The owner of White River's gold mine has filed for creditor protection amid a "stalking horse" bid for the company.
Harte Gold says it is filing an application to the Ontario Superior Court of Justice for an Initial Order under the Companies' Creditors Arrangement Act, while entering into a subscription agreement with a numbered company that is a wholly-owned but indirect subsidiary of Silver Lake Resources Limited.
According to Harte, if the court grants its request, it'll seek approval for a sale and investment solicitation process using that subscription agreement as a "stalking horse" to provide interested parties the opportunity to submit superior proposes - if that bid wins out, the numbered company would become Harte's sole shareholder, though Harte warns there won't be recovery for holders of existing equity interests unless the successful bid "provides significantly higher value" than the subscription agreement, which it calls the "culmination" of Harte's Strategic Review Process.
Along with that agreement, Harte's signed a financing agreement with the same company for a loan of up to $10.8-million - pending court approval - which would allow operations at the Sugar Zone Mine to continue until the transaction closes.
A subsidiary of Silver Lake's been acting as lender under certain debt facilities as Harte underwent a major cash crunch over the last year.