TORONTO--(BUSINESS WIRE)-- Sierra Metals Inc. (TSX: SMT | OTCQX: SMTSF | BVL: SMT) (“Sierra Metals” or the “Company”) reports consolidated financial and operating results for the three months (“Q4”) and full year (“FY”) ending December 31, 2024. All figures are in US dollars.

Ernesto Balarezo, CEO of Sierra Metals, commented, “The fourth quarter of 2024 capped off a tremendous year for Sierra Metals. During the quarter, we achieved record throughput rates, which increased metal production leading to record revenue. This, combined with lower costs during a period of higher metal prices, has led to higher margins, an increase in cash flow generation, accelerated capital investments to secure long-term performance, a solid capital structure, and an overall stronger financial position.”

Mr. Balarezo continues, “Momentum continues to build, and in 2025 we expect to deliver further production increases, lower costs, and stronger cash flows. Most notably, we remain on track to deliver EBITDA of approximately $130 million for the full year in 2025, as we continue creating long-term value for all shareholders.”

Conference Call & Webcast

Management will host a conference call and webcast to discuss these results on March 27, 2025 at 11:00 a.m. (Eastern time). Details are as follows for the webcast – English version and Spanish version – and on the telephone - Canada/US toll free at 1-844-763-8274 or +1-647-484-8814.

2024 Financial and Operating Highlights

The following table displays selected financial and operating information for Q4 2024 and FY 2024:

FY 2024 Operating Highlights

Consolidated throughput during 2024 was more than 2.7 million tonnes, an 11% increase when compared to 2023. Consolidated copper, zinc and silver production was 10%, 3% and 1%, respectively, higher than in 2023, while gold and lead production was slightly lower. When comparing annual consolidated production results to 2024 guidance, copper, silver, gold and zinc exceeded guidance while lead met guidance.

Throughput in Q4 2024 was a record 798 thousand tonnes, 18% higher than in Q4 2023. This was driven by Bolivar operating at 10% higher throughput rates and Yauricocha, now primarily mining below the 1120 level, increasing throughput rates by 31%. Yauricocha’s Q4 2024 production of copper, zinc and silver were 29%, 28%, and 20%, respectively, higher than Q4 2023 with gold production flat and lead production lower by 4% on a quarter-over-quarter basis. When comparing Bolivar’s production for Q4 2024 and Q4 2023, copper was flat, silver was 9% higher and gold was 19% lower.

For FY 2024, Bolivar’s cash cost per copper equivalent payable pound⁽¹⁾ was $2.50 (2023 - $2.56) which was below 2024 guidance range of $2.56 to $2.72. AISC per copper equivalent payable pound⁽²⁾ of $3.21 (2023 - $3.24) was below 2024 guidance range of $3.28 to $3.36.

Yauricocha’s cash cost per copper equivalent payable pound⁽¹⁾ of $3.39 (2023 - $3.02) was within the 2024 guidance range of $3.31 to $3.41 and AISC per copper equivalent payable pound⁽¹⁾ of $3.73 (2023 - $3.46) was below 2024 guidance range of $3.75 to $3.86.

FY 2024 Financial Highlights

Revenue from metals payable of $272.6 million in 2024 represents an increase of 19% from 2023 annual revenue of $229.5 million. Revenue in 2024 increased as a result of the production and commercial improvements at the Yauricocha and Bolivar mines.

Adjusted EBITDA, excluding discontinued operations, was $74.2 million for 2024, representing an increase of 44% from the adjusted EBITDA of $51.5 million for 2023.

Cash flow generated from operations before movements in working capital of $69.5 million for 2024 was higher than $43.3 million in 2023, mainly due to higher revenue.

Cash and cash equivalents of $19.8 million as at December 31, 2024 compared to $9.1 million at the end of 2023. Cash and cash equivalents increased by $10.7 million during 2024 as the $65.1 million generated from operating activities and net $2.7 million generated from financing activities was offset by $57.0 million used in investing activities, as the Company has been advancing the capital investments required to support operations in the long-term.

