September 21, 2012, Vancouver, BC Sierra Madre Developments Inc. (TSX-V: SMG) (Sierra Madre or the Company) is pleased to provide an update regarding amendments to the Option Agreement between the Company and Riverside Resources Inc. (Riverside) (TSX-V: RRI) on the Penoles Property in Durango State, Mexico.
As announced September 6, 2012, to earn a 51% interest in the Penoles Property (under the existing option agreement) the Company was required to make a cash payment of $250,000US to Riverside on September 30, 2012, a cash payment of $1,650,000US to Riverside on or before December 31, 2012, incur a total of $3,000,000 in exploration expenditures before May 31, 2013 (the Company estimates that a total of $2,500,000 in exploration expenditures has been incurred to date), make a $100,000 cash payment to Riverside on May 31, 2013 and also make a last $1,500,000 payment on or before May 31, 2013 (provided that if the trading price of the Companys shares is $0.15 or greater the Company could issue shares for the full amount of the last payment).
Under the revised terms of the Option Agreement, to earn a 51% interest in the Penoles Project the Company will be required to incur the remaining $500,000 in exploration expenditures before March 31, 2013, make a $400,000 payment on March 31, 2013 (payable in cash or shares at the Companys election share payments would be based on the 20 day VWAP and subject to TSXV approval), make a $1,250,000 cash payment to Riverside on June 30, 2013, incur an additional $750,000 in exploration expenditures by September 30, 2013, make a $100,000 cash payment to Riverside on December 31, 2013 and make a final payment of $1,500,000 to Riverside on December 31, 2013 (payable in cash or shares at the Companys election share payments would be based on the 20 day VWAP and subject to TSXV approval). The $500,000 in expenditures and the $400,000 payment due by March 31, 2013 are firm obligations. The amended option agreement is subject to TSX Venture Exchange approval.
ON BEHALF OF THE BOARD
Carl von Einsiedel
CEO and Director
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 in its public securities filings that may cause actual events to differ materially from current expectations. Specifically, there is no assurance the Company will be able to raise the funds necessary to earn an interest in the Penoles project on terms satisfactory to the Company, or at all. 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.