Sierra Metals Continues To Expand Mineralization At Its Bolivar Mine, Chihuahua State, Mexico

Vancouver, BC, July 31, 2013, Sierra Metals Inc. (TSX:SMT)(BVL:SMT) (Sierra Metals or “the Company”) is pleased to announce that drilling and sampling at its Bolivar copper-zinc-silver mine in Chihuahua State, Mexico, continues to demonstrate significant mineralization outside the NI 43-101 resource volume. The Bolivar NW area continues to return potentially-economic results from both the Upper and Lower Skarn horizons, while surface sampling shows the El Gallo body is larger than previously recognized.

Press Release Highlights:

Surface sampling at Old Mina de Fierro, located between the El Gallo and Alta Ley areas, returned an average from 31 samples of 0.988 g/t gold, 42 g/t silver and 0.91% copper.

Drill hole DB13B438 at Bolivar NW intercepted several zones of mineralization, including 2.35 m true width averaging 1.049 g/t gold, 176 g/t silver and 2.03% copper.

Daniel Tellechea, President and CEO of Sierra Metals, commented: “Our resource expansion efforts at Bolivar continue to return positive results. Our current reserve and resources represent only a portion of the mineralization we believe is present and will be defined as we proceed with our operations at this attractive property.”

Surface Sampling

Most of the area between El Gallo and Alta Ley mines is scree covered and there is limited bedrock exposure. An area about 100 m by 20-40 m above the Old Mina de Fierro exposes the Lower Skarn Horizon (Gallo Inferior) and was sampled recently by the Company’s geologists (see Table A below; Tables 1-3). The sampled area is located almost entirely outside the limit of the recent NI 43-10 compliant Pre-Feasibility Study (see press release of April 24, 2013). The Old Mina de Fierro tunnel was also sampled (Table 4) as well as the new access tunnel developed by the Company (Table 5). The sample sites are shown on the map of the Old Mina de Fierro area (link to map). Table A shows the average assay results for all of the samples in a particular sampled area while the bold numbers indicate the averages for the samples in that zone collected in the mineralized zone.

Table A: Results of Sampling in the Old Mina de Fierro Area

Table #	# of Samples	Gold, g/t	Silver, g/t	Copper, %	Zinc, %	Iron, %
1	31	0.988	42	0.91	0.03	31.97
Note:	27	1.107	45	0.96	0.03	32.87
2	10	0.633	52	1.48	0.11	17.08
Note:	6	1.051	84	2.23	0.08	22.28
3	22	1.005	34	0.52	0.00	32.68
Note:	17	1.184	39	0.56	0.01	33.54
4	11	0.110	11	0.88	0.10	12.78
Note:	7	0.145	13	1.20	0.13	13.53
5	18	0.039	10	0.57	0.06	15.83
Note:	4	0.753	29	1.46	0.03	28.79

Note: Samples in bold collected from the main mineralized zone.

These results show that potentially-economic widths of mineralization occur in the area. Although the area between the new Mina de Fierro tunnel and the sampled area is scree-covered, the Company’s geologists believe that the Lower Skarn horizon is mineralized throughout this area and can eventually be mined from El Gallo to Alta Ley, yielding a larger volume to the El Gallo deposit than that currently identified.

Drilling from the access tunnel between San Francisco (Alta Ley) and El Gallo ore zones will be done to determine the grades and widths of this zone along this horizon.

Drilling, Bolivar NW

Drilling continues in the Bolivar NW area of the Alta Ley mine of the Bolivar property and is returning potentially-economic grades and widths (link to map). Table B below shows the results from recent drilling:

Table B: Selected Drill Results from the Bolivar NW Area

Hole ID*	From-To (m)	Interval (m)	Est. True Width (m)	Cu%	Zn %	Au g/t	Ag g/t	Fe %	Skarn
441	241.35-247.65	6.30	5.43	0.10	8.45	0.067	5	11.44
	254.95-260.95	6.00	5.16	0.63	2.96	0.293	18	18.03
438	261.1-263.7	2.60	2.49	0.97	0.01	0.537	76	7.67
	266.7-269.15	2.45	2.35	2.03	0.13	1.049	176	6.11
	271.65-273.35	1.70	1.62	1.27	0.09	0.645	114	4.71
	299.50-303.95	4.45	4.27	0.09	3.08	0.225	8	4.47
	528.55-530.00	1.45	1.39	1.30	0.03	0.294	6	19.50

Note *: all holes have prefix DB13B

Drilling in the Bolivar NW area has demonstrated that an area over 600 x 300 meters in extent contains significant widths of copper-zinc-gold-silver mineralization. Drill spacing at this time is too wide to allow calculation of a 43-101 compliant resource but the Company plans to continue drilling this attractive area with the objective of eventually commissioning a resource update that will include the Bolivar NW area as well as other areas outside the current resource volume.

Bolivar Mine

Bolivar comprises 12 mining concessions covering approximately 6,616 hectares within the municipality of Urique, in the Piedras Verdes mining district of Chihuahua, Mexico. During 2011, the Company completed the construction of the Piedras Verdes Mill, which is located only 6 kilometres from the Bolivar Mine and has an initial capacity of 1,000 tpd, resulting in a declaration of commercial production on November 29, 2011. A construction project to increase production to 2,000 tpd is expected to be completed in 2013.

During the past 3 months ending on June 30, 2013, Bolivar produced a daily average of 1,010 tonnes at a grade of 1.23% Cu, 0.75% Zn and 30.3 g/t Ag with respective recoveries of 85.21% for Cu, 44.92% Zn and 85.58% Ag.

On April 17, 2013 a NI 43-101 compliant Prefeasibility Study (PFS) was released on the Bolivar Mine. This updated reserves and resource calculation has substantially increased the life of mine at Bolivar and shows the upside of potential of the property at depth and along strike. A summary of the NI 43-101 reserves and resources estimate can be found on at www.sierrametals.com

Method of Analysis

Samples were prepared at the ALS Chemex lab facility in Chihuahua, Mexico, and analyzed by ICP and AA methods at their facilities in Vancouver, Canada. Diamond drill samples sent for analysis consisted of half HQ-size and NQ-size diamond core split on site, prepared by the ALS Chemex sample preparation laboratory in Chihuahua, Mexico, and assayed for Au by 50 g fire assay with AA finish, and for Ag by AA on 50 g split sample at the ALS Chemex North Vancouver Laboratory. Assays for Pb, Zn and Cu are analyzed by Induction Coupled Plasma (ICP) at ALS Chemex.

Quality Control

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.

About Sierra Metals

Sierra Metals Inc. is a Canadian mining company focused on precious and base metals from its Yauricocha Mine in Peru, its Bolivar Mine and Cusi Mine in Mexico. 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 and the San Miguelito gold properties in Northern Peru. 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 the Toronto Stock Exchange under the symbol “SMT”.

For further information regarding Sierra Metals, please visit www.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

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.

Sample Location Map of the Old Mina de Fierro Area

Long Section of the Mina de Fierro

Section along N60E Showing Sample Sites on the Surface and in the Old Mina de Fierro Tunnel

Drill Hole Location Map for Bolivar NW

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