Harte Gold finds new anomalies on Sugar property in Ontario

Harte Gold (TSX: HRT; US-OTC: HRTFF) has identified five new anomalies within 15 km to the east and west of its Sugar deposit in northern Ontario that may host both gold and volcanogenic massive sulphide deposits (VMS), the company says.

“This property just never ceases to uncover more surprises,” says Stephen Roman, Harte’s president and CEO.

Helicopter magnetometer (MAG) and time domain electro-magnetic (HTEM) surveys across the Sugar property, 80 km east of the Hemlo gold camp, pinpointed the targets and the company is calling the strongest conductor to the west of the Sugar deposit the Eagle Zone.

“It looks very exciting,” Roman says. “It’s a big target, at least 650 metres long, and oh, probably 20 or 30 metres wide. There is a lot of chalcopyrite and sphalerite on surface so I think it’s obviously a good base metal VMS-type target.”

“Once we finished our airborne the area sort of lit up so we went in there to check it out on foot and luckily enough it’s not too far off a road so it should be fairly easy to bring in a rig and drill a few holes to test it,” Roman continues. “We have found another bunch of them to the east of the Sugar zone that are more fly-in targets where there is no infrastructure at all, so we will probably go in and do some surface sampling there as well to see if we can find outcrop and ascertain what it looks like on surface.”

In the meantime, Harte Gold is busy infill drilling the Sugar and Middle Zones with six drill rigs ahead of resource update in the first quarter of 2018.

“This will be the first real update since 2012 so we are drilling furiously on both of those targets to do infill and down-dip drilling.” (Based on a PEA from July 2012, the Sugar Zone contained 980,900 tonnes grading 10.13 grams gold for 319,280 ounces of contained gold in the indicated category and another 580,500 tonnes grading 8.36 grams gold for 155,960 ounces of contained gold of inferred.)

In the latest batch of drill results released to the market on Sept. 6, intercepts from the Sugar zone included 48.30 grams gold per tonne over 2.12 metres from a depth of 53.20 metres and 10.13 grams gold over 2.53 metres starting from 496 metres. Down-dip drilling below 500 metres returned a 3.39 metre intercept of 14.35 grams gold from a depth of 980.39 metres and 15.71 grams over 2.27 metres from 917.60 metres.

Underground ramp development at Harte Gold’s Sugar gold project in Ontario. Credit: Harte Gold.

In the Middle Zone, just to the north of Sugar, infill drilling returned 13.02 grams gold over 4.50 metres from 724.50 metres downhole and 13.68 grams gold over 7.02 metres from 1055.55 down hole.

Harte notes that the work has brought Sugar Zone mineralization to within about 300 metres of the Middle Zone, which it says suggests the zones could potentially converge.

In addition to drill work in the main Sugar and Middle Zones, Harte has one rig active in the Wolf Zone and another in the Fisher Zone. Preliminary results included 2.67 grams gold over 6.19 metres in the Wolf Zone. In the Lynx Zone, initial mineralization measured 3 grams over half a meter. Assays from the Fisher Zone are pending.

In terms of construction and underground development, Roman says, the company is making good progress.

Harte is on track to start construction in the second quarter of 2018. “We’ve got all the steel for the mill building and expect to have that completed by the end of September or early October,” he confirms. “Then we’ll start populating the building with various pieces of equipment including the ball mill and the gravity circuit and the float cells. So that will all happen throughout the winter—the idea being to start putting some initial material through the mill by the end of April 2018.”

The company has committed over $10 million on long-lead items. Fabrication of the ball mill isunderway with delivery and installation targeted for year-end.

Harte Gold president and CEO Stephen Roman addresses attendees in May 2017 at The Northern Miner’s Canadian Mining Symposium in London, United Kingdom. Photo by Martina Lang.

Meanwhile, underground mine development continues in the Phase I commercial production area. Three levels have been completed, to the 155 level, and the remaining two are under development. About 30,000 tonnes of ore has been mined from the developed areas and is stockpiled on surface to be used as a source of feed during the plant start-up and commissioning slated for the second quarter of next year.

As for permitting, Roman says he expects to complete the Impact Benefit Agreement in about a month. “That would be big news to have all that done,” he says, adding that some of the other permitting would flow from that because “the government wants to make sure you’ve got your IBA and everything is on side.”

“Right now we have our construction permit, our Phase I commercial production permit, which will allow us to do underground mine development for production, and we will need the final permit to turn the mill on,” he says. “We’re still on target to get those things by the end of the year.”

A drill site at the Sugar Zone project. Credit: Harte Gold.

Mike Kozak of Cantor Fitzgerald, says Harte “is in the “sweet spot” with high-grade exploration results and a year-end resource increase serving as near-term catalysts.” Over the medium-term, he says, and “upon transition to production mid-2018, we expect the stock to re-rate higher.”

Kozak, who estimates the company will deliver a resource for the Sugar and Middle Zones of around 2 million ounces of gold (at a grade of between 9 and 10 grams per tonne), has a buy rating on the stock and a price target of $1.10 per share.

“Given Harte’s enviable combination of top-tier grade and favorable location (northern Ontario, Canada), we continue to believe the company is a very strong takeover candidate and point to multiple suitors, all with nearby operating mines.”

Steel for mill construction at Harte Gold’s Sugar gold project in Ontario. Credit: Harte Gold.

Barrick Gold’s (TSX: ABX; NYSE: ABX) Hemlo mine is 60 km from Sugar; Richmont Mines’ (TSX: RIC; NYSE: RIC) Island Gold mine and Wesdome Gold Mines’ (TSX: WDO) Eagle River and Mishi mines are about 80 km away; and Goldcorp’s (TSX: G; NYSE: GG) Borden project is within 100 km.