Cerro Resources NL
ASX : CJO
TSX VENTURE : CJO

Cerro Resources NL

July 09, 2012 08:57 ET

Cerro Resources: 2012 Share Purchase Plan

LONGUEUIL, QUEBEC--(Marketwire - July 9, 2012) - Cerro Resources NL (TSX VENTURE:CJO)(ASX:CJO) is pleased to offer eligible shareholders the opportunity to participate in the Cerro Resources NL 2012 Share Purchase Plan (Plan).

The Directors' have determined that the Plan be made to eligible shareholders, being those who are the registered holders of fully paid ordinary shares in the Company as a 7.00pm AEST on 6 July 2012 (Record Date), and whose address in the Company's register is situated in Australia and New Zealand.

The aim of the Plan is to provide the Company with modest additional funding certainty during the 2nd half of 2012, as the Company seeks to finalise participation/funding terms for the Cerro del Gallo 1st Stage Heap Leach project.

The Plan affords eligible shareholders an opportunity to participate at a relatively low historical share price, should they elect to do so.

Under the Plan, eligible shareholders may subscribe for up to AUD$15,000 worth of fully paid ordinary shares in the Company (New Shares) (subject to a discretionary scale back) at a price of AUD$0.07 per share (Issue Price).

The Issue Price represents a 15% discount to the volume weighted average price of the Company's shares traded on the ASX during the 5 trading days immediately prior to the announcement date of the Plan and a 22% discount to the closing price on the Record Date, and is free of both brokerage and commission.

The Company is offering up to 50,000,000 New Shares under the Plan to raise AUD$3,500,000 (Offer Amount), before costs. The Company reserves the right to scale back a shareholder's subscription (in its absolute discretion) if total shareholder demand exceeds the Offer Amount. The Company also reserves the right to increase the Offer Amount to a maximum of 65,000,000 New Shares to raise AUD$4,550,000 (Maximum Amount) if there is overwhelming shareholder demand.

Funds raised under the Plan will be used to:

  1. secure the outstanding land required for development of the Cerro del Gallo project and attend to permitting and design requirements for the project's advancement;
  2. satisfy the Company's general working capital expenses; and
  3. fund ongoing exploration activities by the Company.

Timetable

Action Date
Record Date 7.00pm AEST on 6 July 2012
Announcement Date of Plan 9 July 2012
Opening Date of Offer 9.00am AEST on 17 July 2012
Closing Date of Offer 5.00pm AEST on 7 August 2012
Allotment Date 10 August 2012
Dispatch date for holding statements 14 August 2012
Quotation of New Shares on ASX 17 August 2012

The timetable is indicative only and subject to change. The Company reserves the right to change the timetable at any time or cancel the Plan at any time before the Allotment Date, subject to applicable regulatory requirements.

Full details of the Plan will be set out in a letter to shareholders, the Plan Booklet and Application Form for Eligible Shareholders (Plan Documents). A copy of the Plan Documents will also be lodged with ASX.

All shares issued under the Plan will be subject to a regulatory four month hold period in Canada under Canadian securities laws and cannot be traded on the TSX Venture Exchange or be resold in Canada during this period, unless an exemption is available from the applicable prospectus requirements in Canada. Shares issued in Australia will be tradeable on the ASX but will not be convertible to shares tradeable in Canada during this hold period. The Company will implement appropriate controls with its share registries to ensure Canadian regulatory requirements are met.

The Plan is subject to certain conditions including, but not limited to, the receipt of all necessary regulatory approvals, including the approval of the TSX Venture Exchange.

If you have any enquiries in relation to the Plan, please call Link Market Services Limited on 1300 880 467 (within Australia), or +61 2 8280 7494 (outside Australia).

About Cerro Resources

Cerro Resources NL (Company) is a precious and base metals exploration and development company. The Company is currently focused on Mexico where it is developing the Cerro del Gallo gold/silver project in the central state of Guanajuato, Mexico, actively exploring the Namiquipa silver project in northern Mexico, and commencing exploration on the Espiritu Santo gold/silver project in Jalisco. The Company also maintains an active working focus on the Mt Isa, Queensland region where it is exploring the Mt Philp haematite project and it holds an interest in the Kalman molybdenum, rhenium, and copper project.

Additional information about the Company and its projects is available on the Company's website at www.cerroresources.com and on SEDAR.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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