TSX-V-listed Harfang Exploration and LaSalle Exploration have entered into a definitive arrangement agreement, dated January 5, pursuant to which Harfang will acquire all of the issued and outstanding shares of LaSalle.
The transaction will be carried out by way of a plan of arrangement under the Business Corporations Act.
Under the terms of the arrangement, LaSalle shareholders will receive, on a pre-consolidation basis, 0.3908 of a Harfang common share for each LaSalle share held.
Upon completion of the arrangement, it is expected that the shareholders of LaSalle will hold about 35.5% of Harfang’s issued and outstanding shares – prior to a concurrent offering.
Concurrently with the arrangement, Harfang proposes to complete, on a post-consolidation basis, a nonbrokered private placement of subscription receipts for between $1-million and $5-million.
The offering is anticipated to close on or before January 31. Harfang intends to use the net proceeds of the offering, once released by the escrow agent following completion of the escrow release conditions, to continue its exploration programmes on the combined Serpent and Radisson properties and for general corporate purposes.
The LaSalle management and board, holding 5.1% of the LaSalle shares, are supportive of the transaction and have entered into support agreements with Harfang to vote their LaSalle shares in favour of the arrangement.
LaSalle CEO Ian Campbell and corporate development VP Ron Stewart will continue in their positions to lead the combined company, which is posited to deliver LaSalle shareholders a quality geological and financial team in a much stronger exploration vehicle.
At the closing of the arrangement, Campbell will be appointed president and CEO and Stewart corporate development VP. François Huot will remain exploration VP and Yvon Robert CFO.
The transaction will consolidate the contiguous gold exploration assets of LaSalle’s Radisson and Harfang’s Serpent properties, in the James Bay region of Québec.
Both properties are posited to benefit from operational efficiency, synergies and a combined exploration strategy as the projects advance, along with an exploration portfolio of high-quality gold assets in Québec and Ontario.
The integration of the Radisson property will add 6 km of strike of potential mineralisation to the Serpent gold-bearing structures. Drill-ready targets within the consolidated project portfolio are said to offer compelling value-creation potential to shareholders of the combined company.
If the arrangement is completed, the LaSalle shares will be delisted from the TSX-V.