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Sierra Metals Inc
Symbol SMT
Shares Issued 163,427,335
Close 2018-06-29 C$ 3.42
Market Cap C$ 558,921,486
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Sierra Metals defines 40m wide Ag area at Santa Rosa

2018-06-29 08:54 ET - News Release

Mr. Mike McAllister reports

SIERRA METALS DEFINES 40-METRE WIDE, HIGH-GRADE SILVER STOCKWORK AREA WHICH REMAINS OPEN TO DEPTH AND WIDTH WITHIN THE SANTA ROSA DE LIMA VEIN AT ITS CUSI MINE, MEXICO

The development program at Sierra Metals Inc.'s Cusi mine has confirmed a wide, high-grade silver stockwork zone located within the Santa Rosa de Lima (SRL) vein complex. The SRL vein is a regional structure which extends on the company's property for a length of 12 kilometres. This stockwork zone is open at depth, and in width, current known dimensions are noted below. The current development program at Cusi is focused on the inclusion of the mineral resources from the SRL vein into the current mine plan. This mineralized zone extends to over 100 metres in length, 40 metres in width and 70 metres in height. The Cusi mine lies within the Sierra Madre Occidental Mountain Range and located within the municipality of Cusihuiriachi in the central portion of Chihuahua state, Mexico.

Highlights of the newly defined area include the following:

  • Size of area: 100 metres long by 40 metres wide by 70 metres high and open to depth and width. Note that this area is within the SRL complex and the SRL veins are open on strike. The typical mineralized zone density is 2.7 tonnes/cubic metre;
  • Size of area and ground conditions lend stockwork zone to be favourable for low-cost bulk mining methods;
  • Mine production plan to utilize the same equipment as the Cusi mine is using for sublevel long hole stoping including long hold drilling equipment and remote-control equipment;
  • Ground conditions review by Geotech staff identified ground conditions which only require conventional ground support techniques, screen and bolting;
  • Development program to date has resulted in mill feed grade in the attached table.

   
  
  
Tonnes Ag (g/t) Au (g/t) Pb (%) Zn (%)

4,437      205     0.07    0.12  0.15  


  

Mine production will incorporate fill into mined out areas, and the andesite cap will be allowed to cave, with fill placement coming on top of the caved area.

All development is supplying mill feed. A definition drilling program is currently in progress, and moving forward, it will provide information necessary for resource category reclassification from current potential status.

All development production was processed at the Malpaso plant, and assays obtained from Malpaso laboratory.

Alonso Lujan, vice-president of exploration at Sierra Metals, commented: "Today's press release demonstrates the existence of increased high-grade silver mineralization at Cusi with the potential for further resource development, as this area remains open at depth and along strike. The increased potential resources defined today will allow the company to utilize the highly productive exploitation method of sublevel caving and help achieve its economic objectives at the Cusi mine. This will be made possible given the morphological characteristics of the mineralized area, as well as the quality of the rock mass (RMR greater than 40). The mine design will utilize sublevel caving which is highly productive, as it substantially reduces the needs for special rock support techniques, such as steel sets and allows for greater flexibility in the usage of current existing mining equipment."

He continued: "Based on today's results management believes there is further potential to expand the SRL area but also the potential to expand resources in other areas such as the San Rafael vein and the San Nicolas vein. Management is very optimistic about the increased potential at the Cusi mine and looks forward to further exploration there."

Igor Gonzales, president and chief executive officer of Sierra Metals, stated: "These results are exceptional and are key to increasing development of the Cusi operations. With the information obtained from these recent results, management believes further development will benefit from our better understanding of the orebody at the Cusi mine." He continued: "The significance of this discovery is that it occurred as a result of mine development work at one of the first areas to be mined at SRL structure. Our plans were to mine the typical four-metre-wide veins at SRL and we encountered a 40-metre-wide stockwork associated with that zone. Our development plan is now incorporating the much wider dimensions of this zone, which has positive implications on volume and economics beyond what was previously anticipated. Mine feed from this zone should increase in the next three months and provide stability of feed to our ore processing facilities at Mal Paso. Over all, I am very pleased with these results as they increase the value of the asset and are important to our growth strategy."

Work programs are now under way developing the primary level in this zone. With the draw points in place, work can commence on definition drilling at the zone to develop a resource. With the company's mining plan, the resource can be turned into a reserve in this area. As noted, all drift development provides mill feed for future metallurgical studies. This area along with SRL sublevel long hole stoping will provide long-term consistent mill feed and aid in the production ramp-up for the Cusi mine.

Quality control

All technical data contained in this news release have been reviewed and approved by Gordon Babcock, PEng, 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 Inc.

Sierra Metals is a 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.

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