The company said engineering and testwork on the final process was underway with construction of the processing plant expected to begin in June.

Sierra expects to concentrate magnetite as an additional process to the existing copper concentrator plant through a series of magnetic drums and regrinding equipment.

The magnetite project was mentioned in the Bolivar Mine's November 2020 preliminary economic assessment though the economic analysis did not include the potential sale of magnetite. Sierra aims to generate increased sales revenue while reducing the tailings for disposition and reducing future closure costs. It is also expected to reduce haulage costs of the copper concentrate.

"We are very excited about initiating this new process the potential for additional revenue for the company. The iron ore market is presenting value enhancing opportunities for Sierra Metals and the company is taking decisive action to extract value from its existing iron ore-copper mineral resources," said Sierra Metals CEO Luis Marchese.

Sierra aims to double throughput at its Bolivar copper-gold-silver mine from 5,000 tonnes per day to 10,000tpd with a life of mine and sustaining capital cost of US$317 million.

Shares in Sierra Metals are trading at C$4.28, valuing the company at $697 million.