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Cerro Grande places Chilean subsidiary into voluntary bankruptcy

Cerro Grande Mining Corp. said June 2 that following the closure of its Pimenton gold-copper mine earlier in the month, the company decided to place its Chilean operating subsidiary, Compañia Minera Pimenton, into voluntary bankruptcy, effective June 1.

The mine was closed due to a lack of sufficient working capital and a series of snowstorms expected to continue to affect the mine's operations.

Under Chilean law, a court appointed bankruptcy liquidator will take possession of the unit and its assets and will be responsible for all ongoing costs related to the property until they sell or liquidate Compañia Minera Pimenton in both voluntary and involuntary filings.

According to the company, there are no bonds in place to cover reclamation procedures at Pimenton, nor they were requested by Chilean government mining agency Sernageomin.

The liquidator will also be responsible for all mine closure costs until the successful sale of the mine, claims and/or liquidating the assets of Compañia Minera Pimenton.

All men on the subsidiary's payroll were terminated, with salaries and severance costs to be covered by the liquidators from the sale proceeds.

Cerro Grande noted that its other subsidiaries, including Compañia Minera Til Til, Compañia Minera Catedral, Compañia Minera Tordillo, Compañia Minera Bandurrias and Compañia Minera Cal Norte, will not be affected by the bankruptcy of Compañia Minera Pimenton.