Mr. Mike McAllister reports

SIERRA METALS REPORTS STRONG Q3-2019 FINANCIAL RESULTS INCLUDING A 16% INCREASE IN ADJUSTED EBITDA AT ITS SOCIEDAD MINERA CORONA SUBSIDIARY IN PERU

Sierra Metals Inc. has filed Sociedad Minera Corona SA's unaudited financial statements and the management discussion and analysis for the third quarter of 2019.

The company holds an 81.8-per-cent interest in Corona. All amounts are presented in United States dollars unless otherwise stated and have not been adjusted for the 18.2-per-cent non-controlling interest.

Corona's highlights for the three months ended Sept. 30, 2019:

• Revenue of $44.4-million versus $38.1-million in Q3 2018;
• Adjusted earnings before interest, taxes, depreciation and amortization of $20.5-million versus $17.6-million in Q3 2018;
• Total tonnes processed of 307,239 versus 283,446 in Q3 2018 -- a new record;
• Net production revenue per tonne of ore milled increased by 10 per cent to $145.64;
• Cash cost per zinc equivalent payable pound decreased by 21 per cent to 38 cents;
• All-in sustaining cost per zinc equivalent payable pound consistent at 66 cents;
• Zinc equivalent production of 57.2 million pounds versus 42.9 million pounds in Q3 2018;
• $29-million of cash and cash equivalents as at Sept. 30, 2019;
• $56.8-million of working capital as at Sept. 30, 2019.

The company achieved record quarterly equivalent metal production and ore throughput from the Yauricocha mine during Q3 2019, which has helped to continue to make up for the lost production realized during the illegal strike during March and April, 2019. Revenues increased by 17 per cent and adjusted EBITDA increased by 16 per cent during Q3 2019 compared with Q3 2018, and the cash flows generated during Q3 2019 allowed the company to finance its capital expenditure programs despite a challenging base metal price environment, and significant increases in zinc treatment and refining costs. Cash costs decreased by 21 per cent quarter over quarter due to a 40-per-cent increase in zinc equivalent payable pounds, as a result of the 8-per-cent increase in throughput, and higher head grades and recoveries for all metals, except zinc. However, the increase in zinc payable pounds was offset by the increase in treatment and refining charges related to the zinc concentrate produced, as well as higher general and administrative costs incurred from higher labour costs, which resulted in the all-in sustaining cost per zinc equivalent payable pound remaining consistent, quarter over quarter. In addition to the record quarterly production realized during Q3 2019, the company has also been able to build up a stockpile of approximately 30,000 tonnes of polymetallic ore, which is expected to be processed during Q4 2019.

Igor Gonzales, president and chief executive officer of Sierra Metals, commented: "I am very pleased with the Yauricocha mine's excellent quarterly financial results as highlighted with notable improvements to revenue and adjusted EBITDA, while seeing lower realized cash costs. These strong improvements were made possible by the excellent production results that were realized this quarter. Our efforts to recover as much lost tonnage as possible from the illegal strike earlier in this year have been successful and we remain committed to falling within the published guidance for Yauricocha. In addition, we continue to reap the benefit of improvements being made at the mine and plant, and expect these improvements to continue to benefit the company through the remainder of the year."

He continued: "Looking ahead, the fourth quarter is an important time for projects, improvements and exploration at Yauricocha. We are working to complete the Yauricocha NI 43-101 reserve and resource update, which is expected in December this year. We are continuing surface drilling at Don Leona and Kilkaska, which are high-value exploration targets and will hopefully have news flow with the results before year-end. Additionally, work continues on the completion of the next level of the tailings deposition facility, needed for the expansion of Yauricocha to the 3,600-tonnes-per-day level. Furthermore, we continue to sink the Yauricocha shaft towards the 1270 level to provide the company access to further reserves and resources in the mine. Finally, work has commenced on the ramp connecting the 820 level with the 720 level of the Yauricocha mine providing for an additional 10,000 tonnes per month of increased capacity to move ore and waste from the mine."

