Sierra Metals' Peruvian subsidiary lifts H1 production, revenue

JOHANNESBURG (miningweekly.com) – The increased production of higher-value ore, improved recoveries and improved metal pricing have positively impacted on Canadian company Sierra Metals’ Corona subsidiary’s results for the half-year.

Corona, which is 80% owned by Sierra Metals and which mines for copper, lead, zinc, silver and gold at the Yauricocha mine, in Peru, earned net income of $21.6-million, or $0.60 a share, for the six months ended June 30 - a 1 046% rise on the net income of $1.9-million, or $0.05 a share, earned in the first half of 2016.

Revenue for the half-year rose to $76.4-million, compared with $35.9-million in the prior comparable period, mainly owing to an increase in tonnes process, higher head grades for copper and zinc, higher recoveries for all metals and increases in the prices of silver, copper, lead, zinc and gold.

Adjusted earnings before interest, taxes, depreciation and amortisation rose to $39.4-million in the half-year, compared with $6.2-million in the prior comparable period.

Yauricocha produced 947 000 oz of silver in the six months, a 27% year-on-year increase, while copper production increased by 76% year-on-year to 4.98-million pounds.

Lead production was flat at 16.39-million pounds and zinc output rose 50% year-on-year to 36.04-million pounds.

Gold production, however, decreased by 42% year-on-year to 1.34-million ounces.

Sierra Metals, meanwhile, expects to see continued mineral resource growth from the brownfield exploration programmes being undertaken by Corona.

“When combined with significant operational improvements already completed at Yauricocha, we expect this will provide for substantial growth in the future for the mine,” Sierra Metals president and CEO Igor Gonzales said on Tuesday.