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Stonegate Capital Partners Updates Coverage On Sierra Metals Inc. (NYSE:SMTS)

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DALLAS, TX / ACCESSWIRE / June 21, 2022 / Sierra Metals Inc. (NYSE:SMTS): The full report can be accessed by clicking on the following link: https://stonegateinc.com/reports/SMTS_Q122.pdf


Sierra Metals Inc. is a diversified Canadian mining company with Green Metal exposure including increasing copper and base metal production with precious metals by-product credits. The Company is focused on the production and development of its Yauricocha Mine in Peru, and Bolivar and Cusi Mines in Mexico as well as increasing production volume and growing mineral resources. The Company's flagship property is the 81.84% owned polymetallic Yauricocha Mine covering an area of 18,778 hectares located in the Yauyos province in Peru. It also operates two additional mines in Mexico, the Bolivar and Cusi Mine. The Company was formerly known as Dia Bras Exploration and changed its name to Sierra Metals, Inc. in December 2012. Sierra Metals is headquartered in Toronto, Canada.


  • Growing diversified polymetallic producer - The Company has three producing mining properties with one mine located in Peru and two in Mexico. For the TTM period ending March 31, 2022, revenue mix includes 38% from copper, 24% from zinc, 24% from silver, 9% from lead, and 5% from gold. From F15 to F21, Sierra Metals successfully increased production from 5,375 tonnes per day in F15 to 10,800 tonnes per day in FY21, which represents a ~12% CAGR. The Company is targeting an increase to 15,500 tonnes per day in 2027.

  • Successful history of building mineral resources and reserves - The Company has a history of growing resources at all three mines. From 2015 to 2020, the Company grew its mineral resources at its Yauricocha mine in Peru from 11.6M tonnes to 27.6M tonnes, for a ~19%CAGR. At its Bolivar mine in Mexico, from 2016 to 2020, it grew mineral resources from 18.4M to 41.0M tonnes, which represents a ~17% CAGR. And lastly, the Cusi mine in Mexico, saw mineral resource growth from 2016 to 2020, move from 3.2M to 10.2M tonnes for a ~26%CAGR. Through various strategic initiatives that include lower risk, near-mine brownfield exploration, the Company is confident it can continue to show growth in mineral resources and reserves.

  • Operating in well-known and established mining districts - Sierra Metals' mining operations are based in first-rate, well-established mining jurisdictions in Peru and Mexico. The Company's flagship mine, Yauricocha is in Peru, one of the most prolific polymetallic producing regions in the world. Furthermore, the mine has been producing for over 70 years. In Mexico, the Company's Bolivar and Cusi mining districts have 300+ year mining histories.

  • Solid balance sheet and cash flows to support growth - In spite of the COVID-19 pandemic, the Company maintained a strong balance sheet with Q122 cash & equivalents at US$19.5M and total debt at US$81.1M. Additionally, TTM cash flow from operations (ending Q1F22) was US$50.2M.

  • Experienced management team - Sierra Metals management team has over 200 years of combined experience in the metals and mining industry. Furthermore, its Board of Directors has extensive experience across the mining industry. Lastly, management, combined with its board of directors and controlled entities, have a ~ 34% ownership position.

  • Valuation - We are using a DCF analysis of our mine models for the Yauricocha, Bolivar and Cusi mines. We then use a 10% discount rate and incorporate a sensitivity analysis to silver prices to arrive at our valuation range of US$3.25 to US$5.00 with a mid-point of US$4.25. See more details on pages 9 and 10.

About Stonegate Capital Partners

Stonegate Capital Partners is a Dallas-based corporate advisory firm dedicated to serving the specialized needs of small-cap public companies. Since our inception, our mission has been to find innovative, undervalued public companies for our network of leading institutional investors who seek high-quality investment opportunities.

Stonegate Capital Partners
(214) 987-4121

SOURCE: Stonegate Capital Partners

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