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The owners of the Rainy River Mine are making a "strategic investment" in Harte Gold's Sugar Zone Mine, north of White River.
New Gold is taking a 14.9 per cent interest in the underground mine by way of a $24.8 million investment through a share purchase agreement. The investment transaction closes on March 24.
In a March 18 news release, Harte said the proceeds are earmarked for mine construction and expansion, and to help with a scheduled US$3.3-million debt payment on a loan from BNP Paribas by March 31. Harte said no further debt payment will be required for the remainder of this year.
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Subject to certain conditions, Harte said they've received tentative approval by their lender to refinance $50 million in debt payments that will allow them to defer payments for 2021 and 2022. The company said gives them greater "financial flexibility over the next two years," enabling them to focus on growing the underground operation.
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The Sugar Zone Mine started commercial production in 2019. The targeted gold production this year is between 60,000 and 65,000 ounces.
Harte Gold president-CEO Frazer Bourchier called the investment a "catalyst" to accelerate development and expansion of Sugar Zone and their plans to produce 100,000 ounces per year.
"New Gold's investment represents more than just a significant financing – it is an endorsement of the potential of the Sugar Zone mine and property, and a vote of confidence that Harte Gold's operational team will continue to deliver on our impending growth strategy."
New Gold operates the Rainy River Mine, northwest of Fort Frances, and the New Afton Mine, west of Kamloops, B.C.
