Sierra Metals announces first proven and probable ore reserves at the Bolivar mine, Mexico supporting a 10-year mine life at its expanded output rate of 2,000 TPD
No. 10-2013SIERRA METALS ANNOUNCES FIRST PROVEN AND PROBABLE ORE RESERVES ATTHE BOLIVAR MINE, MEXICO SUPPORTING A 10-YEAR MINE LIFE AT ITS EXPANDED OUTPUT RATE OF 2,000 TPD ________________________________________________________________________Toronto, Ontario – April 17, 2013 – Sierra Metals Inc. (TSX-V:SMT) (BVL:SMT) (“Sierra Metals” orthe “Company”; previously Dia Bras Exploration) is pleased to announce that a pre-feasibility study hasbeen completed by Gustavson Associates, LLC of Lakewood, Colorado, for its Bolivar copper-zinc-silver mine located in Chihuahua State, Mexico. The study, mine plan and reserve estimate arebased on Gustavson’s work and mine plan on a lower-grade portion of the resources, mainly at its ElGallo Inferior deposit. The evaluation of the higher grade portions of the mine still require furthertechnical studies, which should result in additional resources and continued feed of ore to itsprocessing plant and potentially lead to future reserve additions over the next 10 months. Press Release Highlights: • Bolivar now has Proven and Probable ore reserves totalling 7,456,806 tonnes at 1.044% Cu-Equivalent 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. • These reserves are in the Gallo Inferior deposit, which is the lower-grade portion of resources defined in the October 15, 2012 NI 43-101 Technical Report. The October 2012 report defined 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 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. • Out of the 15.4 million tonnes of Measured and Indicated Resources, 6.1 million tonnes of the highest grades deposits (i.e. Alta Ley and portions of Gallo Superior deposits) were not included at this stage in the reserve calculation because more data are required for mine planning purposes. Additional drilling is underway to complete mine planning in order to convert these Measured and Indicated resources to Proven and Probable Reserves. • Of the modelled tonnage of 9 million tonnes of the lower grade Measured and Indicated Resources, approximately 80% were converted to ore reserves. • 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 currently in commercial production at an ore throughput rate of 1,000 tons per day and should double its production capacity to 2,000 tons per day by the end of May 2013.
Daniel Tellechea, President and CEO of Sierra Metals, commented: “Sierra Metals advances anothermajor step in the Company’s evolution with the completion of this pre-feasibility study that defines forthe first time in the history of the Bolivar mine a formal proven and probable reserve. Not only doesBolivar have reserves now for the next 10 years at its expanded 2,000 ton per day mill, but we areconducting additional significant drilling in two areas to add to its mine life. First, we are drilling thoseportions of the Gallo Superior and Alta Ley that did not have sufficient density of drilling for mineplanning purposes to generate a reserve. It is important to note that the Gallo Superior and Alta Leymeasured and indicated resources are higher grade than Gallo Inferior. Second, we are focusing ourexploration drilling in target areas that have been defined by geophysics and fault extensions from theAlta Ley mine in order to increase resources and grade. These faults controlled high-grade copper-zinc mineralization in the Superior portion of the Alta Ley area, and during 2005-2011 we processed681,305 tonnes averaging 1.65% copper and 8.47% zinc. Our new targets are mineralized zones ofsimilar grade.”Sierra Metals has conducted exploration, development and mining at the Bolívar Mine since 2004.Exploration includes geologic mapping and diamond core drilling in the El Gallo, Increíble and AltaLey areas, which are located within the area of resource modeling, and in the La Narizona, LaMontura, 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 commercialproduction in November 2011 with a processing capacity of 1,000 tonnes per day. The data of priorproduction were used in the development of the pre-feasibility study preparation and as a guide tocontinued mining as well as doubling of production capacity to 2,000 tons per day, which will beeffective by the end of May 2013.This work resulted in a NI 43-101 and CIM compliant resource estimate (see press release of August30, 2012), which is the basis for this pre-feasibility study. Table 1 shows the Measured and IndicatedResources of the compliant resource estimate. Table 1: Deposit M+I with Tonnes and Grade Zone Tonnes Ag (gpt) Cu (%) Zn (%) CuEq (%) Au (gpt) El Gallo Superior 2,041,527 30.920 1.226 0.468 1.663 0.208 El Gallo Inferior 8,550,959 20.820 0.757 0.366 1.064 0.243 Increible - - - - - Not Modeled Alta Ley 4,811,788 12.161 0.649 2.530 1.446 Not Modeled Total 15,404,274 19.454 0.785 1.055 1.263 0.236 Note: CuEq>0.66 AND M&IGustavson received diamond drill data for 683 drill holes located within the area of the undergroundmine workings, and in the Bolívar III, Bolívar IV, and Piedras Verdes concessions to characterize theskarn-type mineralization. Data from these holes as well as underground mapping and sampling wereincluded in the study.
