Sierra Metals Completes the Sale of the Cusi Mine

Rhea-AI Summary

Sierra Metals Inc. (TSX:SMT | OTCQX:SMTSF | BVL: SMT) has completed the sale of its Cusi Mine in Mexico to Minera San Bernabé, a subsidiary of Silverco Mining Corp. The transaction, valued at US$2.5 million in cash, also includes a 2.0% net smelter royalty granted to Sierra Metals. Silverco Mining has the option to purchase half of the royalty for US$5.0 million. This strategic move allows Sierra Metals to focus on its core assets: the Yauricocha polymetallic mine in Peru and the Bolivar copper mine in Mexico. The sale aligns with the company's strategy to streamline operations and allocate resources more effectively.

Positive

• Received US$2.5 million in cash from the sale of Cusi Mine
• Retained a 2.0% net smelter royalty on Cusi Mine production
• Potential for additional US$5.0 million if buyer purchases half of the royalty
• Allows focus on core assets: Yauricocha and Bolivar mines

Negative

• Divestment of an operating mine may reduce overall production and revenue

TORONTO--(BUSINESS WIRE)-- Sierra Metals Inc. (TSX:SMT | OTCQX:SMTSF | BVL: SMT) (“Sierra Metals” or the “Company”) is pleased to announce, further to the May 22, 2024 news release, the completion of the sale of the Cusi Mine and surrounding mineral concessions located in Mexico (collectively, the “Cusi Mine”) to Minera San Bernabé, S.A. de C.V., a subsidiary of Silverco Mining Corp. (“SMC”).

The Company sold the Cusi Mine for US$2.5 million in cash and a 2.0% net smelter royalty in respect of the Cusi Mine granted in favour of Sierra Metals (the “Royalty”)¹. SMC has the right to purchase one-half of the Royalty at any time in exchange for a cash payment to Sierra Metals of US$5.0 million.

The sale of Cusi Mine will allow the Company to direct its full efforts and resources to grow its two core assets, the Yauricocha polymetallic mine in Peru and the copper-producing Bolivar mine in Mexico.

About Sierra Metals

Sierra Metals is a Canadian mining company focused on copper production with additional base and precious metals by-product credits at its Yauricocha Mine in Peru and Bolivar Mine in Mexico. The Company is intent on safely increasing production volume and growing mineral resources. Sierra Metals has recently had several new key discoveries and still has many more exciting brownfield exploration opportunities in Peru and Mexico that are within close proximity to the existing mines. Additionally, the Company has large land packages at each of its mines with several prospective regional targets providing longer-term exploration upside and mineral resource growth potential.

Forward-Looking Statements

This press release contains forward-looking information within the meaning of Canadian securities legislation. Forward-looking information relates to future events or the anticipated performance of Sierra and reflect management's expectations or beliefs regarding such future events and anticipated performance based on an assumed set of economic conditions and courses of action. In certain cases, statements that contain forward-looking information can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", "believes" or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might", "will allow", "occur" or "be achieved" or the negative of these words or comparable terminology. By its very nature forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual performance of Sierra to be materially different from any anticipated performance expressed or implied by such forward-looking information.

Forward-looking information is subject to a variety of risks and uncertainties, which could cause actual events or results to differ from those reflected in the forward-looking information, including, without limitation, the risks described under the heading "Risk Factors" in the Company's annual information form dated March 15, 2024 for its fiscal year ended December 31, 2023 and other risks identified in the Company's filings with Canadian securities regulators, which are available at www.sedarplus.ca.

The risk factors referred to above are not an exhaustive list of the factors that may affect any of the Company's forward-looking information. Forward-looking information includes statements about the future and is inherently uncertain, and the Company's actual achievements or other future events or conditions may differ materially from those reflected in the forward-looking information due to a variety of risks, uncertainties and other factors. The Company's statements containing forward-looking information are based on the beliefs, expectations, and opinions of management on the date the statements are made, and the Company does not assume any obligation to update such forward-looking information if circumstances or management's beliefs, expectations or opinions should change, other than as required by applicable law. For the reasons set forth above, one should not place undue reliance on forward-looking information.

¹ The Royalty was reduced to 0.5% in respect of two (2) surrounding mineral concessions comprising part of the Cusi Mine which the Company believes are not material.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240719218730/en/

For further information regarding Sierra Metals, please visit www.sierrametal.com or contact:

Investor Relations

Sierra Metals Inc.

+1 (866) 721-7437

info@sierrametals.com

Source: Sierra Metals Inc.

FAQ

What was the sale price of Sierra Metals' Cusi Mine?

Sierra Metals (SMTSF) sold the Cusi Mine for US$2.5 million in cash and retained a 2.0% net smelter royalty.

Who purchased Sierra Metals' Cusi Mine?

The Cusi Mine was purchased by Minera San Bernabé, S.A. de C.V., a subsidiary of Silverco Mining Corp.

What are Sierra Metals' remaining core assets after selling Cusi Mine?

After selling Cusi Mine, Sierra Metals' core assets are the Yauricocha polymetallic mine in Peru and the Bolivar copper mine in Mexico.

What royalty did Sierra Metals retain on the Cusi Mine sale?

Sierra Metals retained a 2.0% net smelter royalty on the Cusi Mine, with the buyer having an option to purchase half for US$5.0 million.