Hi Curly,
SIM.v
They have been halted since December 08/04
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Sierra Minerals remains halted
2004-12-10 16:39 ET - Halt Trading
Further to the TSX Venture Exchange bulletin dated Dec. 8, 2004, effective at the opening PT, Dec. 10, 2004, trading in the shares of the company will remain halted pending receipt and review of acceptable documentation regarding the change of business and/or reverse takeover pursuant to TSX Venture Exchange Listings Policy 5.2.
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over this:
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Sierra to buy Cerro Colorado gold mine in Secotec RTO
2004-12-09 17:48 ET - News Release
Mr. Martin Walter reports
SIERRA TO BECOME A GOLD PRODUCER THROUGH THE ACQUISITION OF SECOTEC'S CERRO COLORADO GOLD MINE
Sierra Minerals Inc. has, on Dec. 6, 2004, entered into an arm's-length agreement with Minera Secotec SA de CV, a Mexican incorporated company, to purchase the producing Cerro Colorado gold mine, located in Sonora, Mexico. Cerro Colorado is a heap-leach gold operation that is currently producing at the operational level of 7,000 ounces of gold annually. Sierra's immediate objective will be to boost production to an annual level of 30,000 ounces of gold by investing a further $1-million (U.S.) in additional mining equipment and by constructing additional leach platforms.
The Cerro Colorado mine is located in Sonora state, Mexico, approximately 200 kilometres south of the United states border. Heap-leach mining operations began in 2004, after a 90,000-tonne trial heap was tested in 2003. The deposit has been subjected to a number of historical resource estimates, one completed by Behre Dolbear & Company Ltd. in 1995, a Denver-based geological and mining consulting company. Among other things, Behre Dolbear & Company Ltd. (1995) report the following resources:
proven resource of 6,075,000 tonnes grading 1.5 grams per tonne (g/t) Au; and
probable resource of 1,975,000 tonnes grading 1.73 g/t Au.
A second, and judged by management to be more relevant, resource estimate was completed by Laramide Resources Ltd., prior owners of the project, in 1996. Management considers the Laramide resource estimate to be relevant as compiled from a database of 20,905 drill metres consisting of 196 reverse circulation and diamond drill holes. Of the 196 drill holes, Laramide completed 171 and BP minerals, and a local company Papanto Minas SA de CV completed the other 25 prior to 1995. Data from all 196 drill holes are maintained on site in a geological computer database of which Sierra's qualified geologist has reviewed. In 1996 Laramide Resources Ltd. reported the following:
total drill indicated resource 4,283,000 tonnes grading 1.36 g/t Au.
The mine has estimated resources of 192,000 ounces of gold (Laramide 1996 annual report) which are not National Instrument 43-101 classified, but would meet the inferred category. These resources are being confirmed as mine faces are opened and the mine has a current mine life of seven years. The Cerro Colorado project covers an area of 3,128 hectares, although all the drilling to date has been focused only within the resource area. The current mine head grade is 1.02 g/t Au and approximately 1,500 tonnes of ore are mined daily through conventional open-pit methods. The ore is then crushed and finally fed on to heap-leach pads, where gold is extracted. To date, the current mining operations have recovered approximately 9,000 ounces of gold from the resource.
Sierra's president and chief executive officer, Martin Walter, commenting on the transaction, said: "At Sierra, we have created a new Mexican gold mining and exploration company. This acquisition gives Sierra's current shareholders exposure to today's bullish gold market through Cerro Colorado's unhedged production. The company's new shareholders (current shareholders of Secotec) will gain exposure to excellent exploration properties, such as Sierra's San Martin Au/Ag project. Sierra's exploration expertise will be put to work at Cerro Colorado with an aim to find and develop additional mining resources. Once the Cerro Colorado mine is operating at full capacity, exploration will then be financed through cash flow."
The transaction will constitute a reverse takeover (RTO) and call for Secotec shareholders to own 60 per cent of Sierra's outstanding and issued capital stock on the completion of the transaction. A condition of the transaction is that Sierra must undertake additional fundraising of $1.14-million before the transaction can close. Sierra Minerals will take on Secotec's unaudited $1.9-million (U.S.) debt that it accumulated from mine construction. Other project costs consist of continuing land payments to a third party that total approximately $1-million (U.S.), payable over the next 14-month period and some minor incidental mine operating costs totalling $250,000 (U.S.). Sierra is to receive 100-per-cent project ownership and title to the 3,128-hectare Cerro Colorado project, subject to a 2.5-per-cent net smelter royalty. The project consists of, but is not limited to, its mineral resources, all operational and mining equipment, gold extraction ponds and tanks, project offices, laboratories and vehicles, and of course, the gold production. Keith Piggott, Secotec's general manager, will take a position on the Sierra board, and will be appointed operations manager for Sierra Minerals. Mr. Piggott, a Mexican resident, is the largest shareholder of Secotec, and posttransaction, Mr. Piggott will control approximately 25 per cent of Sierra's outstanding share capital. Mr. Walter will remain as president and chief executive officer of the company.
Kappes Cassiday & Associates of Reno, Nev., are currently preparing a technical report in accordance with the National Instrument 43-101 for the Cerro Colorado project. Under 43-101 requirements, Peter Mullens, a Sierra director and the company's chief geologist, is the qualified person for the project. Mr. Mullens has visited the project, reviewed the contents of this press release and is a member of the Australian Institute of Mining and Metallurgy.
Completion of the Cerro Colorado transaction is subject to a number of conditions, including but not limited to, exchange acceptance and disinterested shareholder approval, and further financial and technical due diligence. The transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all. Trading in the securities of Sierra Minerals should be considered highly speculative. Investors are cautioned that, except as disclosed in the management information circular and/or filing statement, to be prepared in connection with the transaction, any information released or received with respect to the RTO may not be accurate or complete and should not be relied upon. |
