Sierra Madre Announces Closing of $40 Million First Tranche of its $50 Million Offering
Sierra Madre Announces Closing of $40
Million First Tranche of its $50 Million
Offering
Vancouver, British Columbia--(Newsfile Corp. - January 14, 2026) - Sierra Madre Gold and Silver Ltd.
(TSXV: SM) ("
Sierra Madre
" or the "
Company
") is pleased to announce it has closed the first tranche
(the "
First Tranche
") of its previously announced brokered private placement offering pursuant to an
agency agreement dated January 14, 2026 (the "
Agency Agreement
") entered into by the Company,
Beacon Securities Limited ("
Beacon
") as lead agent and sole bookrunner, Canaccord Genuity Corp.,
BMO Capital Markets, VSA Capital Limited and (together with Beacon, the "
Agents
") in connection with
the Offering. In connection with the First Tranche, the Company has issued 30,521,724 subscription
receipts (the "
Subscription Receipts
") at a price of $1.30 per Subscription Receipt (the "
Issue Price
")
for gross proceeds of $39,678,241.20 (the "
Offering
").
The Offering is being conducted in conjunction with the Company's proposed acquisition (the
"
Transaction
") of the Del Toro Silver Mine in the Chalchihuites District in Mexico ("
Del Toro
") from First
Majestic Silver Corp. (see the Company's news release dated December 17, 2025).
Each Subscription Receipt shall be deemed to be exercised, without payment of any additional
consideration and without further action on the part of the holder thereof, for one common share of the
Company (an "
Underlying Share
") upon satisfaction of certain escrow release conditions, including the
receipt of all required corporate, shareholder and regulatory approvals in connection with the Transaction
(collectively, the "
Escrow Release Conditions
").
Pursuant to the closing of the First Tranche, $38,568,280.26 (the "
Escrowed Proceeds
"), being the
gross proceeds of the Subscription Receipts issued under the First Tranche less 50% of the Agents'
Fees (as defined below) and certain expenses of the Agents, was placed into escrow and will be
released to the Company subject to and the completion or satisfaction of Escrow Release Conditions as
set out in the Agency Agreement. Provided that the Escrow Release Conditions are satisfied prior to
5:00 p.m. (Toronto time) on May 14, 2026 (the "
Release Deadline
"), the remaining 50% of the Agents'
Fees, or $1,023,513.03 (and any interest earned thereon) will be released to the Agents from the
Escrowed Proceeds, and the balance of the Escrowed Proceeds (together with interest earned thereon)
will be released to the Company. However, in the event that the Escrow Release Conditions are not
satisfied by the Release Deadline, or if prior to such time, the Company advises the Agents or
announces to the public that it does not intend to satisfy the Escrow Release Conditions, the Escrowed
Proceeds together with the
pro rata
portion of any interest earned thereon (net of any applicable
withholding tax) will be returned to the holders of the Subscription Receipts and the Subscription
Receipts will be cancelled.
The Company intends to close a second tranche of the Offering, including the full exercise of the Agents'
option. The Company intends to use the net proceeds of the Offering to fund the completion of the
Transaction, for exploration and development of Del Toro following completion of the Transaction and for
general working capital purposes.
In connection with the closing of the First Tranche, the Company paid the Agents a cash commission and
corporate finance fee of $2,032,276.06 (the "
Agents' Fee
"), of which 50% was placed into escrow, and
issued to the Agents 1,562,366 compensation options (each, a "
Compensation Option
"). Each
Compensation Option entitles the Agents to purchase one common share at the Issue Price during a
term of 24 months from the closing of the First Tranche.
The securities issued in connection with the Offering are subject to a four-month hold period from the
date of closing of the First Tranche, in addition to any other restrictions under applicable law. The
Offering remains subject to certain conditions, including the receipt of final approval of the TSX Venture
Exchange.
Certain directors and officers of the Company ("
Interested Parties
") subscribed for a total of 219,250
Subscription Receipts in the First Tranche, for aggregate gross proceeds of $285,025.00. The
placement to the Interested Parties constitutes a "related party transaction" within the meaning of
Multilateral Instrument 61-101 -
Protection of Minority Securityholders in Special Transactions
("
MI 61-
101
"). The Company has relied on the exemptions from the formal valuation and minority shareholder
approval requirements of MI 61-101 contained in Sections 5.5(a) and 5.7(1)(a), respectively, as the fair
market value of the Subscription Receipts issued to the Interested Parties in connection with the Offering
does not exceed 25% of the market capitalization of the Company, as determined in accordance with MI
61-101. The Company did not file a material change report in respect of the related party transaction at
least 21 days before the closing of the Offering as the details of the participation of Interested Parties
had not been confirmed at that time.
The securities issued in connection with the First Tranche, and any securities issuable upon conversion
of the securities, under the Offering have not been and will not be registered under the U.S. Securities
Act, or any U.S. state securities laws, and may not be offered or sold in the "United States" (as such term
is defined in Regulation S under the U.S. Securities Act) unless registered under the U.S. Securities Act
and applicable U.S. state securities laws or an exemption from such registration is available. This news
release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale
of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
About Sierra Madre
Sierra Madre Gold and Silver Ltd. is a precious metals development and exploration company focused
on the Guitarra mine in the Temascaltepec mining district, Mexico, and the exploration and development
of its Tepic property in Nayarit, Mexico. The Guitarra mine is a permitted underground mine, which
includes a 500 t/d processing facility that operated until mid-2018 and restarted commercial production
in January 2025.
The +2,600 ha Tepic Project hosts low-sulphidation epithermal gold and silver mineralization with an
existing historic resource.
Sierra Madre's management team has played key roles in managing the exploration and development of
silver and gold mineral reserves and mineral resources. Sierra Madre's team of professionals has
collectively raised over $1 billion for mining companies.
On behalf of the board of directors of Sierra Madre Gold and Silver Ltd.,
"
Alexander Langer
"
Alexander Langer
President, Chief Executive Officer and Director
Contact:
Cautionary Note Regarding Forward-Looking Information
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
news release.
This press release contains "forward-looking information" within the meaning of applicable Canadian
securities legislation and statements that are based on the beliefs of management and reflect the
Company's current expectations. When used in this press release, the words "estimate", "project",
"belief", "anticipate", "intend", "expect", "plan", "predict", "may" or "should" and the negative of these
words or such variations thereon or comparable terminology are intended to identify forward-looking
statements and information. Such statements and information reflect the current view of the Company.
Forward-looking statements and forward-looking information in this press release include, but are not
limited to, statements with respect to the timing and completion of a second tranche of the Offering,
the use of proceeds of the Offering and the receipt of regulatory approvals for the Offering. Risks and
uncertainties may cause actual results to differ materially from those contemplated in those forward-
looking statements and information. By their nature, forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause our actual results, performance or
achievements, or other future events, to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. The forward-looking
information and forward-looking statements contained in this press release are made as of the date of
this press release, and the Company does not undertake to update any forward-looking information or
forward-looking statements that are contained or referenced herein, except as may be required in
accordance with applicable securities laws. All subsequent written and oral forward-looking information
and statements attributable to the Company or persons acting on its behalf is expressly qualified in its
entirety by this notice regarding forward-looking information and statements.
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