The San Juan Mine has been developed and production will commence during the fourth quarter at a rate of tpd.

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1 No SIERRA METALS ADVANCES TOWARDS TRIPLING PRODUCTION AT ITS CUSI MINE DURING 2013 AND ANNOUNCES NEW SILVER EXPANSION PLANS BEYOND 2014, CHIHUAHUA STATE, MEXICO Toronto, Ontario May 28, 2013 Sierra Metals Inc. (TSX-V:SMT)(BVL:SMT) ( Sierra Metals or the Company ) is pleased to report that the Company is on track to triple production at its Cusi property during Development of new access drifts at the La India mine and Minerva Mine is on time and daily production is now double that of The Cusi operation is scheduled to continue to expand and reach production of at least 500 tonnes per day within 4 months. Press Release Highlights: Continued development of the Santa Eduwiges mine to depth has revealed high grades of silver on Level 10A, with silver grades up to 5,836 g/t silver and 4.1 g/t Au over 0.9 m width. Development of the La India mine (Candelaria, 20 de Noviembre, Durana and Saturno veins) is well advanced with the access drift now 200 m along the Candelaria vein. Grades up to 1,496 g/t silver and 5.4 g/t gold over 0.4 m have been encountered along the drift. The Fatima cross-cut drift has cut the Candelaria vein and a newly-started drift along the vein has returned silver grades up to 189 g/t and 1.1 g/t gold over 1.0 m width. Development of the Minerva Mine from a new adit has advanced 58 meters and cut the Minerva vein. Samples from Level 1 of the mine in an older drift returned silver grades of up to 1,237 g/t and gold up to 22.5 g/t over 0.3 m width. Development at the La India Mine has advanced 168 m The San Juan Mine has been developed and production will commence during the fourth quarter at a rate of tpd. Our Cusi operation continues to advance on time with the objective of reaching production of at least 500 tonnes per day by October this year, stated Daniel Tellechea, President & CEO of Sierra Metals. This will complete Phase One of our development of this large silver district, which was the acquisition, exploration, development and pilot mining of the property to reach commercial production and mill throughput of 500 tpd. At that rate and with our budgeted silver grade and recovery, the objective is to have an annualized silver production of over 1,000,000 ounces per year. Phase Two will begin during 2014, consisting of exploration and development with the objective of achieving production of at least 2,000 tpd by 2015 with a

2 new mill on site. For each 500 tpd increment in mine production, we expect a similar proportional increment in silver production. The Cusi project will be the major driver for increasing the Company s global silver production. An NI resource report is in progress and is expected to be completed during the third quarter of this year. The decision to construct a new mill will be subject to an economic study and financing in place. The Company s Cusi Property encompasses 60 concessions covering 11,319 hectares that include 12 inactive mines, each located on a mineralized structure, and which lie within 40 kilometres of the Malpaso Mill. These mines produced high-grade silver but became inactive due to revolution, silver price collapses and world-wide depression in the first half of the 20 th Century. The Company s objective for the Cusi property in 2013 is to advance underground development from five mines, the Santa Eduwiges, Promontorio, La India, Minerva and San Juan Mines to allow mining and development both laterally and at depth. This will bring to five the total of producing mines at the Cusi project. Management believes that Cusi is only starting to reveal its full silver potential. MINE DEVELOPMENT ACCELERATES AT CUSI IN FIVE MINES Sierra Metals is advancing development of the Minerva Mine, San Juan Mine, Promontorio Mine, La India Mine (Candelaria, 20 de Noviembre, Durana and Saturno veins) and Santa Eduwiges Mine to achieve production from these mines of 500 tonnes per day or more in the fourth quarter of 2013 (insert link to Cusi map here). Development work is being done by a combination of the Company s employees plus contractors. Production during the first quarter of this year has already nearly doubled from that of last year, reaching 315 tpd (see press release of April 30, 2013) as opposed to an average of 170 tpd during This increase in production is due mainly to expanded production from the Santa Eduwiges Mine with additional production from the Promontorio Mine. Table 1: Selected Samples from Cusi project, Chihuahua Sample # Sample Width (m) Ag g/t Au g/t Pb % Zn % Mn % Mine or Vein , S. Eduwiges , , , ind* Candelaria ind ind ind ind , , Minerva

3 , *ind = less than detection limit Santa Eduwiges Mine: This mine is where the bulk of pilot mining production was done last year. As development has progressed to deeper levels at Santa Eduwiges this year, silver grades have increased as Table 1 shows. Development of Level 10A of the Santa Eduwiges Mine continues to encounter high grades of silver, as shown in the sample map (insert link to Santa Eduwiges Level 10A here). Promontorio Mine: Development of the new access ramp has reached Levels 5 and 7 and accessed the block known as "La Azucarera" (the sugar bowl), which has an average silver grade of 284 g/t and will provide significant mineralized rock when production reaches 500 tonnes per day. Moreover, the Promontorio ramp is nearing level 8 and will reach La Azucarera in about 150 meters, after which development and mining of this block will begin. Development of the ramp will then be extended to level 9 for further development of La Azucarera and nearby veins. Minerva Mine: This mine is being reopened and is where historically the highest gold grades have been found in this mining district. Sampling of the Minerva Mine supports the earlier reported high gold levels in that mine (see press release of May 10, 2010). Level 1 of the Minerva Mine, which was sampled in 2010, was re-sampled this year in order to obtain manganese grades, which had not been determined during the earlier work. The resampling numbers shown above are within the same range and are consistent with the earlier reported numbers, the highest of which were 32.7 g/t gold and 2,530 g/t silver. The Minerva vein is being developed from a new adit located about 100 m to the north of the sampled area with the objective of reaching un-mined portions of the vein below the sampled area of Level 1.(insert link to Minerva Level 1 here) La India Mine: This mine is also being reopened. Development in the La India Mine will result in near-term production from two separate veins, the Durana and Candelaria veins (insert link to La India area map here). The Fatima and Candelaria tunnels are developing the Candelaria vein at locations about 400 m apart. The Candelaria tunnel has been developed over a length of 200 m (insert link to Candelaria tunnel map here) and has encountered high grades of gold and silver, as shown in Table 1.

4 The La India tunnel will eventually be extended about 100 m to reach the Saturno vein, which will result in production in this mine from three separate veins. San Juan Mine: This mine is also in the process of being reopened this year. The San Juan Mine has been developed and production will commence during the fourth quarter at a rate of tonnes per day. Milling: At the present, mineralized rock is shipped 35 km to the Company s wholly-owned Malpaso mill. Construction of a mill on site will reduce logistics and transport costs, and it is the Company s objective to have a 2,000 tpd mill operating on site by The decision to construct a new mill will be subject to an economic study and financing in place. Method of Analysis Samples were prepared at the Company s lab facility at its Malpaso lab and analyzed by atomic absorption for Cu, Zn, Pb, Bi, Co, Mn, Sb, Cd and Fe. Gold and silver are analyzed by fire assay method. The Malpaso laboratory follows the quality control methodology recommended by CANMET of Canada, such as assaying of blanks, duplicate samples, and check assays by commercial laboratories such as 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 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 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 TSXV under the symbol SMT. For further information on Sierra Metals, please visit or contact: Daniel Tellechea President & CEO Sierra Metals Inc. 1 (866) Matt Morrish Director, Investor Relations Sierra Metals Inc. 1 (866) 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

5 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

6 Location Map of Cusi Mining Area

7 Location Map of the La India Area

8 Sample map of the Candelaria Tunnel

9 Sample Map of Level 10A, Santa Eduwiges Mine

10 Sample Map of Level 1 of the Minerva Mine

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