1st Quarter Results

Sierra Rutile Limited

Sierra Rutile Provides Q1 2015 Operational Update

London, UK, 9 April 2015: Sierra Rutile Limited (AIM: SRX) ("Sierra Rutile") is pleased to provide an operational update on the first quarter of 2015 ("Q1").

Highlights

· Record ilmenite production of 12,803 tonnes, an 86% increase on Q1 2014 production, due to mining operations being in a particularly ilmenite-rich area of Sierra Rutile's deposits.

· Rutile production of 23,342 tonnes, lower than budget due to high proportion of ilmenite, but remains on target to meet full-year rutile production guidance.

· 75% of 2015 fuel consumption hedged, locking in low-fuel costs for the year.

· Majority of Sierra Rutile's 2015 rutile production committed, reflecting the value customers continue to place on security of supply and the quality of Sierra Rutile's product.

Commenting on the Q1 performance, CEO John Sisay said:

"Whilst Q1 rutile production is slightly below our quarterly budget, we remain confident of meeting our full year 2015 rutile production guidance. With the sharp decline in Ebola cases in Sierra Leone, Ebola-related challenges have recently begun to ease, which will allow us to accelerate maintenance plans and drive forward production levels. We continue to remain vigilant for any occurrences of Ebola and all controls remain in place. We are optimistic that conditions in country will continue to improve, allowing us to embark upon further operational improvements and expansion projects during 2015."

Production

Sierra Rutile produced 23,342 tonnes of rutile, 12,803 tonnes of ilmenite and 318 tonnes of zircon concentrate in Q1.

Rutile production was budgeted to be relatively low for Q1 2015 versus prior quarters and the remaining quarters of 2015 due to the current grade of the deposits and planned maintenance activities (see below). Production was, however, below the expected 25,500 - 27,500 tonnes as a result of:

· Mining operations being in a particularly ilmenite-rich area of the deposits, resulting in 5,000 - 6,000 tonnes of additional ilmenite being produced than budget, at the expense of rutile volume;

· In the first half of the quarter, continued Ebola-related supply delays;

· Planned maintenance shutdowns on the Lanti Dry Mine being brought forward into the quarter when irregular parts and materials (i.e., those materials not consumed by operations on an ongoing basis) became available as a result of improvements in the supply chain; and

· A three-day anti-Ebola shutdown imposed by the Government of Sierra Leone.

While the mineralization of areas mined in the quarter was in-line with budget, the high percentage of ilmenite, occurring largely in the Mogbwemo Tailings Mine, was not expected. Based on current sale prices, the value of the additional 5,000 - 6,000 tonnes of ilmenite equates to over 1,000 tonnes of rutile2, implying that rutile-equivalent production was only slightly below the lower end of the expected production range for the quarter. Variability in the rutile to ilmenite ratio is expected to remain a feature of the Mogbwemo Tailings Mine through the first half of 2015, although expectations remain that the value of the overall mineralization will remain aligned with budget.

Despite Q1 rutile production being below budget, the company remains confident of meeting full-year rutile production guidance of 120,000 - 130,000 tonnes, as the shortfall from the Q1 budget is expected to be made up during the remainder of the year from maintenance improvements completed primarily in Q1 (see below).

Though the supply chain has been adjusted to mitigate the effects of Ebola, Sierra Rutile continued to experience a slower provision of irregular parts and materials in the first half of the quarter. The situation is expected to improve substantially going forwards as a significant volume of parts and materials arrived on site in March 2015, and supply chain issues have, in general, improved considerably as Ebola has declined in the second half of the quarter.

Lanti Dry Mine achieved a strong operational performance during March 2015 after a planned maintenance shutdown was brought forwards. Since the shutdown, asset utilization and feed rate have improved notably and are expected to sustain this strong performance going forwards.

A short-duration planned maintenance shutdown is scheduled for Lanti Dredge Mine at the beginning of Q2 2015, now that materials and parts are available, after which operational performance is expected to improve for the remainder of the year.

The commissioning stage of the mineral separation plant upgrade was completed in early Q1 and achieved design throughput in March 2015.

1 Zircon Concentrate is a semi-finished zircon product grading 40-45% ZrO2.

2 Assumes a 5.0x value differential between ilmenite and rutile.

Operating cost

Total operating cash costs3 per tonne in Q1 were $725 / tonne compared to $646 / tonne in 2014 and $595 - 615 / tonne for 2015 guidance.

