Harte Gold Reports Third Quarter 2021 Results and Provides Operational Update
Canada NewsWire
TORONTO, Nov. 1, 2021
TORONTO, Nov. 1, 2021 /CNW/ - HARTE GOLD CORP. ("Harte Gold" or the "Company") (TSX: HRT) (OTC: HRTFF) (Frankfurt: H4O) announced today its results for the three months ended September 30, 2021.
The Company's unaudited financial results for three months ended September 30, 2021 ("Q3 2021"), together with its Management's Discussion and Analysis ("MD&A") for the corresponding period, can be accessed under the Company's profile on www.sedar.com and on the Company's website at www.hartegold.com. All currency references in this press release are in Canadian dollars except as otherwise indicated.
Q3 2021 Highlights:
-- Liquidity position: Cash on hand at September 30, 2021 was $11.4 million
($11.9 million at June 30, 2021). Based on the Company's updated outlook
and guidance for 2021, the Company will require additional funding prior
to the end of 2021 to continue operating and to conclude the Strategic
Review Process. The Company's liquidity position is further discussed
below under "Liquidity and Capital Resources".
-- Gold production: Total production of 15,260 oz Au for Q3 2021 compared to
11,283 oz Au in Q2 2021 and 6,218 oz Au in Q3 2020. Production was
positively impacted by increased throughput and grade. Cumulative gold
production to-date is 38,319 ounces for 2021.
-- Mine capital development: Averaged 10.4 metres per day in Q3 2021
compared to 10.0 metres per day in Q2 2021 and 9.2 metres per day in Q3
2020. Development to the Middle Zone was temporarily suspended in Q2 2021
to manage cash and liquidity and support the Strategic Review Process.
-- Ore tonnes processed: Average throughput rate of 771 tonnes per day (tpd)
for Q3 2021 compared to 674 tpd in Q2 2021 and 649 tpd in Q3 2020.
Increased throughput was a function of improved mine production resulting
in more tonnes delivered to the mill.
-- Head Grade: Increased to 7.1 g/t Au, compared to 6.1 g/t Au in Q2 2021
and 5.7 g/t Au in Q3 2020, due to higher grade areas of ore body being
mined.
-- Continued quarterly improvements and the Strategic Review Process:
-- Q3 2021 proved to be an operationally successful quarter and a notable
improvement from Q2 2021, in part due to ongoing operational improvements
and focused capital and sill development.
-- However, the short-term cash preservation actions continue, including the
curtailment of various sustaining and expansion capital including
development of the Middle Zone, which are anticipated to negatively
impact production in Q4 2021.
-- As the Company outlined in a press released dated May 13, 2021, there are
critical areas of the operation that must be addressed in order to see a
sustainable, consistent increase in production.
-- These four areas include bolstering the mine workforce, accelerating
infill drilling, accelerating mine capital development, and reinforcing
the underground mobile equipment.
-- These initiatives require additional capital. In the absence of securing
the financial liquidity to address these initiatives, the Company
continues to expect that future production will be negatively impacted
-- Revenues: $32.2 million in revenue from 14,669 oz Au sold for Q3 2021
compared with $26.1 million in revenue from 11,855 oz Au in Q2 2021 and
$12.2 million in revenue from 4,882 oz Au sold in Q3 2020.
-- Net loss: $3.1 million net loss in Q3 2021 compared with $0.9 million net
loss in Q2 2021 and $11.8 million net loss in Q3 2020.
-- Mine Operating Cash Flow[1]: $13.7 million in Q3 2021 compared with $9.3
million in Q2 2021 and $4.7 million in Q3 2020.
-- EBITDA1: $5.7 million for Q3 2021 compared with $3.1 million for Q2 2021
and negative $0.7 million in Q3 2020.
-- Cash Cost1: US$1,014/oz in Q3 2021 compared with US$1,159/oz in Q2 2021
and US$1,177/oz in Q3 2020.
-- AISC1: US$1,798/oz in Q3 2021 compared with US$2,033/oz in Q2 2021 and
US$2,197/oz in Q3 2020.
-- Mine Capital development: $5.5 million invested in Q3 2021.
