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Sierra Metals Inc.

Company Data | Introduction | Projects in Hand | Management
News Update
| Chinese

Address :  79 Wellington Street West, Suite 2100
Toronto, Ontario
Canada M5K 1H1
Tel No.: 416-366-7777
Web Site: www.sierrametals.com
E-mail: info@sierrametals.com
Contact Person: Christiana Papadopoulos
Position: Manager Investor Relations


Company Data

Traded Market: TSX
Traded Symbol: SMT
Outstanding Shares: 162,812,763
Public Float: 32,562,552
52 Week High: $ 3.68
52 Week Low: $ 2.75
Present Price: Click Here


Introduction

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Sierra Metals Inc. is a Canadian based growing polymetallic mining company with production from its Yauricocha Mine in Peru, and its Bolivar and Cusi Mines in Mexico. The Company is focused on increasing production volume and growing mineral resources.

Sierra Metals has recently had several new discoveries and still has additional brownfield exploration opportunities at all three mines in Peru and Mexico that are within or close proximity to the existing mines. Additionally, the Company has large land packages at all three mines with several prospective regional targets providing longer term exploration upside and mineral resource growth potential.


Projects in Hand

PROJECTS ON HAND

(1) Yauricocha Silver-Copper-Lead-Zinc-Gold Project, Lima, Western Central Peru

Acquired in 2011, Yauricocha is an underground polymetallic mine using the sublevel block caving and cut-and-fill mining methods. It has been in continuous operation since 1948. The Yauricocha property covers 18,000 hectares that straddle a 20 km strike length of the prolific Yauricocha fault. The mined ore is processed at the Chumpe processing plant. The daily mining rate is approximately 3,000 tonnes and the Chumpe plant has a daily capacity of 3,000 tonnes. Five different types of ore concentrates are produced, transported to Lima and then sold.

Based on current proven and probable mineral reserves and current throughput rates, Yauricocha has an expected mine life of approximately 8.7 years. However, extensive deep drilling was completed in 2016 and 2017 to expand the mine life.

Highlights:

Ownership:

Size:

82%

18,000 Hectares

Concentrates:

Polymetallic Circuit

  • · Lead, Copper and Zinc concentrate

Lead Oxide Circuit

  • · Lead Oxide concentrate

Copper Oxide Circuit

  • · Copper Oxide concentrate

Commodities:

Silver, lead, zinc, copper, gold

Reserve Life:

8.7 years

Operation:

Underground mine: sub-level caving & cut and fill

Deposit Type:

High-temperature, carbonate-replacement deposit

Mill Throughput:

3,000 tpd

Annual Production:

147 M lbs Zinc Equivalent

Reserves and Resources

On November 13, 2017, the Company released an updated NI 43-101 compliant reserve and resource estimate for the Yauricocha Mine.

Category

Tonnes
(x1000)

Ag
(g/t)

Cu
(%)

Pb
(%)

Zn
(%)

Au
(g/t)

AgEq
(g/t)

Reserves

Proven

1,836

46.8

1.08

0.84

2.59

0.64

369.3

Probable

7,081

48.8

1.23

0.75

2.38

0.49

365.9

Proven & Probable

8,917

48.3

1.20

0.77

2.43

0.52

366.6

Resources

Measured

3,094

70.0

1.72

1.23

3.20

0.79

515.7

Indicated

10,112

59.9

1.46

0.83

2.67

0.60

424.0

Measured & Indicated*

13,206

62.3

1.52

0.92

2.79

0.65

445.5

Inferred

6,632

43.0

1.19

0.47

2.16

0.55

329.24

* Measured and Indicated Resources include Proven and Probable Reserves.

