2014

Sierra Metals reports high-grade intercept of 28.8% zinc over 4.1 meters true width at Yauricocha, Peru, and extension of Antacaca orebody to depth at least 250 vertical meters

VANCOUVER, June 20, 2014 /PRNewswire/ - Sierra Metals Inc. (TSX:SMT)(BVL:SMT) ("Sierra Metals" or the "Company") is pleased to announce that it has completed the first phase of its deep drilling program at its Yauricocha mine in Peru, with all five deep drill holes intercepting their targets of mineralized zones. The new drill results reported in this press release demonstrate that the Antacaca orebody extends 250 meters deeper than previously known and that a previously unknown, high-grade mineralized body has been discovered near the Catas orebody.

Press Release Highlights:
  • The Company has completed three additional deep holes on the Catas and Antacaca orebodies that cut copper mineralization at Level 1350, all of which cut wide zones of high grade mineralization:
    • Drill hole CAT-14-14-03 in the Antacaca orebody cut 3.95 meters true width averaging 16.74% zinc, 58.4 g/t silver, 0.23% lead, 0.64% copper and 0.56 g/t gold ( 711.2 g/t silver equivalent grade.) .
      • In addition, the hole cut 2.85 meters true width averaging 21.39% zinc, 357.2 g/t silver, 15.24% lead and 0.13% copper and 0.07 g/t gold (1515.8 g/t silver equivalent grade) in a parallel zone.
      • The hole also cut, at depth, 5.60 meters true width averaging 1.14% copper 250 meters below the current resource boundary.
    • Drill hole CAT-14-14-04 in the Catas orebody cut 4.1 meters true width averaging 28.83% zinc, 67 g/t silver and 0.25% copper (1040.9 g/t silver equivalent grade) representing the top of a previously-unknown orebody, potentially adding to the upside potential of the Central Mine Area.
    • In addition, at depth the hole cut 8.2 meters true width averaging 1.22% copper and 0.98 g/t gold.
    • Drill hole ANT-14-14-05 in the Antacaca orebody cut 9.0 meters true width of 1.08% copper, 3.30% zinc, 30.1 g/t silver and 0.39 g/t gold (274.8 g/t silver equivalent grade), also 250 meters below the current resource boundary.
      • The hole also cut a new polymetallic body 0.8 meters in true width averaging 621.9 g/t silver, 33.52% lead and 26.30% zinc, which is inferred to represent the top of an orebody that will widen at depth (2,475.8 g/t silver equivalent grade).

"All five holes from the current deep drilling program have intercepted the targeted deep extensions of the main orebodies. In addition, they intercepted multiple mineralized high-grade zones, some of which may be extensions of narrower orebodies currently being mined at higher elevations and others that may be new discoveries," stated Daniel Tellechea, President & CEO of Sierra Metals.  "We continue to demonstrate that the four major orebodies at Yauricocha's Central Mine, the Catas, Antacaca, Rosaria and Antacaca Sur, extend significantly to depth and that we are adding significantly to the mine's resource potential."

Antacaca Orebody

Drill hole ANT-14-14-03 was drilled to test the depth extension of the Antacaca orebody, which is immediately adjacent to the Catas orebody, as shown in the enclosed long section (Figure 1).  This hole cut a 5.6 meter wide zone (true width) of 1.14% copper and 0.82 g/t gold 250 meters below the current resource boundary (see Figure 1), thereby significantly extending the Antacaca orebody to depth.

Drill hole ANT-14-14-05 was also drilled to depth and cut 9.0 meters true width of 1.08% copper, 30.1 g/t silver and 0.39 g/t gold.  This hole expands the Antacaca orebody at least 100 meters to the southeast of hole -03, thereby significantly expanding the orebody both to depth and laterally.

Further drilling will be done to expand this mineralization.

