JERSEY, Channel Islands, May 7, 2019 /CNW/ - Appian Natural Resources Fund, L.P. and Appian Natural Resources (UST) Fund, L.P. (together, "Appian"), through its wholly-owned subsidiary ANR Investments B.V., agreed to acquire US$10,000,000 of special shares of Harte Gold Corp. ("Harte") in support of the US$72.5 million senior debt financing package announced by Harte. The special shares will be convertible into common shares of Harte at a price of Cdn$0.27 per common share. Unless approved by the shareholders of Harte, the special shares may not be converted if (but only to the extent) such conversion would result in Appian beneficially owning 20% or more of the outstanding common shares of Harte. Harte has agreed to call a meeting of its shareholders to approve Appian increasing its shareholding in Harte above 20% of the outstanding common shares of Harte by way of the conversion of the special shares and/or the exercise of the new or existing warrants. If Shareholder approval is not obtained by June 30, 2019, Appian may cause Harte to redeem the special shares.
As part of the acquisition described above, (i) Appian will agree to provide Harte with a standby commitment to June 30, 2020 of up to US$7,500,000 in exchange for either a 1.0% or 1.5% (depending on the amount elected by Harte) NSR royalty on the sale of mineral products from the Sugar Zone Project, (ii) Appian will agree to extend the maturity date of its US$20,000,000 subordinated facility by up to 6 months, (iii) as consideration for Appian's standby commitment and extension of the subordinated facility, Harte will agree to issue new five year warrants to Appian to acquire 5,000,000 common shares of Harte at a price of Cdn$0.27 per common share and (iv) Appian will agree to a standstill restricting its ability, subject to certain exceptions, to acquire more than 30% of the outstanding common shares of Harte for a period of 18 months.
The issuance of the special shares and the new warrants are subject to TSX approval and finalization of definitive documentation.
Prior to the completion of the transactions described above, Appian owned and had control and direction over (i) 116,320,214 common shares of Harte representing approximately 19.4% of the outstanding common shares of Harte, (ii) warrants expiring on May 11, 2023 to acquire 4,000,000 common shares of Harte at a price of Cdn$0.51 per common share and (iii) warrants expiring on May 11, 2023 to acquire 2,000,000 common shares of Harte at a price of Cdn$0.50 per common share. Unless approved by the shareholders of Harte, the existing warrants may not be exercised if (but only to the extent) such exercise would result in Appian beneficially owning 20% or more of the outstanding common shares of Harte.
Following completion of the transactions described above and assuming the conversion of the special shares in common shares of Harte at current exchange rates, Appian will own an aggregate of 166,133,645 common shares of Harte (representing an increase of approximately 6.2% to 25.6% of the outstanding common shares of Harte). Assuming the exercise of all of its warrants (in addition to the conversion of the special shares), Appian would own an aggregate of 177,133,645 common shares of Harte (representing a further increase of approximately 1.2% to 26.8% of the outstanding common shares of Harte).
Appian acquired the special shares for investment purposes. Appian has a long-term view of the investment. Depending on the development of Harte's business, financial condition, the market for Harte's securities, general economic conditions and other factors, and subject to certain agreed standstill and other restrictions on sale, Appian may acquire additional securities of Harte, or sell all or some of the securities it holds, in the open market, by private agreement or otherwise.
About Appian Natural Resources Fund
Appian is a metals and mining private equity fund formed under the laws of Jersey, Channel Islands providing long-term capital to both private and public mining companies. The advisor to Appian, Appian Capital Advisory LLP (the "Advisor"), is headquartered in London, with an international network in key mining cities. The Advisor has a senior management team that is a combination of professionals from major mining companies, private equity firms and investment banks, bringing together over 150 years of combined mining experience. In aggregate they have managed in excess of 60 mines through to production and concluded over $200 billion worth of mining sector transactions. With a successful track record of value creation across the full mining life cycle, the Advisor's team's strong operating and corporate skills are available to support management teams to optimise assets and ramp up operations that deliver value and generate attractive returns for all investors.
The head office of Harte is located at 8 King Street East, Suite 1700, Toronto, Ontario, Canada M5C 1B5. The common shares of Harte are listed on the Toronto Stock Exchange.
An early warning report will be filed by Appian in accordance with applicable securities laws and will be available under Harte's profile on the SEDAR website at www.sedar.com.
The head office of Appian is located at 47 Esplanade, St Helier, Jersey, Channel Islands JE1 0BD.
SOURCE Appian Natural Resources Fund L.P.
For further information: For more information, including to obtain a copy of the early warning report to which this press release relates, please contact Michael W. Scherb at the Advisor: Appian Capital Advisory LLP, 23 King Street, 1st Floor, London, SW1Y 6QY, United Kingdom, +44 (0) 207 004 0951