Vancouver, BC – May 13, 2015

• Record Throughput Increased 13.5%
• Measured & Indicated Mineral Resources Increased by 86% at Yauricocha Mine

(Please note that all dollar amounts in this news release are expressed in U.S. dollars unless otherwise indicated. Refer to the Company's first quarter 2015 management discussion and analysis ("MD&A") and financial statements available on the Company's website at www.sierrametals.com and on SEDAR at www.sedar.com for more information.)

Sierra Metals Inc. (TSX:SMT) (BVL:SMT) (“Sierra Metals” or the “Company”) today reported revenue of $34.7 million and an adjusted EBITDA of $14.0 million on record throughput of 472,407 tonnes of ore in the first quarter ended March 31, 2015 ("Q1").  The Company continued to reduce operational costs with a cash cost per tonne processed of $38.05.

Mark Brennan, President and CEO of Sierra Metals, commented: “The Company’s exceptional production and low production costs helped mitigate a downturn in metal prices during the first quarter. We were still able to achieve strong revenues and operating cash flows to further strengthen our balance sheet and financial outlook. The continued production growth at our three operating mines provides Sierra with a strong outlook for the remainder of 2015.” Mr. Brennan continued: “The Company expects to continue expanding and upgrading the mineral reserves and resources at all three mines through mine development and exploration, and continue to deliver solid production and financial results during 2015 and beyond.”

Q1 2015 Operating and Financial Highlights

Financial Update

Revenue from metals payable was $34.7 million in Q1 2015, a decrease from $41.7 million reported in Q1 2014. Lower revenue in the quarter was mainly due to decreases in the prices of silver, copper, lead and gold compared to Q1 2014 of 17%, 16%, 15% and 5%, respectively. This was partially offset by a 13% increase in plant throughput and higher silver head grades at all three mines as well as higher silver recoveries at Yauricocha which resulted in a 27% increase in silver payable ounces.

Cash cost (after by-product credits) per silver payable ounce was $(7.40) vs. Q1 2014: $(21.11) at Yauricocha, cash cost per silver payable ounce was $7.83 vs. Q1 2014: $10.70 at Cusi and cash cost per copper payable pound was $1.56 vs. Q1 2014: $1.57 at Bolivar for Q1 2015. The increase in cash costs at Yauricocha during Q1 2015 was due to the reduction of by-product credits which were the result of the lower metal prices discussed previously, lower zinc head grades, partially offset by the increase in silver payable ounces during the quarter. The decrease in costs at Cusi was due to higher silver payable ounces and by-product credits due to higher plant throughput. Bolivar’s cash costs remained consistent with Q1 2014 as the increase in the copper payable pounds offset the decrease in by-product credits due to the decline in silver and gold prices.

A net loss attributable to shareholders of $(0.7) million, or $0.00 per share was reported for Q1 2015 compared to net income of $2.1 million, or $0.01 per share in Q1 2014. The decrease in net income attributable to shareholders was due to decreased revenues and lower by-product credits, as well as an increase in the interest expense and other finance costs.

Adjusted EBITDA of $14.0 million for Q1 2015 decreased compared to $17.2 million in Q1 2014. The decrease in adjusted EBITDA in Q1 2015 was due to the decrease in revenues.  Adjusted net income attributable to shareholders of $4.1 million or $0.03 per share for Q1 2015 decreased compared to $7.2 million or $0.05 per share for Q1 2014.

A large component of the net income (loss) for every period is the non-cash depletion charge in Peru which was $8.1 million in Q1 2015 (Q1 2014: $8.3 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 54% increase in the mineral reserves at Yauricocha based on the NI 43-101 reports dated October 2012 and November 2013;

Cash flow generated from operations was $3.5 million for Q1 2015 compared to $10.8 million in Q1 2014. The decrease in cash flow was mainly the result of lower revenues generated, lower gross margins achieved and a decrease in payables. Cash and cash equivalents of $38.2 million were reported as at March 31, 2015 compared to $41.3 million at the end of 2014. Cash and cash equivalents have decreased by $3.1 million during Q1 2015 due to the capital expenditures incurred in Mexico and Peru of $(8.3) million, and repayment of loans and credit facilities of $(6.1) million, offset by $3.6 million of operating cash flow and proceeds from the issuance of a credit facility in Mexico of $8.0 million.