He concluded: "Yauricocha continues its strong operational and financial performance for the company, and Corona continues to have a solid balance sheet and strong liquidity. Management remains positive that continued operational efficiencies, and future operational and resource growth are possible at Yauricocha."

                SELECTED UNAUDITED FINANCIAL INFORMATION FOR THE THREE MONTHS AND
                                NINE MONTHS ENDED SEPT. 30, 2019
                       (In thousands of U.S. dollars, except cash cost and
                                    revenue per tonne metrics)

                                                            Three months ended     Nine months ended
                                                          Sept. 30,  Sept. 30,  Sept. 30,  Sept. 30,  
                                                               2019       2018      2019        2018 

Revenue                                                     $44,427     38,121   113,752     129,474
Adjusted EBITDA                                              20,522     17,647    46,162      65,386
Cash flow from operations                                    20,435     17,891    45,539      65,467
Gross profit                                                 20,297     18,529    47,997      68,710
Income tax expense                                          (7,089)    (5,946)  (13,245)    (21,703)
Net income                                                    9,862      9,863    24,308      38,283
Net production revenue per tonne of ore milled               145.64     132.45    141.94      154.55
Cash cost per tonne of ore milled                             67.86      60.34     68.96       61.27
Cash cost per zinc equivalent payable pound                    0.38       0.48      0.46        0.51
All-in sustaining cost per zinc equivalent payable pound      $0.66       0.66      0.77        0.73

                           Sept. 30, 2019  Dec. 31, 2018

Cash and cash equivalents         $28,948         17,898
Assets                            183,913        169,034
Liabilities                        39,776         49,205
Equity                            144,137        119,829

Corona's financial highlights for the three and nine months ended Sept. 30, 2019:

• Revenue of $44.4-million for Q3 2019 compared with $38.1-million in Q3 2018 and revenues of $113.8-million in the first nine months of 2019 (9M 2019) compared with $129.5-million in the first nine months of 2018 (9M 2018). The decrease in revenues for 9M 2019 compared with 9M 2018 was due to a 5-per-cent decrease in tonnes processed due to the illegal strike action initiated by members of the Union of the Mine and Metallurgical Workers of Minera Corona on March 19, 2019. This illegal strike was resolved on April 12, 2019, however, resulted in a total of 24 days of lost production during March and April, 2019. Lower revenues were also affected by the decreases in the prices of silver (1 per cent), copper (9 per cent), zinc (15 per cent) and lead (14 per cent), and higher treatment and refining charges incurred on the company's zinc concentrate. This was partially offset by higher head grades and recoveries for all metals, except zinc. The 17-per-cent increase in revenues realized during Q3 2019 compared with Q3 2018 was the result of an 8-per-cent increase in throughput, and higher head grades and recoveries of all metals, except zinc recoveries, and an increase in the prices of silver and gold.
• Cash cost per zinc equivalent pound sold at the Yauricocha mine of 38 cents for Q3 2019 compared with 48 cents for Q3 2018 and 46 cents for 9M 2019 compared with 51 cents for 9M 2018. All-in sustaining cost per zinc equivalent pound sold of 66 cents for Q3 2019 compared with 66 cents for Q3 2018 and 77 cents for 9M 2019 compared with 73 cents for 9M 2018. The increase in the AISC per zinc equivalent payable pound for 9M 2019 compared with the same period in 2018 was due to the increase in treatment and refining charges for the zinc concentrate produced, higher sustaining capital expenditures, and higher general and administrative costs. These cost increases were partially offset by the increase in zinc equivalent payable pounds as the company realized higher head grades and recoveries for all metals, except zinc recoveries.
• Adjusted EBITDA of $20.5-million for Q3 2019 compared with $17.6-million for Q3 2018 and $46.2-million for 9M 2019 compared with $65.4-million for 9M 2018. The increase in adjusted EBITDA during Q3 2019 compared with Q3 2018 was due to higher throughput, head grades and recoveries for all metals, except zinc recoveries, which resulted in a 40-per-cent increase in zinc equivalent payable pounds and, thus, higher revenues. This was despite decreases in the prices of copper (6 per cent) and zinc (7 per cent), while increases in prices of silver (16 per cent) and gold (23 per cent) contributed to the increase in revenues.
• Operating cash flows before movements in working capital of $20.4-million for Q3 2019 compared with $17.9-million for Q3 2018 and $45.5-million for 9M 2019 compared with $65.5-million for 9M 2018. The increase in operating cash flows before movements in working capital during Q3 2019 compared with Q3 2018 was primarily due to the increase in revenues, discussed previously.
• Cash and cash equivalents of $28.9-million as at Sept. 30, 2019, compared with $17.9-million as at Dec. 31, 2018. Cash and cash equivalents increased by $11-million, which was driven by operating cash flows of $20.8-million, $11.9 million of net intercompany loan repayments received, which was partially offset by capital expenditures of $16.6-million, and debt and interest payments of $5-million.
• Net income of $9.9-million, or 27 cents per share for Q3 2019, compared with net income of $9.9-million, or 27 cents per share, for Q3 2018. Net income of $24.3-million, or 68 cents per share, for 9M 2019 compared with net income of $38.3-million, or $1.06 per share, for 9M 2018.

