Business
Majestic Announces Cancellation of Intercompany Debt
VANCOUVER, BC / ACCESSWIRE / June 15, 2020 / Majestic Gold Corp. (" Majestic " or the " Comp...
About this update from Majestic Gold Corp.
[{"type":"text","content":"Majestic Announces Cancellation of Intercompany DebtVANCOUVER, BC / ACCESSWIRE / June 15, 2020 / Majestic Gold Corp. (\"Majestic\" or the \"Company\") (TSXV:MJS) announces that it has cancelled intercorporate debt (the \"Debt Cancellation\") in the total aggregate amount of CAD$62,073,046 (the \"Debt\") owed to the Company by its 94% owned subsidiary, Sinogold Resources Holdings Group Co., Ltd. (\"Sinogold\"). Since Sinogold is a subsidiary of the Company, the Consolidated Statements of Financial Position of the Company do not present the intercompany loans as the loan receivable of the parent company is a loan payable of the subsidiary which offset and eliminate against each other on the Consolidated Statements of Financial Position with any currency exchange differences recorded to foreign exchange translation reserves on the Consolidated Statements of Changes in Equity. The Company has determined the Debt Cancellation will not have any material effect on the Company's business and affairs.Sinogold is a related party to the Company because it is a subsidiary of the Company, but since it is 94% owned (instead of 100% owned), it is a \"related party transaction\" pursuant to Multilateral Instrument 61-101-Protection of Minority Security Holders in Special Transactions (\"MI 61-101\"). Consequently, the Company is obligated to announce the Debt Cancellation under MI 61-101 which was formalized in an agreement between the Company and Sinogold dated June 4, 2020 pursuant to which the Company agreed to cancel the Debt in exchange for a mutual release between the companies, subject to approval of the directors of each of the companies, approval of the TSX Venture Exchange (the \"Exchange\"), and written approval of arm's length shareholders holding a total aggregate of at least 50% of the common shares of the Company in accordance with the policies of the Exchange.The board of directors of the Company have unanimously approved of the proposed Debt Cancellation, which was also approved in writing by the arm's length shareholders holding at least 50% of the common shares of the Company. Likewise, the Company has also received conditional approval from the Exchange dated June 8, 2020 for approval of the Debt Cancellation. As a result of the Debt Cancellation, there is no change in the percentage ownership of the Company by anyone. The C...