It said the drilling had identified copper sulphide-rich mineral deposits, and the new hydrothermal breccias which contained high-grade zinc and remained open at depth.

Among the highlights, Sierra intercepted 57m at 1.86g/t silver, 0.54% lead, 0.28% copper and 9.53% zinc, from 92.2m, outside the Yauricocha Fault contact zone.

The company has drilled four holes to date from the 1070 level in the Contacto Oriental area and said the results demonstrated the potential for high-grade mineralisation and extensive mineralisation at depth.

"Generally hydrothermal breccias are large structures and the discovery of a new style of mineralisation represents a new opportunity to further increase resources," exploration vice president Alonso Lujan said.

The company is focusing exploration on brownfields opportunities at Yauricocha and its two mines in Mexico, where it last month increased the reserve at Bolivar by 86%.

Yauricocha produced 34.8 million pounds zinc-equivalent in the March quarter at an all-in sustaining cost of US$0.82c/lb.

Sierra had US$25.5 million cash at the end of March.

Shares in the company, which reached a 52-week high of C$3.85 on May 28, closed down 2c yesterday to $3.45.