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Harte Gold Announces $27 Million Bought Deal Private Placement

/EIN News/ -- TORONTO, Dec. 12, 2017 (GLOBE NEWSWIRE) -- HARTE GOLD CORP. (“Harte Gold”) (TSX:HRT) (OTC:HRTFF) (Frankfurt:H4O) is pleased to announce a Bought Deal Private Placement (the “Offering”) of approximately 55.3 million common shares at C$0.47 per common share and approximately 1.8 million flow through common shares at C$0.56 per flow-through common share for total gross proceeds of approximately C$27 million.

Appian Natural Resources Fund (“Appian”) intends to participate on a pro rata basis in the Offering, increasing its shareholding to approximately 19.99% and a significant new shareholder, Orion Mine Finance II LP (“Orion”), will invest US$15 million.

Stephen G. Roman, President and CEO of Harte Gold commented, “We appreciate the on-going support of our largest shareholder, Appian, and welcome Orion as a new shareholder in the Company. On completion of the financing we will have two significant resource capital partners with whom we look forward to collaborating on the completion of the construction of the Sugar Zone Mine.”

Pursuant to the Offering, Harte Gold will provide Appian and Orion rights to the following:

  • Off-take for a portion of the gold doré production from the Sugar Zone Mine at LME spot price; and
  • First offer on any future acquisition financing, as may be contemplated by the Company.

Orion has also confirmed its interest to provide project financing for the construction of the Sugar Zone Mine and has been provided a right to match any such project financing, at the indicative term sheet stage only.

Bought Deal Private Placement

Harte Gold has entered into an agreement with Cantor Fitzgerald Canada Corporation (“Cantor Fitzgerald”), pursuant to which Cantor Fitzgerald has agreed to purchase 57,085,409 common shares of the Company (“Common Shares”) for aggregate gross proceeds of C$26,990,856.

The Offering will consist of two tranches. The first tranche will consist of 55,299,694 Common Shares and will be issued at a price of C$0.47 per Common Share. The second tranche will consist of 1,785,715 common shares of the Company that qualify as "flow-through shares" for the purposes of the Income Tax Act (Canada) ("FT Shares") and will be issued at a price of C$0.56 per FT Share.

The net proceeds raised from the sale of common shares will be used to fund continued development of the Sugar Zone Property including mill construction, an updated resource estimate, NI 43-101 Technical Report and general working capital purposes. Gross proceeds from the sale of FT Shares will be spent on exploration in the Province of Ontario that will qualify as "Canadian Exploration Expenses" ("CEE") and "flow-through mining expenditures" for purposes of the Income Tax Act (Canada) and as "eligible Ontario exploration expenditures" within the meaning of the Taxation Act, 2007 (Ontario).

The Company has granted the underwriters an option (the “Underwriter’s Option”) to purchase up to an additional 15% of Common Shares and FT Shares in the capital of the Company to be sold pursuant to the Offering, exercisable at any time prior to the Closing Date, for additional gross proceeds of up to  C$4 million.  The Offering is scheduled to close on or about December 22, 2017 and is subject to certain conditions, including, but not limited to, the receipt of all necessary regulatory and other approvals including the approval of the Toronto Stock Exchange and the securities regulatory authorities.

Appian, through a wholly-owned subsidiary, intends to acquire 14,262,194 Common Shares in the Offering (or 15,973,900 Common Shares if the Underwriter’s Option is fully exercised) for gross proceeds to Harte Gold of C$6,703,231 (or C$7,507,733 if the Underwriter’s Option is fully exercised). Appian currently owns, directly or indirectly, an aggregate of 96,807,445 Common Shares, or approximately 19.42% of Harte Gold’s issued and outstanding Common Shares. Following completion of the Offering, Appian will own, directly or indirectly, an aggregate of 111,069,639 Common Shares (or 112,781,345 Common Shares if the Underwriter’s Option is fully exercised) representing approximately 19.99% of the issued and outstanding Common Shares.
                                                              
The sale of Common Shares to Appian under the Offering will be a “related party transaction” as defined in Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). Harte Gold will be exempt from the requirements to obtain a formal valuation or minority shareholder approval in connection with the Offering in reliance on sections 5.5(a) and 5.7(a), respectively, of MI 61-101, as the fair market value of the Common Shares issued to Appian will not exceed 25% of Harte Gold’s market capitalization calculated in accordance with MI 61- 101. Harte Gold did not file a material change report 21 days prior to the closing of the Offering as the details of Appian’s participation had not been confirmed at that time.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

About Harte Gold Corp.

Harte Gold Corp. is focused on the exploration and development of its 100% owned Sugar Zone property where it has recently completed a 70,000 tonne Advanced Exploration Bulk Sample at the Sugar Zone Deposit and received a Phase I Production Permit. The Sugar Zone property is located 80 kilometres east of the Hemlo Gold Camp. The Preliminary Economic Assessment dated July 12, 2012, contains an Indicated Resource of 980,900 tonnes, grading 10.13 g/t for 319,280 ounces of contained gold (uncapped) and an Inferred Resource of 580,500 tonnes, grading 8.36 g/t Au for 155,960 ounces of contained gold (uncapped). The mineral resource was prepared in compliance with NI 43-101 guidelines. Harte Gold also holds the Stoughton-Abitibi property located on the Destor-Porcupine Fault Zone adjacent and on strike of the Holloway Gold Mine.

For further information, please contact:

Stephen G. Roman                                                                                
President and CEO                                                                
Tel: 416-368-0999                                                                   
Email: sgr@hartegold.com                                                 

Shawn Howarth
VP Corporate Development
Tel: 416-368-0999
E-mail: sh@hartegold.com

The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.


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