SMTS - Earnings call transcript Q1 2021

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Operator

Good day and thank you for standing by and welcome to the Sierra Metals First Quarter 2021 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to your speaker for today, Mr. Mike McAllister, Vice President of Investor Relations. sir. you, Thank ahead. Please, go

Mike McAllister

Ed operator, Metals and today's Welcome you, our morning, we good quarter XXXX Sierra CEO; Marchese, first Luis On joined to our results CFO. are Thank by everyone. Guimaraes, conference call, call.

published assuming issues read. key And have are quarter. the today's We materials highlights such, presentation been all that the of as

upon might through of always, for for at today's call questions open website. the of the management is I like webcast press also the which Yesterday's those accompanying analysis from available financial However, website presentation, company's are for listening. posted company's would that to and presentation we highlight and the the other can download to discussion interest expand the the be release, that, statements or end issues as sierrametals.com. are on The at

to turn estimates the uncertainties is that that a contains risks, and earnings the projections, call materially call I number could Actual from or subject the other information. Before in current differ I on as over indicate conclusions, to forward-looking our forward-looking results of would information this beliefs. Such based forecast company's information reflected like forward-looking to Luis, factors. is and expectations,

CEO, as factors could assumptions about or the or the otherwise that dollars drawing or go Ed financial SEDAR first is in Luis. material in available material company's amounts our company's information CFO company that and the actual Additional forecast outlook to the information highlights the over differ Guimaraes, on call ahead, which making were on factors cause I or form, from to now dollar the highlights. or forward-looking projection, forward-looking then reflected for information all to Marchese, like the and Please to conclusions, unless quarter that applied materially results would and projections publicly are Luis information, the in EDGAR or forecast a the contained mentioned our annual to call a in turn XX-F for website. Please today's the is in Form conclusion note U.S. noted. on via

Luis Marchese

morning, Good Mike. everyone. Thanks,

costs, now continuing company all, slide and in which our our of the to in operate our impact and take stating included safety be to ability and despite proactive the metals I by as on measures communities, chains which effectively also delays must as have imposed have to to and would to like has Turning start were which for with head grades mining Impacts preparation we above the to mainly challenges the that on Costs as Well, we meet resulting paramount affected lower-grade we potential workers various This consequently from has said, areas lower continue development mitigate sales indirect company. COVID-XX our remains direct ore COVID-XX lower strive still focus as may four. mine indirect and to incurred, of we grades. resulted have into management, expected larger and fixed in supply operate in that XXXX. XXXX finances. and to production. to communities and operations, metal lower lower bodies employees, due That that. affected,

and Further, for We ongoing difficulties carry-forward to some continue to continue to before all exploration And test active monitor deferring and capital we we're join workforce. due also quarantine project, they daily. can employees, the XXXX. employees and

grid also in for production parts affected which few Cusi Texas Northern large-scale power was Mexico, next difficulties and other and outage of loss brought also during production by Mexico XX-day that the Additionally, our affected months. period of has which instability Northern the of caused a approximately power mine some continuous

adjusted EBITDA COVID-XX positive currently remain and we challenges place. faced, while free are the challenges flow. Furthermore, cash However, plans despite and company in mid-term we from solid maintains revenue the the had facing still

-- X,XXX the to Looking recently to Yauricocha. strong day running XXXX. allow by at company an at to use Cusi. Mexico Despite continue permit, an the in us QX XX% will permit, better throughput the turn increase ITM permit, our at are capacity day. per to throughput as opportunities environmental the and ITS ahead of X,XXX increase increased underway expect for This work Yauricocha growth tonnes mineral And capacities and Furthermore, future. to tonnes we end to of to tonnes operations make reserves per XXXX, see complete slide we're the day the resources. and which grow to would we please Yauricocha complete see we development Bolivar continue Yauricocha XXXX requiring This to operations five. in is an received, a for At at by currently installed operational of already receive drilling to X,XXX permitted per the final the facing, in challenges

We in costs. this expect future cash cash flows lower projects and expenditure result, increased capital will

