investors

Sierra Metals is a growing polymetallic producer with a commitment to growth and expansion at all three mines through the implementation of successful brownfield exploration and operational improvement programs.  With strong cash flow generation, an experienced management team and the potential for significant production and mineral resource growth, Sierra Metals is well positioned to grow its balance sheet and increase shareholder value.

STRONG BALANCE SHEET

Solid Financial Position

  • Strong cash flow generating capacity with 9M 2018 CF Before Movements in WC of $75 million1.
  • Solid balance sheet with cash and cash equivalents of $29.1 million2 and net debt of $ 30.7 million2,3.

PROFITABLE

Historic Low Cash Cost Operations

  • Yauricocha Mine, Peru: Acquired in 2011, this world-class asset is a highly profitable polymetallic mining operation due to its historic low cash cost and high head grades. Cash cost per zinc equivalent pound payable in 9M 2018 was US $0.52/lb, AISC4 was US $0.73/lb.5 The Chumpe Mill has a current permitted processing capacity of 3,000 tpd, which is expected to increase to 3,600 tpd in Q1 2019. A Preliminary Economic Assessment has been completed to examine potential expansion to 5,500 tpd by 2021.
  • Bolivar Mine, Mexico: The Bolivar Mine is a low-cost copper mine with silver and zinc by-products that achieved commercial production in November 2011. Cash cost per copper equivalent pound payable in 9M 2018 was US$1.36/lb, AISC4 was US $2.06/lb5. Expansion of the Piedras Verdes Mill from 3,000 tpd to 3,600 tpd is estimated to take place by Q1 2019. A Preliminary Economic Assessment is underway to examine potential expansion to 5,000 tpd by Mid-2020.
  • Cusi Mine, Mexico: The Cusi Mine is a silver producer with zinc, lead and gold by-products that achieved commercial production in January 2013. In 2015, ore processing at the off-site Malpaso Mill increased throughput from 444 tpd to 577 tpd and reached 650 tpd in Q2 2018, which is the current mill capacity. A second mill is being installed and mill capacity will reach 1,200 tpd in Q1-2019. A Preliminary Economic Assessment has been completed to examine potential expansion to 2,700 tpd by Mid-2021.

LEADERSHIP

Proven Explorers, Mine Builders & Operators

Strong Team with Proven Track Record
  • Key Leadership
    • J. Alberto Arias, Founder & Chairman
      • Founder and President of Arias Resource Capital
      • Former Head of Equity Research at Goldman, Sachs & Co. for metals and mining in the U.S., Canada and Latin America
      • Engineering degree in mining and metallurgy from the Colorado School of Mines and MBA from Columbia University
    • Igor Gonzales, President and CEO
      • 35 years of global experience in Mining operations
      • Most recently served as Vice President of Operations at Buenaventura and prior to that at Barrick Gold where is was most recently the Chief Operation Officer with global responsibilities
      • Held various senior management positions with Southern Peru Copper and also is a director for Hudbay Minerals and Buenaventura
    • Ed Guimaraes, Chief Financial Officer
      • Chartered Professional Accountant (CPA, CA) and holds a Bachelor of Arts in Administrative and Commercial Studies from the University of Western Ontario.
      • Held progressive senior management positions with Aur Resources Inc. (Aur) between 1995 and 2007, ultimately serving as Executive Vice-President, Finance and Chief Financial Officer.Since 2007, has worked as a consultant in the resource industry and is currently a director of several publicly listed mining companies.
    • Gordon Babcock, P. Eng., Chief Operating Officer
      • Over 34 years experience in the mine production management, project development, engineering, exploration and mine consulting in precious, base metals and aggregate operations in the Americas
      • Most recently COO at Jaguar Mining and has previously worked for Nyrstar, Breakwater Resources, Coeur Mining Inc., Milpo, The Hochschild group in Peru, Muscocho Explorations and The Noranda Group

DIVERSIFIED

  • Metals: exposure to base AND precious metals producing stable operating cash flows
  • Geographically: operating mines in two stable mining jurisdictions

CORE ASSETS

Three operations offering exceptional exploration potential for long mine life

Well Positioned for Growth
  • Yauricocha Mine
    • Updated NI 43-101 reserve and resource estimate dated November 10, 2017 identified 8.9 Mt of Proven and Probable Reserves & 13.2 Mt of Measured an Indicated Resources .
    • Developing new mining infrastructure at depth and to the North to increase production capacity and maximize operating efficiencies.
    • Continued drilling planned in 2018 for resource expansion, upgrading and exploration.

  • Bolivar Mine
    • Updated NI 43-101 reserve and resource estimate dated July 5, 2018 identified 7.9 Mt of proven and probable reserves at Bolivar.
    • Production currently at 3,000 tpd; expansion planned to increase to approximately 3,500 tpd in Q1 2019.
    • Ongoing drilling plans to continue in 2018 for resource expansion, increasing grade for mill feed.
  • Cusi Mine
    • Sierra Metals has published an updated mineral resource estimate as a result of drilling programs completed between January 2014 and August 2017. The report identified 4.6 Mt of Measured and Indicated Resources and 1.6 Mt of Inferred Resources - representing a 129% increase to the measured and indicated resource tonnage and a 36% increase in inferred tonnage since the last update in January, 2014.
    • The discovery of high quality tonnage at the Cusi mine shows strong potential for production increases going forward.
    • Drilling planned in 2018 for resource expansion, upgrading and exploration.

Footnotes
1Cash Flow from Operations before movements in working capital - excludes the movement from period to period in working capital items minus cash and cash equivalents.
2As of September 30, 2018.
3Consolidated debt minus total cash and cash equivalents.
4All-in Sustaining Costs include treatment and refining charges, selling costs, G&A costs and sustaining
5For the 9 month period ended September 30, 2018.