FY 2024 Exploration Highlights

Exploration to replace mineral depletion and set the basis for future operational growth is a priority for Sierra Metals.

At Yauricocha, a total of 46,390 meters of diamond drilling was completed during 2024, of which 20,551 meters were conducted in the mineralized zones above the 1120 level of the Central mine. The main objective of the drilling program was to explore for new mineralized resources. Additionally, 8,605 meters of diamond drilling was completed to recategorize mineral resources into mineral reserves. Finally, 17,233 meters of infill drilling was completed mostly above level 1120 as the extraction during 2024 was mainly conducted in the upper part of the mine.

At Bolivar, a total of 43,849 meters were drilled during 2024, of which 34,017 meters of diamond drilling was conducted with the objective to recategorize resources into reserves in the Bolivar Northwest, Cieneguita, Dulce, El Gallo, and Marian ore bodies. Further, 9,832 meters of diamond drilling was completed to explore for new resources as well as to replace the ore mined during 2024.

Outlook for 2025

On December 5, 2024, the Company announced its 2025 production and cost guidance, which included full capacity throughput at both the Yauricocha and Bolivar mines.

The Company expects production at Yauricocha in 2025 to be primarily below the 1120 level, complemented by the recent discovery of a new high-grade zone in the upper part of the mine. A number of investments made in 2024 and planned during 2025 should continue to maintain throughput rates close to the 4,000 tonnes per day (“tpd”). As previously noted, the operating consents for Yauricocha allow for an excess of 10% over the permitted capacity of 3,600 tpd. The expected increase in production is driven by the ore bodies below level 1120 as the developments continue to be successful.

At Yauricocha, there are significant exploration opportunities below the 1120 level as the ore body appears open in all directions. Additionally, operating in that area gives Sierra Metals the opportunity to meaningfully explore the near-by zones more rapidly from underground with the goal to increase the reserves conversion to improve the mine sequencing.

At Bolivar, Sierra Metals expects to successfully complete a series of initiatives to increase throughput rates as well as higher grades as the team works towards incorporating the new ore bodies of Dulce and Marian as part of the 2025 production profile by the end of the year. Marian and Dulce are expected to not only provide more minable tonnage, but also higher grades than what was planned.

At Bolivar, ongoing near-mine exploration and district-scale study work has the potential to significantly expand the resource at the mine as well as providing additional upside through prospective opportunities. The two most recent discoveries of Dulce and Marian ore bodies are a great indication of the potential and continuation of the deposit as Bolivar continues with its systematic exploration program.

Overall expectations in 2025 are to reap the benefits of mining below the 1120 level at Yauricocha while putting in place the foundation for future growth at Bolivar through expansion of the tailing facilities. During 2025, Management’s plan at Yauricocha is to convert resources into proven and probable reserves, while at Bolivar the target is to increase the resources, while maintaining the level of reserve conversion.

Production Guidance

Cost Guidance

Non-IFRS Performance Measures

Certain financial measures within this news release, including Cash costs per copper equivalent pound, AISC per copper equivalent pound, Adjusted EBITDA, Adjusted net income (loss) attributable to shareholders and Operating cash flows before movements in working capital, are not measures recognized by International Financial Reporting Standards, as issued by the International Accounting Standards Board (“IFRS”). The non-IFRS measures presented do not have any standardized meaning prescribed by IFRS and are therefore unlikely to be directly comparable to similar measures presented by other issuers. Investors are cautioned that non-IFRS financial measures should not be construed as alternatives to other measures of financial performance calculated in accordance with IFRS. The foregoing non-IFRS financial measures are provided to assist investors with their evaluation of Sierra Metals. Management considers these non-IFRS financial measures to be important indicators in assessing its performance. See additional disclosure below and the “Non-IFRS Performance Measures” section of the FY 2024 MD&A for further information on the definition, calculation and reconciliation of non-IFRS financial measures.

