Sierra Metals Inc. Announces Closing of New Senior Secured US$100 Million Corporate Credit Facility
Sierra Metals Inc. (TSX:SMT) (NYSE American:SMTS) (BVL:SMT) (“Sierra Metals” or the “Company”) announces today that it
has entered into a new six-year senior secured corporate credit facility (“Corporate Facility”) with Banco de Credito del Peru
(“BCP”) that provides funding of up to US$100 million effective March 8, 2019. The Corporate Facility provides the Company with
additional liquidity and will provide the financial flexibility to fund future capital projects in Mexico as well as corporate
working capital requirements. The Company will also use the proceeds of the new facility to repay existing debt balances in the
near term.
The most significant terms of the Corporate Facility are as follows:
- Term: 6-year term maturing March 2025
- Principal Repayment Grace Period: 2 years
- Principal Repayment Period: 4 years
- Interest Rate: 3.15% + LIBOR 3M
The Corporate Facility is subject to customary covenants, including consolidated net leverage and interest coverage ratios and
customary events of default.
Igor Gonzales, President and CEO of Sierra Metals commented, “The new Corporate Facility combined with our strong cash flow
provides greater financial flexibility to our capital structure and will enhance our ability to implement growth initiatives in
line with the Company’s strategic plan. The main use of this facility is to repay the existing BCP credit facility at our Diabras
Peru subsidiary, which was established at the time of the Sociedad Minera Corona acquisition in 2011. The new structure provides a
more efficient capital structure that would allow us to better meet the growth plans for Sierra Metals in the future.”
About Sierra Metals
Sierra Metals Inc. is a Canadian-based growing polymetallic mining company with production from its Yauricocha Mine in Peru, and
its Bolivar and Cusi Mines in Mexico. The Company is focused on increasing production volume and growing mineral resources. Sierra
Metals has recently had several new discoveries and still has additional brownfield exploration opportunities at all three mines in
Peru and Mexico that are within or close proximity to the existing mines. Additionally, the Company has large land packages at all
three mines with several prospective regional targets providing longer term exploration upside and mineral resource growth
potential.
The Company’s Common Shares trade on the Bolsa de Valores de Lima and on the Toronto Stock Exchange under the symbol “SMT” and
on the NYSE American Exchange under the symbol “SMTS”.
For further information regarding Sierra Metals, please visit
www.sierrametals.com.
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Forward-Looking Statements
This press release contains “forward-looking information” and “forward-looking statements” within the meaning of Canadian and
U.S. securities laws related to the Company (collectively, “forward-looking information”). Forward-looking information
includes, but is not limited to, statements with respect to the Company’s operations, including anticipated developments in the
Company’s operations in future periods, the Company’s planned exploration activities, the adequacy of the Company’s financial
resources, and other events or conditions that may occur in the future. Statements concerning mineral reserve and resource
estimates may also be considered to constitute forward-looking statements to the extent that they involve estimates of the
mineralization that will be encountered if and when the properties are developed or further developed. These statements relate to
analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and
assumptions of management. Any statements that express or involve discussions with respect to predictions, expectations, beliefs,
plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as
“expects”, “anticipates”, “plans”, “projects”, “estimates”, “assumes”, “intends”, “strategy”, “goals”, “objectives”, “potential” or
variations thereof, or stating that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur
or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be
forward-looking information.
Forward-looking information is subject to a variety of risks and uncertainties, which could cause actual events or results to
differ from those reflected in the forward-looking information, including, without limitation, risks inherent in the mining
industry including environmental hazards, industrial accidents, unusual or unexpected geological formations, floods, labour
disruptions, explosions, cave-ins, weather conditions and criminal activity; commodity price fluctuations; higher operating and/or
capital costs; lack of available infrastructure; the possibility that future exploration, development or mining results will not be
consistent with the Company’s expectations; risks associated with the estimation of mineral resources and the geology, grade and
continuity of mineral deposits and the inability to replace reserves; fluctuations in the price of commodities used in the
Company’s operations; risks related to foreign operations; changes in laws or policies, foreign taxation, delays or the inability
to obtain necessary governmental permits; risks relating to outstanding borrowings; issues regarding title to the Company’s
properties; risks related to environmental regulation; litigation risks; risks related to uninsured hazards; the impact of
competition; volatility in the price of the Company’s securities; global financial risks; inability to attract or retain qualified
employees; potential conflicts of interest; risks related to a controlling group of shareholders; dependence on third parties;
differences in U.S. and Canadian reporting of mineral reserves and resources; potential dilutive transactions; foreign currency
risks; risks related to business cycles; liquidity risks; reliance on internal control systems; credit risks, including risks
related to the Company’s compliance with covenants with respect to its BCP Facility; uncertainty of production and cost estimates
for the Yauricocha Mine, the Bolivar Mine and the Cusi Mine; and other risks identified in the Company’s filings with Canadian
securities regulators and the U.S. Securities and Exchange Commission, which filings are available at
www.sedar.com and
www.sec.gov, respectively.
This list is not exhaustive of the factors that may affect any of the Company’s forward-looking information. Forward looking
information includes statements about the future and are inherently uncertain, and the Company’s actual achievements or other
future events or conditions may differ materially from those reflected in the forward-looking information due to a variety of
risks, uncertainties and other factors. The Company’s statements containing forward-looking information are based on the beliefs,
expectations and opinions of management on the date the statements are made, and the Company does not assume any obligation to
update forward-looking information if circumstances or management’s beliefs, expectations or opinions should change, other than as
required by applicable law. For the reasons set forth above, one should not place undue reliance on forward-looking
information.
Note Regarding Reserve and Resource Estimates
All reserve and resource estimates reported by the Company are calculated in accordance with the Canadian National Instrument
43-101 - Standards of Disclosure for Mineral Projects and Canadian Institute of Mining and Metallurgy Classification system.
These standards differ significantly from the requirements of the SEC. The differences between these standards are discussed in our
SEC filings. Mineral resources which are not mineral reserves do not have demonstrated economic viability.
Mike McAllister
VP, Corporate Development
Sierra Metals Inc.
+1 (416) 366-7777
info@sierrametals.com
Ed Guimaraes
CFO
Sierra Metals Inc.
+1 (416) 366-7777
Igor Gonzales
President & CEO
Sierra Metals Inc.
+1 (416) 366-7777
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