SIERRA METALS INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023

Corporate Office

77 King Street West, Suite 400,

TSX: SMT

Toronto-Dominion Centre, Toronto,

www.sierrametals.com

ON M5K 0A1 Canada

Sierra Metals Inc.

Management's Discussion and Analysis

For the three months and nine months ended September 30, 2023 (In thousands of United States dollars, unless otherwise stated)

TABLE OF CONTENTS

2

1.

INTRODUCTION

3

2.

COMPANY OVERVIEW

3

3.

Q3 2023 OPERATING AND FINANCIAL HIGHLIGHTS

4

4.

OUTLOOK

7

5.

RESULTS OF OPERATIONS

9

6.

SUMMARIZED FINANCIAL RESULTS

13

7.

QUARTERLY FINANCIAL REVIEW

16

8.

LIQUIDITY AND CAPITAL RESOURCES

19

9.

SAFETY, HEALTH AND ENVIRONMENT

20

10.

OTHER RISKS AND UNCERTAINTIES

20

11.

NON-IFRS PERFORMANCE MEASURES

21

12.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

25

13.

OFF BALANCE SHEET ARRANGEMENTS

27

14.

DISCLOSURE CONTROLS AND INTERNAL CONTROLS OVER FINANCIAL

REPORTING ("ICFR")

27

15.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

28

2

Sierra Metals Inc.

Management's Discussion and Analysis

For the three months and nine months ended September 30, 2023 (In thousands of United States dollars, unless otherwise stated)

1. INTRODUCTION

This Management's Discussion and Analysis ("MD&A") should be read in conjunction with Sierra Metals Inc.'s (the "Company" or "Sierra" or "Sierra Metals") unaudited condensed interim consolidated financial statements for the three-month period ("Q3") and nine-month period ("9M") ended September 30, 2023 and related notes thereto (the "Financial Statements"), which have been prepared in accordance with International Financial Reporting Standards ("IFRS"), as issued by the International Accounting Standards Board ("IASB"). References herein to "$" are to the United States dollar and "C$" are to the Canadian dollar and all tabular amounts are expressed in thousands of $ unless otherwise stated. All information contained in this MD&A is current as of November 9, 2023 unless otherwise noted.

Consolidated operational and financial numbers for the Q3 and 9M ended September 30, 2023 and 2022 exclude numbers related to the Company's Cusi Mine, which has been classified as an 'asset held for sale' as on September 30, 2023.

The Company's common shares (the "Common Shares") are listed and traded on the Toronto Stock Exchange (the "TSX") under the symbol "SMT". Additional information relating to the Company, including the Company's Annual Information Form ("AIF") for the year ended December 31, 2022 dated March 28, 2023, is available on SEDAR+ at www.sedarplus.ca and on the Company's website at www.sierrametals.com. A cautionary note regarding forward-looking information follows this MD&A.

QUALIFIED PERSON

Ricardo Salazar Milla, Corporate Manager of Mineral Resources is a member of the Australian Institute of Geoscientist and is a Qualified Person under National Instrument 43-101 - Standards of Disclosure for Mineral Projects.

2. COMPANY OVERVIEW

Sierra Metals Inc. is a Canadian mining company focused on copper production with additional base and precious metals by-product credits in Peru and Mexico. The Company plans to continue growing its production base through brownfield exploration investments within its properties.

The Company has two producing mining properties and manages its business on the basis of the geographical location of its mining projects. The Peruvian Operation ("Peru") is comprised of the Yauricocha mine ("Yauricocha" or the "Yauricocha Mine"), located in the province of Yauyos, its near-mine concessions, and exploration and early-stage properties. The Mexican Operation ("Mexico") includes the Bolivar ("Bolivar' or the "Bolivar Mine") located in Chihuahua State, Mexico, their near-mine concessions, and exploration and early-stage properties.

In Q1 2023, the Cusi Mine ("Cusi") in Mexico was deemed a non-core asset by the Company and on September 20, 2023 was placed on care and maintenance with a process to sell the mine currently underway.

The Company is focused on the safety and productivity of its producing mines. The Company also has large land packages with several prospective regional targets providing longer-term exploration upside and mineral resource growth potential. The Company is willing to consider and pursue growth opportunities at, and surrounding, its operating projects to enhance and deliver shareholder value.

3

Sierra Metals Inc.

