Harte Gold raising $27 million for Sugar Zone Mine

Harte Gold Corp. [HRT-TSX; HRTFF-OTC; H4O-FSE] said Thursday March 19 that it has raised $27 million from a private placement financing, with proceeds destined for continued mine development at its Sugar Zone Mine located 80 km east of the Hemlo Gold Camp in northern Ontario.

Further to an announcement in a news release on March 11, 2020, the company said it has completed its brokered private placement of flow-through common shares. The flow-through shares were issued in two tranches, with the first tranche consisting of 120.9 million flow-through shares and the final tranche consisting of 47.8 million at an issue price of 16 cents per share. The total proceeds raised under the offering were $27 million, the company said.

Appian Natural Resources Fund, through its wholly-owned subsidiary, ANR Investments BV, acquired 41.2 million common shares in connection with the offering, to maintain its 24.4% pro-rata interest in the company.

Harte Gold shares were unchanged at $0.08 on Thursday and trade in a 52-week range of $0.08 and 38 cents.

Harte is Ontario’s newest gold producer through its wholly-owned Sugar Zone Mine. The project is estimated to contain a NI 43-101 compliant Mineral Resource of 1.1 million ounces of contained gold, and an Inferred Resource of 558,000 ounces of contained gold.

A feasibility study was completed on the Sugar Zone Mine in February, 2019, which estimated total reserves at 890,000 ounces of gold.  Exploration continues on the Sugar Zone, which covers 79,335 hectares of a significant greenstone belt.

Total gold production for 2019 was 27,316 ounces, exceeding the revised guidance range of 24,000 to 26,000 ounces. That includes the 8,017 ounces produced in the fourth quarter of 2019, and marking a 32% increase from production in the third quarter.

The Sugar Zone Mine is expected to produce 42,000 to 48,000 ounces of gold this year at an all-in-sustaining cost of US$1,475 to US$1,650/oz.

After 2020, production growth is expected to continue as higher-grade areas of the mine become accessible. While mined tonnages are expected to be consistent in 2021 and 2022, the average grade of areas mined in those years is expected to improve.

Mining operations are currently expected to run for 12 years and will support further resource expansion drilling in the immediate vicinity of the mine and the ramp up of property-wide exploration programs.

In addition to the Sugar Zone property, Harte Gold also holds the Stoughton Abitibi property on the Destor-Porcupine Fault Zone, east of Timmins, Ontario. That property is adjacent to the Holloway Gold Mine.

Harte acquired the Sugar Zone property in May 2010 from Corona Gold Corp. [CRG-TSX], a company headed by mine financier Ned Goodman. At the time, Corona received cash payments, plus shares equal to a 9.9% stake in Harte.

Some of the exploration since then has focused on “Hemlo-Style” mineralization to the east of the Sugar Zone.  This is a reference to the famous Hemlo gold discoveries of the early 1980s, which were rich enough to support three mines – Williams, Golden Giant, and David Bell.