Cerro Grande Mining Faces Challenges After Asset Purchase Termination
Cerro Grande Mining's Recent Developments
TORONTO — Cerro Grande Mining Corporation (the “Company” or “CEG”) has recently announced a significant update regarding its Asset Purchase Agreement (APA). This decision affects the collaboration with Minera Tamidak Limitada (Tamidak) and impacts the future of the Pimentón Copper Gold Mining Project.
Termination of the Asset Purchase Agreement
The Company made the difficult announcement that it has formally terminated the APA. This agreement, originally signed in late 2020, involved the acquisition of mining concessions and assets associated with the Pimentón Copper Gold Mining Project. The termination occurred after CEG was unable to meet the financial requirements laid out in the agreement.
Financial Obligations and Challenges
Initially, Cerro Grande Mining completed the first two payments toward the total purchase price of the project, amounting to over $2.6 billion Chilean Pesos, which translated to approximately CDN$6.08 million. These payments were made in shares of the Company. However, the third and final installment of $1.3 billion Chilean Pesos, which was due and required to be paid in cash, was not fulfilled. As a result, this has led to a full return of the Pimentón project assets to Tamidak.
Impact on Operations
With the termination of the APA, all acquired assets have reverted back to Tamidak. This situation also affects the previously existing Lease Agreement regarding mining exploitation concessions. Cerro Grande Mining no longer holds any claim or financial interest in the tailings pond reprocessing operation undertaken by Tamidak.
Board of Directors' Review
Amid these changes, the Board of Directors of CEG is actively reviewing its options to adapt to the evolving landscape of the mining sector. This proactive step demonstrates the Company’s commitment to finding viable paths forward in light of recent challenges. Shareholders and interested parties can expect further updates as the situation progresses.
Company Overview and Future Outlook
Cerro Grande Mining Corporation is primarily focused on exploration and development within the vibrant mining sector of Chile. Despite recent setbacks, the company remains determined to identify new opportunities and navigate through these turbulent times.
Contact Information
For additional information and inquiries, stakeholders can reach out to:
Peter Hogg, CFO and Interim CEO
James Mac Auliffe
Email: ceg@cegmining.com
Phone: +56 9 9837 4476
Website: www.cegmining.com
Frequently Asked Questions
What is the reason for the termination of the APA?
The APA was terminated because Cerro Grande Mining was unable to make the final cash payment required under the agreement.
What are the implications for the mining project?
The termination means that all assets related to the Pimentón Copper Gold Mining Project have been returned to Tamidak, impacting the Company's claims and operations in that area.
How has the company performed financially?
While the Company managed to make the initial two payments in shares, the inability to meet the final cash payment has highlighted significant financial challenges.
What steps is the Board of Directors taking?
The Board is currently reviewing options to navigate the impact of the APA termination and will provide further updates as necessary.
Where can I find more information about Cerro Grande Mining?
Additional information can be found on their official website or through direct communication with the company’s representatives.
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