Canada's Sierra Metals sinks into red on impairment, prices

Canadian miner Sierra Metals, which has operations in Peru and Mexico, posted a US$33.3mn loss for full-year 2015 due to an impairment charge and slumping metals output and prices.

Sierra, which reported a US$9.3mn profit for 2014, saw revenues drop 22% to US$134mn in 2015 from US$173mn in 2014, the Toronto-based company said in a statement.

Sierra registered a US$19mn impairment charge for its Mexican Cusi mine. The company said it trimmed cash costs for processing ore to US$40.14/t from US$40.55/t, but its cash position dwindled to US$25.1mn as of December 31 from US$41.3mn a year earlier.

Production slipped 7% to 10.9Moz silver equivalent last year despite the company processing 1.86Mt of ore compared with 1.71Mt in 2014. Last year Sierra produced 42.1Mlb zinc, 42.2Mlb lead, 23.2Mlb copper, 3.1Moz silver and 9,066oz gold.

Sierra, which also operates the Bolívar mine in Mexico and the Yauricocha mine in Peru, produced 54.3Mlb zinc, 48.8Mlb lead, 22.6Mlb copper, 3.15Moz silver and 9,457oz gold in 2014. Yauricocha saw lower production due to declining ore grades and halts in operations because of water issues.

"The latter part of 2015 has been challenging with weaker financial and production results as a result of lower metal prices," CEO Mark Brennan said in the statement. "Despite the challenges, Sierra met its 2015 production guidance despite the need for a major restructuring program at Yauricocha."

The company set 2016 production guidance at 10.4-12.8Moz silver equivalent, including 2.6-3.2Moz silver, 43.2-53.4Mlb zinc, 26.7-32.9Mlb lead, 24.4-30.1Mlb copper and 9,100-11,200oz gold.

In exploration work, underground drilling continues at Yauricocha's Espinoza zone, where the company discovered a high grade zone in January, while work is also ongoing at the Cusi mine and Bolívar's El Fierro and La Sidra targets, according to the company.

***

UPCOMING BNAMERICAS EVENT

5TH Mexico Infrastructure Summit

Click here to see the agenda and speakers