/R E P E A T -- Sierra Metals Announces Strong Fourth Quarter 2014 Financial Results of its Subsidiary Sociedad Minera Corona in Peru/

VANCOUVER, Feb. 13, 2015 /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 fourth quarter of 2014 ("Q4 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.

Corona's Financial Highlights for the Three Months Ended December 31, 2014

  • Net Income of US$ 9.4 million or US$ 0.262 per share for Q4 2014; a 421% increase over Q4 2013;
  • Adjusted EBITDA of US$ 12.7 million for Q4 2014; a 40% increase over Q4 2013;
  • Operating cash flow of US$ 10.5 million for Q4 2014; a 5% increase over Q4 2013;
  • Revenues of US$ 28.1 million for Q4 2014; a 19% increase over Q4 2013; and
  • Cash cost (recovery) per silver payable ounce of US$ (16.20) at the Yauricocha Mine for Q4 2014; a decrease of 131% over Q4 2013.

Audra Walsh, President and CEO of Sierra Metals stated: "We are pleased to report another strong quarter at Corona, achieving higher production levels and realizing continued success with our cost reduction efforts at the Yauricocha Mine, which more than offset the decline in silver and copper prices. An increase in ore throughput of 6%, as well as higher head grades and recoveries for silver, lead and copper contributed to an increase in revenues for the fourth quarter of 2014. The reduction in costs and increase in revenues resulted in higher adjusted EBITDA and net income. Corona is committed to meet its production guidance for 2015 to continue its efforts to remain a low cost producer and to uncover the Yauricocha Mine's full economic potential."

The following table sets out select unaudited financial information for the three months and year ended December 31, 2014:







3 Months Ended

12 Months Ended

(In thousands of US dollars, except cash cost per ounce)


December 31, 2014

December 31, 2013

December 31, 2014

December 31, 2013







Revenue

$

28,073

23,698

119,027

106,175

Adjusted EBITDA1


12,686

9,033

59,552

47,234

Cash Flow from operations


10,469

9,953

47,788

17,703

Gross profit


18,202

9,677

64,352

44,372

Income Tax Expense


(4,422)

(2,097)

(17,889)

(11,959)

Net Income 


9,432

1,810

30,798

16,715

Cash cost (recovery) per silver payable ounce (Yauricocha)2

$

(16.20)

(7.01)

(20.06)

(12.05)







(In thousands of US dollars, unless otherwise stated)


December 31, 2014

December 31, 2013









Cash and cash equivalents

$

28,672

36,242



Assets


111,766

117,583



Liabilities


61,304

58,831



Equity


50,462

58,752









1Adjusted EBITDA is defined by management as EBITDA adjusted for non-cash and non-recurring items including foreign exchange gain (loss).



2Cash costs include cost of sales, treatment and refining charges, and selling expense, and exclude workers' profit sharing, depreciation and 


other non-cash provisions. Cash costs are calculated based on the ounces of payable silver sold for each of the reporting periods.


 

Corona's Financial Highlights for the Three Months and Year Ended December 31, 2014

  • Net income of US$ 9.4 million or US$ 0.262 per share for Q4 2014 compared to US$ 1.8 million or US$ 0.050 per share for the same period in 2013. Net income of US$ 30.8 million or US$ 0.856 per share for the year ended December 31, 2014 compared to US$ 16.7 million or US$ 0.465 per share for the same period in 2013;
  • Revenues of US$ 28.1 million for Q4 2014 compared to US$ 23.7 million for the same period in 2013. Revenues of US$ 119.0 million for the year ended December 31, 2014 compared to US$ 106.2 million for the same period in 2013. The increase in revenues for the three months and year ended December 31, 2014 compared to 2013 is the result of an increase in plant throughput of 6%, higher head grades for lead and copper, higher silver recoveries and an increase in lead and zinc prices during the year;
  • Cash cost (recovery) per silver payable ounce of US$ (16.20), at the Yauricocha Mine, for Q4 2014 compared to US$ (7.01) for the same period in 2013. Cash cost (recovery) per silver payable ounce of US$ (20.06) for the year ended December 31, 2014 compared to US$ (12.05) for the same period in 2013. The decrease in cash costs during 2014 was due to higher plant throughput and an increase in by-product credits due to higher lead and copper grades and higher lead prices realized in 2014 compared to 2013. The Company has also realized continued success with the cost reduction measures that were implementing during the second half of 2013, which have resulted in operating efficiencies and contributed to cost savings during 2014;
  • Adjusted EBITDA of US$ 12.7 million for Q4 2014 compared to US$ 9.0 million for the same period in 2013. Adjusted EBITDA of US$ 59.6 million for the year ended December 31, 2014 compared to US$ 47.2 million for the same period in 2013. The increase in adjusted EBITDA for the three months and year ended December 31, 2014 compared to 2013 is mainly due to the increase in revenues and decrease in costs previously noted;
  • Operating cash flow of US$ 10.5 million for Q4 2014 compared to US$ 10.0 million for the same period in 2013. Operating cash flow of US$ 47.8 million for the year ended December 31, 2014 compared to US$ 17.7 million for the same period in 2013; and
  • Cash and cash equivalents of US$ 28.7 million as at December 31, 2014 compared to US$ 36.2 million as of December 31, 2013. Cash and cash equivalents decreased by US$ 7.5 million mainly driven by US$ 47.6 million of operating cash flow, offset by US$ 39.2 million of dividend payments, US$ 14.6 million of capital expenditures and US$ 1.0 million of financing activities.

Corona's Operational Highlights for the Three Months Ended December 31, 2014:

  • Total tonnes processed of 224,986; a 5% increase over Q4 2013
  • Silver production of 595,340 ounces; a 28% increase over Q4 2013
  • Copper production of 2.3 million pounds; a 97% increase over Q4 2013
  • Lead production of 11.6 million pounds; a 6% increase over Q4 2013
  • Zinc production of 13.4 million pounds; consistent with Q4 2013
  • Gold production of 1,360 ounces; an 18% decrease over Q4 2013

The following table sets out production results for the three months and year ended December 31, 2014:




Yauricocha Production

3 Months Ended

Year Ended


December 31, 2014

December 31, 2013

% Var.

December 31, 2014

December 31, 2013

% Var.








Tonnes processed

224,986

214,454

5%

885,495

837,496

6%








Silver (oz)

595,340

463,964

28%

2,121,565

1,866,769

14%

Copper (000 lb)

2,304

1,167

97%

7,697

6,514

18%

Lead (000 lb)

11,632

10,956

6%

46,714

37,055

26%

Zinc (000 lb)

13,399

13,382

0%

54,256

50,817

7%

Gold (oz)

1,360

1,665

-18%

5,683

6,736

-16%








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. Statements containing forward-looking information express, as at the date of this news release, the Company's plans, estimates, forecasts, projections, expectations or beliefs as to future events or results. These statements reflect the Company's current views with respect to future events and are necessarily based upon a number of assumptions and estimates that, while considered reasonable by the Company, are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. 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.

For further information: please visit www.sierrametals.com or contact: Audra Walsh, President & CEO, Sierra Metals Inc., 1 (866) 493-9646; Ed Guimaraes, CFO, Sierra Metals Inc., 1 (416) 366-7777; Victoria Vargas, Vice President, Investor Relations, Sierra Metals Inc., 1 (866) 493-9646, info@sierrametals.com

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