Sierra Metals Develops the Large (24×40 m) High-Grade Silver Azucarera Stockwork Zone at its Cusi Mine, Chihuahua, Mexico

April 29, 2014

VANCOUVER, April 29, 2014 /PRNewswire/ – Sierra Metals Inc. (TSX:SMT)(BVL:SMT) (“Sierra Metals” or the “Company”) is pleased to
announce that development is proceeding in the thick Azucarera
stockwork breccia at the Promontorio Mine of the Cusi Property. Access
to Azucarera on Level 8 from the ramp is complete and development on
Level 10A is complete with cross cuts. Development ore from both
levels is being shipped to the Company’s Malpaso Mill.

Drilling of the El Gallo vein system, located 150 meters northwest of
Azucarera, is returning high grades of silver over significant widths.

“The development of the Azucarera body is a major step forward in the
growth of production from the Promontorio Mine and is an example of the
type of large, high-grade silver orebodies that can be found on the
Cusi property”, stated Daniel Tellechea, President & CEO of Sierra
Metals. “We are developing multiple working faces in this mine, not
only at Azucarera but also at El Gallo and El Gallo Back veins. The
large volume of silver-mineralized rock in Azucarera will have a major
impact on our mill throughput over the next few months and we are
already seeing this effect in the increased silver head-grade being
processed at the Malpaso Mill.”

Azucarera Body

The Azucarera body is a silver-mineralized stockwork breccia zone formed
at the intersection of the NW-dipping Promontorio Main Vein A with the
SE-dipping Alphabet Veins (A, B, K, J, etc.). The zone is
characterized by multiple, crisscrossing quartz veins, veinlets and
stringers hosted in the Cusi Rhyodacite, which range in width from 0.5
mm to 30 cm. The rhyodacite in the Azucarera body between the
stockwork veins is intensely silicified and contains fine-grained,
disseminated pyrite and argentite. Layers of argentite and traces of
galena are common along selvages of the multiple quartz veins. Figure 1 is a perspective view of the Azucarera body.

The Company’s geologists have extensively sampled the body along drifts
and crosscuts to determine its extent and grade, the results of which
are shown in Table 1:

Table 1: Sampling Results from Various Levels of the Azucarera Body,
Promontorio Mine

    | Level | Elevation | Au g/t | Ag g/t | Pb % | Mn % |  # of  |  Area  |
    |       |  meters   |        |        |      |      |Samples | meters |
    |    5.5|       1930|    0.03|   240  |  0.22|  0.45|      42|   25x30|
    |      7|       1902|    0.02|   275  |  0.18|  1.52|      33|   25x35|
    |      8|       1870|    0.05|   307  |  0.19|  0.68|      46|   25x30|
    |      9|       1842|    0.14|   402  |  0.70|  1.07|      21|   30x30|
    |    10A|       1832|    0.11|   301  |  0.45|  0.87|     186|   24x40|

Drill results demonstrate that the Azucarera body extends to elevation
1810 meters and its extent to depth is unknown. Because the
intersections of the Alphabet Veins with the main Promontorio Vein
(Vein A) create Azucarera, the fact that the K vein is projected to
intersect Vein A at 1,680 meters elevation indicates that this
high-grade body could extend at least 200 meters below Level 7. In
addition, the El Gallo veins are projected to intersect Vein A at an
even greater depth, potentially resulting in an even greater vertical
extent to the Azucarera body.

Azucarera will not be mined above Level 7 in order to maintain stability
of the surface above the body.

The areal extents of the body on levels below Level 10A cannot be
determined from drill intercepts and their extents will be determined
once each lower level is accessed and developed.

El Gallo Vein System

These NE-trending veins, El Gallo, El Gallo Back and Alto del Gallo, are
parallel to the Promontorio Main Vein (A) and the Alphabet Veins (Figure 2). El Gallo Back vein is a splay from El Gallo vein while Alto del
Gallo is a parallel vein. They are about 150 meters northwest of the
Main Vein and dip steeply to the southeast, similar to the Alphabet
Veins. Like them, they are inferred to intersect the Main Vein and
form a stockwork breccia similar to Azucarera but at a much greater
depth. This possible relationship will be tested by drilling once
underground workings are in a suitable position for a drill station
sited for holes to penetrate this possible stockwork zone.

