Name: Bolívar mine.

Location: The Bolívar property is located in Urique, Mexico.

Holding and Controlling Company: The mine is owned by Sierra Metals through subsidiary companies Dia Bras Mexicana and Exmin (collectively Dia Bras).

Brief Description: Bolívar is a copper/silver/zinc/gold underground mine that has been operating commercially since 2011. The property comprises 14 mineral concessions and a processing plant, which is located about 5.1 km from the mine, in the state of Chihuahua.

Brief History: Historical mining and exploration for polymetallic deposits in the Sierra Madre has been conducted since the Spanish colonial period. A native silver vein was discovered at La Nevada, near Batopilas in 1632, with sporadic mining being undertaken for almost a century.

A second phase of mining started in the late eighteenth century at the Carmen mine, but was halted, owing to the Mexican War of Independence from 1810 to 1821. A third phase took place from 1862 to 1914, while mining was halted again in 1910 as a result of the Mexican revolution. Between 1980 and 2000, under the control of the Bencomo family, 300 000 t of mineralised material was mined.

Glamis Gold developed an openpit mine and produced gold through heap leaching at Bolívar in the 1990s.

Sierra Metals acquired the claims for the Bolívar mine in 2003 and mining activities have been ongoing since February 2005.

Sierra Metals completed the construction of the Piedras Verdes mill during 2011. Commercial production at Bolívar started in November 2011.

Products: Copper/silver/zinc/gold.

Geology/Mineralisation: The Bolívar deposit is a copper/zinc skarn and is one of many precious and base metals deposits of the Sierra Madre belt, which trends north-north-west across the states of Chihuahua, Durango and Sonora, in north-western Mexico. The deposit is located within the Guerrero composite terrane, which comprises the bulk of western Mexico and is one of the largest accreted terranes in the North American Cordillera.

The Guerrero terrane, proposed to have accreted to the margin of nuclear Mexico in the late Cretaceous period, consists of submarine and lesser subaerial volcanic and sedimentary sequences ranging from upper Jurassic to middle upper Cretaceous in age. These sequences rest unconformably on deformed and partially metamorphosed early Mesozoic oceanic sequences.

The Piedras Verdes district consists of Cretaceous andesitic to basaltic flows and tuffs intercalated with greywacke, limestone and shale beds, known as the Lower Volcanic Series (LVS). This volcanic-sedimentary package has been intruded by several Upper Cretaceous to Lower Cenozoic age intermediate-to-felsic-composition plutonic bodies that range from 85 Ma to 28.3 Ma in geolic age.

The LVS and intermediate-to-felsic intrusive bodies have, in turn, been overlain by a widespread cap of rhyolitic and dacitic ignimbrites and tuffs referred to as the Upper Volcanic Series (UVS), which were deposited between 30 Ma to 26 Ma; the UVS is one of the largest continuous ignimbrite provinces in the world. All known mineralisation in this region formed during the time interval between the deposition of the LVS and the deposition of the UVS.

At the Bolívar property, the volcanic rocks strike north-west and dip to the north-east. Assuming these volcanics are younger than the granodiorite, the stock must also be tilted to the north-east.

Reserves: Proven and probable reserves as at September 30, 2016, were estimated at 4.33-million tonnes, grading 17.5 g/t silver, 0.31 g/t gold and 0.85% copper.

Resources: Indicated resources as at September 30, 2016, were estimated at 9.34-million tonnes, grading 18.1 g/t silver, 0.30 g/t gold and 0.90% copper.

Inferred resources as at September 30, 2016, were estimated at 9.05-million tonnes, grading 17.9 g/t silver, 0.33 g/t gold and 0.86% copper.

Mining Method: Underground room-and-pillar.

Major Infrastructure and Equipment: Bolívar uses a conventional copper concentrator plant. The operation is completely manual, with no automation or online monitoring being used in the processing circuit.

The mine includes access roads, a camp capable of supporting 385 people, maintenance facilities, an electrical shop, a guard house, fuel storage, laboratories, warehousing, storage yards, administrative offices, plant offices, truck scales, explosives storage, a processing plant and associated facilities, a tailings storage facility, a water storage reservoir and water tanks.

The site uses electric power from the Mexican power grid, backup diesel generators and heating from on-site propane tanks. The mine also has developed waste handling and storage facilities.

Prospects: Drilling is active on the Bolívar West zone.

Exploration programmes are targeted to increase tonnage and grade. Bolívar’s aim for 2017 is to increase production further, reduce costs and complete successful brownfield exploration that can be brought into the production schedule in 2018.

Contact: Sierra Metals investor relations Mike McAllister.

Contact Details:
Sierra Metals,
tel +1 866 493 9646,
email info@sierrametals.com , and
website http://www.sierrametals.com .