Harfang Exploration (TSXV: HAR, OTC: HRFEF)  is an exploration company focused on the provinces of Ontario and Quebec. In early February, Harfang acquired assets in the promising region of James Bay, Québec. It is both a strategic and geographical play as several companies are currently exploring for lithium in the region, leading the way is Patriot Battery Metals ($1.1B Mcap). 

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James Bay Overview

Lithium is a necessary component for producing small, powerful batteries and could be what will power the future. For obvious reasons, Lithium prices have skyrocketed due to the EV batteries' fast increasing demand.
Two-thirds of the world's lithium supply was processed in China in 2021, making the country the leading player in the industry. Because of the transition the world is witnessing, it is crucial to extract lithium for the need of North Americans. Governments and companies understand this, and more and more companies are exploring Canadian provinces, especially the James Bay region, Québec. Several companies discovered lithium from drilling programs such as Azimuth, which encountered lithium from its exploration program, returning highly anomalous values in lithium (up to 447 ppm Li). Besides, probably the most famous company is Patriot Battery Metals and its flagship asset named the Corvette Property. The land package hosts significant lithium potential highlighted by the 2.6 km long CV5 spodumene pegmatite with drill intercepts of 156.9 m at 2.12% Li2O, including 25.0 m at 5.04% Li2O or 5.0 m at 6.36% Li2O (CV22 083), and more. 

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Company Overview

Harfang Exploration Inc. is a technically driven mineral exploration company with the primary mission to discover ore deposits in Québec and Ontario. The Company is managed by an experienced team of industry professionals with a proven track record of success, controls a portfolio of highly prospective projects and has a strong financial position. Harfang is committed to best practices through engagement with all stakeholders and commitment to the environment. Two of the most exciting properties are the Lake Menarik and Menarik East, and Serpent Radisson. 

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The Lake Menarik property is one of Harfang’s premier gold exploration projects that was recently consolidated by purchasing some key central claims, increasing the project area to 15,627 hectares. This important step cleared the way for the Company to conduct an aggressive and first-ever systematic exploration program including diamond drilling. The project area is located 45 km south of the Radisson locality in the Eeyou Istchee James Bay.  Geologically it contains a mafic-ultramafic complex within which previous workers have outlined an historic, non-compliant with NI 43-101 mineral resource estimate of 6.34 Mt @ 7.73% Cr2O3, 398 ppb Pd, and 105 ppb Pt, and, 1.06 Mt @ 0.38% Ni and 0.15% Cu. Semi-massive to massive sulphides have also been discovered by prospecting and drilling with results including 1.88% Ni, 0.35% Cu over 4.5 metres in drilling, and up to 0.75% Ni, 2.24 g/t Pd, 0.13 g/t Pt, 0.60 g/t Au, 1.62% Cu and 0.15% Co in grab sampling. High-grade gold, silver and significant base metal values have also been returned in grab sampling including up to 57.6 g/t Au, 858 g/t Ag, 2.49% Zn and 2.24% Pb. he Serpent-Radisson property located 50 kilometres to the south of the Menarik project. The property benefitted from the merger with LaSalle earlier this year, is vast in size being greater than 50,000 hectares, comparable to the entire Val-d’Or mining camp. The Company has discovered more than 50 gold showings since 2017 with up to 340 g/t Au in grab samples, 7.78 g/t Au over 6.15 m in channel samples, and 1.64 g/t Au over 22.40 m and 4.09 g/t Au over 8.00 m in drill holes.

The company actively searches for opportunities on its properties, notably highlighted by drilling commencing at the Lake Menarik Gold property on February 23. The maiden drilling phase will cover 3,500m through 18 shallow drill holes, testing a variety of targets thanks to geophysical surveys and a recent geological reassessment. 

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On February 8, the company acquired new assets in the James Bay region, becoming one of the largest landholders in the region, holding 3,323 claims and covering 172,014 hectares. The acquisition of these targets resulted thanks to the analysis of 13,400 lake bottom sediments extracted from the Québec world-class governmental digital database. 

“The Eeyou Istchee James Bay region of Québec is rapidly emerging as a North American lithium province comparable to some of the largest districts globally based on the occurrence of several deposits and recent discoveries. It will further benefit from the intensity of exploration this year and I believe there is a high probability that additional discoveries will be made throughout the region given the early stage of exploration in most areas. Importantly for Harfang is that many of our already existing and new targeted projects have overlapping potential for the discovery of both lithium-bearing pegmatites and gold mineralization.”

CEO & President, Ian Campbell

Share Structure / Financials

The latest financial statements occurred for the quarter ending October 31, 2022. Harfang Exploration possesses more than $8M in cash for no debt and $9.2M in exploration and evaluation assets. Harfang had a net $1M loss meaning it could go a long way before seeing a financing that would dilute the share structure. The company has only 58M shares issued and outstanding, for 61.5M shares fully diluted. 0.95M warrants ($1.32) and 2.55M options ($0.54-$0.94) are available. Inside the share structure, we can notice close associates, management & insiders, and funds hold a solid part of it (57%).

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On February 10, Harfang sold to Goldseek Resources its Selbaie property for $5,000 in cash, received 600,000 common shares at $0.04 from Goldseek, and will get a 2% Net Smelter Return royalty that can be bought-back for $1M. 

Regarding the share price, HAR.V trades at $0.235 (March 1st, 2023), and fluctuated over the last 52 weeks between $0.17 to $0.5389. The stock price had a steady downtrend until early December where it bounced back from $0.17. Despite a lot of pressure on the company’s market cap, recent news indicate Harfang’s valuation should be higher. 

Bottom Line

So here’s why we like Harfang: 

-Robust cash position

-Great location (lots of issuers in the region)

-Experienced, focused team 

-Lots of news flow

Harfang Exploration (TSXV: HAR, OTC: HRFEF)‘s recent acquisitions and drilling program set the company on track toward success. Its flagship properties combined with James Bay assets leverage Harfang to potentially produce the most needed elements in the world. 

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