Harfang and LaSalle announce merger and concurrent financing with a strategic investment from Monarch Mining Corporation
Harfang and LaSalle announce merger and concurrent financing with a
strategic investment from Monarch Mining Corporation
Montréal, QC and Vancouver, B.C.– January 6, 2022 – Harfang Exploration Inc. (“Harfang”) (TSX.V:
HAR) and LaSalle Exploration Corp. (“ LaSalle”) (TSX-V: LSX) are pleased to announce that they
have entered into a definitive Arrangement Agreement dated January 5, 2022 (the “Agreement”)
pursuant to which Harfang will acquire all of the issued and outstanding shares of LaSalle (the
“LaSalle Shares”). The transaction will be carried out by way of a plan of arrangement under the
Business Corporations Act (British Columbia) (the “Arrangement”).
Under the terms of th e Arrangement, LaSalle shareholders will receive , on a pre-consolidation
basis (further details on the proposed Harfang share consolidation below) , 0.3908 of a Harfang
common share (the “ Harfang Shares ”) for each LaSalle Share. The exchange ratio implies a
consideration of $0.0968 per LaSalle Share based on the 3 0-day volume weighted average price
(“VWAP”) of the Harfang Shares and the LaSalle Shares on the TSX Venture Exchange (“TSX-V”)
on December 22, 2021. Upon completion of the Arrangement, it is expected that the shareholders
of LaSalle will hold approximately 35.5% of Harfang’s issued and outstanding shares (prior to the
concurrent Offering).
The LaSalle management and board, representing 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’s CEO, Ian Campbell, and VP Corporate
Development, Ron Stewart will continue their positions to lead the combined company, which
will deliver LaSalle shareholders an exceptional geological and financial team in a much stronger
exploration vehicle. See details below.
Dan Innes, Chairman of LaSalle comment ed, “This transaction represents a compelling
opportunity to accelerate the growth strategy of LaSalle in all aspects from exploration, access to
capital and additional accretive transactions. It delivers to both LaSalle and Harfang shareholders
the platform to create an industry leader guided by an experienced managem ent team, an
exceptionally strong board, a highly prospective portfolio of exploration assets, the financial
resources and access to capital to advance our projects and realize their full potential.”
André Gaumond, Chairman of Harfang added, “We are delighted to be entering into a transaction
between LaSalle and Harfang. It is an excellent strategic and cultural fit for both companies,
creating a far stronger platform that has already been embraced by the Quebec institutional
funds. The new Harfang will be larger, more relevant and benefit from the significant synergies
unlocked by the transaction.”
Transaction Highlights
The transaction will consolidate the contiguous gold exploration assets of Lasalle’s Radisson and
Harfang’s Serpent properties, James Bay Region, Québec, both of which will 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 mineralization to the
Serpent gold bearing structures, further solidifying Harfang as the largest mineral claim holder in
the region totalling 508.4 km2. Drill-ready targets within the consolidated project portfolio offer
compelling value creation potential to shareholders of the combined company.
Figure 1. Location of the major gold corridor straddling the limit between the Serpent and
Radisson properties.
The transaction offers several positive direct benefits to the shareholders of Harfang and LaSalle,
including, the following:
• Highly qualified board and management team with a track record of success;
• Solid platform for further consolidation and growth opportunities;
• $9.8M in treasury, excluding the proceeds under the concurrent Offering for total
maximum gross proceeds of $5M;
• Accelerating the exploration of a new district-scale gold corridor in the James Bay Region,
QC, by merging Serpent and Radisson properties (total surface area of 508.4 km2);
• Numerous drill ready targets and blue-sky exploration potential;
• LaSalle and Harfang to commence a combined minimum 6,000 metre drill program on the
Serpent-Radisson property;
• Strong portfolio of exploration properties from which to unlock shareholder value.
Ian Campbell, President and CEO of LaSalle and incoming President and CEO of Harfang
commented, “I am very excited about leading the team and to what this transaction represents
for all of our shareholders as we open this new chapter. Ron and I are very much looking forward
to joining forces with Francois Huot and Yvon Robert and leveraging our broad range of skillsets ,
adding value through focused exploration, unlocking value in all our projects and the platform
which opens up tremendous potential for further consolidation and growth opportunities.”
