Treasury Metals Submits Proposal for the Acquisition of Sierra Minerals

Treasury Metals Submits Proposal for the Acquisition of Sierra Minerals

Treasury Metals Inc., confirmed that it has submitted a non-binding proposal for the acquisition of all of the issued and outstanding common shares of Sierra Minerals Inc. pursuant to a takeover bid or other business combination transaction.

Treasury proposes that Sierra shareholders would receive 0.8 common shares of Treasury for each 1.0 outstanding common share of Sierra. This exchange ratio implies a Sierra share price of $0.22 based on Treasury’s closing share price as of January 27, 2009, and represents an 18% premium above the closing price of Sierra.

Treasury currently holds 6.5 million shares of Sierra, representing approximately 9%, of the issued and outstanding shares of Sierra. In addition, Treasury holds a 2.5% NSR on the Cerro Colorado gold mine.

“Treasury’s proposed business combination offers all shareholders immediate and sustainable value creation and represents a very attractive investment opportunity, providing increased liquidity from Treasury’s diverse base of retail shareholders as well as fresh branding for what we perceive as a gold-hungry market,” said Scott Jobin-Bevans, President and CEO of Treasury. “Our vision is to create a mid-tier gold producer within the next two years and we believe that combining Treasury and Sierra is an important step toward attaining this goal through consolidation in the fragmented junior gold sector.”

The proposal is also subject to the negotiation of appropriate lock-up agreements with Sierra’s major shareholders, restructuring Sierra’s existing debt and obtaining additional financing to meet the combined entity’s working capital needs, all on terms satisfactory to Treasury.

In addition, the proposal is subject to the negotiation of a definitive support agreement, due diligence, and the agreement of each company’s respective board of directors.

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