Sierra Metals updates Mineral Reserve and Resource Estimate for Yauricocha Mine, Peru

INCLUDES MAIDEN RESERVE AND RESOURCE ESTIMATE FOR RECENTLY DISCOVERED ESPERANZA ZONE

TORONTO, Aug. 11, 2016 /CNW/ - Sierra Metals Inc. (TSX: SMT) (BVL: SMT) ("Sierra Metals" or "the Company") has updated its Mineral Reserve and Resources Estimates at the Company's Yauricocha Mine, located in Yauyos Province, Peru. The Company is also pleased to provide a maiden Reserve and Resource Estimate for the recently discovered Esperanza Zone.

The maiden Reserve and Resources Estimate at Esperanza is the result of a successful exploration drill program detailed in Press Releases dated January 15, 2016, May 13, 2016 and May 24, 2016 and it now represents a material proportion of the mine's overall reserves and resources.   

A Technical Report is currently being prepared by SRK Consulting in accordance with NI 43-101 and will be filed on SEDAR within 45 days of this news release.

Press Release Highlights:

• Consolidated Yauricocha Proven and Probable Mineral Reserve Estimate (including Esperanza)

Reserves - Proven and Probable								Contained Metal
		Tonnes	Ag	Cu	Pb	Zn	Au	Ag	Cu	Pb	Zn	Au
		(000's)	g/t	%	%	%	g/t	M oz	M lb	M lb	M lb	oz
Yauricocha
	Proven	847	70.7	0.59	1.60	2.82	0.65	1.9	10.9	29.8	52.6	17,735
	Probable	2,940	58.4	0.91	1.02	2.95	0.62	5.5	58.8	66.1	191.4	58,205
	Proven & Probable	3,787	61.1	0.84	1.15	2.92	0.62	7.4	69.7	95.9	243.9	75,940

• Consolidated Yauricocha Measured & Indicated Resource Estimate (including Esperanza)

Resources - Measured and Indicated								Contained Metal
		Tonnes	Ag	Cu	Pb	Zn	Au	Ag	Cu	Pb	Zn	Au
		(000's)	g/t	%	%	%	g/t	M oz	M lb	M lb	M lb	oz
Yauricocha
	Measured	1,429	74.7	0.87	1.54	3.10	0.71	3.4	27.4	48.6	97.7	32,703
	Indicated	6,442	57.7	1.17	0.81	2.61	0.66	12.0	166.8	115.1	370.7	137,189
	Measured & Indicated	7,871	60.8	1.12	0.94	2.70	0.67	15.4	194.2	163.7	468.4	169,892

• Consolidated Yauricocha Inferred Resource Estimate (including Esperanza)

Resources - Inferred

Contained Metal

Tonnes

Ag

Cu

Pb

Zn

Au

Ag

Cu

Pb

Zn

Au

(000's)

g/t

%

%

%

g/t

M oz

M lb

M lb

M lb

oz

Yauricocha

Inferred

3,745

49.1

1.33

0.58

1.86

0.53

5.9

110.2

48.0

153.7

64,299

• Esperanza Zone Proven and Probable Mineral Reserve Estimate (included in Consolidated Yauricocha total)

Reserves - Proven and Probable								Contained Metal
		Tonnes	Ag	Cu	Pb	Zn	Au	Ag	Cu	Pb	Zn	Au
		(000's)	g/t	%	%	%	g/t	M oz	M lb	M lb	M lb	oz
Esperanza
Zone	Proven	230	50.1	0.85	1.33	3.07	0.34	0.4	4.3	6.7	15.6	2,526
	Probable	1,290	52.1	1.26	1.09	2.84	0.44	2.2	35.9	30.9	80.6	18,441
	Proven & Probable	1,520	51.8	1.20	1.12	2.87	0.43	2.5	40.2	37.7	96.2	20,967

• Esperanza Zone Measured & Indicated Resource Estimate (included in Consolidated Yauricocha total)

