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Sierra Metals announces record 2012 annual production results and issues 2013 production guidance

Sierra Metals announces record 2012 annual production results and issues 2013
                             production guidance

PR Newswire

TORONTO, Jan. 21, 2013

TORONTO, Jan. 21, 2013 /PRNewswire/ - Sierra Metals Inc. (TSX-V:SMT) (BVL:SMT)
("Sierra Metals" or the "Company") is pleased to announce its 2012 annual  and 
fourth quarter production results and to issue production guidance for 2013.

Press Release Highlights:

  *Total of 1,269,849 tonnes processed in 2012 compared to 657,086 tonnes in
    2011. An increase of 93% year-over-year. In the fourth quarter of 2012 a
    total of 343,076 tonnes was processed compared to 257,256 tonnes in the
    same period of 2011. An increase of 33% year-over-year.

  *Total silver ("Ag") production of 2,620,735 ounces ("oz") in 2012 compared
    to 1,517,079 oz in 2011. An increase of 73% year-over-year. In the fourth
    quarter of 2012 a total of 683,937 oz of silver was produced compared to
    605,121 oz of silver in the same period of 2011. An increase of 13%
    year-over-year.

  *Total copper ("Cu") production of 15.9 million pounds ("lb") in 2012
    compared to 10.5 million lb in 2011. An increase of 51% year-over-year. In
    the fourth quarter of 2012 a total of 4.3 million lb of copper was
    produced compared to 3.5 million lb of copper in the same period of 2011.
    An increase of 25% year-over-year.

  *Total lead ("Pb") production of 35.7 million lb in 2012 compared to 19.6
    million lb in 2011. An increase of 82% year-over-year. In the fourth
    quarter of 2012 a total of 8.7 million lb of lead was produced compared to
    8.0 million lb of lead in the same period of 2011. An increase of 9%
    year-over-year.

  *Total zinc ("Zn") production of 59.0 million lb in 2012 compared to 36.3
    million lb in 2011. An increase of 62% year-over-year. In the fourth
    quarter of 2012 a total of 14.7 million lb of zinc was produced compared
    to 10.7 million lb of zinc in the same period of 2011. An increase of 38%
    year-over-year.

  *Total gold ("Au") production at the Yauricocha Mine was 10,491 oz in 2012.
    During the fourth quarter of 2012 a total of 2,181 oz of gold was
    produced.

  *Production Guidance for 2013

       *Silver: 2,582,000 oz - 2,922,000 oz
       *Copper: 20.5 million lb - 23.1 million lb
       *Lead: 42.5 million lb - 48.1 million lb
       *Zinc: 53.7 million lb - 60.8 million lb
       *Gold: 6,000 oz - 7,000 oz

Daniel Tellechea,  President  and CEO  of  Sierra Metals,  commented:  "Sierra 
Metals achieved another record breaking  year of production in 2012.  Increase 
in production was the result of Management's efforts to consolidate operations
in Peru and Mexico and  the realization of subsequent operating  efficiencies. 
The Company is pleased to  issue its first production  guidance in 2013 as  it 
strives to  become  a  premier  precious and  base  metal  producer  in  Latin 
America."

Mine Operations

The  Company  achieved  record-breaking  production  results  for  the  second 
consecutive year  as 2012  marked the  first full  year of  production at  the 
Yauricocha Mine and  commercial production  at the Bolivar  Mine. The  Company 
achieved a total  of 1,269,849 tonnes  of ore processed  (compared to  657,086 
tonnes  in   2011)  from   all  operations,   representing  a   33%   increase 
year-over-year. A  summarized  table  of consolidated  production  results  is 
presented below.

                                                                   
                              3 Months Ended               Year Ended
Consolidated Production Dec 31, ^ Dec 31, ^  % ^  Dec 31, ^   Dec 31,    % ^
                           2012      2011    Var.     2012      2011^1   Var.
                                                                       
Silver (oz)                683,937   605,121   13%  2,620,735  1,517,079   73%
Copper (000 lb)              4,334     3,458   25%     15,851     10,496   51%
Lead (000 lb)                8,696     7,961    9%     35,720     19,636   82%
Zinc (000 lb)               14,706    10,666   38%     59,012     36,341   62%
Gold (oz)                    2,181      N.A.  N.R.     10,491       N.A.  N.R.
                                                                   

^1 Includes Yauricocha Mine production only for the ownership period of
Sociedad Minera Corona S.A.(Corona) from May 26, 2011 to Dec 31, 2011.

Yauricocha Mine, Peru

The Yauricocha Mine in  Peru continued to be  the Company's largest  producing 
mine with a  total of 872,869  tonnes processed in  2012 (compared to  488,417 
tonnes in 2011). In the fourth quarter  of 2012 a total of 222,821 tonnes  was 
processed  (compared  to  199,991  tonnes   in  the  same  period  of   2011). 
Mineralization at  the Yauricocha  Mine  is hosted  in three  different  zones 
including the Copper, Lead-Oxide ("Oxides") and Polymetallic ore bodies.