Management's Discussion and Analysis

For the three months and nine months ended September 30, 2023 (In thousands of United States dollars, unless otherwise stated)

3. Q3 2023 OPERATING AND FINANCIAL HIGHLIGHTS

(In thousands of dollars, except per share and cash cost

Nine months ended September 30,

Q3 2023

Q2 2023

Q3 2022

2023

2022

amounts, consolidated figures unless noted otherwise)

Operating

Ore Processed / Tonnes Milled

622,622

650,302

496,726

1,791,086

1,572,991

Silver Ounces Produced (000's)

458

523

327

1,370

991

Copper Pounds Produced (000's)

9,477

10,459

6,299

28,221

20,957

Lead Pounds Produced (000's)

4,084

3,930

3,579

10,792

10,467

Zinc Pounds Produced (000's)

11,176

12,228

10,815

33,983

31,733

Gold Ounces Produced

3,651

4,311

2,010

11,753

6,121

Copper Equivalent Pounds Produced (000's)1

18,496

20,246

14,593

55,342

44,261

Cash Cost per Tonne Processed

$

59.36

$

56.24

$

65.41

$

58.00

$

62.77

Cash Cost per CuEqLb2

$

2.11

$

1.80

$

2.39

$

2.00

$

2.51

AISC per CuEqLb2

$

3.66

$

3.24

$

3.85

$

3.43

$

4.11

Cash Cost per CuEqLb (Yauricocha)2

$

2.08

$

2.29

$

2.01

$

2.14

$

2.09

AISC per CuEqLb (Yauricocha)2

$

3.75

$

3.97

$

3.36

$

3.62

$

3.49

Cash Cost per CuEqLb (Bolivar)2

$

2.15

$

1.62

$

3.38

$

1.86

$

3.71

AISC per CuEqLb (Bolivar)2

$

3.57

$

3.02

$

5.12

$

3.24

$

5.88

Financial

Revenues

$

56,963

$

58,411

$

35,198

$

168,911

$

126,959

Adjusted EBITDA2

$

8,080

$

14,494

$

(6,218)

$

38,056

$

10,296

Operating cash flows before movements in working capital

$

6,013

$

11,588

$

(6,768)

$

30,452

$

2,303

Adjusted net income (loss) attributable to shareholders2

$

(2,137)

$

5,985

$

(12,125)

$

9,388

$

(16,442)

Net income (loss) attributable to shareholders

$

(9,301)

$

1,638

$

(46,150)

$

(5,610)

$

(61,047)

Net income (loss) (excluding discontinued operations)

$

(2,758)

$

3,896

$

(38,102)

$

4,699

$

(52,144)

Cash and cash equivalents

$

6,052

$

4,393

$

13,690

$

6,052

$

13,690

Working capital 3

$

166,443

$

(88,431)

$

(52,345)

$

166,443

$

(52,345)

  1. Copper equivalent pounds were calculated using the following realized prices:
    Q3 2023 - $23.56/oz Ag, $3.78/lb Cu, $1.10/lb Zn, $0.98/lb Pb, $1,927/oz Au.
    Q2 2023 - $24.17/oz Ag, $3.99/lb Cu, $1.16/lb Zn, $0.96/lb Pb, $1,977/oz Au.
    Q3 2022 - $19.26/oz Ag, $3.51/lb Cu, $1.49/lb Zn, $0.90/lb Pb, $1,730/oz Au.
    9M 2023 - $23.44/oz Ag, $3.94/lb Cu, $1.23/lb Zn, $0.97/lb Pb, $1,932/oz Au.
    9M 2022 - $21.95/oz Ag, $4.12/lb Cu, $1.66/lb Zn, $0.99/lb Pb, $1,826/oz Au.
  2. This is a non-IFRS performance measure, see Non-IFRS Performance Measures section of the MD&A.
  3. Despite the successful refinancing of part of the corporate credit facility and improved operational performance, the Company continues to be in breach of some of its debt covenants, since these are calculated on a rolling four-quarter basis. Hence the working capital continues to be negative due to the result of the reclassification of the long-term portion of the corporate facility and term loan to current.

Q3 2023 Consolidated Operating Summary

The Cusi Mine, which was considered a non-core asset in Q1 2023, was placed in care and maintenance on September 20, 2023, with the mine's results not included in the consolidated operating results. The company has initiated the process to divest the associated assets. As a result, the company classified the Cusi operation as discontinued operation and excluded Cusi production information from the table above.

