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Sierra Minerals Reports 24% Increase in Estimated Gold Production at Cerro Colorado Mine

Wednesday, January 30th, 2008

Sierra Minerals Inc. is pleased to report Cerro Colorado estimated gold production for the year ended December 31, 2007 of 17,400 ounces, up 24% from yearly production of 14,000 ounces in 2006. Because of the timing of the Reverse Take-over transaction by which Cerro Colorado became a public company, production numbers contained in the Sierra 2006 audited annual financial statements refer to the six month period from June 1 to December 31, 2006 of 6075 ounces. Fourth quarter 2007 production is estimated at 3900 gold ounces, up 18% from fourth quarter 2006 production of 3315 ounces, but down approximately 26% from third quarter 2007 production of 5287 ounces. The variance between Q3 and Q4 2007 is mainly attributable to a higher level of carbon shipments which boosted the third quarter by 725 ounces while negligible in the fourth quarter.
As production has increased, gold prices continue to show an upward trend, resulting in higher profitability for Sierra. The average gold price received for Cerro Colorado gold sales in the first nine months of 2007 was $699 per ounce while the estimated average gold price received for the three months ended December 31, 2007 was US$775 per ounce. Current spot gold prices are even higher, at approximately US$920. The actual average sales price for Cerro Colorado’s gold has not yet been calculated as timing of each weekly sale determines the overall average, but Cerro Colorado gold sales are priced using spot as the Company does not engage in any forward selling or hedging.
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