Harfang agrees to acquire NewOrigin Gold
Harfang Exploration Inc. [HAR-TSXV] has agreed to acquire all the issued and outstanding shares of NewOrigin Gold Corp [NEWO-TSXV] that is doesn’t already own, a move that that aims to consolidate the two companies’ exploration assets in Ontario and Quebec, including Abitibi and James Bay.
“The acquisition of NewOrigin comes at an opportune time for Harfang to diversify and strengthen our portfolio,’’ said Harfang Interim President and CEO Vincent Dube-Bourgeois, adding that the move should boost the potential for discovery. The deal is also expected to benefit the combined company’s ability to rapidly advance NewOrigin’s key properties at Sky Lake (northwestern Ontario) and North Abitibi (Larder Lake Mining Division 20 kilometres west of the Ontario/Quebec border).
Under the terms of the transaction, the expected share exchange ratio is 0.25694426 of a Harfang share for each NewOrigin share. The exchange ratio implies a purchase price of $0.0229 per NewOrigin share, implying a value of $1.44 million, based on the 10-day volume weighted average price of Harfang shares of $0.0893 on August 8, 2024.
Prior to closing, NewOrigin expects to complete a series of shares for debt transactions, meaning it will issue NewOrigin shares to settle several outstanding accounts and loans, currently payable to certain current and former directors and officers of NewOrigin, and service providers for a total amount of $181,110.
Assuming the shares for debt transactions are settled, NewOrigin expects to issue 6.04 million shares at a deemed price of $0.03 per share. The shares for debt transactions are being consummated at approximately a 50% premium to the volume weighted average price of NewOrigin shares ending August 8, 2024.
Directors and officers of NewOrigin holding approximately 14.09% of the shares outstanding have entered into customary support agreements with Harfang to vote their shares in favour of the transaction.
Key benefits to shareholders of both companies include a 25-kilometre strike length along the prolific Casa Berardi Deformation Zone that combines Harfang’s Blakelock project and NewOrigin’s North Abitibi project, resulting in a consolidated area of over 11,000 hectares.
Another benefit is the Sky Lake Gold Project, which covers 9,100 hectares over a 27-kilometre strike length of a favourable geological setting in Ontario’s Patricia Mining Division.
The companies said the transaction will result in a more balanced overall portfolio in Quebec and Ontario, allowing Harfang to explore year-round and benefit from Ontario’s infrastructure.
Harfang shares were unchanged at 10 cents, Friday, and currently trade in a 52-week range of 23 cents and $0.07. NewOrigin shares were also unchanged at $0.02 and trade in a 52-week range of $0.045 and $0.01.
Harfang and Quebec Precious Metals Corp. [QPM-TSXV, CJCFF-OTCQB] recently said the had identified high-priority gold and lithium drill targets on their Serpent-Radisson, and Sakami projects in Eeyou Istchee, James Bay, Que.