Sierra Metals converts resources to reserves for Peru, Mexico mines

A Sierra Metals (TSX: SMT, US-OTC: SMTSF) update has converted between one-fourth and more than one-half of the resources at its Yauricocha and Bolivar underground polymetallic mines to reserves. 

Yauricocha, in Mexico, now hosts 6.4 million tonnes of proven and probable reserves, according to an update released on Tuesday. They grade 1.02% copper, 1.83% zinc, 34.43 grams silver per tonne and 0.36 gram gold for 142.6 million lb. copper, 255.6 million lb. zinc, 7 million oz. silver and 70,000 oz. gold. Those reserves give Yauricocha a five-year mine life. 

“(The updated resources and reserves support) the long production history of both assets,” Sierra Metals’ CEO Ernesto Balarezo said. “Preparing a compliant NI 43-101 report with such a significant amount of mineral reserves and resources demonstrates we have a clear path forward and the foundation in place to enhance and to maximize the returns of the growth initiatives that we have planned at our mines.”

Yauricocha also now hosts 10.4 million measured and indicated tonnes grading 1.30% copper, 2.19% zinc, 42.28 grams silver per tonne and 0.48 grams gold; for 297.3 million lb. of contained copper, 500.8 million lb. zinc, 14.1 million oz. silver and 160,000 oz. gold. Its new inferred resources total 13.2 million tonnes grading 1.3% copper, 1.59% zinc, 34.42 grams silver and 0.43 gram gold, for 378.6 million lb. copper, 463.1 million lb. zinc, 14.6 million oz. silver and 180,000 oz. of gold.  

The measured and indicated, and inferred updates give the mine a life of eight years and 10 years, respectively. 

The new estimate updates the previous resource in the preliminary economic assessment from 2022, which gave Yauricocha 14.3 million measured and indicated tonnes grading 43.7 grams silver, 0.5 gram gold, 1.1% copper and 2.1% zinc. The inferred resource was at 11.5 million tonnes for 29 grams silver, 0.44 gram gold, 1.4% copper and 1.03% zinc. 

Sierra currently owns 82% of Yauricocha, located southeast of Lima.  

One-fourth converted

At the Bolivar mine in Peru, the update gives it proven and probable reserves of 5.6 million tonnes over a three-year life. The reserves grade at 0.77% copper, 16.83 grams silver and 0.28 gram gold for 94.7 million lb. copper, 3 million oz. silver and 50,000 oz. gold. 

Its measured and indicated resource comes to 18.4 million tonnes at 0.76% copper, 15.29 grams silver and 0.25 gram gold for 305.9 million lb. copper, 9 million oz. silver and 150,000 oz. gold. Those resources give it a life of seven years. It’s also now estimated to have 12.1 million inferred tonnes grading 0.72% copper, 12.21 grams silver and 0.19 gram gold, for 192.9 million lb. copper, 4.7 million oz. silver and 70,000 oz. gold. 

The new estimates are a contrast with the previous resource from 2020, which gave Bolivar 19.3 million indicated tonnes grading 15.1 grams silver, 0.2 gram gold and 0.8% copper for 406.9 million copper-equivalent pounds. It didn’t have any measured resource. Its inferred resource was 21.3 million tonnes at 14.2 grams silver, 0.21 gram gold and 0.78% copper for 453 million copper-equivalent pounds. 

Sierra owns 100% of Bolivar, located in the northern state of Chihuahua. 

Consistent resource replacement

At Bolivar, the company replaced and increased mineral resources mined in 2023, and with over 8,000 metres of mine development planned in 2024, it expects to continue to replace mineral resources mined through exploration activities.

At Yauricocha, mine development is currently underway below the 1120 level, with full production targeted by the fourth quarter of 2024. Sierra expects to replace and increase mineral resources once it begins mining activities in that portion of the ore body with systematic infill drilling efforts.

Acquired in 2011, Yauricocha represents Sierra Metals’ flagship operation, with over 70 years of continuous production. Bolivar is a much newer operation, recording its first full year of commercial production in 2012.

Shares of Sierra Metals were down 3.4% at 83¢ apiece on Tuesday afternoon, giving the Toronto-based copper miner a market capitalization of $173.7 million. Its shares traded in a 52-week range of 34¢ and $1.00.