Tuesday, October 19, 2021
Sierra Metals (SMTS)(SMT:CA)
Third Quarter Production Impacted by Transitory Operational Challenges
As of April 24, 2020, Noble Capital Markets research on Sierra Metals is published under ticker symbols (SMTS and SMT:CA). The price target is in USD and based on ticker symbol SMTS. Research reports dated prior to April 24, 2020 may not follow these guidelines and could account for a variance in the price target.
Sierra Metals Inc is a precious and base metals producer in Latin America. The company acquires, explores, extracts, and produces mineral concentrates consisting of silver, copper, lead, zinc and gold in Mexico and Peru. Its activity includes the operation of the Yauricocha Mine in Peru, and the Bolivar and Cusi mines in Mexico. Yauricocha is an underground polymetallic mine using the sublevel block caving and cut-and-fill mining methods. Bolivar is a copper-silver-zinc-gold underground mine using room-and-pillar mining method. The majority of the revenue is earned by selling of the mineral concentrates to its customers in Peru.
Mark Reichman, Senior Research Analyst of Natural Resources, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
SMTS reports third quarter production results. During the third quarter, Sierra Metals produced 8.3 million pounds of copper, 7.8 million pounds of lead, 19.1 million pounds of zinc, 2.3 thousand ounces of gold, and 807 thousand ounces of silver. Compared with the prior year period, third quarter production of copper, lead, zinc, gold, and silver declined 32.1%, 20.4%, 23.1%, 43.3%, and 21.1%. Sequentially, production fell 13.4%, 1.5%, 9.6%, 19.6%, and 15.4%, respectively. Production was hindered by the inability to develop higher grade ore sources during the pandemic, unexpected equipment unavailability, and operational constraints at the Cusi mine due to high temperatures. While these issues are expected to be temporary, management now expects 2021 production to be at the low end of its guidance.
Updating estimates. We are lowering our 2021 EPS and EBITDA estimates to $0.25 and $127.6 million from $0.30 and $137.5 million, respectively, to reflect lower full year production. While our EBITDA estimate is modestly below guidance, there may offsets we haven’t considered and we think upside may exist for our fourth quarter estimates. We also trimmed our 2022 EPS and EBITDA estimates to …
This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
