| | UNITED STATES                      | OMB APPROVAL                     
| | ---------------------------------- | ---------------------------------
| | SECURITIES AND EXCHANGE COMMISSION |                                  
| |                                    | OMB Number: 3235-0381            
| | Washington, D.C. 20549             | Expires: September 30, 2018      
| |                                    | Estimated average burden         
| | FORM 40-F                          | hours per response. . . ...429.93



[Check one]



|   |  ̈ | REGISTRATION STATEMENT PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934   
|-- | - | ---------------------------------------------------------------------------------------
|OR
|   | x | ANNUAL REPORT PURSUANT TO SECTION 13(a) OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For the fiscal year ended: December 31,
2017Commission File Number: 001-38141



|Sierra Metals Inc.                                                                                                      
|------------------------------------------------------------------------------------------------------------------------
|(Exact name of Registrant as specified in its charter)                                                                  
|                                                                                                                        
|Not Applicable                                                                                                          
|(Translation of Registrant’s name into English (if applicable))                                                         
|                                                                                                                        
|Canada                                                                                                                  
|(Province or other jurisdiction of incorporation or organization):                                                      
|                                                                                                                        
|1021                                                                                                                    
|(Primary Standard Industrial Classification Code Number (if applicable))                                                
|                                                                                                                        
|Not Applicable                                                                                                          
|(I.R.S. Employer Identification Number (if applicable))                                                                 
|                                                                                                                        
|79 Wellington Street, West, Ste. 2100, Toronto, Ontario M5K 1H1 (416) 366-7777                                          
|(Address and telephone number of Registrant’s principal executive offices)                                              
|                                                                                                                        
|Cogency Global Inc.                                                                                                     
|10 East 40th Street, 10th Floor, New York, NY 10016 (800) 221-0102                                                      
|(Name, address (including zip code) and telephone number (including area code)of agent for service in the United States)



Securities registered or to be registered pursuant to Section
12(b) of the Act.



|Common Shares       |  | NYSE American                            
|------------------- |  | -----------------------------------------
|Title of each class |  | Name of each exchange on which registered



Securities registered or to be registered pursuant to Section
12(g) of the Act.



None



Securities for which there is a reporting obligation pursuant
to Section 15(d) of the Act.



None



For annual reports, indicate by check mark the information filed
with this Form:



Annual
information formxAudited
annual financial statementsx



Indicate the number of outstanding shares of each of the issuer’s
classes of capital or common stock as of the close of the period covered by the annual report.



Common Shares: 163,029,548



Indicate by check mark whether the Registrant
by filing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule
12g3-2(b) under the Securities Exchange Act of 1934 (the “Exchange Act”). If “Yes” is marked, indicate
the file number assigned to the Registrant in connection with such Rule.



Yes ̈ Nox



Indicate by check mark whether the Registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for
such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements
for the past 90 days.



Yesx No ̈



Indicate by check mark whether the registrant is an emerging
growth company as defined in Rule 12b-2 of the Exchange Act.



Emerging
growth companyx



If an emerging growth company that prepares its financial statements
in accordance with U.S. GAAP, indicate by checkmark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act.



 ̈

Not applicable


















EXPLANATORY NOTE



Sierra Metals Inc.
(the “Company” or “we” or “us”) is a Canadian issuer eligible to file its annual report pursuant
to Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), on Form 40-F (“Form
40-F”) pursuant to the multi-jurisdictional disclosure system of the Exchange Act. We are a “foreign private issuer”
as defined in Rule 3b-4 under the Exchange Act. Accordingly, our equity securities are exempt from Sections 14(a), 14(b),
14(c), 14(f) and 16 of the Exchange Act pursuant to Rule 3a12-3.



PRINCIPAL DOCUMENTS



The following documents
have been filed as part of this Annual Report on Form 40-F and incorporated by reference herein:



A. Annual Information
Form



For our Annual Information
Form (the “AIF”) for the year ended December 31, 2017, see Exhibit 99.1 of this Annual Report on Form
40-F.



