Mr. Ernesto Balarezo reports

SIERRA METALS CLOSES $16.4 MILLION PRIVATE PLACEMENT

Sierra Metals Inc. has closed a non-brokered private placement to issue 43,107,360 common shares of the company at a price of 38 cents per common share for aggregate gross proceeds of $16,380,796.80, a portion of which has closed in escrow.

As of Oct. 13, 2023, the company has received $12,837,133.40 in connection with the issuance of 33,781,930 common shares in the first tranche of the private placement. The company is holding $3,543,663.40 in escrow, representing the funds for the second tranche of the private placement, pending satisfaction of conditions established by the Toronto Stock Exchange.

Ernesto Balarezo Valdez, Sierra Metals' chief executive officer, stated: "We are pleased with the tremendous support we have received from shareholders and management as we have worked hard this year to stabilize and optimize our operations. Their participation in this private placement and their financial support validates our strategy to surface value for all our stakeholders."

The proceeds from the private placement will be used to finance growth activities at the company's mines at Yaruicocha, Peru, and Bolivar, Mexico, and for strategic capex (capital expenditures) and general working capital purposes.

Common shares issued pursuant to the private placement will be subject to a statutory hold period.

Directors and management of the company participated in the private placement for an aggregate amount of 3,079,126 common shares, representing approximately 7.14 per cent of the total financing.

Insiders of the company participated in the private placement for an aggregate amount of 2,361,453 common shares. Such participation is considered a related-party transaction within the meaning of Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions. In completing the private placement, Sierra Metals relied on the applicable exemptions from the formal valuation and minority security holder approval requirements available under sections 5.5(a) and 5.7(1)(a) of MI 61-101, respectively, on the basis that neither the fair market value of the subject matter of, nor the fair market value of the consideration for, the private placement, insofar as it involves the participating insiders, exceeds 25 per cent of the company's market capitalization calculated in accordance with MI 61-101. The company did not file a material change report 21 days prior to the closing of the private placement as the details relating to the participation of the participating insiders were not settled until shortly prior to the closing of the private placement. Further information regarding the private placement will be provided in a material change report to be filed by the company.

The private placement was among the alternatives considered by Sierra Metals as part of the company's strategic review process conducted with the assistance of CIBC Capital Markets.

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.