Consolidated throughput in Q3 2023 was 4% lower than in Q2 2023 but 25% higher than in Q3 2022.

4

Sierra Metals Inc.

Management's Discussion and Analysis

For the three months and nine months ended September 30, 2023 (In thousands of United States dollars, unless otherwise stated)

Throughput from the Yauricocha Mine during Q3 2023 was 259,732 tonnes, a 6% increase from the previous quarter and 3% lower than Q3 2022. Copper equivalent production of 10.4 million pounds was 9% higher than the previous quarter driven mainly by higher throughput and better copper grades. In comparison to Q3 2022, metal production was higher, except gold. Copper equivalent production declined 4% because of the change in metal prices, particularly zinc realized prices which averaged 26% lower as compared to the Q3 2022 average realized prices.

The Bolivar Mine achieved a throughput of 362,890 tonnes during Q3 2023, a 59% increase from Q3 2022, but a decline of 11% compared to Q2 2023, as anticipated. Metal production increased as compared to Q3 2022 due to the higher throughput combined with higher head grades. Copper, silver and gold production increased by 104%, 108% and 134% respectively, resulting in a 113% increase in the copper equivalent production for Q3 2023 compared to Q3 2022. Copper equivalent production was 24% lower when compared to Q2 2023 as a result of 11% lower throughput combined with lower grades.

Consolidated cash costs per copper equivalent payable pound(1) in Q3 2023 of $2.11 and consolidated AISC(1) per equivalent payable pound copper of $3.66 were 12% and 5%, respectively, lower than the same quarter of 2022. The improvements in consolidated cash costs and AISC were primarily due to higher production levels at Bolivar despite lower production at Yauricocha.

Yauricocha's cash cost per copper equivalent payable pound(1) was $2.08 (Q3 2022 - $2.01), and AISC per copper equivalent payable pound(1) of $3.75 (Q3 2022 - $3.36) for Q3 2023. Cash costs increased for Q3 2023 due to a 26% decline in average realized prices for zinc which resulted in a 3% decrease in the copper equivalent payable pounds as compared to Q3 2022. The increase in the AISC for Q3 2023 was mainly a result of the 37% and 44% increase in the general and administration ("G&A") costs and sustaining capital expenditure respectively, as compared to Q3 2022.

Bolivar's cash cost per copper equivalent payable pound(1) decreased 37% to $2.15 (Q3 2022 - $3.38), and AISC per copper equivalent payable pound(1) decreased 30% to $3.57 (Q3 2022 - $5.12) as a result of the 131% higher copper equivalent payable pounds as compared to Q3 2022.

Q3 2023 Consolidated Financial Highlights

The Cusi Mine, which was considered a non-core asset in Q1 2023, was placed in care and maintenance on September 20, 2023. The consolidated financial results do not include Cusi.

Revenue from metals payable of $57.0 million in Q3 2023 was an increase of 62% over the revenue of $35.2 million in Q3 2022, and a 2% decrease from the revenue of $58.4 million in Q2 2023. The increase in revenue compared to Q3 2022 was largely driven by higher metal sales at the Bolivar Mine, which recorded a 131% increase in copper equivalent sales over Q3 2022;

Adjusted EBITDA(1) increased to $8.1 million for Q3 2023 from the $(6.2) million in the same quarter of 2022, driven mainly by higher revenues attributable to higher production and improved operating costs compared to Q3 2022;

(1) This is a non-IFRS performance measure, see Non-IFRS Performance Measures section of the MD&A.

5

Sierra Metals Inc.

Management's Discussion and Analysis

For the three months and nine months ended September 30, 2023 (In thousands of United States dollars, unless otherwise stated)

Net loss attributable to shareholders for Q3 2023 was $9.3 million (Q3 2022: net loss of $46.2

million) or $(0.06) per share (basic and diluted) (Q3 2022: $(0.28)).

