TSX:SMT | BVL:SMT | sierrametals.com Q3-2015 Earnings Conference Call November 16, 2015
Disclaimer Certain statements in this presentation constitute forward-looking information within the meaning of Canadian securities legislation. Forward- looking information relates to future events or the anticipated performance of Sierra and reflect management's expectations or beliefs regarding such future events and anticipated performance based on an assumed set of economic conditions and courses of action. In certain cases, statements that contain forward-looking information can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", "believes" or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might", or "will be taken", "occur" or "be achieved" or the negative of these words or comparable terminology. By its very nature forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual performance of Sierra to be materially different from any anticipated performance expressed or implied by such forward-looking information. These include estimates of future production levels; expectations regarding mine production costs; expected trends in mineral prices; changes in general economic conditions and financial markets; changes in prices for silver and other metals; technological and operational hazards in Sierra's mining and mine development activities; risks inherent in mineral exploration; uncertainties inherent in the estimation of mineral reserves, mineral resources, and metal recoveries; the timing and availability of financing; governmental and other approvals; political unrest or instability in countries where Sierra is active; labor relations and other risk factors disclosed in Sierra's Annual Information Form, which is available on SEDAR at www.sedar.com. Although Sierra has attempted to identify important factors that could cause actual performance to differ materially from that described in forward- looking information, there may be other factors that cause its performance not to be as anticipated. Sierra neither intends nor assumes any obligation to update these statements containing forward-looking information to reflect changes in assumptions or circumstances other than as required by applicable law. There can be no assurance that forward-looking information will prove to be accurate as actual results and future events could differ materially from those currently anticipated. Accordingly, readers should not place undue reliance on forward-looking information. This presentation uses the terms "measured resources", "indicated resources" and "inferred resources" as such terms are recognized under National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101") adopted by the Canadian Securities Administrators. Readers are cautioned not to assume that any part or all of the mineral deposits in these categories will ever be converted into reserves. In addition, "inferred resources" have a great amount of uncertainty as to their existence and economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian securities rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, or economic studies, except for a "preliminary assessment" as defined under NI 43- 101. Investors are cautioned not to assume that part or all of an inferred resource exists, or is economically or legally mineable. Thomas L. Robyn, Ph.D., CPG, RPG, is the "Qualified Person" as defined in NI 43-101 and Senior Vice President, Exploration for Sierra supervised the preparation of the scientific and technical information of Sierra included in this presentation. TSX:SMT | BVL:SMT 2
Third Quarter and 9 Month 2015 Operational and Financial Results Conference Call Mark Brennan President and Chief Executive Officer TSX:SMT | BVL:SMT 3
What have we been up to? Third quarter was a transformational quarter • Implementation of best practices and Modernization of the mines with new equipment, modern technologies and methodologies • Production at Yauricocha lower this quarter but changes will enable us to grow production going forward • Bolivar and Cusi continue to perform well • Bolivar had a 9% increase in copper equivalent production over Q3-2014 • Cusi had record silver equivalent production; a 75% increase over Q3-2014 • Solid Financial Position, which allows us to complete Capex projects which will benefit the Company in the coming years TSX:SMT | BVL:SMT 4
