mark brennan

Mark Brennan, President and CEO of Sierra Metals.

Sierra Metals (SMC-T) looks destined to boost resources and mine grades with news it drilled into a strongly-mineralized zone at its Yauricocha mine in Peru.

It looks like this: Sierra, drilling from underground, hit a zone with high copper mineralization about 400 metres north of its Central Mine area (i.e. current operations). The zone is about 240 metres long, open in most directions and yielded some zingers. It’s calling it the Esperanza zone.

Highlights were:

  • 71m @ 1.1% Cu, 4.9% Zn, 2.2% Pb, 0.25 gpt Au, 61.2 gpt Ag
  • 69m @ 3.2% Cu, 1.7% Zn, 0.4% Pb, 1.01 gpt Au, 48.5 gpt Ag
  • 70m @ 1.8% Cu, 3.2% Zn, 1.4% Pb, 0.32 gpt Au, 61.5 gpt Ag

Sierra did a good job outlining the results in a series of diagrams that suggest good continuity of mineralization and potential to expand especially to the north – where the zone appears broadest – and also at depth, which has not been drilled.

(Plan view here. See press release for cross sections.)

Compared to existing resources the tenor of copper mineralization stands out. Resources now sit at 11.4 million tonnes @ 55.4 g/t silver, 0.85% lead, 0.83% copper, 1.73% zinc and 0.76 g/t gold. Obviously, many of the latest drillhits suggest much higher copper mineralization.

Sierra Metals is clearly keen on the new zone, describing results out today as “the thickest sulfide intercepts in the 60 year mining history at Yauricocha.” Indeed, it sees the results as significant enough to warrant a conference call which it’s holding later this morning.

Mark Brennan, Sierra Metals President and CEO, couldn’t immediately be reached by phone this morning, but he noted in a statement the company plans to access Esperanza as early as the third quarter 2016.

If so, he forecast head grades and cash flow could jump in the second half this year.

One question that needs addressing: Is the new mineralization easily compatible with existing processing facilities?

What is now being mined, in a skarn and replacement deposit, is complex producing multiple concentrates. You might guess the metallurgy of Esperanza will be much the same. But nonetheless investors will want to be sure.

We’ll bring you more after hearing from Sierra Metals later today.

Since acquiring an 82% stake in the Yauricocha mine in 2013, Sierra Metalls has more or less doubled resources.

News Release
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