Yauricocha Production

Production

2014

2015

2016

2017

Tonnes processed

885,495

832,225

897,169

1,023,491

Tonnes per day

2,545

2,378

2,563

2,924

Zinc Eq (M Lbs)

167.8

132.4

140.9

146.8

Regional Growth Potential Targets

  • Current brownfield exploration and drilling focused on the Central Mine Area which is only a small portion of the total land package.
  • La Fortuna has significant outcrops of copper. Further drilling may determine if there is potential for higher grade copper source.
  • Kilkasca was a former producing mine. This may represent a promising target for future organic growth and expansion.

(2) Bolivar and Cusi Projects, Chihuahua, Mexico

Sierra Metals Inc. is a significant mineral property holder in Mexico with a land package of over 142,000 hectares. The Company's key assets in Mexico include the 100% owned producing Bolivar and Cusi mines located in southwest and central Chihuahua State, respectively.

Bolivar Copper Project

Highlights:

Ownership:

Size:

100%

15,217 Hectares

Concentrates:

Copper with Silver and Gold by-product credits

Commodities:

Copper, silver, gold

Reserve Life:

5 years

Operation:

Underground mine; room and pillar

Deposit Type:

Copper skarn

Mill Throughput:

3,000 tpd increased to 3,500 tpd

Annual Production:

18.3 M Lbs Copper Equivalent

On April 19, 2017, the Company released an updated NI 43-101 compliant reserve and resource estimate for the Bolivar Mine.

Tonnes

(M)

Ag

(g/t)

Cu

(%)

Au

(g/t)

CuEq

(%)

CuEq

(M lb)

Probable Reserves

4.3

17.5

0.85

0.31

1.18

112.1

Indicated*
Resources

9.3

18.1

0.90

0.30

1.23

252.9

Inferred Resources

9.1

17.9

0.86

0.33

1.20

239.8

*Includes Probable

Bolivar Production

Production

2014

2015

2016

2017

Tonnes processed

665,950

830,447

950,398

887,237

Tonnes per day

1,903

2,373

2,715

2,535

Copper Eq (M lbs)

18.38

21.90

21.89

18.34

Bolivar Northwest and Bolivar West Targets

  • Titan 24 Geophysical Survey completed on Bolivar West and Northwest areas resulting in 24 anomalies and 8 high value drill targets.
  • 17,000 Meters of drilling program completed in 2017 with the majority occurring at Bolivar West where high grade copper intercepts have occurred.
  • 28 holes (12,300 meters), recently completed which provided the Company with higher Copper, Zinc and Silver grades. This detailed drill data will be used to update the current mineral resources report at the Bolivar mine.
  • Bolivar West average grade of 2.55% copper equivalent with an average true width of 9.1 meters, which is significantly above El Gallo’s current resource grade and current head grades.
  • Bolivar West still has further potential resource growth prospects and remains open to the northeast.

Cusi Silver Project

Highlights:

Ownership:

Size:

100%

11,671 Hectares

Concentrates:

Lead and Zinc concentrates with significant silver

Commodities:

Silver, zinc, lead, gold

Operation:

Underground mine in development; cut and fill

Deposit Type:

High-grade, low-sulphidation epithermal

Mill Throughput:

400 tpd increasing to 650 tpd

Annual Production:

549 K Oz Silver Equivalent

On April 17, 2017, the Company released announced an updated NI 43-101 reserve and resource estimate for the Cusi Mine:

Category

Tonnes
(M)

Ag
(g/t)

Pb
(%)

Zn
(%)

Au
(g/t)

AgEq

(g/t)

AgEq

(M oz)

Resources

Measured

0.4

225

0.55

0.68

0.13

268

3.1

Indicated

4.2

217

0.64

0.66

0.21

267

36.0

Inferred

1.6

158

0.54

0.84

0.16

207

10.9

Santa Rosa de Lima Zone

  • Average grade of the intercepts for 29,500 meter program is 372 g/t AgEq with Average true width of 3.8 meters.
  • Step out drilling extends silver mineralization beyond the Santa Rosa de Lima zone with similar high-grade characteristics.
  • Zone extended from 1 km to 1.7 km all within the 12 km structure running inside Sierra Metals property boundary.

