Cerro Grande Mining Corp. announced the closure of its Pimenton mine and that it has entered into voluntary bankruptcy, effective June 1. On the advice of its Chilean lawyers, the directors and management of Compania Minera Pimenton and the Board of Directors of Cerro Grande Mining Corp. decided to go into voluntary bankruptcy versus waiting for its creditors to place Pimenton into involuntary bankruptcy.
Under Chilean law, a court-appointed bankruptcy liquidator will take possession of Compañia Minera Pimenton and its assets and is responsible for all ongoing costs of Pimenton until they are successful in obtaining the sale or liquidation of Compañia Minera Pimenton in both voluntary and involuntary filings.
There are no bonds in place to cover the reclamation procedures at Pimenton and none were requested by Sernageomin, the Chilean government mining agency. The liquidator will be responsible for all mine closure costs, if any, until the liquidator is successful in selling the mine, claims and/or liquidating the assets of Compañia Minera Pimenton. All employees at Compañia Minera Pimenton have been terminated and their salaries and severance costs will be paid for by the liquidator from the sale or liquidation of Compañia Minera Pimenton.
Under Chilean law, salary and some severance costs must be paid first and once paid, the creditors of the mine are second to be paid.
The Liquidator is paid his fees from the proceeds of the sale of Compania Minera Pimenton or liquidation of its assets.
The other subsidiaries of CEG, including Compañia Minera Til Til, Compañia Minera Catedral, Compañia Minera Tordillo, Compañia Minera Bandurrias and Compañia Minera Cal Norte are not affected by the bankruptcy of Compañia Minera Pimenton.
No officers or directors of Cerro Grande Mining Corp. have resigned. The transfer agent is still in place.