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Soma Gold Corp. (TSXV: SOMA,OTC:SMAGF) (WKN: A2P4DU) (OTC: SMAGF) (the "Company" or "Soma") is pleased to announce that it has arranged an unsecured revolving credit facility (the "Credit Facility") of up to C$2,500,000 from Hampson Equities Ltd. (the "Lender"), a company controlled by Geoff Hampson, CEO and Chairman of the Company. Soma intends to use the proceeds from the Credit Facility for working capital purposes and to support the purchase of mineralized material from third-party producers in Colombia.
The Credit Facility is documented as a revolving credit note, under which the Lender has agreed to make advances to the Company from time to time up to the maximum principal amount, and amounts repaid may be reborrowed. Advances bear interest at a fixed rate of 6.00% per annum, and each advance, together with accrued interest, is repayable six (6) months after the date of such advance, subject to the Lender's right to demand repayment on five (5) business days' written notice. The Company is allowed to prepay each advance without penalty or premium.
As the Lender is controlled by an insider of the Company, the Credit Facility constitutes a "related party transaction" for the purposes of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The Company is relying on the exemptions from the formal valuation and minority shareholder approval requirements contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101, as the fair market value of the Credit Facility does not exceed 25% of the Company's market capitalization. The Credit Facility was reviewed and approved by the Board of Directors of the Company, with Geoff Hampson, an interested director, declaring his interest and abstaining from voting.
Sergio Rios, President of the Company, states, "This Credit Facility allows Soma to enter into agreements with mineral rights holders who are mining properties that are near to the Company's milling facilities, whereby the Company purchases the mineralized material in advance of processing. The Credit Facility allows the Company to bridge the timing gap between the purchase of the rock and the sale of the resultant gold."
ABOUT SOMA GOLD
Soma Gold Corp. (TSXV: SOMA,OTC:SMAGF) is a mining company focused on gold production and exploration. The Company owns two adjacent mining properties in Antioquia, Colombia, with a combined milling capacity of 675 TPD (Permitted for 1,400 TPD). The El Bagre Mill is currently operating and producing. Internally generated funds are being used to finance a regional exploration program.
With a solid commitment to sustainability and community engagement, Soma Gold Corp. is dedicated to achieving excellence in all aspects of its operations.
The Company also owns an exploration property near Tucuma, Para State, Brazil that is currently under option to Ero Copper Corp.
On behalf of the Board of Directors
"Wylie Hui"
Chief Financial Officer
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
All statements, analysis and other information contained in this press release about anticipated future events or results constitute forward-looking statements, including statements regarding the intended use of proceeds of the Credit Facility, the availability of advances under the Credit Facility and the Company's plans to purchase mineralized material from third-party producers. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "believe", "plan", "estimate", "expect" and "intend" and statements that an event or result "may", "will", "should", "could" or "might" occur or be achieved and other similar expressions. Forward-looking statements are subject to business and economic risks and uncertainties and other factors that could cause actual results of operations to differ materially from those contained in the forward-looking statements, including the risk that the Lender demands repayment of amounts outstanding under the Credit Facility. Forward-looking statements are based on estimates and opinions of management at the date the statements are made. The Company does not undertake any obligation to update forward-looking statements even if circumstances or management's estimates or opinions should change except as required by applicable laws. Investors should not place undue reliance on forward-looking statements.
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SOURCE Soma Gold Corp.
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