Sienna Gold Inc
TSX VENTURE : SGP

February 24, 2011 13:40 ET

Sienna Gold Inc. Announces $7,000,000 Financing

CALGARY, ALBERTA--(Marketwire - Feb. 24, 2011) - Sienna Gold Inc. ("Sienna" or the "Corporation") (TSX VENTURE:SGP) wishes to announce that it has, subject to regulatory approval, completed a private placement financing of US $7,000,000. This financing will be completed entirely in Peru and Colombia, with the lead broker being Grupo Privado de Inversiones – Valores S.A., Sociedad Agente de Bolsa (GPI Valores SAB). The Corporation will issue 17,500,000 units at US$0.40 per unit, with each unit consisting of one common share and one common share purchase warrant. Each warrant entitles the holder to subscribe for one additional share for CDN$0.60 for a period of one year from closing. Proceeds will be used for further exploration work on the Corporation's Igor project in Peru and for general working capital. Sienna will pay commissions of 7% to GPI and issue 7% broker warrants, each of which will entitle the holder to subscribe for one additional unit at the issue price for a period of one year from closing.

Company Goals

To drill approximately 10,000 – 20,000 meters in the next 24 months. This total meterage will be allotted to a three-pronged exploration program on the Igor Project.

1.1 Infill drilling on the Domo to enhance the resources that are included in our NI 43-101 report and move them from inferred to measured and indicated.

1.2 Drilling of the high grade veins in the Tesoros area to increase and enhance the resources reported in the NI 43-101 report. This program should rapidly add ounces to the resource due to the grade of the veins and the fact that they are outcropping.

1.3 Exploration drilling for the porphyry target on the property. In 2008 the Corporation drilled the CA-01b "discovery hole". In addition to returning 218.4 metres at 0.6 g/t gold and 22.3 g/t silver, largely as oxide mineralization, the hole finished in mineralization.

1.4 The last 2 m assayed 1.7 g/t gold, 61 g/t silver, and 0.44% copper.

This, along with various other indicators, suggests that the Igor project is underlain by a large porphyry copper gold system. The "Big Prize" at Igor is to find and delineate economically viable porphyry mineralization. The focus for this exploration will be south east from the location of the current drilling program along the roughly north-south Callanquitas Trend.

This drilling in Callanquitas will also help outline oxidized gold which in the discovery hole was present over 200 meters of mineralization and which will eventually be incorporated into a resource.

Domo and Tesoro resources.

The Corporation hopes to define an oxidized, leachable and bulk mineable resource equivalent to 1,000,000 oz gold. It has undertaken a feasibility study for small mine utilizing the resources included in the current NI 43-101 report.

A feasability study is underway for a small mine utilizing the resources included in the current NI 43-101. As part of the current feasibility study an environmental firm has been identified to carry out the environmental impact assessment of the project. This will be completed in approximately 18 months.

Sienna will also review the metallurgy from the scoping study prepared in 2008 with identification and procurement of the production assets, and will need to acquire the surface rights required to put the mine into production.

Lima Listing

The Company has received conditional approval for listing from the Lima Stock Exchange and is waiting the approval from CONASEV, which is the Securities commission of Peru.

This press release was reviewed and approved by Owen Miller (Aus IMM Member No 207275), consultant to Sienna Minerals. (a wholly owned subsidiary of Sienna Gold Inc.), who is a "Qualified Person" according to National Instrument 43-101.

Sienna Gold Inc. is a gold exploration company with property interests in Peru. Its key prospect is the Igor Mine Project, a formerly producing mine that the Corporation plans to explore further. 

Advisory

Certain statements and information contained in this press release, including but not limited to management's assessment of Sienna's future plans and operations, production, reserves, , capital expenditure programs and debt levels contain forward-looking statements. In particular, this press release contains statements concerning the anticipated feasibility study and identification of drilling targets. All statements other than statements of historical fact may be forward looking statements. These statements, by their nature, are subject to numerous risks and uncertainties, some of which are beyond Sienna's control including the effect of general economic conditions, industry conditions, changes in regulatory and taxation regimes, volatility of commodity prices, escalation of operating and capital costs, currency fluctuations, the availability of services, imprecision of reserve estimates, geological, technical, drilling and processing problems, environmental risks, weather, the lack of availability of qualified personnel or management, stock market volatility, the ability to access sufficient capital from internal and external sources and competition from other industry participants for, among other things, capital, services,undeveloped lands and skilled personnel that may cause actual results or events to differ materially from those anticipated in the forward looking statements. Such forward-looking statements, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated in the statements made and should not unduly be relied on. These statements speak only as of the date of this press release. Sienna does not intend and does not assume any obligation to update these forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. Sienna's business is subject to various risks that are discussed in its filings on the System for Electronic Document Analysis and Retrieval (SEDAR).

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Sienna Gold Inc.
    John M. Rucci
    President
    (403) 508 2061