The Company has been drilling the El Gallo Veins from an underground
drill station on Level 6. As a result, the drill holes cut several
veins before intersecting El Gallo and El Gallo Back. Table 2 shows
the results from two of the underground holes.

Table 2: Drill Intersections from Underground Drill Holes

    |     |              |  Core  | Est. |    |    |      |      |        |
    | Hole|   To-From, m | Length,|True  | Au | Ag | Pb % | Mn % |   Vein |
    | #*  |              |   m    |Width,|g/t |g/t |      |      |   Name |
    |     |              |        |  m   |    |    |      |      |        |
    | M202|     26.0-28.5|     2.5|   2.3|0.05| 266|  0.16|  0.34|       L|
    |     |     85.3-90.2|     4.9|   4.5|0.05| 104|  0.04|  0.37|    Alto|
    |  and|              |        |      |    |    |      |      |     del|
    |     |              |        |      |    |    |      |      |   Gallo|
    |  and|   120.2-122.0|     1.8|   1.7|0.05| 119|  0.17|  0.19|El Gallo|
    |  and| 123.95-124.85|     0.9|   0.8|0.05| 179|  0.11|  0.18|El Gallo|
    |  and|   125.5-128.8|     3.3|   3.0|0.05| 295|  0.29|  0.20|   Gallo|
    |     |              |        |      |    |    |      |      |    Back|
    | M204|   83.95-84.75|     0.8|   0.7|0.05| 181|  0.09|  0.21|Alto del|
    |     |              |        |      |    |    |      |      |   Gallo|
    |  and|   112.4-115.0|     2.6|  2.25|0.05| 131|  0.01|  0.17|El Gallo|
    |  and|  128.05-131.2|    2.15|   2.1|0.08| 294|  0.00|  0.08|   Gallo|
    |     |              |        |      |    |    |      |      |    Back|

    * All holes have prefix DC14; M = underground hole

The Company is developing El Gallo Vein with drifts along it on Level
6. The total drift length is 79 meters and development rock is shipped
to Malpaso Mill for processing. The NE development drift had an average
grade of 182 g/t silver and the SW development drift averaged 106 g/t.
The southwest drift has encountered the San Nicolas structure and
drifting has stopped in that direction.

The Company plans to develop these veins by constructing a ramp to Level
9 and drifting across the several Alphabet Veins and the Gallo veins to
Gallo Back vein then stoping the veins to Level 6. Access to Gallo
Back vein on Level 9 is planned to be completed by the end of 2014.

Cusi Property

The Cusi property has an historical production of 100-200 million ounces
of silver between 1680 and 1940. Production was interrupted multiple
times by Indian raids, wars, revolution, depression, etc. Historical
operators needed grades of 1,000 g/t silver or more to be economic and
many areas were left un-mined. There are multiple high-grade silver
veins open to depth.

An updated NI 43-101 compliant resource by Gustavson Associates, LLC of
Lakewood, Colorado, was recently completed (see press release dated
March 27, 2014), which reported a 70% increase in silver ounces, a 40%
increase in silver grade, and a 20% increase in tonnes in the Indicated
category. Also, there was a 37% increase in silver ounces and a 66%
increase in tonnes in the Inferred category.

The Company’s objective for the Cusi property in 2014 is to advance
underground development from five mines, the Santa Eduwiges,
Promontorio, La Gloria, Minerva and Candelaria mines to allow mining
and development both laterally and at depth. This will bring the total
of producing mines at the Cusi project to five. Management believes
that Cusi is only starting to reveal its full silver potential.

Method of Analysis

Samples were prepared at the Company’s lab facility at its Malpaso lab
and analyzed by atomic absorption for Cu, Zn, Pb, Bi, Co, Mn, Sb, Cd
and Fe. Gold and silver are analyzed by fire assay method. The
Malpaso laboratory follows the quality control methodology recommended
by CANMET of Canada, such as assaying of blanks, duplicate samples, and
check assays by commercial laboratories such as Chemex.

Quality Assurance

The technical content of this news release has been approved by Thomas
L. Robyn, Ph.D., CPG, RPG, and a Qualified Person as defined in NI

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. 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

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