Harte Gold Announces $6.0 Million Bought Deal Offering on Same Terms as Previously Announced July 16th Financing
TORONTO, Sept. 11, 2019 /CNW/ - HARTE GOLD CORP. ("Harte Gold" or the "Company") (TSX: HRT/FSE: H4O/OTC: HRTFF) is pleased to announce that it has entered into an agreement with Echelon Wealth Partners Inc. ("Echelon "), pursuant to which Echelon has agreed to purchase, on a bought deal basis, 20,000,000 flow-through common shares (the "Flow-Through Shares") of the Company at a price of $0.30 per Flow-Through Share (the "Issue Price") for gross proceeds of $6.0 million (the Offering").
The Offering will be conducted by Echelon as sole underwriter and bookrunner. The Company has granted Echelon an option to purchase up to an additional 15.0% of the Flow-Through Shares sold under the Offering at the Issue Price (the "Underwriters' Option"). The Underwriters' Option may be exercised in whole or in part to purchase Flow-Through Shares as determined by Echelon upon written notice to the Company at any time up to 48 hours prior to the closing date of the Offering.
The gross proceeds from the issuance of the Flow-Through Shares will be used for "Canadian exploration" expenses ("CEE"), and will qualify as "flow-through mining expenditures" (the "Qualifying Expenditures"), as those terms are defined in the Income Tax Act (Canada), which will be renounced with an effective date no later than December 31, 2019 to the initial purchasers of the Flow-Through Shares (other than Echelon) in an aggregate amount not less than the gross proceeds raised from the issue of the Flow-Through Shares, and, if the Qualifying Expenditures are reduced by the Canada Revenue Agency, the Company will indemnify each initial purchaser (other than Echelon) for any additional taxes payable by such subscriber as a result of the Company's failure to renounce the Qualifying Expenditures as agreed.
Harte has agreed to grant Echelon a cash commission equal to 5.0% of the gross proceeds of the Offering (including the Underwriters' Option) and that number of broker warrants ("Broker Warrants") equal to 5.0% of the number of Flow-Through Shares sold in the Offering (including the Underwriters' Option), provided that such commissions shall be reduced to 3% in respect of any Flow-Through Shares sold to purchasers on the "President's List", such list not to exceed $2,000,000. Each Broker Warrant will be exercisable into one common share at a price equal to $0.30 per common share for a period of 18 months from the closing date of the Offering.
The Offering will be completed by way of a short form prospectus to be filed in each of the provinces of Canada, with the exception of the province of Quebec, by way of a private placement in the United States, and in those jurisdictions outside of Canada and the United States which are agreed to by the Company and the Underwriters, where the Flow-Through Shares can be issued on a private placement basis, exempt from any prospectus, registration or other similar requirements.
The Offering is expected to close on or about September 27, 2019, or such other date as the Company and Echelon may agree, and is subject to customary closing conditions, including the approval of the securities regulatory authorities and the TSX.
This news release does not constitute an offer to sell or a solicitation of an offer to sell any of securities in the United States. The securities have not been and will not be registered under 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 is Ontario's newest gold producer through its wholly owned Sugar Zone Mine in White River Ontario. Using a 3 g/t gold cut-off, the NI 43-101 compliant Mineral Resource Estimate dated February 19, 2019 contains an Indicated Mineral Resource of 4,243,000 tonnes grading 8.12 g/t Au with 1,108,000 ounces contained gold and an Inferred Mineral Resource of 2,954,000 tonnes, grading 5.88 g/t Au with 558,000 ounces contained gold.
A NI 43-101 compliant Feasibility Study was completed on the Sugar Zone Mine effective February 15, 2019 calculating total Reserves of 3,879,000 tonnes grading 7.1 g/t Au with 890,000 ounces of gold. Exploration continues on the Sugar Zone Property, which encompasses 79,335 hectares covering a significant greenstone belt.
This news release includes "forward-looking statements", within the meaning of applicable securities legislation, which are based on the opinions and estimates of management and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. Forward-looking statements in this news release include statements regarding the ability of the Company to successfully complete its management and Board renewal initiative, the availability of the US$7.5 million Appian standby commitment and the Company raising additional capital on a timely basis to address short-term working capital needs. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "budget", "plan", "continue", "estimate", "expect", "forecast", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar words suggesting future outcomes or statements regarding an outlook. Such risks and uncertainties include, but are not limited to, there being no events of default or breaches of key financing agreements, including agreements with BNP Paribas and Appian; the Company being able to attract and retain qualified candidates to join the Company's management team and Board, risks associated with the mining industry, including operational risks in exploration, development and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections in relation to production, costs and expenses; the uncertainty surrounding the ability of the Company to obtain all permits, consents or authorizations required for its operations and activities; and health, safety and environmental risks, the risk of commodity price and foreign exchange rate fluctuations, the ability of Harte Gold to fund the capital and operating expenses necessary to achieve the business objectives of Harte Gold, the uncertainty associated with commercial negotiations and negotiating with foreign governments and risks associated with international business activities, as well as those risks described in public disclosure documents filed by the Company. Due to the risks, uncertainties and assumptions inherent in forward-looking statements, prospective investors in securities of the Company should not place undue reliance on these forward-looking statements. Readers are cautioned that the foregoing list of risks, uncertainties and other factors are not exhaustive. The forward-looking statements contained in this news release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or in any other documents filed with Canadian securities regulatory authorities, whether as a result of new information, future events or otherwise, except in accordance with applicable securities laws. The forward-looking statements are expressly qualified by this cautionary statement. The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.