Mine works to stay afloat

·2 min read

White River Mayor Angelo Bazzoni says he hasn’t lost faith in a gold mine struggling to continue operating just north of town.

The ongoing financial challenges facing Harte Gold’s Sugar Zone mine a 40-minute drive from the municipality aren’t surprising for anyone who has tried to operate a business in Northern Ontario, he says.

“It’s very difficult to run a business in the North,” Bazzoni, who is self-employed himself, said Tuesday. “The freight costs alone are very significant.”

On Monday, Australian miner Silver Lake Resources announced its plan to take on US$63 million worth of debt Harte Gold owes to Toronto-based investment banker BNP Paribas.

Silver Lake said it sourced its “cash reserves” for the transaction.

“Silver Lake intends to work co-operatively with Harte Gold and its stakeholders to deliver an outcome which will provide the best opportunity to realize the full potential of the Sugar Zone mine and the associated land package,” a Silver Lake news release said.

According to the release, a credit agreement between Harte Gold and BNP Paribas that has already been extended three times is due to expire on Nov. 30.

The Sugar Zone mine, which went into production in 2019, has employed about 130 people at the site. In the spring of 2020, the operation temporarily shut down to prevent the spread of COVID-19, then later resumed production.

Harte Gold news releases earlier this year have outlined the operation’s struggles to raise funds and attract workers, while raising the prospect that it may no longer be able to operate.

In a separate news release on Monday, Harte Gold cautioned “there can be no assurance . . . that the company will be able to continue as a going concern.”

It added: “Based on the company’s current cash flow forecast, the company will still require additional financing prior to the end of 2021 in order to continue operations and conclude (a) strategic review process.”

Bazzoni, who has seen a few Northern Ontario business rise from the ashes, including White River’s lumber mill, said he is staying positive about the Sugar Zone’s prospects.

“Harte Gold has been upfront and honest with us,” he said. “They’ve told us the (mineral resources to keep the mine operating) is there.”

“It not just for our town,” Bazzoni added. “Mining is a primary industry for our region.”

Carl Clutchey, Local Journalism Initiative Reporter, The Chronicle-Journal

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