An anonymous director reports

ARIAS RESOURCE CAPITAL PUBLISHES INFORMATION CIRCULAR TO HIGHLIGHT THE URGENT CASE FOR CHANGE AT SIERRA METALS

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), have published and mailed an information circular to draw attention to the critical need for change at the board of Sierra Metals Inc. The circular highlights the strengths of ARC's nominee slate who bring a deep understanding of the geologic potential of Sierra's Yauricocha, Bolivar and Cusi mines as well as prior experience managing these assets. Shareholders will also find ARC's five-point plan to bring Sierra back to profitability and restore shareholder value with the urgency it deserves.

The circular details irrefutable facts about the destruction of shareholder value in Sierra over the past two years under the incumbent Sierra board. This includes rapid decline in revenue and profitability, ore throughput dropping to the levels seen during the height of the COVID-19 pandemic, negative working capital, and the inability to meet debt obligations which has pushed the financially distressed company toward insolvency.

When ARC representatives left the Sierra board in mid-2021, the company was on a growth trajectory. Sierra, however, has performed abysmally under the watch of the incumbent board. ARC believes that the board has failed to perform its fiduciary duties and is not interested in the urgent turnaround of the company and restoration of shareholder value. This is further proven by the fact that two strategic reviews in as many years have not yielded any result that would boost shareholder confidence.

Left with no choice, on May 1, 2023, the nominating shareholders proposed five highly qualified nominees -- J. Alberto Arias, Derek White, Daniel Tellechea, Ricardo Arrarte and Alonso Checa -- for election to the board at Sierra's annual general and special meeting scheduled for June 28, 2023. This is to ensure a reconstituted board that is incentivized to swiftly turn around the company and maximize returns for all shareholders. ARC owns around 27 per cent of issued and outstanding shares of Sierra, while the entire incumbent board combined owns less than 1 per cent.

A copy of the circular is available under Sierra's profile on SEDAR and at ProtectYourSierraInvestment.com, where ARC's press releases and other relevant case for change documents are available.

Shareholders can also call or text Kingsdale Advisors on 1-888-370-3955 (toll-free in North America) or e-mail contactus@kingsdaleadvisors.com, or chat with an adviser on ProtectYourSierraInvestment.com for more information.

Advisers

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

We seek Safe Harbor.