Sierra Metals Inc. [SMT-TSX, BVL] released results of a preliminary economic assessment (PEA) for its Yauricocha polymetallic mine in Peru.
Among the highlights is an after-tax net present value of US$333 million using a discount rate of 8.0% at 5,500 tonnes/day and an operating cost of US$48.89/tonne milled.
The PEA is based on an updated resource estimate, which includes a 26% increase in measured and indicated resources and a 79% rise in inferred resources.
It envisages life-of-mine payable production of 419 million pounds of copper, 13.7 million ounces of silver, 43,000 ounces of gold, 541 million pounds of zinc, and 167 million pounds of lead.
Sierra Metals is a mid-tier precious and base metals producer with a portfolio that includes the Bolivar and Cusi mines in Mexico. The company has said it expects to produce between 110.1 and 122.3 million pounds of copper equivalent this year. The company is focused on increasing production volume and growing mineral resources.
The Yauricocha Mine is located in the Allis district, Yauyos province, department of Lima. Polymetallic mineralization has been mined from Yauricocha for more than 50 years. The majority of the mining is executed through mechanized sub-level caving with a relatively small portion of the mining using cut and fill.
Mineralized material is transported via rail to a processing facility, located roughly one kilometre from the mine site. In the first nine months of 2020, the mine produced 56.8 million pounds of copper equivalent. That compares to 27.8 million pounds at Bolivar and 614,000 ounces of silver equivalent at Cusi.
“I am very encouraged by the results of the PEA, which support the company’s organic growth strategy and plan to profitably develop and grow the Yauricocha Mine production rate to 5,500 tonnes per day in 2024 from today’s permitted capacity of 3,150 tonnes per day, based on current analyst consensus metal price estimates,” said Sierra Metals CEO Luis Marchese.
On Wednesday, Sierra Metals shares advanced 1.5% or $0.05 to $3.44 in light trading volume. The shares trade in a 52-week range of $3.67 and 89 cents.