Resources - Measured and Indicated								Contained Metal
		Tonnes	Ag	Cu	Pb	Zn	Au	Ag	Cu	Pb	Zn	Au
		(000's)	g/t	%	%	%	g/t	M oz	M lb	M lb	M lb	oz
Esperanza
Zone	Measured	444	65.4	1.23	1.45	3.38	0.44	0.9	12.1	14.2	33.1	6,275
	Indicated	2,090	69.7	1.81	1.22	3.20	0.58	4.7	83.4	56.2	147.5	38,844
	Measured & Indicated	2,534	68.9	1.71	1.26	3.23	0.55	5.6	95.5	70.4	180.7	45,119

• Esperanza Zone Inferred Resource Estimate (included in Consolidated Yauricocha total)

Resources - Inferred

Contained Metal

Tonnes

Ag

Cu

Pb

Zn

Au

Ag

Cu

Pb

Zn

Au

(000's)

g/t

%

%

%

g/t

M oz

M lb

M lb

M lb

oz

Esperanza

Zone

Inferred

1,542

68.9

1.87

0.92

2.49

0.63

3.4

63.7

31.2

84.7

31,468

• Sierra Metals provides maiden Resources Estimate for the recently discovered Esperanza zone with 2,534,000 tonnes averaging 68.9 g/t silver, 1.71% copper, 1.26% lead, 3.23% zinc and 0.55 g/t gold classified as Measured and Indicated Resources as at June 30, 2016. The Esperanza Zone includes an additional 1,541,800 tonnes in Inferred Mineral Resources averaging 69.0 g/t silver, 1.87% copper, 0.92% lead, 2.49% zinc and 0.63 g/t gold.
  
  
• Total Proven and Probable Mineral Reserves for Yauricocha (including Esperanza) are 3,787,000 tonnes averaging 61.1 g/t silver, 0.84% copper, 1.15% lead, 2.92% zinc and 0.62g/t gold.
  
  
• Total Measured and Indicated Mineral Resources for Yauricocha (including Esperanza) are 3,745,000 tonnes averaging 60.8 g/t silver, 1.12% copper, 0.94% lead, 2.70% zinc and 0.67 g/t gold.
  
  
• Total Inferred Mineral Resources for Yauricocha (including Esperanza) are 3,774,930 tonnes averaging 49.1 g/t silver, 1.33% copper, 0.58% lead, 1.86% zinc and 0.53 g/t gold.
  
  
• Updated Reserves and Resources Estimate varies from the 2015 Technical Report due to an increase in the Net Smelter Return (NSR) cut off grades resulting in higher value material, reduction in commodity prices* and depletion by production since the Report was completed.
  
  
• The updated Reserve and Resource Estimate has incorporated new exploration drilling, sampling, and face mapping information into the geologic interpretation and grade estimations providing more refined resource models.

* Metal price assumptions considered for the calculation of unit values are: Silver (US$/oz 16.76), Copper (US$/lb 2.28), Lead (US$/lb 0.86), Zinc (US$/lb 0.94) Gold (US$/oz 1,251.00).

"We are very pleased with the updated Reserve and Resource report for the Yauricocha mine, including the statement of maiden mineral reserves and resources for the Esperanza Zone coming less than one year from the initial discovery."  stated Mark Brennan, President & CEO of Sierra Metals Inc.  "The significance of these results are that with only a relatively small amount of drilling at Esperanza, we have already established 2.5 million tonnes of mineral resources in the Measured & Indicated category, which represents 30% of the total M&I Resources, and 1.5 million tonnes in the Inferred category which represents over 41% of total Inferred Resources. We believe that Esperanza is in the early stages of its drilling delineation and our aggressive exploration programs will continue to add high quality tonnage to our resources in the coming months."

He continued, "Esperanza is but one of the brownfield opportunities that have the ability to transform the Yauricocha Mine. While advancing Esperanza aggressively forward, we are currently evaluating other potential high value target areas as we consider that Yauricocha is far from being fully explored even near existing mining infrastructure as the Esperanza discovery clearly shows."

Finally, Mr. Brennan added, "The current resource model optimizes the value generation to the Company by raising cut-off grades and incorporating wider mineralized structures identified at the Esperanza Discovery while displacing other economically-marginal areas."