Catas Orebody

A third long hole (CAT-14-14-04) drilled from Level 920 has penetrated copper mineralization in the Catas orebody at Level 1350, expanding the known strike length of the Catas orebody at depth by at least 100 meters.  The hole also cut several polymetallic ore zones above the main target zone, similar to those cut by drill holes CAT-14-14-01 and -02 (see press release dated May 6, 2014).

Figure 2, Figure 3 and Figure 4 show the zones of mineralization in the drill holes.

Table 1 below shows results from the two holes:

Table 1: Drilling Results from the Catas Orebody, Yauricocha Mine

Drill Hole

From-To, m

Core
Length, m

Est.
True
Width,
m

Ag g/t

Pb%

Cu%

Zn%

Au g/t

Ag

Equiv

g/t***

Ore Type

14-03*

14.7-19.3

4.6

3.9

271.4

14.54

0.09

23.46

0.17

1479.1

Polymetallic


23.55-27.00

3.45

2.85

357.2

15.24

0.13

21.39

0.07

1515.8

Polymetallic


44.4-47.0

3.0

2.5

137.6

5.01

0.04

2.11

0.01

357.1

Intrusive**


60.45-64.00

3.55

2.80

125.3

4.92

0.06

6.48

0.00

485.9

Intrusive**


274.0-279.0

5.0

4.2

83.8

0.19

0.34

5.54

1.09

124.3

Polymetallic


324.2-328.65

4.45

3.95

58.4

0.23

0.64

16.74

0.56

711.2

Polymetallic


580.0-587.0

7.0

5.6

16.3

0.10

1.14

0.82

0.05

166.3

Copper

14-04+

325.0-331.1

6.1

4.1

67.0

0.10

0.25

28.83

0.10

1040.9

Polymetallic


336.0-337.3

1.3

0.7

54.1

0.07

0.33

1.82

0.06

153.1

Pyritic


340.8-344.0

3.2

2.1

96.3

0.17

0.04

0.24

0.69

156.3

Pyritic


426.0-431.15

5.25

3.75

33.7

0.07

0.35

5.86

0.45

290.7

Polymetallic


515.9-520.0

4.1

2.3

24.5

0.07

0.58

2.40

1.50

258.1

Polymetallic


520.0-532.0

12.0

8.2

29.9

.04

1.22

0.21

0.95

222.8

Polym+Cu

Incl.

520.0-522.0

2.0

0.8

65.3

0.05

1.71

0.20

1.13

319.8

Copper

Incl.

522.0-525.2

3.2

2.4

10.3

0.04

0.58

0.53

1.03

152.8

Pyritic

Incl.

525.2-527.0

1.8

1.2

64.2

0.02

2.56

0.08

1.43

420.1

Copper

Incl.

527.0-530.0

3.0

2.2

8.5

0.05

0.51

0.08

0.47

94.4

Pyritic

Incl.

530.0-532.0

2.0

1.3

26.9

0.03

1.63

0.05

0.91

253.9

Copper


532.0-540.0

8.0

5.8

6.1

0.04

0.63

0.04

0.27

90.2

Pyritic

14-05*

16.2-24.4

8.2

4.2

326.7

16.97

0.19

26.07

0.02

1691.2

Polymetallic


43.0-53.8

10.8

6.6

39.7

1.15

0.03

1.39

0.00

121.6

Intrusive**


91.0-92.4

1.4

0.8

621.9

33.52

0.17

26.30

0.03

2474.8

Polymetallicx


600.1-614.9

14.8

9.0

30.1

0.06

1.08

3.30

0.39

274.8

Mixed

Incl.

600.1-606.9

6.8

4.1

31.6

0.06

0.86

6.91

0.59

383.7

Polymetallic

Incl.

606.9-607.5

0.6

0.2

53.6

0.04

2.08

0.43

0.82

334.0

Copper

Incl.

607.5-608.0

0.5

0.1

31.0

0.30

0.96

0.65

0.28

177.2

Pyritic

Incl.

608.0-608.9

0.9

0.4

47.5

0.05

1.73

0.79

0.68

295.1

Copper

Incl.

