Vancouver, B.C.,January 24, 2014 -Sierra Madre Developments Inc. (the “Company”) (TSX.V: SMG) makes the following announcement in accordance with National Instrument 62-103 The Early Warning System and Related Take Over Bids and Insider Reporting Issues.

Further to the Company’s news release of January 22, 2014 regarding the closing of the Company’s sale of certain assets to Morro Bay Resources Ltd. (“Morro Bay”), the Company advises that it has today filed an early warning report in connection with the receipt by it of an aggregate 12,294,026 common shares (the “Shares”) and 6,147,013 share purchase warrants (“Warrants”) of Morro Bay.  The Shares represent approximately 23.06% of Morro Bay’s current issued and outstanding share capital (53,309,950 common shares). The Shares and Warrants represent approximately 31.02% of Morro Bay’s issued and outstanding share capital assuming the exercise of such Warrants.

The Company advises it did not act jointly with any other party in acquiring the Shares and Warrants. As previously reported, the Shares and Warrants were acquired by the Company at the deemed price of $0.10 per unit, in consideration of Morro Bay acquiring all of the Company’s rights to an option to earn up to a 65% interest in mining concessions in Mexico comprising the Peñoles Project owned by Riverside Resources Inc. and a drill rig that has been used on the Peñoles Project.

It is the Company’s intention to distribute all of the Shares and Warrants to its shareholders by way of dividend-in-kind (except to Riverside Resources Inc., which received shares and warrants directly from the Company and which has waived its rights to participate in the Company’s dividend distribution).

A copy of the Early Warning Report may be found under Morro Bay’s profile on www.sedar.com.

ON BEHALF OF THE BOARD OF DIRECTORS

Carl von Einsiedel, CEO

For additional information contact: 604-685-3357

Neither TSX VentureExchange nor its Regulation Services Provider (as that tenn is defined in thepolicies of the TSX Venture Exchange) accepts responsib ilityfo r the adequacy or accuracy of this release.