Harte Gold - The good and the bad news with this great potential high-grade gold producer - InvestorIntel
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Harte Gold – The good and the bad news with this great potential high-grade gold producer Investors patience has definitely been tested with the slow ramp and high AISCs of gold production from January 2019 until now, and again recently with the COVID-19 mine closure since the end of March 2020. Harte Gold Corp. (TSX: HRT) is a relatively new gold producer with its primary focus on its 100% owned Sugar Zone property 24 km north of White River, Ontario, Canada. Exploration on the Sugar Zone property includes 83,850 hectares encompassing a significant greenstone belt with a 35 kilometre strike length. The property has huge exploration upside with ~90% yet to be explored. The 10% explored has already found 1.67 million gold ounces in the Indicated and Inferred categories. Harte Gold’s Sugar Zone property has a M&I Resource estimate of 1.1 Moz contained Au @ 8.1 g/t, and Inferred Resource of 558 koz contained Au @ 5.8 g/t. Gold production began in January 2019 but there has been some ramp up problems resulting in lower production and higher costs, which helps explain the current low stock price. The Good news
The good news for Harte Gold right now is the high gold prices, especially when converted to CAD. In fact gold is currently trading at USD 1,728, which equates to CAD 2,410. The CAD gold price is up 41.09% over the past one year. USD gold price (now US$1,728) and CAD gold price (now $2,410) 1 year price chart The other good news is that Harte’s gold production (prior to the COVID-19 stoppage) was trending higher. Gold production for the three months ended March 31, 2020 (“Q1”) totaled 8,597 ounces, the highest quarterly production result to-date. Q1 production was 7% higher than Q4, 2019, and 42% higher than Q3 2019. Once back into full production the mine should be on track for a minimum run rate of 35,000 ounces pa, which should ramp steadily towards a 60,000 ounces pa run rate in 2021. Combine rising gold production, reducing AISC’s and we should start to see some profits later in 2020 or early 2021, assuming gold prices hold, and the mine reopens soon. As economies of scale kick in 2021 should be a significantly better year for Harte Gold. Other good news was the December 2019 discovery of high grade gold that showed initial sampling returned grades of up to 247 g/t. This potential new high grade gold zone (the TT8 Discovery) is approximately 17 km southeast of the Sugar Zone
Mine in an area previously mapped by OGS geologists as granite and not known to host gold mineralization. The TT8 Discovery is believed to be an extension of an existing known greenstone belt to the east. The Company reported that “17 chip samples across a 40 metre strike extent have returned gold values from 11.1 g/t to 247.0 g/t Au.” Q1 2020 performance – Increased gold production, reduced costs, improved grades The bad news The bad news for investors is that the stock price has fallen over the past year as the company has struggled to yet meet previous Feasibility Study targets for production and costs. AISCs in Q1 were still too high at USD 1,951/oz, despite falling 20% YoY (and 4% QoQ). Production whilst improving is well below the previous 60,000 ounces pa target. The other bad news is the mine had to close due to COVID-19 at the end of March 2020. This will mean Q2 production will be negatively impacted. Harte Gold has stated: “The Company is in constant review of the situation and will make a decision on restart in due course. Detailed planning is underway that will allow the Company to mobilize and resume operations in an efficient manner once the decision to restart is made. Higher grade stope material expected later this year
should have a positive impact on gold production. Further guidance will be provided once detailed planning is complete.” Wrap up Investors patience has definitely been tested with the slow ramp and high AISCs of gold production from January 2019 until now, and again recently with the COVID-19 mine closure since the end of March 2020. The May 2020 announcement that BNP Paribas has agreed to defer debt payments removes any short- term liquidity concerns. Despite a very testing start the fact remains the Sugar Mine and property has enormous potential. Grades are improving and get higher as they go deeper, with the average grade of the M&I Resource at 8.1 g/t, compared to the Q1 2020 mined grades of 5.5 g/t. Put another way, grades should steadily improve another 47% only to reach the average 8.1 g/t level. Combine this increased grade over the next few years with growing production to meet the mill’s capacity of 60,000 ounces pa, then AISCs should have dropped very significantly towards the forecast AISC of US$845 in the April 2019 Feasibility Study. The December 2019 new high-grade gold discovery reminds investors again of the huge exploration potential across the vast 83,850 hectares Sugar Zone Property. It appears that investors will still need some more patience in 2020; however with an experienced new management and operations team Q1 2020 has shown they are slowly turning things around. Q2 results will be poor due to the COVID-19 shutdown, but H2 2020, and 2021 should see great improvements.
MI3 Tech Note on Troilus Gold
Corp. (TSX: TLG | OTCQB:
CHXMF)
Mario Drolet President of MI3 Communications Financières Inc.
