Sugar Zone could be even sweeter, Harte Gold’s Roman says

Harte Gold president and CEO Stephen G. Roman at the Sugar Zone gold project in Ontario.  Source: Harte Gold Harte Gold president and CEO Stephen G. Roman at the Sugar Zone gold project in Ontario. Source: Harte Gold

Development is picking up speed at Harte Gold’s (TSX: HRT; US-OTC: HRTFF) Sugar Zone deposit, 60 km east of the Hemlo gold camp near Wawa, Ont., with a major financing, recent bulk sampling and toll-milling deals.

Harte has signed a letter of intent with Barrick Gold (TSX: ABX; NYSE: ABX) to process a 70,000-tonne bulk sample from the Sugar Zone mine at its nearby Hemlo mill, and signed a deal for a gold loan of up to US$6 million from metal merchant Auramet International. The term sheet with Auramet includes an undisclosed working capital facility on top of the loan of physical gold, and a final agreement is expected by the end of August.

In May, Harte Gold signed a preliminary agreement with Sudbury-based Technica Mining for a $20-million fixed price mining contract, and a final agreement is due before the end of July. Technica expects to mine bulk sampling to begin next January at a rate of 300 tonnes per day.

“This will get the project started and cash flowing, and then the plan is to build our own mill on-site once we complete the permitting,” Harte Gold’s president and CEO Stephen G. Roman says in an interview. “We’ve got an excellent, high-grade deposit sitting there in the Sugar Zone, so we’ve been working hard to get it into production, get cash flow and finance exploration with cash flow, rather than raise money and diluting the company during this period of low share prices.”

The Sugar Zone deposit — named after the granular nature of the  gold-bearing quartz veins on the property — is 25 km northeast of White River, a town of 500 to 800 people, and an hour’s drive northeast of Wawa.

The epithermal deposit is part of the Dayohessarah greenstone belt, which is situated between two larger greenstone belts: the Hemlo greenstone belt to the west and the Kabinakagami greenstone belt to the east.

Sugar Zone has an indicated resource of 980,900 tonnes grading 10.3 grams gold per tonne for 319,280 contained oz. gold, and an inferred 580,500 tonnes grading 8.36 grams gold for 155,960 contained oz. gold.

“Currently we have about five years of resource drilled,” Roman says. “The drilling is fairly intense in the first 400 metres of depth along a 1 km strike length, and below that, we’ve had deeper drilling extending to 1,000 metres and we still hit the orebody. Since we have indications it extends at depth we think we’re going to have significantly more there than the current resource. These Archean lode gold deposits typically extend to depth, and this one seems no different.”

Roman adds that the orebody comes right to surface so the ramp gets into ore almost immediately. “We’ll be ramping down enough to mine under the crown pillar,” he explains. “The initial plan is to do bulk sampling and if permitting comes on time we expect to have a seamless flow right into commercial operations. So mining will start at 300 tonnes per day, and then in commercial production we’ll bump that up to 600 tonnes per day, or about 70,000 oz. gold a year.”

Under its bulk sample agreement with Technica, the contract miner will charge only its costs and then Harte Gold will give it a cut of any profits after the work is completed.

“We expect it to be a high-grade, low-cost operation,” Roman says. “The Technica group is very competent. They’re doing a lot of work for a number of companies in northern Ontario and they are very efficient and safe miners.”

Over the course of the 12 to 18 months of bulk-sampling, Roman says, Harte will assess Technica’s capabilities and costs in order to plan for longer-term mining of the deposit, including whether to use its own crews.

Roman notes that the Sugar Zone deposit is a shear zone hosting a gold-rich quartz vein with mostly free gold — 85% of it recoverable with gravity methods. “That again reduces the cost of milling, because you can get a significant portion of the gold out with a simple gravity installation,” he says.

Roman emphasizes that the company doesn’t want to toll mill longer than it has to, however, and says that “there are a number of groups that have indicated they are willing to finance a mill.” He estimates that the mill and mine development would cost about $30 million.

The great thing about the Sugar Zone deposit, he says, is that it’s a continuous, steeply dipping orebody amenable to low-cost mining, with high grade.

“In the gold industry today, typical grades for a majority of deposits average around 1 gram gold per tonne,” he says. “This one is 10 grams gold per tonne, so that makes for a profitable operation.”  

Moreover, he says, the company has staked the entire 30 by 10 km Dayohessarah greenstone belt, which was part of the original Hemlo greenstone belt, and is prospective for further discoveries.

In addition to the Sugar Zone, there is Harte’s Wolf zone, 2 km north, where limited drilling has found Hemlo-style rock. “We need to follow up that discovery because we feel that it could get significantly bigger,” Roman says, adding that the company has found anomalous gold on surface continuing from the area where drilling has returned some exceptional grades.

The company is also exploring west of the Sugar Zone along the Contact zone, which is the contact between sedimentary and volcanic units, hosting a sericitic schist and anomalous gold mineralization similar to the Hemlo deposit, he says. 

Harte Gold and Corona Gold bought the Sugar Zone property in 1998. Roman and his team took control of the company in January 2009, and acquired 100% ownership in May 2012.

The deposit is between the cities of Sault Ste. Marie (311 km south) and Thunder Bay (383 km west).

It is close to the Trans-Canada Highway and Highway 631, which extends north from White River to Highway 11, and passes within 11 km east of the property. A Hydro One electrical transmission line also passes through White River, as well as Canadian Pacific’s transcontinental main line.

Elsewhere in Ontario, the company owns the Stoughton–Abitibi property on the Destor–Porcupine fault zone, 110 km east of Timmins, 50 km northeast of Kirkland Lake and 10 km east of St Andrew Goldfields’ (TSX: SAS; US-OTC: STADF) Holloway gold mine.


1 Comment on "Sugar Zone could be even sweeter, Harte Gold’s Roman says"

  1. corey peeters | August 29, 2015 at 9:08 am | Reply

    are they hiring?

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