Toronto-listed New Gold has agreed to make a strategic investment in fellow-listed Harte Gold by way of a private placement subscription of 154 940 153 shares at C$0.16 a share.
This will raise Harte Gold gross proceeds of C$24.8-million and provide New Gold with a 14.9% interest in the company’s shares.
“New Gold’s investment represents more than just a significant financing – it is an endorsement of the potential of the Sugar Zone mine and property, and a vote of confidence that Harte Gold’s operational team will continue to deliver on our impending growth strategy,” said Harte Gold president and CEO Frazer Bourchier.
He added that New Gold’s investment was more a catalyst to accelerate development and the future expansion of the Sugar Zone mine, in White River, targeting 100 000 oz/y by 2023.
“We are excited to embark on this relationship,” said Bourchier.
Meanwhile, Harte Gold announced that it had received a nonbinding indicative proposal from BNP Paribas to reschedule about C$50-million of the scheduled amortisation payments under the company’s senior debt facility.
This would provide the miner with more financial flexibility over the next two years.