Investment Highlights

  • Low Cash Cost Producer of Precious and Base Metals
  • Solid Financial Position with High Liquidity and Strong Operating Cash Flows
  • Strong Production and Reserve Growth
  • Diversified Production and Asset Base
  • Strong Leadership


Management

Management and Directors

Igor Gonzales, President & Chief Executive Officer, Director

Mr. Gonzales has more than 35 years of experience in the mining industry, most recently he was COO at Buenaventura and prior to that was with Barrick Gold from 1998 to 2013 where he most recently held the position of Executive VP and COO. Prior to joining Barrick, he served in various roles with Southern Peru Copper.

Gordon Babcock, P.Eng., Chief Operating Officer

Over 34 years of experience in mine production management, project development, engineering, exploration and mine consulting in precious, base metals and aggregate operations in the Americas. Most recently COO at Jaguar Mining.

Ed Guimaraes, CPA, CA, Chief Financial Officer

25 years experience in the mining industry, most recently in a consulting role and several Board directorships. He was Executive Vice-President, Finance and Chief Financial Officer of Aur Resources.

Alonso Lujan, Vice President Exploration

26 years international experience in mineral exploration with a positive track record for increasing companies' resources, output and company value. Mr. Lujan most recently spent 6 years with Mata-Trafigura as the General Manger.

Americo Zuzunaga, CP (Geologist by Mining Engineer), Vice President of Corporate Planning

Over 30 years of international experience in mining operations, mine and business planning, engineering studies, project management and optimizing development. Mr. Zuzunaga was most recently at BISA as a Technical Studies Manager.

Dante Vargas, Vice President of Human Resources and Continuous Improvement

Over 35 years of experience in management, strategic planning, organizational effectiveness and security and risk management in different countries in Latin America. Most recently he was the Operational Excellence Manager for Buenaventura.

Mike McAllister, Vice President of Corporate Development

13 years experience working with public mining companies, the last 8 as a mining specialized investor relations professional

Worked for Avion Gold, Savary Gold, Alder Resources and Black Iron. Previously Mr. McAllister worked at BMO Capital Markets

Augusto Chung, CP (Metallurgist), Consultant to Sierra Metals

34 years metallurgical and mine management experience with a positive track record for increasing companies' output and company value. Mr. Chung was most recently with Rio Alto Mining as the Vice President of Projects.

J. Alberto Arias, Chairman

Mr. Arias has over 21 years of experience in the field of international mining finance. He is the founder and President of Arias Resource Capital Management LP.

Douglas Cater, Director

Steven Dean, Director

Philip Renaud, Director

Dionisio Romero Paoletti, Director

Jose Alberto Vizquerra-Benavides, Director


News Update

On June 18, 2018, Sierra Metals Inc. has released the results of a preliminary economic assessment (PEA) regarding the Company's Cusi mine, located in Chihuahua state, Mexico.

Highlights of the PEA include:

· After-tax net present value (NPV): $92.2-million (U.S.) at an 8-per-cent discount rate;

  • After-tax internal rate of return (IRR): 75 per cent;
  • After-tax payback period: 4.6 years;
  • Life-of-mine capital cost: $104.5-million (U.S.);
  • Net after-tax cash flow: $150.6-million (U.S.);
  • Total operating unit cost: $41.36 (U.S.)/tonne;

· Plant processing rate: currently 650 tonnes per day (tpd) growing to 1,200 tpd by the first quarter of 2019 and 2,700 tpd by mid-2021;

  • Average silver recovery rate: 87 per cent;
  • Mine life: nine years based on existing mineral resource estimate;
  • Life-of-mine silver production: 30 million ounces.

On June 7, 2018, Sierra Metals Inc. reported positive drilling results from high-grade polymetallic structures including five meters of 36% zinc, 9% lead, 175 g/t silver located 250 meters east of current mine operations at the Yauricocha mine, Peru.

