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Highlights
- Euromax Resources to issue an unsecured promissory note to Galena Resource Equities
- Funding to support immediate working capital needs
- Transaction qualifies as a related party transaction under securities regulations
Operating within the mining and natural resources sector, Euromax Resources Ltd (TSX:CVE). has provided an update concerning its latest financial arrangements. The company, which focuses on the development of mineral resource projects, has confirmed that it will issue a promissory note as a means of securing short-term liquidity.
Details of the Promissory Note
Euromax Resources has agreed to issue a non-interest bearing, unsecured, and non-convertible promissory note to Galena Resource Equities Limited. Galena is one of Euromax’s significant shareholders and is managed by Galena Asset Management, an affiliate of Trafigura Pte Ltd. The financing agreement is intended to support the company’s immediate working capital requirements.
Absence of Operational Cash Flow
The company has indicated that it currently lacks an operational cash flow stream. As such, the proceeds from the promissory note are expected to serve as a bridge to maintain ongoing corporate functions and commitments. Euromax also signaled that additional financial support may be necessary later in the year, depending on future developments.
Regulatory Classification of the Transaction
The transaction qualifies as a related party transaction under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions. Galena’s shareholding exceeds the minimum threshold that defines a related party status under the regulation.
Despite this classification, the transaction is exempt from the formal valuation requirement under Section 5.4 and from the minority approval requirement under Section 5.6 of the same instrument. These exemptions apply due to the nature of the transaction and specific provisions outlined in subsections 5.5(b) and 5.7(f).
Filing of Material Change Report
Euromax did not issue a material change report a full three weeks ahead of the transaction, which is typically required under regulatory guidelines. The company cited the urgent need to secure funding in a timely manner as the reason for this expedited approach.
Background on Galena and Affiliations
Galena Resource Equities is managed by Galena Asset Management S.A., an entity affiliated with Trafigura Pte Ltd., a global commodities trading group. Galena’s position as a principal shareholder places it in a key strategic position with respect to Euromax’s financial direction.
