TORONTO – (COMMERCIAL THREAD) – Sierra Metals Inc. (TSX: SMT) (BVL: SMT) (NYSE AMERICAN: SMTS) (“Sierra Metals” or “the Company”) today announces that its board of directors (the “Board”) has completed its previously announced review of strategic alternatives.
Based on a thorough review of various alternatives, the board has determined, in consultation with its financial and legal advisors, that maximum shareholder value will be provided by the Company’s pursuit of various strategic opportunities to improve the value.
Within its current assets and large and diversified resource base, the Company will continue to focus its efforts on growing metal production that should fuel anticipated global infrastructure supply demands. The increased focus will apply specifically to copper and steel fabrication products (zinc and iron ore), with the production of precious metals as a precious by-product of cost credit.
In addition, the Company has completed a workable review of its assets and will consider additional appropriate actions with respect to the Company’s portfolio of assets. This action could take the form of divestments, joint ventures (âJVsâ) or partnerships, and could include assets such as the Cusi silver mine or exploration targets located outside of current operating areas.
Sierra Metals believes in the importance of environmental, social and corporate governance and will focus more on these issues with a view to maintaining applicable best practices in each of these areas. We strive for excellence in fulfilling our environmental and social duties and responsibilities, ultimately sharing increased well-being with our workforce and in the communities where we operate.
The Company will continue to apply a disciplined approach to capital allocation and to use funds for sustainment and growth projects, using a rigorous phase-gate process with close monitoring of implementation and delivery of projects which include:
Delivery of current pre-feasibility studies for mine expansion on our 3 operations, starting with the Bolivar mine, followed by Yauricocha and Cusi.
Progress with the inclusion in the Company’s mining plans of certain short-term underground mining and brownfield opportunities with the aim of increasing the yield of the Yauricocha and Bolivar mines.
As a result of COVID restrictions that limit the Company on its exploration activities, entirely new exploration on our vast 110,000 hectare land lots will be reactivated in due course to develop new opportunities for expanded mineral resources. The Company will be open to JVs and partnerships for these opportunities.
Jose Vizquerra-Benavides, Chairman of the Board of Sierra Metals, said: âWe have reached the end of the strategic review process announced earlier this year. This process, which has taken longer than usual due to COVID, has helped highlight the value of our current operations and the value improvement opportunities that are available for The process has allowed us to expand a strategy that will guide our efforts for years to come, including a renewed focus on green and steel-related metals, the inclusion of the added value of our current vast land holdings and the well-being shared with our parties stakeholders. “
Luis Marchese, CEO of Sierra Metals, said: âThe company expects to have more robust EBITDA and free cash flow starting next year and for years to come. This is an advantage of recent throughput expansions, which are expected to increase production in our metal line, along with strengthened metal prices based on current consensus metal price projections. Our new dividend policy was launched on the basis of these positive developments and demonstrates our confidence in the Company and our ability to implement our growth initiatives. Over the past few years, we have made significant changes across the organization, streamlining our operations, strengthening our team, optimizing our operations and dramatically improving our financial performance. Our operations have not only proven to be resilient enough in these uncertain times, but we also anticipate the pandemic and the strategic review process as a significantly stronger company, with a strong focus on growth and value creation for all. shareholders as we execute our strategy. “
In addition, the board authorized the payment of an annual dividend consisting of a base dividend of US $ 5 million or US $ 0.03 per share plus an additional amount based on the free cash flow generated each year. after factoring in planned capital expenditures, distributions to non-controlling interests, all-new exploration and mandatory debt service. The initial dividend is expected to be declared in November 2021 and paid to shareholders in December 2021. Further details on this dividend will be provided in a subsequent press release.
Appointment of new directors
The Board is also pleased to announce the appointment of Carlos E. Santa Cruz and Oscar M. Cabrera to the Board, with immediate effect. MM. Cabrera and Santa Cruz were appointed following the resignation of two directors earlier this year.
