Mr. J. Alberto Arias of Arias Resource Capital reports

ARIAS RESOURCE CAPITAL FOCUSES ON THE FACTS REGARDING SIERRA METALS WITH PROTECTYOURSIERRAINVESTMENT.COM

Arias Resource Capital Fund II LP and Arias Resource Capital Fund II (Mexico) LP (the nominating shareholders), together with other affiliates of Arias Resource Capital and its principal (together with the nominating shareholders, ARC) has launched ProtectYourSierraInvestment.com to highlight the urgent case for change at Sierra Metals Inc. and the need for a major reconstitution of the board of directors. Regardless of any statements made by Sierra, the facts are indisputable as is the urgent need for change at Sierra. Shareholders are encouraged to visit the website for important updates ahead of Sierra's pivotal shareholder meeting.

Highlights:

• Shareholders are reminded that Sierra Metals' market capitalization has plummeted over 90 per cent in less than two years since Arias Resource Capital representatives left the Sierra Board.
• In sharp contrast, Sierra Metals shareholders saw total positive returns of 93.12 per cent as recently as FY20 (and 188.33 per cent cumulative between 2010 and mid-2021) when Arias Resource Capital representatives were on the Sierra Board and the company had leadership that was properly aligned to deliver high profitability and long-term sustainability.
• Arias Resource Capital holds approximately 27 per cent of the shares of Sierra Metals and has proposed for election to the Board five nominees with a record of delivering results to restore and protect shareholder value.

Last week, ARC announced that it would be nominating J. Alberto Arias, Derek White, Daniel Tellechea, Ricardo Arrarte, and Alonso Checa (collectively, the "ARC Nominees") for election to the Board at Sierra's annual general and special meeting of shareholders currently scheduled to be held on June 28, 2023.

The Urgent Need for Change

Since ARC representatives left the Board in mid-2021, Sierra shareholders have seen the value of their investments drop by over 90 per cent under the oversight of a Board that has a shareholding of less than 1 per cent in the company. ARC believes that the Board's lack of ownership and incentive is central to the demonstrable lack of urgency with which the Board has acted to address Sierra's challenges and why Sierra shareholders have seen total negative returns of ~73.68 per cent over the last four quarters ending March 31, 2023.

The ARC Nominees, on the other hand, have in-depth knowledge of Sierra's operations and ARC representatives have previously overseen Sierra's market capitalization growth from under US$50 million to over US$600 million. ARC Nominees include former Sierra Board members J. Alberto Arias and Ricardo Arrarte, who as recently as FY20 achieved positive total shareholder returns of 93.12 per cent. During the 10 years under ARC's leadership, the company's annual throughput grew significantly and profitability reached record highs, highlighting ARC's mission of delivering profitable growth and long-term sustainability.

J. Alberto Arias, director and principal of ARC, stated, "The company's recent decline stands in sharp contrast to the returns we accomplished while serving on the Board. Sierra urgently needs a Board with in-country experience in the mining and metals industry in Peru and Mexico, expertise in geological, mining and metallurgical engineering, experience in permitting and community engagement, and expertise in mining finance and M&A transactions in the metals sector. The ARC Nominees have this experience and expertise, and a track-record of previously turning Sierra into a profitable mining player. Sierra's Board claims they are doing all the right things; the data tells the opposite story."

Refusal of Sierra's Incumbent Board to Address Core Issues

Sierra issued a press release responding to ARC's May 1, 2023 press release. Sierra's response does not address the fundamental problems plaguing the company, while inadvertently agreeing to the broader points made by ARC.

Sierra remains in financial distress and is at the mercy of its lenders, which is a cause of worry for shareholders and their investments. The Board's poor performance is further established as the company is yet to formalize the refinancing contract with its lenders. This is more than six months after Sierra's loans went into forbearance. Sierra has portrayed a bridging loan as a resolution for its short-term debt obligations when this type of financing is more analogous to a "Payday Loan" for a troubled Company.

Despite the ongoing financial bleeding, Sierra's second strategic review process in as many years, has not produced any outcome that can reassure shareholders that the Board is capable of turning the company around. Sierra's incumbent Board points to tactical and operational activities it is pursuing as being a product of the strategic review. These do not fall within the purview of services that a financial advisor is compensated for, nor has the financial advisor retained by Sierra in November 2022 appeared to come up with any accretive possible outcomes of a strategic review. Despite these pressing and troubling circumstances, the company's incumbent Board refused to directly engage with ARC representatives for over six months.

ARC's 10-year track-record in growing Sierra into a profitable midsize mining player, contrasted with the subsequent sharp decline in the company's value and financial and operational metrics after ARC representatives left the Board, is no coincidence. The lack of productive communication and meaningful engagement by the incumbent Board with ARC, Sierra's virtual founder and largest shareholder for the past 14 years, is egregious and demonstrates the focus on entrenchment rather than restoring Sierra's value.

Sierra's shareholders are urged to visit ProtectYourSierraInvestment.com to learn about ARC's proposed nominees and why they have the experience and expertise to restore Sierra to its former track-record of success through robust production growth and a focus on maximizing shareholder value.

ADVISORS

ARC has retained Kingsdale Advisors as its strategic shareholder and communications advisor and, should ARC commence a formal solicitation of proxies, its strategic shareholder advisor and proxy solicitation agent. ARC has retained Stikeman Elliott LLP as its legal advisor.

ABOUT ARC

Arias Resource Capital, founded in 2007, is a Miami-based private equity firm in the metals sector that invests in critical materials empowering the clean energy revolution.

We seek Safe Harbor.