Sierra Metals Inc. said Jan. 8 that its board of directors approved a plan to return up to US$30 million to shareholders this year as the company enters a new phase generating free cash flow.

To pursue that, the company intends to launch a substantial issuer bid, offering to repurchase for cancellation up to US$15 million of its common shares from shareholders for cash, with the terms set to be announced in the second quarter.

The company said that its board has an ongoing review of and consideration with respect to the method the remaining US$15 million will be distributed to its shareholders, including potential further substantial issuer bids.

Sierra Metals expects to be in a position to return a significant portion of its excess free cash flow to shareholders annually.