Daniel Tellechea, President and CEO of Sierra Metals, commented: ?gSierra?fs results for the third quarter of 2013 were mainly driven by decreased revenues due to both lower commodity prices and lower metal production relative to the same period in 2012. We expect our results to improve in the fourth quarter as we consolidate the production ramp up at Bolivar, implement measures to control grade dilution and reduce the frequency of mudrushes at Yauricocha, and benefit from the measures undertaken to reduce operating costs.?h

The following table sets out the selected financial results for the three and nine month periods ended September 30, 2013 and 2012, respectively:

Financial Events

• Adjusted net income attributable to shareholders (excluding the non-cash depletion charge described above) of $7.8 million or $0.05 per share for the three months ended September 30, 2013 compared to $11.6 million or $0.07 per share for the same period in 2012. Adjusted net income attributable to shareholders of $28.9 million or $0.18 per share for the nine months ended September 30, 2013 compared to $41.8 million or $0.28 per share for the same period in 2012.
  
• Net loss attributable to shareholders of $6.8 million or $0.04 per share for the three months ended September 30, 2013 compared to a loss of $10.1 million ($0.07 per share) for the same period in 2012. Net loss attributable to shareholders of $20.3 million or $0.13 per share for the nine months ended September 30, 2013 compared to a loss of $18.0 million ($0.13 per share) for the same period in 2012.
  
• A large component of the net loss for every quarter is the non-cash depletion charge in Peru, which for the three months ended September 30, 2013 was $14.6 million (2012 – $21.7 million) and for the nine months ended September 30, 2013 was $49.2 million (2012 – $59.8 million). The units of production depletion charge is based on the aggregate fair value of the Yauricocha mineral property at the date of acquisition of Sociedad Minera Corona S.A. (?gCorona?h) of $363.9 million amortized over the total proven and probable reserves of the mine. In the event that additional reserves are identified this depletion charge will be prospectively reduced in future periods.
  
• Adjusted EBITDA of $11.2 million for the three months ended September 30, 2013 compared to $25.6 million for the same period in 2012. Adjusted EBITDA of $43.0 million for the nine months ended September 30, 2013 compared to $71.1 million for the same period in 2012. This decrease was mainly a result of lower commodity prices and lower metal production due to lower head grades driven by higher dilution levels at Yauricocha.
  
• Cash flow generated from continuing operations of $6.6 million for the three months ended September 30, 2013 compared to $11.9 million for the same period in 2012. Cash flow generated from continuing operations of $14.7 million for the nine months ended September 30, 2013 compared to $37.3 million for the same period in 2012. This decrease was mainly driven by lower adjusted EBITDA.
  
• Cash and cash equivalents of $33.7 million as at September 30, 2013 compared to $79.8 million at the end of 2012. Cash and cash equivalents have decreased by $46.1 million during 2013 mainly due to capital expenditures of $34.0 million incurred in Mexico and Peru. These expenditures are in line with the Company?fs growth and development initiatives financed by the $45.0 million private placement completed in 2012.
  
• Revenues of $30.6 million for the three months ended September 30, 2013 compared to $46.1 million for the same period in 2012. Revenues of $109.6 million for the nine months ended September 30, 2013 compared to $136.4 million for the same period in 2012.
  
• Negative silver cash cost of US$11.25 per ounce (?goz?h) at Yauricocha, silver cash cost of US$14.96 per oz at Cusi and copper cash cost of US$1.81 per pound (?glb?h) at Bolivar for the three months ended September 30, 2013 compared to negative silver cash cost of US$17.64 per oz at Yauricocha and US$2.11 per lb at Bolivar for the same period in 2012. Negative silver cash cost of US$13.37 per oz at Yauricocha, silver cash cost of US$16.21 per oz at Cusi and copper cash cost of US$1.68 per lb at Bolivar for the nine months ended September 30, 2013 compared to negative silver cash cost of US$21.44 per oz at Yauricocha and US$1.50 per lb at Bolivar for the same period in 2012. Cash costs at Cusi for 2012 are not available because this property was not in commercial production at that time.

Operational Events

• Total silver production of 626,735 oz in the third quarter of 2013 compared to 681,846 oz for the same period in 2012. An 8% decrease year-over-year. Total silver production of 1,906,763 oz in the first nine months of 2013 compared to 1,936,836 oz for the same period in 2012. In line with the previous period.
  
