SIERRA MADRE SIGNS DRILLING CONTRACT FOR PENOLES PROJECT, MEXICO
Vancouver, BC (March 23, 2012) – Management of Sierra Madre Developments Inc. (TSX-V:SMG – “Sierra Madre” or the “Company”) is pleased to announce that the Company’s wholly owned Mexican subsidiary Minera Sierra Madre Exploraciones SA de CV, has signed a contract with Procesadora de Minerales de Durango SA de CV to complete a minimum of 2,500 meters of core drilling at the Company’s Penoles Project in the Durango Silver Belt, Mexico. The Project hosts a partially defined oxide gold prospect (El Capitan), two historic silver mines (Jesus Maria and San Rafael) and multiple early stage targets in a land package that covers more than half of the historic “Penoles Mining District”. Sierra Madre has an option to earn up to a 65% interest from Riverside Resources Inc (“Riverside”) by incurring exploration expenditures and making cash and share payments to Riverside and the underlying property owners.
The Company is also pleased to announce the closing of the non-brokered private placement financing led by Burgeonvest-Bick Securities Ltd. (“Burgeonvest”) in Toronto previously announced by news release on February 15, 2012. Pursuant to the Offering, the Company raised $2,276,250 through the sale of 30,350,000 units (the “Units”) at a price of C$0.075 per Unit.
Sierra Madre’s 2011 drill program at Penoles returned long intervals of potentially economic grade gold mineralization over a strike length of 700 meters at El Capitan (DDH 11-07 returned 108.4 meters @ 0.42 g/t Au and DDH 11-17 returned 88.4 meters averaging 0.82 g/t Au – see press release dated October 24, 2011) and a single hole drilled below one of the historic silver mines (Jesus Maria) confirmed that the original deposit is open at depth below existing mine workings. Argonaut Gold Inc. is currently heap leach mining the nearby El Castillo deposit (a low grade oxide gold deposit averaging 0.32 g/t gold with a cut-off grade of 0.15 g/t Au). Preliminary bottle roll tests indicate the mineralization at El Capitan may be amendable to cyanide leaching and the next step for Sierra Madre will be to complete delineation drilling at El Capitan and Jesus Maria.
Management would also like to announce that the Company has signed agreements with FronTier Consulting based in Toronto and with Trident Financial based in Vancouver to provide investor relations services including introducing the Company to institutional and retail investors and arranging promotional roadshows. The agreements are for an initial term of six months and may be extended by mutual consent of the parties. In connection with these agreements the Company will pay a total of $10,000 per month and issue a total of 700,000 incentive stock options at a price of $0.10 per share which options will vest 25% every three months over the first year following the engagement. The Company has also issued 1,500,000 incentive stock options at a price of $0.10 to certain officers, directors, consultants and employees of the Company in connection with the Company’s stock option plan.
The scientific and technical data contained in this news release were prepared under the supervision of Carl von Einsiedel, P.Geo and CEO of Sierra Madre who is the Qualified Person for this release.
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”
Carl von Einsiedel, CEO
For additional information contact: 604-685-3357
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 by Sierra Madre and Riverside in their public securities filings that may cause actual events to differ materially from current expectations. There can be no assurance that 2,500 metres will be drilled, or the results therefrom will correspond to or support prior drill results, or that any mineral deposits identified at Penoles will be economically viable. 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.