Sierra Metals Drilling At Its Yauricocha Mine, Peru, Demonstrates 150 Meter Depth Extension To Orebodies With High Grades Of Gold, Silver, Copper, Lead And Zinc Over Wide Widths

TORONTO,Jan. 9, 2013/PRNewswire/ -Sierra Metals Inc. (TSXV: SMT) (BVL: SMT) ("Sierra Metals" or the "Company") is pleased to announce that continued drilling at its Yauricocha mine inPeruhas expanded to depth known mineralization in the Central Mine Area. The positive results of the drilling programme will be documented in a forth-coming NI 43-101 resource update, scheduled for early 2013.

"These results are important because these holes are the deepest in the mine's history and demonstrate that the orebodies of the Central Mine Area have good depth potential,"saidDaniel Tellechea, the Company's President and CEO."The high grade intercepts over wide widths reported in this press release indicate that the mineralizing processes in this area were strong even in the deepest levels of the mine and we expect that these orebodies will continue to significant depths. Our drilling success with high grade intercepts at Catas and Antacaca Sur will help us upgrade resources from Inferred to Measured and Indicated Resources and increases our certainty that the Antacaca Sur and Rosaura orebodies have significant depth extensions. Moreover, we have just begun to evaluate the exploration potential outside the immediate mine area and we will continue our aggressive program to add to the mine's resources."

The Company's press release ofSeptember 6, 2012described the result of the first round of resource-expansion drilling, which more than tripled Proven and Probable Reserves to 4.2 million tonnes and quantified 1.8 million tonnes of Inferred Resources.

The second round of drilling, which is the focus of this press release, had the objective to increase further the total resource tonnage of these orebodies, increase the tonnes in Measured & Indicated Resources, and demonstrate the longer mine life expected by the Company. In order to accomplish this goal, during this second round the Company has drilled 12,263.2 meters of diamond core in 65 holes. The coding for the drill hole numbers is as follows: for drill hole ANT-11-12-08the sequence is: Orebody Drilled - Level from which hole was drilled - year hole was drilled - number of hole drilled from that level.

The attachedlong sectionshows the piercing points of the drill holes reported herein and significant assay results from recent drill holes are shown in the tables below. Results from earlier holes in the second round have been reported previously (see press release ofOctober 12, 2012). A complete list of drill holes and assay results for this second round of drilling can be foundhere.

Examination of the attached long section shows that potentially-economic intercepts have been made under the known mineralization of the Cuye-Catas zone and the Antacaca-Rosaura-Antacaca Sur zone.

Antacaca Orebody Drill Results Level 920 to Level 970

* All holes have the prefix ANT-14-12-

Antacaca Sur Orebody Drill Results Level 770

* All holes have the prefix ANT-11-12-

Catas Orebody Drill Results Level 920 to Level 1220

* All holes have the prefix CAT-14-12

Rosaura Orebody Drill Results Level 920 to Level 970

* All holes have the prefix ROS-14-12-

Exploration Programme

Drilling continues in the Central Mine Area from Level 920 with the objective of exploring the orebodies Antacaca, Antacaca Sur and Rosaura to the 1220 level, a vertical distance of 300 meters below the existing workings. These results will be used to determine the continuity of these bodies to depth and to estimate additional mineral resources that will be converted to mine reserves according to NI 43-101 standards.

In the Cachi Cachi mine area, a drilling program will be conducted to explore the Privatizadora, Manuelita, Elissa and other bodies with the objective of augmenting the mineral resources in this area of the property.

Quality ControlThe technical content of this news release has been approved byThomas L. Robyn, Ph.D., CPG, RPG, and a Qualified Person as defined in NI 43-101.

About Sierra MetalsSierra Metals Inc. is a Canadian mining company focused on precious and base metals from its Yauricocha mine inPeruand its Bolivar mine inMexico. The Company is also advancing its Cusi silver project inMexicofrom advanced development into commercial production. In addition, Sierra Metals is exploring several precious and base metal targets inPeruandMexico. Projects inPeruinclude Adrico (gold),Victoria(copper-silver) and Ipillo (polymetallic) at the Yauricocha Property in the province of Yauyos. Projects inMexicoincludeBacerac(silver) in thestate of Sonora,La Verde(gold) at the Batopilas Property in thestate of Chihuahua, and LasColoradas(silver) at the Melchor Ocampo Property in the state ofZacatecas.

For further information on Sierra Metals, please visitwww.sierrametals.comor contact:

This press release does not constitute an offer to sell or solicitation of an offer to buy the securities inthe United Statesor 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 inthe United Statesabsent 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 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 atwww.sedar.com.

SOURCE Sierra Metals Inc.

PDF available at:http://stream1.newswire.ca/media/2013/01/09/20130109_C4710_DOC_EN_22360.pdf

PDF available at:http://stream1.newswire.ca/media/2013/01/09/20130109_C4710_DOC_EN_22361.pdf

For further information: <p> <b>Daniel Tellechea</b><br/> President & CEO<br/> Sierra Metals Inc.<br/> 1 (866) 493?9646<br/> <br/> <b>Matt Morrish</b><br/> Director, Investor Relations<br/> Sierra Metals Inc.<br/> 1 (866) 493?9646 </p>