Mr. Eric Finlayson reports
KAIZEN DISCOVERY ANNOUNCES ADDITIONAL US$642,000 SHORT-TERM LOAN FROM HPX TECHCO
Kaizen Discovery Inc. has arranged an additional $642,000 (U.S.) short-term loan from its majority shareholder HPX TechCo Inc., a wholly owned subsidiary of High Power Exploration Inc.
"We appreciate the continued support of our majority shareholder HPX as we continue to make preparations for a new phase of exploration at our 100-per-cent-owned Pinaya copper-gold project in Peru," commented Eric Finlayson, interim president and chief executive officer.
HPX will advance funds under the loan at its discretion from time to time upon request by Kaizen prior to the maturity date. The loan is in addition to the existing short-term loan of $3.40-million (U.S.) from HPX. Kaizen has issued to HPX a second amended and restated unsecured promissory note that replaces the amended unsecured promissory note covering the existing short-term loan that was due on Dec. 31, 2020 (refer to Kaizen's news release dated Aug. 6, 2020). The second amended promissory note evidences the total of up to $4.04-million (U.S.) plus interest that will be owed to HPX and reflects a maturity date for all amounts owing as of Sept. 30, 2021. The loan has an interest rate of 10 per cent per annum, compounding only at maturity.
The company intends to use the proceeds from the loan for general working capital purposes.
The loan constitutes a related party transaction under Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions as HPX is a related party of Kaizen given its greater than 10-per-cent beneficial shareholding. Pursuant to Section 5.7(1)(f) of MI 61-101, the company is exempt from obtaining minority approval of the company's shareholders in respect of the loan because it was determined that the loan is on reasonable commercial terms that are not less advantageous to the company than if the loan was obtained from a person dealing at arm's length with the company and because the loan is not convertible into, or repayable in, equity or voting securities of the company or a subsidiary of the company or otherwise participating in nature. The company will file a material change report in respect of the loan. However, the material change report will be filed less than 21 days prior to the closing of the loan, which is consistent with market practice and which the company deems is reasonable in the circumstances.
About Kaizen Discovery Inc.
Kaizen is a Canadian mineral exploration and development company with exploration projects in Peru and Canada.
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