Securities Law & Instruments

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- National Instrument 51-102 Continuous Disclosure Obligations, s. 13.1 -- National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings, s. 4.5 -- National Instrument 52-110 Audit Committees, s. 8.1 -- National Instrument 58-101 Disclosure of Corporate Governance Practices, s. 3.1 -- General -- Filer seeks relief from the requirement in s. 1.1 definition of "venture issuer", that a reporting issuer not have any of its securities listed or quoted on a marketplace outside of Canada and the United States of America, in order to become listed on the Risk Capital Segment of the Lima Stock Exchange Segmento de Capital de Riesgo da la Bolsa de Valores de Lima) (the Exchange).

Applicable Legislative Provisions

National Instrument 51-102 Continuous Disclosure Obligations, s. 13.1.

National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings, s. 8.6.

National Instrument 52-110 Audit Committees, s. 8.1.

National Instrument 58-101 Disclosure of Corporate Governance Practices, s. 3.1.

December 18, 2012

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ONTARIO

(the "Jurisdiction")

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

SIERRA METALS INC.

FORMERLY DIA BRAS EXPLORATION INC.

(the "Filer")

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Filer for a decision under the securities legislation of the Jurisdiction (the "Legislation") for relief from the requirement in the definition of "venture issuer" in section 1.1 of each of National Instrument 51-102 -- Continuous Disclosure Obligations, National Instrument 52-109 -- Certification of Disclosure in Issuers' Annual and Interim Filings, National Instrument 52-110 -- Audit Committees and National Instrument 58-101 -- Disclosure of Corporate Governance Practices that a reporting issuer not, at the relevant time, have any of its securities listed or quoted on any of the Toronto Stock Exchange, a U.S. marketplace or a marketplace outside of Canada and the United States of America other than the Alternative Investment Market of the London Stock Exchange or the PLUS markets operated by PLUS Markets Group plc (the "Exemption Sought").

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):

(a) the Ontario Securities Commission is the principal regulator for the application; and

(b) the Filer has provided notice that section 4.7(1) of Multilateral Instrument 11-102 -- Passport System is intended to be relied upon in each of Alberta, British Columbia and Quebec (collectively with the Jurisdiction, the "Reporting Jurisdictions").

Interpretation

Terms defined in National Instrument 14-101 -- Definitions have the same meaning in this decision, unless otherwise defined.

Representations

The decision is based on the following facts represented by the Filer:

1. The Filer exists pursuant to articles of incorporation dated April 11, 1996, as amended, filed in accordance with the Canada Business Corporations Act.

2. The registered and head office of the Filer is located in Toronto, Ontario.

3. The Filer's common shares (the "Shares") are listed on the TSX Venture Exchange (the "TSXV") under the trading symbol "DIB".

4. The Filer is a reporting issuer in each of the Reporting Jurisdictions.

5. The Filer is a junior exploration company with its principal assets located in Mexico and Peru.

6. The Shares have also been listed on the Segmento de Capital de Riesgo of the Lima Stock Exchange (Bolsa de Valores de Lima S.A.) (the "Lima Venture Exchange") in Peru since February 29, 2012. The Filer decided to list the Shares on the Lima Venture Exchange due to the Filer's connection to Peru and to facilitate the sale and transfer of the Shares in Peru. However, the Filer was unaware that listing on the Lima Venture Exchange would affect its status as a "venture issuer".

7. The Filer discovered the effect of the Lima listing on its status as a "venture issuer" in connection with a review when preparing its third quarter interim period financial statements.

8. The Lima Venture Exchange is a junior market.

9. The Lima Venture Exchange is similar to the TSXV in terms of its requirements as the requirements of the Lima Venture Exchange were modeled after those of the TSXV, among other reputable venture exchanges.

10. The Lima Venture Exchange requires the Filer to comply with TSXV requirements in order to maintain its listing; the Lima Venture Exchange also requires that the Filer file with the Lima Venture Exchange copies of all public disclosure documents filed with Canadian securities regulators.

11. The information that the Filer has provided about the Lima Venture Exchange (and its status as a junior market) herein is accurate as at the date of this decision.

12. The Filer confirms that, as of the date of this decision, it has filed its interim period financial statements within the time period prescribed for a "venture issuer" and the Filer is not otherwise in default of securities legislation in any of the Reporting Jurisdictions.

Decision

The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make the decision.

The decision of the principal regulator under the Legislation is that the Exemption Sought is granted provided that:

(a) the Lima Venture Exchange is not restructured in a manner that makes it unreasonable to conclude that it is still a junior market;

(b) the representations listed in sections 8 to 11 above continue to be true;

(c) the Filer continues to have the Shares listed on the TSXV; and

(d) the Filer does not have any securities listed or quoted on any of the Toronto Stock Exchange, a U.S. marketplace or a marketplace outside of Canada and the United States of America other than the Lima Venture Exchange, the Alternative Investment Market of the London Stock Exchange or the PLUS markets operated by PLUS Markets Group plc.

"Shannon O'Hearn"
Manager, Corporate Finance Branch
Ontario Securities Commission