Cerro Grande Mining’s Chilean subsidiary Compañia Minera Pimenton has filed for voluntary bankruptcy.
Following advice from its lawyers and the consultation process involving management and directors of both companies, Cerro Grande has taken the step, rather than wait for its creditors to place Pimenton into an involuntary bankruptcy.
The decision comes after Cerro Grande Mining closed its Pimenton mine last month owing to a combination of a lack of adequate working capital and occurrence of snowstorms that affected operations at the mine.
In accordance with Chilean law, a bankruptcy liquidator will take over Pimenton and its assets and will be responsible for all ongoing costs. The possession will continue until the sale or liquidation of the company.
Employees of Compañia Minera Pimenton have been terminated and their salaries and severance costs will be incurred by the liquidator from the sale or liquidation process.
Payment to the liquidator for carrying out the process will be arranged from proceeds of the sale of Pimenton or liquidation of its assets.
According to Cerro Grande, the bankruptcy filing will have no bearing on its other subsidiaries, including Compañia Minera Til Til, Compañia Minera Catedral, Compañia Minera Tordillo, Compañia Minera Bandurrias and Compañia Minera Cal Norte.
The liquidator will incur all costs related to the mine closure.
Cerro Grande Mining is a gold and copper producing company engaged in acquiring, exploring, evaluating and developing new gold, copper and industrial mineral properties in central Chile.