Japan Gold Announces US$1 Million Convertible Debenture Financing

Executive Summary

• Japan Gold Corp. announced a non-brokered private placement of unsecured convertible debentures for gross proceeds of US$1,000,000 (CDN$1,393,000) to strategic investor and major shareholder Equinox Partners Investment Management, LLC.
• The debentures carry a 10% annual interest rate, mature in three years, and provide the company with the option to settle principal and accrued interest in cash or common shares based on specific pricing formulas.
• Proceeds will be utilized for general working capital, with the transaction structured as a related party transaction under MI 61-101, relying on exemptions from formal valuation and minority shareholder approval requirements.

Key Details

• Gross Proceeds: US$1,000,000 (CDN$1,393,000)
• Instrument: Non-brokered private placement of unsecured convertible debentures
• Investor: Equinox Partners Investment Management, LLC (strategic investor & major shareholder)
• Maturity Date: Three years from the date of issuance
• Interest Rate: 10% per annum (non-compounded), accruing daily but payable in cash only at maturity, upon an Event of Default, or upon early redemption
• Redemption/Conversion Mechanism: The Company may elect to satisfy cash obligations by delivering common shares at a price per share equal to the greater of: (i) the most recent TSXV market price on the payment date, (ii) $0.11, or (iii) the conversion price of debt in a "Future Financing Event" (defined as a subsequent private placement of ≥CDN$2,000,000 within 12 months of closing)
• Use of Proceeds: General working capital purposes
• Hold Period: Four-month statutory hold period from the date of issuance for the debentures and any convertible securities
• Regulatory & Compliance Status: Subject to final TSX Venture Exchange approval; classified as a related party transaction under MI 61-101, with exemptions from formal valuation and minority shareholder approval relied upon as the fair market value does not exceed 25% of the Company's market capitalization
• Post-Closing Shareholding: Equinox will hold 90,133,518 shares, representing approximately 29.32% of the issued and outstanding common shares, and will be subject to alternative monthly reporting under NI 62-103.