Operational Performance Third Quarter and 9M 2015 Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2015 2014 2015 2014 (In thousands of dollars, except per share and cash cost amounts) Operating Ore Processed / Tonnes Milled 452,082 430,523 1,407,863 1,277,855 Silver Ounces Produced 691,129 794,251 2,501,839 2,272,746 Copper pounds produced (000's) 4,709 5,309 17,701 16,735 Lead pounds produced (000's) 11,026 12,553 34,257 36,738 Zinc pounds produced (000's) 9,332 14,668 32,812 40,857 Gold ounces produced 2,026 2,143 6,864 7,127 Copper Equivalent Pounds Produced (000's) 1 16,240 19,698 57,337 58,204 Silver Equivalent Ounces Produced (000's) 1 2,436 2,955 8,601 8,731 Cash Cost per Tonne Processed $ 40.25 $ 40.58 $ 43.27 $ 39.77 Cash Cost (recovery) per silver payable ounce (Yauricocha) 2 $ 3.33 $ (24.26) $ (7.25) $ (21.71) Cash Cost per copper payable pound (Bolivar) 2 $ 2.14 $ 1.71 $ 1.66 $ 1.59 Cash Cost per silver payable ounce (Cusi) 2 $ 10.65 $ 6.34 $ 8.95 $ 7.48 Financial Revenues $ 28,421 $ 44,505 $ 109,028 $ 131,757 Adjusted EBITDA 2 $ 2,013 $ 20,673 $ 34,252 $ 59,193 Operating cash flows before movements in working capital $ 19,937 $ 58,289 $ 1,527 $ 34,988 Adjusted net income (loss) attributable to shareholders 2 $ (3,646) $ 8,287 $ 7,707 $ 24,913 Net income (loss) attributable to shareholders $ (6,761) $ 1,465 $ (6,219) $ 5,934 Cash and cash equivalents $ 46,729 $ 46,729 $ 32,124 $ 32,124 Working capital $ 22,047 $ 33,786 $ 22,047 $ 33,786 1 Silver equivalent ounces are based on the following metal prices: $20/oz Ag, $3.00/lb Cu, $0.85/lb Pb, $0.95/lb Zn, $1,250/oz Au. 2 Adjusted EBITDA includes adjustments for depletion and depreciation, interest expense and other financing costs, interest income, share-based compensation, Foreign Exchange (gain) loss and income taxes; see non- IFRS Performance Measures section of the Company’s MD&A. TSX:SMT | BVL:SMT 5
“Continued low cost production and strengthening of the balance sheet during a period of depressed metal prices positions the Company for strong future returns” Ed Guimaraes Chief Financial Officer TSX:SMT | BVL:SMT 6
Successful Refinancing of Corona Acquisition Credit Facility Significant amendments to facility include • Remaining $48M due on the facility split into 2 tranches: • Tranche 1: $24M - quarterly principal repayments of $1.25M beginning in November 2016 and ending in August 2020 • Tranche 2: $24M - no quarterly repayments, to be repaid in full August 2020 • One year principal repayment grace period • Reduced interest rate now 3.65% plus 3M LIBOR vs previous rate of 4.15% plus 3M LIBOR • Term of facility extended for 5 years TSX:SMT | BVL:SMT 7
Q3 2015 Cash Flow TSX:SMT | BVL:SMT 8
9M 2015 Cash Flow TSX:SMT | BVL:SMT 9
Financial Highlights Second Quarter and H1 2015 Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2015 2014 2015 2014 (In thousands of dollars, except per share and cash cost amounts) Financial Revenues $ 28,421 $ 44,505 $ 109,028 $ 131,757 Adjusted EBITDA 2 $ 2,013 $ 20,673 $ 34,252 $ 59,193 Operating cash flows before movements in working capital $ 1,527 $ 19,937 $ 34,988 $ 58,289 Adjusted net income (loss) attributable to shareholders 2 $ (3,646) $ 8,287 $ 7,707 $ 24,913 Net income (loss) attributable to shareholders $ (6,761) $ 1,465 $ (6,219) $ 5,934 Cash and cash equivalents $ 32,124 $ 46,729 $ 32,124 $ 46,729 Working capital $ 22,047 $ 33,786 $ 22,047 $ 33,786 2015 2014 Realized Metal Prices Revenue Mix Copper (In US dollars) Q3 9M Q3 9M 32% (last 12 months) Silver (oz) $14.64 $15.90 $19.22 $19.76 Copper (lb) $ 2.38 $ 2.59 $ 3.14 $ 3.13 Silver Lead (lb) $ 0.77 $ 0.82 $ 0.99 $ 0.97 Zinc 29% Zinc (lb) $ 0.82 $ 0.92 $ 1.06 $ 0.97 17% Gold (oz) $1,101 $1,168 $1,267 $1,282 1 As of Sept 30, 2015. Gold Lead 2 Adjusted EBITDA includes adjustments for depletion and depreciation, interest expense and other financing costs, interest 5% 17% income, share-based compensation, Foreign Exchange (gain) loss and income taxes; see non-IFRS Performance Measures section of the Company’s MD&A. TSX:SMT | BVL:SMT 10
Recommend
More recommend
