Sierra Minerals Inc.
TSX : SIM

Sierra Minerals Inc.

March 09, 2009 13:28 ET

Sierra Minerals Closes First Tranche of Equity Private Placement

Finalizes New Debt Agreement With Warman

TORONTO, ONTARIO--(Marketwire - March 9, 2009) -

NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA OR THROUGH U.S. NEWSWIRE SERVICES

Sierra Minerals Inc. (TSX:SIM) ("Sierra" or the "Company") is pleased to announce the closing of the first tranche a non-brokered private placement financing through the issuance of 8,000,000 units priced at $0.20 per unit for total proceeds of $1,600,000. 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 two years. 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.

The Company is also pleased to announce that it has finalized a new debt agreement with Warman Investments Pty. Ltd. ("Warman") after making payments to Warman of US$190,000 as payment in full against all accrued and unpaid interest and US$500,000 towards the outstanding principal balance on the old US$1,950,000 principal loan. The payments were made from the proceeds of the non-brokered private placement. The new US$1,450,000 principal loan, dated March 6, 2009, bears interest at 8% payable quarterly and repayable as follows: US$150,000 on or before June 30, 2009, US$350,000 on or before September 30, 2009, US$500,000 on or before December 31, 2009 and US$450,000 on or before March 31, 2010. The Company can elect to accelerate repayment at its option without penalty.

The remaining proceeds of the offering will be used towards capital improvements required to expand production at the Cerro Colorado gold mine from 20,000 ounces per year to approximately 30,000 ounces per year and for general working capital purposes. No fees are payable in respect of this offering.

In addition, a second tranche to the non-brokered private placement of up to an additional 2,000,000 units on the same terms, remains open. The Company expects to close the second tranche within the next week.

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 25,000 to 30,000 ounces of gold in 2009. Sierra is currently completing its initial National Instrument 43-101 mineral resource estimate at Cerro Colorado which is expected to be completed by the end of Q1 2009. The Company's exploration pipeline includes an extensive regional land package which covers over 34,000 hectares in Sonora, Mexico. Further information about Sierra Minerals and the Cerro Colorado Gold Mine can be found on the Company's website at www.sierraminerals.ca.

CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION

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 www.sedar.com. 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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