Harte Gold Announces Signing of Subscription Agreement and Loan Agreement and Files Application under the Companies’ Creditors Arrangement Act

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TORONTO, December 7, 2021 / CNW / – HARTE GOLD CORP. (“Gold Harte“or the”Society“) (TSX: HRT) (OTC: HRTFF) (Frankfurt: H4O) announces that it will file an application today with the Ontario Superior Court of Justice (Commercial List) (the”To research“) for an Initial Order under the Companies’ Creditors Arrangement Act (the “LACC“).

Concurrent with the commencement of the CCAA proceeding, Harte Gold entered into a subscription agreement (the “Subscription contract“) with 1000025833 Ontario Inc. (the”Investor“), an indirect wholly owned subsidiary of Silver Lake Resources Limited (“Silver Lake“) (ASX: SLR), under which the investor, if he is the successful bidder at the conclusion of the SISP (defined below) and is approved by the Court, would become the sole shareholder of the Company in a transaction that provides for the continuation of its activities and operations as a going concern.

Harte Gold and the Investor have also entered into a loan agreement whereby the Investor has agreed, subject to the terms and conditions contained therein, including the approval of the Court, to lend up to a maximum of $ 10.8 million (the “DIP funding agreement“) to the Company, to fund the operations and proceedings under the CCAA. The DIP Funding Agreement, if approved by the Court, will provide Harte Gold with the necessary liquidity to continue the operations of Sugar Zone Mine until the closing of a transaction. Together, the Subscription agreement and the DIP financing agreement demonstrate the silver lake strong support for the Sugar Zone mine and the restructuring process.

The investor is the lender of Harte Gold under the Amended and Restated Credit Agreement entered into dated August 28, 2020 with BNP Paribas (as amended on the date hereof, the “Credit agreement“). The Subscription Agreement is a” credit offer “which provides for (1) full payment of all priority claims to, or pari passu with, the amounts due under the credit agreement; (2) full payment of the duly fulfilled and guaranteed obligations owed to AHG (Jersey) Limited under the Facility Agreement dated August 28, 2020 (the “Appian installation“); and (3) the assumption of a maximum of $ 7.5 million in accounts payable. The subscription agreement does not provide for any recovery for other stakeholders subordinate to the Appian plant, including holders of existing interests in the company.

If the court grants the initial order, Harte Gold will seek approval of a solicitation, sale and investment process (“SISP“) and the authorization to use the subscription contract as a” hunt horse “in the SISP in order to provide interested parties the opportunity to submit superior proposals and allow Harte Gold to determine the highest transaction and the best available to the company and its stakeholders Unless the successful offer at closing of the SISP provides significantly higher value than the subscription contract, there will be no clawback for holders of existing holdings in the society.

The signing of the Subscription Contract and the DIP Financing Contract is the culmination of the Strategic Review Process undertaken by the Company over several months. After careful consideration of all available alternatives and the interests of stakeholders, the Harte Gold Board of Directors has determined that it is in the best interests of the Company and its stakeholders to sign the Subscription Agreement and DIP financing agreement and initiate proceedings under the CCAA and undertake the SISP.

Trading in Harte Gold securities

Trading in the common shares of Harte Gold on the Toronto Stock Exchange (“TSX“) should be discontinued. The Company currently expects its common shares to be delisted in due course.

Additional information

A further update will be provided following the hearing of the CCAA application by the Court.

About Harte Gold Corp.

Harte Gold owns a 100% interest in the Sugar Zone mine located at Blanche River, Canada. The Sugar Zone mine entered commercial production in 2019. The Company has additional potential through exploration of the Sugar Zone property, which comprises 81,287 hectares covering an important greenstone belt. Harte Gold trades on the TSX under the symbol “HRT”, on the OTC under the symbol “HRTFF” and on the Frankfurt Stock Exchange under the symbol “H4O”.

