Harte Gold Announces Fifth Amendment to Forbearance Agreement

HARTE GOLD CORP. announces a fifth amendment to its Forbearance Agreement with BNP Paribas (“BNPP”), as administrative agent and Qualified Risk Management Lender under the Debt Facilities, and a wholly-owned subsidiary of Silver Lake Resources Limited (“Silver Lake”) as Lender under the Debt Facilities.

The Forbearance Agreement, initially announced on July 30, 2021, and amended on September 30, October 15,  October 29 and November 18, 2021, has been further amended pursuant to an Amending Agreement dated November 30, 2021, which extends the date to which Silver Lake and BNPP have agreed, subject to certain terms and conditions, to refrain from enforcing their rights and remedies under the Debt Facilities to December 6, 2021 (the “Forbearance Period”).

There can be no assurance that the Forbearance Agreement will be further extended or, if it is extended, what the terms of such further extension will be. If the Forbearance Agreement is not extended at the end of the Forbearance Period, Silver Lake and BNPP will have the right to demand immediate repayment of all outstanding indebtedness under the Debt Facilities and to initiate steps to enforce their rights.

The Strategic Review Process has not yet resulted in any binding offers being received by the Company. Discussions are, however, ongoing with a number of parties with respect to a potential transaction. While the Amending Agreement allows for such discussions to continue, there can be no assurance that such discussions will result in a transaction, what the value of any transaction might be, what the terms or timing of such a transaction might be or that the Company will be able to continue as a going concern if no transaction is concluded.

At the time of issuing this news release, the Company does not expect that the Strategic Review Process will result in a transaction which would provide any value for holders of Harte Gold’s equity securities (including securities convertible into or exercisable for equity securities). As a result of the foregoing, holders of Harte Gold’s equity securities (including securities convertible into or exercisable for equity securities) are cautioned that trading in such securities is highly speculative, and that the trading prices for such securities may bear little or no relationship to the actual realization of value, if any, by holders thereof at the ultimate outcome of the Strategic Review Process. Also, there can be no assurance that the Company’s common shares will continue to trade on the TSX or on any other trading platform.

In order to preserve liquidity to support the Strategic Review Process, the Company has continued to defer the implementation of various mitigation measures that were aimed at addressing the production variance from plan experienced to date in 2021. The Company has also reduced certain sustaining and expansion capital expenditures. However, based on the Company’s current cash flow forecast, the Company will require additional financing prior to the end of 2021 in order to continue operations and conclude the Strategic Review Process. While the Company is in discussions with a number of parties regarding such additional financing, there can be no assurance that the Company will obtain the required financing or what the terms of such financing might be.

The Company will provide updates when further disclosure is required or otherwise appropriate.

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