2010 News Releases

Vancouver, British Columbia and Toronto, Ontario (February 25, 2010) -- Sierra Minerals Inc. (TSX: SIM) ("Sierra") and Goldgroup Resources Inc., a privately-held British Columbia company ("Goldgroup") are pleased to announce that, further to their joint news release issued January 29, 2010, they have signed a definitive arrangement (the "Agreement") dated February 23, 2010 with respect to the proposed business combination (the "Transaction") which is intended to create a premier junior gold producing company focused exclusively on Mexico targeting growth in production, mineral resources, profitability and cash flow from an impressive group of near-term production and advanced stage projects.

Under the terms of the Agreement, the outstanding common shares of Sierra will be consolidated on a 2.85:1 basis and shareholders of Goldgroup will receive one post-consolidation common share of Sierra for each one Goldgroup common share. Goldgroup will amalgamate with a wholly-owned subsidiary of Sierra pursuant to a statutory plan of arrangement under the Business Corporations Act (British Columbia). The combined entity will be named Goldgroup Resources Inc. ("New Goldgroup") and will continue to be listed on the TSX. On a post-Transaction basis, New Goldgroup will have approximately 83.3 million shares outstanding (90.6 million fully diluted, all of which are currently in-the-money), subject to adjustment for any additional Goldgroup shares that may be issued under the private placement financing discussed below. The fully diluted ownership split is expected to be approximately 58.5% for the Goldgroup shareholders and approximately 41.5% for the Sierra shareholders.

Transaction Details

Further details regarding the proposed business combination shall be provided in a joint information circular (the "Circular") which will be mailed to shareholders of Goldgroup and Sierra in connection with Goldgroup and Sierra's respective shareholders' meetings to approve the Transaction. The parties expect to complete and mail the Circular in March 2010 and plan to hold the special meetings in early April 2010. The Transaction is expected to close shortly thereafter.

Closing of the Transaction, as contemplated by the Agreement, is subject to a number of conditions and approvals which include; approval of the respective shareholders of Goldgroup and Sierra; court approval of the plan of arrangement; and the approval of all relevant regulatory authorities and third parties, including the TSX. Special independent committees of Goldgroup and Sierra have recommended the agreement to their respective boards of directors who will recommend the Transaction to their respective shareholders in the Circular. The Agreement provides for termination rights, including termination in the event the Transaction is not completed by May 31, 2010, unless extended by mutual agreement.

Financing Update

Pursuant to the terms of the Letter of Agreement signed January 28, 2010, Goldgroup committed to raise between $5 million and $10 million through a non-brokered private placement of Goldgroup common shares at a price of $1.00 per share. Investors have oversubscribed the minimum $5 million commitment to-date and additional funds are being raised under the financing.

About Sierra and Goldgroup

For further information on Sierra, please visit Sierra's website at www.sierraminerals.ca. For further information on Goldgroup, please visit Goldgroup's website at www.goldgroupresources.com. The Sierra and Goldgroup business combination presentation will be available on the homepage of both companies' websites in due course.

For further information please contact:

Keith Piggott, CEO
Gregg Sedun, Executive Chairman
T: 604-682-1943