On June 6, 2018, Sierra Metals Inc. has released results of an infill drilling program evaluating the continuity and characteristics of geophysical anomalies that were previously tested as part of a recent Titan 24 geophysical survey and deemed high-value targets at the Bolivar property, Chihuahua, Mexico. Sierra Metals confirmed northern extension of the Bolivar northwest orebody containing an average grade of 1.37% copper and an average true width of 8.1 meters at the Bolivar mine, Mexico.

On June 5, 2018, Sierra Metals Inc. has released drilling results demonstrating the potential to increase mineral resources between Esperanza zone and Cuye zone, located within the central mine at Yauricocha. Sierra Metals deepest drilling results of 1.7 km yields high grade results and confirms new mineralized zone including 120 g/t Au, 0.85% Pb, 0.01% Cu, 7.78% Zn, 0.34 g/t Au over 2.9 meters between the Esperanza and Cuye zones at Yauricocha mine, Peru

On June 4, 2018, Sierra Metals Inc. has released the voting results from the Company's annual general meeting of shareholders held on May 30, 2018. Shareholders voted in favour of all matters brought before the meeting, including the reappointment of PricewaterhouseCoopers as auditor for the ensuing year and the election of management's nominees as directors. Sierra Metals shareholders elect seven directors at AGM.

On June 4, 2018, Sierra Metals Inc. has released drilling results demonstrating high-grade polymetallic ore and a new mineralization style of hydrothermal breccias located at the Contacto Oriental zone extension situated within the central mine at Yauricocha. Sierra Metals discovers new high-grade zone including 1.86 g/t Ag, 0.54% Pb, 0.28% Cu, 9.53% Zn over 57 meters located 220 meters east of the current mine operations at the Yauricocha mine, Peru.

On May 22, 2018, Sierra Metals Inc. has updated its mineral reserve and resource estimate at the company's Bolivar mine, located in Chihuahua state, Mexico. A technical report prepared by SRK Consulting (U.S.) Inc. in accordance with National Instrument 43-101 standards of disclosure has been completed and will be filed on SEDAR within 45 days of this news release.

On May 09, 2018, Sierra Metals Inc. had revenue of $61.7-million and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $27.4-million on throughput of 557,710 tonnes, and metal production of 4.4 million silver equivalent (AgEq) ounces, 23.4 million copper equivalent (CuEq) pounds and 47.2 million zinc equivalent (ZnEq) pounds, for the three-month period ended March 31, 2018. The Company achieved record quarterly throughput from both the Yauricocha and Bolivar Mines, continuing the successful production increases realized during 2017. Consolidated production of copper increased 11%, silver decreased 15%, lead decreased 31%, zinc was flat, and gold increased 10% compared to Q1 2017.

On April 30, 2018, Sierra Metals' Corona earns $15.1M (U.S.) in Q1. Revenues of $46.6-million versus $38.5-million in the first quarter of 2017; and the adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $24.2-million versus $20.5-million in the first quarter of 2017

On April 11, 2018, Sierra Metals Inc. has released first quarter 2018 production results featuring the highest level of consolidated quarterly throughput to date.

Results are from Sierra Metals' three underground mines in Latin America: the Yauricocha polymetallic mine in Peru, and the Bolivar copper and Cusi silver mines in Mexico.

First quarter 2018 production highlights:

  • Silver production of 600,000 ounces, a 15-per-cent decrease from the first quarter of 2017;
  • Copper production of 8.1 million pounds, an 11-per-cent increase from the first quarter of 2017;
  • Zinc production of 18.2 million pounds flat when compared with the first quarter of 2017;
  • Total of 557,710 tonnes processed, a 5-per-cent increase from the first quarter of 2017;
  • Record quarterly throughput at both the Yauricocha mine and Bolivar mine.


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