Sierra Minerals Inc.

Sierra Minerals Inc.

December 24, 2008 12:08 ET

Sierra Successfully Renegotiates Piggott Loan

TORONTO, ONTARIO--(Marketwire - Dec. 24, 2008) - Sierra Minerals Inc. (TSX:SIM) ("Sierra" or the "Company") is pleased to announce that the Company has negotiated a new loan agreement with Keith Piggott, Chairman of Sierra and the Company's largest shareholder, to replace the existing loan agreement which had been in default since November 15, 2007.

Mr. Piggott originally loaned the Company US$140,000 by way of a loan agreement dated September 15, 2006. The loan was unsecured, carried an interest rate of 12.33% per annum and was due to be repaid in full on September 15, 2007. On that date, the Company repaid US$70,000 in principal, all outstanding and accrued interest and extended the due date to November 15, 2007. The Company was unable to repay the remaining balance by the due date and a penalty interest rate of 20% was triggered retroactive to September 15, 2007. The Company has been accruing interest at 20% on the US$70,000 outstanding principal since that time.

Under the terms of the new loan agreement, the loan remains unsecured with outstanding principal set at US$70,000. The annual interest rate has been lowered to 4%, retroactive to September 15, 2007, thereby amending accrued and unpaid interest since that date from 20% to 4% per annum, of the principal balance outstanding. In addition, the due date of the loan has been extended to December 31, 2009.

Michael Farrant, President and CEO commented, "One of my goals since joining Sierra has been to bring our debt arrangements back on side and on terms that are favourable to the Company and all of its shareholders. In agreeing to retroactively lower the interest rate from 20% to 4% and extend the due date to the end of 2009, Mr. Piggott has demonstrated the leadership required in his capacities as the Company's Chairman, largest shareholder and creditor. He recognizes the advantages of being a profitable gold producer with positive cash flow during these turbulent economic times and has provided an extremely positive step forward in terms of allowing the Company to realize its full potential in 2009 to the benefit of all shareholders."

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 is on target to produce approximately 20,000 ounces of gold in 2008. Sierra is currently completing its initial NI 43-101 mineral resource estimate at Cerro Colorado. 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


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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