Gold Reach Resources Ltd. (TSX-V:GRV) is pleased to announce that it anticipates a pending refund of approximately $1,700,000 arising from the Company’s claim for refundable B.C. Mineral Exploration Tax Credits.
During the fiscal year ended March 31, 2014, the Company incurred qualified exploration expenditures in British Columbia on the Ootsa Property located within the prescribed Mountain Pine Beetle affected area that qualify for an enhanced tax credit refund of 30% of qualifying expenditures. Based on the Company’s recently filed T2 Corporate income tax return for the year ended March 31, 2014, a refund in excess of $1,700,000 is anticipated. Receipt of the refund is expected sometime between July 2014 and October 2014 and it is subject to a Canada Revenue Agency review and possible audit.
To access a portion of this anticipated refund for the use on the 2014 Ootsa exploration program, the Company has entered into a $1,000,000 bridge loan agreement whereby the lender will advance the Company the loan amount bearing interest at 12% per annum to be accrued and compounded quarterly. The Loan and accrued interest will be secured by a first and floating charge on the BCMETC refund total. Repayment of the Loan’s principal amount and payment of the accrued interest thereon are both due on the earlier of twelve months from the date of the original Loan advance or within three days of the Company’s receipt of the BCMETC refund. On the date of the Loan advance the Company will issue 500,000 common share warrants entitling the lender to purchase one common share at any time on or before the Maturity Date at an exercise price per share equal to $0.80.
Shares acquired by the lender from the exercise of Warrants are subject to a four-month hold period commencing from the date of issue of the Warrants.
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