VANCOUVER, April 24, 2014 /PRNewswire/ - Sierra Metals Inc. (TSX:SMT)(BVL:SMT) ("Sierra Metals" or the "Company") is pleased to announce that development of the Gallo Superior Magnetita orebody has started and mining will begin within two months, adding another mining area to its production. Gallo Superior Magnetita is included in the 43-101 compliant Pre-Feasibility Study authored by Gustavson Associates of Lakewood, Colorado ("Gustavson") and dated May 31, 2013. Development is along two fronts, Rebaje 398 and Banco 314.
In addition, the Company's exploration drilling in the Bolivar NW area has further defined a mineralized zone that is not within the previous resource or reserve calculations done by Gustavson. This area is located 400 meters northwest of the Alta Ley mine of Bolivar.
| Press Release Highlights:
"The development of Gallo Superior Magnetita is important and is part of our plan to achieve production of 2,500 tonnes per day in 2015", stated Daniel Tellechea, President & CEO of Sierra Metals. "The El Gallo orebodies contain significant tonnage and are hosted in thick mantos that allow us to mine large volumes on a daily basis. Going forward, we expect to have significant growth in production at Bolivar as underground development advances. In addition, our exploration results, especially at Bolivar Northwest, support our geologists' interpretation that the overall Bolivar area is extensively mineralized and more discoveries are expected in the future."
The Gallo Superior Magnetita orebodyis 20 meters thick and 200 x 150 meters in lateral dimensions,and is hosted in a manto that dips 24 degrees to the NE. Ore mined during development work and processed through the mill has returned average copper grades 12% higher than indicated in the resource estimation. This variation reflects how mined grades can differ from those determined from widely-spaced drill holes.
Figure 1 shows a perspective view of the Gallo Superior Magnetita orebody.
Bolivar Northwest Viejo: Development and mining of the Bolivar NW Viejo area, located near the Level 6 portal of Alta Ley and drilled in 2004, has commenced because the mineralization at that location is now economic with the Piedras Mill in operation at 2,000 tpd. There are two blocks in this area: an underground mineable block (Block C) and an open-pitable block (Block A). These mineralized bodies are not included in the resource calculations completed by Gustavson, dated October 15, 2012. The Company's geologists estimate that Block C contains 90,000-110,000 tonnes averaging 35-40 g/t silver, 1.2-1.4% copper and 0.2-0.4% zinc, while Block A contains 190,000-210,000 tonnes averaging 17-21 g/t silver, 0.5-0.7% copper and 2-3% zinc. The potential quantity and grade is conceptual in nature and there has been insufficient exploration to define an NI 43-101 compliant resource.
The underground workings for Bolivar NW Viejo project will also be a starting point for a ramp to the Bolivar NW area shown in Figure 2.
Bolivar Northwest: In addition to the resource in the main El Gallo and Alta Ley deposits, the Company's exploration drilling has discovered a deposit that is not within the current resource. On May 14, 2013, the Company published drill results from the Bolivar NW area that indicate potentially-economic copper-zinc-(silver-gold) mineralization.
This drilling defined the mineralized bodies in Bolivar NW, which are shown as a perspective view in Figure 2. Figure 2 also shows the locations of the major mining areas of the Bolivar project as well as the location of a proposed ramp that will access Bolivar NW. Bolivar NW is located 400 meters northwest of Bolivar Alta Ley/Bolivar NW Viejo and extends over an area 250 x 170 meters with a cumulative thickness of Upper and Lower Skarns of 8 meters.
The Company's geologists infer that, based on drilling done before and during 2013, Bolivar NW contains 500,000-600,000 tonnes averaging 0.9-1.1% copper, 0.9-1.1% zinc, 30-35 g/t silver and 0.5-0.7 g/t gold. The mineralized volume, however, remains open to the northwest. The potential quantity and grade is conceptual in nature and there has been insufficient exploration to define an NI 43-101 compliant resource.