The recent update to the Yauricocha Resources and Reserves has highlighted some key differences between the 2015 Technical Report and the current (2016) resources and reserves estimates. Specifically, the incorporation of new exploration drilling, used lower commodity price assumptions, sampling, and face mapping information into the geologic interpretations and grade estimations which have resulted in a further refinement of the ore body. As commodity prices improve certain areas which have been excluded using lower metal prices could be included in future reserve and resource updates. It is managements view that the resulting resource and reserve estimates reflect the ongoing efforts by the company to achieve good value from the Yauricocha asset while focusing on quality over quantity given the current operating and metal price environment.

Mineral Resource Estimate
Mineral Resource Estimations have been conducted by the following Qualified Persons:

• Thomas C. Matthews of Gustavson Associates; Datamine™ Software
  • Mascota, Cachi-Cachi (excl. Elissa)
• Matthew Hastings of SRK Consulting (U.S.) Inc.; Maptek Vulcan™ Software
  • Mina Central, Esperanza, Elissa, Cuerpos Pequenos

This release features mineral resources reported from models developed and estimated by SRK as well as Gustavson Associates, using criteria determined by both Sierra Metals and SRK deemed to be reasonable for reporting of these resources. SRK has reviewed and reported resources from the Gustavson models for selected areas, and conducted new estimates for others. This release provides the maiden resource estimate for the new Esperanza area, discovered in late 2015, which now features significant drilling and sufficient geologic understanding to support mineral reserves and resource developments.

The understanding of the geology and mineralization at Yauricocha is based on a combination of geologic mapping, drilling, and development sampling that guides the ongoing exploration and mining. SRK has reviewed the methods and procedures for these data collection methods and notes that they are generally reasonable and consistent with industry best practice.

The procedures and methods supporting the mineral resource estimate have been developed by SRK or Gustavson Associates in conjunction with Sierra Metals geological personnel. The resource estimate presented herein have been conducted by independent consultants using supporting data generated by the site. In general, the geologic models are defined by the site geologists using manual and 3D modeling techniques from drilling and development data. These models are used to constrain block models, which are flagged with bulk density, mine area, depletion, etc. Grade is estimated into these block models using both drilling and channel samples, applying industry-standard estimation methodology. Grades are estimated using either ordinary kriging or inverse distance methods as appropriate. Mineral Resources estimated by the independent consultants are categorized in a manner consistent with industry best practice. Total metallurgical recoveries in the various concentrates, as well as consensus commodity pricing have been provided by the Company, and are used to calculate unit values for the blocks in the models. Mineral resources are reported above reasonable unit value cut-offs, based on general break-even mining and processing costs provided by the Yauricocha Mine.

SRK is of the opinion that the resource estimates are suitable for public reporting and are a fair representation of the in situ contained tonnes, grade, and metal for the Yauricocha deposit.

The consolidated mineral resource statement for the Yauricocha Mine including Mina Central, Esperanza, Cachi-Cachi, Mascota, and Cuerpos Pequenos areas are presented in Tables 1 (M&I) and Table 2 (Inferred).  The maiden mineral resource statement for the Esperanza Zone is presented in Table 3 (M&I) and Table 4 (Inferred). The effective date of Mina Central, Cachi-Cachi, Mascota and Cuerpos Pequenos areas is December 31, 2015. The effective date for Esperanza is June 30, 2016. SRK is currently preparing an NI 43-101 Technical Report, which will support this disclosure within 45 days.

Table 1: Consolidated Yauricocha Measured & Indicated Resource Estimate (including Esperanza)

Resources - Measured and Indicated								Contained Metal
		Tonnes	Ag	Cu	Pb	Zn	Au	Ag	Cu	Pb	Zn	Au
		(000's)	g/t	%	%	%	g/t	M oz	M lb	M lb	M lb	oz
Yauricocha
	Measured	1,429	74.7	0.87	1.54	3.10	0.71	3.4	27.4	48.6	97.7	32,703
	Indicated	6,442	57.7	1.17	0.81	2.61	0.66	12.0	166.8	115.1	370.7	137,189
	Measured & Indicated	7,871	60.8	1.12	0.94	2.70	0.67	15.4	194.2	163.7	468.4	169,892

