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Friday, May 12, 2017 Derek Macpherson

Q1 Financials Reflective of SMT's Improvements

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Sierra Metals Inc. (TSX:SMT, BVL:SMT) reported strong Q1 2017 financial results, reflecting successful production improvements from its Yauricocha mine and favourable metal prices. Consequently, revenues increased by 130% YoY and 30% QoQ, while adjusted EBITDA increased 59% QoQ (480% YoY) to US$25.4 million. Despite a weak quarter at Cusi, company-wide CuEq production increased by 28% YoY and 23% QoQ. Cash costs decreased 17% QoQ (10% YoY) to US$0.96 lb CuEq and AISC decreased by 32% QoQ (21% YoY) to US$1.50 lb CuEq, highlighting continued success of the optimization program. The company remains focused on brownfield exploration at all operating mines, expecting to add more high-value tonnage in the future. We anticipate a strong 2017 from Sierra as operations continue to improve and exploration advances, all of which should further enhance the company’s value. read more


Tuesday, May 02, 2017 Derek Macpherson

SMT Continues to Execute at Yauricocha

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Sierra Metals Inc. (TSX:SMT, BVL:SMT) reported strong Q1 2017 financial results from its Yauricocha mine in Peru (Sociedad Minera Corona S.A. - 81.8% owned subsidiary). The results reflect operational improvements carried out at Yauricocha over the course of the year as revenue increased by ~21% QoQ (~208% YoY). On a YoY basis, all costs were substantially improved. QoQ, AISC were reduced by ~34.0% on a copper equivalent basis. We view the results positively as Sierra continues to experience operational improvements. In addition, we believe further exploration success at Yauricocha is key to enhancing the company’s value. read more


Monday, May 01, 2017 Derek Macpherson

SMT Discovers New Zone & Expands Cuye-Mascota

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Sierra Metals Inc. (TSX:SMT, BVL:SMT) announced results from an ongoing brownfield drill program being carried out at the company’s flagship Yauricocha mine in Peru. Drilling between the Esperanza zone and the Cachi-Cachi mine, resulted in the discovery of a new mineralized structure, the Esperanza North zone, which the company will continue to drill at depth (Figure 1). In addition, results from 3 holes drilled at the Cuye-Mascota zone discovered in November 2016, extended the zone which continues to remain open at depth and longitudinally to the northwest and southeast. Drilling confirmed the current orebody continues from the 1070 level at depth to below the 1270 level, noting previous results from 2011 and 2012 were unsuccessful between the 870m and 1020m level horizon (Figure 2). The results from this program will be included in a resource and reserve estimate update expected in Q4 2017. Over the course of the year, the company will continue to focus on expansion drilling and exploring the newly discovered zones to further define areas of opportunity near existing operations. We believe continued exploration success along with ongoing operational improvements at Sierra’s operating mines, are key to enhancing the company’s value and liquidity read more


Friday, April 21, 2017 Derek Macpherson

Sierra Q1 Results Show Continued Improvements

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Sierra Metals Inc. (TSX:SMT, BVL:SMT) reported Q1 2017 production results from its operating mines in Peru and Mexico. The company’s quarterly production showed continued incremental operational improvements at both Yauricocha and Bolivar, offsetting a weak quarter at Cusi (Figure 1). The company remains focused on improving operations and near-mine exploration, which should help it surface the value of these assets. In our view, continued exploration success along with ongoing operational improvements at Sierra’s operating mines are key to enhancing the company’s value and liquidity. read more


Thursday, April 13, 2017 Derek Macpherson

SMT Updates Resource Estimate at Cusi

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Sierra Metals Inc. (TSX:SMT, BVL:SMT) provided an updated resource estimate comprised of drilling completed between January 2014 and January 2017 at its Cusi mine in Mexico (Figure 1). Due to the length of time since the previous resource update (2013) as well as differences in cut-off grades, recoveries, and average metal prices, we view the estimates as incomparable. The update does not include the 15,000m drill program which began in December 2016, targeting the Santa Rosa de Lima zone. The company is focused on converting resources into the measured and indicated categories, which will be incorporated in an updated resource expected in H2 2017. As mentioned in a post earlier this week, the company is in the process of obtaining a listing on the NYSE MKT, Cusi’s resource update will also aide in furthering that process. Sierra continues to achieve exploration success and deliver improvements at its operating mines, as this progress continues in addition to obtaining a US listing, we believe the progress should enhance the company’s value and improve the liquidity of the stock. read more


Wednesday, April 12, 2017 Derek Macpherson

SMT Updates Resource & Reserve Estimates at Bolivar

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Sierra Metals Inc. (TSX:SMT, BVL:SMT) announced an updated resource and reserve estimate at its Bolivar Mine in Mexico (Figure 1). The update includes drilling completed between January 2013 and September 2016, and does not include the current ~20,000m of expansion drilling underway at the mine. Results from the successful program are to be incorporated in an update expected in H2 2017. In our view, this resource does not compare to the previous one (2012) because of metal prices changes, process changes at Bolivar and production from the mine. However, as the company is focused on obtaining its listing on the NYSE, expected shortly, the resource and reserve update will aide in advancing that process. As Sierra continues to deliver operational improvements and exploration success at its operating mines, as well as accomplishing a listing on the NYSE, we view these as positive steps to enhancing the company’s value and improving liquidity of the stock. read more


Tuesday, March 07, 2017 Derek Macpherson

SMT Likely to Add High Value Tonnage at Bolivar

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Sierra Metals Inc. (TSX:SMT, BVL:SMT) announced initial drill results from the La Sidra and Bolivar West zones at its Bolivar mine in Mexico. In our view, the good results from the brownfield exploration program suggest the company is likely to deliver on its objective to add high value tonnes and extend mine life at Bolivar. Drilling continues to imply the existence of high grade Au-Ag mineralization at La Sidra. The zone currently extends over 500m along strike and to a depth of 300m while remaining open 2.5km NE-SW along strike and down dip. Results from Bolivar West similarly returned a weighted average grade above the resource grade. Sierra plans to follow-up on strong anomaly zones detected during a recent IP survey at Bolivar West and Bolivar Northwest. In our view, continued exploration success along with ongoing operational improvements at Sierra’s Yauricocha and Bolivar mines is key to enhancing the company’s value and positioning to bring about the necessary capital structure changes needed. read more


Monday, February 27, 2017 Derek Macpherson

SMT Makes High Grade Discovery at Cusi

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Sierra Metals Inc. (TSX:SMT, BVL:SMT) announced the discovery of a new high grade silver zone within the Santa Rosa de Lima structure at its Cusi mine in Mexico. Given the significantly higher average grade of today’s results over Cusi’s resource grade, we believe this discovery could materially improve this mine’s economics in the same way the discovery of the Esperanza zone was for Sierra’s Yauricocha mine in Peru. We expect this discovery to add value to the Cusi asset and potentially positively impact the mine’s cash flow in the near term. However, in light of that Cusi only contributed 6% of Sierra’s consolidated Q4 2016 AgEq production, the impact of this discovery on Sierra’s overall cash flow is likely to be limited. However, this discovery may allow Sierra to monetize this asset. We continue to expect that Sierra’s performance in 2017 is going to be underpinned by operational improvements at Yauricocha, which in our view is key to enhancing the company’s value and positioning to bring about the necessary capital structure changes. read more


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