Standby Facility Update

Sierra Rutile Limited

Standby Facility Update

London, UK, 24 September 2015: Sierra Rutile Limited (AIM: SRX) ("Sierra Rutile") is pleased to announce that it has secured a standby loan facility of US$15 million from Nedbank (the "Nedbank Standby Facility"). The Nedbank Standby Facility replaces the facility provided by Pala Investments (the "Pala Standby Facility"), which was announced on 21 April 2015, and may be utilised, if required, to fund the construction of Phase 1 of the Gangama Dry Mine (the "Project"), which remains on budget and on track to commence production in late Q2 2016.

The Nedbank Standby Facility, like the Pala Standby Facility it replaces, provides financial flexibility to Sierra Rutile during the construction phase of the Project. The cost of the Nedbank Standby Facility, if drawn, is less than the Pala Standby Facility with an interest rate of LIBOR plus 2% (compared with the Pala Standby Facility which carried an interest rate of LIBOR plus 5.25%). The Nedbank Standby Facility has no associated arrangement or commitment fees. Any funds which Sierra Rutile wishes to draw from the Nedbank Standby Facility will be secured by an equivalent amount of cash collateral to be provided by Pala.

Further, to provide flexibility to manage its working capital requirements more efficiently during the construction phase of the Project, Sierra Rutile will also be able to access cash received from its sales that would have normally been restricted between interest periods under the terms of the existing US$20 million working capital facility from Nedbank (the "Working Capital Facility"). Access to such restricted cash between interest periods, if requested by Sierra Rutile, will be similarly backed by cash collateral provided from Pala.

Sierra Rutile and Pala have entered into a cash collateral agreement (the "Cash Collateral Agreement") under which Sierra Rutile will pay an interest rate of 1% on any cash collateral which it may request from Pala under the Nedbank Standby Facility and the Working Capital Facility, and under which Sierra Rutile agrees to repay Pala in respect of any cash collateral which is claimed by Nedbank. Under the AIM Rules, the Cash Collateral Agreement is classified as a related party transaction. The directors of Sierra Rutile (with the exception of Michael Barton, Michael Brown and Stephen Gill, employees of Pala), having consulted with Sierra Rutile's nominated adviser, Investec Bank plc, consider that the terms of the Cash Collateral Agreement are fair and reasonable insofar as Sierra Rutile's shareholders are concerned.

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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 mines, located in the south west of Sierra Leone, are based on 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