Strong Board and Management
The Arrangement brings together a highly experienced team of mining industry professionals with
the Board to be composed of:
• Jean-Pierre Janson as Chairman, current Chairman of Midland Exploration
• André Gaumond, Former President of Virginia Mines
• Daniel Innes, Founder and original CEO, Lake Shore Gold Corp.
• Ian Campbell, President and CEO of LaSalle Exploration Corp.
• Sylvie Prud’homme, former Manager, Investor Relations at Osisko Mining Corporation
• Karen Rees, Former VP Exploration and Corporate Secretary at Temex Resources Corp.
• Vincent Dubé-Bourgeois, CEO of GoldSpot Discoveries Corp.
At the closing of the Arrangement, Ian Cam pbell will be appointed as President and Chief
Executive Officer, Ron Stewart will be appointed as Vice President , Corporate Development ,
François Huot will remain Vice President Exploration, and Yvon Robert will remain as Chief
Financial Officer. François Goulet has accepted to remain as President and Chief Executive Officer
of Har fang until the closing of the Arrangement, at which time his resignation previously
announced on September 1, 2021 will become effective.
Transaction Details
Pursuant to the terms of the Agreement, Harfang will acquire all of the issued and outstanding
LaSalle Shares on the basis of 0.3908 Harfang Shares (on a pre-Consolidation basis) for each share
of LaSalle held (the “ Exchange Ratio”). Warrants and options of LaSalle will be adjusted or
exchanged to become warrants and options, respectively, of Harfan g based on the Exchange
Ratio. It is anticipated that these securities will be adjusted or exchanged on a post-Consolidation
basis. The transaction was negotiated at arm’s length.
Immediately prior to the closing of the transaction, it is anticipated that Harfang will consolidate
its common shares on a 2 .1554 for one basis (the “ Consolidation”), subject to the receipt of all
necessary approvals.
The Arrangement will be carried out by way of a court -approved plan of arrangement under the
Business Corporation s Act (British Columbia) and is subject to a number of conditions being
satisfied or waived by one or both of Harfang and LaSalle at or prior to closing of the Arrangement,
including approval of LaSalle shareholders , together with any requisite minority approvals,
completion of the Consolidation, amendment of the Harfang stock option plan to extend expiry
date of stock options to 12 months following the date a person ceases to be an “eligible person”
under the plan, and receipt of all necessary regulatory and court approvals and the satisfaction of
certain other closing conditions customary for a transaction of th is nature, including completion
of the Offering (as hereinafter defined).
It is expected that the special meeting of LaSalle shareholders to approve the proposed
Arrangement will be held on or before March 31, 2022 (the “LaSalle Meeting”) and, if approved
at such meeting and all other conditions have been met, it is expected that the Arrangement
would close shortly thereafter.
The Agreement includes customary provisions, including non -solicitation, right -to-match and
fiduciary out provisions, as well as ce rtain representations, covenants and conditions that are
customary for a transaction of this nature. A termination fee of $300,000 may be payable by either
party in the case of certain terminating events.
Further information regarding the Arrangement will be contained in the management information
circular to be prepared by LaSalle (the “ LaSalle Circular ”) and mailed to its securityholders in
connection with the LaSalle Meeting . All securityholders of LaSalle are urged to read the
information circular once available, as it will contain important additional information concerning
the Arrangement.
LaSalle is subject to Multilateral Instrument 61 -101 – Protection of Minority Security Holders in
Special Transactions (“ MI 61-101”). MI 61-101 provides that, in certain circumstances, where a
“related party” (as defined in MI 61 -101) of an issuer is entitled to receive a “collateral benefit”
(as defined in MI 61 -101) in connection with an arrangement transaction such as the
Arrangement, such transaction may be considered a “business combination” for the purposes of
MI 61-101 and subject to minority shareholder approval requirements.
