Sierra Metals Produces 2 Million Silver Equivalent Ounces in Q2-2015 at its Sociedad Minera Corona Subsidiary in Peru

TORONTO, July 30, 2015 /CNW/ - Sierra Metals Inc. (TSX:SMT)(BVL:SMT) ("Sierra Metals" or the "Company") announces the filing of Sociedad Minera Corona S.A.'s ("Corona") unaudited Financial Statements and Management Discussion and Analysis ("MD&A") for the second quarter of 2015 ("Q2 2015"). The Company holds an 81.8% interest in Corona. All amounts are presented in thousands of US dollars unless otherwise stated and have not been adjusted for the 18.2% non-controlling interest.

Corona's Financial Highlights for the Three Months Ended June 30, 2015

• Net Income of US$ 7.2 million or US$ 0.20 per share for Q2 2015
• Adjusted EBITDA of US$ 13.3 million for Q2 2015
• Operating cash flow of US$ 2.7 million for Q2 2015
• Revenues of US$ 28.3 million for Q2 2015
• Cash cost (recovery) per silver payable ounce of US$ (14.42) at the Yauricocha Mine for Q2 2015

Corona's Operational Highlights for the Three Months Ended June 30, 2015:

• Total tonnes processed of 224,988; a 2% increase over Q2 2014
• Silver equivalent production of 2.0 million ounces; a 4% increase over Q2 2014
• Silver production of 576,537 ounces; a 20% increase over Q2 2014
• Copper production of 2.0 million pounds; a 16% increase over Q2 2014
• Lead production of 10.8 million pounds; a 4% decrease over Q2 2014
• Zinc production of 13.0 million pounds; a 3% decrease over Q2 2014
• Gold production of 1,232 ounces; a 17% decrease over Q2 2014

Higher silver and copper head grades and higher recoveries for all metals, except copper, mitigated the decline in metals prices and have resulted in another quarter of positive operating cash flow.

"In spite of the lower commodity price environment, Corona had another exceptional quarter of financial and production results highlighted by strong revenues and adjusted EBITDA which were generated from our continued increased productivity and production growth," stated Mark Brennan, President and CEO of Sierra Metals. " Corona continues on the path to meet its production guidance for 2015 by remaining a low cost producer while continuing to demonstrate the Yauricocha Mine's full economic potential."

The following displays selected unaudited financial information for the three and six months ended June 30, 2015:

		3 Months Ended		6 Months Ended
(In thousands of US dollars, except cash cost per ounce)		June 30, 2015	June 30, 2014	June 30, 2015	June 30, 2014
Revenue	$	28,338	31,003	50,907	58,911
Adjusted EBITDA^1		13,315	15,377	23,578	28,274
Cash Flow from operations^2		2,706	10,495	7,328	19,337
Gross profit		14,250	14,898	24,668	27,864
Income Tax Expense		(4,327)	(4,237)	(7,467)	(7,724)
Net Income		7,240	6,973	11,933	13,165
Cash cost (recovery) per silver payable ounce (Yauricocha)^3	$	(14.42)	(19.67)	(10.97)	(20.33)
(In thousands of US dollars, unless otherwise stated)		June 30, 2015	December 31, 2014
Cash and cash equivalents^2	$	22,476	28,672
Assets		112,956	111,811
Liabilities		56,549	62,449
Equity		56,407	49,362

¹ Adjusted EBITDA is a non-IFRS performance measure and is defined by management as EBITDA adjusted for non-cash and non-recurring items; see non-IFRS Performance Measures section of the Company's MD&A

² The Company received US$ 6.0 million in payments for concentrates on July 1, 2015, which was the main reason for the decrease in cash and increase in trade receivables as at June 30, 2015 compared to December 31, 2014.

³ Cash costs per silver payable ounce is a non-IFRS performance measure and includes cost of sales, treatment and refining charges, and selling expense, and exclude workers' profit sharing, depreciation and other non-cash provisions; see non-IFRS Performance Measures section of the Company's MD&A.

