Embattled miner Harte Gold CEO Frazier Bourchier said on Wednesday that he continued to believe in the long-term value of the Sugar Zone mine, in Ontario, but that the mine needed additional capital to unlock and sustain elevated levels of operating performance.

Production plateaued in the second quarter, owing to labour shortages, reduced equipment reliability and the need for more definition infill drilling and accelerated mine development.

Total production of 11 283 oz in the second quarter compared with 11 776 oz in the first quarter. Production was adversely affected by a six-day mill closure in late June, owing to a workplace transmission of Covid-19.

Revenue edged up to C$26.1-million, and the company posted a net loss of C$0.9-million.

Harte, which is midstride a strategic review process to obtain financing, ended the quarter with C$11.9-million cash and based on its updated outlook and guidance for 2021, it would require additional funding by the fourth quarter.

A special committee, comprising independent directors Joseph Conway and Douglas Cater, is supporting the strategic review process. Last month, Appian nominee Geoffrey Cohen stepped down with two other nominees from Harte’s board. Cohen served with Conway and Carter on a committee to support the evaluating of strategic alternatives for the company.

Further, Harte warned that its already lowered guidance for 2021 was at risk and may not be achieved.

To ensure sufficient liquidity to support the strategic review process, the company has deferred the implementation of various mitigation measures that were aimed at addressing the production variance from plan experienced to date in 2021. It has also reduced certain sustaining and expansion capital expenditures, which may adversely impact production over the next six months.

The guidance was lowered by 10 000 oz in May to between 50 000 oz and 55 000 oz, at an all-in sustaining cost of $1 800/oz to $2 200/oz, compared with its previous target range of $1 400/oz to $1 550/oz.