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Sierra Metals Mexico
Sierra Metals Peru

Investment Highlights

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Low Cash Cost Producing Assets

  • Yauricocha mine, Peru: Acquired in 2011, this world-class asset is a highly profitable polymetallic mining operation due to its low cash cost and high head grades. Silver by-product cash cost is USD $(19.67)/oz.1
     
  • Bolivar mine, Mexico: The Bolivar mine is a high-grade, low-cost copper mine with silver and zinc by-products that achieved commercial production in November 2011. In 2013, the Piedras Verdes mill has doubled throughput to 60,000 tpm and has a copper by-product cost of USD $1.51/lb.1
     
  • Cusi mine, Mexico: The Cusi silver mine achieved commercial production in January 2013 and is currently producing from the Santa Eduwiges mine. The Malpaso Mill, located 35 km northwest of the Cusi Mine currently has a capacity of 19,500 tonnes per month and has silver by-product cash cost of $5.291. The Company released an updated NI 43-101 resource calculation study in March 2014.

Solid Financial Position

  • Strong cash flow generating capacity with EBITDA of $38.5 million and cash flow from operations of $21.5 million for the six months ending June 30th , 2014.
  • Solid balance sheet with cash and cash equivalents of $42.1 million and net debt2 of $ 48.1 million for the six months ending June 30th, 2014
  • Declared a $0.75 million dividend in Q1, 2104

Well Positioned for Growth

  • Yauricocha mine
    • New NI 43-101 report in November 2013 has tripled proven and probable reserves.
    • Completing exploration and development program to expanded resources at depth and test regional targets.
    • Developing new mining infrastructure at depth to increase production capacity and maximize operating efficiencies.
       
  • Bolivar mine
    • New NI 43-101 report (April 2013) identified 7.5 Mt of proven and probable reserves at Bolivar
    • Recently doubled production from 30,000 tpm to 60,000 tpm
    • Completing exploration program to continue to expand reserves and resources
  • Cusi project
    • Expand new disseminated silver discovery with current exploration program
    • Completed an updated NI 43-101 compliant resource in March 2014
    • Upgrading existing production infrastructures to allow higher throughput

Strong Team With Proven Track Record

  • Key Leadership
      • Audra Walsh, P.E., President and CEO
        • B.Sc. in Mine Engineering from the South Dakota School of Mines
        • Extensive experience in strategic planning, mine optimization and management of large engineering teams.
        • Ex-CEO of Minera SA, a private mining company with assets located worldwide and controlling shareholder of Orvana Minerals
        • Held Senior positions at Newmont Mining and Barrick Gold
      • J. Alberto Arias, Founder & Chairman
        • Founder and President of Arias Resource Capital
        • Former Head of Equity Research at Goldman, Sachs & Co. for metals and mining in the U.S., Canada and Latin America
        • Engineering degree in mining and metallurgy from the Colorado School of Mines and MBA from Columbia University
      • Thomas Robyn, Ph. D., Senior Vice President, Exploration
        • Ph.D., Geology in 1977 from the University of Oregon with a major in Igneous Petrology/Volcanology.
        • Ex-Anaconda Minerals regional exploration manager in Norway.
        • Held top-level positions with several junior companies, and in recent years has advised investment funds with respect to mineral companies.
        • International experience, oversaw projects in such countries as Australia, Ecuador, Greenland, Norway, Liberia, Equatorial Guinea, Guyana and Suriname, as well as several US states. He is director of Yorbeau Resources Inc.
  • Recent Achievements
    • Increased the Indicated Resources in silver ounces at Cusi by 70% and silver grade by 40%
    • Completed the doubling of capacity of the Piedras Verdes Mill
    • Graduated to the TSX
    • Increased measured and indicated resources at Bolivar
    • Increased proven and probable reserves at Yauricocha and discovered new target at depth

Footnotes

1For the three months ended June 30th1 , 2014

2Consolidated debt minus total cash and cash equivalents.