Q3 2021 Operating and Financial Summary:
3 months ended
September June30 March31 December September
30 31 30
Units 2021 2021 2021 2020 2020
Operating
Performance
Ore Tonnes
Processed Tonnes 70,922 61,354 64,418 46,288 36,367
Average
Daily
Throughput tpd 771 674 716 503 649
Head Grade g/t Au 7.1 6.1 6.1 7.7 5.7
Recovery % 94.9% 94.1% 93.7% 95.0% 93.4%
Gold Ounces
Produced oz 15,260 11,283 11,776 10,835 6,218
Gold Ounces
Sold oz 14,669 11,855 12,349 9,228 4,882
Key
Financial
Data
Revenues,
net 000 $ 32,207 26,054 27,368 21,950 12,215
Mine
Operating
Cash
Flow(1) 000 $ 13,701 9,343 9,152 8,679 4,690
EBITDA(1) 000 $ 5,278 3,101 1,606 1,935 (677)
Net income /
(loss) 000 $ (3,062) (920) 5,833 10,562 (11,750)
Net increase
/
(decrease)
in cash 000 $ (468) (9,184) 12,806 (13,185) 16,511
Cash on hand
at end of
period 000 $ 11,402 11,870 21,054 8,248 21,433
Key
Statistics
Average
Realized
Gold
Price(1) US$/oz 1,752 1,798 1,768 1,843 1,898
Realized
Gold Price
After
Hedge(1) US$/oz 1,625 1,631 1,491 1,547 1,374
Cash
Operating C$/tonne
Cost processed 265 277 287 291 210
Cash Cost(1) US$/oz 1,014 1,159 1,183 1,122 1,177
AISC(1) US$/oz 1,799 2,033 1,916 2,882 2,197
________________________
(1) Mine Operating Cash Flow, Average Realized Gold
Price, EBITDA, Cash Cost and AISC are non-IFRS measures,
refer to the definitions of non-IFRS measures in the
Company's MD&A for a reconciliation
Operational Update:
Continued Quarterly Improvements in the Context of the Strategic Review Process
Q3 2021 proved to be another successful quarter and a notable improvement from Q2 2021, in part due to ongoing operational improvements and focused capital and sill development. However, short-term cash preservation actions continue, including the curtailment of various sustaining and expansion capital including development of the Middle Zone, which are anticipated to negatively impact production in Q4 2021.
As outlined in the press releases dated May 13, 2021 and August 4, 2021, there are critical areas of the operation that must be addressed in order to see sustainable, consistent improvements in mine throughput and production. These areas include bolstering the mine workforce, accelerating infill drilling, accelerating mine capital development, and reinforcing the underground equipment. These initiatives require additional capital and, in the absence of securing the financial liquidity to address these initiatives, the Company continues to expect that future production will be negatively impacted.
Key Mine Production Statistics Continued to Trend Positively for the Quarter
Mine capital development averaged 10.4 metres per day in Q3 2021, similar to the Q2 2021 average of 10.0 metres per day. Development at the Middle Zone remains temporarily suspended pending the outcome of the Strategic Review Process. All capital development in the quarter was focussed on advancing the North and South declines and sub level development to increase short and medium-term production flexibility.
Average grade for Q3 2021 was 7.1 g/t Au, higher than Q2 2021 and inline with reserve grade estimates. The higher average grade is a function of stope areas currently being mined and a greater proportion of longhole ore relative to sill development ore material.
Throughput averaged 771 tpd for the quarter, a significant improvement over the average for Q2 2021 of 674 tpd. The increase in ore tonnes processed is a function of more stoping areas being available due to the prioritization of mine capital development over the last two quarters combined with improvements in reliability of a portion of the underground mobile fleet.
While the increase in throughput is a positive step and has allowed the Company to effectively reach nameplate capacity, sustaining throughput at 800 tpd is not viewed as achievable in the absence of additional capital for the following four areas (further details are provided in the Company's press release dated May 13, 2021):
-- Bolster mine workforce: The Company continues to operate below budgeted
labour. Increasing the mine workforce through attraction and retention
policies, particularly in the underground workforce, is critical to
longer-term sustainability.
-- Accelerate definition drilling: Accelerating infill drilling would allow
the Company to better react to grade distribution in areas where the mine
was sparsely drilled (50-metre spacings) prior to entering production.
-- Accelerate mine capital development: Current development rates will not
sustain 800 tpd throughput. In order to sustain a rate of 800 tpd, the
Company needs to target up to 15 metres per day with increased focus on
decline ramp development as compared to horizontal development, for at
least the next 6 to 9 months. To consider the ultimate plan of 1,200 tpd,
the Company needs to target up to 18 metres per day of decline and