B. Audited Annual
Financial Statements



For our audited annual
financial statements (“Audited Financial Statements”), for the year ended December 31, 2017, including the Independent
Auditors’ Report of Registered Public Accounting Firm, see Exhibit 99.2 of this Form 40-F. The Audited
Financial Statements are stated in United States Dollars (US$) and are prepared in accordance with International Financial Reporting
Standards (IFRS) as issued by the International Accounting Standards Board (IASB).



C. Management’s
Discussion and Analysis



For our management’s
discussion and analysis (the “MD&A”) for the year ended December 31, 2017, see Exhibit 99.3 of
this Form 40-F.



FORWARD-LOOKING STATEMENTS



This Form 40-F, the
exhibits attached hereto and the documents incorporated by reference herein, including our AIF, contain “forward looking
information” within the meaning of Canadian and United securities laws related to our company and its operations, and in
particular, the anticipated developments in the Company’s operations in future periods, the Company’s planned exploration
activities, the adequacy of the Company’s financial resources and other events or conditions that may occur in the future.
Statements concerning mineral reserve and resource estimates may also be considered to constitute forward-looking statements to
the extent that they involve estimates of the mineralization that will be encountered if and when the properties are developed
or further developed. These statements relate to analyses and other information that are based on forecasts of future results,
estimates of amounts not yet determinable and assumptions of management.



These forward-looking
statements include, but are not limited to: future production of silver, gold, lead, copper and zinc (collectively, the “metals”);
future cash costs per ounce or pound of the metals; the price of the metals; the effects of domestic and foreign laws, regulations
and government policies and actions affecting the Company’s operations or potential future operations; future successful
development of the Yauricocha mine in Yauyos Province, Peru (the “Yauricocha Mine”), the Bolivar mine in Chihuahua,
Mexico (the “Bolivar Mine”) and the Cusihuiriachic property in Chihuahua, Mexico (the “Cusi Mine”) and
other exploration and development projects; the sufficiency of the Company’s current working capital, anticipated operating
cash flow or the Company’s ability to raise necessary funds; estimated production rates for the metals produced by the Company;
timing of production; the estimated cost of sustaining capital; ongoing or future development plans and capital replacement, improvement
or remediation programs; the estimates of expected or anticipated economic returns from the Company’s mining projects; future
sales of the metals, concentrates or other future products produced by the Company; and the Company’s plans and expectations
for its properties and operations.





1







Forward-looking information
is subject to a variety of risks and uncertainties, which could cause actual events or results to differ from those reflected in
the forward-looking information, including, without limitation, risks inherent in the mining industry including environmental hazards,
industrial accidents, unusual or unexpected geological formations, floods, labour disruptions, explosions, cave-ins, weather conditions
and criminal activity; commodity price fluctuations; higher operating and/or capital costs; lack of available infrastructure; the
possibility that future exploration, development or mining results will not be consistent with the Company’s expectations;
risks associated with the estimation of mineral resources and the geology, grade and continuity of mineral deposits and the inability
to replace reserves; fluctuations in the price of commodities used in the Company’s operations; risks related to foreign
operations; changes in laws or policies, foreign taxation, delays or the inability to obtain necessary governmental permits; risks
relating to outstanding borrowings; issues regarding title to the Company’s properties; risks related to environmental regulation;
litigation risks; risks related to uninsured hazards; the impact of competition; volatility in the price of the Company’s
securities; global financial risks; inability to attract or retain qualified employees; potential conflicts of interest; risks
related to a controlling group of shareholders; dependence on third parties; differences in U.S. and Canadian reporting of mineral
reserves and resources; claims under U.S. securities laws; potential dilutive transactions; foreign currency risks; risks related
to business cycles; liquidity risks; reliance on internal control systems; and credit risks.