Excluding discontinued operations, net loss was $2.8 million in Q3 2023 versus a loss of $38.1 million in Q3 2022;

Adjusted net loss attributable to shareholders(1) of $2.1 million, or $(0.01) per share, for Q3 2023 compared to the adjusted net loss of $12.1 million, or $(0.07) per share for Q3 2022;

A large component of the net income for every period is the non-cash depletion charge in Peru, which was $1.4 million for Q3 2023 (Q3 2022: $1.4 million). The non-cash depletion charge is based on the aggregate fair value of the Yauricocha mineral property at the date of acquisition of Corona of $371.0 million amortized over the total proven and probable reserves of the mine;

Cash flow generated from operating activities before movements in working capital of $6.0 million for Q3 2023 as compared to $6.8 million of cash used in operating activities in Q3 2022. The increase resulted from higher revenues during the quarter;

Cash and cash equivalents as at September 30, 2023 were $18.2 million (including restricted cash of $12.1 million) and working capital of $(81.4) million as compared to $5.1 million and $(78.1) million, respectively, at the end of 2022. Cash and cash equivalents increased during the nine-month period as a result of cash generated from operating activities of $35.3 million, cash generated from financing activities of $10.3 million and cash used in investing activities of $32.5 million.

(1) This is a non-IFRS performance measure, see Non-IFRS Performance Measures section of the MD&A.

Project Development

  • Mine development at Bolivar during Q3 2023 totaled 3,260 meters, which included 1,702 meters of development to prepare stopes for mine production, and 1,558 meters to development of ramps.

Exploration Highlights

Peru:

  • Surface exploration continued near the mine to increase geological resources, with plans to explore the following areas - North Prometida and a breccia body. Underground exploration involved diamond drilling of 2,295 meters in the Fortuna, Pamela and Carmencita zones to replace and expand mineral resources, finding significant polymetallic mineralization in different bodies.

Mexico:

  • At Bolivar during Q3 2023, 17,540 meters were drilled in the Bolivar, Cieneguita and Dulce zones encountering important skarn intersections with mineralization, upgrading the resources of the three principal structures of the Bolivar Mine.

6

Sierra Metals Inc.

Management's Discussion and Analysis

For the three months and nine months ended September 30, 2023 (In thousands of United States dollars, unless otherwise stated)

4. OUTLOOK

Metal Prices

Noted in the table below are historical metal prices as per the London Metal Exchange ("LME"):

LME Average Prices

2023

2022

(In US dollars)

Q3

Q2

Q1

Q4

Q3

Q2

Q1

Silver (oz)

$

23.57

$

24.18

$

22.56

$

21.20

$

19.22

$

22.64

$

23.94

Copper (lb)

$

3.79

$

3.84

$

4.05

$

3.63

$

3.51

$

4.32

$

4.53

Zinc (lb)

$

1.10

$

1.15

$

1.42

$

1.36

$

1.48

$

1.78

$

1.70

Lead (lb)

$

0.98

$

0.96

$

0.97

$

0.95

$

0.90

$

1.00

$

1.06

Gold (oz)

$

1,929

$

1,978

$

1,888

$

1,729

$

1,729

$

1,873

$

1,874

The overall trend for metal prices in Q3 2023 was downward, with a few exceptions, as concerns about a global economic slowdown weighed on demand. Copper prices averaged $3.79 per pound in Q3 2023, slightly down from the Q2 2023 average of $3.84 per pound. The decline was driven by several factors, including weaker demand from China, the world's largest copper consumer. For Q4 2023, prices are expected to average between $3.75-$4.00 per pound. The market is expected to remain tightly balanced and the growth of copper demand outside of China is expected to remain weak.

Zinc prices declined by 4% to average $1.10 per pound, as compared to the Q2 2023 average of $1.15 per pound. The decline was mainly due to the weaker demand from the automotive and construction sectors and the increased supply from mines outside of Europe. For Q4 2023, prices are expected to average between $1.00-1.10 per pound. The market is expected to be in a small surplus with continuing weak demand. However, prices may be supported by a recovery in Chinese demand and further supply disruptions.

Lead prices were relatively flat in Q3 2023, averaging $0.98 per pound with an even balance between demand and supply. For Q4 2023, prices are expected to average in the range of $0.80- $0.90 per pound. The market is expected to be in a small surplus, with demand remaining weak and supply disruptions starting to ease.

Gold and silver prices experienced modest declines in Q3 2023 due to the strengthening of the US dollar and the rising interest rates in the United States.

