SIERRA METALS

7/24/2019 SIERRA METALS

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No. 04-2016

SIERRA METALS ANNOUNCES FINANCIAL RESULTS FOR Q4-2015 AT ITS

SUBSIDIARY SOCIEDAD MINERA CORONA IN PERU

Restructuring process at the Mine continued to temporarily depress production

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Toronto, ONFebruary 16, 2016Sierra Metals Inc. (TSX:SMT)(BVL:SMT) (Sierra Metals or theCompany) announces the filing of Sociedad Minera Corona S.A.s (Corona) unaudited FinancialStatements and Management Discussion and Analysis (MD&A) for the fourth quarter of 2015 (Q42015). The Company holds an 81.8% interest in Corona. All amounts are presented in thousands of USdollars unless otherwise stated and have not been adjusted for the 18.2% non-controlling interest.

Coronas Financial Highlights for the Three Months Ended December 31, 2015

$21.8 million of cash and cash equivalents as at December 31, 2015 Revenues of US$ 12.1 million for Q4 2015 Adjusted EBITDA of US$ (1.5) million for Q4 2015

Coronas Operational Highlightsfor the Three Months Ended December 31, 2015:

Total tonnes processed: 193,710 Silver equivalent production of 1.2 million ounces Copper equivalent production of 8.3 million pounds

The restructuring process at the Yauricocha Mine has continued to temporarily depress throughput andgrades, resulting in significantly lower production of all metals during Q4 2015. The decrease in productionwas primarily due to lower ore grades being mined and throughput interruption caused by themanagement of water control issues. The Company continued to focus on the improvement of minesequencing, improvements to safety, design and the introduction of mechanized mining methods to theMine. These implementations will enable the Company to benefit from best practices and productionincreases in the future.

Corona reported weaker financial and production results for the quarter as a consequence of lower metalprices and the introduction of important operational improvements that have temporarily impactedproduction levels, but that aim to structurally improve our operations and production capabilities, statedMark Brennan, President and CEO of Sierra Metals.

He continued, Corona continues to have a solid balance sheet and strong liquidity despite the challengesit faced in the second half of the year. It is a testament to the quality of the Yauricocha Mine that we havebeen able to meet our 2015 guidance in spite of the unanticipated need for a major restructuring programat the mine. The Yauricocha Mine shall continue to deliver growth for the Company and its shareholderswith continued brownfield exploration success such as the recently announced Esperanza Zone discoveryas well as from our production optimization program.


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The following table displays selected unaudited financial information for the three months and yearended December 31, 2015:

1Adjusted EBITDA includes adjustments for depletion and depreciation, interest expense and other financing costs, interestincome, share-based compensation, Foreign Exchange (gain) loss and income taxes; see non-IFRS Performance Measures

section of the Companys MD&A.2All-In Sustaining Cost per silver equivalent payable ounce and copper equivalent payable pound are non-IFRS performance

measures and include cost of sales, treatment and refining charges, sustaining capital expenditures, general and administrativeexpense, and selling expense, and exclude workers' profit sharing, depreciation and other non-cash provisions; Cash cost per silver

equivalent payable ounce and copper equivalent payable pound, net revenue per tonne of ore milled, and cash cost per tonne ofore milled are non-IFRS performance measures; see non-IFRS Performance Measures section of the Companys MD&A.

Coronas Financial Highlights for the Three Months and Year Ended December 31, 2015

Cash and cash equivalents of US$ 21.8 million as at December 31, 2015 compared to US$ 28.7million as at December 31, 2014. Cash and cash equivalents decreased by US$ 6.9 million. This wasmainly driven by US$ 14.9 million of operating cash flow offset by US$ 12.1 million of capitalexpenditures and US$ 9.3 million of financing activities, including dividends paid of US$ 4.9 million;

Revenues of US$ 12.1 million for Q4 2015 compared to US$ 28.1 million in Q4 2014 and revenuesof US$ 80.1 million for the year ended December 31, 2015 compared to US$ 119.0 million for thesame period in 2014. The decrease in revenue was due to the decrease in production, decrease inhead grades for all metals, and the decreases in the price of silver (17%), copper (19%), lead (14%),zinc (9%) and gold (8%) during 2015 compared to 2014.

Cash cost per silver equivalent payable ounce (at the Yauricocha Mine) of US$10.03 for Q4 2015compared to US$6.31 for Q4 2014 and US$ 7.45 for the year ended December 31, 2015 comparedto US$ 4.34 for the same period in 2014. All-in sustaining cost (AISC) per silver equivalent payableounce of US$ 17.77 for Q4 2015 compared to US$ 12.61 for Q4 2014 and US$ 14.11 for the yearended December 31, 2015 compared to US$ 10.60 for the same period in 2014. The increase in AISCduring Q4 and the year ended December 31, 2015 was due to the decrease in plant throughput andore feed head grades due to the decrease in available production from higher grade zones in theMine; and additional costs related to the mechanization and water management controls continuingto be implemented at the Mine;