Operational Update

For Q1 2015, the Company achieved the highest recorded quarterly throughput of 472,407 tonnes. Which included silver (‘‘Ag’’) production of 899,691 ounces (‘’oz’’) which increased by 24% compared to 728,211 oz in Q1 2014. The increase in silver production was due to higher plant throughput and silver head grades at all three mines and higher silver recoveries at Yauricocha.  Copper (‘‘Cu’’) production of 6.5 million pounds (‘’lb’’) increased by 13% compared to 5.7 million lb in Q1 2014. The increase in copper production was due to the ramp up from 1,000 tonnes per day (“tpd”) to 2,000 tpd at Bolivar which resulted in 21% higher throughput during the quarter. Lead (‘‘Pb’’) production of 12.1 million lb was consistent with the 12.2 million lb in Q1 2014. Zinc (‘‘Zn’’) production of 10.5 million lb decreased by 18% compared to 12.7 million lb in Q1 2014. The decrease in zinc production was due to the decrease in zinc head grades at Yauricocha. Gold (‘‘Au’’) production of 2,661 oz increased by 7% compared to 2,485 oz in Q1 2014. The increase in gold production during the quarter was due to higher plant throughput at all three mines and higher head grades and recoveries realized at the Bolivar Mine and higher recoveries at the Yauricocha Mine.

The Company is on pace to exceed 2015 production guidance for all metals, except zinc and gold, as well as silver equivalent ounces and its capital expenditure guidance. Zinc and gold production are expected to increase sufficiently during the remainder of 2015 to meet guidance.

Project Development Update

On March 31, 2015 the Company announced that Yauricocha’s combined Measured and Indicated Mineral Resources have been increased by over 5,270,000 tonnes, representing an 86% increase over the previously reported mineral resource. This is supported by an National Instrument 43-101 technical report entitled “NI 43-101 Technical Report on the Yauricocha Mine, Yauyos Province Peru” dated May 11, 2015 (with an effective date of December 31, 2014) prepared for the Company by Gustavson and Associates, a copy of which has been filed and is available under the Company’s profile on SEDAR at www.sedar.com. Over the same period, Mineral Reserves have been reduced by approximately 1,017,000 tonnes following mine depletion, the exclusion of brownfields zones (Victoria and Ipillo Mines) and the application of current metal prices and smelter terms.

During Q1 2015, the Company performed diamond drilling in the Antacaca South orebody, at the Yauricocha Mine with an aim to explore and define the continuity of mineralization at depth below the 920 level. Nine holes were drilled with a total length of 1956.30 meters.

Mine development at Bolivar during Q1 2015 totaled 974 meters. Drilling began at the La Sidra exploration project which has a quartz vein with an average width of 3 meters with head grades of 300g/t Ag.

At Cusi, development drilling has reached 45 meters below level 13 of the Santa Eduwiges Mine and the Company is developing the B vein, (above Santa Marina) obtaining 230g/t Ag, and 1.23% Pb. The San Nicolas vein on level 13 obtained head grades of 202g/t Ag and 0.55% Pb. Also during Q1 2015, at the Cusi property, there was development of 50 meters into the La Mexicana vein which had head grades of 119g/t and 1.59% Pb.

Exploration Update

At Yauricocha, during Q1 2015 Sierra drilled 10 holes totaling 1,242.6 meters of resource expansion drilling on the Rosaura and Antacaca Sur orebodies with intercepts of ore grade and widths.  The most notable is ANTS-13-15-01 that cut 17.9 meters true width averaging 124 g/t silver, 3.74% lead, 5.28% zinc, 0.77% copper and 1.02 g/t gold.

At the Cusi property, the Company continues drilling multiple vein targets in both the Promontorio and Santa Eduwiges mines. During Q1 2015, 2,507.15 meters were drilled in 23 underground holes in both areas. Several high-grade intercepts were made, such as: DC15M268 with 2.85 meters core length averaging 438 g/t silver; and, DC15M275 with 2.9 meters core length averaging 553 g/t silver (Malpaso lab results).

Quality Control

The technical content of this new release has been approved by Thomas L. Robyn, Ph.D., CPG, RPG, a Qualified Person as defined in NI 43-101.

Weblinks

The Company's unaudited condensed interim consolidated financial statements and MD&A for the three months ended March 31, 2015, are available on the Company's website at: sierrametals.com/investors/reports/ and under the Company´s profile on SEDAR at www.sedar.com.

Postponement of First Quarter 2015 Results Conference Call Webcast

Due to the recent changes in Senior Management at the Company, we will be postponing the Q1 2015 results conference call until a later date to be announced.

About Sierra Metals

Sierra Metals Inc. is a Canadian mining company focused on the production of precious and base metals from its Yauricocha Mine in Peru, and 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 the Toronto Stock Exchange under the symbol “SMT”.

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 “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.

Original Article: http://sierrametals.com/investors/news_releases/index.php?&content_id=239