Harte Gold completes resource update for Sugar

Harte Gold’s (TSX: HRT; US-OTC: HRTFF) Sugar Zone gold mine in northern Ontario reached commercial production on Jan. 1, and permitting is underway to increase throughput to 800 tonnes per day.

In the meantime, the company has just folded into a revised resource estimate, 90,000 metres of infill and step-out drilling it completed last year across the Sugar, Middle and Wolf Zones.

The drill program extended mineralization along strike and another 400 metres down dip at the Sugar and Middle zones, and increased the indicated resource 55%. The company also expanded inferred resources to 1,300 metres below surface.

The updated resource includes the Wolf zone for the first time.

Now Sugar contains 1.11 million oz. gold in 4.24 million indicated tonnes at a grade of 8.12 grams gold per tonne and 558,000 oz. gold in 2.95  million inferred tonnes grading 5.88 grams gold.

The expanded indicated resources will form the basis of a feasibility study that should be completed by the end of March, and will, for the first time, define reserves.

“Generally speaking, we accomplished a lot during 2018,” says Stephen Roman, the company’s president and CEO. “We also did quite a bit of deeper drilling, which takes longer, but it did prove up the fact that the orebody continues at depth.”

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

Roman says that some of the zones seem to be converging at depth.

“The 90,000-metre program drilled below a depth of 700 metres and we’ve got a hole all the way down to 1,300 metres, and it’s proving up the whole thesis that this is being fed by a larger system at depth, similar to Richmont, which started hitting a lot of good stuff at depth, and Wesdome, similarly, which is a bit of a pattern. Hemlo didn’t hit their main zone until they were below 600 metres, and so we’re defining a similar pattern here.”

The other thing that excites Roman is the regional exploration potential across the land package. The company undertook a lot of fieldwork last year, including prospecting and geophysical and geochemical surveying, he says, identifying three targets where he hopes his team will find more orebodies.

The Hambleton Lake Zone is 8 km north of the portal to the Sugar Zone mine, while K7 is 5–6 km to the south of the portal. Twenty km north of the mine is the Flat Lake Zone.

A lot of the targets are in swampy areas, so Roman wants to drill as many holes as he can this winter before break-up.

Roman envisions drilling 5,000 metres across the three targets, but the program can be expanded, depending on results.

After initial drilling at K7, Roman says there are “good indications of something happening with anomalous gold values.” At Hambleton Lake, meanwhile, the company’s geochem work produced gold-in-soil samples of up to 826 parts per billion (ppb). By contrast, Roman says, similar geochem analysis at the Sugar Zone yielded values of 25 ppb in soil samples. In the Flat Lake area, the company has found significant electromagnetic anomalies, as well as up to 1% zinc in surface sampling.

“There are a lot of targets that are going to generate new orebodies for Harte Gold, similar to the way we found the Middle zone and the Wolf zone,” he says. “These are all discoveries made by us on the property just doing exploration, and we think this will continue.”

Near-mine exploration will focus on the expansion of inferred resources along strike and the convergence of all three zones — Sugar, Middle and Wolf — at depth.

Drilling so far this year between the Middle and Wolf zones has returned intercepts including 12.4 grams gold over 2 metres from 1,099 metres downhole; 13.39 grams gold over 4 metres from 950 metres; and 12.98 grams gold over 4 metres from 884 metres deep.

Sugar is the province’s first high-grade gold mine built in over a decade, and, based on estimates, could run for 12 years and recover 904,000 oz. gold.

At press time Harte Gold was trading at 34.5¢ per share within a 52-week range of 29¢ and 55¢.

The company has 600 million shares outstanding for a $207-million market capitalization.

Macquarie Research has a 12-month target price of 80¢ per share and an “outperform” rating.

“Harte Gold has successfully expanded the footprint of the indicated resource to depth at the Sugar Zone (now to ~1,100 metres vertical depth) and laterally and to depth at the Middle Zone using reasonable estimation parameters (US$1,250 per oz. gold, C$86 per tonne mining cost, C$28 per tonne processing),” the bank’s analysts said in a research note. “We are encouraged by the lateral and vertical grade continuity of Sugar Zone North and the Middle Zone, which saw down-dip indicated resource expansions of 400 metres and 500 metres, respectively.”