Resource World Magazine

24 www.resourceworld.com A P R I L / M A Y 2 0 2 0 weather the upcoming challenges that lie ahead in 2020, including those caused by the COVID-19 pandemic. We will continue to endeavour to improve our operating performance, strengthen our asset base and expand throughput as soon as possible which should provide for lower all-in sustaining costs and continued cash flow." YAURICOCHA MINE Zinc equivalent metal production at Yauricocha increased 19% to 187.7 million lbs in 2019 compared to 2018 due to 1% higher ore throughput, higher zinc, lead and gold head grade, and higher recover- ies for all metals. "Yauricocha continues to be a solid per- former for the company," said Gonzales. "We continue to improve the mine with a focus to expand production to 3600 tonnes per day in the later part of 2020." The Yauricocha Mine ran at an average rate of 3,677 tpd during the 4th quarter in order to compensate for the loss of pro - duction due to an illegal strike in the first half of the year (average throughput in 2019 was 3,190 tpd). The company hopes to receive permits to officially increase Yauricocha's throughput to 3,600 tpd in 2020. Yauricocha's cash cost per zinc equiva - lent payable pound rang in at US $0.46, down from US $0.52 in 2018. AISC per zinc equivalent payable pound was US $0.79, up from US $0.73 in 2018. Lower cost of sales and cash costs were attributed to higher production and consequent 21% higher sale of zinc equivalent pounds as compared to 2018. AISC per zinc equiva - lent payable pound was 8% higher as a result of higher sustaining capital and an increase in zinc treatment and refining costs as compared to 2018. BOLIVAR MINE The Bolivar mine produced 27.2 million copper equivalent pounds in 2019, a 28% increase over 2018. "At Bolivar we had an excellent year, realizing a 23% increase in throughput, which was a new record," stated Gonzales. The mine finished the year with an average throughput of 3,600 tpd and the company has set its sights on reaching a 5,000 tpd throughput in 2020. Bolivar's cash cost per copper equiva - lent payable pound was US $1.73 which is up from US $1.44 in 2018. The AISC per copper equivalent payable pound was US $2.86, an increase from US $2.13 in 2018. The company reports that the increase in cost of sales and cash cost per copper equivalent pound resulted mainly from higher operating costs during the year. The increase in AISC per copper equiva - lent payable pound during 2019 compared to 2018 was attributed to higher cash costs and higher sustaining capital expenditures at the mine. UPDATED RESOURCE AT BOLIVAR MINE AND PEA PLANNED On March 31, 2020, the company announced a new resource estimate for the Bolivar Mine which included 10,203 metres of drilling completed between October and December 2019 and accounted for production up until December 2019. Mineral Reserves for Bolivar now stand at 7.5 million tonnes averaging 0.69% copper, 13.4 g/t silver and 0.22 g/t gold, or 0.87% copper equivalent, rep - resenting a 5% tonnage decrease to the previous reserve estimate from 2017. The new reserve estimate includes two years of depletion of approximately 2.5 million tonnes of ore. Total Indicated Mineral Resources for the Bolivar Mine have increased 68% since the December 2019 update to 19.5 million tonnes averaging 0.78% copper, 15.4 g/t silver and 0.20 g/t gold, or 0.96% copper equivalent. Overall metal content increased by 37% in equivalent copper terms. Total Inferred Mineral Resources for the Bolivar Mine increased 29% to 21.5 mil - lion tonnes averaging 0.78% copper, 14.2 g/t silver and 0.21 g/t gold or 0.96% cop- per equivalent. Overall metal content has increased by 7% in terms of equivalent copper. "This larger mineral resource reflects the success of our exploration programs and the potential at our Bolivar operations to justify further throughput expan - sions," said Gonzales. "It is worth noting that after two years of mining depletion we realized only a 5% decline in tonnage and 2% decline in copper content, which reflects our ability to replace the mineral reserves at the mine over the years." Sierra plans to update the Preliminary Economic Assessment for the Bolivar Mine with the goal of providing a clear path to further potential expansions at the mine beyond the 5,000 tpd level. CUSI MINE The Cusi Mine, in Mexico, produced 1.02 million silver equivalent ounces in 2019, a 27% increase when compared with 2018. The mine ended the year with an average throughput of 815 tpd and is expected to reach its throughput goal of 1,200 tpd this year. Cusi's cash cost per silver equivalent payable ounce was US $21.38, up from US $15.71 in 2018. The AISC per silver equivalent payable ounce was US $30.89 compared with US $22.09 in 2018. The company states that unit costs for the com - parable period were higher at Cusi because the slight increase in silver equivalent pay- able pound could not offset the increase in cost of sales and sustaining costs which including higher capital expenditures at the mine. Sierra plans to release an updated resource estimate at Cusi late in the sec - ond quarter of 2020 that will include a maiden reserve estimate. At this time the Cusi Mine has been placed into Care and Maintenance as a result of the COVID-19 epidemic. Gonzales summed up the 2019 year-end results stating: "Sierra Metals' balance sheet remains strong with the liquid - ity needed to meet our operational and growth expenditure requirements. The company is on track for further growth at all three mines." Sierra Metals currently has 161.2 mil- lion shares outstanding and a market capitalization of $178 million. n SIERRA METALS

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