A gold mine in White River needs financing to restart operations after stopping production due to COVID-19.
Putting the Sugar Zone Mine on care and maintenance due to COVID-19 “has had a negative impact on the company’s working capital position,” Harte Gold says. “The company’s primary objective is to obtain sufficient financing to enable a successful restart of the mine.”
The Toronto-based gold company is working with senior lender BNP Paribas to reprofile its debt.
The European bank provided Harte Gold its senior debt facility in 2019.
“It was based on operating assumptions and startup assumptions that have arguably changed materially between performance of last year, but also into the COVID and restart of this year,” said vice-president of corporate development Shawn Howarth. “What we told BNP is that we want to be able to match our operating assumptions with the overall debt.”
Harte Gold wants a solution by the fourth quarter this year.
The company has completed a “detailed restart’ and 18-month operating plan for the mine.
Most of the workers at the mine are hired by Redpath Mining Contractors and Engineers. Harte Gold wants to transition those workers to its own employees over about a three-month span when the mine reopens. “Some” production drilling and blasting is done by other contractors, said Howarth.
When work restarts at the mill, Harte Gold will have about 87 direct employees. Twenty three of those workers live in White River and area. Those numbers exclude employees of contractors at Sugar Zone Mine.
Harte Gold anticipates increasing its workforce to 250 direct employees after taking over mining operations, said Howarth.
“I think that ultimately it’s important to the company to have its own philosophy within the mine workforce, more control over the mine fleet equipment,” he told The Sault Star.
Harte Gold wants to get equipment financing to buy the mine fleet.
The company is exploring an expansion scenario to increase mine and mill throughput from 800 tonnes to 1,200 tonnes per day.
Harte Gold (TSE: HRT) closed at 12 cents on Friday. The company’s share price has ranged from 7.5 cents to 35 cents over the last 52 weeks.
The Sault Star