News Releases

Kaizen Discovery announces US$2.15 million short-term loan from HPX TechCo

December 23, 2019

Kaizen Discovery Inc. (TSXV: KZD)is pleased to announce the arrangement of a short-term loan of US$2.15 million under an unsecured promissory note provided by its majority shareholder HPX TechCo Inc. (“HPX”); a wholly-owned subsidiary of High Power Exploration Inc. The unsecured Loan has a maturity date of June 30, 2020, and has an interest rate of 10% per annum, compounding only at maturity. The interest rate will increase to 12% per annum in the event that Kaizen does not repay the amount owing upon the maturity date.

The Loan constitutes a “related party transaction” under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (MI 61-101) as HPX is a related party of Kaizen given its greater than 10% 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.

The Company intends to use the proceeds for exploration of the Pinaya copper-gold project in Peru and for general working capital purposes.

Please see Kaizen’s news release for more information.

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