CEGMF Cerro Grande Mining Corporation (PK)

TORONTO, Aug. 15, 2014 /PRNewswire/ - Cerro Grande Mining Corporation (the "Company" or "CEG") (TSX: CEG) (OTCQX: CEGMF) announced today its interim unaudited consolidated Financial Statements and Management Discussion and Analysis for the 3 months fiscal quarter ended June 30, 2014 compared to the same quarter a year ago and its results for the nine months fiscal period ended June 30, 2014 compared to the nine month period ended June 30, 2013 a year ago have been filed on SEDAR and the Company refers the reader to those materials for additional  information.

Operational Highlights

• Gold produced by the Pimenton Mine for the nine months ended June 30, 2014 was 6,459 oz compared to 8,233 oz in the comparable period a year ago due in part to the 5 week shut down described under Other Events below.
• Pimenton's cash cost for the nine months ended June 30, 2014 was $1,295 per ounce of gold produced net of by product credits, compared to $1,250 per oz in the comparable period a year ago.
• Pimenton's cash production cost for the nine months ended June 30, 2014 was $1,203 per ounce of gold produced net of by product credit compared to $1,472 per oz in the comparable period a year ago.
• The average gold recovery for the nine months ended June 30, 2014 was 94.88% compared to 93.90% in the comparable period a year ago.
• Currently the plant has been permitted to operate at an average of 166 tons per day.

Financial Highlights  

• Loss before income taxes for the nine month period ended June 30, 2014 was $3,883 (2013 - $5,454 which included an impairment charge of $2,140 and a gain of $865). Loss before income taxes for the three months ended June 30, 2014 was $1,591 (2013- $4,382 which included an impairment charge of $2,140 and a gain of $865).
• Average price per ounce of gold during the nine months ended June 30, 2014 was $1,284 (2013 - $1,588). Average price per ounce during the three months ended June 30, 201 was $1,289 (2013 - $1,414).
• Net loss after income taxes for the nine months ended June 30, 2014 was $3,806 compared to $5,342 in the same period in 2013. Net loss after income taxes for the three months ended June 30, 2014 was $1,514 compared to $4,148 for the same period in 2013.
• Basic loss per share for the third quarter ended June 30, 2014 was 0.03 per share compared to 0.06 per share in the same period 2013.
• At June 30, 2014, the Company had cash and cash equivalents of $104 compared to $291 at June 30, 2013.
• Cash flow from operations as at June 30, 2014 before capital investment was $120 (2013- negative $2,719).

Other Events

• As previously reported on May 9, 2014 the Municipality of San Esteban, in which the Pimenton Mine and installations are located, ordered the mine shut down because the Mine lacked a proper  municipal  permit for the plant and camp buildings.  The Company has undergone a long process of permitting with the municipality and all other relevant government authorities over a number of years which has resulted in all the appropriate permits being issued, except the final one for the plant and camp buildings which is based, to a large extent, on first receiving other permits or certificates dealing with water use, land use, health and safety and structural calculations, amongst others.  The only missing document was a certificate relating to the structural calculations used in the construction of the plant and camp buildings.  The Company presented the already completed structural calculations approved by a required third party specialist and has successfully obtained the last remaining permit issued. As a consequence of the above, the mine obtained permission to restart its operations on June 12^th which were fully resumed on June 16^th.

Subsequent Events

• Subsequent to the quarter end, and as informed in a press release dated July 4^th, the company has signed a Private Placement Debenture for up to US$3,000,000 of debentures to be issued. Westmount Capital is a Switzerland based capital market firm and has been engaged to assist with identifying and introducing purchasers to the Company related to the placement which shall be repaid in 6 semi-annual instalments either in cash or in gold dore produced by the Pimenton Mine at a deemed price per ounce of gold of US$1,157. The Debentures will bear an annual interest rate of 6% to be paid in cash quarterly in arrears.
• As reported on July 28^th, the Company was advised by the Toronto Stock Exchange (TSX) that the Continued Listing Committee of the TSX had decided to delist the Company effective August 25^th primarily under Section 710 (a) (i) Financial condition. The Company is currently applying for listing on the Canadian Securities Exchange.

Cerro Grande Mining Corporation is a minerals producing, exploration and development company with properties and activities currently focused in Chile.

Cautionary Statement on Forward-looking Information

This news release contains "forward-looking information", which may include, but is not limited to, statements with respect to the future financial or operating performance of CEG. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of CEG to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements contained herein are made as of the date of this press release based on current expectations and beliefs and CEG disclaims, other than as required by law, any obligation to update any forward-looking statements whether as a result of new information, results, future events, circumstances, or if management's estimates or opinions should change, or otherwise. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, the reader is cautioned not to place undue reliance on forward-looking statements.

SOURCE Cerro Grande Mining Corporation