SMTS - Sierra Metals (SMTS) - Production Improved Sequentially Although Short of Our Estimates

Second quarter 2022 production. During the second quarter, Sierra Metals produced 8.3 million pounds of copper, 3.3 million pounds of lead, 10.4 million pounds of zinc, 2.6 thousand ounces of gold, and 608 thousand ounces of silver. On a sequential basis, copper and gold production increased 31.8% and 36.3%, respectively, while lead, zinc, and silver production declined 20.9%, 0.6%, and 17.2%, respectively. On a sequential basis, copper equivalent pounds produced increased 11.9% to 17.8 million pounds due to 61.7% and 11.3% increases in copper equivalent production at Bolivar and Yauricocha, respectively. The Cusi mine experienced underground flooding which impacted silver production. Compared with the prior year period, second quarter production of copper, lead, zinc, gold, and silver declined 12.6%, 58.1%, 50.7%, 6.8%, and 36.3%, respectively. For the first half of the year, copper equivalent production of 33.7 million pounds came in toward the low end of the company's guidance.Updating estimates. For the second quarter, we have lowered our EBITDA and EPS estimates to $19.6 million and $0.03, respectively, from $24.3 million and $0.05. For 2022, our full year EBITDA and EPS estimates have been reduced to $89.1 million and $0.18, respectively, from $101.9 million and $0.23. Our revised estimates reflect lower production expectations and metals prices. While metals pricing remains a wildcard, we expect continued operational improvement at Yauricocha and Bolivar. Read More >>