Any statements that
express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions
or future events or performance (often, but not always, using words or phrases such as “expects”, “anticipates”,
“plans”, “projects”, “estimates”, “assumes”, “intends”, “strategy”,
“goals”, “objectives”, “potential” or variations thereof, or stating that certain actions,
events or results “may”, “could”, “would”, “might” or “will” be taken,
occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and
may be forward-looking information. Forward-looking information is subject to a variety of known and unknown risks, uncertainties
and other factors that could cause actual events or results to differ from those expressed or implied by the forward-looking information,
including, without limitation: uncertainty of production and cost estimates for the Yauricocha Mine, the Bolivar Mine and the Cusi
Mine; uncertainty of production at the Company’s exploration and development properties; risks and uncertainties associated
with developing and exploring new mines including start-up delays; risks and hazards associated with the business of mineral exploration,
development and mining (including operating in foreign jurisdictions, environmental hazards, industrial accidents, unusual or unexpected
geological or structure formations, pressures, cave-ins and flooding); risks and uncertainties relating to the interpretation of
drill results and the geology, grade and continuity of the Company’s mineral deposits; risks related to the Company’s
ability to obtain adequate financing for the Company’s planned development activities and to complete further exploration
programs; fluctuations in spot and forward markets for the metals and certain other commodities; risks related to general economic
conditions, including recent market and world events and conditions; inadequate insurance, or inability to obtain insurance, to
cover these risks and hazards; relationships with and claims by local communities and indigenous populations; diminishing quantities
or grades of mineral reserves as properties are mined; challenges to, or difficulty maintaining, the Company’s title to properties
and continued ownership thereof; risks related to the Company’s covenants with respect to the BCP Facility (as defined in
the AIF); changes in national and local legislation, taxation, controls or regulations and political or economic developments or
changes in Canada, Mexico, Peru or other countries where they may carry on business; risks related to the delay in obtaining or
failure to obtain required permits, or non-compliance with permits the Company has obtained; increased costs and restrictions on
operations due to compliance with environmental laws and regulations; regulations and pending legislation governing issues involving
climate change, as well as the physical impacts of climate change; risks related to reclamation activities on the Company’s
properties; uncertainties related to title to the Company’s mineral properties and the surface rights thereon, including
the Company’s ability to acquire, or economically acquire, the surface rights to certain of the Company’s exploration
and development projects; the Company’s ability to successfully acquire additional commercially mineable mineral rights;
risks related to currency fluctuations (such as the Canadian dollar, the United States dollar, the Peruvian sol and the Mexican
peso); increased costs affecting the mining industry, including occasional high rates of inflation; increased competition in the
mining industry for properties, qualified personnel and management; risks related to some of the Company’s directors’
and officers’ involvement with other natural resource companies; the Company’s ability to attract and retain qualified
personnel and management to grow the Company’s business; risks related to estimates of deferred tax assets and liabilities;
risks related to claims and legal proceedings, the Company’s ability to maintain adequate internal control over financial
reporting and our ability to maintain our status as a "foreign private issuer ("FPI") under United States securities
laws.





2







This list is not exhaustive
of the factors that may affect any of the Company’s forward-looking information. Forward looking information includes statements
about the future and are inherently uncertain, and the Company’s actual achievements or other future events or conditions
may differ materially from those reflected in the forward-looking information due to a variety of risks, uncertainties and other
factors, including, without limitation, those referred to in our AIF under the heading “Risk Factors”. The Company’s
statements containing forward-looking information are based on the beliefs, expectations and opinions of management on the date
the statements are made, and the Company does not assume any obligation to update forward-looking information if circumstances
or management’s beliefs, expectations or opinions should change, other than as required by applicable law. For the reasons
set forth above, one should not place undue reliance on forward-looking information.



CURRENCY



Unless otherwise indicated,
all dollar amounts in this Form 40-F are in United States dollars. All references to "C$" or to “Canadian dollars"
are to the currency of Canada. The exchange rate of United States dollars into Canadian dollars, on December 29, 2017, based on
the noon rate published by the Bank of Canada, was US$1.00 = C$1.2545.



NOTE TO UNITED STATES READERS —

DIFFERENCES IN UNITED STATES AND CANADIAN
REPORTING PRACTICES



We are permitted under
the multi-jurisdictional disclosure system adopted by the United States Securities and Exchange Commission (the “SEC”),
to prepare this Form 40-F in accordance with Canadian disclosure requirements, which differ from those of the SEC. We have prepared
our financial statements, which are filed as Exhibit 99.2 to this Form 40-F, in accordance with International
Financial Reporting Standards as issued by the International Accounting Standards Board, and they are not comparable with financial
statements of U.S. and other companies prepared in accordance with U. S. generally accepted accounting principles.



