Sierra Metals Announces $9 Million Drilling Budget for 2015 Following a Strategic Decision to Accelerate Resource Definition at its Three Operating Mines

VANCOUVER, Feb. 18, 2015 /CNW/ - Sierra Metals Inc. (TSX: SMT) (BVL: SMT) ("Sierra Metals" or "the Company"), is pleased to announce a $9 million budgeted exploration program for 2015 to drill over 75,000 meters on its three operating mines in Peru and Mexico and over 4,000 meters on two exploration targets in Mexico. 

The 2015 program aims to continue to expand and upgrade the mineral reserves and resources at all three mines as well as follow up on a number of high-priority exploration targets identified during the Company's prior years' exploration programs.

Program Highlights:

Audra Walsh, President and CEO of Sierra Metals, stated: "Our 2015 drilling program reflects a strategic decision to accelerate the quantification of Sierra's mineral resources on the back of important exploration and mine development advances achieved during 2014. This plan is in-line with Sierra's strong commitment to continue a 5-year track record of consistently growing the Company's reserves, resources and production at our three mines, as well as plans to identify new mineralized zones that will become targets for additional resource drilling. Particularly important are: i) The definition drilling on new mineralized zones at Yauricocha discovered in 2014; ii) Step-out drilling at the Bolivar Mine copper-silver manto orebodies; iii) Further delineation of the high-grade La Sidra gold-silver vein at Bolivar; and, iv) Plans at Cusi to continue to add reserves and resources to better quantify the dimensions of future expansion plans with a potential new mill currently under a prefeasibility study evaluation."

Yauricocha Mine, Peru

Underground drilling in 2014 led to the expansion and upgrading of mineralization at both the Central Mine and Cachi Cachi Mine.  The two deepest holes ever drilled at the Central Mine intersected high-grade copper mineralization over wide widths (Table 1), demonstrating the large vertical dimensions and continuity of these orebodies.

Table 1: Select Drill Results from the Catas Orebody, Central Mine, Yauricocha, Peru

Drill hole CAT-14-14-03 cut the Catas orebody 525 meters below the current working level 920, while hole -05 cut the orebody 575 meters below level 920.  These holes demonstrate that the orebodies continue to significant depths, as predicted by the Company's geologists over the past several years.

Additional information on these and other holes, such as longitudinal sections and cross sections, will be presented in future NI43-101 technical reports and press releases.

The 2015 program will continue to:

1. Delineate the extension of mineralization on the Antacaca Sur and Mascota deposits of the Central Mine and further explore the Antacaca Sur Extremo orebody to determine if Central Mine-type mineralization continues to the southeast (Figure 1).
2. Drill the Yauricocha Norte Extremo to test the possible extension of Central Mine mineralization to the northwest.
3. Test the depth extension of mineralization at the Cachi Cachi Mine.

An important development in 2014 was the discovery through geologic mapping of five mineralized chimney breccias in an area 400 meters west of the Central Mine. Exploration drilling from both surface and underground will follow up on the initial drill testing in 2014, which intersected multiple mineralized bodies and returned grades of up to 181 g/t silver and 10.60% zinc (SMT, December 23, 2014 press release).

Bolivar Mine, Mexico

In 2014, underground drilling expanded the copper-gold-silver mineralization at Bolivar NW while surface sampling and drilling continued to highlight the promising La Sidra silver-gold quartz vein system.

The 2015 program will continue resource expansion at the Bolívar NW, Alta Ley and Step Out zones as well as continue surface exploration drilling on several targets, including:

• La Sidra: Surface mapping and sampling has traced this silver-gold quartz vein system over an impressive 2,500 meter strike length. Drilling in 2014 over a 150 meters length of the vein intersected up to 5 g/t gold, 440 g/t silver, 2% lead and 5% zinc over widths up to 5 meters (SMT, December 23, 2014 press release; Figure 2). Drilling in 2015 will continue to test the shoot laterally and to depth.

• Lilly Norte: This 300 m x 150 m tourmaline-rich breccia pipe hosts disseminated copper mineralization and has returned grades up to 0.25% copper over 14 m of core length. The breccia pipe intrudes andesite that caps the underlying skarn layer. The exploration target is large-tonnage, copper-zinc-silver mineralization where the breccia cuts through the thick skarn horizon, similar to that now being mined at El Gallo and Alta Lay.

• Nathalie Fault: In 2013, drilling within the Upper Skarn horizon near the Nathalie Fault intersected 13.6% zinc and 0.89% copper over 10.1 m estimated true width (SMT, May 14, 2013 press release). Drilling in 2015 will test the extent of the mineralization, with a target tonnage of over 2 million tonnes.

Cusi Mine, Mexico

In 2014, a successful surface and underground drilling program concentrated on expanding and upgrading the resources for the Promontorio and Santa Eduwiges mines and testing for depth extension of several of the veins. In addition, underground development work at the Promontorio Mine exposed several hundreds of meters of mineralized shoots, some of which lie outside of the current resource estimate.

The 2015 drilling program more than triples the total meters drilled in 2014 and will focus on significant expansion of the currently defined resources at both the Promontorio and Santa Eduwiges mines, as well as surface exploration drilling at five areas: San Nicolas Central, Milagro, Candelaria, the La India/Candelaria junction, and San Juan.

Drilling will also explore the Azucarera stockwork breccia zone (Figure 3) to depth.

Regional, Mexico

Over 4,000 meters of exploration drilling has been allocated for two projects in Mexico.

At the Bacerac property in northeast Sonora, RC (reverse circulation) drilling will target the San Patricio mineralized breccia zone, a 400 m x 500 m area of historical workings where confirmation trenching and sampling by the Company returned significant values of silver and gold (SMT, October 9, 2012 press release).

At the Batopilas property in southwest Chihuahua, core drilling will target the Corralitos prospect where previous surface exploration and drilling confirmed the presence of stockwork copper-molybdenum mineralization over a 1.5 km² area that is open in all directions (SMT, November 3, 2011 press release). Mineralization appears to be controlled by NNE-trending faults and lies within a much broader area of alteration covering several square kilometers.

Quality Control

The technical content of this news release has been approved by Thomas L. Robyn, Ph.D., CPG, RPG, a 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 base metals from its Yauricocha Mine in Peru and 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 and the San Miguelito gold properties in Northern 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 Company's shares trade on the Bolsa de Valores de Lima and the TSX under the symbol "SMT".

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. Other than statements of historical fact, all statements are "forward-looking statements", which involve various known and unknown risk and uncertainties and other factors, including market conditions that may affect the Company's ability to execute its current business plan and to continue to pay a quarterly dividend. Actual results might differ materially from results suggested in any 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 unless and until required by securities laws applicable to the Company. Additional information identifying risks and uncertainties is contained in filings by the Company with the Canadian securities regulators, which filings are available at www.sedar.com.

SOURCE Sierra Metals Inc.