Yauricocha

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No. 01-2016

Sierra Metals discovers a significant new high grade zone at its Yauricochamine in Peru

Thickest high-grade sulfide intercepts in the 60 year history of the mineadjacent to existing underground operations

Announces investor conference call and webcast to review drill results

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Dri l l hole highl igh ts include:

Hole ESP-10: 1.1% Cu, 4.9% Zn, 2.2% Pb, 0.25 gp t Au, 61.2 gp t Ag over 70.6mHole ESP-14: 3.2% Cu, 1.7% Zn, 0.4% Pb, 1.01 gp t Au, 48.5 gp t Ag over 69.2m

Hole ESP-15: 1.8% Cu, 3.2% Zn, 1.4% Pb, 0.32 gp t Au, 61.5 gp t Ag over 70.0m

Toronto, ON January 28, 2016 Sierra Metals Inc. (TSX: SMT) (BVL: SMT) (SierraMetals or the Company) today announced the discovery of a new high grade sulfide zone,referred to as the Esperanza zone, located 400 metres north of the central mine area, alongstrike from current mining activities. The discovery comes as part of ongoing drill testing ofpriority targets at its Yauricocha Mine located 150km east southeast of Lima in the YauricochaMining District (Cordillera Occidental), Peru.

The Esperanza zone has returned the thickest sulfide intercepts in the 60 year mining historyat Yauricocha. Hole ESP-14 returned a length weighted average of 3.2% Cu, 1.7% Zn, 0.4%Pb, 1.01 gpt Au, 48.5 gpt Ag over 69.2 metres, hole ESP-15 returned a length weightedaverage of 1.8% Cu, 3.2% Zn, 1.4% Pb, 0.32 gpt Au, 61.5 gpt Ag over 70.0 metres and holeESP-10 returned a length weighted average of 1.1% Cu, 4.9% Zn, 2.2% Pb, 0.25 gpt Au, 61.2gpt Ag over 70.6 metres. The mineralization is hosted by a thick sequence of marble andconsists of sulfide replacement and variably altered copper-magnetite skarn (chalcopyrite,bornite, chalcocite +/- native copper) with extensive lead and zinc sulfide replacement.

The area was identified as a high priority target adjacent to and along strike from the currentunderground mining activity. To the end of December 2015, a total of 15 holes (total of 3,922.8metres) were drilled through the target area from the 870 and 920 level of the mine (607metres and 657 metres below surface respectively). All holes intersected the zone with theexception of ESP-11 which tested the upper limit of the zone. Drilling to date demonstratesthe zone has a strike length of at least 240 metres, has been successfully tested to a depth of170 metres below the 870 level and is open along strike at depth. The majority of this zoneappears to be located below the 870 level however additional drilling is required to define theupper limit of the zone. There are currently two drills operating on the 870 level that arefocused on delineation and expansion of the Esperanza zone as it is a priority to fast track thismaterial into the production schedule. Underground development has been initiated to supportadditional drill locations for further exploration and delineation of the zone. Assays received todate for all holes are summarized as length weighted composite intervals in Table 1, below.

The discovery of the Esperanza zone demonstrates the untapped potential close to theexisting mine workings at Yauricocha stated Matthew Wunder, Vice President Exploration ofSierra Metals. Intercepts such as returned in ESP-10, ESP-14 and ESP-15 are not commonin mineral exploration and suggests that we are closing in on a more productive part of themineralizing system and may lead to the source of the hydrothermal system. There is


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ESP-10 71.0 77.8 6.8 82.2 3.6 0.8 13.3 0.16

ESP-10 92.2 162.8 70.6 61.2 2.2 1.1 4.9 0.25 Esp

ESP-10 Incl. 92.2 102.0 9.8 84.9 5.4 0.2 12.0 0.10 Esp

ESP-10 Incl. 113.05 121.0 7.95 168.2 7.7 2.1 14.4 0.41 Esp

ESP-10 Incl. 129.2 135.0 5.8 97.0 0.2 5.4 0.7 0.52 Esp

ESP-10 Incl. 156.4 162.8 6.4 75.2 1.4 1.6 4.4 0.54 Esp

ESP-11 No Significant Values

ESP-12 146.0 153.8 7.8 47.3 3.9 0.1 6.2 0.19 Esp

ESP-13 132.4 140.5 8.1 54.6 0.3 0.0 0.7 0.25 Esp

ESP-14 53.7 57.0 3.3 438.3 0.6 8.1 2.4 0.26

ESP-14 125.0 194.2 69.2 48.5 0.4 3.2 1.7 1.01 Esp

ESP-14 Incl. 125.0 134.0 9.0 85.8 2.6 2.3 10.5 0.39 Esp

ESP-14 Incl. 152.8 166.0 13.2 45.6 0.0 3.7 0.0 0.43 Esp

ESP-14 Incl. 171.0 194.2 23.2 73.2 0.0 6.0 0.1 1.89 Esp

ESP-14 and Incl. 171.0 187.7 16.7 89.6 0.1 7.2 0.1 2.39 Esp

ESP-15 55.65 75.8 20.15 147.8 0.1 5.6 0.1 0.36

ESP-15 Incl. 56.0 64.0 8.0 156.1 0.1 6.5 0.2 0.46

ESP-15 131.0 201.0 70.0 61.5 1.4 1.8 3.2 0.32 Esp

ESP-15 Incl. 138.0 149.1 11.1 96.6 0.7 2.1 2.8 0.47 Esp

ESP-15 Incl. 153.2 178.5 25.3 115.4 2.4 3.8 5.8 0.57 Esp

ESP-15 Incl. 198.9 201.0 2.1 91.4 10.0 0.3 17.3 0.51 Esp

ESP-15 215.0 235.0 20.0 35.2 0.3 1.6 0.6 0.70 Esp

ESP-15 Incl. 223.7 235.0 11.3 41.6 0.1 2.5 0.3 0.82 Esp

All reported intercepts are core length as further drilling is required to determine true thicknesses.

