Sierra Minerals Inc.
TSX : SIM

Sierra Minerals Inc.

January 18, 2007 10:35 ET

Sierra Intersects 32 Metres Grading 3.42 gm/t Gold at Cerro Colorado Mine, Mexico

- also completes purchase of mine property -

TORONTO, ONTARIO--(CCNMatthews - Jan. 18, 2007) - Sierra Minerals Inc. "Sierra" (TSX:SIM) is pleased to provide results of the recently completed drill program at its Cerro Colorado Gold Mine, Sonora, Mexico. Sierra has planned a large multi-phase drilling campaign, which will be ongoing throughout 2007, to both upgrade the historical resource calculations to 43-101 compliance and to expand the reserve at the mine. This is the first drill program carried out by Sierra since completing the acquisition of the Cerro Colorado Mine in September, 2006.

The mine produced approximately 14,000 ounces of gold in 2006 at a head grade of 0.76gm/t so the identification of a new, near surface zone of higher grade further substantiates the projected increase in produuction and cash flow for 2007.

A total of eight holes were completed, seven of which were drilled on targets outside existing known ore resources. Highlights from the drill program at Cerro Colorado include drill hole GM-4 which intersected 32 meters of 3.42 gm/t gold and 6.0 gm/t silver at 30 metres below surface and drillhole GM-5 that intersected 32 meters at 1.72 gm/t gold at 80 metres below the surface. These new results will have a positive impact on the overall mineable mineral resources at Cerro Colorado.



A summary of results is as follows:

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HOLE EASTING NORTHING FROM TO WIDTH Au Ag
No. (m) (m) (m) (m) (m) (g/t) (g/t)
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GM-1 420349 3343981 0 3 3 0.63 0.15
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GM-2 420114 3344064 NSV
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GM-3 420276 3344156 6.1 25.9 19.8 0.40 1.32
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GM-4 420292 3344116 35.1 67.1 32 3.42 6.00
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Including 41.2 61 19.8 5.37 9.01
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GM-5 420504 3344221 68.6 100.6 32 1.72 0.32
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Including 82.4 88.5 6.1 7.42 0.2
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GM-6 420243 3343991 102.2 120.5 18.3 0.2 1.3
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GM-7 420226 3344025 77.8 88.5 10.7 0.65 2.89
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GM-8 420360 3343923 97.6 102.2 4.6 0.28 13.00
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Note : The above intersections have been calculated with a 0.2 g/t mine cut off grade. The majority of the drill holes were drilled at a dip of 60 degrees, which is roughly perpendicular to the dip of the known ore systems. True widths are approximately 90 % of the reported. NSV denotes "No Significant Values".

Sierra is also pleased to announce that in December 2006 the Company made its final payment to Mr. Abraham Nasser, the underlying owner of the mineral rights at Cerro Colorado. This payment makes the total paid to Mr. Nasser of US$1.74 million in the year 2006 and satisfies the agreement between the two parties. Title to the Nasser concessions is being transferred outright to Sierra's 100%-owned Mexican subsidiary, Granmin S.A de CV.

With the completion of the payments pursuant to the Nasser Agreement, operating cash flow will now be available to fund the exploration drilling and to affect capital improvements as previously reported in the Company's release of November 13th, 2006. In line with this mandate, two additional Caterpillar 773 ore-trucks were recently purchased at auction and will be delivered to the mine site in late January. Together with other planned operational upgrades, this should facilitate the Company's 2007 goals of increased production at lower cash costs.

At the Cerro Colorado mine site, Sierra has implemented a quality control program to ensure best practices in chemical sampling and analysis of surface and drill core samples. All assaying for the eight holes reported was completed by International Plasma Laboratories of Richmond BC Canada and was independently checked by the company's on-site mine assay laboratory. Under the guidelines of the NI 43-101, the required qualified person for the Cerro Colorado Gold Mine is Mr. Stephen Weatherup of CCIC, who is a professional geologist registered in British Columbia, Canada.

Sierra Minerals Inc. is a precious metals producing company focused on acquiring and developing advanced stage gold and silver deposits that have a likelihood of realizing near-term production. The Company's primary focus is Mexico although it is actively reviewing opportunities throughout the Americas. Sierra is committed to company-wide environmental and corporate social responsibility best practices.

FORWARD-LOOKING STATEMENTS

This press release includes certain "forward-looking information" within the meaning of the Securities Act (Ontario), including, but not limited to, statements as to timing and extent of exploration programs, the availability of exploration results and the extent of future production from the Cerro Colorado Mine. As such, forward-looking information addresses future events and conditions and so involves inherent risks and uncertainties, as disclosed under the heading "Risk Factors" and elsewhere in Sierra documents filed from time to time with the Ontario Securities Commission and other regulatory authorities. Actual results could differ significantly from those currently projected as a result of, among those factors, adverse weather, regulatory changes, delays in receiving permits, accidents, delays in completing exploration activities and results of exploration activities, not all of which are in the control of Sierra. The forward-looking information contained herein is Sierra's reasonable estimate today of future events and conditions, but no assurance can be given that such events or conditions will occur.

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