TORONTO, December 01, 2020 (GLOBE NEWSWIRE) – Cerro Grande Mining Corporation (the “society” or “CEG“(CSE: CEG) announces that the Chilean wholly owned subsidiary of CEG, Minera Til Til SpA (“Til Til“) Today the contract for the purchase of assets and the assignment of contracts (the”APA“) With Minera Tamidak Limitada (“Tamidak“), According to which Til Til acquired from Tamidak the mining concessions and other assets for the Tamidak-owned Pimentón copper-gold mining project and Tamidak’s rights and obligations under the exploration and option to joint venture agreement (the”FQM agreement“) On or about April 27, 2020 between Tamidak and FQM Exploration (Chile) SA (“FQM“), A Chilean subsidiary of First Quantum Minerals Ltd. Tamidak is a private Chilean company owned by David Thomson and his sons.
The Pimentón copper-gold mining project covers 3,121 hectares and is located about 120 km northeast of Santiago in the Andes in Chile. Pimentón, opened voluntary bankruptcy proceedings in June 2017. As part of these bankruptcy proceedings, Tamidak acquired the Pimentón copper-gold mining project on June 25, 2018.
According to the APA, CEG has on behalf of Til Til as the buyer the first installment of 1,300,000,000 Chilean pesos (2,202,755.14 CAD) of the total purchase price of 3,900,000,000 Chilean pesos (the “Purchase price”) Payable below this (approximately CAD 6,608,265, based on the nominal exchange rate of the Chilean peso to the Canadian dollar, the issue price of USD 0.05 per share on 30. The shares issued to Tamidak are subject to a hold period until April 2, 2021 .
Under the APA, each of the second and third installments of the purchase price of 1,300,000,000 Chilean pesos each is due on the date no more than 18 months and 36 months from today, respectively, and is payable in cash or the equivalent in common stock of the Company, as Tamidak may choose in its sole discretion, at a price per share which is the higher of (A) the simple average of the closing price per CEG common share on the CSE for. corresponds to the 10 consecutive trading days that end on the day immediately before payment; and (B) CDN $ 0.05 per share (or such other minimum price per share as may be in effect at the time in accordance with the policies and rules of the CSE). In the case of payments to be made in Company Common Shares as above, the number of CEG Common Shares to be issued will be determined on the basis of the nominal Chilean Peso to Canadian Dollar exchange rate determined the day prior to each payment as published by the Chilean Central Bank.
If one of the two remaining purchase price installments is not paid to Tamidak on time and in full, the APA is automatically terminated and CEG is obliged to return all assets and the rights and obligations under the FQM agreement to Tamidak. In such a case, Tamidak will retain all payments previously made to Tamidak under the APA as compensation, without prejudice to any other compensation claims to which Tamidak may be legally entitled. Further details on the APA and the FQM agreement can be found in the company’s press releases dated July 15 and September 14, 2020.
Such an acquisition constitutes a related party transaction for CEG. As such, the company requested and received at a special meeting of shareholders on 10, performed by David, Ian and Matthew Thomson) under Multilateral Instrument 61-101 – Protection of Minority Securities Holders in Special Transactions (“MI 61-101“). Pursuant to MI 61-101, the transaction is not subject to the formal valuation requirement of MI 61-101 because the company’s common stock is not listed on any particular market, which is the markets set out in Section 5.5 (b) of MI 61 – 101.
This press release has been prepared by the management of the CEG, which bears full responsibility for its content.
Cerro Grande Mining Corporation is an exploration and development company with properties and activities currently focused in Chile.
Cautionary Note Regarding Forward-Looking Information:
This press release contains certain “forward-looking information”. All statements, other than historical facts, relating to activities, events or developments that the Company believes, expects or expects to occur in the future (including, without limitation, Aboutlating to the Payment of the future purchase price installments) represent forward-looking information.
This forward-looking information reflects the company’s current expectations or beliefs based on information currently available to the company and certain assumptions, including the company’s ability to Pay any future purchase price installments in time. Forward-looking information is subject to a number of significant risks and uncertainties and other factors that could cause the company’s actual results to differ materially from those discussed in the forward-looking information and, even if such actual results are realized or materially realized, no assurance can be given that they will have the expected impact or impact on the company. Factors that could cause actual results or events to differ materially from current expectations include, but are not limited to: the company’s inability to make the required installment payments or to fail to obtain the expected benefits from the FQM agreement.
All forward-looking information speaks only as of the date of its publication and the company disclaims any intention or obligation to update any forward-looking information based on new information, except as required by applicable securities laws, future events or results, or otherwise. While the company believes that the assumptions made in any forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and, accordingly, the uncertainty it contains should not place undue reliance on such information.