Cotton & Western Mining, Inc. announces effective May 23, 2013, that the Board and the majority shareholders of Cotton & Western Mining, Inc. have approved a Plan of Reorganization (the "Plan") 28 May, 2013, 21:00 ET from Cotton & Western Mining, Inc.
ENSENADA, Mexico, May 28, 2013 /PRNewswire/ -- The primary considerations behind the Plan were/are as follows:
The sole revenue generating asset of CWRN (Pinksheets: CWRN) consists of a wholly owned foreign (Mexican) operating Subsidiary, Panamerican Minerals Ventures S.A. de C.V.(PMV), which was held in trust for CWRN and its shareholders by Robert L. Cotton and Sharon Vasquez . Due to a severe lack of Operating Capital, PMV was forced to cease mining operations in October of 2012, and had amassed unpaid debts in excess of $2.0 Million USD. Furthermore, PMV is a Defendant in various legal proceedings in Mexico, the loss of any of which would force PMV to declare bankruptcy. In all, PMV required on the order of $5.0 Million USD in financing in order to allow it to resume operations. As CWRN was/ is unable to provide this financing, and in order to preserve any value for CWRN`s Shareholders, the Board believed it had to act immediately.
After careful consideration of all the options open to it, the Board of CWRN has adopted a Plan of Reorganization under which it spins off, pro rata to shareholders, a newly formed subsidiary, Kiliwa Mining Group, US, Inc. (KMG) which will hold the stock of the Mexican subsidiary mining Company Panamerican Minerals S.A. de C.V. This will be accomplished via a dividend consisting of the shares of the wholly owned subsidiary KMG, pro rata, issued to all of the shareholders of CWRN, as of an effective date within 60 days hereof, on a 1 KMG share for each 1,000 CWRN shares basis, as part of the Plan of Reorganization on a record date to be determined in accordance with Notice requirements of CUSIP, DTC, and FINRA. Said KMG shares shall be held, in trust, by the Escrow Agent (transfer agent) pending effectiveness of a registration statement under the Securities Act of 1933.
The Board`s actions have already resulted in sufficient financial relief having been extended to allow PMV to avoid bankruptcy and the loss of its equipment, while retiring a significant portion of its outstanding payables. Furthermore, on May 19, 2013, PMV successfully shipped 68,069 Tons of Iron Ore from Ensenada aboard a Panamax Bulker (a first for Baja California minerals), of which 45,000 Tons were that material previously sold but quarantined by the Customs authorities and only recently released, plus 23,000 Tons of other inventory. The Board believes that their actions will allow sufficient capitalization to allow sustainable operations under KMG`s new management team.
