Mr. Rod Husband reports
CONVERTIBLE LOAN FINANCING ARRANGED
Majestic Gold Corp. has arranged a$10-million loan to advance its Song Jiagou project in China. A total of $9-million from theproceeds from the loan will be used by the company in connection with its Song Jiagou project and thebalance of $1-million for general working capital purposes.
The loan will have a one-year term and loan principal will be convertible at the option of the lender inwhole or in part into common shares of the company until 12 months from the date of theloan advance at the price of 20.5 cents per share. The loan will bear interest at the rate of 7.5 per cent per year,payable on maturity, and accrued and unpaid interest will be convertible at the option of the lender inwhole or in part into shares of the company until 12 months from the date of the loan advance atmarket price at the time of conversion.
The lender is at arm's length from the company and will not become an insider as a result of anyconversion of principal and interest. All shares issued on any conversion of loan principal or interest willbe subject to a four-month hold period from the date of advance of loan proceeds. The loan is subject toacceptance by the TSX Venture Exchange.