Soma Gold lines up $1.76M credit line from its own chairman
What's the deal? Soma Gold Corp.Dealroom has a profile for this one. Try Dealroom → (TSXV: SOMA) has arranged an unsecured revolving credit facility of up to US$1.83M. The lender is Hampson Equities Ltd.Dealroom has a profile for this one. Try Dealroom →, a company controlled by Geoff Hampson, Soma's chief executive officer and chairman.
How it works: Advances carry a fixed 6% annual interest rate and are repayable six months after each draw, subject to the lender's right to demand repayment on five business days' notice. Soma can reborrow repaid amounts and prepay without penalty.
What's the money for? Soma plans to use the proceeds for working capital and to buy mineralized material from third-party producers in Colombia.
Why now? President Sergio Rios said the facility lets Soma buy ore from nearby mineral rights holders ahead of processing. It "allows the Company to bridge the timing gap between the purchase of the rock and the sale of the resultant gold," he said.
What's the endgame? Soma owns two adjacent properties in Antioquia, Colombia, with combined milling capacity of 675 TPD and permits for 1,400 TPD. Its El Bagre Mill is producing, and internally generated funds are financing a regional exploration program.
What could go wrong? Because the lender is controlled by an insider, the facility is a related-party transaction under Multilateral Instrument 61-101. Soma is relying on exemptions from formal valuation and minority shareholder approval, as the facility's value stays below 25% of its market capitalization; Hampson abstained from the board vote.
The signal: For a small producer, tapping its own chairman for short-term credit is a quick, low-friction way to fund inventory without diluting shareholders — a common move for junior miners managing cash-flow timing.
Read more: pr.sacramentooracle.com
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