Cordoba Minerals Corp. (TSX-V:CDB; OTCQB:CDBMF)announced that the Company has arranged for a short-term loan of US$425,000 from its majority shareholder, High Power Exploration Inc. (“HPX”). The Loan is in addition to the US$500,000 short-term loan provided by HPX in September 2019 (refer to Cordoba’s news release dated September 25, 2019). The Loan has been provided in the form of a grid promissory note and bears interest at 10%, compounding only at maturity. The interest rate will increase to 12% per annum in the event that Cordoba does not repay the amount owing upon the December 31, 2019 maturity date. The purpose of the Loan is to cover short term general administrative activities.
The Loan is considered a “related party transaction” under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”) because HPX is a related party to Cordoba as the majority shareholder. Pursuant to Section 5.5(b) and 5.7(1)(a) of MI 61-101, Cordoba is exempt from obtaining a formal valuation and approval of Cordoba’s minority shareholders as Cordoba is listed on the TSX Venture Exchange and the fair market value of the Loan is less than 25% of Cordoba’s market capitalization for purposes of MI 61-101.
Cordoba 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 issuance of the Loan, which is consistent with market practice and Cordoba deems reasonable in the circumstances.