Caution regarding forward-looking information:

This press release includes “forward-looking statements” within the meaning of applicable securities laws, which are based on the opinions and estimates of management and are subject to various risks and uncertainties and other factors that could cause actual events or results differ materially from those projected in forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as “seek”, “anticipate”, “budget”, “plan”, “continue”, “estimate”, “expect”, ” predict “,” may “,” will “,” project “,” predict “,” potential “,” target “,” intend “,” could “,” could “,” should “,” believe “and similar words suggesting future results or statements about a prospect. The specific forward-looking statements contained in this press release include, without limitation, the filing by the Company of an application for an initial order with the Court under the CCAA; the Investor, if it is the successful bidder at the conclusion of the SISP and is approved by the Court, becoming the sole shareholder of the Company in a transaction which provides for the continuation of its activities and operations as a going concern ; the investor providing the DIP financing to the company to fund the operations and proceedings under the CCAA; the DIP financing agreement, if approved by the court, providing Harte Gold with the liquidity necessary to continue operations of the sugar zone mine until a transaction closes; Harte Gold seeking approval of a SISP and permission to use the subscription agreement as a “stalking horse” in the SISP; there will be no clawback for holders of existing holdings in the Company unless the successful offer at the conclusion of the SISP provides for a significantly higher value than the Subscription Contract; trading in the common shares of Harte Gold on the TSX should be halted; the Company currently expects its common shares to be delisted in due course; and the Company having additional potential through exploration on the Sugar Zone property. Forward-looking statements are necessarily based on a number of estimates and assumptions, including significant estimates and assumptions relating to the factors set forth below, although believed to be reasonable by the Company as of the date of this press release. In light of management’s experience and perception of current conditions and expected developments are inherently subject to significant business, economic and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in forward-looking statements, and you should not place undue reliance on such statements and information. These risks and uncertainties include, but are not limited to, the strategic review process that does not result in a transaction that brings value to the Company’s stakeholders; the Company being unable to secure sufficient funding to complete the strategic review process; the Company being unable to continue operating; the risk that the Company will not have adequate sources of funding to finance the operations of the Company in the near future; the risk that the Company may not be able to obtain sufficient financing for working capital, capital expenditures, debt service requirements and general corporate or other objectives; the risk that the Company does not have sufficient assets to meet its debts or satisfy its creditors; as the Company is able to attract and retain qualified candidates to join the Company’s management team and board of directors, the risks associated with the mining industry, including operational risks in the exploration, development and production; delays or changes in plans for exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections with respect to production, costs and expenditures; the uncertainty surrounding the Company’s ability to obtain any permits, agreements, consents or authorizations required for its operations and activities; and risks to health, safety and the environment, the risk of fluctuations in commodity prices and exchange rates, the ability of Harte Gold to finance the capital and operating expenses necessary to achieve business objectives of Harte Gold, the uncertainty associated with business negotiations and negotiations with subcontractors and other parties and the risks associated with international business activities, as well as other risks and uncertainties which are further described in the Annual Information Form of the Company. Company dated March 30, 2021, and in other documents filed by the Company with securities and regulatory authorities which are available on SEDAR at www.sedar.com. Because of the risks, uncertainties and assumptions inherent in forward-looking statements, potential investors in the securities of the Company should not place undue reliance on such forward-looking statements. Readers are cautioned that the foregoing list of risks, uncertainties and other factors is not exhaustive. The forward-looking statements contained in this press release are made as of the date hereof and the Company assumes no obligation to publicly update or revise the forward-looking statements or in any other document filed with the Canadian securities regulatory authorities. whether as a result of new information, future events or otherwise, except in accordance with applicable securities laws. Forward-looking statements are expressly qualified by this cautionary statement. The Toronto Stock Exchange has not reviewed and accepts no responsibility for the adequacy or accuracy of this press release.

SOURCE Harte Gold Corp.

For more information: please visit www.hartegold.com or contact: Frazer Bourchier, President and CEO, Email: [email protected]

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