Sterling Mining Company Signs Memorandum of Understanding to Acquire Baroness Silver Tailings Project.

Business Editors

COEUR D'ALENE, Idaho--(BUSINESS WIRE)--Jan. 26, 2004

Sterling Mining Company (OTC:SRLM) is pleased to announce that it has signed a Memorandum of Understanding (MOU) for a 60-day option period to acquire the Baroness Silver Tailings Project near Zacatecas, Mexico.

The Baroness Project reportedly consists of up to 5 million tons of finely ground tailings with an average grade of 3.0 ounces per ton (oz/t) silver and 0.02 oz/t gold, yielding an in-situ total of up to 15 million ounces of silver and 100,000 ounces of gold. Estimated mineral recovery, using environmentally-friendly calcium or sodium thiosulphate leaching, is reportedly at least 60 percent, although the Company is confident that this figure can be improved significantly with additional metallurgical research. The project includes necessary processing infrastructure.

Sterling Vice-President Jim Williams has previously undertaken mineral project due diligence in the Zacatecas area and will spearhead the Sterling due diligence efforts over the next month. These efforts will include a small auger drilling program to test the volume and representative grade of the tailings and to verify earlier professional reports. Mr. Williams commented, "Mexico is the world's largest silver-producing country and retains numerous untapped resources, several of which are currently under Company review as potential acquisitions."

Sterling President Ray De Motte added, "Our primary mission at Sterling is to provide superior leverage to future silver price increases by adding to and enhancing our silver assets. The Baroness Tailings Project, should it meet our investment criteria, offers the exciting possibility of near-term silver production. Any Sterling profits realized from Baroness operations would be reinvested in additional silver exploration efforts, principally at the Sunshine Mine."

Please visit the Sterling website at www.sterlingmining.com for more information.

Sterling Mining Company controls the legendary Sunshine Mine, the richest silver mine in American history, with more than 360 million ounces of production over the past century. Sterling offers investors superior leverage to silver price increases through its extensive portfolio of "Silver Valley" landholdings and through strategic alliances and equity stakes in neighboring companies. Sterling stock trades on the OTC Market under the symbol "SRLM."

Certain statements contained in this press release are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based on beliefs of management as well as assumptions made by and information currently available to management. Forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from expected results.