Largo vs Sierra Metals (corrected version)
Although Largo’s Market Cap has declined some 80% since the start of the transitional period under Arias Chairmanship / vision the company has no problem meeting its debt obligations with a strong Current Ratio of 2.80 (i.e current assets = 280% of current liabilities) and a healthy Long Term Debt-to-Equity ratio of 0.17 (indicating no risk related to long term debt).
In comparison, Sierra Metals Market has declined ~91% in the past 2 years and the company is in financial distress as the company is unable to pay short term obligations/debts/payables (Current Ratio of 0.45 i.e current assets = 45% of current liabilities).
The following is an interesting reading about Arias (its largest shareholder) effort to turn Sierra Metals around.
https://www.globenewswire.com/en/news-release/2023/05/02/2658728/0/en/Arias-Resource-Capital-Proposes-Five-Nominees-for-Sierra-Metals-Board.html
Slate to Oversee Turnaround and Restore Sierra Metals
to its Former Track-Record of Prosperity and Value Creation
. Nomination comes from Sierra’s largest shareholders as Sierra continues to underperform operationally, faces an unsolved financial crisis, and struggles to meet its debt obligations due to a significant drop in metals production combined with a significant increase in operating costs compared to prior years.
. Sierra’s revolving suite of executives and directors have destroyed over 90% of Sierra’s market capitalization over the past two years, are responsible for total negative returns of -73.68% over the last four quarters ending March 31, 2023 and have failed to deliver on two strategic review processes in two years.
. ARC’s proposed nominees include former Sierra directors who were previously involved in Sierra’s remarkable growth in production and profitability from 2010 until ARC representatives left the board in mid-2021, and who achieved positive total shareholder returns of 93.12% in 2020 and 188.33% cumulative (9.64% annualized) from 2010 until mid-2021 for Sierra shareholders.
. Sierra Board’s poor oversight, lack of practical mining experience with Sierra’s operating and exploration assets in Peru and Mexico, and an absence of meaningful ownership (less than 1% of issued and outstanding common shares of Sierra), is risking Sierra’s strong asset base of critical metals that the world needs to meet its low carbon future.
. ARC holds approximately 27% of the shares of Sierra and its proposed nominees have the experience and track-record required to enhance the efficiency and production throughput of the Company, while accessing broader financing sources and strategic partners to provide medium and long-term solutions to Sierra’s financial liquidity issues. They are the right people to return Sierra to the track record of success and prosperity it had prior to mid-2021.