TORONTO, Aug. 3, 2018 /CNW/ - Sierra Metals Inc.
(TSX: SMT) (BVL: SMT) (NYSE AMERICAN: SMTS) ("Sierra Metals" or "the Company") has filed a technical report prepared in
accordance with National Instrument 43-101 ("NI 43-101") on the Cusi Mine (the "Report"). The Report supports the disclosure made
by the Company in its news release dated June 18, 2018 entitled "Sierra Metals Announces
Preliminary Economic Assessment Results for a 315% Output Expansion at its Cusi Mine in Mexico
Yielding a 75% Internal Rate of Return."
The Report is based on technical inputs from various independent consulting groups, including; SRK, Redco, Anddes, Kappes
Cassiday and Flopac and was compiled under National Instrument 43-101 standards by Mining Plus Peru SAC. There are no material
differences in the Preliminary Economic Assessment results contained in the Report from those disclosed in the June 18, 2018 news release.
This subsequent report is based on the results from a 43-101 Technical Report on the Cusi Mine dated February 9, 2018 with an effective date of August 31, 2017 entitled "NI 43-101
Technical Report on Resources Cusi Mine Mexico", that was prepared by independent SRK Consulting (U.S.), Inc.
The Report included PEA results with:
- After-tax Net Present Value (NPV): US$92.2 Million at an 8% discount rate
- After-tax Internal Rate of Return (IRR): 75%
- After-tax Payback Period: 4.6 years
- Life of Mine Capital Cost: US$104.5 Million
- Net After-tax Cash Flow: US$150.6 Million
- Total Operating Unit Cost: US$41.36/tonne
- Plant Processing Rate: Currently 650 tonnes per day (TPD) growing to 1,200 TPD by Q1 2019 and 2,700 TPD by
mid-2021
- Average Silver Recovery Rate 87%
- Mine Life: 9 years based on existing Mineral Resource Estimate
- Life of Mine Silver Production Payable: 30 Million Ounces
The Report dated July 31, 2018 with an effective date of August 31,
2017 is entitled "NI 43-101 Preliminary Economic Assessment (PEA) for the Cusi Mine,
Chihuahua State, Mexico" and was prepared by independent consultant Mining Plus Peru
SAC.
Signed by Qualified Persons:
Enrique Rubio, Ph.D.
Giovanny Ortiz, BSc, PGeo, FAusIMM,
Gordon Babcock, P.Eng.
Americo Zuzunaga, MausIMM CP
Augusto Chung, FAusIMM CP
The information in this announcement regarding the PEA results included in the Report is qualified in its entirety by
reference to the Report. The Report is available for review on SEDAR (www.sedar.com), EDGAR (www.SEC.gov) and the
Company's website (www.sierrametals.com).
Quality Control
All technical data contained in this news release has been reviewed and approved by:
Gordon Babcock, P.Eng., Chief Operating Officer and a Qualified Person under National
Instrument 43-101 – Standards of Disclosure for Mineral Projects.
Americo Zuzunaga, MAusIMM CP (Mining Engineer) and Vice President of Corporate Planning is a
Qualified Person and chartered professional qualifying as a Competent Person under the Joint Ore Reserves Committee (JORC)
Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.
Augusto Chung, FAusIMM CP (Metallurgist) and Consultant to Sierra Metals is a Qualified Person
and chartered professional qualifying as a Competent Person on metallurgical processes.
About Sierra Metals
Sierra Metals Inc. is 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 key discoveries and still has many more exciting brownfield exploration opportunities at all three
Mines in Peru and Mexico that are within close proximity to the
existing mines. Additionally, the Company also has large land packages at all three mines with several prospective regional
targets providing longer-term exploration upside and mineral resource growth potential.
The Company's Common Shares trade on the Bolsa de Valores de Lima and on the Toronto Stock
Exchange under the symbol "SMT" and on the NYSE American Exchange under the symbol "SMTS."
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Forward-Looking Statements
This press release contains "forward-looking information" and "forward-looking statements" within the meaning of Canadian and
U.S. securities laws related to the Company (collectively, "forward-looking information"). Forward-looking information includes,
but is not limited to, statements with respect to the Company's operations, including the anticipated developments in the
Company's operations in future periods, the Company's planned exploration activities, the adequacy of the Company's financial
resources, and other events or conditions that may occur in the future. Statements concerning mineral reserve and resource
estimates may also be considered to constitute forward-looking statements to the extent that they involve estimates of the
mineralization that will be encountered if and when the properties are developed or further developed. These statements relate to
analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and
assumptions of management. Any statements that express or involve discussions with respect to predictions, expectations, beliefs,
plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such
as "expects", "anticipates", "plans", "projects", "estimates", "assumes", "intends", "strategy", "goals", "objectives",
"potential" or variations thereof, or stating that certain actions, events or results "may", "could", "would", "might" or "will"
be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical
fact and may be forward-looking information.
Forward-looking information is subject to a variety of risks and uncertainties, which could cause actual events or results to
differ from those reflected in the forward-looking information, including, without limitation, risks inherent in the mining
industry including environmental hazards, industrial accidents, unusual or unexpected geological formations, floods, labour
disruptions, explosions, cave-ins, weather conditions and criminal activity; commodity price fluctuations; higher operating
and/or capital costs; lack of available infrastructure; the possibility that future exploration, development or mining results
will not be consistent with the Company's expectations; risks associated with the estimation of mineral resources and the
geology, grade and continuity of mineral deposits and the inability to replace reserves; fluctuations in the price of commodities
used in the Company's operations; risks related to foreign operations; changes in laws or policies, foreign taxation, delays or
the inability to obtain necessary governmental permits; risks relating to outstanding borrowings; issues regarding title to the
Company's properties; risks related to environmental regulation; litigation risks; risks related to uninsured hazards; the impact
of competition; volatility in the price of the Company's securities; global financial risks; inability to attract or retain
qualified employees; potential conflicts of interest; risks related to a controlling group of shareholders; dependence on third
parties; differences in U.S. and Canadian reporting of mineral reserves and resources; potential dilutive transactions; foreign
currency risks; risks related to business cycles; liquidity risks; reliance on internal control systems; credit risks, including
risks related to the Company's compliance with covenants with respect to its BCP Facility; uncertainty of production and cost
estimates for the Yauricocha Mine, the Bolivar Mine and the Cusi Mine; and other risks identified in the Company's filings with
Canadian securities regulators and the U.S. Securities and Exchange Commission ("SEC"), which filings are available at www.sedar.com and www.sec.gov, respectively.
This list is not exhaustive of the factors that may affect any of the Company's forward-looking information. Forward-looking
information includes statements about the future and are inherently uncertain, and the Company's actual achievements or other
future events or conditions may differ materially from those reflected in the forward-looking information due to a variety of
risks, uncertainties and other factors. The Company's statements containing forward-looking information are based on the beliefs,
expectations, and opinions of management on the date the statements are made, and the Company does not assume any obligation to
update forward-looking information if circumstances or management's beliefs, expectations or opinions should change, other than
as required by applicable law. For the reasons set forth above, one should not place undue reliance on forward-looking
information.
Note Regarding Reserve and Resource Estimates
All reserve and resource estimates reported by the Company are calculated in accordance with the Canadian National Instrument
43-101 - Standards of Disclosure for Mineral Projects and the Canadian Institute of Mining and Metallurgy Classification
system. These standards differ significantly from the requirements of the SEC. The differences between these standards are
discussed in our SEC filings. Mineral resources which are not mineral reserves do not have demonstrated economic viability.
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SOURCE Sierra Metals Inc.
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