TORONTO,
July 4, 2014 /PRNewswire/ - Cerro
Grande Mining Corporation (the "Company" or "CEG")
(TSX: CEG) (OTCQX: CEGMF), announced today a proposed private
placement financing of nonconvertible debentures (the
"Debentures") with a combined aggregate subscription price
of up to US$3,000,000 (the
"Offering"). The Debentures will bear interest at the rate
of 6% per annum, payable in cash, quarterly in arrears.
Pursuant to the terms of the Offering, it is proposed that Company
will repay 1/6th of the original principal amount of each Debenture
semi-annually (each such repayment, a "Repayment"). It is
also proposed that, at the option of the holder of a Debenture, any
Repayment may be satisfied by the tender of: (i) cash;or (ii) gold
dore produced from the Company's Pimenton Mine, at a deemed price
per ounce of gold of US$1,157 per
ounce
Proceeds of the private placement are expected to be used for
general working capital purposes, including, but not limited to,
the repayment of debt, project development and corporate and
administrative
purposes.
Westmount Capital ("Westmount"), a Switzerland-based capital markets firm, has
been engaged to assist with identifying and introducing purchasers
to the Company in connection with the Offering as well as to
provide corporate finance advisory services. In consideration for
its services, Westmount will
receive, subject to Toronto Stock Exchange approval, 500,000 common
shares in the capital of the Company as a due diligence fee and may
receive an aggregate cash fee equal to 10% of the gross proceeds
from the sale of the Debentures to purchasers introduced to the
Company by Westmount in connection
with the Offering. Forty percent of the cash fee may at the option
of Westmount be satisfied by the
issuance to Westmount of a
non-convertible debenture having the same terms and conditions as
the Debentures.
The Company is a minerals producing, exploration and development
company with properties and activities currently focused in
Chile.
Forward-Looking Information
This news release contains certain forward-looking information. All
information, other than information regarding historical fact, that
addresses activities, events or developments that the Company
believes, expects or anticipates will or may occur in the future is
forward-looking information. Forward-looking information contained
in this news release includes, but may not be limited to, the
completion of the Offering, the expected use of proceeds and the
future Repayments. The forward-looking information contained in
this news release reflects the current expectations, assumptions
and/or beliefs of the Company based on information currently
available to the Company. With respect to the forwardlooking
information contained in this news release, the Company has made
assumptions regarding, among other things, the Company's working
capital requirements and the ability of the Company to complete the
Offering and satisfy the Repayments. The forward-looking
information contained in this news release is subject to a number
of risks and uncertainties that may cause actual results or events
to differ materially from current expectations, including the
inability of the Company to use the proceeds of the Offering
towards its working capital requirements and the inability of the
Company to complete the Offering or satisfy the Repayments. Any
forward-looking information speaks only as of the date on which it
is made and, except as may be required by applicable law, the
Company disclaims any obligation to update or modify such
forwardlooking information, either because of new information,
future events or for any other reason.
SOURCE Cerro Grande Mining Corporation