VANCOUVER, Nov. 13, 2014 /PRNewswire/ – Sierra Metals Inc. (SMT) (bvl:SMT) ("Sierra Metals" or the "Company") is pleased to report the filing of its unaudited Financial Statements and Management Discussion and Analysis ("MD&A") for the third quarter of 2014. All amounts are presented in US dollars unless otherwise stated. For the complete Financial Statements and/or MD&A please visit the Company's website www.sierrametals.com or SEDAR at www.sedar.com.

Audra Walsh, President and CEO of Sierra Metals, commented: "We had another very solid quarter, reporting both strong operating cash flow and earnings despite the challenging metal price environment.  The increase of our revenues for the first nine months of the year has been mainly driven by higher throughput at both Bolivar and Cusi mines, higher lead grades and higher lead and silver recoveries at Yauricocha, and higher volumes of concentrate sold." Ms. Walsh continued: "Looking forward to the remainder of the year, we are confident that Sierra Metals will continue to deliver growth through existing operations and we remain on track to meet our near and long term corporate objectives ."

Sierra Metals' Financial Highlights For The Third Quarter of 2014:

• Net Income of $1.5 million or $0.01 per share for the third quarter of 2014; a 122% increase compared to the third quarter of 2013;
• Adjusted EBITDA of $20.7 million for the third quarter of 2014; a 92% increase compared to the third quarter of 2013;
• Adjusted net income attributable to shareholders of $8.3 million or $0.05 per share for the third quarter of 2014; a 121% increase compared to the third quarter of 2013;
• Cash flow from operations of $26.8 million for the third quarter of 2014; a 248% increase compared to the third quarter of 2013;
• By-product cash cost per ounce of silver of negative $24.26 at Yauricocha for the third quarter of 2014; a 115% decrease compared to the third quarter of 2013; by-product cash cost per ounce of silver of $6.35 at Cusi for the third quarter of 2014; a 58% decrease compared to the third quarter of 2013; and by-product cash cost per pound of copper of $1.71 at Bolivar for the third quarter of 2014; a 6% decrease compared to the third quarter of 2013;
• Cash and cash equivalents of $46.7 million as at September 30, 2014 compared to $44.9 million at December 31, 2013; a 4% increase over the 2013 year-end balance.

The following table sets out selected quarterly financial results:

• Revenues of $44.5 million for the third quarter of 2014 compared to $29.4 million for the same period in 2013. Revenues of $131.8 million for the nine months ended September 30, 2014 compared to $107.1 million for the nine months ended September 30, 2013. The increase in revenues is mainly driven by higher throughput at Bolivar and Cusi, higher lead grades and higher lead and silver recoveries at Yauricocha.
• Adjusted EBITDA of $20.7 million for the third quarter of 2014 compared to $10.8 million for the same period in 2013. Adjusted EBITDA of $59.2 million for the nine months ended September 30, 2014 compared to $42.1 million for the same period in 2013. The increase in adjusted EBITDA for 2014 compared to 2013 is mainly due to the increase in revenues as a result of the production ramp up in Bolivar from 1,000 tpd to 2,000 tpd since late in 2013, the higher lead head grades and higher silver and lead recoveries at Cusi. In Peru the contribution to the increase in adjusted EBITDA is mainly the result of higher lead head grades and higher silver and lead recoveries at Yauricocha.  In addition, the Company recorded higher gross margins during the period as a result of the measures taken to increase operating efficiencies and reduce costs. Moreover, the Company has improved its EBITDA results during 2014 in Peru due to higher metal production and lower operating costs, and in Mexico due to higher throughput levels and economies of scale.
• Cash flow generated from operations of $26.8 million for the third quarter of 2014 compared to $7.7 million for the same period in 2013. Cash flow generated from operations of $47.9 million for the nine months ended September 30, 2014 compared to $14.3 million for the same period in 2013.  The increase in cash flow is mainly the result of higher revenues generated, higher gross margins and workers' profit sharing and tax working capital adjustments in 2014.
• Adjusted net income attributable to shareholders of $8.3 million or $0.05 per share for the third quarter of 2014 compared to $3.8 million or $0.02 per share for the same period in 2013. Adjusted net income attributable to shareholders of $24.9 million or $0.16 per share for the nine months ended September 30, 2014 compared to $15.2 million or $0.10 per share for the same period in 2013.
• Net income attributable to shareholders of $1.5 million or $0.01 per share for the third quarter of 2014 compared to a loss of $6.6 million ($0.04 per share) for the same period in 2013. Net income attributable to shareholders of $5.9 million or $0.04 per share for the nine months ended September 30, 2014 compared to a loss of $19.6 million ($0.12 per share) for the same period in 2013. The increase in net income attributable to shareholders is mainly due to the measures that the Company has been implementing since the third quarter of 2013 in Mexico and Peru to increase operating efficiencies and reduce costs, the decrease in the non-cash depletion charge on the Sociedad Minera Corona S.A.'s ("Corona") acquisition, and the increase in concentrate sold.
• A large component of the net income or loss for every quarter is the non-cash depletion charge in Peru, which for the three months ended September 30, 2014 was $8.3 million (2013 – $14.9 million) and the nine months ended September 30, 2014 was $25.7 million (2013- $48.1 million). The non-cash depletion charge is based on the aggregate fair value of the Yauricocha mineral property at the date of acquisition of Corona of $371.0 million amortized over the total proven and probable reserves and measured and indicated resources of the mine. The Company has been successful in reducing the depletion expense year over year as a result of the increase in the mineral reserves at Yauricocha based on the NI 43-101 reports dated October 2012 and November 2013.
• By-product cash cost per ounce of silver of negative $24.26 at Yauricocha, by-product cash cost per ounce of silver of $6.35 at Cusi and by-product cash cost per pound of copper of $1.71 at Bolivar for the third quarter of 2014 compared to a by-product cash cost per ounce of silver of negative $11.27 at Yauricocha, by-product cash cost per ounce of silver of $14.96 at Cusi and by-product cash cost per pound of copper of $1.81 at Bolivar for the same period of 2013.
• Cash and cash equivalents of $46.7 million as at September 30, 2014 compared to $44.9 million at the end of 2013. Cash and cash equivalents have increased by $1.8 million during the nine months ended September 30, 2014 mainly due to the capital expenditures incurred in Mexico and Peru of $29.6 million, repayment of loans and credit facilities of $11.1 million, and dividends paid to shareholders and non-controlling interest totaling $5.3 million, partially offset by $47.9 million of operating cash flow.

Operational Highlights For The Third Quarter of 2014:

• Total tonnes processed of 430,523; a 49% increase over third quarter 2013
• Silver production of 794,251 ounces; a 27% increase over third quarter 2013
• Copper production of 5.3 million pounds; a 62% increase over third quarter 2013
• Lead production of 12.6 million pounds; a 46% increase over third quarter 2013
• Zinc production of 14.7 million pounds; a 19% increase over third quarter 2013
• Gold production of 2,143 ounces; a 28% increase over third quarter 2013

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, 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 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 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.