Canada-based Harfang Exploration has agreed to acquire compatriot NewOrigin in an all-share transaction, with a goal of consolidating their assets in Quebec and Ontario.
This deal will see Harfang purchasing all issued and outstanding common shares of NewOrigin that it does not already own.
Post-transaction, NewOrigin shareholders will own around 20% of Harfang.
The share exchange ratio is set at 0.25694426 of a Harfang share for each NewOrigin share, with adjustments based on the agreement's terms.
The transaction will combine Harfang's Blakelock project in northeastern Ontario with NewOrigin's North Abitibi project.
This will result in the creation of a consolidated asset spanning over 11,000 hectares and a 25km strike length along the Casa Berardi Deformation Zone.
Before finalising the transaction, NewOrigin plans to settle outstanding accounts and loans through shares for debt transactions, issuing NewOrigin shares worth $181,110.50.
The agreement also includes a subscription agreement for a convertible debenture, where Harfang will loan $250,000 to NewOrigin at an 11.95% annual interest rate.
These funds will help NewOrigin settle accounts payable, loans, and transaction fees.
The deal will undergo a court-approved plan of arrangement and requires the clearance of the Ontario Superior Court of Justice and a two-thirds majority vote by NewOrigin shareholders.
Directors and officers of NewOrigin, representing nearly 14.09% of the outstanding shares, have agreed to support the transaction.
Harfang interim president and CEO Vincent Dubé-Bourgeois said: “The acquisition of NewOrigin comes at an opportune time for Harfang to diversify and strengthen our portfolio.
“With a new and highly engaged management team, these additional assets will accelerate our growth by increasing our ground along the Casa Berardi and gaining an underexplored asset in the incredible Pickle Lake mining camp.”
NewOrigin chairman and interim CEO Robert Valliant will become a member of the Harfang board as part of the deal.
Outlining the benefits of the deal, Valliant noted: “We can now move forward as Harfang shareholders and share in ownership of a well-funded group with demonstrated access to capital and an energetic management team.”