Corona's operational highlights for the three and nine months ended Sept. 30, 2019

                          PRODUCTION RESULTS
          FOR THE THREE AND NINE MONTHS ENDED SEPT. 30, 2019

Yauricocha production          Three months ended  Nine months ended
                                 Q3 2019  Q3 2018   Q3 2019  Q3 2018
 
Tonnes processed (mt)            307,239  283,446   795,218  838,285
Daily throughput                   3,511    3,239     3,029    3,193
Silver grade (g/t)                 66.36    58.68     64.49    59.12
Copper grade                       1.12%    0.98%     1.06%    0.94%
Lead grade                         1.69%    1.16%     1.58%    1.23%
Zinc grade                         3.79%    3.65%     3.59%    3.59%
Gold grade (g/t)                    0.59     0.59      0.58     0.58
Silver recovery                   81.21%   75.47%    79.00%   72.92%
Copper recovery                   79.36%   72.55%    77.68%   69.38%
Lead recovery                     90.51%   84.03%    89.71%   83.48%
Zinc recovery                     87.48%   90.95%    88.25%   89.25%
Gold recovery                     22.13%   17.08%    19.13%   16.44%
Silver ounces (000s)                 532      404     1,303    1,162
Copper pounds (000s)               6,012    4,428    14,411   12,039
Lead pounds (000s)                10,340    6,114    24,857   18,993
Zinc pounds (000s)                22,480   20,772    55,494   59,215
Gold ounces                        1,282      911     2,844    2,553
Zinc equivalent pounds (000s)     57,166   42,854   130,122  116,749

Qualified persons

All technical production data contained in this news release have been reviewed and approved by: Americo Zuzunaga, FAusIMM, CP (mining engineer) and vice-president of corporate planning, who is a qualified person and chartered professional qualifying as a competent person under the Joint Ore Reserves Committee Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.

Augusto Chung, FAusIMM, CP (metallurgist), and vice-president of special projects and metallurgy, and a chartered professional qualifying as a competent person on metallurgical processes.

About Sierra Metals Inc.

Sierra Metals is Canadian-based growing polymetallic mining company with production from its Yauricocha mine in Peru, and its Bolivar and Cusi mines in Mexico. The company remains focused on increasing production volume and growing mineral resources. Sierra Metals has recently had several discoveries and still has additional brownfield exploration opportunities at all three mines in Peru and Mexico that are within close proximity to the existing mines. Additionally, the company has large land packages at all three mines with several prospective regional targets providing longer-term exploration upside and mineral resource growth potential.

We seek Safe Harbor.