Statement Re: Share price movement

Sierra Rutile Limited

Statement Re: Share price movement

7 September 2011: Sierra Rutile Limited ("SRL or the Company") notes the recent move in the Company's share price and confirms that it has been informed by Pala Minerals Limited, a wholly owned subsidiary of Pala Investments AG Limited ("Pala") of their intention to make an unsolicited conditional cash offer to acquire the entire outstanding share capital of the Company.

The Board has formed an independent sub-committee to review, in conjunction with the Company's legal and financial advisors, the merits of any proposal.

A further announcement will be made if appropriate.

ENDS

Contacts:

Sierra Rutile Limited

John Sisay, Chief Executive

Tel: +44 (0) 207 321 0000

Collins Stewart Europe Limited

Financial Adviser

John Prior / Adam Miller

Tel: +44 (0) 20 7523 8350

Aura Financial

Michael Oke / Andy Mills

Tel: +44 (0) 207 321 0000