Last updated on April 18, 2014 at 1:21 EDT

Sierra Metals announces first proven and probable ore reserves at the Bolivar mine, Mexico supporting a 10-year mine life at its expanded output rate of 2,000 TPD

April 17, 2013

TORONTO, April 17, 2013 /PRNewswire/ – Sierra Metals Inc. (TSX-V:SMT) (BVL:SMT) (“Sierra Metals” or the “Company” previously Dia
Bras Exploration) is pleased to announce that a pre-feasibility study
has been completed by Gustavson Associates, LLC of Lakewood, Colorado,
for its Bolivar copper-zinc-silver mine located in Chihuahua State,
Mexico.  The study, mine plan and reserve estimate are based on
Gustavson’s work and mine plan on a lower-grade portion of the
resources, mainly at its El Gallo Inferior deposit.  The evaluation of
the higher grade portions of the mine still require further technical
studies, which should result in additional resources and continued feed
of ore to its processing plant and potentially lead to future reserve
additions over the next 10 months.

    |Press Release Highlights:                                            |
    |                                                                     |
    |    --  Bolivar now has Proven and Probable ore reserves totalling   |
    |        7,456,806 tonnes at 1.044% Cu-Equivalent averaging 19.5 g/t  |
    |        silver, 0.759% Cu, 0.329% Zn.  Gold contents average 0.226   |
    |        g/t but were not included in the CuEq calculation, but were  |
    |        included within the project's economics.                     |
    |                                                                     |
    |    --  These reserves are in the Gallo Inferior deposit, which is   |
    |        the lower-grade portion of resources defined in the October  |
    |        15, 2012 NI 43-101 Technical Report.  The October 2012 report|
    |        defined 15,404,000 tonnes of Measured and Indicated Resources|
    |        averaging 19.4 g/t silver, 0.79% copper, and 1.01% zinc at a |
    |        cut-off grade of 0.66% CuEq.  Gold contents averaged 0.226   |
    |        g/t and were added to the Resource model in January 2013     |
    |        using the same data used to do the NI 43-101 Technical       |
    |        Report.                                                      |
    |                                                                     |
    |    --  Out of the 15.4 million tonnes of Measured and Indicated     |
    |        Resources, 6.1 million tonnes of the highest grades deposits |
    |        (i.e. Alta Ley and portions of Gallo Superior deposits) were |
    |        not included at this stage in the reserve calculation because|
    |        more data are required for mine planning purposes.           |
    |        Additional drilling is underway to complete mine planning in |
    |        order to convert these Measured and Indicated resources to   |
    |        Proven and Probable Reserves.                                |
    |                                                                     |
    |    --  Of the modelled tonnage of 9 million tonnes of the lower     |
    |        grade Measured and Indicated Resources, approximately 80%    |
    |        were converted to ore reserves.                              |
    |                                                                     |
    |    --  At a production rate of 2,000 tonnes per day, these reserves |
    |        provide a 10-year mine life with an additional year of       |
    |        processing from the stockpile for a total of 11 years.       |
    |                                                                     |
    |    --  Bolivar is currently in commercial production at an ore      |
    |        throughput rate of 1,000 tons per day and should double its  |
    |        production capacity to 2,000 tons per day by the end of May  |

Daniel Tellechea, President and CEO of Sierra Metals, commented:Sierra Metals advances another major step in the Company’s evolution
with the completion of this pre-feasibility study that defines for the
first time in the history of the Bolivar mine a formal proven and
probable reserve.  Not only does Bolivar have reserves now for the next
10 years at its expanded 2,000 ton per day mill, but we are conducting
additional significant drilling in two areas to add to its mine life. 
First, we are drilling those portions of the Gallo Superior and Alta
Ley that did not have sufficient density of drilling for mine planning
purposes to generate a reserve.  It is important to note that the Gallo
Superior and Alta Ley measured and indicated resources are higher grade
than Gallo Inferior.  Second, we are focusing our exploration drilling
in target areas that have been defined by geophysics and fault
extensions from the Alta Ley mine in order to increase resources and
grade.  These faults controlled high-grade copper-zinc mineralization
in the Superior portion of the Alta Ley area, and during 2005-2011 we
processed 681,305 tonnes averaging 1.65% copper and 8.47% zinc.  Our
new targets are mineralized zones of similar grade.”

Sierra Metals has conducted exploration, development and mining at the
Bolívar Mine since 2004.  Exploration includes geologic mapping and
diamond core drilling in the El Gallo, Increíble and Alta Ley areas,
which are located within the area of resource modeling, and in the La
Narizona, La Montura, La Pequeña and El Val areas, which are located
outside the area of resource modeling.  Pilot mining has been conducted
and has provided valuable information regarding metallurgy, recovery
rates, smelter treatment and refining charges, etc.

Bolivar built its new Piedras Verdes ore processing mill in 2010-2011
and declared commercial production in November 2011 with a processing
capacity of 1,000 tonnes per day.  The data of prior production were
used in the development of the pre-feasibility study preparation and as
a guide to continued mining as well as doubling of production capacity
to 2,000 tons per day, which will be effective by the end of May 2013.

