SMTS - Sierra Metals (SMTS)(SMT:CA) - Updating Estimates Based on Lower-Than-Expected First Quarter Production

First quarter production was below expectations. First quarter production was negatively impacted by lower grades of ore mined at the Yauricocha and Bolivar mines. Copper, lead, and zinc production amounted to 7.9 million, 9.0 million, and 24.1 million pounds, respectively, while silver and gold production amounted to 961.0 and 2.6 thousand ounces. Copper production decreased 26% relative to the fourth quarter of 2020 and 33% compared to the prior year period.2021 production guidance unchanged. First quarter production results were impacted by some transitory operational issues that resulted in production from lower grade ore bodies. Despite lower-than-expected production, the company is still expected to meet its forecasted production guidance ranges despite the ongoing challenges of the pandemic. Sierra Metals will release first quarter 2021 financial results after the market close on May 6, 2021. Management will host a webcast and investor call on May 7, 2021 at 10:30 am ET.Updating estimates. We have modestly lowered our 2021 EPS and EBITDA estimates to $0.38 and $173.1 million from $0.40 and $179.1 million, respectively. The reduction in our estimates reflects lower production estimates and modestly higher operating costs, partially offset by higher metals prices.Rating remains Outperform. In our opinion, Sierra Metals offers an attractive long-term growth outlook driven by a favorable metals price outlook and the company’s increasing production profile. We think the company is well-positioned to benefit from growing demand for its metals driven by economic growth, increased infrastructure spending, and for use in clean energy and renewable power technologies.Read More >>