Corporate Update
NEWS RELEASE
September 17, 2015 Symbol:-TSX-V:NAA OTCQX:SIOCF CORPORATE UPDATE
Vancouver, BC – SIERRA IRON ORE CORPORATION (“Sierra” or the “Company”) announces that is has entered into an option agreement, dated September 3, 2015, with Emerald Lake Development Corporation (“ELD”). The option agreement will allow the Company to earn up to a fifty-one (51%) percent interest in the minerals hosted by a property (known as the Allen Property), located near Emo, Ontario.
In order to maintain the option, Sierra shall pay cash and make the following share issuances to ELD:
a) $100,000 within ten (10) days after the receipt of regulatory approval;
b) 1,000,000 shares within ten (10) days after the receipt of regulatory approval;
c) 1,000,000 shares within three (3) months after the receipt of regulatory approval;
d) $500,000 within eight (8) months after the receipt of regulatory approval;
e) $1,500,000 within twelve (12) months after the receipt of regulatory approval; and
f) 1,500,000 shares within twelve (12) months after the receipt of regulatory approval.
Sierra will also be required to perform work programs on the Allen Property within twelve (12) months of receipt of regulatory approval having an aggregate cost of $1,500,000.
Upon completion of the noted cash payments, share issuances and work program, Sierra shall be deemed to have earned a fifteen (15%) percent undivided interest in the Allen Property and in the rights of ELD with respect thereto. Subject to Sierra earning a fifteen (15%) percent interest in the Allen Property, Sierra will have an additional two (2) year option to purchase an additional ten (10%) percent of the Allen Property by issuing common shares that equal ten (10%) percent of the then fair market value of the Allen Property, as determined by an independent third party valuator acceptable to both parties.
Provided that Sierra completes the foregoing requirements to complete the purchase of a twenty-five (25%) percent undivided interest in the Allen Property, for a period of 2-years from the date of earning Sierra shall have a right of first refusal to purchase an additional twenty six (26%) percent undivided interest in the Allen Property (for a total of fifty (51%) percent) by issuing common shares that equal twenty six (26%) percent of the then fair market value of the Allen Property, as determined by an independent third party valuator acceptable to both parties.
The Allen Property contains polymetallic Ni – Cu – Co sulphides hosted by basic norites presumed to be the basal layer of a phased layered (laccomorphic) Complex referred to as the Emo Complex. The sulphides describe massive, parallel trending lenses (also referred to as shoots) with historic drilling indicates widths of 14 feet to 40 feet. These widths may be significantly greater but must be tested.
Mr. Frank Puskas, P. Eng., MSc a Qualified Person (QP) as defined by NI 43-101 has approved the geological content of this Press Release.
CANADA USA 13236 Cliffstone Court #1021 – 100 Easy Street Lake Country BC V4V 2R1 Carefree, AZ 85377 Tel: 250-766-1517 Tel: 480-575-1220 Fax: 250-766-1839 Fax: 480-488-3492 www.sierrairon.com [email protected] Further to the news release dated May 27, 2015, the previously announced option agreement for the Farm Property, dated May 26, 2015, with ELD has been amended and will now require that the Company make the following payments to earn up to 50% of all mineral rights:
a) $250,000 shall be paid to ELD upon regulatory approval; and
b) $250,000 shall be paid to ELD one year after regulatory approval.
In order to earn its initial 50% interest the Company shall also be required to complete a work program having a cost of no less than $2,000,000 over the 24-month period following the date of the agreement.
Provided the Company completes the requirements to complete the purchase of a 50% undivided interest in the Farm Property, for a period of 2-years from the date of earning, the Company shall have the right of first refusal to purchase an additional 42% interest in the property by issuing common shares that equal 42% of the then fair market value of the property. A royalty consisting of 3% of net smelter returns shall be payable upon the commencement of commercial production.
A finder’s fee will no longer be payable on this property transaction.
Further to the August 14, 2015 news release, the Company wishes to re-announce a private placement to a qualified investor of a convertible debenture with a value of $250,000. The debenture has a term to maturity of 18-months from issuance, will bear interest at 10% and is convertible into common shares of the Company (as to principal and/or interest), at a price of $0.31 per share, at any time prior to maturity.
As at the date of this press release, the Company had received the full advance under the convertible debenture.
The proceeds of the private placement will be used to advance exploration on the Emerald Lake properties and for general working capital purposes.
The noted acquisitions and private placement remain subject to TSXV approvals.
About the Company
Sierra is a mineral exploration company focused on creating value through the exploration and development of its British Columbia and Ontario mineral properties. Sierra is in the initial stages of a surface program on its recently acquired Emo Ontario, properties and has planned a 1st stage 1,000 meter drill program to commence in September, 2015.
On behalf of The Board of Directors of Sierra Iron Ore Corporation.
Wally Boguski,
President & CEO
This news release contains certain forward looking statements which involve known and unknown risks, delays, and uncertainties not under the control of Sierra Iron Ore Corporation which may cause actual results, performance or achievements of Sierra Iron Ore Corporation to be materially different from the results, performance or expectation implied by these forward looking statements.
Neither 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 press release, which has been prepared by management.