TORONTO, Oct. 27, 2014 /CNW Telbec/ - Compania Minera Auromin Ltda. ("Auromin") announces that on October 24, 2014, Auromin, a company controlled by
David Thomson, a director and officer of Cerro Grande Mining
Corporation (the "Company"), purchased 4,498,000 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$200,000 (CDN$224,900) (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,
Auromin acquired 26,484,780 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 Auromin in the amount of
US$1,177,625 (CDN$1,324,239) 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"). 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. Thomson in the
Placement and the Debt Settlement represent 17.70% of such outstanding
Common Shares. Beneficial ownership and control of the Common Shares
and the Warrants was acquired by Mr. Thomson.
Mr. Thomson now owns 52,718,929 Common Shares representing 30.33% of the
issued and outstanding Common Shares. Mr. Thomson also holds stock
options, convertible debentures and warrants to acquire, in the
aggregate, up to 5,299,057 Common Shares.
Auromin'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. Auromin 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.
Auromin'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. Thomson and Auromin in accordance
with applicable Canadian securities laws, contact Auromin 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
Compania Minera Auromin Ltda.
Avenida Santa Maria 2224
Providencia
Santiago, Chile
7500014