Sierra Madre Developments Inc.
TSX VENTURE : SMG

Sierra Madre Developments Inc.

November 21, 2011 12:36 ET

Sierra Madre Developments and Omineca Mining and Metals Announce Signing of an Option to Purchase the Harrison Gold Property

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 21, 2011) - Sierra Madre Developments Inc. ("Sierra Madre" or the "Company") (TSX VENTURE:SMG) is pleased to announce that the Company has signed an Option to Purchase Agreement with Omineca Mining and Metals Corp. ("Omineca" or the "Vendor") (TSX VENTURE:OMM) whereby Sierra Madre can acquire a 100% interest in the 2,427 ha Harrison Gold Project (also referred to as the Abo project) located in south western BC.

To exercise the Option, SMG must, on or before the fifth anniversary of TSXV approval, (a) pay to the Vendor an aggregate $1,000,000; (b) deliver an aggregate of 4,000,000 common shares of Sierra Madre; and (c) incur an aggregate of at least $3,000,000 of expenditures on the Property, as follows:

(a) pay to the Vendor:
(i) the sum of $25,000 upon the date of signing the Agreement;
(ii) an additional $25,000 within ten days following receipt of TSXV approval to the Agreement (the "Approval Date");
(iii) an additional $50,000 on or before the first anniversary of the Approval Date;
(iv) an additional $100,000 on or before the second anniversary of the Approval Date;
(v) an additional $100,000 on or before the third anniversary of the Approval Date;
(vi) an additional $200,000 on or before the fourth anniversary of the Approval Date;
and,
(vii) an additional $500,000 on or before the fifth anniversary of the Approval Date;
(b) issue and deliver to the Vendor:
(i) 200,000 Shares within ten days following the Approval Date;
(ii) an additional 300,000 Shares on or before the first anniversary of the Approval Date;
(iii) an additional 500,000 Shares on or before the second anniversary of the Approval Date;
(iv) an additional 500,000 Shares on or before the third anniversary of the Approval Date;
(v) an additional 1,000,000 Shares on or before the fourth anniversary of the Approval Date;
(vi) an additional 1,500,000 Shares on or before the fifth anniversary of the Approval Date;
(c) incur expenditures on or with respect to the Property, of at least:
(i) $100,000 on or before the first anniversary of the Approval Date;
(ii) an additional $150,000 on or before the second anniversary of the Approval Date;
(iii) an additional $250,000 on or before the third anniversary of the Approval Date;
(iv) an additional $1,000,000 on or before the fourth anniversary of the Approval Date; and
(v) an additional $1,500,000 on or before the fifth anniversary of the Approval Date.

Omineca will also retain a 2% Net Smelter Return royalty. Sierra Madre has the right to purchase one-half of the Royalty at any time for $1,000,000 in cash.

The claims cover several intrusion related gold occurrences that have been intermittently explored by various operators since the early 1970's. Approximately $4 – $7 million was expended by Abo Resources, Kerr Addison Mines Ltd., Bema International Resources Ltd. and Northern Continental Resources over the years. Exploration work since 1970 has included a total of 19,490m (64,000') of diamond drilling in 161 drill holes and small-scale underground development work. Most of the historic work was focused on the northern part of the Property in the area of the Jenner and Portal Stocks. Drill results reported from the Portal Zone include 30 meters averaging 3.17 grams per tonne gold (EMPR ASS RPT 19584). Drill results reported from the Jenner Stock include 64m averaging 3.77 g/t (EMPR ASS RPT 20144). Other gold-bearing stocks identified on the Property include the Hill and Lake Stocks. These areas have seen limited exploration in comparison to the Jenner-Portal Stocks areas. Diamond drill intersections reported from the Hill Stock area include DDH BX88-130 which averaged 3.54 g/t Au and 6.3 g/t Ag over 27 meters, and contained 8m averaging 8.7 g/t Au and 14.2 g/t Ag (EMPR ASS RPT 20144). The Property is road-accessible year-round. Hydroelectric power, natural gas and rail-service are located within three kilometers of Property boundaries.

In 2002, Barry Price, P.Geo., was retained to review an historic resource estimate calculated by G. Norman on behalf of Bema Resources for the Property based on historical results. Price estimated a "probable resource" for the Jenner and Portal Stocks of 1,845,000 tonnes averaging 2.79 g/t or 165,200 oz. in situ, with a further Possible Resource of 613,600 tonnes averaging 2.79 g/t or 55,100 oz. The reliability of the historical data is unknown but is considered relevant by Company management. The historical data is non-NI 43-101 compliant and should not be relied upon. The historical resource estimate uses a category of "probable resource" which is no longer used under NI 43-101. Neither Omineca nor Sierra Madre has done sufficient work to validate the above resource estimate. It is the Company's intention to verify the historical data and confirmation work may produce results that differ substantially from the historic results.

Sierra Madre CEO, Carl von Einsiedel, P.Geo. comments: "The Harrison Project represents an excellent opportunity for Sierra Madre to build shareholder value. The extensive exploration work carried out on intrusion related gold occurrences in the Yukon in last few years has helped develop new geological models and innovative exploration methods for these types of deposits. Much of the Harrison Property is relatively unexplored and the wealth of historic technical data will make it possible for Sierra Madre to utilize management expertise and quickly identify target areas that can build on the success of previous programs."

About Sierra Madre Developments: Sierra Madre is a TSX Venture listed junior mining company based in Vancouver, British Columbia, Canada. Management has extensive exploration and mining expertise and the Company's business model is to acquire advanced gold and silver projects and build shareholder value by rapidly advancing our projects through the resource delineation stage.

ON BEHALF OF SIERRA MADRE DEVELOPMENTS INC.

Carl von Einsiedel, CEO

Certain statements in this press release may be considered forward-looking information. These statements can be identified by the use of forward looking terminology (e.g., "expect", "estimates", "intends", "anticipates", "believes", "plans"). Such information involves known and unknown risks -- including the availability of funds, the results of financing and exploration activities, the interpretation of exploration results and other geological data, or unanticipated costs and expenses and other risks identified in the Company's public securities filings that may cause actual events to differ materially from current expectations. There is no assurance the Company will be able to exercise its option to acquire the Harrison Lake Property. There is no assurance any additional work on the Property will yield results which verify past results, or otherwise indicate the Property to have any economic resource. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release.

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

  • Sierra Madre Developments Inc.
    Carl von Einsiedel
    CEO
    604-685-3357