Toronto, Ontario – April 24, 2013 – Sierra Metals Inc. (TSX-V:SMT) (BVL:SMT) (“Sierra Metals” or the “Company”; previously Dia Bras Exploration) is pleased to provide this revised news release which includes additional supporting details on the pre-feasibility study completed by Gustavson Associates, LLC (“Gustavson”) of Lakewood, Colorado, for its Bolivar copper-zinc-silver mine located in Chihuahua State, Mexico announced on April 17, 2013.  The study, mine plan and reserve estimate are based on Gustavson’s work and mine plan.

Press Release Highlights:

• Proven and Probable reserves total 7,456,806 tonnes at 1.044% CuEq 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.


• The reserves are based on the October 15, 2012 NI 43-101 Technical Report on Resource, which reported 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, applicable only to portions of the Gallo Superior and Gallo inferior zones that were modelled, 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 on Resource.


• Of the modelled tonnage, approximately 80% of the Measured and Indicated Resources are mineable.  Only the Gallo Inferior deposit and a portion of the Gallo Superior were modelled in the pre-feasibility study because additional drilling is required to convert M&I resources of Alta Ley and Gallo Superior to Proven and Probable Reserves.


• Economic results show capital costs of US$43.0 million, with initial cost of approximately US$7.0 million and sustaining capital over the Life of Mine of approximately US$36.0 million


• The project has an estimated pre-tax NPV of US$135.6 Million and a post-tax, base case NPV of US$91.7 million, at an 8% discount rate.


• 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 in commercial production at a rate of 1,000 tons per day and is expected to double its production capacity to 2,000 tons per day by Q2 2013.

Sierra Metals has conducted exploration, development and mining at the Bolívar Mine since 2003.  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 April 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 each deposit with the compliant resource estimate broken out by Measured, Indicated and Measured+Indicated. Table 1A shows the Resources by each deposit.

The effective date of this resource estimate is April 5, 2013, and was completed by Gustavson as an independent report by Zachery J. Black, Qualified Person as defined by NI 43-101.  Mineral resources are not mineral reserves and do not demonstrate economic viability. There is no certainty that all or any part of the mineral resource will be converted to mineral reserves.

Table 1: Total Resources for the Bolívar Mine

Table 1A: M&I Tonnes and Grade by Deposit

Note:  CuEq>0.66 AND M&I

The equation for copper equivalent is presented below.

 Equation for Copper Equivalent

Values used for copper equivalent calculation are provided below:

• Copper




• $3.56 per pound


• 82% recovery


• Zinc




• $0.96 per pound


• 81% recovery


• Silver




• $26.28 per pound


• 77% recovery. 

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, Piedras Verdes, and El Gallo 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 mined from only the El Gallo Superior and El Gallo Inferior.  Additional information, namely additional drill holes, is required to move the Measured and Indicated tonnes at Alta Ley to reserves.

On an overall recovery of the Gallo Deposits, 7.46 million tonnes are mined from the Gallo 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 M+I.

This Reserves Statement has an effective date of April 5, 2013 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

Economic parameters used in the calculation are shown in the Appendix below.

Gustavson is of the opinion that these deposits could potentially yield more Reserves as data collection and interpretation continue, based on current conditions.

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. and Donald E. Hulse of Gustavson Associates LLC, Qualified Person as defined by NI 43-101

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 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. 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”.

For further information on Sierra Metals, please visit www.sierrametals.com or contact:

Daniel Tellechea
President & CEO
Sierra Metals Inc.
1 (866) 493‐9646

Matt Morrish
Director, Investor Relations
Sierra Metals Inc.
1 (866) 493‐9646

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.

Appendix