EXPLORATION & DEVELOPMENT

Sierra looks to Cusi, Yauricocha expansions

Releases resource updates and a PEA

Ngaire McDiarmid
 Sierra Metals’ Yauricocha mine in Peru

Sierra Metals’ Yauricocha mine in Peru

The company has released significant resource updates for both operations and a preliminary economic assessment on expanding Yauricocha from 3,780tpd to 5,500tpd.

At Cusi, measured and indicated resources increased 18% in tonnage to 5.3 million tonnes for 37 million ounces silver-equivalent, and inferred rose 200% to 4.8Mt for 28.8Moz Ag-eq.

"This updated mineral resource estimate is the foundation of our upcoming preliminary economic assessment update that will help us to determine the most capital efficient expansion scope for the Cusi mine, in a similar way that we have evaluated the Yauricocha mine in Peru and Bolivar mine in Mexico," CEO Luis Marchese said.

Sierra had announced a positive PEA on doubling Bolivar's output to 10,000tpd in October.

At Yauricocha, Sierra said the PEA's starting point of 3,780tpd represented the expected upcoming expansion from the current 3,150tpd to 3,600tpd plus a 5% overallotment allowance, pending a permit expected in early 2021.

Marchese said the PEA determined a further expansion to 5,500tpd was the optimum production level based on its current, expanded mineral resource base.

Sierra reported a 26% tonnage increase in the measured and indicated resources to 15.9Mt and a 79% increase in inferred resource tonnage to 11.6Mt, which Marchese said was "the highest resource in the mine's history" since acquiring it in 2011 with an indicated resource of 5Mt and having since mined 9.1Mt of ore.

The PEA put the life-of-mine and sustaining capital cost at US$268.5 million and the after-tax NPV8 at $333 million.

Over 12 years, Yauricocha was expected to produce 419 million pounds of copper, 13.7Moz of silver, 43,000oz of gold, 541Mlb of zinc and 167Mlb of lead.

"The company plans to continue with its disciplined approach of profitable growth and now plans to proceed with the next step of the completion of a prefeasibility study to further de-risk the plan and determine the best path forward," Marchese said.

Sierra Metals had reported a 350% year-on-year jump in headline earnings earlier this month, as record production from Bolivar and Cusi coincided with higher metals prices, helping offset lower sales and increased treatment and refining charges at Yauricocha.

Sierra shares (TSX: SMT) reached a 12-month high of C$3.67 this week.

They closed down 0.3% to $3.38 to capitalise it at $550 million (US$420 million).

A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining Journal Intelligence team.

A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining Journal Intelligence team.

editions

ESG Mining Company Index: Benchmarking the Future of Sustainable Mining

The ESG Mining Company Index report provides an in-depth evaluation of ESG performance of 61 of the world's largest mining companies. Using a robust framework, it assesses each company across 9 meticulously weighted indicators within 6 essential pillars.

editions

Mining Journal Intelligence Global Leadership Report 2024: Net Zero

Gain insights into decarbonisation trends and strategies from interviews with 20+ top mining executives and experts plus an industrywide survey.

editions

Mining Journal Intelligence Project Pipeline Handbook 2024

View our 50 top mining projects, handpicked using a unique, objective selection process from a database of 450+ global assets.

editions

Mining Journal Intelligence Investor Sentiment Report 2024

Survey revealing the plans, priorities, and preferences of 120+ mining investors and their expectations for the sector in 2024.