Vancouver, BC – July 17, 2013 – Sierra Metals Inc. (TSX:SMT)(BVL:SMT) (“Sierra Metals” or the “Company”) is pleased to announce a new silver resource estimate on its Cusihuiriachic Property (Cusi), Chihuahua State, Mexico.  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 (“Gustavson”) of Lakewood, Colorado.

Press Release Highlights:

• Sierra Metals increases its silver resource estimate five-fold at the Cusi Mine, Mexico


• The total estimated Indicated Mineral Resources for the Cusi Property with exploration drilling information as of the end of December 31, 2012 are:




• 1,380,000 tonnes averaging 165 g/t Ag, 0.30% Pb and 0.29% Zn at a cut-off grade of 90.0 g/t Ag, which contain 7.3 million oz of silver


• Total estimated Inferred Resources are:




• 1,651,000 tonnes averaging 273 g/t Ag, 0.14% Pb and 0.08% Zn at the same cut-off that contain 14.6 million oz of silver.


• Drilling continues with the objective of expanding the resources of the property, especially in the Veta de Contacto and Santa Rosa areas as well as extensions of the Promontorio and Santa Eduwiges structures.  These resources do not yet include the results from this year’s exploration drilling.

“Drilling and geologic mapping continue to demonstrate the upside potential of the Cusi property”, stated Daniel Tellechea, President & CEO of Sierra Metals.  “These results are very encouraging as they show sufficient geologic potential for Sierra to contemplate investment decisions concerning the Cusi project. We consider this resource estimate a first step in quantifying the size of the multiple silver-rich areas at our Cusi property.  Note that none of the successful drilling results reported at Cusi this year is reflected in the resources and should be included for our next resource update later this year. ”

While aggressively pursuing its target of reaching 500 tonnes per day production from the Cusi property (see press release of May 28, 2013), the Company’s geologic mapping is identifying areas with extensive potential for additional mineralization. 

Methods of Estimation

The major structures and mineralized zones were evaluated by Gustavson using two different estimation methods.

1. The San Juan and La India areas are structurally-controlled epithermal veins with a single predominant structure.  These vein shapes were created as 3-D wireframes in Leapfrog™ software and grades were estimated using the drill samples coded as vein material in the logging.


2. The Promontorio and Santa Eduwiges areas are also structurally-controlled epithermal veins although they are structurally complex having formed in between the Cusi and San Nicolas faults as multiple sub-parallel shear structures.  These zones were modeled using two concentric grade shells created as 3-D wireframes in Leapfrog™ software at 50 g-Ag/t and 150 g-Ag/t.  The higher grade limit was used to restrict overextension of high grade intercepts, and the 50 g/t limit allowed for the estimation of grades spanning the reporting cutoff of 90 g/t.

Cusi Property Resource Estimate

The following tables show the Cusi Property Indicated, and Inferred Resources at various cut-off grades.  The resource estimate is effective as of December 31, 2012.  The 90 g-Ag/t cut-off grade was selected by Gustavson based on current cost data from the project.

Quality and grade are estimates and are rounded to reflect the fact that the resource estimate is an approximation.

Although the data inputs for this study were cut off as of December 31, 2012, drilling has continued.  Since that date to end-June, 2013, 11,100.15 meters have been drilled in 40 surface holes and 1,931.17 meters in 21 underground holes.  The results from these holes will be included in future studies.  Based on the results from these holes, the potential for resource expansion is significant.

In addition, 11,450 meters of surface drilling and 4,219 meters of underground drilling are planned for the remainder of 2013, the results of which – depending on the cut-off date – will be included in future studies.

The Company plans to have another resource update combined with a pre-feasibility study completed in early 2014, with the objective of converting some resources to reserves.

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.

The Cusi project is currently in commercial production.  Mining was initiated at Cusi as a pilot project to evaluate the deposit’s viability.  This has gradually expanded to the current production status although no feasibility study of reserves has been completed, which may lead to increased technical and economic risks.

Both the Cusi mine and the Mal Paso plant are permitted to include current mine plans and there are no known political or environmental risks.

Method of Analysis

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 half 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, and for Ag by AA on 50 g split sample at the ALS Chemex North Vancouver Laboratory. Assays for Pb, Zn and Cu are analyzed by Induction Coupled Plasma (ICP) at ALS Chemex.  Samples processed at the Mal Paso laboratory owned by Sierra Metals were utilized to determine mineralized zones however they were not used for the grade estimates.

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.

Recent drilling in extension of stockwork zone cut high-grade silver over wide widths; e.g., 49 m @ 753 g/t Ag (true width ± 6 m). In 2012, pilot mining production at Cusi consisted of 54,125t @ 185 g/t silver and 0.57% lead (avg. 170 tpd). Commercial production was announced on January 1, 2013. Mining is done by cut-and-fill method. The Company plans to release a NI 43-101 complaint resources report in Q3 2013.

The Company’s objective for the Cusi property in 2013 is to advance underground development from five mines, the Santa Eduwiges, Promontorio, La India, Minerva and San Juan Mines to allow mining and development both laterally and at depth. This will bring to five the total of producing mines at the Cusi project. Management believes that Cusi is only starting to reveal its full silver potential.

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.  Donald E. Hulse P.E., SME-RM of Gustavson Associates was responsible for the resource estimate.  Mr. Hulse is a Qualified Person as defined in NI 43-101 and a Principal Mining Engineer.

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