Harte Gold Corp. has entered into a binding term sheet with Appian Capital Advisory LLP for up to $30 million in financing, subject to receipt of approval from the Toronto Stock Exchange. Proceeds of the financing was used to facilitate a restart of the Sugar Zone mining operation in July.
The financing package will provide the company with a funded solution for mine restart, a return to 800-ton-per-day (t/d) capacity and a pathway to 1,200-t/d capacity as well as enhanced exploration efforts.
“This proposed transaction represents the completion of our review process,” Chair of the Board of Harte Gold and Chair of the Special Committee Joseph Conway said. “Given the company’s current financial condition, the proposed transaction provides the best financing alternative available to the company, limiting up-front dilution, providing sufficient funding to cover cash flow and capital requirements on startup, and allowing for immediate capital to accelerate the restart of operations.”
The proposed transaction will, subject to receipt of approval from the exchange and other closing and drawdown conditions, provide the company with the funds required to restart the Sugar Zone mine operation in mid-July and allow Harte Gold to carry out several initiatives that are already well under way.
All mine activities have commenced at the Sugar Zone mine. The company is ahead on all key mining metrics, supporting the planned mill startup scheduled for early August. Backfill, waste and ore development are meeting or exceeding expectations. Longhole blasting and ore haulage rates are improving daily. A significant stockpile has been built up to feed the mill on restart.
A phased restart approach has been established and will start with backfill and select mining operations. Mill operations would resume in late July once a sufficient stockpile is developed. The company believes approximately C$35 million (approximately US$25.7 million) is required to return the mine to 800 t/d. A detailed 18-month planning is now complete. The company is targeting 2020 production at 20,000 ounces (oz) to 24,000 oz. Production for 2021 is targeted at 60,000 oz to 65,000 oz. For 2021, the company would expect to see significant production growth over 2019 and 2020 production levels, resulting from entering into higher grade zones, higher mine production and improving mine development rates.