Additionally, connect both will efficiencies are we And to Bolivar tunnel exploration cash expenditure plant with through concentrator and expect throughput continuing At of the operating generation underground future. mines improvements mineral Cusi, in costs. expanded and that completing double programs improve capital the improvements to and These fund at like programs haulage driving operational tailings infrastructure include our reduce the the flows. these with Bolivar mines. to Yauricocha, and at facility an we

concentrate. development cost. expected June, also transportation lowering construction Bolivar, to and in approximately that This was of expected our our This tailings iron of year an at Board. plant by to enhance we expect approved recently processing XXX,XXX is while iron tonnes to profitability, per project is a Additionally, ore produce which Bolivar's is commence XX% ore

the mines. completed continue work We previous three to the the all build preliminary economic the which upon assessments three for of completion on at prefeasibility studies mines

had day the the were of for on emerge challenges, COVID-XX conclusion company per mines The Slide indirect the balance Bolivar receive We at and first per able doubling are throughput stronger capacity and We to respectively. expansion to has a relatively Cusi tonnes a say In all and position. quarter, Yauricocha we and with sheet decent throughput cash X. pandemic. the starting would face the direct XXXXX and despite I XXXX mine a to tonnes the XXXX still day of

While to we continue environment operate remain hopeful. vulnerable in COVID-XX to we a due

per of the further continue improving improvements flow in production company made costs. infrastructure and cash capital expect growing We The and remain liquidity benefit XXXX a to improvements and metal has production investments prices. We and necessary improving to will our quarter for the company's to the sustainable over the committed share improving shareholders. to turn Ed first benefiting growth highlights. and Ed? call more that importantly I financial the value prudent now and With

Ed Guimaraes

Luis everyone. good and you Thank morning

the Slide Turning to million. COVID-XX-related relatively challenges. X. a had X.X% first increase quarter operational good a now consolidated to despite We of our throughput and reported The generated $XX company EBITDA

quarter XXXX. positive flow ramp million solid progress finished and operations income COVID-XX we of and as evolving effects approximately the the with free cash into and cash. reported net in financial up, providing These despite relatively the continue to expansions which we optimized we expect performances of and also We $XX.X results are product operational solid

led revenue and followed Our be silver copper by to by metal zinc. mix continues by

saw production XXXX. portion disclosed XXXX to is copper leading the the an revenue. factors, reduced in we take improvement a expected to to mix and continue in it seen In company's role have we QX, QX in of While continued a end due QX, previously metal have at XXXX to relatively XXXX remains in I prices. it's remained strong metals believe metal improve realized all the zinc and Copper a pound. of strong and also Precious QX currently. into today $X.XX and

and costs cash tonnage to now head compared in early ounces cash higher Yauricocha weather costs lower the in Turning both equivalent part Bolivar, of the to in lower at from sold. reduced due increase grade bad Slide were the to Cusi, same XXXX, QX. and quarter, X, production, to Bolivar were silver XX% payable lower period at metal contributions due higher the from attributable zones grades during to At

with sustaining the impact XXXX as equivalent all-in sustaining was offset per silver payable line silver ounces. ounce capital, equivalent However, QX costs higher the in in increase of payable

committed a finished support We million of $XX with and the cash net have total expenditures quarter capital have position Management more the to Turning now $XX.X The per plan balance the call working turn benefiting initiatives. over value, importantly, slide Mike? all share million. company's now to strong and prudent to to approximately remains and improving continues shareholders. capital and back I company Mike. will sustainable growth to the growth and X. debt that, With sheet,

Mike McAllister

the portion ends this That Ed. Thanks, call. of presentation

may other of questions we topics to shareholders to that like We Operator, interest call lines. As to open previously would the have. please open the from now discussing participants. are mentioned, open

Operator

Markets. our So comes with question the Reichman [Operator Capital Mark first line Instructions] of Noble from

Mark Reichman

Good morning.

