67% Output Expansion At Bolivar Mine 

 

TORONTO - Sierra Metals Inc. reported the results of a Preliminary Economic Assessment ("PEA") regarding the Company's Bolivar Mine, located in Chihuahua State, Mexico. The PEA is based on technical inputs from various independent consulting groups, including; SRK, Redco, Anddes and Transmin. Igor Gonzales, President and CEO of Sierra Metals said, "The Company is very encouraged by the results of this PEA as they support the plan to profitably develop and grow the Bolivar Mine in sustainable and staged steps from 3,000 TPD currently, to 3,600 TPD in Q1-2019, and to 5,000 TPD in mid-2020, based on consensus metal pricing.

The Company is incorporating an aggressive Capex program into the PEA of US$96.0 million over the life of the mine, which includes exploration drilling to increase the mineral resources and convert the existing resources to reserves. Additionally, the PEA reflects an aggressive development program designed to open a mineable reserve at depth and on strike. The Opex reflects yearly production development, definition drilling programs, and other operational costs.

The current study focuses on the current Mineral Resource reported in the 43-101 Technical Report filed on July 5, 2018 and does not include any drilling completed after October 31, 2017. The Company is continuing with its successful brownfield exploration programs and expects to continue to grow the mineral resources at the Bolivar Mine this year. We believe that this expansion not only provides additional value to the company, as the PEA quantifies, but could also leverage the value of future resource additions. Potential new copper pounds discovered could be incorporated into production plans earlier than if the Company maintained current capacity levels."

He concluded, "We are continuing with our strategy to increase shareholder value and grow the reserve and resource base at the Company. We successfully completed brownfield exploration programs at all three mines and increased the mineral reserves and resources during the past two years. Additionally, we implemented a successful operational improvement program in Peru and have completed an effective turn-around program in Mexico, and we have already seen returns on this well-spent capital. Building upon these successes, we have completed a PEA at Cusi and Bolivar, and scoping studies at the Yauricocha Mine expected shortly, which will maximize value and profitability through the implementation of automation and possible throughput increases which will further drive growth and benefit all shareholders in the future."

The property is located in the Piedras Verdes District of Chihuahua State, Mexico, approximately 250 kilometers southwest of the city of Chihuahua and consists of 14 mineral concessions (6,800 hectares). The Bolivar deposit is a Cu-Zn skarn and is one of many precious and base metal deposits of the Sierra Madre belt, which trends north-northwest across the states of Chihuahua, Durango and Sonora in northwestern Mexico (Meinert, 2007). Mineralization exhibits strong stratigraphic control and two stratigraphic horizons host the bulk of the mineralization: an upper calcic horizon, which predominantly hosts Zn-rich mineralization, and a lower dolomitic horizon, which predominantly hosts Cu-rich mineralization. In both cases, the highest grades are developed where structures and associated breccia zones cross these favorable horizons near skarn-marble contacts.

To determine how mine output could be increased, Sierra Metals commissioned Redco Mining Consultants to undertake a scoping study, considering; existing development and infrastructure, geotechnical characteristics, geological controls and mineralization style. The study (Redco, 2018) determined that Longhole Stoping could be used to achieve sustainable production of 5,000 TPD. As part of their scoping study, Redco considered plans for ventilation on a general scale. Sierra Metals recognizes that further and more detailed ventilation plans are required to support a deeper conceptual mine design.

The Piedras Verdes Plant, located 5.1 kilometers from the Bolivar Mine, uses a conventional crushing-milling-flotation circuit to recover mineral and to produce commercial quality copper concentrates with silver and gold by-product credits. Mineral is delivered from the mine to the plant in 18-tonne trucks. Mineral processing and the recovery of the mineral is demonstrated, and copper, silver and gold recoveries are established at 85.0%, 78.2% and 63.7% respectively. The Piedras Verdes Plant current throughput is 3,000 TPD. In line with proposed increases in mine output, the processing capacity at Piedras Verdes will increase to 3,600 TPD in Q1-2019, and to 5,000 TPD by mid-2020.

The current tailings storage facility has an in-situ capacity to store tailings until year end 2019. A plan is currently underway to construct a much larger capacity facility which will include the installation of a starter dam followed by deposition of filtered - dewatered tailings in a facility which will accommodate 14 million tonnes of filtered tailings providing capacity for future plant expansion. Engineering for this program is provided by ANDDES Engineers from Peru.