VANCOUVER, June 18, 2012 /CNW/ - SIERRA IRON ORE CORPORATION (the "Company") is pleased to announce that it has entered into an agreement (the "Mazomique Agreement") with Aztec Zinc de Mexico S.A. de C.V. (the "Owner"), an arm's-length party, to acquire up to an 80% interest in a highly prospective iron ore property (the "Mazomique Property") comprising of one concession covering an area of 3,055.27 ha near the northeast boundary of Sinaloa and Chihuahua states. The Mazomique property has excellent infrastructure to transport drill equipment and heavy machinery with an existing 25km partly sealed and all weather gravel road from the city of Choix.
In order to earn its 80% interest, the Company is required to pay the Owner a total cash amount of USD$100,000 in stages: $10,000 upon execution, $20,000 on or before 6-months after regulatory approval; $20,000 on or before 12-months after regulatory approval, $20,000 on or before 18-months after regulatory approval and $30,000 on or before 24-months after regulatory approval. In addition, a total of 14,500,000 shares must be issued to the Owner in stages: i) 2,000,000 shares no later than 5-days after regulatory approval; ii) 2,000,000 shares 6-months after regulatory approval; and iii) 10, 500,000 shares on or before the earliest of the expenditure of $2,000,000 on work programs over three years, the presentation of a positive feasibility study and the commencement of commercial iron-ore production on the Mazomique Property.
This acquisition remains subject to regulatory approval which will, in turn be subject to shareholder approval. The Mazomique Agreement will be put to shareholders for a vote at the Company's upcoming Annual General Meeting scheduled for July 9, 2012.
"We are very excited at the prospect of acquiring the Mazomique Property," stated Wally Boguski, CEO and President. "The proximity to an operating mine and existing infrastructure will mean that our company will now have the potential for two near term operating iron ore mines in the region."
There will be no finder's fees paid.
The Mazomique concession encloses and surrounds the El Rosario iron mine currently being operated by Paradox Global Resources S.A. de C.V. Paradox regularly exports a reported 20 to 30 thousand metric tons of iron ore per month to overseas markets. The iron mineralization at El Rosario consists primarily of magnetite and hematite enclosed ore at the periphery of a skarn zone developed at the contact between limestone and Tertiary granodiorite. Recent rock chip geochemistry survey suggests a western extension of the El Rosario iron mineralization into the Mazomique concession.
About Sierra Iron Ore
Sierra Iron Ore is a growth focused mineral exploration company creating value through the exploration and development of the El Creston property located in the Sinaloa State of Mexico. The company has a continual fieldwork program at the El Creston Property that is comprised of drilling, mapping, sampling and planning for further property development. Roads have been built and upgraded as well as equipment has been mobilized for further developing the known iron ore mineral zones identified by recent exploration work.
Mr. Ruben Verzosa, P. Eng., a Qualified Person (QP) as defined by NI 43-101 has approved the geological content of this Press Release.
On behalf of The Board of Directors of Sierra Iron Ore Corporation.
Paul Lee, Director
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 Corp. 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.
For further information:
Corey Safran, Investor Relations, at 609-228-0595, or by email at [email protected].