I Bolivar? but probably So address expect grade the when this just to happen to of wanted exactly ask, you in commentary, Luis, needs what is and at improvements some to first Yauricocha and do see his question

Luis Marchese

the what prioritizing Thanks have is for we development Thanks had that mining question. and mean Mark over for at both year we that, time been and make been over situation the with Mark. the that now grades, we we although prioritizing with a COVID we've to mines sure has effect I this now have happened quarter first bodies So, Otherwise, had wouldn't larger plant. okay? the we lower the ore tonnes In met the and are to feed we've tonnage. of process, the in been prioritization. have

X% Mexico is reaching trying to higher-grade highlight situation catch in Having back As that, people around of so Peru still population these have the of that results And the week. we pandemia In quite middle government parts the in to we we different on other areas, vaccinated. said the vaccination better seems and of want or we're starting due COVID in of up speak, roll this just only to can to development out I process the terms production. The metal are terms to been the the in on is wave. of X% second receded. vaccination the Peru, XX-year-old over from world, for has where in of the

issues we issues from in terms amounts is of end ongoing Certainly, is vaccines getting still year hopefully So the into finish be the of to this at we when the do would are mine. expect to the by this this the way And of having country. – can situation. over a mass the we winter for presenting ahead

required. are meantime, back more the contractors, development reaching and that our people we is in to more trying go So into to adding

start get that In expect we will as in next into that we that. results coming are starting we better Mexico, would we months, the feel the speak. I seeing So of areas to

sooner. struggling residual But So we team that see COVID. still is effects although from could the with some

Mark Reichman

comparing by range, driven achieve low range. trajectory of the it the the say, end the too be I production quarter mean is during to Is remainder much should to that doesn't But your kind COVID. stress about the it when of the seem impact it in ability to to actuals to will that first be gain way fair of like the ground a of So guidance the think year it? part of of

Luis Marchese

Yes. Yes.

it. I think that summarizes

Mark Reichman

couple got the queue I go with I’ve of back up follow into a questions. more just think But you I’ll later. and

Luis Marchese

you. Thank Okay.

Operator

Hunchak next Alex of comes from with line CIBC. question Your the

Alex Hunchak

taking to the Hi, everyone. was Thanks for my I ask on going guidance. questions. also

like switching looks But to it to the answered exploration guys maybe one. you So have sort that Yauricocha.

that bit Is plan? of guys something to actual see more in this add to we some or a going drilling Some take that maybe that could nice the that? results than year, out mine resources And the when zone is there. it can new you

Luis Marchese

year Sierra that stretch spots areas and start putting Yauricocha Thanks Yes into call with add we and Alex. – to Esperanza to started that to X.X there. one driving last kilometer the question, for [ph] look Cachi exploration mill we this some what

have next and continuity of that's we result some right in we announced found release. Esperanza to the a of our As press in north the what market that,

mind, a are, year the drilling So this pressing see are to this this to infill up we is of where close far add how that okay? and go. also going to is okay. bit findings even next resources should step do these fairly financially some down And we to So us and take

better should very help we very So it to are operating. reach where good resources news. us for to are this year. It's these close And

Alex Hunchak

impact for but could are maybe going just might then it's bit in on Okay. And closure forward? uncertain comment a guys that know Peru you your viewing situation that. also a you that still, I going give and maybe the how forward? Thank political Great. you how

Luis Marchese

XX-whatever-percent -- mining XX% Peru It's the in important the of XX% really taxes. the Well is exports Peru. is of GDP. Yeah. the very of of country.

the elephant the And it's every in in as of of comes terms room discussion topic the presidential it election. So economy. always with a

this So the now. is case

addressed also take of Fujimori initiatives their Keiko benefits their the Peru that, the Castillo. They impact and candidates. government their and There Pedro revenues the discussions into the demography. two is the have of view. about said redistributing and One other mining to are We rest. around have the mining Having population and country a

there debate. a Keep -- have the to initiatives been majority. forward, So minorities Congress if -- strong in have none through is that candidates already the to move a Congress. elected the have and for Congress two has through go they in They a will of and mind

in decision-making to particular any what would through of which So terms but in have Congress a to discussing anything, is through we're good go mining, debate. and

as in campaign. the of now said middle We the you are

it's a So uncertain. bit

campaigns You how know are.

with the political this. will eventually and comes have out let's result industry a will and a And in together what So wait of for engage see adversary. engage the to then -- we conversation

Alex Hunchak

Okay. That's good a synopsis.