LaSalle has determined that certain directors or executive officers of LaSalle are receiving a
“collateral benefit” in connection with the Arrangement as each beneficially owns or exercises
control or direction over more than 1% of LaSalle Securities (calculated in accordance with MI 61-
101). Consequently, the LaSalle Shares beneficially owned, directly or indirectly, these certain
directors or executive officers will be excluded for the purposes of determining if minority
approval of the Arrangement is obtained
This announcement is for informational purposes only and does not constitute an offer to
purchase, a solicitation of an offer to sell any shares or a solicitation of a proxy.
Concurrent Financing
Concurrently with the Arrangement , Harfang proposes to complete, on a post -Consolidation
basis, a non -brokered private placement of subscription receipts (the “ Offering”) for minimum
proceeds of $ 1 million and maximum proceeds of $ 5 million. The Offering will be comprised of
common share subscription receipts (the “ Subscription Receipts ”) at a price of $0. 55 per
Subscription Receipt. Upon satisfaction of the Escrow Release Conditions (as defined below), each
Subscription Receipt shall be exchangeable for one post-Consolidation common share of Harfang.
The Offering is anticipated to close on or before January 31, 2022. The funds received from the
Offering will be held in escrow (the “Escrowed Funds”) by an escrow agent pending completion
of the Arrangement. Release of the Escrowed Funds will be conditional upon satisfaction of the
following conditions (together, the “ Escrow Release Conditions ”): (i) approval of the
Arrangement by LaSalle shareholders ; (ii) closing of the Arrangement; (iii) completion of the
Consolidation; (iv) the closing of the Offering for minimum proceeds of $ 1 million; and (v) the
receipt of all required regulatory approvals including, without limitation, the conditional approval
of the TSX-V for the Arrangement, the Consolidation and the Offering. 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 programs on the combined Serpent /
Radisson properties and for general corporate purposes. The LaSalle Circular will contain
complete details on the intended use of proceeds.
In connection with the Offering, Harfang has received expression s of interest from strategic
investors including Québec Institutional Funds for an amount of $1,6 00,000. Furthermore,
Harfang and Monarch Mining Corporation (“ Monarch”) have signed a binding term sheet
pursuant to which Monarch has agreed to participate in the Offering for an amount of $1,500,000
(the “Monarch Investment ”). In connection with the Monarch Investment, and as a condition
precedent thereto, Harfang has also agreed, subject to the receipt of the required regulatory
approvals, to subscribe for common shares of Monarch for a total amount of $750,000. It is also
anticipated that management will participate in the Offering for a total of $200,000 (details of
such participation remain to be confirmed).
Board Recommendations
The board of directors of LaSalle (the “ LaSalle Board”) has formed a special committee (the
“Special Committee ”) to consider and evaluate the Arrangement . The Special Committee,
following a review of the terms and conditions of the Agreement and consideration of a number
of factors, unanimously recommended that the LaSalle Board approve the Arrangement . After
receiving the recommendation of the Special Committee and advice, including a fairness opinion,
from its advisors, the LaSalle Board has unanimously determined that the Arrangement is in the
best interests of LaSalle and will recommend that LaSalle shareholders vote in favour of the
Arrangement. Prior to the execution of the Agreement, Evans & Evans, Inc. provided a fairness
opinion that, based upon and subject to the assumptions, limitations and qualifications in such
opinion, the consideration to be received by the LaSalle shareholders is fair, from a financial point
of view, to LaSalle shareholders. A summary of the fairness opinion will be included in the LaSalle
Circular.
LaSalle Delisting and SEDAR
If the Arrangement is completed, the LaSalle Shares will be delisted from the TSX-V. A copy of the
Agreement will be available through LaSalle and Harfang’s filings with the applicable securities
regulatory authorities in Canada on SEDAR at www.sedar.com.
Advisors and Counsel
Laurentian Bank Securities Inc. is acting as financial advisor and Fasken Martineau DuMoulin LLP
is acting as legal counsel to Harfang.
Evans & Evans, Inc. has provided the Special Committee with a fairness opinion in respect of the
Arrangement and Armstrong Simpson is acting as legal counsel to LaSalle.
Qualified Persons
Technical aspects of this news release have been reviewed, verified and approved on behalf of
Harfang by François Huot, P.Geo., Vice President Exploration of Harfang, and on behalf of LaSalle
by Ron Stewart, Vice President Corporate Development , BSc. Geology, of LaSalle, both of whom
are qualified persons as defined by National Instrument 43 -101 – Standards of Disclosure for
Mineral Projects.
