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Harte Gold raising C$27M for Sugar Zone development, exploration

Harte Gold Corp. said Dec. 12 that it signed an agreement engaging Cantor Fitzgerald Canada Corp. for a bought-deal private placement of 57,085,409 shares to raise gross proceeds of approximately C$27.0 million.

The offering is expected to close on or around Dec. 22, with flow-through proceeds earmarked for exploration in Ontario and the remainder to be used for the continued development of the preproduction-stage Sugar Zone gold project in Ontario and for general working capital.

At Sugar Zone, Harte Gold is planning mill construction and an updated resource estimate.

The offering will consist of two tranches, the first comprising 55,299,694 common shares at 47 cents each and the second comprising 1,785,715 flow-through common shares at 56 cents each. Harte Gold also granted the underwriter an overallotment option to purchase up to a further 15% of the shares offered at any time before closing, for additional gross proceeds of up to C$4 million.

Appian Natural Resources Fund, the company's largest shareholder, intends to participate on a pro rata basis, subscribing for 14,262,194 common shares for about C$6.7 million and raising its stake in Harte Gold from approximately 19.42% to 19.99%.

Orion Mine Finance II LP will invest US$15 million in Harte Gold by participating in the offering, and it expressed interest in providing project financing for the construction of Harte Gold's Sugar Zone operation.

Pursuant to the deal, Harte Gold will grant Appian and Orion rights for an off-take deal over a portion of the gold doré produced at Sugar Zone and first offer on any future acquisition financing.

Harte Gold also raised C$25 million in early July for the Sugar Zone development.