Monday, January 30, 2023
Mark Reichman, Senior Research Analyst, Natural Resources, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Fourth quarter and full year 2022 production. During the fourth quarter, Sierra Metals produced 6.2 million pounds of copper, 2.1 million pounds of lead, 6.4 million pounds of zinc, 3.4 thousand ounces of gold, and 570 thousand ounces of silver. Compared with the prior year period, production of copper and gold increased 2% and 83%, respectively, while lead, zinc, and silver declined 66%, 57%, and 29%. On a sequential basis, gold production increased 55%, while lead, zinc, silver, and copper declined 47%, 41%, 15%, and 2%, respectively. Compared to 2021, gold production in 2022 increased 6%, while lead, zinc, silver, and copper production declined 56%, 52%, 27%, and 15%, respectively. Copper equivalent production decreased 15% versus the prior quarter, 21% versus the prior year period, and 29% on a full year basis.
Operational performance. During the fourth quarter, Sierra achieved meaningful improvement at the Bolivar mine due to infrastructure upgrades and advances in the mine’s development work. Compared to the prior quarter, copper equivalent production increased 69% due to a 19% increase in throughput and improved head grades. While Cusi silver equivalent production was relatively flat relative to the prior quarter, an 11% increase in throughput helped offset the impact of lower grades and recoveries. Yauricocha performance was negatively impacted by a progressive restart of operations following a mudslide that led to the suspension of operations late in the third quarter.
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