 4.8 million. The decrease in cash was mainly driven by US$ 8.8 million of operating cash flow, offset by US$ 9.4 million of dividend payments and US$ 4.0 million of capital expenditures. •A negative silver cash cost of US$ 21.11 per ounce ("oz") at Yauricocha in the first quarter of 2014 compared to a negative cash cost of US$ 18.86 in the same period of 2013. Lower silver cash cost mainly resulted from lower cash cost per tonne of ore driven by operating efficiencies achieved during second half of 2013.

Corona's Operational Highlights

•Silver production of 494,294 oz in the first quarter of 2014 compared to 474,601 oz for the same period in 2013. •Copper production of 1.7 million pounds ("lb") in the first quarter of 2014 compared to 2.2 million lb for the same period in 2013. •Lead production of 11.7 million lb in the first quarter of 2014 compared to 8.4 million lb for the same period in 2013. •Zinc production of 12.7 million lb in the first quarter of 2014 compared to 13.0 million lb for the same period in 2013. •Gold production from the Yauricocha Mine was 1,474 oz in the first quarter of 2014 and 1,598 oz for the same period in 2013.

The following table sets out production results as of March 31, 2014 and 2013:




Yauricocha Production

3 Months Ended



Mar 31, 2014

Mar 31, 2013

% Var.









Silver production (oz)

494,294

474,601

4%

Copper production (000 lb)

1,739

2,175

-20%

Lead production (000 lb)

11,683

8,379

39%

Zinc production (000 lb)

12,732

13,045

-2%

Gold Production (oz)

1,474

1,598

-8%















About Sierra Metals


Sierra Metals Inc. is a Canadian mining company focused on precious and base metals from its Yauricocha Mine in Peru, its Bolivar Mine and Cusi Mine in Mexico. In addition, Sierra Metals is exploring several precious and base metal targets in Peru and Mexico. Projects in Peru include Adrico (gold), Victoria (copper-silver) and Ipillo (polymetallic) at the Yauricocha Property in the province of Yauyos and the San Miguelito gold properties in Northern Peru. Projects in Mexico include Bacerac (silver) in the state of Sonora, and La Verde (gold) at the Batopilas Property in the state of Chihuahua.

The Company's shares trade on the Bolsa de Valores de Lima and the Toronto Stock Exchange under the symbol "SMT".


Forward-Looking Statements


Except for statements of historical fact contained herein, the information in this press release may constitute "forward-looking information" within the meaning of Canadian securities law. Other than statements of historical fact, all statements are "forward-looking statements", which involve various known and unknown risk and uncertainties and other factors, including market conditions that may affect the Company's ability to execute its current business plan.  Actual results might differ materially from results suggested in any forward-looking statements. The Company assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward-looking statements unless and until required by securities laws applicable to the Company. Additional information identifying risks and uncertainties is contained in filings by the Company with the Canadian securities regulators, which filings are available at www.sedar.com.

SOURCE Sierra Metals Inc.


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Source: Canada Newswire


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