Currency Exchange Rates

The results of Sierra's operations are affected by US dollar exchange rates. Sierra's largest exposures are to the US dollar/Peruvian Nuevo Sol exchange rate and the US dollar/Mexican Peso exchange rate which impacts operating and administration costs in Peru and Mexico incurred in Nuevo Soles and Pesos while revenues are earned in US dollars. As at September 30, 2023 the US dollar/Peruvian Nuevo Sol exchange rate was 3.80 (December 31, 2022: 3.82) and the US dollar/Mexican Peso exchange rate was 17.62 (December 31, 2022: 19.36). The Company also has a minor exposure to the Canadian dollar through corporate administrative costs.

Operational and Financial Outlook and Guidance

The Company is on-track to meet its 2023 production guidance. Production for all metals has been in-line with the guidance range as can be seen from the table below. Copper equivalent production calculations have been negatively impacted by the drop in zinc prices during the nine-

7

Sierra Metals Inc.

Management's Discussion and Analysis

For the three months and nine months ended September 30, 2023 (In thousands of United States dollars, unless otherwise stated)

month period ended September 30, 2023. For comparison purposes, the copper equivalent production has been recalculated at the same metal prices that were used for the original guidance. Cash costs and AISC per copper equivalent payable pound for Yauricocha and Bolivar have also been adjusted in the 'Cash costs and AISC' table below by using copper equivalent payable pounds at 2023 guidance metal prices.

Metals and Copper equivalent pounds production:

2023 Guidance (1)

2023 9M (1)

Low

High

Actual

Silver (000 oz)

1,500

1,700

1,370

Copper (000 lbs)

37,300

42,400

28,221

Lead (000 lbs)

14,000

15,400

10,792

Zinc (000 lbs)

46,000

50,500

33,983

Gold (oz)

13,500

15,400

11,753

Copper equivalent pounds (000's) (2)

74,300

83,300

57,851

  1. 2023 Production guidance and actual production for 9M 2023 exclude production from the Cusi mine, which the Company considers as a non- core asset.
  2. 2023 metal equivalent guidance was calculated using the following prices: $21.03/oz Ag, $3.55/lb Cu, $1.35/lb Zn, $0.93/lb Pb and $1,741/oz Au. Actual copper equivalent pounds produced have been recalculated using the same price for comparison purposes

Cash costs and AISC:

Actual for 9M 2023(3)

Equivalent Production

Cash costs range

AISC(2) range

Copper Eq Lbs

Cash costs

AISC(2)

Mine

Range (1)

per CuEqLb

per CuEqLb

('000)

per CuEqLb per CuEqLb

Yauricocha

Copper Eq Lbs ('000)

40,000 - 44,000

$1.81 - $1.88

$3.50 - $3.60

31,460

$1.97

$3.34

Bolivar

Copper Eq Lbs ('000)

34,500 - 39,500

$1.92 - $2.05

$3.02 - $3.25

26,391

$1.86

$3.24

  1. 2023 metal equivalent guidance was calculated using the following prices: $21.03/oz Ag, $3.55/lb Cu, $1.35/lb Zn, $0.93/lb Pb and $1,741/oz Au. Actual copper equivalent pounds produced have been recalculated using the same price for comparison purposes.
  2. AISC includes treatment and refining charges, selling costs, G&A costs and sustaining capital expenditure. These costs have been adjusted using copper equivalent payable pounds calculated at metal prices used for 2023 guidance as per note 1 above.
  3. These costs have been adjusted using copper equivalent payable pounds calculated at metal prices used for 2023 guidance as per note 1 above.

During the third quarter of 2023, the Company raised approximately C$16.4 million from various investors, including existing shareholders, directors and employees in a private placement of 43,107,360 common shares. The private placement closed after the end of the third quarter and funds became available in two tranches, the first being approximately C$12.8 million and the second being approximately C$3.5 million, each at a subscription price of C$0.38 per common share. Common shares issued pursuant to the private placement are subject to statutory hold requirements, as applicable.

On September 20, 2023, the Company placed its Cusi Mine on care and maintenance and initiated the process to sell the mine. This is consistent with the Company's Q4 2022 announcement to deem Cusi as a non-core operation.

Stabilizing operations with a focus on health and safety remains the other key short- to medium- term priority for management. The Company's long-term objective is to expand the resources at its core operating mines. The Company is working closely with regulatory bodies to expedite additional permitting at Yauricocha without compromising on safety and environmental regulations.

The Company is also streamlining operations, reducing costs and deferring growth-related capital expenditure for cash preservation.

8

Sierra Metals Inc.

