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March 6, 2013 /PRNewswire/ - Sierra Metals Inc. (TSXV: SMT) (BVL: SMT) ("Sierra" or the "Company") is pleased to report that a Federal Court in the
State of Chihuahua has granted to the Company a temporary suspension of the adverse resolution issued by the State Court of
Chihuahua, Mexico. A final verdict by the Federal Court is pending. The Company will continue to vigorously defend this claim by applying the proper legal resources necessary to defend its position. Sierra continues to believe that the original claim is without merit.
October 2009, Polo y Ron Minerals, S.A. de C.V. ("P&R") sued the Company and one of its subsidiaries,
Dia Bras Mexicana, S.A. de C.V. P&R claimed damages for the cancelation of an option agreement (the "Option
Agreement") regarding the
San Jose properties in
Chihuahua, Mexico (the "San Jose Properties"). The Company believes that it has complied with all of its obligations pertaining to the Option Agreement.
October 2011, the 8
th Civil Court of the Judicial District of
Morelos in Chihuahua issued a resolution that absolved the Company from the claims brought against it by P&R on the basis that P&R did not provide evidence to support any of its claims. P&R appealed this resolution to the State Court, which overruled the previous resolution and ordered the Company to: (i) transfer to P&R 17 mining concessions from the Company's Bolivar project, including the mining concessions where mine operations are located; and (ii) pay
US$422,674 to P&R.
The San Jose Properties are not located in any areas where
Dia Bras Mexicana, S.A. de C.V currently operates, nor are these properties included in any resource estimates of the Company.