Sierra Rutile Provides Q1 2014 Operational Update

Sierra Rutile Limited

Sierra Rutile Provides Q1 2014 Operational Update

London, UK, 7 April 2014: Sierra Rutile Limited (AIM: SRX) ("Sierra Rutile") is pleased to provide an operational update on the first quarter of 2014 ("Q1").

Highlights:

· Strong operational performance with quarterly production in line with forecasts at:

- 28,218 tonnes of rutile, a 12% increase on Q1 2013 production; and

- 6,868 tonnes of ilmenite, a 23% increase on Q1 2013 production.

· Continued improvement in operating cost efficiency during the quarter, resulting in a 33% reduction in operating cash cost per tonne[1] relative to H1 2013.

· Reduced rutile inventory during the quarter as TiO2 feedstock demand continued to strengthen supported by increasing end-user consumption.

Commenting on the Q1 performance, CEO John Sisay said: "I am pleased with the company's performance in Q1, where we have continued to deliver record production levels and reap the benefits from a continued strategic focus on cost efficiency. We believe we are well positioned to meet 2014 guidance."

Production

Production for Q1 was in line with forecasts at 28,218 tonnes of rutile and 6,868 tonnes of ilmenite, 12% and 23%, respectively, ahead of Q1 2013 volumes.

Cost efficiency

Sierra Rutile continues to achieve significant results with regard to operating cost efficiency as operating cash cost per tonne declined to US$539 per tonne during Q1. Through the on-going, company-wide cost reduction programme, Sierra Rutile has seen a steady decline in operating cash costs and expects to see further cost reductions during 2014.

Expansion projects

The Board continues to monitor market conditions in contemplating the appropriate time to develop the Gangama Dry Mining project. Although recent market developments show positive momentum for the sector, the Board would like to ensure that these developments are strongly embedded before initiating development of the project. As such, the Board will continue to monitor market conditions going forward with the aim to implement the project only when its full value can be realized.

Financing

As at 31 March 2014, Sierra Rutile had a cash balance of US$15.0 million.

Sales

Sales in Q1 were slightly higher than production during the quarter, resulting in a reduction in inventory. Sierra Rutile continues to see structural improvements in the sector as pigment plant capacity utilisation rates improve and reported TiO2 pigment inventory levels approach historical averages for the season. Sierra Rutile believes that TiO2 inventory destocking has been completed and that the sector will continue to strengthen, driving improved business fundamentals and resulting in stronger TiO2 feedstock demand and prices going forward.

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 911 million tonnes (as at 30 September 2013).

www.sierra-rutile.com