Sierra Madre Developments Mexican subsidiary Minera Sierra Madre Exploraciones has signed a contract with Procesadora de Minerales de Durango to complete a minimum of 2,500 of core drilling at the company's Penoles project in the Durango Silver Belt, Mexico.
The project hosts a partially defined oxide gold prospect (El Capitan), two historic silver mines (Jesus Maria and San Rafael) and multiple early stage targets.
Sierra Madre has an option to earn up to a 65% interest from Riverside Resources by incurring exploration expenditures and making cash and share payments to Riverside and the underlying property owners.
The company has also closed a non-brokered private placement financing led by Burgeonvest-Bick Securities in Toronto.
Sierra Madre’s 2011 drill program at Penoles returned long intervals of potentially economic grade gold mineralisation over a strike length of 700m at El Capitan.