Table 2: Consolidated Yauricocha Inferred Resource Estimate (including Esperanza)

Resources - Inferred

Contained Metal

Tonnes

Ag

Cu

Pb

Zn

Au

Ag

Cu

Pb

Zn

Au

(000's)

g/t

%

%

%

g/t

M oz

M lb

M lb

M lb

oz

Yauricocha

Inferred

3,745

49.1

1.33

0.58

1.86

0.53

5.9

110.2

48.0

153.7

64,299

Notes for Measured, Indicated and Inferred Resource Estimates (Tables 1 and 2)

• Mineral resources are reported inclusive of ore reserves. Mineral resources are not ore reserves and do not have demonstrated economic viability. All figures rounded to reflect the relative accuracy of the estimates. Gold, silver, copper, lead, and zinc assays were capped where appropriate.
• Mineral resources are reported at unit value cut-offs (CoG) based on metal price assumptions*, variable metallurgical recovery assumptions (variable metallurgical recoveries** as a function of grade and relative metal distribution in individual concentrates), generalized mining/processing costs.
  * Metal price assumptions considered for the calculation of unit values are: Gold (US$/oz 1,251.00), Silver (US$/oz 16.76), Copper (US$/lb 2.28), Lead (US$/lb 0.86), and Zinc (US$/lb 0.94).

Mina Central
** Metallurgical recovery assumptions for the Mina Central area are 77% Ag, 18% Au, 76% Cu, 88% Pb, and 94% Zn (polymetallic material).

• The unit value COG for the Mina Central area is a consistent US$40

Esperanza
** Metallurgical recovery assumptions for the Esperanza area are 77% Ag, 18% Au, 76% Cu, 88% Pb, and 94% Zn (polymetallic material).

• The unit value COG for the Esperanza area is a consistent US$44.

Cachi Cachi
** Metallurgical recovery assumptions for the Cachi-Cachi area are 77% Ag, 18% Au, 76% Cu, 88% Pb, and 94% Zn (polymetallic material).

• The unit value COG for the Cachi-Cachi area is variable by area:
  • US$40 = Angelita;
  • US$44 = Elissa & Escondida;
  • US$38 = Karlita; and
  • US$51 = Zulma

Mascota.
** Metallurgical recovery assumptions for the Mascota area are 53% Ag, 24% Au, 0% Cu, 66% Pb, and 0% Zn (lead oxide material).

• The unit value COG for the Mascota area is a consistent US$38.

Cuerpos Pequenos
** Metallurgical recovery assumptions for the Cuerpos Pequenos area are variable:
-         Metallurgical recovery assumptions for the Cuye area are 66% Ag, 35% Au, 90% Cu, 0% Pb, and 0% Zn (copper sulfide material);
-         Metallurgical recovery assumptions for the Contacto Occ. and Violeta areas are 53% Ag, 24% Au, 0% Cu, 66% Pb, and 0% Zn (lead oxide material); and
-         Metallurgical recovery assumptions for the remaining areas are 77% Ag, 18% Au, 76% Cu, 88% Pb, and 94% Zn (polymetallic material).

• The unit value COG for the Cuerpos Pequenos area is variable by area.
  • US$43 = Violeta;
  • US$38 = Cuye; and
  • US$51 = Contacto Occ., Contacto, Ori., CSM II, CSM I, CSM, Cuye Sur, Marita, Juliana, Gallito, Butz, Pozo Rico.

Table 3: Esperanza Zone Measured & Indicated Resource Estimate

Resources - Measured and Indicated								Contained Metal
		Tonnes	Ag	Cu	Pb	Zn	Au	Ag	Cu	Pb	Zn	Au
		(000's)	g/t	%	%	%	g/t	M oz	M lb	M lb	M lb	oz
Esperanza
Zone	Measured	444	65.4	1.23	1.45	3.38	0.44	0.9	12.1	14.2	33.1	6,275
	Indicated	2,090	69.7	1.81	1.22	3.20	0.58	4.7	83.4	56.2	147.5	38,844
	Measured & Indicated	2,534	68.9	1.71	1.26	3.23	0.55	5.6	95.5	70.4	180.7	45,119

