Funds made available through a 6-month line of credit will allow Major General Resources (VSE) to initiate a winter drilling program at its wholly owned Meen Lake, McVean Lake and First Loon properties in the Pickle Lake belt of northwestern Ontario. The company’s bank has agreed to provide a $200,000 line of credit guaranteed by certain company insiders and other individuals. If Major General’s debt to the bank is not repaid within six months, the debt outstanding will be converted to a 12-month loan from the guarantors.
Under the agreement, the guarantors have the option of converting their common shares in Major General at 42 cents per share during the 6-month term. Guarantors will be issued at a total of 95,238 common shares in consideration of the loan guarantee.
Both the line of credit and the loan guarantee arrangement are subject to regulatory approval.
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