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Sunday, February 11, 2018 Derek Macpherson

Sierra Provides Positive Update on its Assets

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We recently attended the Sierra Metals Inc. (TSX:SMT) Investor and Analyst Day and were impressed with the quality of the presentation and the outlook for the company. While there are certainly important operational improvements ongoing at the company’s projects, the presentation focused on providing an update on the company’s brownfield exploration, which has revealed significant exploration upside. The presentation schedule included an overview of the company’s financials, exploration targets, operations and guidance for its three projects. Sierra’s VP Exploration & General Manager in Mexico, Alonso Lujan, went through each project and provided an in-depth overview of exploration activities. The company’s Chief Operating Officer, Gordon Babcock, was also very effective in providing an operational update and outlook for Sierra.  read more


Thursday, January 18, 2018 Derek Macpherson

Sierra Reports Improving Production in 2017 Results

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Sierra Metals Inc. (TSX:SMT, BVL:SMT, NYSE:SMTS) reported modestly improved production results for Q4 2017 with an increase in CuEq production of 1.6% versus Q3 2017 and a 1% decrease in full year production to 90Mlb CuEq compared to 2016. Metal production still remains slightly weaker than 2016 due to lower production from the Cusi and Bolivar projects. The sharp decrease in metal production at Cusi last quarter was due to the company’s implementation of a new plan to improve operational performance, where production has since rebounded in Q4 2017 by 35%. Bolivar and Cusi have already seen increased tonnage QoQ as the key components of the operational improvement plan reach completion and further throughput increases are expected at both mines in H1 2018. The program has already been successfully implemented at Yauricocha and is expected to improve production, modernize operations and lower costs at both Cusi and Bolivar by early 2018. In our view, the ongoing operational improvements in addition to $6M of drilling are key to enhancing the company’s value and liquidity in 2018. The company has also announced its 2018 production guidance, which is expected to be in the range of 89-104Mlb CuEq.   read more


Tuesday, January 02, 2018 Derek Macpherson

Sierra Updates Cusi Resource

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Sierra Metals Inc. (TSX:SMT, BVL:SMT, NYSE:SMTS) has updated the mineral resource estimate for its Cusi silver mine in Mexico, following an aggressive drill program and multiple new discoveries. The results include a significant increase in tonnage (up 94% overall) along with a modest decrease in grade (down 19%), the net effect of which is an overall increase in contained metal (up 57% on a AgEq basis). The previous update was completed in January 2017, and since has been updated to account for production, a new cut-off grade of 105 g/t AgEq (previously 110 g/t AgEq) and an additional 48,684m of drilling, which targeted the high-grade Santa Rosa de Lima zone and Promontorio. In Q1 2018, the company expects to complete ongoing operational improvements at both Cusi and Bolivar, as reported in October. At Cusi, the focus remains the Santa Rosa de Lima zone, which it expects in Q2 2018 will be the main supply of ore in terms of tonnage and grade. Brownfield exploration remains a priority for the company to further increase mineral resources. A prefeasibility study and capex estimate study is anticipated for Q3 2018 to outline economic operations for a new Cusi plant. We continue to believe ongoing operational improvements in addition to ongoing exploration are key to enhancing the company’s value and liquidity. read more


Tuesday, December 19, 2017 Derek Macpherson

Sierra Drill Results Suggest New Exploration Opportunity

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Sierra Metals Inc. (TSX:SMT, BVL:SMT, NYSE:SMTS) reported drill results from the Cuye area at its Yauricocha mine, returning high-grade copper and polymetallic mineralization over wide intervals. Although early, a new exploration opportunity potentially exists as low-grade disseminated copper mineralization was found in the intrusive rock formation, whereas it is usually found in the contact of the intrusive and the volcanics. This has not previously been tested or known at Yauricocha. Brownfield exploration is ongoing, and is focused on near-mine discoveries and expansion in 2018. Yauricocha remains a key aspect of the company’s operations, therefore ongoing exploration success is important in enhancing the company’s value. read more


