Potential suitors for Harte Gold (TSX: HRT) and its Sugar Zone gold mine in Ontario have until Jan. 14 to submit bids for the distressed company. If no bids are received, Australia’s Silver Lake Resources (ASX: SLR) will become the new owner of the assets.
Harte was granted creditor protection earlier this month. The company has been trying to find an acquirer since reporting that it did not have funds to proceed with a planned expansion of the mine, or to pay its debt obligations in May. The company began production at Sugar Zone in 2019 with an anticipated 13-year mine life. But Harte ran into multiple issues, including lower than expected production, equipment and ventilation issues, and labour issues.
Harte said it would have to suspend operations if it didn’t get an infusion of cash before the end of the year. In November, Silver Lake acquired US$63.3 million in credit facilities extended to Harte by BNP Paribas, and agreed to loan the miner $10.8 million.
BNP has entered into a support agreement with Silver Lake to support its stalking horse bid.
The Sugar Zone mine produced 15,260 oz. gold in the third quarter, up from to 11,283 oz. In the previous quarter, and 6,218 oz. in last year’s third quarter.
In January, the company released a feasibility study supporting the expansion of the mine to 1,200 tonnes per day from 800 tonnes per day.
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