About Harfang Exploration Inc.
Harfang is a mining exploration company whose primary mission is to discover new gold districts
in the province of Québec. Harfang's development model is based on the generation of new
mining projects and on the establishment of partnerships with major exp loration and mining
companies to advance its exploration projects. Harfang trades on the TSX Venture Exchange
(“TSX-V”) under the symbol “HAR”.
About LaSalle Exploration Corp.
LaSalle is a Canadian exploration company focused on less explored districts of the Abitibi in
Ontario and Québec, recognized for mining investment based on mineral potential, policy and
success, LaSalle is actively exploring Radisson in the developing Eeyou Itschee -James Bay region
in Québec as well as the Blakelock and Egan high -grade gold properties located in northeastern
Ontario. LaSalle trades on the TSX Venture Exchange (“TSX-V”) under the symbol “LSX”.
For further information please contact:
Harfang Exploration Inc
Telephone: 514 940-0670 x339
Email: [email protected]
LaSalle Exploration Corp.
Telephone: (604) 647-3966
Email: [email protected]
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of
the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Cautionary Statement Regarding Forward Looking Information
All statements, trend analysis and other information contained in this press release about anticipated future
events or results constitute forward -looking statements. Forward- looking statements are o ften, but not
always, identified by the use of words such as “seek”, “anticipate”, “believe”, “plan”, “estimate”, “expect”
and “intend” and statements that an event or result “may”, “will”, “should”, “could” or “might” occur or be
achieved and other similar expressions. All statements, other than statements of historical fact, included
herein, including, without limitation, statements regarding anticipated benefits of the Arrangement , the
closing of the Arrangement, the Offering, the Serpent and Radisson properties (the “Projects”), including
anticipated operational synergies between the properties, are forward -looking statements. Although
Harfang and LaSalle (the "Companies") believe that the expectations reflected in such forward- looking
statements and/or information are reasonable, undue reliance should not be placed on forward- looking
statements since the Companies can give no assurance that such expectations will prove to be correct. These
statements involve known and unknown risks, uncertainties and other factors that may cause actual results
or events to differ materially from those anticipated in such forward-looking statements, including the risks,
uncertainties and other factors identified in the Companies' periodic filings with Canadian securities
regulators, and assumptions made with regard to: the Companies' ability to complete the proposed
Arrangement; the Companies' ability to secure the necessary shareholder, securityholder, legal and
regulatory approvals required to complete the Arrangement ; the ability to complete the Offering; the
estimated costs associated with the advancement of the Projects; and the Companies' ability to achieve the
synergies expected as a result of the Arrangement. Forward-looking statements are subject to business and
economic risks and uncertainties and other factors that could cause actual results of operations to differ
materially from those containe d in the forward -looking statements. Important factors that could cause
actual results to differ materially from the Companies’ expectations include risks associated with the
business of Harfang and LaSalle; risks related to the satisfaction or waiver of certain conditions to the closing
of the Arrangement; non-completion of the Arrangement; risks related to reliance on technical information
provided by Harfang and LaSalle; risks related to exploration and potential development of the Projects;
business and economic conditions in the mining industry generally; the impact of COVID -19 on the
Companies’ business; fluctuations in commodity prices and currency exchange rates; uncertainties relating
to interpretation of drill results and the geology, continuity and grade of mineral deposits; the need for
cooperation of government agencies and indigenous groups in the exploration and development of
properties and the issuance of required permits; the need to obtain additional financing to develop
properties and uncertainty as to the availability and terms of future financing; the possibility of delay in
exploration or development programs and uncertainty of meeting anticipated program milestones;
uncertainty as to timely availability of permits and other governmental approvals; and other risk factors as
detailed from time to time and additional risks identified in Harfang and LaSalle’s filings with Canadian
securities regulators on SEDAR in Canada (available at www.sedar.com). Forward- looking statements are
based on estimates and opinions of management at the date the statements are made. Neither Harfang nor
LaSalle undertakes any obligation to update forward- looking statements except as required by applicable
securities laws. Investors should not place undue reliance on forward-looking statements.