Mr. Igor Gonzales reports

SIERRA METALS REPORTS 2018 CONSOLIDATED FINANCIAL RESULTS INCLUDING $90.1 MILLION OF OPERATING CASH FLOWS BEFORE MOVEMENTS IN WORKING CAPITAL CONFERENCE CALL MARCH 29, 2019 AT 10:30 AM (EDT)

Sierra Metals Inc. has provided its year-end financial results for the year ended Dec. 31, 2018, including revenue of $232.4-million and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $89.8-million on throughput of 2,325,288 tonnes and metal production of 18 million silver equivalent ounces, 95.2 million copper equivalent pounds and 215.1 million zinc equivalent pounds.

During 2018, the annual consolidated production of silver, copper, zinc and gold increased 17 per cent, 27 per cent, 1 per cent and 25 per cent, respectively, while annual consolidated lead production decreased by 7 per cent, compared with 2017. The company achieved record consolidated quarterly ore throughput during the fourth quarter 2018, as well as record quarterly ore throughput from the Bolivar and Cusi mines. These results continued the company's successful production increases realized during the first three quarters of 2018, which resulted in strong annual consolidated production figures.

Metal production at Yauricocha increased by 14 per cent in Q4 2018, compared with Q4 2017, due to 5-per-cent-higher ore throughput, higher head grades of all metals, except zinc, and higher lead and gold recoveries. At Bolivar, 20-per-cent-higher ore throughput and higher silver and gold head grades resulted in a 16-per-cent increase in copper equivalent pounds produced in Q4 2018, compared with Q4 2017. The Cusi mine realized a 258-per-cent increase in throughput, which resulted in a 70-per-cent increase in silver equivalent ounces produced during Q4 2018, compared with Q4 2017.

Igor Gonzales, president and chief executive officer of Sierra Metals, stated: "I am very pleased with the company's performance during Q4 and full year 2018. Despite challenges, such as harsh weather events in Q3 at the Bolivar mine, the company generated positive cash flow at its three operating mines, realizing a 13-per-cent increase over 2017, and our production results were solid with year-over-year increases to the consolidated production of all metals except lead. The company continues to realize positive returns on the capital investments and operational improvement efforts at all our mines. This is best demonstrated through our improving operating performance, strengthening of our asset base, significantly lower all-in sustaining costs and continued strong cash flow.

"Two thousand nineteen will be an important year for the company as we begin to ramp up production in Mexico. Most equipment is in place at Bolivar for the mill expansion and the Cusi mill is also closer to completion. The development in both Mexican mines continues with a goal of increasing production volume and recoveries which are expected to support higher metal production starting in Q2 2019. We continue to modernize and improve all our mines, implementing best operational practices. These improvements are expected to allow for the company to increase metal production over the course of the coming year. Our company-wide ongoing brownfield exploration programs should also lead to further significant growth in reserves and resources, which will add to the value of our assets during the year ahead.

"The 2019 capex [capital expenditure] budget of $83-million provides for the company's extensive growth plans. Similar to previous capex programs, these are investments which will provide the company with significant returns on the capital invested and continue to be a very efficient use of capital when considering the production and resource growth that they will deliver to company and its shareholders. The 2019 capex program is expected to be funded through 2019 EBITDA, as well as existing cash, nevertheless, a new $100-million (U.S.) credit facility recently put in place provides the company with ample flexibility to make these prudent investments."

He continued: "Sierra Metals' balance sheet remains strong with the liquidity needed to meet our operational and growth expenditure requirements. The company is on track for further growth in 2019 based upon positive PEA [preliminary economic assessment] studies released earlier this year, demonstrating robust growth opportunities for the company at all mines. We continue working on life-of-mine plans, which are expected to be completed in mid-2019. Additionally, NI [National Instrument] 43-101 technical reports are expected to be completed for the Yauricocha mine by the end of Q2 2019 and for Bolivar and Cusi mines by the end of Q4 2019, this will also include a maiden reserve estimate for the Cusi mine. We are very optimistic that these updated reports will provide for additional reserves and resources at all mines."