Adjusted EBITDA of US$ (1.5) million for Q4 2015 compared to US$ 12.5 million for Q4 2014 andUS$ 24.9 million for the year ended December 31, 2015 compared to US$ 59.4 million for the sameperiod in 2014. The decrease in adjusted EBITDA for 2015 is due to the decrease in plant throughput,head grades and metal prices for all metals, and the increase in costs, previously discussed,

(In thousands of US dollars, except cash cost and revenue

per tonne metrics) December 31, 2015 December 31, 2014 December 31, 2015 December 31, 2014

Revenue $ 12,140 28,073 80,113 119,027

Adjusted EBITDA (1) (1,453) 12,498 24,901 59,364

Cash Flow from operations (4,794) 10,469 14,926 47,557

Gross profit (loss) (272) 18,202 27,611 64,202

Income Tax Recovery (Expense) 364 (5,251) (7,953) (18,717)

Net Income (loss) (4,441) 8,416 7,532 29,782

Net revenue per tonne of ore milled (2) 62.67 124.79 96.26 134.42

Cash cost per tonne of ore milled (2) 54.55 51.05 52.03 48.95

Cash cost per silver equivalent payable ounce (2) 10.03 6.31 7.45 4.34

All-In Sustaining Cost per silver equivalent payable ounce (2) 17.77 12.61 14.11 10.60

Cash cost per copper equivalent payable pound (2) 1.50 0.95 1.12 0.65

All-In Sustaining Cost per copper equivalent payable pound (2) $ 2.67 1.89 2.12 1.59

(In thousands of US dollars, unless otherwise stated) December 31, 2015 December 31, 2014

Cash and cash equivalents $ 21,818 28,672

Assets 105,099 111,811

Liabilities 53,093 62,449

Equity 52,006 49,362

Three Months Ended Year Ended


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Sierra Metals Inc.

Operating cash flow of US$ (4.8) million for Q4 2015 compared to US$ 10.5 million for Q4 2014 andUS$ 14.9 million for the year ended December 31, 2015 compared to US$ 47.6 million for the sameperiod in 2014;

Net loss of US$ (4.4) million, or US$ (0.12) per share, for Q4 2015 compared to net income of US$

8.4 million, or US$ 0.23 per share, for Q4 2014. Net income of US$ 7.5 million, or US$ 0.21 per share,for the year ended December 31, 2015 compared to US$ 29.8 million, or US$ 0.83 per share, for thesame period in 2014.

Coronas Operational Highlights for the Three Months and Year Ended December 31, 2015:

The following table displays the production results for the three months and year ended December 31,2015:

Quality Control

All production technical data contained in this news release has been reviewed and approved by GordonBabcock, P.Eng., Chief Operating Officer and a Qualified Person under National Instrument 43-101 Standards of Disclosure for Mineral Projects.

About Sierra Metals

Sierra Metals Inc. is a Canadian mining company focused on precious and base metals from itsYauricocha 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 andthe San Miguelito gold properties in Northern Peru. Projects in Mexico include Bacerac (silver) in the stateof Sonora, and La Verde (gold) at the Batopilas property in the state of Chihuahua.

The Companys shares trade on the Bolsa de Valores de Lima and the Toronto Stock Exchange underthe symbol SMT.

Yauricocha Production

Dec 31, 2015 Dec 31, 2014 % Var. Dec 31, 2015 Dec 31, 2014 % Var.

Tonnes processed (mt) 193,710 224,986 -14% 832,225 885,495 -6%

Daily throughput 2,214 2,571 -14% 2,378 2,545 -6%

Silver ounces 287,140 595,340 -52% 1,791,056 2,121,565 -16%

Copper pounds (000's) 1,047 2,304 -55% 5,567 7,697 -28%

Lead pounds (000's) 6,814 11,632 -41% 39,430 46,714 -16%

Zinc pounds (000's) 9,265 13,399 -31% 42,077 54,256 -22%

Gold ounces 1,041 1,360 -23% 5,018 5,683 -12%

Silver equivalent ounces (000's) (1) 1,239 2,157 -43% 6,614 8,194 -19%

Copper equivalent pounds (000's)(1) 8,259 14,378 -43% 44,094 54,625 -19%

3 Months Ended 12 Months Ended

(1) Silver equivalent ounces & copper equivalent pounds were calculated using the following metal prices: $20/oz Ag, $3.00/lb Cu, $0.85/lb Pb, $0.95/lb Zn,

$1,250/oz Au.


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

Mike McAllister

Director, Corporate DevelopmentSierra Metals Inc.1 (416) [email protected]

Ed Guimaraes

CFOSierra Metals Inc.1 (416) 366-7777

Mark Brennan

President & CEOSierra Metals Inc.1 (416) 366-7777

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-lookinginformation express, as at the date of this news release, the Companys plans, estimates, forecasts, projections,expectations or beliefs as to future events or results. These statements reflect the Companys current views withrespect to future events and are necessarily based upon a number of assumptions and estimates that, whileconsidered 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 inany 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 unlessand until required by securities laws applicable to the Company. Additional information identifying risks anduncertainties is contained in filings by the Company with the Canadian securities regulators, which filings are availableat www.sedar.com.

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