TORONTO,
Oct. 27, 2014 /PRNewswire/ - 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