Harmony Gold Corp.

Harmony Gold Corp.

November 18, 2011 10:43 ET

Harmony Enters Into Letter of Intent to Acquire 14 Claims in Northwest Territories and Arranges Financing

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 18, 2011) - Harmony Gold Corp. (TSX VENTURE:H) (the "Company" or "Harmony") announces it has signed a Letter of Intent (the "LOI") with Messrs. Patrick McDowall and Dave Smith (collectively the "Vendors") to acquire a one hundred percent (100%) interest, subject to a two percent (2%) net smelter return (the "NSR"), in fourteen claims located in the Northwest Territories, Canada (the "Property").

Option Terms

Pursuant to the LOI and in consideration of the payment of $25,000, Harmony has been granted the sole and exclusive option to acquire a one hundred percent (100%) beneficial interest in and to the Property (the "Option"), free and clear of all encumbrances other than the NSR, in consideration of i) issuing the Vendors an aggregate six million (6,000,000) common shares in the capital of Harmony; ii) making cash payments of an aggregate $100,000 (inclusive of the $25,000 down payment) and iii) incurring not less than $250,000 in exploration expenditures on the Property within twelve months of the acceptance of the transaction by TSX Venture Exchange ("TSXV"). It is anticipated that the shares to be issued to the Vendors under the Option will be subject to resale and escrow restrictions.

Provided Harmony exercises the Option and still owns the Property, it is required to make advance royalty payments in the amount of $12,000 per annum commencing December 31, 2016, increasing to $24,000 per annum on December 31, 2021.

This transaction is subject to standard closing conditions including due diligence and analysis by each of the parties, the parties completing a definitive agreement and obtaining TSXV approval.

The Company also announces that it has arranged a non-brokered private placement of 10,000,000 units at $0.10 cents per unit for gross proceeds of $1,000,000. Each unit will consist of one common share and one transferable common share purchase warrant. Each warrant will entitle the holder thereof to purchase one additional common share in the capital of the Company at a price of $0.20 per warrant share for a period of 24 months following the closing date.

The Company will pay finder's fees in respect of purchasers of securities introduced to the Company by certain finders. The finder's fees shall be comprised of a cash fee equal to 7% of the total amount paid by purchasers, to be paid by cash. The finder's fees will be paid upon closing of the private placement.

All securities to be issued in conjunction with this financing will be subject to a restrictive hold period ending 4 months and one day following the closing date.

The proceeds from the financing will be used for general working capital requirements.

Closing of the financing is subject to certain conditions, including acceptance of the terms of the financing by the TSXV.


Craig Michael Engelsman, President

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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