Vancouver, British Columbia--(Newsfile Corp. - March 9, 2020) - Southern Arc Minerals Inc. (TSXV: SA) ("Southern Arc") and Japan Gold Corp. (TSXV: JG) (OTCQB: JGLDF) ("Japan Gold") are pleased to announce that Southern Arc has agreed to the terms of an unsecured loan to Japan Gold in the principal amount of C$1 million (the "Loan"). The Loan is for a 6 month term ending on September 9, 2020. The proceeds from the Loan will be used by Japan Gold for working capital and general corporate purposes.
In consideration for the Loan, Southern Arc will receive from Japan Gold a cash fee of 5% of the amount of the Loan and 500,000 non-transferable share purchase warrants. Each warrant will entitle Southern Arc to purchase one common share of Japan Gold at $0.40 per share until March 9, 2021. Any shares issued on exercise of the Warrants are subject to a four month hold period expiring on July 10, 2020.
Southern Arc currently owns 25.87% of Japan Gold's issued and outstanding common shares. The Loan is considered a "related party transaction" for both companies pursuant to Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). Southern Arc and Japan Gold are each relying on Section 5.5(a) of MI 61-101 for an exemption from the formal valuation requirement and Section 5.7(1)(a) of MI 61-101 for an exemption from the minority shareholder approval requirement, as the fair market value of the transaction does not exceed 25% of either company's market capitalization. Southern Arc and Japan Gold have four directors in common. The terms and conditions of the Loan have been reviewed and approved by the independent directors of each of Southern Arc and Japan Gold.
On behalf of the Board of Southern Arc Minerals Inc. and Japan Gold Corp.
Chairman & CEO
About Southern Arc
About Japan Gold Corp.
For further information please contact:
Chairman & CEO of Southern Arc Minerals Inc.
Chairman & CEO of Japan Gold Corp.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as such term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Certain information contained herein constitutes "forward-looking information" under Canadian securities legislation. Forward-looking information includes, but is not limited to, statements with respect to the use of proceeds and issuance of securities. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "will be" or variations of such words and phrases or statements that certain actions, events or results "will" occur. Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made and they are subject to known and unknown risks, uncertainties and other factors that may cause the actual results to be materially different from those expressed or implied by such forward-looking statements or forward-looking information, including: the receipt of all necessary regulatory approvals, capital expenditures and other costs, and financing and additional capital requirements. Although management of Southern Arc and Japan Gold have attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements and forward looking information. Southern Arc and Japan Gold will not update any forward-looking statements or forward-looking information that are incorporated by reference herein, except as required by applicable securities laws.
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