Harte Gold receives final permit for Sugar Zone mine

It's taken at least five years of permitting, but Harte Gold (TSX: HRT; US-OTC: HRTFF) has cleared its last regulatory hurdle and can now flip the switch and put its Sugar Zone mine into production.

The mine will be Ontario's first high-grade gold mine built in over a decade and is expected to run for 12 years and recover about 904,000 ounces of gold.

Production will start next week and full commercial production is anticipated in November.

This year the mine is expected to produce 11,000 ounces of gold and 40,000-50,000 oz. gold in 2019.

Over the coming two years, throughput at Sugar Zone is scheduled to grow from the current rate of 540 tonnes per day rate to 800 tonnes per day, reaching annual production of 75,000 oz. gold by 2020.

The mine is expected to hit the 1,400 tonne per day throughput mark and produce more than 100,000 oz. gold a year by around 2021.

A drill site at Harte Gold's Sugar Zone gold property in Ontario. Credit: Harte Gold.

Stephen Roman, Harte Gold's president and CEO, said he knew the day would eventually come when the company received its final permit to mine, process ore and pour gold on site, but that it has been a very long and tortuous process.

In total the mine required some 300 permits. By contrast, when Roman put the Black Fox mine (now owned by McEwen Mining (TSX: MUX; NYSE: MUX)) into production in the mid-1990s, he was only required to get 14 permits.

"We went from a greenfield to pouring the first gold in ten months," he says of Black Fox. "With this project it took at least five years."

Roman says the list of permits required "has exploded" and now even includes permits for things like methane emissions from portable toilets.

"It gets to that level of craziness-I don't think people realize how difficult it is these days, even for exploration," he says, noting that companies must apply for permits to drill exploration holes.

"It's a broken system, no doubt about it," he continues. "A lot of investment has left the province and is going to other places like Quebec and Newfoundland and other spots where it is easier to work. I hope some sense will get back into the system here and we'll start attracting more investment in Ontario."

In the meantime, underground development work continues to exceed targeted rates and 40,000 tonnes of mineralized material has been stockpiled.

Full commissioning of the mill complex is nearing completion, water has been successfully circulated throughout the plant, and tests of and crushing and conveyance systems are all done.

The power line has been built to site and all electrical equipment has been installed, allowing the company to connect to the grid and "energize" the entire Sugar Zone mine site and mill next week.

Harte Gold also plans to release an updated resource in the first quarter of 2019.

The mine currently has an indicated resource of 2.61 million tonnes grading 8.52 grams gold per tonne for 714,200 ounces of contained gold and an inferred resource of 3.59 million tonnes grading 6.59 grams gold for 760,800 oz.

Harte Gold's shares were trading at $0.445 apiece at presstime, within a 52-week range of $0.29 and $0.62.

Pierre Vaillancourt, who covers the company for Haywood Securities, has a buy rating on the stock and a price target of $0.80 per share.

"Although Harte Gold is expensive relative to peers, the valuation is supported by strong mine economics and prospects for production growth," he penned in a research note to clients. "In addition, we believe there remains attractive exploration upside at the Sugar Zone and beyond."