TORONTO, April 16, 2012 /PRNewswire/ - Cerro Grande Mining Corporation (the "Company" or "CEG") (TSX: CEG) (OTCQX: CEGMF) announced that it has signed a Letter of Offer for up to a US $10,000,000 Credit Facility from Macquarie Bank Limited ("Macquarie").
The Credit Facility amount is for up to US $10,000,000 in 2 tranches. Tranche 1 is for up to US $5,000,000 for a period of up to 30 months with prepayment rights. Tranche 2 is for up to US $5,000,000 and will be available at Macquarie's sole discretion one year from the initial draw down on terms to be determined.
The purpose of the Credit Facility will be to fund additional capital improvements at the Company's Pimenton mine and for exploration activities on the Company's Santa Cecilia project on which the Company holds an option. The Company may also use a part to the Credit Facility proceeds to increase drilling activities on its Pimenton copper/gold/molybdenum deposit and to fund exploration activities at its Tordillo and La Bella prospects.
Stephen W. Houghton, CEO, stated that the Credit Facility from Macquarie coupled the Company's own cash flow will significantly improve the time line to enhance production at its Pimenton mine, to increase drilling activities on the Pimenton porphyry deposit and provide the Company with additional funding to increase drilling activities on its Santa Cecilia project during the next drilling season which begins in October, 2012. He continued by stating that the Board of Directors and management are very pleased by the confidence Macquarie has placed in our mining projects.Macquarie is a leading mining finance bank based in Sydney, Australia and has financed companies located in Latin America such as Beadell Resources' Tucano Gold project in Brazil; SilverCrest Mines' Santa Elena Gold-Silver project in Mexico; B2 Gold with projects in Nicaragua, Colombia, Costa Rica and Uruguay; Minera Andes' San Jose Gold project in Argentina; Bema Gold's Refugio Gold project in Chile and Minera IRL with projects in Peru and Argentina. Cerro Grande Mining Corporation is a minerals producing, exploration and development company with properties and activities currently focused in Chile. Cautionary Statement on Forward-looking Information