The attached table displays selected financial and operational information for the three months and year ended Dec. 31, 2018.

                               Q4 AND 12-MONTH 2018 FINANCIAL HIGHLIGHTS
                    (in thousands of dollars, except per-share and cash cost amounts,
                              consolidated figures unless noted otherwise)

                                                         Three months ended                 12 months ended
                                                      Dec. 31,      Dec. 31,       Dec. 31,         Dec. 31,
                                                         2018          2017           2018             2017

Operating
Ore processed/tonnes milled                           599,297       498,199      2,325,288        1,988,738
Silver ounces produced (000s)                             701           496          2,716            2,317
Copper pounds produced (000s)                           8,932         7,471         33,968           26,775
Lead pounds produced (000s)                             7,948         5,736         27,714           29,704
Zinc pounds produced (000s)                            17,545        19,545         76,831           76,088
Gold ounces produced                                    2,137         1,591          7,743            6,197
Copper equivalent pounds produced (000s)               23,447        21,856         95,184           90,354
Zinc equivalent pounds produced (000s)                 56,287        47,287        215,053          193,152
Silver equivalent ounces produced (000s)                4,445         4,078         17,988           14,865
Cash cost per tonne processed                          $50.44        $50.57         $47.55           $46.87
Cost of sales per AgEq oz                               $7.99         $7.91          $7.35            $7.75
Cash cost per AgEq oz                                   $7.68         $7.54          $7.03            $7.41
AISC per AgEq oz                                       $10.59        $12.42         $10.04           $12.34
Cost of sales per CuEq lb                               $1.51         $1.48          $1.39            $1.27
Cash cost per CuEq lb                                   $1.45         $1.41          $1.33            $1.22
AISC per CuEq lb                                        $2.00         $2.32          $1.90            $2.03
Cost of sales per ZnEq lb                               $0.63         $0.68          $0.61            $0.60
Cash cost per ZnEq lb                                   $0.61         $0.65          $0.58            $0.57
AISC per ZnEq lb                                        $0.84         $1.07          $0.83            $0.95
Cash cost per ZnEq lb (Yauricocha)                      $0.52         $0.57          $0.52            $0.50
AISC per ZnEq lb (Yauricocha)                           $0.73         $0.90          $0.73            $0.78
Cash cost per CuEq lb (Bolivar)                         $1.67         $1.72          $1.44            $1.49
AISC per CuEq lb (Bolivar)                              $2.37         $3.03          $2.13            $2.68
Cash cost per AgEq oz (Cusi)                           $18.96        $18.66         $15.71           $15.37
AISC per AgEq oz (Cusi)                                $23.27        $36.33         $22.09           $33.90
Financial
Revenues                                              $55,019       $51,170       $232,371         $205,118
Adjusted EBITDA                                       $15,263       $19,208        $89,756          $81,034
Operating cash flows before
movements in working capital                          $15,167       $17,812        $90,148          $79,785
Adjusted net income attributable
to shareholders                                          $783        $3,241        $29,009          $23,482
Net income (loss) attributable
to shareholders                                       $(2,654)       $2,118        $18,814          $(4,645)
Cash and cash equivalents                             $21,832       $23,878        $21,832          $23,878
Working capital                                       $(8,290)      $(6,784)       $(8,290)         $(6,784)                            

Revenue from metals payable of $232.4-million in 2018 increased by 13 per cent from $205.1-million in 2017. Higher revenues are primarily attributable to: the 8-per-cent increase in throughput and the higher head grades and recoveries for copper and gold at Yauricocha in 2018, compared with 2017; the 16-per-cent increase in throughput, higher silver and gold head grades, and higher gold recoveries resulted in Bolivar's revenues being 17 per cent higher than 2017; and the 112-per-cent increase in throughput and higher silver recoveries resulted in Cusi's revenues being 88 per cent higher than 2017. The increase in revenues were realized despite decreases in the prices of silver (9 per cent), lead (4 per cent) and zinc (1 per cent), which copper prices increased by 5 per cent and gold prices were consistent with 2017.

