Harte Gold receives permit for 800 t/d operation
TSX-listed Harte Gold on Monday announced a total refinancing of its existing debt and receipt of approval to increase operational throughput from 540 t/d to 800 t/d at its Sugar Zone mine, in White River, Ontario.
The senior debt financing package for $72.5-million would be provided by BNP Paribas, comprising a $52.5-million six-year term loan and $20-million three-year revolving credit facility.
The interest is calculated at the London interbank offered rate plus 2.875% to 3.875% based on credit ratios.
Debt repayment starts on March 31, 2020 when the company is producing at full capacity.
Further, an equity investment of $10-million would be provided by Appian Natural Resources Fund.
The financing package would improve Harte’s liquidity and strengthen its working capital as it increased production to 800 t/d.
On May 3, the Ministry of Energy, Northern Development and Mines and the Ministry of Environment, Conservation and Parks, issued permits authorising an increase in mine production to 800 t/d.
This would provide the company the capacity to increase gold production at minimal cost from 41 000 oz/y to 65 000 oz/y.
“Management and the board have been working hard to deliver a financial restructuring, which puts the company on sound financial footing and unlocks the significant value inherent to the Sugar Zone mine and surrounding property package,” Harte Gold CEO and president Stephen G. Roman commented.
He added that a lower cost of debt and flexible repayment schedule would allow the company to focus on reinvesting free cash flow generated from the mine into property-wide exploration and development.
“The permitting to 800 t/d is a major achievement. We have accelerated the permitting timeline by two quarters, allowing Harte Gold to move to full scale production sooner than the conservative forecast in the feasibility study.”
He noted that this increase in production provides the company with added cash flows and allows the mill to operate at maximum efficiency.
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