Friday, November 03, 2017 Derek Macpherson

Sierra Reports Strong Financials at Yauricocha

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Sierra Metals Inc. (TSX:SMT, BVL:SMT) reported Q3 2017 financial results from its Yauricocha mine in Peru (Sociedad Minera Corona S.A. - 81.8% owned subsidiary). Unadjusted for ownership interest, revenue for the quarter was US$39.6 million, a slight increase of 5% QoQ and an increase of 34% YoY. Q3 marks the highest quarter of production in Yauricocha’s history, which reflects the success of the company’s operational improvement program. YoY cash cost per CuEq oz payable has increased slightly to $1.08 per CuEq payable pound QoQ and by 37% YoY, whereas AISC increased 9% QoQ and only 20% YoY to $1.71 per CuEq payable pound. The increase in costs was a result of increased Capex as well as exploration expenses and the cost of infrastructure improvements, all of which should have longer term value. The company also recently increased reserves at Yauricocha by 134%, which was reported by the company in October. Yauricocha remains a key aspect of the company’s operations, ongoing exploration success is important to enhancing the company’s value.  read more


Sunday, October 29, 2017 Derek Macpherson

Sierra Increases Mineral Reserves at Yauricocha

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Sierra Metals Inc. (TSX:SMT, BVL:SMT, NYSE:SMTS) announced an update to its mineral reserves at Yauricocha to 8.9Mt averaging 48.3 g/t Ag, 1.2% Cu, 0.8% Pb, 2.4% Zn and 0.5 g/t Au, which represents a 134% increase to the previous Reserve Estimate in August 2016 (Figure 1). This update follows the September press release announcing significant increases to Yauricocha’s mineral resources. Yauricocha is the company’s flagship project located in Peru, which represented approximately 78% of the company’s total CuEq production in Q3 2018. This increase in reserves is significant because it represents a doubling of mine-life based on current throughput levels. The company will continue to carry out brownfield exploration on the property to further increase its mineral resources. We note that to achieve 2017 production guidance, the company will require a strong Q4. In our view, the ongoing operational improvements at Cusi and Bolivar, the reserve update and potential production increase at Yauricocha and ongoing exploration are key to enhancing the company’s value and liquidity.  read more


Tuesday, October 24, 2017 Derek Macpherson

Sierra Provides Update on Mexican Operations

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Sierra Metals Inc. (TSX:SMT, BVL:SMT, NYSE:SMTS) announced an update regarding its operational improvement program at the Mexican operations, Bolivar and Cusi. The operational improvement plan is expected to improve production, modernize operations and lower costs at both Cusi and Bolivar by early 2018. The company’s recent update includes the strengthening of the corporate team, increases in metallurgical recoveries at both operations, new equipment at Bolivar to maximize ore delivery and drift development in the Santa de Rosa structure at Cusi. Management is expecting to complete the improvements by the end of Q1 2018 and see higher cash flow from its Mexico operations starting in Q2 2018. We note that to achieve 2017 production guidance, the company will require a strong Q4. In our view, the ongoing operational improvements in addition to ongoing exploration are key to enhancing the company’s value and liquidity.  read more


Tuesday, October 17, 2017 Derek Macpherson

Sierra Reports Higher Q3 2017 Results

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Sierra Metals Inc. (TSX:SMT, BVL:SMT, NYSE:SMTS) reported modestly improved production results for Q3 2017 with an increase in CuEq production of 2% versus Q2 2017. However, metal production remains weaker than Q3 2016 due to lower production from its projects in Mexico. The QoQ decrease in metal production at Cusi is a result of shifting resources to develop recently discovered higher grade zones. An operational improvement program, which has already been successful at Yauricocha, is currently underway at Bolivar and Cusi and is expected to improve production, modernize operations and lower costs by early 2018. We note the company is likely to need a strong Q4, to achieve 2017 production guidance. In our view, the ongoing operational improvements in addition to ongoing exploration are key to enhancing the company’s value and liquidity. read more


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