Harfang Exploration (HAR.V) Has Plenty of Resourceful Gold Projects

Marc Challande
May 31, 2022
5
minute read

Harfang Exploration (HAR.V)  is a mining exploration company whose primary mission is to discover new gold districts in the province of Quebec. The company’s development model is based on the generation of new mining projects and on establishing partnerships with major exploration and mining companies to advance its mining projects. The company recently unveiled its 2022 summer exploration strategy and plans, and its future looks more promising.

Harfang Exploration Inc. owns many projects in the Quebec and Ontario provinces of Canada. The company owns four gold projects (Serpent-Radisson, Blakelock, Egan, Lake Ménarik, 1 Copper/Nickel/PGE project (Lake Aulneau), and 1 Chromium/Nickel/PGE/Gold project (Ménarik East). In a recent update, the company shared much News about its several projects:

  • Serpent-Radisson (Québec): Harfang has discovered >50 gold showings distributed along a structural corridor for 18 km and open laterally in both directions.
  • Egan (Ontario): The field crew has been mobilized to Egan (Ontario) to complete an expanded soil survey designed to follow up on the encouraging first pass work conducted in 2021.
  • Lake Ménarik: the previous exploration returned multiple high-grade gold occurrences (grabs up to 1,918 g/t Au and channels up to 12.5 g/t Au and 25.5 g/t Ag over 3.6 meters) as well as an intercept of 0.89 g/t Au over 68.3 meters in one of the 17 shallow historic drill holes completed in 2000.
  • Lake Aulneau: located in the Labrador Trough (Québec), covers a ~20-kilometre-long Proterozoic package of rocks prospective for copper-nickel-PGE mineralization. Previous exploration identified seven specific prospects. Historical drilling conducted from the 1950s to the late 1980s resulted in an aggregate non-compliant resource of approximately 2 million tonnes grading 2.0% Cu and 0.50% Ni with PGEs (Hollinger North Shore, 1976; La Fosse Platinum, 1987).
  • Blakelock: The next phase of exploration for Blakelock (northeastern Ontario) is scheduled for the 2023 winter season. Work by previous owners returned encouraging drill intercepts, including 10.9 g/t Au and 97.5 g/t Ag over 10.25 meters and 6.16 g/t Au and 17.7 g/t Ag over 4.55 meters from the Porphyry Creek target.

Several other Gold projects are underway, including Pontax, Douay North, Lake Tapiatic, Bonfait, La Passe, Taiga, Lake Fagnant, and Selbaie projects.

Fundamentals. & Share Structure

For a junior mining exploration company, Harfang has high-quality fundamentals. With only 57M shares outstanding for 66.5M shares fully diluted, the company has low data compared to other mining companies, and investors will only face low dilution.

Harfang has a tiny float of 24M shares (43%) with the rest locked by insiders or institutions:

  • 2% Pan American;
  • 2% Crescat
  • 5% Monarch Mining Corporation;
  • 5% Osisko Development;
  • 6% Management & Insiders;
  • 7% Caisse de Dépôt et Placement du Québec (CDPQ);
  • 12% Québec Funds (FTQ, SIDEX, SBDJ, Desjardins)
  • 18% Close associates.

The company only has 6.7M warrants (weighted average exercise price of $0.48) and 2M options weighted average exercise price of $0.31). Another important data here is the cash on hands. A company with a low cash position must go through private placements and create an extreme dilution. But it is not Harfang’s case. The company has as much as $10M cash, which is beyond excellent. Considering the company’s last financial statement, its expenses represent $3.5M for the fiscal year 2022 vs. $1.7M for 2021 (it is explained because the company funded more in its drilling campaign in 2022 with $1.9M spent vs. $183k in 2021). It means the company could last years without having to raise more funds.

About insider trading, there isn’t significant data.

Latest News: Outline its exploration strategy and plans for the summer phase of activities on its portfolio of projects located in the Eeyou Istchee James Bay and Abitibi districts of Québec and Ontario (Figure 1). Armed with a treasury of $10 million, a very experienced team of explorationists, and a portfolio comprised of fourteen (14) highly prospective projects, Harfang is well-positioned to assume a leadership position in these districts. The Board of the Company has approved a budget of approximately $2 million to advance eight projects over the next five months. Half of the budget has been allocated to Serpent-Radisson (Québec), where Harfang has discovered >50 gold showings distributed along a structural corridor for 18 km and open laterally in both directions.

President and CEO Ian Campbell commented*, “We are excited to initiate our summer 2022 exploration program following the comprehensive review of our entire portfolio of projects. Whereas our focus had been primarily on exploring our flagship Serpent-Radisson project over the last years, we recognized multiple targets and opportunities on several other projects that offer considerable potential as near-term value-creating catalysts.*

Share movement

The stock is traded at $0.29 for a current market cap of $0.29. Investors witnessed a 52-weeks high of $0.86 and are closer to their 52-week low of $0.255. Inflation and recent geopolitical conflicts pushed investors to exit minor exchanges, and HAR underwent the general fear. With a substantial $10M cash in hand, ongoing evaluations for drill targets should lead the company’s market cap to a higher valuation.

Year-over-Year, the stock price suffered a downtrend. Chart patterns indicate a strong bearish movement, with a Simple MA (200) at $0.50, way above the Simple MA (20) of $0.29. Besides, since May 08th, the stock price seems to consolidate at around $0.30. Its RSI data indicates 48, which means the stock is neither overbought nor oversold (under 30 or above 70). The volume decreased over the last couple of weeks (this data is general for many companies). Its 50-day ADV decreased by 55k to reach 27k shares traded for its 20-day ADV. This data could also help the stock price consolidate as we witness more minor movements. The Bollinger bands indicate short-term fluctuations between $0.25 to $0.35.

Bottom Line

Harfang Exploration is undervalued regarding its fundamentals and project opportunities. With minor exchanges being affected by several data, it allowed investors to invest in bargains. Harfang has other projects underway, and any major news should augment the company’s valuation.