TORONTO, Oct. 27, 2014 /CNW Telbec/ - Compania Minera Chanar Blanco S.A. ("Chanar Blanco") announces that on October 24, 2014, Chanar Blanco, a company controlled by Mario Hernandez, a director and officer of Cerro Grande Mining Corporation (the "Company"), purchased 11,245,000 units of securities of the Company (each, a "Unit") at a price of CDN$0.05 per Unit for aggregate cash proceeds to the Company of US$500,000 (CDN$562,250) (the "Placement"). Each Unit comprises one common share of the Company (each a "Common Share") and one Common Share purchase warrant (each, a "Warrant") with each Warrant exercisable to acquire one Common Share until October 24, 2019 at a price of CDN$0.07 per share. In addition, Chanar Blanco acquired 22,160,440 Common Shares (representing an issue price of CDN$0.05 per share) in full and final settlement of outstanding indebtedness of the Company owed to Chanar Blanco in the amount of US$985,347 (CDN$1,108,022) consisting of accrued but unpaid royalty payments, unpaid past services provided to the Company in addition to cash advances (including interest thereon) made to the Company (the "Debt Settlement") (the "Debt Settlement"). All amounts have been converted at an exchange ratio of US$1.00 to CDN$1.1245.
Taking into account all of the Common Shares issued in the Placement and the Debt Settlement, the Company now has 174,977,010 Common Shares issued and outstanding. The Common Shares issued to Mr. Hernandez in the Placement and the Debt Settlement represents 19.09% of such outstanding Common Shares. Beneficial ownership and control of the Common Shares and the Warrants was acquired by Mr. Hernandez.
Mr. Hernandez now owns 54,922,201 Common Shares representing 31.38% of the issued and outstanding Common Shares. Mr. Hernandez also holds stock options, convertible debentures and warrants to acquire, in the aggregate, up to 12,046,057 Common Shares.
Chanar Blanco's purpose in effecting the Placement and the Debt Settlement was to provide an immediate source of cash to the Company and to provide financial relief to the Company in a time of financial hardship for the Company. Chanar Blanco may in the future increase or decrease its ownership of securities of the Company from time to time depending upon the business and prospects of the Company and future market conditions.
Chanar Blanco's address and other contact information is set forth below. For further information, including to obtain a copy, once filed, of the report required to be filed by Mr. Hernandez and Chanar Blanco in accordance with applicable Canadian securities laws, contact Chanar Blanco at the address specified below.
The issuance of this news release is not an admission that an entity named in this news release owns or controls any described securities or is a joint actor with another named entity.
SOURCE: Cerro Grande Mining Corporation
For further information:
Compania Minera Chanar Blanco S.A.
380 Los Carreras, Of, 425
La Serena, Chile
Attn: Mario Hernandez
Tel: +56 51 222 6920