During 2012, aggregate production of these ore bodies was 2,143,971 oz of  Ag, 
9.1 million lb of Cu, 35.2 million lb of Pb, 49.9 million lb of Zn and  10,491 
oz of Au. During  the fourth quarter of  2012 aggregate production from  these 
ore bodies was  547,114 oz  Ag, 2.2  million lb Cu,  8.6 million  lb Pb,  13.8 
million lb of Zn and 2,181 oz Au.

A summary of  production from  the Yauricocha Mine  for the  year-end and  the 
fourth quarter of 2012 have been provided below.

                                                                  
                             3 Months Ended                Year ended
Yauricocha Production^1 Dec 31, ^ Dec 31, ^  % ^  Dec 31, ^   Dec 31,    % ^
                          2012      2011    Var.     2012      2011^2   Var.
                                                                       
Silver (oz)               547,114   530,449    3%  2,143,971  1,232,455    74%
Copper (000 lb)             2,172     2,525  -14%      9,061      7,381    23%
Lead (000 lb)               8,571     7,871    9%     35,200     19,230    83%
Zinc (000 lb)              13,803     8,579   61%     49,888     21,927   128%
Gold (oz)                   2,181      N.A.  N.R.     10,491       N.A.   N.R.
                                                                  

^1 For a detailed summary of production for the Yauricocha Mine please click
here.
^2 Includes Yauricocha Mine production only for the ownership period of Corona
from May 26, 2011 to Dec 31, 2011.

Bolivar Mine, Mexico

Since the announcement of commercial production on November 29, 2011, the  new 
Piedras Verdes mill has  continued to increase the  production profile of  the 
Bolivar Mine. During 2012, total ore  processed at the Bolivar Mine  increased 
129% with 312,952 tonnes  processed compared to 136,715  tonnes in 2011.  This 
resulted in 2012  production of  copper increasing 118%  with a  total of  6.8 
million lb produced compared to 3.1  million lb in 2011. Additionally,  silver 
production increased by 53% in  2012 to 191,285 oz  compared to 125,037 oz  in 
2011. This increase in production was the result of increased throughput  even 
though silver grades decreased 35% to 24.58  g/t Ag in 2012 compared to  37.74 
g/t Ag in 2011. Despite this substantial increase in throughput during  2012, 
zinc production decreased 37% to 9.1 million lb compared to 14.4 million lb in
2011. The decrease  in zinc  production resulted  from a  lower head-grade  of 
1.81% in 2012 compared to 5.57% in 2011.

During the fourth  quarter of 2012  total ore processed  increased 93% with  a 
total of  93,704 tonnes  processed (an  average of  31,234 tonnes  per  month) 
compared to 48,461 tonnes processed in the same period of 2011. This  resulted 
in copper production increasing 132% to  2.2 million lb in the fourth  quarter 
compared to  0.9  million  in  the  same  period  2011.  Additionally,  silver 
production increased 96% with 55,143 oz produced compared to 28,184 oz in  the 
same period of 2011. Despite the substantial increase in throughput during the
fourth quarter, zinc production declined 57% to 0.9 million lb compared to 2.1
million lb in the same period of 2011.  This decrease was the result of a  64% 
decline in zinc  grades to 0.94%  in the  fourth quarter of  2012 compared  to 
2.63% in the same period of 2011.

A summary of production from the Bolivar Mine for the year-end and the  fourth 
quarter of 2012 have been provided below.

                                                                 
Bolivar                   3 Months Ended                  Year ended
Production^1        Dec 31,    Dec 31,   % Var.   Dec 31,    Dec 31,   % Var.
                      2012       2011              2012        2011
                                                                 
Copper (000 lb)         2,163        933   132%       6,790      3,115    118%
Zinc (000 lb)             904      2,087   -57%       9,125     14,414    -37%
Silver (oz)            55,143     28,184    96%     191,285    125,037     53%
                                                                 

^1 For a detailed summary of production for the Bolivar Mine please click
here.

Cusi, Mexico

Total production at Cusi increased 163%  in 2012 with 84,027 tonnes  processed 
compared to 31,954  tonnes in  2011. The higher  tonnage is  explained by  the 
additional processing of 29,903 tonnes of  tailings at the Malpaso mill  while 
Cusi's material accounted  for 54,125  tonnes. In this  context, the  combined 
effect of historic tailings and Cusi's  material during 2012 drove silver  and 
lead grades down to 157 g/t and 0.50%, compared to 185 g/t and 0.90% in  2011, 
respectively.

