Could you provide an overview of Sierra Metals?

Sierra Metals produces copper, zinc, led, gold and silver, but even though over 55% of our revenues come from copper, we think of ourselves as metal-agnostic, extracting value from all economic resources in our deposits. We have two producing mines: Yauricocha in Peru and Bolivar in Mexico. Q4 2024 was our best performing quarter in the last two years, when a new management team stepped in (January 2023). Before this point, Sierra Metals was on the brink of bankruptcy. We are very proud of what we have been able to achieve over this period. The company is now cash-positive, we have refinanced our debt, and we are producing at nameplate capacity in both mines. Could you elaborate on the current financial situation and the turnaround achieved in the last two years?

In 2022, Sierra Metals produced around US$13 million in EBITDA. When the new management took over in 2023, we were able to increase EBITDA to US$52 million (+300%), and in 2024, we actually reached just over US$74 million (460% and 42%). For the full year 25, we are expecting an EBITDA of US$130 million. We realized this incremental value creation by taking greater care of our operations but also introducing a new mindset: In the past, Sierra Metals had positioned itself as a target for sale. When you are in a selling mindset, you easily neglect capital investments for the long-term. The new management came in to operate and grow this company and this is what we are doing. How has the permit to mine below the level 1,120 at Yauricocha changed the prospects of the asset?

In Yauricocha, 95% of the known reserves and resources are sitting below the 1,120 level. In February 2024, we obtained the permit to mine below this level and in May 2024, we released to the markets an updated NI 43-101 report that proves that Yauricocha has over 300 million lb of copper equivalent in reserves and over 1.3 billion lb of copper equivalent in resources, with the deposit remaining open along strike and at depth. Sierra Metals is also building a new tailings dam at Bolivar. How will this enable a production ramp-up?

Located in the state of Chihuahua, Mexico. Bolivar is a much younger mine compared to Yauricocha. When we got here two years ago, Bolivar was producing at around 2,000 t/d, well below the 5,000 t/d mill capacity. We were able to reach nameplate capacity in the second half of 2024 and we have over 130 million lb of copper equivalent in reserves and over 750 million lb of copper equivalent in resources based on the latest NI 43-101 issued in 2024.

However, we have an opportunity to take Bolivar to 7,500 t/d. The constraint to this expansion is the tailings dam. Therefore, we are in the process of engineering and permitting for a new tailings facility that will use an environmentally friendly dry stacking system. We expect the construction to be ready by 2027. Could you also give us a sense of your exploration strategy in Mexico and Peru?

At Bolivar, we are finding new material everywhere we drill. We have been able to replace everything we mined in the last two years. In terms of our broader regional exploration, we have over 80,000 hectares of mining concessions divided across eight projects, some of which sit very close to Bolivar. One particular area, called Churuguayvo, caught our attention and has become our primary exploration target as we believe it could become a new satellite gold deposit for Bolivar. Meanwhile, the other seven projects are pure greenfield exploration licenses in a very prospective part of Chihuahua.

In Peru, at Yauricocha our brownfield exploration efforts are focused on two primary targets. One of these is Alida, a parallel structure to Mina Central, from where we have been mining for the last 75 years. We think Alida has the potential to become a new Mina Central and we are actively drilling this target. The other target is a porphyry-like structure we call Triada. To develop a potentially large-scale porphyry deposit, we would need a strategic partner. We are currently investing between US$2 to US$3 million in the ground, but exploring such a structure requires a lot more.

*Sierra Metals was acquired by Alpayana in May 2025.