This work resulted in a NI 43-101 and CIM compliant resource estimate
(see press release of August 30, 2012), which is the basis for this
pre-feasibility study.  Table 1 shows the Measured and Indicated
Resources of the compliant resource estimate.

Table 1: Deposit M+I with  Tonnes and Grade

    |   Zone  |     Tonnes  |Ag (gpt)|Cu (%)|Zn (%)|CuEq (%)|  Au (gpt) |
    |El Gallo |    2,041,527|  30.920| 1.226| 0.468|   1.663|    0.208  |
    |Superior |             |        |      |      |        |           |
    |El Gallo |    8,550,959|  20.820| 0.757| 0.366|   1.064|    0.243  |
    |Inferior |             |        |      |      |        |           |
    |Increible|            -|       -|     -|     -|       -|Not Modeled|
    |Alta Ley |    4,811,788|  12.161| 0.649| 2.530|   1.446|Not Modeled|
    |Total    |   15,404,274|  19.454| 0.785| 1.055|   1.263|    0.236  |

Note:  CuEq>0.66 AND M&I

Gustavson received diamond drill data for 683 drill holes located within
the area of the underground mine workings, and in the Bolívar III,
Bolívar IV, and Piedras Verdes concessions to characterize the
skarn-type mineralization.  Data from these holes as well as
underground mapping and sampling were included in the study.

The recovered tonnes, including dilution, for each area were then
scheduled for production.  The total tonnes and grades shown in Table 2
constitute the Reserve Statement for the Bolivar Project as of the date
of this pre-feasibility report.  These tonnes are from only portions of
the El Gallo Superior and El Gallo Inferior.  Additional information,
namely additional drill holes, is required to upgrade the Measured and
Indicated tonnes at Alta Ley plus un-mined areas of Gallo Superior to

On an overall recovery of the Gallo Deposits, 7.46 million tonnes are
mined from the Gallo Superior and Inferior deposits (2.04 + 8.55
million tonnes for a total of 10.59 million tonnes). This is an overall
recovery of 70.5% of the material modeled.  However, from the economic
model where only the final logical mine layout was used, the recoveries
of the mineable Resources range from 76.0 % to 83.5%. Essentially the
mine plan recovers 70.5% of the M+I, but recovers 76-83% of the
mineable M+I.

This Reserves Statement has an effective date of December 31, 2012 and
was completed by Gustavson as an independent report under the
supervision of Karl D. Gurr, Qualified Person as defined by NI 43-101.

Table 2  Combined Reserve Statement for the Bolivar Project

    |   RoM Tonnes +  |  Tonnes |Ag gpt|Cu % |Zn % |CuEq % (no Au)|Au gpt|
    |  Diluted Grades |         |      |     |     |              |      |
    |Waste            |        0|  0.00|0.00%|0.00%|      0.00%   | 0.000|
    |RoM - Measured - |4,339,914| 22.52|0.84%|0.19%|      1.11%   | 0.223|
    |Proven           |         |      |     |     |              |      |
    |RoM - Indicated -|3,116,893| 15.35|0.65%|0.52%|      0.95%   | 0.231|
    |Probable         |         |      |     |     |              |      |
    |Waste - Inferred |  102,002| 14.56|0.62%|0.56%|      0.91%   | 0.234|
    |Total P+P        |7,456,806| 19.52|0.76%|0.33%|      1.04%   | 0.226|
    |Total P+P+Waste  |7,558,808| 19.45|0.76%|0.33%|      1.04%   | 0.227|

RoM = Run of mine

Gustavson believes that these deposits may have additional potential as
data collection and interpretation continue, but this reserve statement
provides a snapshot at this point in time.  Continued exploration
success at the mine may justify further production expansion in the

Quality Assurance

The technical content of this news release has been approved by Thomas
L. Robyn, Ph.D., CPG, RPG, a Qualified Person as defined in NI 43-101
and Senior Vice President, Exploration, for Sierra Metals, Inc.

About Sierra Metals

Sierra Metals Inc. is a Canadian mining company focused on precious and
base metals from its Yauricocha mine in Peru and its Bolivar mine in
Mexico. The Company is also advancing its Cusi silver project in Mexico
from advanced development into commercial production. In addition,
Sierra Metals is xploring 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. Projects in Mexico include Bacerac (silver) in
the state of Sonora, La Verde (gold) at the Batopilas Property in the
state of Chihuahua, and Las Coloradas (silver) at the Melchor Ocampo
Property in the state of Zacatecas.

The Company’s shares trade on the Bolsa de Valores de Lima and TSXV
under the symbol “SMT”.

This press release does not constitute an offer to sell or solicitation
of an offer to buy the securities in the United States or any other
jurisdiction. The Common Shares will not be and have not been
registered under the United States Securities Act of 1933, as amended,
and may not be offered or sold in the United States absent registration
or an applicable exemption from the registration requirements.

Neither the TSXV nor its Regulation Services Provider (as that term is
defined in policies of the TSXV) accepts responsibility for the
adequacy or accuracy of this release.

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. Other than
statements of historical fact, all statements are “forward-looking
statements”, which involve various known and unknown risk and
uncertainties and other factors, including market conditions that may
affect the Company’s ability to execute its current business plan. 
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.

Source: PR Newswire