Cash costs in Q1 were budgeted to be high due to the relatively lower production volumes forecast but were higher than this budget as a result of the production shortfall. Additionally, the method of only counting by-products sold during the quarter when calculating cash costs means that the large volume of ilmenite produced during the quarter will not become apparent from a cash cost perspective until the product is sold in future quarters.

Management is confident that the Company remains on target to meet full-year cost guidance as production volumes increase significantly during the remainder of the year and the additional ilmenite volume is sold.

Sierra Rutile has introduced a fuel hedging program for 75% of its fuel consumption in 2015 (both diesel and marine fuel oil), thus benefitting from the recent decline in oil prices by locking in low fuel costs for the year (at a cost of under US$1 million). Fuel represents a major cost component of Sierra Rutile's operations, with approximately 25% of Sierra Rutile's total operating costs being energy-related. In Q1, Sierra Rutile depleted fuel inventories purchased in 2014, and as such, cost reductions from the hedging program will only be fully realized from Q2 2015 onwards.

3 Total operating cash cost (includes direct operating costs, general administrative costs and corporate costs but excludes depreciation) less by-product revenue divided by tonnes of rutile produced.

4 Direct operating cash cost (includes direct operating costs but excludes depreciation) less by-product revenue divided by tonnes of rutile produced.

5 All-in cash cost (total operating cash cost plus stay-in-business capital cost, but excludes depreciation) less by-product revenue divided by tonnes of rutile produced.

Expansion projects

Gangama Dry Mine

During the quarter Sierra Rutile continued to refine the engineering and planning for the Gangama Dry Mine. A geotechnical study was commenced on March and some limited preparatory earth works began, using excess capacity in Sierra Rutile's own equipment fleet (at a cost of under $500k), to enable work to be completed prior to the onset of the 2015 rainy season. Sierra Rutile continues to refine its plans for the Gangama Dry Mine and intends to provide a more comprehensive update in the coming months.

Sembehun Dry Mine

Sierra Rutile also continued to advance the Sembehun Dry Mine project, utilizing the results of the continued Gangama Dry Mine work and findings from the Lanti Dry Mine. Aside from the mining and concentrating plan, further work is underway to increase the confidence level of future studies. Sierra Rutile expects to be in a position to provide an update on the results of this work within Q2 2015.

Sales

The majority of Sierra Rutile's 2015 rutile production has been committed. This reflects the value customers continue to place on the security of supply and the premium quality of Sierra Rutile's product.

Strong economic conditions in the U.S. are expected to support continued pigment demand and the titanium metal market has also seen some recovery, largely driven by aerospace demand. A number of major consumers have drawn down their feedstock and semi-finished product inventories, resulting in an expected demand increase in high-grade chloride feedstock later in 2015. Furthermore, looking to the longer-term, Sierra Rutile believes the rate of advancement of Chinese chloride-process development is improving, positioning Chinese customers as a meaningful new source of rutile demand in the future.

These positive demand improvements are, however, tempered by forced sales from certain distressed TiO2 feedstock producers that continue to undermine price improvements.

Ebola update

To date, there have been no Ebola cases at Sierra Rutile's operations. Recent publications from the World Health Organization have shown a significant decline in new cases of Ebola in Sierra Leone and large parts of the country remain Ebola-free. In late March the Government of Sierra Leone implemented a nationwide curfew, which resulted in some interruption to Sierra Rutile's operations. The focus of this curfew was to root out pockets of infection within the country in an effort to maintain the very positive decline in infection rates towards zero. This is in contrast to the curfews of 2014 that were focused on gaining control of the virus rather than eradication.

Sierra Rutile has seen a marked improvement in previously disclosed Ebola-related challenges in recent weeks. Notwithstanding the decline in cases, a safe work environment continues to be the first priority for Sierra Rutile and all Ebola-mitigation measures remain in place to minimize risk to operations and employees.

ENDS

For Further Information:

Notes to Editors

About Sierra Rutile Limited

Sierra Rutile produces titanium feedstock industrial minerals (primarily rutile, with some associated ilmenite), as well as smaller quantities of zircon. Sierra Rutile's mine, located in the south west of Sierra Leone, is one of the largest natural rutile deposits in the world, with a JORC-Compliant Mineral Resource for measured, indicated and inferred resources for the Sierra Rutile mine of over 895 million tonnes (as at 30 September 2014).

www.sierra-rutile.com