A plan map of the Yauricocha mine area is shown in Figure 1, Figure 2 is a plan map through the Esperanza zoneat the 920 level and Figures 3, 4 and 5 are cross sections through the Esperanza zone (reference lines for thecross sections are located on Figure 2). A complete list of assays for the drill holes presented in this news releaseare available on the Sierra Metals website at:https://sierrametals.com/files/doc_news/2016/News-Release-Jan-28-2016-Individual-Assay-Table-for-Web-site-1130am-Jan-27th-2016.pdf

Conference Call Webcast

Sierra Metals senior management will host a conference call on Tuesday, February 2, 2016at 10:30 AM (E.S.T.) to discuss the Companys drill results at Esperanza.

Via Webcast:

A live audio webcast of the meeting will be available on the Companys website

www.sierrametals.com or at:

http://event.on24.com/wcc/r/1126434/ACAD9C9D4973272BE4B28BD5C5942BB4

The webcast along with presentation slides will be archived for 180 days on

www.sierrametals.com
https://sierrametals.com/files/doc_news/2016/News-Release-Jan-28-2016-Individual-Assay-Table-for-Web-site-1130am-Jan-27th-2016.pdfhttps://sierrametals.com/files/doc_news/2016/News-Release-Jan-28-2016-Individual-Assay-Table-for-Web-site-1130am-Jan-27th-2016.pdfhttps://sierrametals.com/files/doc_news/2016/News-Release-Jan-28-2016-Individual-Assay-Table-for-Web-site-1130am-Jan-27th-2016.pdfhttp://event.on24.com/wcc/r/1126434/ACAD9C9D4973272BE4B28BD5C5942BB4http://event.on24.com/wcc/r/1126434/ACAD9C9D4973272BE4B28BD5C5942BB4http://event.on24.com/wcc/r/1126434/ACAD9C9D4973272BE4B28BD5C5942BB4https://sierrametals.com/files/doc_news/2016/News-Release-Jan-28-2016-Individual-Assay-Table-for-Web-site-1130am-Jan-27th-2016.pdfhttps://sierrametals.com/files/doc_news/2016/News-Release-Jan-28-2016-Individual-Assay-Table-for-Web-site-1130am-Jan-27th-2016.pdf


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Via phone:

For those who prefer to listen by phone, dial-in instructions are below. To ensure yourparticipation, please call approximately five minutes prior to the scheduled start time of thecall.

Participant Number (Toll Free Peru): 0800-53-840Participant Number (Toll Free North America): (877) 201-0168Participant Number (International): (647) 788-4901Conference ID: 40995275


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Figure 1 - Plan View


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Figure 2 - Plan View


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Figure 3Cross Section


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Figure 4 -Cross Section


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Quality Control

The quality assurance-quality control (QA-QC) program employed by Sierra Metals has beendescribed in detail in the NI-43-101 report for Yauricocha dated May 25, 2012, prepared byGustavson Associates in Denver, which is available for review on Sedar. Standards andblanks are inserted into the sample stream and duplicate samples are sent to the ALS PeruS.A. lab (Chemex) in Lima as per internal quality control procedures.

Qualfied Persons

The technical content of this news release has been approved by Matthew Wunder, B.Sc,P.Geo. and Qualified Person as defined in NI-43-101.

About Sierra Metals

Sierra Metals Inc. is a Canadian mining company focused on production of precious and basemetals from its Yauricocha Mine in Peru, and its Bolivar Mine and Cusi Mine in Mexico. Inaddition, Sierra Metals is exploring several precious and base metals targets in Peru andMexico. 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 inNorthern 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 Companys shares trade on the Lima Stock Exchange (Bolsa de Valores de Lima) andon the TSX under the symbol SMT.

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

Mike McAllisterDirector, Corporate DevelopmentSierra Metals Inc.(416) 366-7777Email: [email protected]

Matthew WunderVice President, ExplorationSierra Metals Inc.(416) 366-7777

Mark BrennanPresident & CEOSierra Metals Inc.(416) 366-7777

Forward-Looking Statements

Except for statements of historical fact contained herein, the information in this press releasemay constitute forward-looking information within the meaning of Canadian securities law.Statements containing forward-looking information express, as at the date of this newsrelease, the Companys plans, estimates, forecasts, projections, expectations or beliefs as tofuture events or results. These statements reflect the Companys current views with respectto 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 resultsmight differ materially from results suggested in any forward-looking statements. TheCompany 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 statementsunless required by securities laws applicable to the Company. Additional informationidentifying risks and uncertainties is contained in filings by the Company with the Canadiansecurities regulators, which filings are available atwww.sedar.com.
http://www.sedar.com/http://www.sedar.com/http://www.sedar.com/http://www.sedar.com/

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