East Asia Minerals Corp.’s board of directors has approved the settlement of up to $339,623.66 of debt through the issuance of common shares of the company. Pursuant to the debt settlement, the company would issue up to 6,792,473 common shares of the company at a deemed price of five cents per share to a creditor of the company, being the service company of the chairman and chief executive officer of the company.
The issuance of the shares to the creditor is subject to the approval of the TSX Venture Exchange and the shareholders of the company. All securities issued will be subject to a four-month hold period, which will expire on the date that is four months and one day from the date of issue.
The board of directors has also approved the settlement of up to $56,000 of debt through the issuance of common shares of the company. Pursuant to the debt settlement-2, the company would issue up to 1.12 million common shares of the company at a deemed price of five cents per share to certain creditors of the company, including certain directors and officers.
Further to the news release dated Aug. 21, 2019, and Nov. 5, 2019, whereby the company advised that in order to maintain the momentum on completing the Sangihe production licence approval, CEO Terry Filbert elected to sell shares and loan the net proceeds to the company in order to pay expenses that are necessary for this process. To this end, this debt settlement includes the settlement of debt to Mr. Filbert. The CEO is committed to the success of the company and this issue will replace the shares sold to support the company in its endeavours.
The issuance of the shares-2 to the creditors is subject to the approval of the TSX-V. All securities issued will be subject to a four-month hold period, which will expire on the date that is four months and one day from the date of issue.
As certain insiders participated in the debt settlement, it is considered to be a related party transaction under Multilateral Instrument 61-101 — Protection of Minority Security Holders in Special Transaction. All of the independent directors of the company, acting in good faith, considered the transactions and determined that the fair market value of the securities being issued to insiders and the consideration being paid is reasonable. The company intends to rely on the exemptions from the valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(a) and 5.7(a).
On behalf of the Board of Directors of East Asia Minerals,
Chairman & CEO