Sierra Minerals Inc.

Sierra Minerals Inc.

September 25, 2009 17:05 ET

Sierra Minerals Closes $2.0 Million Private Placement With Sprott Asset Management

TORONTO, ONTARIO--(Marketwire - Sept. 25, 2009) -


Sierra Minerals Inc. (TSX:SIM) ("Sierra" or the "Company")
is pleased to announce the closing of a non-brokered private placement (the "Private Placement") through the issuance of 10,000,000 units to Sprott Asset Management, as portfolio manager for various funds, priced at $0.20 per unit for total proceeds of $2,000,000. Each unit consists of one common share and one half of one common share purchase warrant. Each whole warrant will entitle the holder to acquire one additional common share at a price of $0.30 for a period of 18 months. Each of the common shares and warrants are subject to a hold period of four months plus one day from the date of issuance in accordance with the policies of the Toronto Stock Exchange and applicable securities laws. A finder's fee of $75,000 has been paid in relation to the Private Placement.

Proceeds of the Private Placement will partially be used to purchase certain mining equipment, currently being rented. The elimination of these rental costs will not only result in significant cash savings, but will also reduce cash operating costs. The remainder of the proceeds will support general working capital purposes and various corporate development initiatives. Following this transaction, Sierra will have 90,328,331 common shares outstanding with Sprott Asset Management owning approximately 11.1%. The Private Placement is subject to regulatory approval and the completion of definitive documentation.

In addition, Sierra is pleased to announce the appointment of GMP Securities L.P. ("GMP") as financial advisor to the Company in connection with the provision of strategic advice regarding the evaluation of potential acquisition targets.

Michael Farrant, President and CEO of Sierra Minerals commented, "Sierra welcomes Sprott Asset Management as a significant shareholder of our Company. I believe that the additional financial flexibility from this financing will enable us to deliver the maximum benefit to all our shareholders both from our Cerro Colorado mine and from corporate development opportunities afforded us as a producer in this $1,000 per ounce gold price environment. In addition, we look forward to working with top notch advisors in GMP. We view their engagement as an extremely positive step towards maximizing shareholder value."

About Sierra Minerals

Sierra Minerals is a Canadian based gold production and exploration company. The Company owns and operates the Cerro Colorado Gold Mine in Sonora, Mexico. All gold production is un-hedged and the Company expects to produce approximately 20,000 to 25,000 ounces of gold in 2009. The Company's exploration pipeline includes an extensive 34,000-hectare regional land package in Sonora, Mexico. Further information about Sierra Minerals and the Cerro Colorado Gold Mine can be found on the Company's website at


This news release includes "forward-looking information", as such term is defined in applicable securities laws. The forward-looking information includes, without limitation, the success of exploration activities and other similar statements concerning anticipated future events, conditions or results that are not historical facts including the extent of future production from the Cerro Colorado Gold Mine. These statements reflect management's current estimates, beliefs, intentions and expectations; they are not guarantees of future performance. The Company cautions that all forward looking information is inherently uncertain and that actual performance may be affected by a number of material factors, many of which are beyond the Company's control. Such factors include, among others, risks and uncertainties relating to exploration and development; the ability of the Company to obtain additional financing; the Company's limited operating history; the need to comply with environmental and governmental regulations; political and economic instability and general civil unrest in Mexico, if any; potential defects in title to the Company's properties; fluctuations in currency exchange rates; fluctuating prices of commodities; operating hazards and risks; competition; and other risks and uncertainties, including those described in the Company's other regulatory filings filed with the Canadian Securities Administrators and available at Accordingly, actual future events, conditions and results may differ materially from the estimates, beliefs, intentions and expectations expressed or implied in the forward-looking information. All statements are made as of the date of this news release and the Company is under no obligation to update or alter any forward-looking information.

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