CLASSIFICATION OF MINERAL RESERVES AND
RESOURCES



In our AIF, the definitions
of proven and probable mineral reserves, and measured, indicated and inferred mineral resources are those used by the Canadian
provincial securities regulatory authorities and conform to the definitions utilized by the Canadian Institute of Mining, Metallurgy
and Petroleum (the "CIM"), as the CIM Definition Standards on Mineral Resources and Mineral Reserves adopted by the CIM
Council, as amended.





3







CAUTIONARY NOTE TO UNITED STATES READERS

CONCERNING MINERAL RESERVES AND RESOURCE
ESTIMATES



Our AIF for the year
ended December 31, 2017 attached to the Form 40-F as Exhibit 99.1 and incorporated by reference herein has been prepared
in accordance with the requirements of the securities laws in effect in Canada, which differ from the requirements of United States
securities laws. The terms “mineral reserve”, “proven mineral reserve” and “probable mineral reserve”
are Canadian mining terms as defined in accordance with the Canadian Securities Administrators’ National Instrument 43-101
– Standards of Disclosure for Mineral Projects (“NI 43-101”) and the Canadian Institute of Mining, Metallurgy
and Petroleum as the CIM Definition Standards on Mineral Resources and Mineral Reserves adopted by the CIM Council, as amended.
These definitions differ from the definitions in SEC Industry Guide 7 under the United States Securities Act of 1933, as amended
(the "Securities Act"). Under SEC Industry Guide 7 standards, a “final” or “bankable” feasibility
study is required to report reserves, the three-year historical average price is used in any reserve or cash flow analysis to designate
reserves and the primary environmental analysis or report must be filed with the appropriate governmental authority.



In addition, the terms
“mineral resource”, “measured mineral resource”, “indicated mineral resource” and “inferred
mineral resource” are defined in and required to be disclosed by NI 43-101; however, these terms are not defined terms under
SEC Industry Guide 7 and are normally not permitted to be used in reports and registration statements filed with the SEC. Investors
are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves.
“Inferred mineral resources” have a great amount of uncertainty as to their existence, and great uncertainty as to
their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded
to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility
studies, except in rare cases. Investors are cautioned not to assume that all or any part of an inferred mineral resource exists
or is economically or legally mineable. Disclosure of “contained ounces” in a resource is permitted disclosure under
Canadian regulations; however, the SEC normally only permits issuers to report mineralization that does not constitute “reserves”
by SEC Industry Guide 7 standards as in place tonnage and grade without reference to unit measures.



Accordingly, information
contained in our AIF contain descriptions of our mineral deposits that may not be comparable to similar information made public
by U.S. companies subject to the reporting and disclosure requirements under the United States federal securities laws and the
rules and regulations thereunder.



TAX MATTERS



Purchasing, holding
or disposing of our securities may have tax consequences under the laws of the United States and Canada that are not described
in this Form 40-F or our AIF. Shareholders are solely responsible for determining the tax consequences as applicable to their particular
circumstances and should consult with their own tax advisors concerning an investment in our securities.





4







Based on the nature
of our current business activities, we do not believe that we were a PFIC for our 2017 fiscal year, and we dos not expect to be
a PFIC in our current taxation year. However, the tests for determining PFIC status are based upon the composition of our income
and assets and the income and assets of our subsidiaries and affiliates from time to time, and it is difficult to make accurate
predictions of future income and assets. Accordingly, there can be no assurance that we will not become a PFIC in the future. A
non-U.S. corporation generally will be considered a PFIC for any taxable year if either: (i) at least 75% of its gross income is
passive income; or (ii) at least 50% of the value of its assets is attributable to assets that produce or are held for the production
of passive income (which generally includes cash). It is difficult to make accurate predictions of future income and assets, which
are relevant to the determination of PFIC status. If we were to be treated as a PFIC for any taxation year, such characterization
could result in adverse U.S. income tax consequences to certain U.S. holders our common shares. If we were to be treated as a PFIC
for any taxable year, a U.S. holder may be able to make certain elections with respect to our common shares to mitigate the tax
consequences of PFIC status, such as a “Qualified Electing Fund” (“QEF”) election or a “mark-to-market”
election. If a U.S. holder timely makes a QEF election, such U.S. holder generally would be required to include in income on a
current basis such U.S. holder’s pro rata share of our ordinary income and net capital gains. In order for a U.S. holder
to be able to make a QEF election, such U.S. holder will need certain information from us. There is no assurance, however, that
we will have such information, or that we will be able to obtain this information.



