• E-mail
• Print
• Comment
• Font Size
• Digg
• del.icio.us
• Discuss article

Sierra Engages Max Capital Markets Ltd. For $3.2 Million Private Placement

Posted on: Friday, 8 February 2008, 18:00 CST

Sierra Minerals Inc ("Sierra") (TSX: SIM) is pleased to announce it has engaged Max Capital Markets Ltd. ("Max Capital") as its exclusive agent for a "best efforts" private placement of up to 8,000,000 units at a price of $0.40 per unit for gross proceeds to Sierra of $3.2 million. Each unit will consist of one common share and one half of a common share purchase warrant. Each whole warrant will entitle the holder to acquire one additional common share of Sierra at a price of $0.70 for a period of two years after closing.

The units will be sold to "accredited investors" in Alberta, Ontario, B.C. and offshore and such other jurisdictions as may be agreed between Sierra and Max Capital on a prospectus-exempt basis, and closing is expected to occur on or before March 31, 2008 subject to TSX approval.

The proceeds from the private placement will be used by Sierra for optimization of its Cerro Colorado mine in Sonora, Mexico which is currently producing gold at a rate of approximately 18,000 per annum. The proposed financing will fund mine expansion, including the purchase of a secondary crusher and replacement of depreciated equipment. These initiatives are expected to increase the production rate to approximately 30,000 ounces per annum.

In connection with the placement, Max Capital will receive a cash commission of 7% of the gross proceeds from sales pursuant to the Offering, and broker warrants to purchase the number of units equal to 7% of the total number of units sold pursuant to the Offering. The broker warrants will be exercisable at the issue price of the units and will have a term of two years from the Closing Date. Max Capital is a Toronto-based investment dealer that has provided financing and advisory services to multiple clients in the resource sector. For more information, please see their website at www.maxcpl.com.

The private placement is subject to regulatory approval, including that of the TSX.

As part of its marketing program to enhance visibility in the financial community, Sierra is also participating this weekend in the 2008 Phoenix Resource Investment Conference sponsored by the Cambridge House and running February 9 and 10, 2008 - see attached link http://www.cambridgehouse.ca/ch_phoenix2008.html#Exhibitors.

Sierra management would welcome the opportunity to meet conference attendees at Booth #115.

About Sierra

Sierra is a profitable gold producer focused on expansion by acquiring and developing advanced stage gold and silver deposits that have a likelihood of realizing near-term production. Production from the mine historically has been at an average grade of 0.84 g/t gold. The Company's focus is Mexico, where it owns and operates the Cerro Colorado Gold mine. Sierra is completing a comprehensive drill program of 20,000 metres to produce a technical resource estimate in the near term. Sierra has exploration concessions in excess of 30,000 hectares surrounding the mine and in nearby areas. Sierra is committed to company-wide environmental and corporate social responsibility best practices.

FORWARD-LOOKING STATEMENTS

This press release includes certain "forward-looking information" within the meaning of the Securities Act (Ontario), including, but not limited to, statements as to timing and extent of exploration programs, the availability of exploration results, potential success of the proposed financing and the extent of future production from the Cerro Colorado Mine. As such, forward-looking information addresses future events and conditions and so involves inherent risks and uncertainties, as disclosed under the heading "Risk Factors" and elsewhere in Sierra documents filed from time to time with the Ontario Securities Commission and other regulatory authorities. Actual results could differ significantly from those currently projected as a result of, among those factors, adverse weather, regulatory changes, delays in receiving permits, accidents, delays in completing exploration activities and results of exploration activities, not all of which are in the control of Sierra. The forward-looking information contained herein is Sierra's reasonable estimate today of future events and conditions, but no assurance can be given that such events or conditions will occur.

 Contacts: Sierra Minerals Inc. Martin J. Walter President & CEO (416) 363-8147 (416) 599-4959 (FAX) Email: marty@sierraminerals.ca  Sierra Minerals Inc. Suite 3680, 130 King St West Toronto, Ontario M5X 1B1 Website: www.sierraminerals.ca

SOURCE: Sierra Minerals Inc.

Source: MARKET WIRE

More News in this Category