Table 4: Esperanza Zone Inferred Resource Estimate

Resources - Inferred

Contained Metal

Tonnes

Ag

Cu

Pb

Zn

Au

Ag

Cu

Pb

Zn

Au

(000's)

g/t

%

%

%

g/t

M oz

M lb

M lb

M lb

oz

Esperanza

Zone

Inferred

1,542

68.9

1.87

0.92

2.49

0.63

3.4

63.7

31.2

84.7

31,468

Notes for Esperanza Zone Measured, Indicated and Inferred Resource Estimate (Tables 3 and 4)

• Mineral resources are reported inclusive of ore reserves. Mineral resources are not ore reserves and do not have demonstrated economic viability. All figures rounded to reflect the relative accuracy of the estimates. Gold, silver, copper, lead, and zinc assays were capped where appropriate.
• Mineral resources are reported at unit value cut-offs (CoG) based on metal price assumptions*, variable metallurgical recovery assumptions (variable metallurgical recoveries** as a function of grade and relative metal distribution in individual concentrates), generalized mining/processing costs.
  * Metal price assumptions considered for the calculation of unit values are: Gold (US$/oz 1,251.00), Silver (US$/oz 16.76), Copper (US$/lb 2.28), Lead (US$/lb 0.86), and Zinc (US$/lb 0.94).
  ** Metallurgical recovery assumptions for the Esperanza area are 77% Ag, 18% Au, 76% Cu, 88% Pb, and 94% Zn (polymetallic material).
• The unit value COG for the Esperanza area is a consistent US$44.

Mineral Reserve Estimate

Mineral Reserve Estimates have been conducted by Jon Larson of SRK Consulting (U.S.) Inc., a Qualified Person under National Instrument 43-101 – Standards of Disclosure for Mineral Projects, using Maptek Vulcan™ and Minemax iGantt software.

This release features mineral reserves reported from models developed and estimated by SRK as well as Gustavson Associates, using criteria determined by Sierra Metals and SRK to be reasonable for reporting of these reserves. This release provides the maiden reserve estimation for the new Esperanza area, discovered in late 2015.

The procedures and methods supporting the mineral reserve estimation have been developed by SRK in conjunction with Sierra Metals mine planning personnel. The reserve estimates presented herein have been conducted by independent consultants using supporting data generated by the site. In general, each mining area is evaluated using reasonable mining block shapes based on the mining method applicable to the zone. Mineral Resources estimated by the independent consultants are categorized in a manner consistent with industry best practice. Data and information supporting the mining recovery, mining dilution, reconciliation-based grade adjustments, metallurgical recoveries, consensus commodity pricing, and treatment and refining charges have been provided by the Company and reviewed by SRK. These factors are used to calculate unit values for the blocks in the models. Historic and expected direct and indirect mining, processing and general and administrative costs were provided by Sierra Metals. To be considered economic, the Net Smelter Return (NSR) value of the mining block must be greater than the economic cutoff. Blocks below the economic cutoff but above the marginal cutoff are, in some cases, included in the reserve where they are in between or immediately adjacent to an economic block and it is reasonable to expect that no significant additional development would be required to extract the marginal block. Isolated blocks, defined as blocks with no defined access, have been excluded. Only material classified as Measured and Indicated Resources contribute to the grade values in a mining block. Material inside a block and not classified as Measured or Indicated is assumed to have 0 grade. Mined out areas were provided by Sierra Metals personnel.

SRK is of the opinion that the reserve estimate is suitable for public reporting and are a fair representation of the mill feed tonnes, grade, and metal for the Yauricocha deposit.

The consolidated mineral reserve statement for the Yauricocha Mine including Mina Central, Esperanza, Cachi-Cachi, Mascota, and Cuerpos Pequenos areas are presented in Tables 5 and the maiden mineral reserve statement for the Esperanza Zone is presented in Table 6. The effective date for Mina Central, Cachi-Cachi, Mascota, and Cuerpos Pequenos areas is December 31, 2015. The effective date for Esperanza is June 30, 2016. SRK is currently preparing an NI 43-101 Technical Report which will support this disclosure within 45 days.