Each U.S. holder should
consult with such U.S. holder’s own tax advisor regarding the availability and tax consequences of a QEF election with respect
to our common shares, the applicability and potential advantages and disadvantages of making a “mark-to-market” election
with respect to our common shares if we are or become a PFIC, including the tax issues raised by lower-tier PFICs that we may own
and the procedures for making such an election.



The PFIC rules are
very complex and are not described completely herein. U.S. holders are urged to consult their own tax advisors regarding the PFIC
rules. the tax consequences of such rules to such U.S. Holders, and the U.S. federal income tax consequences of the acquisition,
ownership and disposition of our common shares in light of their particular circumstances.



DISCLOSURE CONTROLS AND PROCEDURES



Evaluation of Disclosure Controls and Procedures



At the end of the period
covered by this annual report on Form 40-F, an evaluation was carried out under the supervision of, and with the participation
of our management, including the Chief Executive Officer (“CEO”) and the Chief Financial Officer (“CFO”),
of the effectiveness of the design and operations of our disclosure controls and procedures (as defined in Rule 13a–15(e)
and Rule 15d–15(e) under the Exchange Act). Based on that evaluation, the CEO and the CFO have concluded that as of
the end of the period covered by this annual report, our disclosure controls and procedures were adequately designed and effective
in ensuring that: (i) information required to be disclosed by us in reports that we file or submit to the SEC under the Exchange
Act is recorded, processed, summarized and reported within the time periods specified in applicable SEC rules and forms and (ii) material
information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to our management,
including the CEO and the CFO, as appropriate, to allow for accurate and timely decisions regarding required disclosure.



Management's Annual Report on Internal
Control over Financial Reporting



For management’s
report on internal control over financial reporting, see “Disclosure Controls and Internal Controls over Financial Reporting
("ICFR") in our MD&A attached as Exhibit 99.3 to this Form 40-F and incorporated by reference
herein. This annual report does not include an attestation report of the Company's registered public accounting firm due to a transition
period established by rules of the SEC for companies that are newly public in the U.S.





5







Changes in Internal Controls over Financial Reporting



During the fiscal year
ended December 31, 2017, no changes occurred in our internal control over financial reporting that have materially affected, or
are reasonably likely to materially affect, our internal control over financial reporting.



Certifications



See Exhibits 31.1, 31.2, 32.1 and 32.2 to
this Form 40-F.



NOTICES PURSUANT
TO REGULATION BTR



We did not send any
notices required by Rule 104 of Regulation BTR during the fiscal year ended December 31, 2017 concerning any equity security subject
to a blackout period under Rule 101 of Regulation BTR.



CORPORATE GOVERNANCE



We are subject to a
variety of corporate governance guidelines and requirements of the Toronto Stock Exchange, the NYSE American Stock Exchange (the
“NYSE American”), the Canadian Securities Administrators and the SEC. We believe that we meet or exceed the applicable
corporate governance requirements. Although we are listed on the NYSE American, as "foreign private issuer," as defined
in the rules of the SEC, we are not required to comply with all of that exchange's corporate governance rules which are applicable
to U.S. companies. Our principal obligations under the governance rules of the NYSE American are the obligation to maintain an
independent audit committee in accordance with Rule 10A-3 under the Exchange Act, the obligation to notify the NYSE American if
any of our executive officers becomes aware of any material non-compliance with any of the applicable NYSE American governance
rues, the obligation to file annual and interim written affirmations, on forms mandated by the NYSE
American, relating to our compliance with applicable NYSE American governance rules, and the obligation to disclose the significant
ways in which the governance standards that we follow differ from those applicable to U.S. companies under the NYSE governance
rules. While we are exempt from the NYSE American Rule requiring its listed companies to maintain an independent compensation committee
in accordance with SEC Rule10C-1, our Board of Directors has a compensation in compliance with the requirements of the Toronto
Stock Exchange and Canadian law. The members of the Compensation Committee of our Board are identified under the caption "Directors
and Officers" in our AIF.