Drilling has restarted at Bolivar NW in order to expand the mineralized zone and results will be included in the next NI 43-101 compliant update on Bolivar planned for late 2014.
The Company has inititated an aggressive exploration program on the Bolivar property, outside the main mine area. The focus of the program will be to test several precious metals targets that have been identified by the Company's geologists over several years (Figure 3). They are:
La Lilly: This area contains at least four NE-trending quartz veins that extend up to 2,000 meters on strike, range up to 2-3 meters wide, and were the subject of small-scale historical mining. Selected sampling of mineralized rock at the mine dump by the Company's geologists has returned values of: (1) 6.0 g/t gold, 1,136 g/t silver, 8.35% copper, 11.04% lead and 6.94% zinc; and (2) 4.2 g/t gold, 1,192 g/t silver, 8.88% copper, 10.84% lead and 7.68% zinc. Drilling of the southeastern-most vein began in mid-April.
Veta Piedras Verde: This NE-trending quartz vein is located near the Company's Piedras Verde mill and is hosted by an andesite dike cutting granodiorite. The vein is variably brecciated and has been mapped over a distance of about 500 meters; it is 1.5-3 meters wide where exposed. The best assays from chip-channels are: 3.0 g/t gold, 601 g/t silver, 0.44% copper, 5.63% lead and 0.01% zinc; and, 2.0 g/t gold, 340 g/t silver, 0.29% copper, 4.18% lead and 0.00% zinc. Drilling of the vein began in early April.
La Sidra/La Verdolaga: This area contains NE-trending quartz veins that extend for more than 1,000 meters on strike, range in width from 1 meters to 6 meters, and have returned gold grades that are highly-anomalous. For example, two 2-meter-wide channel samples assayed: (1) 1.57 g/t gold, 81 g/t silver, 10.55% lead, 7.32% zinc and 0.40% copper; and, (2) 1.70 g/t gold, 11.4 g/t silver, 0.73% lead, 1.20% zinc and 0.44% copper. Detailed mapping and sampling of this area was started in mid-April.
Churuguayvo (Reyna de Oro): This prospect was previously drilled by two companies, with 10 NQ core holes (1997) and 22 RC holes (2004 & 2005). The Company has recovered most of the drill core but none of the RC cuttings. Records from the RC drilling programs indicate high-grade gold zones, with values such as 19.8 meters @ 3.10 g/t, 21.3 meters @ 4.77 g/t and 13.7 meters @ 3.52 g/t (all lengths are drill lengths). The Company intends to re-map and re-drill the prospect with the objective of defining underground-mineable gold mineralization.
La Cilica: This prospect was explored by historical operators who completed minor underground works. It is a narrow structure in andesite, about 0.8 meters wide where exposed, that hosts quartz breccia containing semi-massive sulfide minerals such galena and sphalerite. Sampling of the structure returned high precious and base-metal grades, such as: (1) nine samples collected along various parts of the vein averaged 1.61 g/t gold 107 g/t silver, 1.24% lead, 1.09% zinc and 1.25% copper. Four samples collected from dumps at prospect pits averaged 1.30 g/t gold, 30 g/t silver, 1.52% lead, 3.02% zinc and 0.96% copper. Although these results are attractive, the vein is not the primary target.
The primary target here is large skarn deposits hosted by the underlying thick beds of skarnified carbonate rocks. These rocks have mapped thicknesses of over 400 meters where the overlying andesite has been eroded to expose them. At the Cilica prospect, they underlie the andesite at an unknown depth.Mapping will be done to enable the Company's geologists to infer the depth to the favorable host rocks, the same type that hosts the Bolivar Mine, and plan a drill program to explore for large-tonnage Cu-Zn-(Ag-Au) deposits hosted in skarn.
The Company expects to providein early May an update on the mapping, sampling and drilling programs now in progress.
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".
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.