The recovered tonnes, including dilution, for each area were then scheduled for production. The totaltonnes and grades shown in Table 2 constitute the Reserve Statement for the Bolivar Project as of thedate of this pre-feasibility report. These tonnes are from only portions of the El Gallo Superior and ElGallo Inferior. Additional information, namely additional drill holes, is required to upgrade theMeasured and Indicated tonnes at Alta Ley plus un-mined areas of Gallo Superior to reserves.On an overall recovery of the Gallo Deposits, 7.46 million tonnes are mined from the Gallo Superiorand Inferior deposits (2.04 + 8.55 million tonnes for a total of 10.59 million tonnes). This is an overallrecovery of 70.5% of the material modeled. However, from the economic model where only the finallogical 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 mineable M+I.This Reserves Statement has an effective date of December 31, 2012 and was completed byGustavson as an independent report under the supervision of Karl D. Gurr, Qualified Person asdefined by NI 43-101. Table 2 Combined Reserve Statement for the Bolivar Project RoM Tonnes + Diluted Grades Tonnes Ag gpt Cu % Zn % CuEq % (no Au) Au gpt Waste 0 0.00 0.00% 0.00% 0.00% 0.000 RoM - Measured - Proven 4,339,914 22.52 0.84% 0.19% 1.11% 0.223 RoM - Indicated - Probable 3,116,893 15.35 0.65% 0.52% 0.95% 0.231 Waste - Inferred 102,002 14.56 0.62% 0.56% 0.91% 0.234 Total P+P 7,456,806 19.52 0.76% 0.33% 1.04% 0.226 Total P+P+Waste 7,558,808 19.45 0.76% 0.33% 1.04% 0.227RoM = Run of mineGustavson believes that these deposits may have additional potential as data collection andinterpretation continue, but this reserve statement provides a snapshot at this point in time.Continued exploration success at the mine may justify further production expansion in the future.Quality AssuranceThe technical content of this news release has been approved by Thomas L. Robyn, Ph.D., CPG, RPG, aQualified Person as defined in NI 43-101 and Senior Vice President, Exploration, for Sierra Metals, Inc.About Sierra MetalsSierra Metals Inc. is a Canadian mining company focused on precious and base metals from its Yauricochamine in Peru and its Bolivar mine in Mexico. The Company is also advancing its Cusi silver project in Mexicofrom advanced development into commercial production. In addition, Sierra Metals is xploring several preciousand base metal targets in Peru and Mexico. Projects in Peru include Adrico (gold), Victoria (copper-silver) andIpillo (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 LasColoradas (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 Matt Morrish President & CEO Director, Investor Relations
Sierra Metals Inc. Sierra Metals Inc. 1 (866) 493‐9646 1 (866) 493‐9646This press release does not constitute an offer to sell or solicitation of an offer to buy the securities in the UnitedStates or any other jurisdiction. The Common Shares will not be and have not been registered under the UnitedStates Securities Act of 1933, as amended, and may not be offered or sold in the United States absentregistration 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) acceptsresponsibility for the adequacy or accuracy of this release.Forward-Looking StatementsExcept 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 historicalfact, all statements are “forward-looking statements”, which involve various known and unknown risk anduncertainties and other factors, including market conditions that may affect the Company’s ability to execute itscurrent business plan. Actual results might differ materially from results suggested in any forward-lookingstatements. The Company assumes no obligation to update the forward-looking statements, or to update thereasons why actual results could differ from those reflected in the forward-looking statements unless and untilrequired by securities laws applicable to the Company. Additional information identifying risks and uncertaintiesis contained in filings by the Company with the Canadian securities regulators, which filings are available atwww.sedar.com.