Mr. Santa Cruz is a mining engineer with over 40 years of experience and a strong international management experience in mining operations at a senior level. He has held positions with major mining companies, including senior vice president of Australian and New Zealand operations and senior vice president of South American operations for Newmont. He is currently Chairman of the Board of Directors of BISA Ingenieria de Proyectos SA. and director of the JRC IngenierÃa y ConstrucciÃ³n SAC. Mr. Santa Cruz is an independent mining consultant and part-time professor at Pontificia Universidad CatÃ³lica and a member of industry advisory committees at Penn State and Piura University. Chairman of the Board of Directors of CIMADE, an NGO focused on the promotion of mega-projects in mining and sustainable infrastructure. Mr. Santa Cruz holds a PhD in Mining Engineering and a Masters in Industrial Engineering from Penn State University, as well as the Advanced Management Program from Harvard University. Mr. Santa Cruz is a Peruvian citizen.
Mr. Cabrera is a Senior Equity Analyst with over 20 years of experience in the metals and mining industry for high growth investment banks and Canadian financial institutions including Goldman Sachs, Merrill Lynch Canada and World Markets. CIBC. He has gained recognition for his thought leadership in the industry, fundamental analysis of commodities and strong industry relationships, which has led to advisory roles for public mining companies, including Nexa Resources SA. and European. Mr. Cabrera holds an MBA from York University, an M Eng. in Structural Engineering from the University of Toronto and a Bachelor of Science in Civil Engineering from the Instituto TecnolÃ³gico y de Estudios Superiores de Monterrey. Mr. Cabrera is a Canadian citizen, originally from Mexico.
JosÃ© Vizquerra-Benavides commented, âWe are extremely pleased that Carlos and Oscar are joining the Sierra Board of Directors. Their in-depth knowledge of mining operations and projects in Peru and Mexico as well as commodity and capital market analysis will benefit the company as we move forward on a plan of growth and value creation for all stakeholders. . “
About Sierra Metals
Sierra Metals Inc. is a diversified Canadian mining company focused on the production and development of precious and base metals from its Yauricocha polymetallic mine in Peru and the Bolivar and Cusi mines in Mexico. The Company is focused on increasing production volume and growing mineral resources. Sierra Metals has recently made several key new discoveries and still has many interesting brownfield exploration opportunities at the three mines in Peru and Mexico that are in close proximity to existing mines. In addition, the Company also owns large plots of land in all three mines with several promising regional targets offering long-term exploration potential and mineral resource growth.
The Company’s common shares trade on the Bolsa de Valores de Lima and the Toronto Stock Exchange under the symbol “SMT” and on the NYSE American Exchange under the symbol “SMTS”.
For more information on Sierra Metals, please visit www.sierrametals.com.
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This press release contains “forward-looking information” and “forward-looking statements” within the meaning of Canadian and United States securities laws (collectively, “forward-looking information“). Forward-looking information includes, without limitation, statements regarding the date of the 2020 General Meeting of Shareholders and the expected filing of the compensation statement. All statements that express or involve discussions regarding forecasts , expectations, beliefs, plans, projections, goals, assumptions or future events or performance (often, but not always, using words or phrases such as “expects”, “anticipates”, “plans”, ” projects â,â believes â,â assumes â,â intends â,â strategy â,â goals â,â objectives â,â potential âor variations thereof, or stating that certain actions, events or results “could”, “could”, “could”, “could” or “will” be taken, will occur or will be carried out, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking information.
Forward-looking information is subject to various risks and uncertainties, which could cause actual events or results to differ from those reflected in the forward-looking information, including, without limitation, the risks described under the heading âBusiness Factorsâ. risk âin the The Company’s Annual Information Form dated March 30, 2020 for its fiscal year ended December 31, 2019 and the other risks identified in the documents filed by the Company with the Canadian securities regulatory authorities and the Securities and Exchange Commission of United States, which documents are available at www.sedar.com and www.sec.gov, respectively.
The risk factors mentioned above do not constitute an exhaustive list of factors likely to affect the Company’s forward-looking information. Forward-looking information includes statements about the future and is inherently uncertain, and the actual achievements of the Company or other future events or conditions may differ materially from those reflected in forward-looking information due to various risks, uncertainties and other factors. . The Company’s statements containing forward-looking information are based on the beliefs, expectations and opinions of management at the date the statements are made, and the Company assumes no obligation to update such forward-looking information if circumstances or beliefs, expectations or opinions should change, except as required by applicable law. For the reasons set out above, one should not place undue reliance on forward-looking information.