Yauricocha's cash cost per zinc equivalent payable pound was 52 cents (2017 -- 50 cents) and AISC (all-in sustaining costs) per zinc equivalent payable pound of 73 cents (2017 -- 78 cents). The decrease in the AISC per zinc equivalent payable pound for 2018, compared with 2017, was a result of lower sustaining capital expenditures and higher zinc equivalent payable pounds, while cash costs remained consistent. This was partially offset by slight increases in general and administrative costs. These cost decreases were realized despite a $2-million increase in labor costs, due to the company's union agreement and a salary adjustment to bring the 2018 salaries in line with the current market rates. The payment was made during November, 2018, and December, 2018, but retroactive to the entire year's salaries. Going forward, these costs will be amortized over the entire year for 2019. The union was formed in July, 2017, and has grown to 406 workers at the end of 2018, equivalent to approximately 60 per cent of the company's work force, representing the majority of the mine employees.

Bolivar's cash cost per copper equivalent payable pound was $1.44 (2017 -- $1.49) and AISC per copper equivalent payable pound was $2.13 (2017 -- $2.70) for 2018, compared with 2017. The decrease in the AISC per copper equivalent payable pound during 2018, compared with 2017, was due to the increase in copper equivalent payable pounds resulting from higher throughput, higher silver and gold head grades, and higher gold recoveries, as well as a decrease in sustaining capital expenditures.

Cusi's cash cost per silver equivalent payable ounce was $15.71 (2017 -- $15.37) and AISC per silver equivalent payable ounce was $22.09 (2017 -- $33.90) for 2018, compared with 2017. AISC per silver equivalent payable ounce decreased due to higher silver equivalent payable ounces resulting from higher throughput, higher silver recoveries, lower treatment and refining charges, and lower sustaining capital expenditures.

Adjusted EBITDA of $89.8-million for 2018 increased by 11 per cent, compared with $81-million in 2017. The increase in adjusted EBITDA in 2018 was due to the increase in revenues realized at all three mines during 2018, mainly the result of higher throughput.

Cash flow generated from operations before movements in working capital of $90.1-million for 2018 increased, compared with $79.8-million in 2017. The increase in operating cash flow is mainly the result of higher revenues generated and higher gross margins realized.

Net income/loss attributable to shareholders for 2018 was $18.8-million (2017 -- loss of $4.6-million), or 12 cents per share (basic and diluted) (2017 -- loss of three cents per share). The net loss incurred in 2017 included a $4.4-million non-cash loss on the distribution of Cautivo Mining Inc. assets to Sierra shareholders.

Cash and cash equivalents of $21.8-million and working capital loss of $8.3-million as at Dec. 31, 2018, compared with $23.9-million and loss of $6.8-million, respectively, at the end of 2017. Cash and cash equivalents have decreased by $2-million during 2018 due to $61.9-million of operating cash flows and $10-million drawn down from a short-term revolving line of credit, being offset by capital expenditure loss incurred in Mexico and Peru of $49.3-million, repayment of loans, credit facilities and interest of $21.5-million, and dividends paid to non-controlling interest shareholders of $2.9-million.

Project development

Mine development at Bolivar during Q4 2018 totalled 1,136 metres. Most of these metres (553 metres) were developed to prepare stopes for mine production. The remainder of the metres (583 metres) were related to the deepening of ramps and developing service ramps to be used for ventilation and pumping in the El Gallo Inferior orebody.

During Q4 2018, at the Cusi property, mine development totalled 1,059 metres, which included 25 metres of ramp development at the Santa Rosa de Lima zone, with the rest of the development related to stope preparation in various zones within the mines.

Exploration update

Peru

During Q4 2018, the company drilled 58 holes, totalling 10,537 metres at Yauricocha. The drilling included the following.