Luis Marchese

you. Thank

Alex Hunchak

guys. Thanks for And me. that's it

Luis Marchese

you, Alex. Thank

Operator

comes Lee Family with Your from of Cooperman Office. line Omega question next the

Lee Cooperman

that do process a not you say about incredulous Let review just which as January. say me something guys early in this strategic was big that valued deal I voluntarily the am

can what strategic say So the us you review process? to update about

Luis Marchese

Thank is unusual the that times. you the we... strategic than We And review restrictions -- the affected you because anything question. Cooperman. on can expected for by much also has a can it's okay Mr. pretty been longer taking I had these well we bit say process of Thank

Lee Cooperman

had When to what if think something do that Well you're do guess? conclude but to you'll you going say, you'll when think we're say. asking the you you process, not to have

Luis Marchese

And working to certainly, tell. the happen on market we the months. come expect in -- with from consistently it we process. this and are But few to difficult back this results hopefully won't good to next We

Lee Cooperman

All right.

the a Because enough not and XX%. from Freeport the strategic willing up review I an look give come the mispriced. In Second at look next pricing, to to the EBITDA stock projecting we Despite company question. you come, words, favorable a the was think price sale I recapitalize up attractive year, If happen for is point could does look I the your XX% very tonnage the up at other copper at forecast price. vantage to your at you're and company this – that but is debt the earnings your stock levels. buy you these of prices sign putting much to quite take process the -- stock, years, process is couple company carry? on grow an that? at to doesn't only Year-to-date yield your uncomfortable is a prepared substantially, the gold that's assume significantly or back debt if I will you're stay how attractive, doing But But after is company year-to-date. to provide example

Luis Marchese

for Mike, that suggesting. you question. the and Thank scenario the made comparison you. comment market the you and on on Thank Mike can situation are the then can just the you comment we on that maybe

Mike McAllister

Yeah.

But then producer. thing play. say you – we're I only Freeport Freeport a if copper is down. an to apples-to-apples a comparison. us We're is So of the not would pure it's diversified more yes compare there see, really

at Hudbay we're you to base line. or If look With against as doing doing peers we're on like And we're iron compared mid-tier silver other some pretty comparables, much good metals better. us them ore, well a level. in

while on you we're I not hear the a yet. major So Freeport,

off. ways little a So,

a that. it's for really So, a not more of We're – comparison fair

Lee Cooperman

I sale. outcome. you premium is have company you're price. people speaking interested company a a selling of none favorable up observe at am for not a And mentioning would itself Well put Generally, because in anticipate I these themselves up discounted get for companies a puts when the sale,

free value by look I look net be of of cap cash couple the and example, could be will the words, we to say hundred plus seems times, for other that, In I and EBITDA the two-thirds had flow shareholders million that's I lot in company, me was the which at you market you'll enterprise So debt a create of next company. $XXX a think That's our for of a to the EBITDA the million position. of value two cash at year, when company. if recapping

very staying to of plant right year anyway current we million. it's Am million guidance? So me luck, seed. in spot that that our to you're with prices which still guidance, EBITDA on I can own $XXX but just still at and $XXX is I $XXX make exciting assuming $XXX that Is that prices this your to consensus million million

Ed Guimaraes

Thank still you. Yes our Yes. guidance. it's

Lee Cooperman

Okay. Good.

prices money more we're I to than you levels, at assume we if I – current you and earn would that remain Okay. which assumption currently? XXXX in said the And would is earning big XXXX will that anticipate

Ed Guimaraes

correct. That's

Lee Cooperman

Good. Okay.

And which ore that a to me fair ore CapEx project, the What iron going return the of about Okay. is up profitability amount like the tell the likely look to take business? of or iron CapEx. is on

Luis Marchese

thanks We that we were are are about We the going bringing – question. now. for to very excited into project construction which

release economics EIA including few We are next going in weeks we as Bolivar project. to for the that the issued

