After a recent rally – from 5 cents to 15 cents – shares of
Harte Gold Corp. (
TSX: T.HRT,
Stock Forum) are expected to remain stable for the time being.
That’s because investors with deep pockets are gearing up to participate in a private placement financing that will be used to fund exploration on the company’s Sugar Zone property.
A well placed source said he expects financier Ned Goodman and Harte President and Chief Executive Officer Stephen Roman to take down shares in the upcoming private placement. Gross proceeds are likely to be in the $2 million to $3 million range.
As noted recently by Stockhouse, Harte has already outlined a gold resource of roughly 475,000 ounces on the Sugar Zone property, where the company is gearing up to extract a 70,000-tonne bulk sample.
But company observers say it is exploration that is occurring about 5 kilometres east of the Sugar Zone which recently sent the stock to a high of 15 cents, from 5 cents in early April.
On Friday, the stock eased 7% to 14 cents, leaving a market cap of $30.3 million, based on 216.5 million shares outstanding. The 52-week range is 15 cents and 5 cents.
In late March, 2014, the company said it is conducting airborne and surface surveys in a bid to pinpoint the source of “Hemlo style” mineralization that occurs in a number of boulders (including the so-called Peacock Boulder) that coughed up gold values of 87 grams per tonne.
This is a reference to the infamous Hemlo gold discoveries of the early 1980s, which gave life to three mines – Williams, Golden Giant, David Bell, -- two of which are in production more than 30 years after the initial discoveries.
Harte Gold is exploring 60 kilometres east of the Hemlo mines which are presently operated by
Barrick Gold (
TSX: T.ABX,
Stock Forum).
On June 2, 2014, the Toronto-based company announced the discovery of five high priority “up-ice” induced polarization anomalies associated with shear zones, along with various other anomalies after a recently completed Phase 1, IP survey on the Sugar Zone property.
According to a news release, three of the five IP anomalies border previously un-surveyed topographic depression located one kilometre northeast of the Peacock boulders. This depression also shows strong potential to be the source of the boulders.
The release went on to note, “The purpose of this IP survey was to identify the source of the Peacock boulders that returned gold assays up to 87 grams per tonne. In addition, highly elevated gold pathfinder elements such as arsenic, molybdenum, tungsten and zinc have been identified.”
As for the expected private placement, sources say the company needs to raise money soon. But any further uptick in the stock price will make it more costly for Goodman and Roman to participate in a financing.
Harte acquired the Sugar Zone property in May, 2010 from
Corona Gold Corp. (
TSX: T.CRG,
Stock Forum), a company headed by Goodman. At the time, Corona received cash payments, plus Harte shares, equal to 9.9% of Harte.