Harfang Exploration Inc. (TSXV:HAR) entered into a definitive arrangement to acquire LaSalle Exploration Corp. (TSXV:LSX) for CAD 9.8 million on January 5, 2022. Under the terms of the Arrangement, LaSalle shareholders will receive, on a pre-consolidation basis 0.3908 of a Harfang common share for each LaSalle Share. The exchange ratio implies a consideration of CAD 0.0968 per LaSalle Share based on the 30-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. 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. A termination fee of CAD 300,000 may be payable by either party in the case of certain terminating events. LaSalle's Chief Executive Officer, Ian Campbell, and Vice President 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. The Arrangement brings together a highly experienced team of mining industry professionals with the Board to be composed of: Jean-Pierre Janson, André Gaumond, Daniel Innes, Ian Campbell, Sylvie Prud'homme, Karen Rees and Vincent Dubé-Bourgeois. At the closing of the Arrangement, Ian Campbell 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 Harfang until the closing of the Arrangement, at which time his resignation previously announced on September 1, 2021, will become effective. 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, subject to the receipt of all necessary approvals. Concurrently with the Arrangement, Harfang proposes to complete, on a post-Consolidation basis, a non-brokered private placement of subscription receipts for minimum proceeds of CAD 1 million and maximum proceeds of CAD 5 million. The Offering will be comprised of common share subscription receipts (the "Subscription Receipts") at a price of CAD 0.55 per Subscription Receipt. Upon satisfaction of the Escrow Release Conditions, 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. Following completion of the Transaction, LaSalle's shares will be delisted from the TSXV.
The transaction 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, third party consents, completion of the consolidation, amendment of the Harfang stock option plan, LaSalle Shareholders holding no more than 5% of the outstanding LaSalle Shares shall have exercised their Dissent Rights, each of the Lock-up Agreements shall not have been terminated, the Escrow Release Conditions shall have been satisfied and the underlying Post-Consolidation Harfang Shares shall have been approved for issuance immediately after the Effective Time and the Harfang Consolidation, the TSX-V shall have conditionally approved the listing thereon of the Post-Consolidation Harfang Shares to be issued, the distribution of the Post-Consolidation Harfang Shares and receipt of all necessary regulatory and court approvals and the satisfaction of certain other closing conditions customary for a transaction of this nature, including completion of the Offering. The special meeting of LaSalle shareholders to approve the proposed Arrangement will be held on March 30, 2022 and, if approved, it is expected that the Arrangement would close shortly thereafter. The board of directors of LaSalle has formed a 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. As of March 30, 2022, the shareholders of LaSalle Exploration have unanimously approved the transaction with unanimous support. The Supreme Court of British Columbia hearing for the final order to approve the transaction is currently scheduled to take place on April 1, 2022. As of April 1, 2022, the Supreme Court of British Columbia issued a Final Court Order approving the plan of arrangement. As of March 30, 2022, the transaction is expected to close on or about April 8, 2022. As of April 4, 2022, the Transaction remains subject to final approval by the TSX Venture Exchange and is expected to close in mid-April upon completion of all required filings and approvals.
Laurentian Bank Securities Inc. is acting as financial advisor and Frank Mariage of Fasken Martineau DuMoulin LLP is acting as legal counsel to Harfang. Evans & Evans, Inc. acted as financial advisor to LaSalle and has provided the Special Committee with a fairness opinion in respect of the Arrangement and Paul Simpson of Armstrong Simpson is acting as legal counsel to LaSalle. Computershare Investor Services Inc. acted as depositary to Harfang.