But I cannot can the project. I So some about economics. tell you this claim characteristics

to going spend iron concentrate. of capital reduced going are seen the in a X.X $XX at We you've to intensity. very do tonnes We're million ore press for as million release it

other in end. the iron the If the compare of we us are low with ore project intensity you CapEx market, any in

way operating other very the of Bolivar that have fortunate XX line terms the hand, mine. On of only costs, a miles is in road we from

project production and facilities available. port, magnetite. And the that going from the to to which in we CapEx. issue one have because anywhere a the Mexico if you have line one has major have the have we of and that train are terms closest While infrastructure operation becomes the in color build a infrastructure also to usually major world, ore is and in that in bring we iron manage and don't We space our

other hand, stockpile On the through to a ore have will we mine we're the our this cash going cost own operating that to facilities. new process the And at good of end. these quite drive low

bring challenge to So to going to add now ore these are our resources. value operations and our as we as is then possible soon following

going of our rest, as current aware metals zinc iron have is ore. So top think because copper, which add on we I you we're are and silver, mix, strong extremely to

to example the So Sierra mix an Metals much is become metals for pretty of right the future. going

Lee Cooperman

Yes.

answer improved large, and Is But million You don't few want not a correct? the $XX gone of CapEx the more answer and have the without the doing for ahead to question you by have you would weeks. that because analysis.

Luis Marchese

the Absolutely. follow Yes. have But to we regulations...

Lee Cooperman

Well this is an open mic.

You have open that this whatever public path. I to the is So want right? to go -- don't down

with I'm -- year you EBITDA. you using expect say, cash $XXX Just do In than the million presently? end you let's other have words, more to have as

looking have $XXX at? of Have been of the $XXX of yet much has million million? how spent what how year spent money this words, that any We million, spending CapEx In you much we're year? additional $XXX other already this

Ed Guimaraes

a million in Yes. that. annualize we and the what in the to add-on annualized, positive Yes, bit quarter you from flow about little to Yes. said have. QX, take your a cash terms be to But we and $XX And there -- we're so we free behind yes, balances. question, were cash to if of expect we're answer

Lee Cooperman

would year debt-free. Yes. end that I would expect the you

and If Is bad debt minus too that you your be that took cash assumption would a debt you your aggressive? free.

Ed Guimaraes

be be to yes be some, closely, minimis. it's Might going million. that. around de than but going might $XX approximately It's be It less but it's to to going No. have

Lee Cooperman

favorable -- but we And say in have I'd do little if the auction This I favorable largest a third the conclusion is bit I we have am think conclusion. don't I the shareholder and company. to esoteric, a process a

price have buy substituting than I the in business think relative in lowest the other more to debt words, in last that an materially cheap environment consider are structure. value. rates history should to sale we pay capital is to very should this asset underlying for and we're interest the equity the our where In equity the that buyer

than earner, be So a to view happy to suspect -- last as management. million we to in seemed off-line you feel equity intelligent with hundred structure we're going And probably forward? couple long view which me my it of think capital expressing debt substitute as that the So observation. I I'm and discuss a EBITDA-type dollar expressing would higher just to that for

recall to requiring to this making going we You're we mean, been by I it What and XX love are for done over have are anybody doing questions doing Why the that else. are don't I've afraid Why it this stuff we to to this way you call? years ask being listen to of? I like you Mike. difficult preregister? one so Why preregistration are and people that? for

Mike McAllister

And has star scaled COVID. operators many available. matter provider A there's not back that as during

dials everybody to be last if so they're And in minute the at going overwhelmed.

we're preregister. that to we're this as so And away And would improve. things asking people hoping go

Lee Cooperman

Got you.

you healthy. Thank your Thanks. appreciate. you. you. Got answer. I luck. Thank Good Okay. Stay for

Operator

Your Richard next question comes of with Equitec [ph]. Carrigan from the line

Unidentified Analyst

Good morning.

company? You've as already question. in process only of ago last answered my months question questions. Did But I specific four review have the this expression interest my of undertake some now. a we That's one result

Luis Marchese

undertake Thank for because discussed we question. Well, it thank opportunity And this a company. position view No. you that -- of strategic the time It Board to and the of was process. the the was right it the was Board good the you. the

Unidentified Analyst

correctly And earlier did another drag probably understand months that an perhaps? on answering question you for two process I the will

Luis Marchese

that, few months. we I but go expect Well, next cannot that the for it preempt will

Unidentified Analyst

Thank your and good you time for luck.

Luis Marchese

Thank you.