Management's Discussion and Analysis

For the three months and nine months ended September 30, 2023 (In thousands of United States dollars, unless otherwise stated)

5. RESULTS OF OPERATIONS

Selected Production Results on a Mine-by-Mine Basis for the Past Eight Quarters

2023

2022

2021

Production Highlights

Q3

Q2

Q1

Q4

Q3

Q2

Q1

Q4

Ore Processed/tonnes milled

Yauricocha

259,732

244,315

219,145

152,586

269,057

317,087

315,250

277,531

Bolivar

362,890

405,987

299,017

270,313

227,669

256,372

187,556

227,722

Consolidated

622,622

650,302

518,162

422,899

496,726

573,459

502,806

505,253

Cash cost per tonne processed

Yauricocha

$

75.89

$

80.63

$

78.38

$

99.67

$

74.75

$

69.31

$

59.19

$

64.54

Bolivar

$

47.52

$

41.57

$

43.99

$

41.05

$

54.37

$

55.38

$

60.82

$

50.29

Consolidated

$

59.36

$

56.24

$

58.54

$

62.20

$

65.41

$

63.08

$

59.80

$

58.12

Silver ounces produced (000's)

Yauricocha

310

316

249

134

256

267

256

331

Bolivar

148

207

140

93

71

83

58

57

Consolidated

458

523

389

227

327

350

314

388

Copper pounds produced (000's)

Yauricocha

3,807

2,808

2,895

1,621

3,514

5,127

4,279

3,836

Bolivar

5,671

7,651

5,390

4,549

2,785

3,207

2,045

2,235

Consolidated

9,478

10,459

8,285

6,170

6,299

8,334

6,324

6,071

Lead pounds produced (000's)

Yauricocha

4,084

3,930

2,778

1,749

3,579

3,060

3,828

5,430

Consolidated

4,084

3,930

2,778

1,749

3,579

3,060

3,828

5,430

Zinc pounds produced (000's)

Yauricocha

11,175

12,228

10,579

6,367

10,815

10,426

10,492

14,913

Consolidated

11,175

12,228

10,579

6,367

10,815

10,426

10,492

14,913

Gold ounces produced

Yauricocha

686

633

754

439

743

1,179

1,057

957

Bolivar

2,965

3,678

3,037

2,801

1,267

1,283

592

634

Consolidated

3,651

4,311

3,791

3,240

2,010

2,462

1,649

1,591

% Var

Nine months ended September 30,

Consolidated Production

Q3 2023

Q2 2023

Q3 2022

vs Q2 2023

vs Q3 2022

2023

2022

% Var

Tonnes processed

622,622

650,302

496,726

-4%

25%

1,791,086

1,572,991

14%

Daily throughput

7,116

7,432

5,677

-4%

25%

6,823

5,992

14%

Silver ounces (000's)

458

523

327

-12%

991

40%

1,370

38%

Copper pounds (000's)

9,478

10,459

6,299

-9%

50%

28,221

20,957

35%

Zinc pounds (000's)

11,175

12,228

10,815

-9%

3%

33,983

31,733

7%

Lead pounds (000's)

4,084

3,930

3,579

4%

14%

10,792

10,467

3%

Gold ounces

3,651

4,311

2,010

-15%

82%

11,753

6,121

92%

Copper equivalent pounds (000's) (1)

18,496

20,246

14,593

-9%

27%

55,342

44,261

25%

Metals payable in concentrates

Silver ounces (000's)

418

415

296

1%

41%

1,151

909

27%

Copper pounds (000's)

9,451

9,728

5,937

-3%

59%

26,993

19,861

36%

Zinc pounds (000's)

9,586

10,675

9,657

-10%

-1%

29,655

26,310

13%

Lead pounds (000's)

4,166

3,216

3,708

30%

12%

10,050

10,700

-6%

Gold ounces

4,403

4,173

1,987

6%

122%

11,873

5,612

112%

Copper equivalent pounds (000's) (1)

18,170

18,187

13,608

0%

34%

51,344

40,363

27%

  1. Copper equivalent pounds were calculated using the following realized prices: Q3 2023 - $23.56/oz Ag, $3.78/lb Cu, $1.10/lb Zn, $0.98/lb Pb, $1,927/oz Au. Q2 2023 - $24.17/oz Ag, $3.99/lb Cu, $1.16/lb Zn, $0.96/lb Pb, $1,977/oz Au. Q3 2022 - $19.26/oz Ag, $3.51/lb Cu, $1.49/lb Zn, $0.90/lb Pb, $1,730/oz Au. 9M 2023 - $23.44/oz Ag, $3.94/lb Cu, $1.23/lb Zn, $0.97/lb Pb, $1,932/oz Au. 9M 2022 - $21.95/oz Ag, $4.12/lb Cu, $1.66/lb Zn, $0.99/lb Pb, $1,826/oz Au.