The significant ways
in which the NYSE American governance rules differ for us, as a Canadian company, are the availability of a reduced quorum requirement
for shareholder meetings, the absence of any requirement for shareholder approval for issuance of common shares that could result
in a 20% increase in the number of outstanding common shares or shareholder approval for amendments to option plans. A company
seeking relief under or from these NYSE American provisions must provide written certification from independent local counsel that
the non-complying practice is not prohibited by home country law. In addition, the company must provide English language disclosure
of any significant ways in which its corporate governance practices differ from those followed by domestic companies pursuant to
NYSE American standards. This disclosure may be provided on the company’s website but must be included in the company’s
annual report distributed to shareholders in the United States.



We review our governance
practices and monitor developments in Canada and the United States on an on-going basis to ensure we remain in compliance with
applicable rules and standards. The Board is committed to sound corporate governance practices which are both in the interest of
our shareholders and contribute to effective and efficient decision making.





6







CODE OF BUSINESS ETHICS



The Board expects management
to operate our business in a manner that enhances shareholder value and is consistent with the highest level of integrity. Accordingly,
the Board has adopted a Code of Business Conduct & Ethics (the "Code") that covering all employees, officers, directors,
agents and contractors of our company to assist them to maintain the highest standards of ethical conduct in corporate affairs.
In addition, the Board must comply with conflict of interest provisions in Canadian corporate law, including relevant securities
regulatory instruments, in order to ensure that directors exercise independent judgment in considering transactions and agreements
in respect of which a director or executive officer has a material interest. A copy of the Code is available on our website at
https://s2.q4cdn.com/485819848/files/doc_downloads/corporate_gov/Code-of-Business-Conduct-and-Ethics-current.pdf and from
our office at the address listed on the.



All amendments and
any waivers of the Code that apply to the officers covered by it will be posted on our website, furnished to the SEC as required,
and provided to any shareholder who requests them. During the fiscal year ended December 31, 2017, we did not grant any waiver,
including an implicit waiver, from a provision of the Code to any executive officer or director.



INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM, PRINCIPAL ACCOUNTING FEES AND SERVICES AND AUDIT COMMITTEE PRE-APPROVAL POLICIES AND PROCEDURES



PricewaterhouseCoopers
LLP acted as our independent registered public accounting firm for the fiscal years ended December 31, 2017 and 2016. For a description
of the total amount PricewaterhouseCoopers LLP billed to us for services performed in the last two fiscal years by category of
service (audit fees, audit-related fees, tax fees and all other fees), see the information under the caption "Audit Committee
Information - External Auditor Fees" in our AIF, which is attached as Exhibit 99.1 to this Form 40-F and incorporated by reference
herein.



The audit committee
has adopted specific policies and procedures for the engagement of non-audit services, including the requirement that all non-audit
services to be performed by the external auditor must be pre-approved and monitored by the audit committee. Subject to National
Instrument 52-110 Audit Committeesof the Canadian Securities Administrators, the engagement of non-audit services
is considered by our Board, and where applicable the audit committee, on a case-by-case basis.



OFF-BALANCE SHEET ARRANGEMENTS



We have no off-balance sheet
arrangements as at December 31, 2017.



TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS



|                                         |  | Within 1 year |        |  | 1-2 years |  |       | 2-5 years |  |  | After 5 years |  |  | Total |   |  | As at December 31,
 2017 | 
|---------------------------------------- |  | ------------- | ------ |  | --------- |  | ----- | --------- |  |  | ------------- |  |  | ----- | - |  | ------------------------ | 
|                                         |  | $             |        |  | $         |  |       | $         |  |  | $             |  |  | $     |   |  | $                        | 
|Accounts payable and accrued liabilities |  |               | 32,319 |  |           |  | -     |           |  |  | -             |  |  |       | - |  |                          | 
|Loans payable                            |  |               | 28,770 |  |           |  | 7,520 |           |  |  | 28,430        |  |  |       | - |  |                          | 
|Interest on loans payable                |  |               | 207    |  |           |  | 197   |           |  |  | 250           |  |  |       | - |  |                          | 
|Other liabilities                        |  |               | 8,579  |  |           |  | 1,113 |           |  |  | -             |  |  |       | - |  |                          | 
|Total Commitments                        |  |               | 69,875 |  |           |  | 8,830 |           |  |  | 28,680        |  |  |       | - |  |                          | 





7







AUDIT COMMITTEE



Audit Committee



Our Board of Directors
has a separately designated standing Audit Committee established in accordance with Section 3(a)(58)(A) of the Exchange Act.
The members of our Audit Committee are identified under the caption “Audit Committee Information” in the AIF which
is attached as Exhibit 99.1 to this annual report on Form 40-F and incorporated by reference herein. In the
opinion of the Board, all members of the Audit Committee are financially literate and independent, as such terms are defined by
the NYSE American's corporate governance listing standards applicable to us and as determined by Rule 10A-3 under the Exchange
Act.



The listing of our
common shares on the NYSE American and our registration statement on Form F-10 under the Securities Act each became effective on
July 7, 2017. On that date, Mr. Igor Gonzalez, our President and Chief Executive Officer, was a member of our Audit Committee but,
as our Chief Executive Officer, was not independent as defined in SEC Rule 10A-3 and the NYSE American listing standards for audit
committees of FPIs. Mr. Gonzalez served as a member of our audit committee pursuant to the exemption from such independence requirements
set forth in SEC Rule 10A-3(b)(1)(iv)(2) until November 9, 2017. On November 9, 2017, Mr. Jose Vizquerra Benavides was appointed
to the Board of Directors and also joined the Company's Audit Committee, replacing Mr. Gonzales, who stepped down from the Audit
Committee on that date. Mr. Vizquerra Benavides is independent under the NYSE American corporate governance listing standards applicable
to us and Rule 10A-3 under the Exchange Act. We believe that our reliance on Rule 10A-3(b)(1)(iv)(2) between our initial listing
on the NYSE American from July 7, 2017 through November 9, 2017 did not materially adversely affect the ability of the Audit Committee
to act independently and to satisfy the other requirements of SEC Rule 10A-3.



Audit Committee Charter



Our Audit Committee
Charter is provided in Schedule A to the AIF, which is attached as Exhibit 99.1 to this annual report on Form 40-F and incorporated
by reference herein. The Charter also is available in print to any shareholder that provides us with a written request.



AUDIT COMMITTEE FINANCIAL EXPERT



The Board has determined
that each of Douglas Cater, Philip Renaud and Jose Vizquerra Benavides are “independent” and have the necessary qualifications
to be designated as “audit committee financial experts,” within the meaning of applicable rules of the SEC and the
NYSE American.



The SEC has indicated
that the designation or identification of a person as an audit committee financial expert does not make such person an “expert”
for any purpose, impose any duties, obligations or liability on such person that are greater than those imposed on members of the
audit committee and the board of directors who do not carry this designation or identification, or affect the duties, obligations
or liability of any other member of the audit committee or board of directors.





8







INTERACTIVE DATA FILE



In accordance with
SEC policy set forth in Securities Exchange Commission Release No. 33-9002 for initial interactive data submissions, our financial
statements as of and for the twelve-month period formatted in XBRL (eXtensible Business Reporting Language) will be submitted by
amendment to this Form 40-F to be filed within 30 days after the filing date of this report.