Operator

line Your Jim Young comes of the Investment. next question Midwest with from

Jim Young

the here or the these first of my Thank one, That's you. you levels for questions the question. materializing couple foreseeable remain expected trends couple you. for A decline the hi. over in of to future, cost would these expect quarters? these experienced at Number next regarding -- to are a we see Yeah, that quarter, elevated

Luis Marchese

question. Thank Jim. the for Thanks you

the metal successful of the produced As expect the we that's grades a to cost But function can ore be go into down. mix. higher-grade up, go Jim we bringing how on per this

bit all it's bit in quarter. difficult that the they are we first because in we behind the I there because impacts of this more Peru. had I think a the said of who wave Yauricocha Bolivar are second middle is as in in a getting

we getting those trickier as trying faster those grades. the into would bit a are more to get bringing said liked Having as ores and have to. it's So mine soon that, to we into get workforce into

we So do COVID of that's well we terms of how in a this situation. can function how do and

give you that me the a sick the screening Let -- In the number strikingly that And XX. with that work over -- have Bolivar, the -- the strikes over XXX of in or in a XXX through out stop in were January, XXX we we COVID. in people quarter. has first process we February, had got that

in we're the the COVID XX% So talking over sick our of and month X%. are first who in month second another of workers

real a been has the first in okay, this Mexico quarter. in So hit,

we're into looking way numbers, we still it. seeing lower but are Now

we more in seeing are Peru cases. Now

don't been over of So, workers so evolve, happy that certainly to many working, are that few our out I'm still we we we okay? this disease are going our but screening know this the have is happy sick how -- is last But of process months.

Jim Young

you situation, Okay. your quarter? first do third able feel Metals' understand of much that specific appreciate aren't the comment benefit give how to -- I this how upon past the you a Ed, would RCs Thank And us us The in And employees. additional And RCs. lower you the can benefit question be Ed, as to pertaining recognize and next a the sense much you of Sierra expect for help in and TCs we from focus in regarding can give XXXX? the on safety quarter quarter is fourth the and TCs you. for of directly and but the quarter, really second I us saw and

Ed Guimaraes

question. going especially I And could mind mechanism elaborating little bit and a TC explain a on little bit that's metal in the situation don't the very rising works. more and prices how TC a the good Jim, I with

So, off-takers. tender our our nature. off, reason term. very is, negotiated do and the one COVID the year. do commitments RCs all contractual in that had that first of every contracts with year many with previous just for concentrates TCs fulfilling had customers, delays Typically, a we And the these was from are They're because first in short we our contracts. we year, of usually still And -- for process quarter

into the in XX So, negotiate are counterparty And offtakers, participate some the will, upside TCs wants any that if to provisions it they contract, that when you involves in is these puts escalators. And built refiners. that you the metal or about means a of what RCs, price.

case -- take So, $X.XX. has Copper $X.XX. in year currently the just a copper. -- copper We're of around was ago at let's

of way implications higher per rising. escalator the -- what of rises, price. now that the in to at sake, on negotiated would tonne be participate by is does per mean the tonne for was TC this the form the TC? copper and Your price $XX,XXX as TC. over So, that TC What say, price base And $X,XXX just metal a We're can base an argument's let's the at offtakers price.

will you now, could to that No, in can could significant. the instance copper -- It's were the that get what XXX% they prices a essentially be you the in not So they escalator. that is upside. that TC see upside. copper, are for of $XX. benchmark metal of We just it If where and participate increase a don't case TC of based significant for take $XX I'm saying rise on like in the stay

Jim Young

[Indiscernible]

Ed Guimaraes

we That's it our which control and that it are the Not sustaining all-in cash out our all-in of our in overall costs. include sustaining costs is correct. cost in essentially industry-wide That's does costs, number. but affect

So what -- there. we're that's with and dealing

right -- terms closer were negotiated for they terms to were it's at they now Even is And -- could benchmark with it there Is want some instance now. in the to is significant if as year's this last for much TCs last you think better No, XXX, tear So, RCs. thing. good benchmark to Copper thing take But factor is will. down year. probably XXX. about upward benchmark copper. was be I copper XX% a in though on that especially of thing? pressure compared definitely on year if XXX we a bad level. you the zinc look Same escalator This and a you you it have for down to if

think metal participate I'd we I but that sooner costs. important than $X.XX, it's copper -- shouldn't to upside fully we the price of take a this don't recognize in of

Jim Young

And [Indiscernible] for that's just this

Ed Guimaraes

That's correct.