9

Sierra Metals Inc.

Management's Discussion and Analysis

For the three months and nine months ended September 30, 2023 (In thousands of United States dollars, unless otherwise stated)

The Peruvian Operation - Yauricocha Mine, Yauyos, Peru

Sierra's main asset, 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 producing for approximately 75 years. Ore is processed at the on- site Chumpe plant using a combination of crushing, grinding and flotation and is permitted to produce at a rate of 3,600 tonnes per day ("tpd"). The ore is treated in two separate circuits and is extracted from three different types of deposits which include the following:

  • A polymetallic deposit, containing silver, lead, zinc, copper, and gold
  • A lead oxide deposit, containing lead, silver and gold
  • A copper oxide deposit, containing copper, silver, lead and gold

Yauricocha Production

A summary of production from the Yauricocha Mine is provided below:

Yauricocha Production

Q3 2023

Q2 2023

Q3 2022

Nine Months Ended September 30,

20232022

Tonnes processed

259,732

244,315

269,057

723,192

901,394

Daily throughput

2,968

2,792

3,075

2,755

3,434

Silver grade (g/t)

58.72

54.83

47.61

53.69

43.70

Copper grade

0.89%

0.72%

0.77%

0.80%

0.83%

Lead grade

0.86%

0.87%

0.72%

0.82%

0.65%

Zinc grade

2.36%

2.65%

2.16%

2.51%

1.95%

Gold Grade (g/t)

0.41

0.40

0.41

0.42

0.49

Silver recovery

63.16%

73.25%

62.27%

70.51%

61.61%

Copper recovery

74.81%

72.21%

77.30%

74.20%

77.55%

Lead recovery

83.09%

83.88%

83.60%

82.92%

79.73%

Zinc recovery

82.57%

85.54%

84.28%

84.67%

81.33%

Gold Recovery

19.95%

20.33%

20.79%

21.12%

20.83%

Silver production (000 oz)

310

316

256

875

779

Copper production (000 lb)

3,806

2,808

3,514

9,509

12,920

Lead production (000 lb)

4,084

3,930

3,579

10,792

10,467

Zinc production (000 lb)

11,176

12,228

10,815

33,983

31,733

Gold Production (oz)

686

633

743

2,073

2,979

Copper equivalent pounds (000's)(1)

10,396

9,525

10,794

28,950

33,702

  1. Copper equivalent pounds were calculated using the following realized prices: Q3 2023 - $23.56/oz Ag, $3.78/lb Cu, $1.10/lb Zn, $0.98/lb Pb, $1,927/oz Au. Q2 2023 - $24.17/oz Ag, $3.99/lb Cu, $1.16/lb Zn, $0.96/lb Pb, $1,977/oz Au. Q3 2022 - $19.26/oz Ag, $3.51/lb Cu, $1.49/lb Zn, $0.90/lb Pb, $1,730/oz Au. 9M 2023 - $23.44/oz Ag, $3.94/lb Cu, $1.23/lb Zn, $0.97/lb Pb, $1,932/oz Au. 9M 2022 - $21.95/oz Ag, $4.12/lb Cu, $1.66/lb Zn, $0.99/lb Pb, $1,826/oz Au.

The Yauricocha Mine processed 259,732 tonnes during Q3 2023, an increase of 6% over the previous quarter. Copper grades increased by 23% when compared to Q2 2023 as well as silver and gold grades by 7% and 3%, respectively.

Copper equivalent production for Q3 2023 of 10.4 million pounds represented a 9% increase over the previous quarter. This increase was attributed mainly to the 36% increase in copper production. Lead and gold production increased 4% and 8%, respectively, while zinc production declined 9% due to lower grades compared to Q2 2023.

10

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Disclaimer

Sierra Metals Inc. published this content on 13 November 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 November 2023 09:47:14 UTC.