Arias Resource Capital Fund II L.P. and Arias Resource Capital Fund II (Mexico) L.P. (the “Nominating Shareholders”), together with other affiliates of Arias Resource Capital and its principal (together with the Nominating Shareholders, “ARC”) holding approximately 27% of the outstanding shares of Sierra Metals Inc. (“Sierra” or the “Company”) (TSX: SMT), cautions Sierra shareholders regarding the questionable tactics that Sierra’s incumbent board of directors (the “Board”) may be resorting to in order to entrench themselves in advance of the Company’s annual meeting of shareholders scheduled to be held on at 2:00 p.m. (Eastern time) on June 28, 2023 (the “Meeting”). Concerned shareholders should attend the Meeting, to be held virtually via live audio webcast, online at:

Purposely Misleading Press Release Claiming Support for Incumbent Sierra Nominees

On the evening of June 15, 2023, a purposely misleading press release was disseminated over Canadian newswire services and filed under Sierra’s profile on SEDAR, purportedly on behalf of one of Peru’s most prominent banks. (the “Bank”). The press release stated that it was the Bank’s apparent intention to vote 3.6% of the outstanding Sierra shares in favour of the Company’s proposed Board slate, while parroting the allegations about ARC and its nominees featured in the Company’s management information circular cover letter and directing inquiries to the personal email account at Gmail of an individual named Alberto Gubbins.

After being alerted to the purposely misleading press release by ARC, the Bank confirmed that this press release was not issued or authorized by the Bank. On June 16, 2023 a correction was issued by the newswire service identifying Mr. Gubbins as the sole source of the press release.

ARC is aware that Mr. Gubbins has been in recent contact with Sierra’s Board member and Chief Executive Officer, Ernesto Balarezo. It is ARC’s understanding that the two met, on or about May 22, 2023.

As the beneficiary, Sierra should immediately publicly confirm that it was wholly unaware of the June 15, 2023 purposely misleading press release prior to its dissemination, disclose what actions, if any, it took to avoid the market being misled, and to disclose Sierra’s, and its directors’ and executives’, relationship and dealings and with Mr. Gubbins and other supporting shareholders.

If Sierra fails to do so, shareholders must question the lengths to which the Company is prepared to go in order to sway the results of the Meeting and whether shareholders’ voices will actually be heard.

Offering Dilutive Financing Arrangements for Votes?

ARC is extremely concerned, and other Sierra shareholders should be as well, that if re-elected, the Board may provide a minority group of friendly shareholders that vote in favour of them at the Meeting with the opportunity to acquire Sierra shares at prices that are not reflective of Sierra’s fundamental value, while substantially diluting all other shareholders. Sierra itself effectively raised the potential for a quid pro quo arrangement when it stated, in part:

“[Sierra] received unsolicited communications from shareholders who collectively hold 24,728,870 Shares (approximately 15% of the outstanding Shares) advising [Sierra] that they intend to support the nominees of [Sierra] … certain of these shareholders have indicated that they are willing to provide further financial support to Sierra Metals.”1

When faced with the above allegation, Sierra’s confirmed that “the shareholders who have contacted the Company have expressed their interest to support future financings of Sierra Metals should the opportunities present themselves” but issued a carefully worded, limited denial of any “financial arrangements or agreements between the Company and the supportive shareholders respecting the voting for the Board’s nominees.” 2

Sierra should immediately publicly disclose the nature of the communications with these “unsolicited” shareholders and confirm that there are absolutely no financial or non-financial agreements, arrangements or understandings (written or oral) between the Company and any shareholders respecting the voting for the Board’s nominees.

If Sierra fails to do so, shareholders should be extremely wary of dilutive financings following the Meeting should the current Board be re-elected.


ARC is soliciting proxies for the election of five highly qualified and competent nominees – J. Alberto Arias, Derek White, Daniel Tellechea, Ricardo Arrarte, and Alonso Checa (collectively, the “ARC Nominees”) – to the Board. ARC is Sierra’s largest shareholder holding approximately 27% of the outstanding shares in the Company and has been a committed long-term investor since 2008. ARC understands Sierra’s assets and its long-term potential as well as the importance of a refreshed Board to urgently turnaround the Company.

The ARC Nominees intend to act swiftly to resolve Sierra’s mounting losses, share price collapse and financial liquidity challenges, and to restore the Company to its previous track record of excellence and value creation prior to mid-2021.

The YELLOW proxy must be received prior to 5:00 p.m. (Eastern time) on Friday, June 23, 2023 to make your vote count. Don’t Wait, Vote Right Away.

