Mr. Miguel Aramburu reports

SIERRA METALS REITERATES RECOMMENDATION TO TAKE NO ACTION AS ALPAYANA AMENDS HOSTILE BID

Sierra Metals Inc. has confirmed that its board of directors has carefully reviewed the amendments to the opportunistic hostile takeover bid to acquire all of the outstanding common shares of the company by an affiliate of Alpayana SAC, and continues to recommend that shareholders of Sierra Metals take no action and reject the hostile bid by not tendering their common shares.

The notice of variation and extension dated April 2, 2025, and filed by Alpayana on April 4, 2025, increases the offer price from 85 cents per common share to $1.11 per common share, and extends the expiry date of the hostile bid from April 14, 2025, to April 25, 2025. Alpayana has also waived, among other things, its condition that at least 66-2/3rds per cent of the outstanding common shares must be tendered to the hostile bid, presumably in response to lower-than-expected interest from shareholders of Sierra Metals. The hostile bid remains subject to a significant number of conditions, which are not subject to materiality thresholds or reasonableness standards or any other objective criteria, but rather are in Alpayana's sole discretion. Further, even at the revised offer price, the hostile bid remains significantly below the valuations seen in comparable transactions as outlined in the company's director circular dated Jan. 13, 2025.

Sierra's financial adviser, BMO Capital Markets, has also delivered an opinion to the board and the special committee of independent directors, which reaffirms that, as of the date of the opinion, and based upon and subject to the assumptions, limitations and qualifications contained therein, and such other matters as BMO Capital Markets considered relevant, the revised offer price is inadequate from a financial point of view to the shareholders of Sierra Metals.

Miguel Aramburu, chair of the board, commented: "Alpayana continues to offer an inadequate price that undervalues Sierra Metals and does not reflect full and fair value for the common shares of the company. The board believes there is far greater value inherent in the company's assets, particularly in light of our strong financial and operating performance. We recommend that shareholders reject the hostile bid as it is not in the best interests of Sierra Metals or our shareholders."

Response to Alpayana's most recent claims

Alpayana's news release issued on April 2, 2025, repeated several of the unsubstantiated claims it first put forward in its takeover bid circular dated Dec. 30, 2024. The company fully addressed these claims in the director circular. In addition, Alpayana has made new assertions relating to the company, including the following:

• Alpayana calls into question the reliability of the company's 2025 guidance, based on adjustments made to preliminary financial results during the 2024 year-end audit process. The company reaffirms its guidance that 2025 earnings before interest, taxes, depreciation and amortization is expected to be approximately $130-million (U.S.), representing year-over-year growth of 75 per cent. Furthermore, the company reminds its shareholders that the management team has executed on all of its major objectives over the past two years, delivering significantly improved results, and also met its guidance for 2024. The adjustments reflected in the company's 2024 audited financial statements are the result of a rigorous internal review initiated by the company's new financial leadership team. Attempts to cast doubt on the company's outlook based on responsible and transparent financial corrections are misleading and fail to recognize the significant operational and financial turnaround delivered by the company over the past two years.
• Alpayana speculates that the company may undertake a dilutive financing to service its debt. This statement disregards the significant improvement in the company's balance sheet and the outlook for increased cash generation as demonstrated by the above-noted 2025 EBITDA guidance. As noted in the director circular, the company's anticipated net debt/2025 estimated EBITDA ratio is already below the industry median. Sierra Metals has not announced or initiated any new equity financing, and any speculation about dilution is unwarranted and ignores the company's current trajectory and financial discipline.
• Alpayana notes that the company has not announced any alternative offers. The special committee continues to evaluate a range of strategic options, working closely and actively with its external financial and legal advisers. As previously announced, the company has engaged BMO Capital Markets as financial adviser and is currently undertaking a robust process to evaluate strategic options to maximize long-term value for all shareholders and stakeholders. The special committee plans to report to the company's shareholders on its recommendations following the completion of this process.
• Alpayana alleges that the company is entering into a hostile macroeconomic and local and international political environment, a situation not referenced in its earlier materials. As previously noted, the hostile bid is opportunistic and seeks to amplify market dissonance to spook its shareholders into accepting an offer price that undervalues Sierra Metals and does not reflect full and fair value for the common shares of Sierra Metals.

The director circular listed 12 reasons to reject the hostile bid, supported by details on the company's operations, strategy and financial position, as well as the higher valuations seen in precedent transactions, while also refuting many of Alpayana's claims. In its news release, Alpayana has offered no substantive response that might help the company's shareholders make a decision.

Recommendation to continue to reject the hostile bid

The board unanimously recommends that Sierra Metals shareholders reject the hostile bid and not tender their common shares to the hostile bid. Shareholders simply need to take no action to reject the hostile bid.

The board's determination was reached following careful consideration of a number of factors, including advice from its financial and legal advisers, and the recommendation of the special committee, including the inadequacy opinion from BMO Capital Markets, reaffirming the inadequacy of the revised offer price from a financial point of view. Furthermore, none of the directors or officers of Sierra Metals have tendered, or intend to tender, their common shares to the hostile bid.

Shareholders are encouraged to carefully review the director circular in its entirety. This document has been mailed to Sierra Metals shareholders and is available on SEDAR+ under the company's profile and on the company's website.

Any Sierra Metals shareholders who have already tendered their common shares to the hostile bid and who wish to obtain assistance in withdrawing them are urged to contact their broker or Carson Proxy Advisors, Sierra Metals' information agent and strategic shareholder adviser, by North American toll-free phone at 1-800-530-5189, by local and text: 416-751-2066, or by e-mail at info@carsonproxy.com.

About Sierra Metals Inc.

Sierra Metals is a Canadian mining company focused on copper production with additional base and precious metal byproduct credits at its Yauricocha mine in Peru and its Bolivar mine in Mexico. The company is intent on safely increasing production volume and expanding 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.