Mr. Ernesto Balarezo reports

SIERRA METALS PLACES CUSI MINE ON CARE AND MAINTENANCE AND INITIATES SALE PROCESS

Sierra Metals Inc. has placed the Cusi silver mine in Mexico on care and maintenance and initiated a process to sell the mine.

Ernesto Balarezo Valdez, Sierra Metals' chief executive officer, stated: "Earlier this year, the company deemed the Cusi silver mine a non-core asset and, given current market conditions, has made the difficult decision to put the mine on care and maintenance. In efforts to crystalize value for shareholders we have a process under way to sell Cusi. Sierra is transitioning to become a copper-focused mining company, and the planned divestiture of Cusi will allow us to focus on our two key mines, Yauricocha in Peru and Bolivar in Mexico, where we have significant potential to continue growing our copper production."

SCP Resource Finance is acting as financial adviser for the Cusi mine sale process. There can be no assurance that this process will result in the sale of the Cusi mine. The company will provide further updates at such time the board deems it necessary or appropriate.

About the Cusi mine

The Cusi mine is located in Chihuahua state, Mexico, approximately 135 kilometres from Chihuahua city. The property encompasses 73 concessions covering 11,665 hectares over a range of elevation of 2,000 to 2,500 metres above sea level in the Sierra Madre Occidental mountain range. Cusi has the capacity to produce 1,200 tonnes per day and its processing plant includes a conventional ball mill and flotation plants fed from a crushing circuit. The flotation circuit has the ability to produce silver, lead and zinc concentrates.

Exploration at Cusi was focused on the Cusi fault and the Santa Rosa de Lima vein complex. The Cusi fault extends on the company's property for a length of 12 kilometres. The Cusi mine lies within the Sierra Madre Occidental mountain range. Additionally, there are numerous satellite exploration targets, which are the subject of drilling and exploration drifts.

All permits for the Cusi mine and surrounding exploration properties are in good standing.

About Sierra Metals Inc.

Sierra Metals is a Canadian mining company focused on copper production with additional base metal and precious metal byproduct credits at its Yauricocha mine in Peru and the Bolivar mine in Mexico. The company is intent on safely 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 in Peru and Mexico that are within close proximity to the existing mines. Additionally, the company has large land packages at each of its mines with several prospective regional targets, providing longer-term exploration upside and mineral resource growth potential.

We seek Safe Harbor.