Table 5: Consolidated Yauricocha Proven and Probable Mineral Reserve Estimate (Including Esperanza)

Reserves - Proven and Probable								Contained Metal
		Tonnes	Ag	Cu	Pb	Zn	Au	Ag	Cu	Pb	Zn	Au
		(000's)	g/t	%	%	%	g/t	M oz	M lb	M lb	M lb	oz
Yauricocha
	Proven	847	70.7	0.59	1.60	2.82	0.65	1.9	10.9	29.8	52.6	17,735
	Probable	2,940	58.4	0.91	1.02	2.95	0.62	5.5	58.8	66.1	191.4	58,205
	Proven & Probable	3,787	61.1	0.84	1.15	2.92	0.62	7.4	69.7	95.9	243.9	75,940

Notes for Consolidated Yauricocha Proven and Probable Mineral Reserve Estimates (Table 5)

• All figures rounded to reflect the relative accuracy of the estimates. Totals may not sum due to rounding.
• Ore reserves are reported at NSR cutoffs (CoG) based on metal price assumptions*, grade adjustments made to the resource model**, metallurgical recovery assumptions***, mining costs, processing costs, general and administrative (G&A) costs, and treatment and refining charges.
  * Metal price assumptions considered for the calculation of NSR are: Gold (US$/oz 1,251.00), Silver (US$/oz 16.76), Copper (US$/lb 2.28), Lead (US$/lb 0.86), and Zinc (US$/lb 0.94)

Mina Central
** Grade adjustments (reductions) are based on historical mine to mill reconciliation and are 12% Ag, 0% Au, 10% Cu, 8% Pb, and 9% Zn.
*** Metallurgical recovery assumptions are 69% Ag, 18% Au, 55% Cu, 84% Pb, and 90% Zn (polymetallic material).

• The NSR CoG for Mina Central is variable by area:
  • US$58 = Catas, Antacaca; and
  • US$55 = Rosura, Antacaca Sur.
• Mining recovery applied is variable by area:
  • 80% = Catas, Antacaca; and
  • 70% = Rosura, Antacaca Sur.
• Mining dilution, applied with a zero grade, is variable by area:
  • 20% = Catas, Antacaca; and
  • 25% = Rosura, Antacaca Sur.

Esperanza
** Grade adjustments (reductions) are based on historical mine to mill reconciliation and are 12% Ag, 0% Au, 10% Cu, 8% Pb, and 9% Zn.
*** Metallurgical recovery assumptions are 69% Ag, 18% Au, 55% Cu, 84% Pb, and 90% Zn (polymetallic material).

• The NSR CoG for Esperanza is US$56.
• Mining recovery applied is 90%; and
• Mining dilution, applied with a zero grade, is 20%.

Cachi-Cachi
** Grade adjustments (reductions) are based on historical mine to mill reconciliation and are 12% Ag, 0% Au, 10% Cu, 8% Pb, and 9% Zn.
*** Metallurgical recovery assumptions for the area are 69% Ag, 18% Au, 55% Cu, 84% Pb, and 90% Zn (polymetallic material).

• The NSR CoG for Cachi Cachi is variable by area:
  • US$75 = Zulma;
  • US$64 = Elissa, Escondida;
  • US$58 = Angelita; and
  • US$56 = Karlita.
• Mining recovery applied is variable by area:
  • 90% = Zulma, Karlita;
  • 95% = Elissa, Escondida; and
  • 80% = Angelita.
• Mining dilution, applied with a zero grade, is variable by area:
  • 10% = Zulma, Elissa, Escondida; and
  • 20% = Angelita, Karlita.

Mascota
** Grade adjustments (reductions) are based on historical mine to mill reconciliation and are 14% Ag, 0% Au, 7% Cu, 13% Pb, and 7% Zn.
*** Metallurgical recovery assumptions for the area re 53% Ag, 40% Au, 0% Cu, 66% Pb, and 0% Zn (lead oxide material).