608.9-612.0

3.1

2.2

18.1

0.06

0.61

0.11

0.09

91.8

Pyritic

Incl.

612.0-614.9

2.9

2.0

28.8

0.02

1.73

0.06

0.02

210.5

Copper

* Prefix ANT-14-
** Intrusive rock hosting veinlets containing galena and sphalerite
+ Prefix CAT-14-
X New polymetallic body
***Equivalent silver grade is calculated using $20/oz Ag, $3.00/lb Cu, $0.85/lb Pb, $0.95/lb Zn, $1,250/oz Au

 

Implications

The results of these five holes, CAT-14-14-01, -02 and -04 plus ANT-14-14-03 and -05, demonstrate that potentially-economic mineralization in the Central Mine Area continues to much greater depth than previously known (Note: Results from holes CAT-14-14-01 and CAT 14-14-02 were released on May 6, 2014.)  The potential to extend Yauricocha's mine life in this area is greatly enhanced by these results.  Further drilling of this area is planned.

The high grade zinc intercept in CAT-14-14-04 (28.83%) from 325.0-331.1 meters down-hole (Level 1170) may represent the top of a previously-unknown orebody, potentially adding further to the upside potential of the Central Mine Area.  Drill hole ANT-14-14-05 also cut a high-grade polymetallic body. The relationship between these two apparently new bodies will be determined by additional drilling.

In addition, the Company is currently extending Level 920 to the southeast to develop a drill station that will test the depth and lateral extents of the Antacaca Sur orebody, which currently is known to extend only to Level 970.  This drill station will be able to test the depth extent of Antacaca Sur by a minimum of an additional 300 meters, to Level 1270. 

Yauricocha Property

Yauricocha is an underground mine located in western central Peru in the Yauyos province, approximately 12 km west of the Continental Divide. The Yauricocha property covers 18,778 hectares that straddle a 20 km strike length of the prolific Yauricocha fault, a major ore controlling structure in this part of western central Peru. The mine is at an average altitude of 4,600 meters and has been a producing asset for more than 60 years. Ore is processed at the on-site Chumpe plant using a combination of crushing, grinding and flotation; the plant has a capacity of 2,500 tpd. The mine produces silver, lead, zinc, copper and gold in concentrates. 

In May 2011, Sierra Metals acquired 81.8% of Sociedad Minera Corona's 100% position in Yauricocha and initiated an aggressive drilling program to expand the mine's reserves.  By December 2013, this program had increased Proven and Probable reserves from 1.1 million tonnes to 6.4 million tonnes.

Mineralization at Yauricocha is high-temperature, carbonate-replacement type and orebodies tend to be elongated, tabular-shaped, and extend to depth.  In plan view, the orebodies are lenses that dip steeply to the NE or are approximately vertical with major axes parallel to the general strike of the strata (NW-SE).  Their vertical dimensions are almost always much greater than their horizontal.  The orebodies are emplaced in the Jumasha limestone and form groupings within the limestone as well as along the contact with the Celendín lutites and in contact with intrusive masses.

Method of Analysis

Samples are prepared at the Yauricocha lab facility at the Chumpe mill, which is on site. Core and channel samples from the mine are assayed utilizing one of two procedures. Silver, lead, zinc and copper are assayed by atomic absorption. Gold is fire-assayed with an atomic absorption finish. Diamond drill samples sent for analysis consist of half NQ-size and BQ-size diamond core split on site.

The quality assurance-quality control (QA-QC) program employed by Sierra Metals has been described in detail in the NI 43-101 report on Yauricocha dated November 15, 2013, prepared by Gustavson Associates of Denver, Colorado, which is available for review on SEDAR.

Quality Assurance

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

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 Mine 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 and La Verde (gold) at the Batopilas Property in the state of Chihuahua.

The Company's shares trade on the Bolsa de Valores de Lima and the Toronto Stock Exchange under the symbol "SMT".

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 at www.sedar.com.


SOURCE Sierra Metals Inc.



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