MINE SAFETY DISCLOSURE



Pursuant to Section
1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, issuers that are operators, or that have a subsidiary
that is an operator, of a coal or other mine in the United States are required to disclose in their periodic reports filed with
the SEC information regarding specified health and safety violations, orders and citations, related assessments and legal actions,
and mining-related fatalities under the regulation of the Federal Mine Safety and Health Review Administration under the Federal
Mine Safety and Health Act of 1977. During the fiscal year ended December 31, 2017, neither we nor any of our subsidiaries operated
a coal or other mine in the United States, and we were not subject to any citations, orders or other legal actions under the Federal
Mine Safety and Health Act of 1977.



ADDITIONAL INFORMATION



Additional
information relating to our company, including our AIF, our Audited Financial Statements and our MD&A, can be found on SEDAR
at www.sedar.com, on the SEC website at www.sec.gov, or on our website at http://sierramatals.com.  Shareholders may
also contact the head of Investor Relations of the Company by phone at 1-(866) 493-9646 or by e-mail at info@sierrametals.com to
request copies of these documents and this annual report on Form 40-F.



CONTACTING THE BOARD



Shareholders, employees
and other interested parties may communicate directly with the Board by:



| | · | writing to:      Jill Neff, Corporate Secretary
| | - | -----------------------------------------------



Sierra
Metals Inc.

79
Wellington Street West, Suite 2100

Toronto,
ON M5K 1H1

Canada

| | · | calling:           1-416-366-7777
| | - | ---------------------------------



| | · | emailing:        jill.neff@sierrametals.com
| | - | -------------------------------------------





UNDERTAKING AND CONSENT TO SERVICE OF
PROCESS



A.       Undertaking



We undertake to make
available, in person or by telephone, representatives to respond to inquiries made by the SEC staff, and to furnish promptly, when
requested to do so by the SEC staff, information relating to: the securities registered pursuant to Form 40-F; the securities in
relation to which the obligation to file an annual report on Form 40-F arises; or transactions in said securities.





9







B.       Consent
to Service of Process



We have previously
filed with the SEC a written consent to service of process and power of attorney on Form F-X. Any change to the name or address
of our agent for service shall be communicated promptly to the SEC by amendment to the Form F-X referencing our file number.



INDEX TO EXHIBITS



|Consents       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|23.1           | Consent of PricewaterhouseCoopers LLP                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|23.2           | Consent of Matthew Hastings                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|23.3           | Consent of Shannon L. Rheaume                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|23.4           | Consent of Jeff Osborn                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|23.5           | Consent of Fernando Rodrigues                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|23.6           | Consent of Daniel H. Sepulveda                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|23.7           | Consent of John Tinucci                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|23.8           | Consent of Jon Larson                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|23.9           | Consent of Giovanny J. Ortiz                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|23.10          | Consent of Mark Willow                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|23.11          | Consent of Gordon Babcock                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|23.12          | Consent of Americo Zuzunaga                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Certifications |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|31.1           | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934                                                                                                                                                                                                                                                                                                                                                               
|               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|31.2           | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934                                                                                                                                                                                                                                                                                                                                                               
|               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|32.1           | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 (This Exhibit is furnished herewith, but not deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that we explicitly incorporate it by reference.)
|               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|32.2           | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1850 (This Exhibit is furnished herewith, but not deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that we explicitly incorporate it by reference.)





10







|Annual
 Information |                                                                                                     
|------------------- | ----------------------------------------------------------------------------------------------------
|                    |                                                                                                     
|99.1                | Annual Information Form of Sierra Metals Inc. for the year ended December 31, 2017                  
|                    |                                                                                                     
|99.2                | Audited Consolidated Financial Statements of Sierra Metals Inc. for the year ended December 31, 2017
|                    |                                                                                                     
|99.3                | Management’s Discussion and Analysis of Sierra Metals Inc. for the year ended December 31, 2017     





11







SIGNATURES



Pursuant to the requirements
of the Exchange Act, the Registrant certifies that it meets all of the requirements for filing this Form 40-F and has duly caused
this amendment to our annual report to be signed on its behalf by the undersigned, thereto duly authorized.



| | SIERRA METALS INC.
| | ------------------
| |                   
| | By:               
| | Name:             
| | Title:            



Date: March 22, 2018