So, these keep relatively these contracts we short-term. because --

escalators So, to negotiate when zero. they we these year, next reset

and if was $X.XX Xst, then So, XXXX that's contract the on price go there. escalator negotiated or that at whenever that base or -- copper January we escalators from

impact just doesn't really really short-term TC situation. impact on it a any It's the long-term. have So,

Jim Young

still look RCs for that And too?

Ed Guimaraes

No, it's charge. we've wouldn't It's the in wouldn't swing prices like things base It's seen. such -- see metal seeing the significant copper about you prices. years Normally, a headline. in don't TC. XX on over past it I recall we the just on be because a these hardly talk swings treatment

Jim Young

overall to the bit. on grades the recognize But commodity way the production, the and way, Okay. to issue last out that for question. and my just the totally -- not of that it is on the EBITDA, guidance impact the seem from you XXth me are little a have given because that end that curious of And January bit just that gave the a low impact you near-term low a that of would range then secondly, eliminated little where prices understand COVID and I frankly little say would on is back challenges disappointed I end guess, range at of I I'm --

guidance understand So, end that don't and range for you're low the EBITDA of not why eliminating for XXXX? updating that I

Ed Guimaraes

I certainly at think still look premature, We'll it. it's Jim.

I've off But that refinements mentioned of the that of not with we've I we in fully now at QX this provide may we'll lot associated adjustments COVID more maintaining the months terms that it assays. it clarity is -- -- think probably in benefiting price and couple given of point. leaving in a future, where now comfortable in costs close to price QX given in further the make we'll the had a we when that metals. definitely for we're but we're It's or participation

Jim Young

That’s very Thanks now. right Okay. much. for all

Operator

Market. Capital Mark from question of And Reichman the Noble you line have a with follow-up

Mark Reichman

is a for question Ed. This Yes.

XXXX included, million of, originally $XX So last $XX a carryover expenditures to million, were which kind capital from for those of year. be forecasted

was ore the million sustaining, plant. $XX million expansion. $XX million And So $XX got the iron for for was you've processing for now

you, I you year maybe year, do spending budget expect for the the to just So for full ask the the of, remainder $XX of the for kind or expand could address processing should the including plant? the million

Ed Guimaraes

And the development. mine you restrictions exploration Thank with had affected COVID, and yes that development. affected we question. has It's for have

too early it tell. we Could similar But the if are we had of that so could terms It's into XXXX. -- impact. And have that -- in have to still carryforward was headcount restricted we a carryforward? explained an

headcounts. early be But we But that -- So where Yes. just at because there could really we of safety the just carryforward might into it's it's year. and lower including magnetite too It's a that? next million, the we're announced. precautions having recently the the have do if of Could plus $XXX $XX million at the we to fall $XX say. million looking we short

Mark Reichman

Yes.

the that that of some earlier will to Luis my of alluded some in So spending question. fund improvements

you the of that in ability terms for terms some a that to ground for well? CapEx your gain production function of will -- -- in be or So to of the of in of the think expansion is more the on sustaining spending, the as year do remainder of --

Ed Guimaraes

maintaining easily… of In could -- we because terms

Mark Reichman

be all. should It

Ed Guimaraes

thing really have cash good can is we It's the we -- the capacity all-in so it's plant that really production. in -- the over impact CapEx. just The to doesn't the sustaining. sustaining. The fund it's go growth And

really spend can So we of more will if regarding situation COVID. It's it. a security we definitely

Mark Reichman

Thank you much. Great. very Okay.

Operator

no questions time. are this there at And

Mike McAllister

team, the all sierrametals.com. participants Thank you thank replay That management the today. after us concludes questions materials today's or may for the of website behalf further us would A today's If are to I you be joining reach of webcast any our out like found On operator. at on call. there all concerns, and can call. to

company's the you website. today's the conclude Our operator. Please as as Thank in be found contact information can presentation, call. on well

Operator

Ladies concluded. your call. call in you participation and has thank today's conference gentlemen, Today's for conference

may now You disconnect.

Sierra Metals (SMTSF) 7 May 212021 Q1 Earnings call transcript