Sierra Metals Processing Material from the Esperanza Zone at its Yauricocha Mine In Peru

From Discovery to Processing in less than one year

TORONTO, Aug. 4, 2016 /CNW/ - Sierra Metals Inc. (TSX: SMT) (BVL: SMT) ("Sierra Metals" or "the Company") is very pleased to report that recent exploration development and test stope programs from the Esperanza zone have provided material which is currently being processed at the Chumpe plant at its Yauricocha Mine located in the Lima District, Peru.

This program is part of the evaluation and advanced exploration activities ongoing at the Yauricocha Mine. Current results from these test programs have confirmed the presence of significant sulphide mineralization encountered at the Esperanza zone. This zone is expected to make a very positive contribution to the operation in the immediate future.

The Esperanza ore is a base metals sulphide ore.  The metallurgical response is similar to the current sulphide ores the mine is currently processing at this time.

The company continues work on expanding these exploration opportunities to develop new areas of potential mill feed. Currently work is ongoing to update the last reserve and resource statement which was filed last year. This will include new areas to the mine such as the Esperanza zone. Once the statement is complete it will be followed by a technical report as per 43-101 guidelines.

"I am very pleased to see how quickly the development and test stoping from the Esperanza zone has progressed and we have now reached the stage where it is being processed in the Chumpe plant." commented Mark Brennan, President and CEO of Sierra Metals. "The initial discovery in late 2015, the announcement of the discovery in January 2016 to the material currently being delivered to the Chumpe Mill has all occurred within a time frame of less than one year.  The speed of this process speaks to the expertise, efficiency and quality of our technical professionals working at the Mine site."

He continued "The Esperanza zone has exhibited continued positive sulphide intercepts which have now been confirmed by exploration, development and test stope work programs. Esperanza provides excellent new upside including potential future expansion and extended mine life possibilities at the Yauricocha Mine, which already boasts an impressive 68 year mining history."

Delineation drilling was completed during the first half of 2016 to define the upper portion of the zone to allow for mine planning and extraction to begin in the third quarter as previously discussed. Drilling is on-going at the Esperanza Zone from the 1070 level to further extend the zone which remains open to the north, south and at depth.

Quality Control

All technical data contained in this news release has been reviewed and approved by Gordon Babcock, P.Eng., Chief Operating Officer and a Qualified Person under National Instrument 43-101 – Standards of Disclosure for Mineral Projects.

About Sierra Metals

Sierra Metals Inc. is a Canadian mining company focused on production of precious and base metals from its Yauricocha Mine in Peru, and its Bolivar Mine and Cusi Mine in Mexico. In addition, Sierra Metals is exploring several precious and base metals targets in Peru and Mexico. Projects in Peru include Adrico (gold), Victoria (copper-silver) and Ipillo (polymetallic) at the Yauricocha Property in the province of Yauyos and the San Miguelito gold properties in Northern Peru. Projects in Mexico include Bacerac (silver) in the state of Sonora and La Verde (gold) at the Batopilas Property in the state of Chihuahua.

The Company's shares trade on the Lima Stock Exchange (Bolsa de Valores de Lima) and on the TSX under the symbol "SMT".

Forward-Looking Statements

Except for statements of historical fact contained herein, the information in this press release may constitute "forward-looking information" within the meaning of Canadian securities law. Statements containing forward-looking information express, as at the date of this news release, the Company's plans, estimates, forecasts, projections, expectations or beliefs as to future events or results.  These statements reflect the Company's current views with respect to future events and are necessarily based upon a number of assumptions and estimates that, while considered reasonable by the Company, are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Actual results might differ materially from results suggested in any forward-looking statements. The Company assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward-looking statements unless required by securities laws applicable to the Company. Additional information identifying risks and uncertainties is contained in filings by the Company with the Canadian securities regulators, which filings are available at www.sedar.com.

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SOURCE Sierra Metals Inc.

Mike McAllister, Vice President, Corporate Development, Sierra Metals Inc., Tel: [phone], Email: [email protected]; Mark Brennan, President & CEO, Sierra Metals Inc., Tel: [phone]