Sierra Metals reports Q4-2016 financial results at its Sociedad Minera Corona subsidiary in Peru

TORONTO, Feb. 15, 2017

The Company holds an 81.8% interest in Corona. All amounts are presented in US dollars, unless otherwise stated, and have not been adjusted for the 18.2% non-controlling interest.

Corona's Highlights for the Three Months Ended December 31, 2016

• Revenues of US$31.9 million vs US$12.1 million in Q4 2015
• Adjusted EBITDA of US$ 14.9 million vs US$(1.5) million in Q4 2015
• Total tonnes processed of 236,650 vs 193,710 in Q4 2015
• Net production revenue per tonne of ore milled increased by 113% to US$132.66
• All in sustaining cost ("ASIC") per silver equivalent payable ounce lower by 25% to US$12.51
• Silver equivalent production of 2.2 million ounces vs 1.3 million ounces in Q4 2015
• Copper equivalent production of 14.4 million pounds vs 8.8 million pounds in Q4 2015
• $36.9 million of cash and cash equivalents as at December 31, 2016
• $20.0 million of working capital as at December 31, 2016

Sierra Metals continues to see a positive impact from the operational improvements program with significant improvements in Revenue and adjusted EBITDA combined with lower costs in the fourth quarter at its Yauricocha mine in Peru. The Company completed key aspects of the operational improvements program this quarter including the transitioning to a higher capacity hoist at the Mascota shaft and has returned to normalized operations. Sierra Metals achieved remarkable year over year improvements in the fourth quarter with revenue up 164%, adjusted EBITDA up 1,093% and the all in sustaining cost ("ASIC") per silver equivalent payable ounce lower by 25% to US$12.51.  The Company's continued emphasis at Yauricocha will be to focus on the production of higher value ore, further cost reductions where possible and optimization to improve the Company's production, operating margins and cash flow generation.

"I am extremely pleased with the very successful operational improvements program completed at the Yauricocha Mine and how that has translated into near record production levels in the fourth quarter complimented by remarkable improvements to revenues, adjusted EBITDA and cashflow for the Mine." stated Mark Brennan, President and CEO of Sierra Metals. "Corona's operating margins and cash flows have been positively impacted by the Company's focus on the processing of higher value ore. This can be seen by an increase of 69% in silver equivalent production year over year which has led to significant increases in revenue and adjusted EBITDA and a lower AISC per silver equivalent payable ounce. Corona's Q4 near record production level was the second highest in the 68-year history of the Mine. This was still accomplished despite a planned 25-day shutdown in November, to complete the transition to a new, higher capacity hoist located on the 720 level at the Mascota shaft (please see press release dated September 12, 2016). 

He continued, "Corona's balance sheet continues to improve and the Company has strong liquidity.  Management is optimistic that we will realize continued mineral resource growth from our brownfield exploration programs including the Esperanza zone, the Cuye-Mascota zone as well as several other high value targets within the mine complex.  When combined with significant operational improvements already completed at Yauricocha, we expect this will provide for substantial growth generation in the future."

The following table displays selected unaudited financial information for the three months and year ended December 31, 2016: