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