08:19 AM EST, 01/14/2025 (MT Newswires) -- Sierra Metals Inc. ( SMTSF ) announced Tuesday that its Board of Directors has recommended that Sierra shareholders reject the unsolicited all-cash take-over bid by an affiliate of Alpayana S.A.C., to acquire all of the issued and outstanding common shares of Sierra for C$0.85 per share.

Miguel Aramburu, Chair of the Board, in a statement said: "Alpayana is offering to buy your common shares at a price that undervalues the company and is well below where prior transactions of a similar nature have transacted. At a time of growing worldwide demand for copper, Sierra owns two thriving copper-producing mines in proven jurisdictions. The company has increased production significantly at both of the Yauricocha and Bolivar mines and expects to continue to grow mineral resources and production in 2025. As a result, the company is positioned to deliver improvements in its operational results and create meaningful shareholder value by a significant expected increase in EBITDA."

The company said it has introduced a projection of approximately US$130 million of EBITDA in 2025. It added this represents "significant year over year growth" in EBITDA from US$72 million in 2024 (expected) and US$50 million in 2023, representing an approximate 80% increase relative to 2024 (expected) EBITDA and an approximate 158% increase relative to 2023 EBITDA. According to SMT, this increase is expected to be driven by increased production at both Yauricocha and Bolivar and careful management of costs. "While the company does not typically provide EBITDA guidance, the Board determined that the information is essential to shareholders in the unique circumstances of the Hostile Bid. The EBITDA projection provides support for the Board's recommendation to reject the Hostile Bid."

SMT Chair Aramburu noted the "collective view of greater than 50% of Sierra's shareholders who have informed the company that they are aligned with the view of the Board."

Shares in SMT edged up $0.01 to $0.82 on the TSX yesterday.