Sierra Metals (TSX: SMT) (NYSE Amex: SMTS) reviewed 10-06-2020
Market Cap: 237 Million (USD)
Share Price: 1.45 (USD)
Shares outstanding: 162,810,554 as of 30 June 2020
Cash: $40.7 M (USD) as of 30 June 2020
Debt: $99 M (USD) via Credit facility as of 30 June 2020
Current operations: Yes
Insiders: Low
Institutional: 25 institutions hold 65% of float
Website: sierrametals.com
Investor Presentation: https://www.sierrametals.com/investors/events/default.aspx#presentation
CEO: Luis Marchese
Good mining jurisdictions — three Operating mines in Peru and Mexico
Has a large number of development properties, also in Peru and Mexico
Operating Mines:
Yauricocha (Peru) – Ag (14%) and small amt of Au (2%); mostly Zinc-Copper-Lead
Bolivar (Mexico) – 70% Cu, 16% Au, 14% Ag; produced 13,500 tons of Copper in 2019
Cusi (Mexico) – Silver mine with 7% lead; produced 1M oz. of silver in 2019; grade 180 g/ton
Cusi has potential to increase silver production; the company mostly mines copper, lead, and zinc and has a current silver production only of about 25%
They have 10 properties in Chihuahua Mexico and another four in Peru. Five are in late-stage development
Bottom line:
- This is a little tough to value due to the overweighting of base metals. Yet, the company has been finding nice grade silver and is drilling. All-in costs for silver (free-cash-flow) ~$11 oz (USD)
- The 1.5M at $24 silver is $36M (USD) represents ~15% of their mkt cap
- Approx $74.25M copper value is 31% of mkt cap (calc at $2.75 / pound)
- Trading at the mid-point of the 52-wk range of $0.45-$2.75 USD
- No position, but considering it