Sierra Metals announces new discovery at its Yauricocha Mine in Peru

• Underground drilling intersects several wide high-grade copper, lead, zinc and silver sulfide intercepts at the Cuye-Mascota area of the mine
• Second significant discovery at Yauricocha within twelve months near existing mining infrastructure

Drill hole highlights include:

Hole MAS-09: 4.90% Cu, 0.89% Zn, 0.37% Pb, 0.23 gpt Au, 226.45 gpt Ag over 18.2m
Hole MAS-17: 0.46% Cu, 17.71% Zn, 4.13% Pb, 0.94 gpt Au, 125.16 gpt Ag over 30.10m
Hole MAS-23: 0.73% Cu, 28.85% Zn, 1.45% Pb, 0.35 gpt Au, 149.00 gpt Ag over 7.55m
Hole MAS-23: 2.72% Cu, 0.43% Zn, 0.09% Pb, 2.12 gpt Au, 102.95 gpt Ag over 20.00m
Hole MAS-27: 0.39% Cu, 12.59% Zn, 3.46% Pb, 0.68 gpt Au, 91.91 gpt Ag over 9.60m
Hole MAS-27: 1.32% Cu, 0.53% Zn, 0.05% Pb, 0.87 gpt Au, 45.67 gpt Ag over 8.80m

TORONTO, Nov. 17, 2016 /CNW/ - Sierra Metals Inc. (TSX: SMT) (BVL: SMT) ("Sierra Metals" or "the Company") is very pleased to announce the discovery of a new high grade sulfide zone referred to as the "Cuye - Mascota" zone, located 200 meters north of the central mine area along strike and adjacent to current mining activities. The discovery comes as part of ongoing diamond drill brownfield exploration programs testing priority targets at its Yauricocha Mine located 150 kilometers southeast of Lima in the Yauricocha Mining District (Cordillera Occidental), Peru.

A total of seven drill holes have been drilled to date on the Cuye - Mascota orebody, which is located at the extreme south end of the Mascota oxide orebody (see plan view). Sierra Metals continues with exploration drilling activities in areas below the Cuye and Mascota ore bodies and will continue to report assay results as they become available.

Gordon Babcock, Chief Operating Officer of Sierra Metals commented: "As a result of this drilling program, continued mineralization has been identified in the Cuye - Mascota zone, as well as other important structures such as the extension of the existing Mascota zone. This has provided the Company with important information that had been previously unknown. This new information will be reported in the next resource review conducted by the Company."

The Cuye - Mascota orebody had been previously mined up to and including the 870 level horizon. The orebody was predominantly a copper sulfide deposit which was reduced to many small structures below the 870 level. Exploration carried out during 2011 and 2012 was unsuccessful between the 870 and 1020 level horizon, which was the lowest level that could be drilled at that time. Due to the results of the current development program on the 1070 level, geologists have confirmed that the Cuye - Mascota orebody continues at depth to below the 1270 level, and includes a drill intercept at the 1420 level. Geologists have also identified the transition zone of oxides to fresh lead, zinc and silver sulfide mineralization in this drilling program.

"Our brownfield exploration programs have continued to provide the Company with new targets and opportunities for resource growth within the existing Yauricocha Mine." Commented Mark Brennan, President and CEO of Sierra Metals.  "The significance of these results is that the drilling has identified a new zone 200 meters long which is still open in several directions and are high-grade wide structures. The historic Cuye copper orebody used to be one of the main cashflow generators 10 years ago at Yauricocha.  This discovery seems to have found its extension at depth with similar widths and grades as the historic Cuye Orebody located at higher levels which was thought to have been depleted. The discovery of the transition zone from oxides to sulfides at the Mascota orebody is very important because of the higher recovery rates associated with processing sulfide versus oxide ores.  Mascota has been one of our most important cashflow contributors in recent years despite its lower metal recovery resulting from being an oxide orebody."

He added "The new discoveries such as Esperanza, the "Cuerpos Pequenos" zones and now the Cuye - Mascota zone continue to offer high grade material within proximity of existing mine and infrastructure. Unlocking Yauricocha's potential through brownfield exploration and these new discoveries are a key part of the Company's growth strategy."

In Table 1 below, these holes have identified the intercept of other smaller mineralized zones parallel to the main structures Cuye and Mascota.

Table 1 - Length Weighted Composite Intervals

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

A plan view of the 1370 level with executed drill holes is shown in Figure 2 with Figures 3 showing a plan view of 1270 level with cross sections on holes Mas 09,29,1828,23,32 shown in Figure 4 Cross Section 1 up to Figure 8 Cross Section 5.

Method of Analysis

All samples were prepared at ALS Minerals (Chemex) – Lima, Peru. Assay using ICP-AES and atomic absorption for silver, zinc, lead and copper. Gold is fire assayed with atomic absorption finish. Diamond drill core samples which are sent for assay consist of ½ HQ or NQ drill core, split on site, one half with the remainder stored on site.

Quality Control

The quality assurance-quality control (QA-QC) program employed by Sierra Metals has been described in detail in the NI-43-101 report for Yauricocha dated September 9, 2016, prepared by SRK Consulting in Denver, which is available for review on Sedar. Standards and blanks are inserted into the sample stream and duplicate samples are sent to the ALS Peru S.A. lab (Chemex) in Lima as per internal quality control procedures. 

Qualified Persons

The technical content of this news release has been approved by Gordon Babcock P. Eng. 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 metals 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 Lima Stock Exchange (Bolsa de Valores de Lima) and on 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. Statements containing forward-looking information express, as at the date of this news release, the Company's plans, estimates, forecasts, projections, expectations or beliefs as to future events or results.  These statements reflect the Company's current views with respect to 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 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 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.

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SOURCE Sierra Metals Inc.