Sierra Metals Reports Strong Q4-2018 Financial Results at its Sociedad Minera Corona Subsidiary in Peru

TORONTO, Feb. 15, 2019

TORONTO, Feb. 15, 2019 /PRNewswire/ - Sierra Metals Inc. (TSX:SMT, BVL:SMT) ("Sierra Metals" or the "Company") announces the filing of Sociedad Minera Corona S.A.'s ("Corona") audited Financial Statements and the Management Discussion and Analysis ("MD&A") for the fourth quarter of 2018 ("Q4 2018"). 

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, 2018

• Revenues of US$39.2 million vs. US$38.2 million in Q4 2017
• Adjusted EBITDA of US$17.4 million vs. US$17.5 million in Q4 2017
• Total tonnes processed of 268,363 vs. 254,933 in Q4 2017
• Net production revenue per tonne of ore milled increased by 2% to US$144.11
• Cash cost per zinc equivalent payable pound lower by 7% to US$0.52
• All in sustaining cost ("AISC") per zinc equivalent payable pound lower by 19% to US$0.73
• Zinc equivalent production of 40.6 million pounds vs. 35.8 million pounds in Q4 2017
• $17.9 million of cash and cash equivalents as at December 31, 2018
• $41.1 million of working capital as at December 31, 2018

The Yauricocha Mine continued its strong operational and financial performance during Q4 2018, realizing increases in metal production and revenues compared to Q4 2017, despite a challenging metal price environment. Cash cost and AISC per zinc equivalent payable pound were both lower in Q4 2018 compared to Q4 2017 due to the higher metal production, and despite a $2.0 million increase in labor costs, due to the Company's union agreement and a salary adjustment to bring the 2018 salaries in line with the current market rates. The payment was made during November and December 2018 but retroactive to the entire year's salaries. Going forward these costs will be amortized over the entire year for 2019. The union was formed in July 2017 and has grown to 406 workers at the end of 2018, equivalent to approximately 60% of the Company's workforce, representing the majority of the mine employees

Igor Gonzales, President and CEO of Sierra Metals commented, "I am pleased with Yauricocha's performance in the fourth quarter which saw increased revenue and consistent adjusted EBITDA compared to the same quarter in 2017 and both stronger revenue and adjusted EBITDA on a year over year basis. We also continue to reap the benefits of investments made at the Mine through increased net production revenue per tonne of ore milled as well as through lower cash costs and all-in sustaing costs. 

The Company continues to make progress on projects at the Mine and during the fourth quarter we completed the refurbishment of the lower part of the Mascota Shaft as well as the infrastructure and tie-ins for the Yauricocha tunnel, allowing for faster turn-around in the cycle time of the trolley locomotives, and providing for increased capacity and handling of larger volumes of ore and waste.