Non-IFRS Reconciliation of Adjusted EBITDA

EBITDA is a non-IFRS measure that represents an indication of the Company’s continuing capacity to generate earnings from operations before taking into account management’s financing decisions and costs of consuming capital assets, which vary according to their vintage, technological currency, and management’s estimate of their useful life. EBITDA comprises revenue less operating expenses before interest expense (income), property, plant and equipment amortization and depletion, and income taxes. Adjusted EBITDA has been included in this news release. Under IFRS, entities must reflect in compensation expense the cost of share-based payments. In the Company’s circumstances, share-based payments involve a significant accrual of amounts that will not be settled in cash but are settled by the issuance of shares in exchange for cash. As such, the Company has made an entity specific adjustment to EBITDA for these expenses. The Company has also made an entity-specific adjustment to the foreign currency exchange (gain)/loss. The Company considers cash flow before movements in working capital to be the IFRS performance measure that is most closely comparable to adjusted EBITDA.

The following table provides a reconciliation of adjusted EBITDA to the consolidated financial statements for the three months and years ended December 31, 2024 and 2023:

Non-IFRS Reconciliation of Adjusted Net Income (Loss)

Adjusted net income (loss) attributable to shareholders represents net income (loss) attributable to shareholders excluding certain impacts, net of taxes, such as non-cash depletion charge due to the acquisition of Corona, impairment charges and reversal of impairment charges, write-down of assets, and certain non-cash and non-recurring items including but not limited to share-based compensation and foreign exchange (gain) loss. The Company believes that, in addition to conventional measures prepared in accordance with IFRS, certain investors may want to use this information to evaluate the Company’s performance and ability to generate cash flows. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance in accordance with IFRS.

The following table provides a reconciliation of adjusted net income (loss) to the consolidated financial statements for the three months and years ended December 31, 2024 and 2023:

Cash Cost per Copper Equivalent Payable Pound

The Company uses the non-IFRS measure of cash cost per copper equivalent payable pound to manage and evaluate operating performance. The Company believes that, in addition to conventional measures prepared in accordance with IFRS, certain investors use this information to evaluate the Company’s performance and ability to generate cash flows. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. The Company considers cost of sales per copper equivalent payable pound to be the most comparable IFRS measure to cash cost per copper equivalent payable pound and has included calculations of this metric in the reconciliations within the applicable tables to follow.

All-in Sustaining Cost per Copper Equivalent Payable Pound

All‐In Sustaining Cost (AISC) is a non‐IFRS measure and is calculated based on guidance provided by the World Gold Council (“WGC”). WGC is not a regulatory industry organization and does not have the authority to develop accounting standards for disclosure requirements. Other mining companies may calculate AISC differently as a result of differences in underlying accounting principles and policies applied, as well as differences in definitions of sustaining versus development capital expenditures.

AISC is a more comprehensive measure than cash cost per pound for the Company’s consolidated operating performance by providing greater visibility, comparability and representation of the total costs associated with producing copper from its current operations.

The Company defines sustaining capital expenditures as, “costs incurred to sustain and maintain existing assets at current productive capacity and constant planned levels of productive output without resulting in an increase in the life of assets, future earnings, or improvements in recovery or grade. Sustaining capital includes costs required to improve/enhance assets to minimum standards for reliability, environmental or safety requirements. Sustaining capital expenditures excludes all expenditures at the Company’s new projects and certain expenditures at current operations which are deemed expansionary in nature.”

Consolidated AISC includes total production cash costs incurred at the Company’s mining operations, including treatment and refining charges and selling costs, which forms the basis of the Company’s total cash costs. Additionally, the Company includes sustaining capital expenditures and corporate general and administrative expenses. AISC by mine does not include certain corporate and non‐cash items such as general and administrative expenses and share-based payments. The Company believes that this measure represents the total sustainable costs of producing copper from current operations and provides the Company and other stakeholders of the Company with additional information of the Company’s operational performance and ability to generate cash flows. As the measure seeks to reflect the full cost of copper production from current operations, new project capital and expansionary capital at current operations are not included. Certain other cash expenditures, including tax payments, dividends and financing costs are also not included.

The following table provides a reconciliation of cost of sales to cash cost, as reported in the Company’s consolidated statement of income for the three months and years ended December 31, 2024 and 2023:

The following table provides detailed information on Yauricocha’s cash cost, and all-in sustaining cost per copper equivalent payable pound for the three months and years ended December 31, 2024 and 2023:

The following table provides detailed information on Bolivar’s cash cost, and all-in sustaining cost per copper equivalent payable pound for the three months and years ended December 31, 2024 and 2023:

Additional Non-IFRS Measures

Operating cash flows before movements in working capital excludes the movement from period-to-period in working capital items including trade and other receivables, prepaid expenses, deposits, inventories, trade and other payables and the effects of foreign exchange rates on these items. The most comparable IFRS measure is cash flows from operating activities.

Qualified Persons Statement

Ricardo Salazar Milla (AIG #8551), Corporate Manager – Mineral Resources of Sierra Metals, is a Qualified Person as defined under National Instrument NI 43-101 – Standards of Disclosure for Mineral Projects. Mr. Salazar has reviewed and approved the scientific and technical content of this news release.

About Sierra Metals

Sierra Metals is a Canadian mining company focused on copper production with additional base and precious metals by-product credits at its Yauricocha Mine in Peru and Bolivar Mine in Mexico. The Company is intent on safely increasing production volume and growing mineral resources. Sierra Metals has recently had several new key discoveries and still has many more exciting brownfield exploration opportunities in Peru and Mexico that are within close proximity to the existing mines. Additionally, the Company has large land packages at each of its mines with several prospective regional targets providing longer-term exploration upside and mineral resource growth potential.

Forward-Looking Statements

This press release contains forward-looking information within the meaning of Canadian securities legislation. Forward-looking information relates to future events or the anticipated performance of Sierra and reflect management's expectations or beliefs regarding such future events and anticipated performance based on an assumed set of economic conditions and courses of action. In certain cases, statements that contain forward-looking information can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", "believes" or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might", or "will be taken", "occur" or "be achieved" or the negative of these words or comparable terminology. By its very nature forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual performance of Sierra to be materially different from any anticipated performance expressed or implied by such forward-looking information. Forward-looking statements in this press release include, but are not limited to, statements with respect to the Company’s production and cost guidance for the year to be ended December 31, 2025, the significance of drill results, the ability to incorporate new drilling in an updated mineral resource and the Company’s ability to grow the deposit at the Bolivar Mine and to recategorize mineral resources at Yauricocha into mineral reserves. Forward-looking information is subject to a variety of risks and uncertainties, which could cause actual events or results to differ from those reflected in the forward-looking information, including, without limitation, the risks described under the heading "Risk Factors" in the Company's annual information form dated March 26, 2025 for its fiscal year ended December 31, 2024 and other risks identified in the Company's filings with Canadian securities regulators, which are available at www.sedarplus.ca.

The risk factors referred to above are not an exhaustive list of the factors that may affect any of the Company's forward-looking information. Forward-looking information includes statements about the future and is inherently uncertain, and the Company's actual achievements or other future events or conditions may differ materially from those reflected in the forward-looking information due to a variety of risks, uncertainties and other factors. The Company's statements containing forward-looking information are based on the beliefs, expectations, and opinions of management on the date the statements are made, and the Company does not assume any obligation to update such forward-looking information if circumstances or management's beliefs, expectations or opinions should change, other than as required by applicable law. For the reasons set forth above, one should not place undue reliance on forward-looking information.

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