Australia's Silver Lake Resources have been chosen the owner of Harte Gold's struggling Sugar Zone Mine near White River.
Perth-based Silver Lake announced Jan. 21 that its bid for the three-year-old underground operation and its expansive, mineral-rich gold property has been accepted, coming out of the auction stage of the creditor protection process.
Silver Lake appeared late last year as a 'stalking horse' bidder for the cash-strapped Toronto mining company which had threatened closure by year's end. Harte Gold had entered creditor protection in early December.
The formal sales process began before Christmas and wrapped up with the bid deadline on Jan. 14.
A second bidder had surfaced in recent days but its identity was never disclosed. Harte and the court-appointed monitor, deemed the two bids comparable and went to the auction stage of the CCAA process this week.In a release,
Harte said an "improved bid" by Silver Lake proved successful.
The transaction involves US$74.5 million in credit to the buyer, reflecting the value of loans Harte owes Silver Lake, along with $22 million out of the money hedge book and accounts associated with operating of the mine and the issuing of Silver Lakes shares at an estimated value of $28 million, plus a small cash consideration of up to $3 million, Silver Lake said in its release.
The transaction goes for court approval on Jan. 28.
Harte's only asset is the Sugar Zone Mine, 20 kilometres north of White River, roughly halfway between Sault Ste. Marie and Thunder Bay, not far off the Trans-Canada Highway.
The mine is situated on more than 81,000 hectares of a gold-endowed greenstone belt. Silver Lake has also entered into an agreement with Appian, one of Harte Gold's lenders, to acquire a combined 2 per cent net smelter royalty on the entire Sugar Zone property, for $22-million payable in Silver Lake shares.