• Total copper production of 3.3 million lb in the third quarter of 2013 compared to 3.5 million lb for the same period in 2012. A 7% decrease year-over-year. Total copper production of 11.1 million lb in the first nine months of 2013 compared to 11.5 million lb for the same period in 2012. A 4% decrease year-over-year.
  
• Total lead production of 8.6 million lb in the third quarter of 2013 compared to 10.0 million lb for the same period in 2012. A 14% decrease year-over-year. Total lead production of 26.7 million lb in the first nine months of 2013 compared to 27.0 million lb for the same period in 2012. In line with the previous period.
  
• Total zinc production of 12.3 million lb in the third quarter of 2013 compared to 15.4 million lb for the same period in 2012. A 20% decrease year-over-year. Total zinc production of 38.4 million lb in the first nine months of 2013 compared to 44.3 million lb for the same period in 2012. A 13% decrease year-over-year.
  
• Total gold production of 1,673 oz in the third quarter of 2013 compared to 2,409 oz for the same period in 2012. A 31% decrease year-over-year. Total gold production of 5,071 oz in the first nine months of 2013 compared to 8,310 oz for the same period of 2012. A 39% decrease year-over-year.
  
• On September 30, 2013 the Company announced that mill capacity at its Bolivar mine has been doubled to 2,000 tonnes-per-day (?gtpd?h) from 1,000 tpd. The Company installed a leased, 1,250 kva generator to increase mill throughput to bypass delays in the installation of the power substation that will provide power via the Company?fs newly-constructed 10 km power line. The mill is now working on a combination of generator power and line power. Once the work on the power substation is completed, which is expected to be by year-end, the mill will operate off the national grid power system. Since September 20, 2013, the Piedras Verdes mill has increased daily throughput as the new circuit is being tuned and adjusted. Bolivar achieved an average throughput of 1,915 tpd in October 2013.
  
• Lower production at Yauricocha during the third quarter of 2013 was mainly driven by higher dilution in head grades due to unusual levels of water at the mine that also produced a higher frequency of mudrushes. The Company has engaged SRK Consulting to assist Yauricocha with this matter and expects to report improvements during the fourth quarter of 2013.

The following table sets out consolidated production results for the three and nine months ended September 30, 2013 and 2012. Please note that the production figures presented below include 100% of Yauricocha?fs figures for that period. No adjustments have been made for the portion applicable to the non-controlling interest.

Exploration Events

• On July 9, 2013 the Company announced that drilling has extended the Veta del Contacto at its Cusi project, Chihuahua state, Mexico, to a depth extent of over 700 m. Detailed geologic mapping has identified two areas of wide silicification and veining at vein intersections, which are high-priority drill targets. Drill hole DC12B575 cut 4.0 m true width of Veta del Contacto averaging 709 g/t silver and 2.12% lead. Drill hole DC12B578 cut 1.0 m true width of Veta del Contacto averaging 459 g/t silver, 4.04 g/t gold and 1.81% lead. Geologic mapping in the San Juan area reveals a broad zone of silicification and veining at the intersection of the San Juan and Las Margaritas veins. Another zone of silicification occurs at the intersection of the La Gloria and Minerva veins. These results extend the silver mineralization from surface down to 700 meters depth and the vein remains open at depth. The geologists?f structural interpretation of the Veta Del Contacto vein indicates significant potential mining width.
  
• On July 17, 2013, the Company announced a new silver resource estimate on its Cusi Mine. These resources are in two areas of the Cusi Mine currently in commercial production, Promontorio and Santa Eduwiges, as well as in two prospective areas, La India and San Juan, where the Company is doing underground development. This resource estimate was prepared by Gustavson Associates, LLC of Lakewood, Colorado (?gGustavson?h). The silver resource estimate was increased five-fold.
  
  
  
  • The new total estimated Indicated Mineral Resources for the Cusi Mine with exploration drilling information as of December 31, 2012 are: 1,380,000 tonnes averaging 165 g/t silver, 0.30% lead and 0.29% zinc at a cut-off grade of 90.0 g/t silver, which contain 7.3 million oz of silver.
    