Total production at  Cusi increased 202%  in the fourth  quarter of 2012  with 
26,550 tonnes processed compared to 8,804  tonnes in the same period in  2011. 
The higher tonnage is explained by the additional processing of 11,053  tonnes 
of historic tailings at the Mal Paso mill while Cusi's material accounted  for 
15,496 tonnes. In this context, the  combined effect of historic tailings  and 
Cusi's material during the fourth quarter of 2012 drove silver and lead grades
down to 154 g/t and 0.46%, compared to 192 g/t and 0.67% in the same period of
2011, respectively.

A summary of production  from the Cusi operation  for year-end and the  fourth 
quarter of 2012 have been provided below.

                                                                 
                         3 Months Ended                  Year ended
Cusi Production^1  Dec 31,    Dec 31,   % Var.   Dec 31,     Dec 31,   % Var.
                     2012       2011              2012        2011
                                                                 
Silver (oz)           81,680     46,488    76%     285,479     159,587     79%
   Flotation        81,680     39,323   108%     281,296     131,328    114%
   Lixiviation            0      7,166  -100%       4,183      28,259    -85%
                                                                 
Lead (000 lb)            126         90    40%         520         406     28%
                                                                 

^1 For a detailed summary of production for the Cusi Project please click
here.

2013 Production Guidance

Sierra Metals is  pleased to  issue its production  consolidated guidance  for 
2013. The Company's production estimates for 2013 have been provided below.

                        
Consolidated       Low      High
                            
Silver (oz)     2,582,000 2,922,000
Copper (000 lb)    20,400    23,100
Zinc (000 lb)      53,700    60,700
Lead (000 lb)      42,400    48,000
Gold (oz)           6,000     7,000
                        

------------------------------------------------------------------------------

Quality Assurance

The technical content  of this  news release has  been approved  by Thomas  L. 
Robyn, Ph.D., CPG, RPG, a Qualified Person as defined in NI 43-101 and  Senior 
Vice President, Exploration, for Sierra Metals, Inc.

About Sierra Metals

Sierra Metals Inc. is a Canadian  mining company focused on precious and  base 
metals from its Yauricocha mine  in Peru and its  Bolivar mine in Mexico.  The 
Company is also  advancing its  Cusi silver  project in  Mexico from  advanced 
development  into  commercial  production.  In  addition,  Sierra  Metals   is 
exploring several precious and base metal targets in Peru and Mexico. Projects
in  Peru   include  Adrico   (gold),  Victoria   (copper-silver)  and   Ipillo 
(polymetallic) at the Yauricocha Property in the province of Yauyos.  Projects 
in Mexico include Bacerac (silver) in the state of Sonora, La Verde (gold)  at 
the Batopilas Property in the state  of Chihuahua, and Las Coloradas  (silver) 
at the Melchor Ocampo Property in the state of Zacatecas.

The Company's shares trade on the Bolsa de Valores de Lima and TSXV under  the 
symbol "SMT".

This press release does not constitute an offer to sell or solicitation of  an 
offer to buy the  securities in the United  States or any other  jurisdiction. 
The Common Shares will not  be and have not  been registered under the  United 
States Securities Act of 1933, as amended,  and may not be offered or sold  in 
the United  States absent  registration or  an applicable  exemption from  the 
registration requirements.

Neither the TSXV nor its Regulation Services Provider (as that term is defined
in policies of the TSXV) accepts  responsibility for the adequacy or  accuracy 
of this release.

Forward-Looking Statements

Except for statements of historical fact contained herein, the information  in 
this press  release may  constitute "forward-looking  information" within  the 
meaning of Canadian securities law. Other than statements of historical  fact, 
all statements are "forward-looking  statements", which involve various  known 
and unknown  risk  and  uncertainties  and  other  factors,  including  market 
conditions that  may  affect the  Company's  ability to  execute  its  current 
business plan. Actual results might differ materially from results  suggested 
in any forward-looking statements. The Company assumes no obligation to update
the forward-looking statements, or  to update the  reasons why actual  results 
could differ from those reflected in the forward-looking statements unless and
until required  by  securities  laws applicable  to  the  Company.  Additional 
information identifying risks and uncertainties is contained in filings by the
Company with the Canadian securities  regulators, which filings are  available 
at www.sedar.com.

SOURCE Sierra Metals Inc.

PDF available at:
http://stream1.newswire.ca/media/2013/01/21/20130121_C7247_DOC_EN_22734.pdf

PDF available at:
http://stream1.newswire.ca/media/2013/01/21/20130121_C7247_DOC_EN_22735.pdf

PDF available at:
http://stream1.newswire.ca/media/2013/01/21/20130121_C7247_DOC_EN_22736.pdf

Contact:

For further information on Sierra Metals, please visitwww.sierrametals.com or
contact:

Daniel Tellechea
President & CEO
Sierra Metals Inc.
1 (866) 493-9646

Matt Morrish
Director, Investor Relations
Sierra Metals Inc.
1 (866) 493-9646
 
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