Harte Gold Announces Q1 2019 Results

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TORONTO, May 15, 2019 (GLOBE NEWSWIRE) -- (“Harte Gold” or the “Company”) (TSX: HRT / OTC: HRTFF / Frankfurt: H4O) is pleased to announce the following results for the first quarter (“Q1 2019”) ended March 31, 2019.

Stephen G. Roman, President and CEO of Harte Gold, commented “With our first quarter of operations completed, we are pleased to announce improving production at the Sugar Zone Mine.  The quarter started with many winter challenges affecting our mining operations.  We have progressed through our startup issues and operations continue to improve.”  

The following outlook is based on the Feasibility Study Plan, adjusted for Q1 2019 actual results.

The following are some of the value opportunities management is pursuing to improve mine plan economics currently not captured in the Feasibility Study Plan:

Excluding debt, the Company had a working capital deficit of $14,109,039 at March 31, 2019 compared to a deficit of $10,895,611 at December 31, 2018. In view of its discussions with various lenders about an overall refinancing, the Company had elected not to drawdown further on its Sprott loan facility. At March 31, 2019, US $40 million of the US $50 million Sprott loan facility had been drawn.

On May 6, 2019, the Company announced a US$82.5 million refinancing package, comprising US$10.0 million investment in special shares of the Company by Appian and a US $72.5 million senior debt facility provided by BNP Paribas (“BNP”). Proceeds will be used to repay the existing Appian and Sprott loans as well as for general corporate purposes.

The Appian special share investment is convertible to common shares at a price of C$0.27 per share upon receipt of shareholder approval to enable Appian to increase its ownership of the Company above 20%. Such approval is expected to be obtained at the Company’s annual general meeting in June. Additionally, Appian provided a non-equity stand-by facility of US $7.5 million available at Harte’s option for a period of 12 months and agreed to extend the maturity of its existing debt facility until closing of the BNP loans. The Company has agreed to issue Appian 5 million warrants to purchase common shares at Cdn $0.27 per share for a 5 year period, as compensation for the loan extension and stand-by commitments.

The BNP debt facility comprises a term loan of US $52.5 million and a revolving credit facility of US $20.0 million. Interest on the BNP debt is LIBOR plus 2.875% to 3.875% dependent on credit ratios. Principal repayments under the term loan begin on March 31, 2020 repayable quarterly over 22 quarters through June 30, 2025. The BNP debt facility will replace the Appian and Sprott loans and will be secured by all the assets of the Company.

The refinancing is expected to be completed in Q2 2019, improving the liquidity position of the Company and significantly reducing the debt servicing costs.

The company has implemented a quality assurance and control (“QA/QC”) program to ensure sampling and analysis of mine and exploration work is conducted in accordance with industry standards. Drill core is sawn in half with one half of the core shipped to Activation Laboratories located in Thunder Bay, ON, while the other half is retained at the Company’s core facilities in White River, ON, for future verification. Channel and Chip samples were sent to Wesdome Mines lab in Wawa, ON. Certified reference standards and blanks are inserted into the sample stream on a regular interval basis and monitored as part of the QA/QC program. Gold analysis is performed by fire assay using atomic absorption, gravimetric or pulp metallic finish.

Robert Kusins, P. Geo., Harte Gold’s Senior Mineral Resource geologist, is the Company’s Qualified Person and has prepared, supervised the preparation, or approved the scientific and technical disclosure in this news release.

Harte Gold is Ontario’s newest gold producer through its wholly owned Sugar Zone Mine in White River Ontario.  Using a 3 g/t gold cut-off, the NI 43-101 compliant Mineral Resource Estimate dated February 19, 2019 contains an Indicated Mineral Resource of 4,243,000 tonnes grading 8.12 g/t Au with 1,108,000 ounces contained gold and an Inferred Mineral Resource of 2,954,000 tonnes, grading 5.88 g/t Au with 558,000 ounces contained gold.  Exploration continues on the Sugar Zone Property, which encompasses 79,335 hectares covering a significant greenstone belt.


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Globe Newswire: 00:00 GMT Thursday 16th May 2019

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