Update on Hondo Minerals and Binding Letter of Intent with Crowncorp
CHLORIDE, AZ, Dec. 16, 2013 /PRNewswire/ - Hondo Minerals Corporation (OTCBB:HMNC) today announces that Crowncorp Investments Corporation, a Texas Corporation ("Crowncorp"), its principals, associates and consultants have maintained continuous contact with Hondo and assured Hondo of their intent to consummate the agreed transaction. In addition to Fides, Crowncorp and its principals, associates and consultants are arranging several different financing options to fund this transaction; Crowncorp has recently communicated to Hondo their intention to cure the breach by delivering the first tranche of funds under the Letter of Intent on or about December 19, 2013. Although Hondo still has other remedies available under Crowncorp's default, this funding of the first tranche will mitigate some concerns about moving forward with Crowncorp.
The binding letter of intent was entered into by and between Hondo and Crowncorp on April 27, 2013 (the "Letter of Intent"). As agreed in the Letter of Intent, Crowncorp promised to acquire all of the issued and outstanding stock of Hondo in exchange for a total purchase price of $88 Million USD (the "Acquisition")
Pursuant to the Letter of Intent, in the event that: (i) the Acquisition is not consummated in six months, that is by October 27, 2013; (ii) Crowncorp fails to provide funding in accordance with the schedule set forth in the Letter of Intent; and/or (iii) Crowncorp otherwise fails to perform its obligations as set forth in the Letter of Intent, Hondo would be entitled to a break-up fee of $2 Million USD (the "Break-Up Fee") plus any damages that it would be entitled to receive as a result of Crowncorp's default.
Hondo in its preparation for the winter, the staffing at our Tennessee Mine site in Chloride, Arizona, has been greatly reduced, and production process refinements have substantially ceased for the winter.
Additionally, GAL Resources, a sub-licensee under Hondo's license agreement for the E-Leach process, is still evaluating the application of this technology on their projects.
As of fiscal year-ended July 31, 2013 Hondo raised $1,754,000 in various debt instruments. Additional issuances of equity, debt or convertible debt securities will result in dilution to our current shareholders. Such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, Hondo may not have sufficient cash on hand to continue its mining activities and to fund ongoing operational expenses.
About Hondo Minerals
Hondo Minerals Corporation is engaged in the acquisition of mines, mining claims and mining real estate in the United States, Canada and Mexico with mineral reserves of precious metals or non-ferrous metals. Hondo was incorporated under the laws of the State of Nevada on September 25, 2007. Hondo's common stock is listed on the Over The Counter Exchange (OTC:HMNC). For more information, please consult Hondo's website at: www.hondominerals.com.
About Crowncorp Investments Corporation
Crowncorp Investments Corporation, a corporation duly formed under the laws of the State of Texas in May 2007, has been involved in buying and selling of petroleum, petroleum derivatives, and commodities since its inception. In addition, Crowncorp has expertise across a wide range of activities related to mining and minerals processing including exploration, development, smelting, refining, safety, environmental protection, product stewardship, recycling and research and seeks to enhance shareholder value and seize growth opportunities by acquiring mines and mining claims in the United States.
Forward Looking Statements.
This press release contains forward-looking statements that involve risks and uncertainties, including the Company's beliefs about its business prospects and future results of operations. Some factors that could cause actual results to differ materially include economic and operational risks, changes in anticipated earnings, continuation of current contracts, and other factors detailed in the Company's filings with the Securities and Exchange Commission, including its most recent Forms 10-K and 10-Q. The Company forecasts provided above are dynamic and therefore refer only to this release date. The Company does not undertake to update any forecasts that it may make available to the investing public.
SOURCE Hondo Minerals Corporation