SMT:CC - Sierra Metals (SMTS)(SMT:CA) - On Track to Meet First Half Production Guidance; New High-Grade Discovery at Yauricocha
First quarter 2022 production. During the first quarter, Sierra Metals produced 6.3 million pounds of copper, 4.2 million pounds of lead, 10.5 million pounds of zinc, 1.9 thousand ounces of gold, and 734 thousand ounces of silver. Compared with the prior year period, first quarter production of copper, lead, zinc, gold, and silver declined 19.9%, 53.2%, 56.5%, 27.0%, and 23.6%, respectively. On a sequential basis, copper and silver production increased 4.2% and 3.2%, respectively, while lead, zinc, and silver production declined 29.9%, 29.6%, and 8.8%, respectively. In our view, production is on track to reach the company’s first half guidance of 34.0 to 39.5 million copper equivalent pounds.Estimates are little changed. We are maintaining our first quarter and full year EPS estimates of $0.03 and $0.21, respectively. We forecast full year EBITDA of $100.8 million compared to our prior estimate of $100.9 million. Sierra will report first quarter financial results after the market close on May 11 and will host an investor conference call on May 12 at 11:00 am ET.New high grade zone discovery at Yauricocha. Sierra has discovered a new high grade ore sulfide zone located adjacent to existing underground operations at Yauricocha. The discovery was made during the company’s exploration drilling program and represents a leap forward in terms of expanding Yauricocha’s ore resource within currently permitted levels of the mine. Management expects to access part of the ore body as early as the third quarter which would positively impact head grades in the second half of 2022.Rating remains Outperform. In our opinion, Sierra Metals offers an attractive valuation and is well-positioned for growth. The discovery of a new high grade zone at Yauricocha is significant given that it is within the currently permitted area and could positively impact grades going forward. In our view, first quarter production results put the company on track to achieve its production guidance with steady improvement throughout the year. Read More >>