Vancouver, BC ¨C October 21, 2013 ¨C Sierra Metals Inc. (TSX:SMT)(BVL:SMT) (¡°Sierra Metals¡± or the ¡°Company¡±) is pleased to announce that drilling continues to expand the boundaries of the high grade silver bodies along the Cusi Fault at Promontorio Mine.

Press Release Highlights:

• Veta del Contacto (Promontorio) body has now been intercepted over a horizontal distance of 250 meters and a vertical distance of 700 meters
   




• Drill hole DC13B628 cut 9.6 meters core length (3.0 m true width) averaging 622 g/t silver.
   


• Drill hole DC13B634 cut 1.4 meters core length (1.4 m true width) averaging 887 g/t silver.
   


• Since 2011, 34 drill holes have identified and expanded the known mineralized zones, which are open in both directions along strike and to depth.
   


• Sierra intends to complete a series of drill-hole fans along the 800-meter-long gap between Santa Rosa and Veta del Contacto (Santa Eduwiges) in order to explore for additional wide, high-grade silver veins. In addition, holes will be drilled northwest of Veta del Contacto (Promontorio) to test for more dilational zones in this relatively unexplored portion of the fault.
   


• An updated NI 43-101 report is expected in early 2014.
   


• Development of the Santa Rosa and Veta del Contacto (Promontorio) veins is in progress. Workings on Levels 6 and 7 have entered the Cusi Fault structure and are being developed to the wide, high-grade silver zones. Santa Rosa and Veta del Contacto will be reached in early November on these two levels, while on Level 9 Santa Rosa will be reached in three months.
   


• Veta del Contacto (Santa Eduwiges) has been accessed on Level 11 and development along the vein is progress.

Daniel Tellechea, President and CEO of Sierra Metals, commented: ¡°These cumulative drill results demonstrate that the Cusi Fault system is an important controlling structure for wide, high-grade silver veins. The fault zone is only beginning to be explored but indications are that the Cusi Fault in the Promontorio area could become a significant producer of high-grade ore. Production from Cusi at present is predominantly from Santa Eduwiges Mine, which is shipping 220-250 tonnes per day to the Malpaso mill. Promontorio currently ships 50-60 tonnes per day but tonnage will increase by year¡¯s end to an amount similar to Santa Eduwiges as development along the Cusi Fault provides access to the high-grade silver veins. We are on track to meet our production objective of 500 tonnes per day by year¡¯s end.¡±

Drill Results

The Cusi Fault (Figure 1) in the Promontorio Mine area has been cut by multiple drill holes. Veta del Contacto (Promontorio) has been intersected over a horizontal distance of 250 meters and a vertical distance of 700 meters (Figure 2). Santa Rosa is less defined but the Company¡¯s geologists infer that the two bodies could be connected, which would yield a horizontal distance of over 400 meters containing high-grade silver veins. Table 1 shows the more recent drill results from this area:

Table 1: Drill Core Samples from Promontorio Mine

* All drill holes have prefix DC

In order to illustrate the widths and silver grades of the drill intercepts, the results from previously published drill holes are shown in Table 2 below:

Table 2: Previously Published Results from Promontorio Mine

* All drill holes have prefix DC
a: published July 9, 2013; b: published December 13, 2012; c: published November 29, 2012; d: published July 17, 2012; e: published March 30,2012; f: published November 15, 2011

Cusi Fault System

The Cusi Fault is the major regional fault bounding the northeast side of the Cusi mining district. This NW-trending fault is structurally complex between the Promontorio and Santa Eduwiges mines in that its dip reverses, changing from a normal, SW-dipping fault northwest of Promontorio to a reverse, SE-dipping fault between Promontorio and Santa Eduwiges, and then returning to normal fault orientation southeast of Santa Eduwiges. This orientation reversal has been confirmed by geologic mapping and drill hole logging.

Implications

The structural complexity of the Cusi Fault has created multiple dilational zones that have been filled by wide, high-grade silver veins such as Santa Rosa (see press release dated July 9, 2013) and Veta del Contacto (Santa Eduwiges) (see press release dated September 9, 2013). Only about 20% of the complex zone has been tested by drilling, although the Company¡¯s geologists infer that several more dilational zones with silver mineralization can be expected between Santa Rosa and Veta del Contacto (Santa Eduwiges), a distance of about 800 meters. In all, a distance of over 1,200 meters along the Cusi Fault is a major target for additional veins.

Sierra intends to complete a series of drill-hole fans along the 800-meter-long gap between Santa Rosa and Veta del Contacto (Santa Eduwiges) in order to explore for additional wide, high-grade silver veins. In addition, holes will be drilled NW of Veta del Contacto (Promontorio) to test for additional dilational zones in this relatively-unexplored portion of the fault.

An updated NI 43-101 report is expected to be completed in early 2014.

Mine Development

Mine development continues at the Promontorio, Santa Eduwiges, Minerva-La Gloria and Candelaria mines; as follows:

Promontorio: development on Levels 6 and 7 has reached the Cusi Fault and drifts are being extended to reach the wider, high-grade portions of the Santa Rosa vein. Santa Rosa and Veta del Contacto will be reached on these levels in early November. A drift along the ¡®K¡¯ vein is heading toward the Cusi Fault; the ¡®K¡¯ vein averages 230 g/t silver over 2.5 meters width. On Level 9, an old drift is being widened and extended to the Santa Rosa body, which is expected to be reached in 3 months. On Level 6, another drift is being extended to develop the San Nicolas and El Gallo veins.

Santa Eduwiges: a ramp is being driven from Level 11 to Level 12 to access un-mined portions of the veins of Santa Eduwiges. On Level 11, drifting along the San Antonio vein is following a 3-m-wide zone averaging 250 g/t silver. Also on Level 11, a drift is following Veta del Contacto (Santa Eduwiges) in both directions. The vein is hosted by a breccia at the andesite/rhyodacite fault contact and has returned high grades of silver (see press release dated September 9, 2013).

Minerva-La Gloria: the drift to La Gloria is now 230 meters long and has followed the vein towards the expected ore shoots defined on surface. A switchback ramp is being driven under the Minerva vein, which is expected to reach the un-mined portion of the vein in early November.

Candelaria: development continues on two levels, the Fatima level and the Candelaria level. The Fatima level is 80 meters above the Candelaria level and followed a 150-long zone to the northeast that averaged 227 g/t Ag over a width of 1.95 m in strongly oxidized rock. The Candelaria level has reached the reduced (sulfide-bearing) zone at the switchback zone where drifting changes from a northeast direction to the southwest.

Method of Analysis

Drill samples were prepared at the ALS Chemex lab facility in Chihuahua, Mexico, and analyzed by ICP and AA methods at their facilities in Vancouver, Canada. Diamond drill samples sent for analysis consisted of NQ-size and BQ-size diamond core split on site, prepared by the ALS Chemex sample preparation laboratory in Chihuahua, Mexico, and assayed for Au by 50 g fire assay with AA finish. Assays for Ag, Pb, Zn, Cu and trace elements are analyzed by Induction Coupled Plasma (ICP-41) on 50g split sample at the ALS Chemex North Vancouver Laboratory. Over-limits of Ag and base metals are assayed by OG-46 method. Higher results of Au and Ag are assayed by GRA-21 method.

Quality Control

The quality assurance-quality control (QA-QC) of Sierra Metals at Cusi has been described in detail in Gustavson Associates¡¯ NI 43-101 report dated August 23, 2013.

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.

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, 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 the Toronto Stock Exchange under the symbol ¡°SMT¡±.

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

Forward-Looking Statements