• The NSR CoG for Mascota is US$56.
• Mining recovery applied is 90%.
• Mining dilution, applied with a zero grade, is 20%.

Cuerpos Pequenos
** Grade adjustments (reductions) are based on historical mine to mill reconciliation and are variable:
-    14% Ag, 0% Au, 7% Cu, 13% Pb, and 7% Zn = Contacto Occ; and
-    12% Ag, 0% Au, 10% Cu, 8% Pb, and 9% Zn = All others.
*** Metallurgical recovery assumptions for the area are variable:
-    53% Ag, 40% Au, 0% Cu, 66% Pb, and 0% Zn = Contacto Occ. (lead oxide material)
-    66% Ag, 35% Au, 90% Cu, 0% Pb, and 0% Zn = CUYE (copper sulfide material)
-    69% Ag, 18% Au, 55% Cu, 84% Pb, and 90% Zn = All others (polymetallic material)

• The unit value CoG is variable by area:
  • US$56 = CUYE; and
  • US$75 = All others.
• Mining recovery applied is variable by area:
  • 95% = CSM_II;
  • 94% = C_ORI, CSM_I, Gallito;
  • 90% = C_OCC, CSM, CUYE, Marita, Juliana, Pozo Rico; and
  • 88% = Butz.
• Mining dilution, applied with a zero grade, is variable by area:
  • 20% = CUYE, Marita; and
  • 10% = All others.

Table 6: Esperanza Zone Proven and Probable Mineral Reserve Estimate

Reserves - Proven and Probable								Contained Metal
		Tonnes	Ag	Cu	Pb	Zn	Au	Ag	Cu	Pb	Zn	Au
		(000's)	g/t	%	%	%	g/t	M oz	M lb	M lb	M lb	oz
Esperanza
Zone	Proven	230	50.1	0.85	1.33	3.07	0.34	0.4	4.3	6.7	15.6	2,526
	Probable	1,290	52.1	1.26	1.09	2.84	0.44	2.2	35.9	30.9	80.6	18,441
	Proven & Probable	1,520	51.8	1.20	1.12	2.87	0.43	2.5	40.2	37.7	96.2	20,967

Notes for Esperanza Zone Proven and Probable Mineral Reserve Estimate (Table 6)

• All figures rounded to reflect the relative accuracy of the estimates. Totals may not sum due to rounding.
• Ore reserves are reported at NSR cutoffs (CoG) based on metal price assumptions*, grade adjustments made to the resource model**, metallurgical recovery assumptions***, mining costs, processing costs, general and administrative (G&A) costs, and treatment and refining charges.
  * Metal price assumptions considered for the calculation of NSR are: Gold (US$/oz 1,251.00), Silver (US$/oz 16.76), Copper (US$/lb 2.28), Lead (US$/lb 0.86), and Zinc (US$/lb 0.94).
  ** Grade adjustments (reductions) are based on historical mine to mill reconciliation and are 12% Ag, 0% Au, 10% Cu, 8% Pb, and 9% Zn.
  *** Metallurgical recovery assumptions for the area are 69% Ag, 18% Au, 55% Cu, 84% Pb, and 90% Zn (polymetallic material).
• The NSR CoG for Esperanza is US$56.
  • Mining recovery applied is 90%; and
  • Mining dilution, applied with a zero grade, is 20%.

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

This release includes certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical facts, that address estimated resource quantities, grades and contained metals, possible future mining, exploration and development activities, are forward-looking statements. Although the Company believes the forward-looking statements are based on reasonable assumptions, such statements should not be in any way construed as guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include market prices for metals, the conclusions of detailed technical analyses, lower than expected grades and quantities of resources, mining rates and recovery rates and the lack of availability of necessary capital, which may not be available to the Company on terms acceptable to it or at all. The Company is subject to the specific risks inherent in the mining business as well as general.

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SOURCE Sierra Metals Inc.

regarding Sierra Metals, please visit www.sierrametals.com or contact: Mike McAllister, Vice President, Corporate Development, Sierra Metals Inc., Tel: [phone], Email: [email protected]; Mark Brennan, President & CEO, Sierra Metals Inc., Tel: [phone]