Exploration drilling:

• Copper porphyry mineralization (Central mine zone Level 720): Two holes totalling 1,341 metres were drilled to continue to test the priority anomaly located in the monzonite intrusive zone, where a copper molybdenum mineralized porphyry was discovered earlier in the year. Drill results continue to display the presence of a copper molybdenum porphyry orebody, where the company has observed typical alterations, as well as copper mineralization disseminated in the encased rock, as veinlets with quartz and copper are present with molybdenum.
• Cuye orebody (Level 1070 Central mine zone): One hole totalling 210 metres to explore the continuity of mineralization of the orebody at depth. The hole confirmed the continuity of this mineralized orebody at depth.
• Catas orebody (Level 1070 Central mine zone): One hole totalling 681 metres confirmed the continuity of the copper mineralization at depth.
• Contacto occidental orebody (Level 1070 Central mine zone): One hole totalling 86 metres confirmed the continuity of the mineralization at depth of this cuerpo chico small orebody.
• Escondida Norte (Level 870 Cachi Cachi): four holes totalling 1,745 metres with the objective of exploring and defining the fresh sulphide zones, as areas previously explored in this area have intercepted oxide zones with silver and lead mineralization; these holes drilled intercepted mineralized structures of polymetallic sulphide zones.
• Cachi Cachi Norte (Level 720 Cachi Cachi): Two holes totalling 681 metres with the objective of exploring the northern part of the mineralized orebodies within the Cachi Cachi mine that did not encounter any mineralization of ore-grade material.

Definition drilling:

• Antacaca Sur (Level 920): Seventeen holes totalling 2,186 metres with the objective of defining more certainty on the orebody between the 970 level sublevel and the future sublevel eight metres above the 1020 level.
• Esperanza (Level 970): Fourteen holes totalling 1,770 metres which confirmed the continuity of mineralization of the orebody. Holes were executed between the sublevel development level eight metres above the 1020 level and the 1020 level.
• Angelita (Level 870 Cachi Cachi): Eleven holes totalling 1,577 metres which represents the orebody on the 870 sublevel between an area 16 metres and eight metres above the 870 level.
• Yoselin (Level 920 Cachi Cachi mine): Five holes totalling 260 metres which confirmed the orebody and the extension of the orebody to 1070 level. These drill holes provided more geological information to help plan potential mining of the orebody. Once the drift reaches the 1070 level, the remainder of orebody below will be drilled off from the 1070 level. Initial highlights of the average grades encountered in this cuerpo chico or small orebody included 1.2 ounces silver, 4.8 per cent lead, 0.09 per cent copper and 8.5 per cent zinc. Further assay results are pending but the company will continue to drill the Yoselin zone.

Mexico

Bolivar:

• At Bolivar, during Q4 2018, 6,258 metres were drilled from surface, as well as diamond drilling within the mine. Two thousand one hundred eighty-three metres were drilled within the mine in the El Gallo zone. There was also 3,865 metres drilled at the Bolivar West extension to explore the extension of the orebody to the north and west, exploring the skarn orebody with semi-massive magnetite and disseminated nodules of chalcopyrite. There were also 210 metres drilled at La Campana, which is a new exploration target where the company is exploring the possibility of finding a skarn orebody with copper and zinc.

Cusi:

• During Q4 2018, the company drilled 1,781 metres to support the development of the Santa Rosa de Lima vein in Promontorio to further verify the size and continuity of the orezone. Two thousand four hundred ninety-seven metres of surface diamond drilling was performed to explore the depth of the mineralized structure of San Nicolas in the area of the San Juan mine.

Conference call webcast

Sierra Metals' senior management will host a conference call on Friday, March 29, 2019, at 10:30 a.m. EDT to discuss the company's financial and operating results for the three months and year ended Dec. 31, 2018.

Through webcast

A live audio webcast of the meeting will be available on the company's website.

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

Through phone

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

Participant number (toll-free North America):  833-245-9659

Participant number (toll-free Peru):  0800-71-476

Participant number (international):  1-647-689-4231

Conference ID:  1687775

Quality control

All technical production data contained in this news release have been reviewed and approved by Gordon Babcock, professional engineer, 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 discoveries and still has additional brownfield exploration opportunities at all three mines in Peru and Mexico that are within or close proximity to the existing mines. Additionally, the company has large land packages at all three mines with several prospective regional targets providing longer-term exploration upside and mineral resource growth potential.

We seek Safe Harbor.