TORONTO, Nov. 8, 2016 /PRNewswire/ - Cerro Grande Mining Corporation (the " Company" or " CEG") (CSE:CEG) (OTCQB:CEGMF) announced today that its Board of Directors (with David Thomson and Mario Hernandez abstaining) has conditionally approved the issuance of Convertible Debentures of the Company, subject to the approval of the Chief Executive Officer of CEG and Mr. Thomson and Mr. Hernandez of the final documentation of the transaction. The Convertible Debentures will be issued to Mr. David Thomson, or a company controlled by him, and to Mr. Mario Hernandez or a company controlled by him in final payment of advances and salaries totalling US$2,771,237 owed to them through the end of July 2016. Both Mr. Thomson and Mr. Hernandez are Directors and Officers of the Company. The Convertible Debentures are being issued to immediately improve the serious financial difficulties faced by the Company with of view of setting the Company on improved financial ground to carry out its mining business in Chile in the future. The Convertible Debentures would be guaranteed by mortgages on the Tordillo and Catedral/Rino claims as well as shares of the companies controlled by Tordillo and Catedral. Tordillo is owned 100% by CEG and Catedral/Rino is owned 50,01% by CEG. The Convertible Debentures would be convertible at Cdn $0.05 per share for a term of 3 years and pay interest semi annually at the rate of 8%. Mr. Thomson would be issued a Convertible Debenture in the amount of US$1,517,636 and Mr. Hernandez would be issued a Convertible Debenture in the amount of US$1,253,601. The proposed placement and related debt settlement (the " Proposed Transaction") constitutes a "related party transaction" under Multilateral Instrument 61-101- Protection of Minority Security Holders in Special Transactions (" MI 61-101") due to the participation of Messrs. Thomson and Hernandez. The Company intends to rely on the "financial hardship" exemptions from both the formal valuation and minority shareholder approval requirements of MI 61-101 in connection with the Proposed Transaction. In reliance thereon, the Board of Directors of the Company (other than Messrs. Thomson and Hernandez, who abstained from voting), including all of its independent members, considered the Proposed Transaction and unanimously concluded that the Company is in serious financial difficulty and the Proposed Transaction, the terms of which are reasonable in the circumstances, will improve the financial position of the Company. There is no requirement, corporate or otherwise (including pursuant to the rules of the Canadian Securities Exchange), to hold a meeting to obtain any approval of the holders of Common Shares in connection with the Proposed Transaction. Cerro Grande Mining Corporation currently has 267,852,410 shares outstanding (298,720,591 shares on a fully-diluted basis). Following the issuance of the Convertible Debentures, the Company will have 267,852,410 shares outstanding (370,258,965 shares on a fully-diluted basis).