GobiMin Inc has agreed to extend the repayment term from April 6, 2017 to October 6, 2017 with respect to a US$4 million revolving, term loan facility bearing an interest rate of 3.5% per annum in favour of China Precision Material Limited (CPML), a non-arm’s length party.
All the other terms of the loan agreement remain unchanged. GobiMin may demand repayment of principal and interest anytime with a three day notice. The outstanding principal amount of the loan is currently US$3.5 million.
GobiMin owns a 10.06% indirect equity interest in CPML which engages in the trading of metals, predominately silver, in Hong Kong.
The loan is considered a ‘related party transaction’ under Multilateral Instrument 61-101 ‘Protection of Minority Security Holders in Special Transactions’ (MI 61-101).
The company is relying on Sections 5.5(a) and 5.7(1)(a) of MI 61-101, respectively, for exemptions from the formal valuation and minority approval requirements under MI 61-101, as the amount of the loan to CPML does not exceed 25% of the corporation’s market capitalisation.
Extension of the loan is subject to receipt of all applicable regulatory and exchange approvals.
GobiMin is a TSX-V listed company with mining interests in China, primarily in Xinjiang Uygur Autonomous Region in the country’s west. The company holds a 70% equity interest in a company incorporated in China to explore, develop and operate the Sawayaerdun Gold Project in Xinjiang.