Shareholders can call or text Kingsdale Advisors on 1.888.370.3955 (toll free in North America), email, or chat with an advisor on for more information.


ARC has retained Kingsdale Advisors as its strategic shareholder, communications and proxy advisor and Stikeman Elliott LLP as its legal advisor.


Arias Resource Capital, founded in 2007, is a Miami-based private equity firm in the metals sector that invests in critical materials empowering the clean energy revolution.


This news release contains forward-looking information within the meaning of applicable securities laws (“forward-looking statements”) and are prospective in nature. These forward-looking statements are not based on historical facts, but rather on current expectations and may include projections about future events and estimates and their underlying assumptions, statements regarding plans, objectives, intentions and expectations with respect to future financial results, events, operations, services, product development and potential, and statements regarding future performance. Forward-looking statements are generally identified by the words “expects”, “anticipates”, “believes”, “intends”, “estimates”, “plans”, “will”, “may”, “should”, “could”, “believes”, “potential” or “continue” and similar expressions, or the negative thereof. Forward-looking statements in this news release include, without limitation, statements regarding the potential benefits, contributions and development of the ARC Nominees and the expected impact and results of Sierra’s corporate governance practices, and Sierra’s intentions regarding dilutive financings. There are numerous risks and uncertainties that could cause actual results and ARC’s plans and objectives to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements in this news release, including, without limitation, the risks described under the headings such as “Cautionary Statement – Forward Looking Information” and “Risk Factors” in Sierra’s annual information form dated March 28, 2023 for its fiscal year ended December 31, 2022, and other risks identified in Sierra’s filings with Canadian securities regulatory authorities which are available under Sierra’s profile on SEDAR at The forward-looking statements speak only as of the date hereof and, other than as required by applicable law, ARC undertakes no duty or obligation to update or revise any forward-looking information or statements contained in this news release as a result of new information, future events, changes in expectation or otherwise.


In connection with the Nominating Shareholders’ solicitation of proxies in respect of the Meeting, the Nominating Shareholders have filed and mailed its dissident proxy circular (the “ARC Circular”) and the YELLOW form of proxy to Sierra shareholders.

Any solicitation made by ARC will be made by it and not by or on behalf of the management of Sierra. All costs incurred for any solicitation will be borne by ARC, provided that, subject to applicable law, ARC may seek reimbursement from Sierra of ARC’s out-of-pocket expenses, including proxy solicitation expenses and legal fees, incurred in connection with any successful result at a meeting of Sierra shareholders. Proxies may be solicited by ARC pursuant to the ARC Circular. Solicitations may be made by or on behalf of ARC by mail, telephone, fax, email or other electronic means as well as by newspaper or other media advertising, and in person by directors, officers and employees of ARC, who will not be specifically remunerated therefor. ARC may also solicit proxies in reliance upon the public broadcast exemption to the solicitation requirements under applicable Canadian corporate and securities laws, including through press releases, speeches or publications, and by any other manner permitted under applicable Canadian laws. ARC may engage the services of one or more agents and authorize other persons to assist in soliciting proxies on its behalf, which agents would receive customary fees for such services. In particular, ARC has engaged Kingsdale Advisors (“Kingsdale”) to act as ARC’s shareholder and communications advisor and to act as its strategic shareholder advisor and proxy solicitation agent to solicit proxies in the United States and Canada. Pursuant to this engagement, Kingsdale will receive an initial fee of C$150,000, plus a customary fee for each call to and from shareholders. Proxies may be revoked by instrument in writing by a shareholder giving the proxy or by its duly authorized officer or attorney, or in any other manner permitted by law and the articles or by-laws of Sierra. None of ARC nor, to its knowledge, any of its associates or affiliates, has any material interest, direct or indirect: (i) in any transaction since the beginning of Sierra’s most recently completed financial year or in any proposed transaction that has materially affected or would materially affect Sierra or any of its subsidiaries; or (ii) by way of beneficial ownership of securities or otherwise, in any matter proposed to be acted on by Sierra at the Meeting, other than the election of directors to the board of Sierra or as disclosed in accordance with applicable law.

See the ARC Circular for further information regarding the Nominating Shareholders, ARC and the ARC Nominees. A copy is available under Sierra’s profile on SEDAR at

Sierra trades on the Toronto Stock Exchange under the symbol “SMT”. Sierra’s head office is located at 77 King Street West, Suite 400, Toronto, Ontario M5K 0A1.


Aquin GeorgeDirector, Special SituationsKingsdale Advisors647-265-4528

________________________1 Page 4 of the Cover Letter to Sierra’s Management Information Circular dated May 29, 2023.2 Sierra’s press release dated June 14, 2023.


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