  • Total estimated Inferred Resources are: 1,651,000 tonnes averaging 273 g/t silver, 0.14% lead and 0.08% zinc at the same cut-off that contain 14.6 million oz of silver.
  
  
• On August 14, 2013 the Company announced that drilling at its Yauricocha Mine in Peru has discovered high-grade, silver-lead-zinc mineralization in the Cachi Cachi Mine, located immediately north of the Central Mine Area. The positive results of this drilling demonstrate that additional potentially-economic polymetallic mineralization occurs within the Yauricocha fault zone along strike from the main mine area. Drill hole 12-13-04 cut 5.6 m true width averaging 199 g/t silver, 6.44% lead and 19.93% zinc in the Elissa body of the Cachi Cachi Mine. Drill hole 12-13-08 cut 4.6 m true width averaging 226 g/t silver, 18.16% lead and 19.42% zinc in the Escondida body of the Cachi Cachi Mine. Mineralization remains open to depth.
  
• On August 29, 2013 the Company announced that drilling at its Yauricocha Mine in Peru has extended mineralization to depth at the previously identified exploration target below Central Mine Area at the Yauricocha Mine. These results demonstrate that the mineralization in the various ore bodies of the Central Mine Area continues below the 1270 Level and remains open to depth. These results support the previous statements that high-grade ore continues to depth in the Central Mine Area, drilling has significantly extended mineralization of the Rosaura ore body over a strike length of 150 m and more than 250 m to depth, which will add tonnage to the resources when an updated NI 43-101 estimate is completed later this year. Additional drilling will be done to extend other bodies below current workings with the intent of increasing known reserves and resources in the future.

Corporate Events

• On July 5, 2013 the Company announced that its common shares were approved for listing on the TSX and commenced trading on the TSX at the opening of the market on July 8, 2013 under the symbol ?gSMT?h.
  
• On August 23, 2013 Sierra Metals announced that it signed an amended and restated dealer agreement (the ?gAmended Agreement?h) with a designated broker (the ?gBroker?h) in respect of its previously announced normal course issuer bid (?gNCIB?h). The Company and the Broker entered into a dealer agreement dated March 26, 2013, as amended on May 10, 2013, whereby the Broker was engaged to operate an automatic share purchase plan (?gASPP?h) under the NCIB. The primary amendment agreed between the parties under the Amended Agreement was the conversion of the ASPP into a discretionary share purchase plan (?gDSPP?h). Pursuant to the DSPP, the Broker will only trade with the Company?fs express instructions.
  
• On September 19, 2013 the Company announced the appointment of Mr. Igor Gonzales to its Board of Directors. Mr. Gonzales is originally from Peru and has more than 30 years of experience in the mining industry. He is currently a member of the Board of Directors of HudBay Minerals Inc. From 1998 to 2013, Mr. Gonzales was with Barrick Gold Corporation, most recently as Executive Vice President and Chief Operating Officer. Between 1980 and 1996, Mr. Gonzales served in various roles with Southern Peru Copper Corporation. Mr. Gonzales has a Bachelor of Science degree in Chemical Engineering from the University of San Antonio Abad in Cusco, Peru, and was a Fulbright Scholar at the New Mexico Institute of Mining and Technology, where he earned a Master of Science degree in Extractive Metallurgy.
  
• On October 17, 2013 the Company amended its acquisition financing at Dia Bras Peru, its wholly owned subsidiary, and closed a new $60 million credit facility at Corona. The main changes on the acquisition financing include: extended tenor from 3 to 5 years, lower interest rates from Libor + 4.50% to Libor + 4.15%, less restrictions on capital expenditures, and more flexibility to transfer excess cash among the Company?fs subsidiaries. Consequently, with this debt refinancing, Sierra Metals has strengthened its liquidity, enhanced its financial flexibility and secured the capital required to execute its medium term plans.

Quality Control

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?fs shares trade on the Bolsa de Valores de Lima and the Toronto Stock Exchange under the symbol ?gSMT?h.

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

Forward-Looking Statements

Except for statements of historical fact contained herein, the information in this press release may constitute ?gforward-looking information?h within the meaning of Canadian securities law. Other than statements of historical fact, all statements are ?gforward-looking statements?h, which involve various known and unknown risk and uncertainties and other factors, including market conditions that may affect the Company?fs 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.