Corona's Financial Highlights for the Three and Six Months Ended June 30, 2015

• Net income of US$ 7.2 million, or US$ 0.20 per share, for Q2 2015 compared to US$ 7.0 million, or US$ 0.19 per share, for Q2 2014. Net income of US$ 11.9 million, or US$ 0.33 per share, for the six months ended June 30, 2015 compared to US$ 13.2 million, or US$ 0.37 per share, for the same period in 2014
• Revenues of US$ 28.3 million for Q2 2015 compared to US$ 31.0 million in Q2 2014 and revenues of US$ 50.9 million for the six months ended June 30, 2015 compared to US$ 58.9 million for the same period in 2014. The decrease in revenue was due to the decreases in the prices of silver, copper, lead and gold  of 18%, 13%, 15% and 7%, respectively, during the first six months of 2015 compared to the same period in 2014,. This was partially offset by a 2% increase in plant throughput and higher head grades and recoveries of silver, resulting in a 17% increase in silver payable ounces
• Cash and cash equivalents of US$ 22.5 million as at June 30, 2015 compared to US$ 28.7 million as at December 31, 2014. Cash and cash equivalents decreased by US$ 6.2 million. This was mainly driven by US$ 7.3 million of operating cash flow, offset by US$ 6.0 million of capital expenditures and US$ 7.4 million of financing activities, including dividends paid of US$ 4.9 million. The Company received US$ 6.0 million in payments for concentrates on July 1, 2015, which was the main reason for the decrease in cash and increase in trade receivables as at June 30, 2015 compared to December 31, 2014
• Cash cost (recovery) per silver payable ounce (at the Yauricocha Mine) of US$ (14.42) for Q2 2015 compared to US$ (19.67) for Q2 2014 and US$ (10.97) for the six month period ended June 30, 2015 compared to US$ (20.33) for the same period in 2014. The increase in by-product cash costs during Q2 and the six month period ended June 30, 2015 ("H1 2015") was due to the reduction of by-product credits which were the result of the lower metal prices mentioned above, lower zinc head grades, partially offset by the increase in silver payable ounces during the quarter, as production cash costs have remained consistent
• Adjusted EBITDA of US$ 13.3 million for Q2 2015 compared to US$ 15.4 million for Q2 2014 and US$ 23.6 million for the six months ended June 30, 2015 compared to US$ 28.3 million for the same period in 2014. The decrease in adjusted EBITDA for Q2 and H1 2015 is mainly due to the decrease in revenues previously discussed
• Operating cash flow of US$ 2.7 million for Q2 2015 compared to US$ 10.5 million for Q2 2014 and US$ 7.3 million for the six month period ended June 30, 2015 compared to US$ 19.3 million for the same period in 2014. The decrease in operating cash flow for Q2 and H1 2015 was due to negative working capital adjustments from the increase in trade receivables and decrease in current income taxes payable and employee profit sharing payable, and the decrease in revenues

Corona's Operational Highlights for the Three and Six Months Ended June 30, 2015:

The following table displays the production results for the three and six months ended June 30, 2015:

Yauricocha Production		3 Months Ended			6 Months Ended
		Q2 2015	Q2 2014	% Var.	H1 2015	H1 2014	% Var.
Tonnes processed (mt)		224,988	219,988	2%	444,957	435,538	2%
	Daily throughput	2,571	2,514	2%	2,543	2,489	2%
Silver ounces		576,537	479,254	20%	1,126,510	973,548	16%
Copper pounds (000's)		2,037	1,755	16%	3,749	3,494	7%
Lead pounds (000's)		10,751	11,206	-4%	22,489	22,888	-2%
Zinc pounds (000's)		13,019	13,457	-3%	23,480	26,189	-10%
Gold ounces		1,232	1,480	-17%	2,819	2,954	-5%
Silver equivalent ounces (000's)^(1)		2,035	1,951	4%	3,936	3,899	1%

(1) Silver equivalent ounces were calculated using the following metal prices: $20/oz Ag, $3.00/lb Cu, $0.85/lb Pb, $0.95/lb Zn, $1,250/oz Au.

About Sierra Metals

Sierra Metals Inc. is a Canadian mining company focused on precious and base metals from its Yauricocha Mine in Peru, its Bolivar Mine and Cusi Mine in Mexico. In addition, Sierra Metals is exploring several precious and base metal 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 Bolsa de Valores de Lima and the Toronto Stock Exchange 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 and until 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.

SOURCE Sierra Metals Inc.

regarding Sierra Metals, please visit www.sierrametals.com or contact: Mike McAllister, Director, Corporate Development, Sierra Metals Inc., 1 [phone], [email protected]; Ed Guimaraes, CFO, Sierra Metals Inc., 1 [phone]; Mark Brennan, President & CEO, Sierra Metals Inc., 1 [phone]