(MI3) released a technical note at market open yesterday on
Troilus Gold Corp. (TSX: TLG | OTCQB: CHXMF) for exclusive
distribution on InvestorIntel. In this note, MI3 highlighted
the following points on Troilus Gold Corp.:
Past-producing gold and copper mine located northeast of
the Val-d’Or district in Quebec, Canada.
Production infrastructure in place, includes an
extensive network of roads, sub-station and power lines,
permitted tailings facility and an operational water
treatment facility.
April 28, 2020 News Release: Troilus Becomes Largest
Claim Holder in Frôtet-Evans Greenstone Belt; Expands
Land Position by More than 67,000 Hectares — click here
April 21, 2020 News Release: Troilus Intersects 1.56g/t
AuEq over 73 Metres in Southwest Zone Representing One
of the Best Results Ever on the Troilus Property — click
here
Great rebound from $0.415 to almost the high of the year
(last July at $0.90)
TLG traded over 17 Million shares over the last three
months between $0.57 & $0.88
Support: S2; $0.75 S1; $0.80 Resistance: R1;
$0.90 R2; $0.97 next target!About Troilus Gold Corp. Troilus is a Toronto-based, Quebec focused, advanced stage exploration and early-development company focused on the mineral expansion and potential mine re-start of the former gold and copper Troilus mine. The 16,000-hectare Troilus property is located northeast of Chibougamau, within the Frotêt-Evans Greenstone Belt in Quebec, Canada. From 1996 to 2010, Inmet Mining Corporation operated the Troilus project as an open pit mine, producing more than 2,000,000 ounces of gold and nearly 70,000 tonnes of copper. PLEASE DO YOUR DUE DILIGENCE Disclaimer: This MI3 Technical Note produced by MI³ Communications Financières is neither an offer to sell, nor the solicitation of an offer to buy any of the securities discussed therein. The information contained is prepared by
MI3, emanating from sources deemed to be reliable. MI3 Communications Financières makes no representations or warranties with respect to the accuracy, correctness or completeness of such information. MI³ Communications Financières accepts no liability whatsoever for any loss arising from the use of the information contained therein. Please take note that for compliance purposes, all directors, consultants or employees of MI3 Communications Financières are prohibited from trading the securities of the company and MI3 Communications Financières is a shareholder and do not intend to sell any shares during the distribution of this note. Is $3000 gold possible? A look at the ‘for and against’, and Australian gold miner Alkane Resources 2020 has seen unprecedented levels of global economic disruption due to the COVID-19 (coronavirus) pandemic. This has seen share markets collapse and the gold price rise 15% in just a few months. Some say this is just the beginning of the gold bull run, with Bank of America now forecasting gold prices could reach US$3,000/oz, which is almost double the current price of US$1,721/oz. Today we look at the arguments for and against US$3,000/oz gold. Gold 1 year price chart – Gold = US$1,721
Source
The case for US$3,000/oz gold
COVID-19 has so far caused 2,994,958 confirmed cases and
206,997 deaths, and is severely disrupting the global
economy. Some countries are now re-opening their
economies; however the risk remains high of a second
wave of infections. We may still be a long way away from
herd immunity, successful treatments, and a successful
vaccine.
Goldman Sachs recently stated: The downturn will be 4
times worse than the Global Financial Crisis (GFC). In
the U.S., second-quarter activity likely dropped 35%
while unemployment could hit 15%.
The IMF forecasts global GDP to be minus 3% in 2020,
then recover to +5.2% in 2021, assuming pandemic fades
in the second half of 2020.
The coronavirus health crisis may be followed by a
coronavirus debt crisis. Global governments have
responded to the COVID-19 with massive stimulus, andhence trillions of dollars in new money printing.
Bank of America (BoA) forecasts gold to hit US$3,000/oz
by October 2021, in a report titled: “The Fed can’t
print gold.” BoA states that with an official recession
looming, monetary authorities are poised to buy record
amounts of financial assets and double the sizes of
their balance sheets.
Global gold supply is struggling to increase each year
as it becomes harder and more costly to find and mine
gold.
Gold performs best when rates are low, and right now we
have historic low interest rates.
Historically gold has proved to be the best storage of
wealth.
The case against US$3,000/oz gold
Lower jewelry demand in India and China may put downward
pressure on the gold price. Gold jewelry represents the
largest source of annual demand for gold. Though it has
declined over recent decades, but it still accounts for
around 50% of total demand.
A stronger US dollar may mean a lower USD gold price.
We may recover quickly from COVID-19, and stock market
sentiment could improve, thereby lowering sentiment
towards gold investment.
Viewpoint
I think BoA hit the nail on the head with their report title:
“The Fed can’t print gold.” Gold’s scarcity and centuries long
history as a preserver of wealth means investors will always
seek gold as a safe haven. The global supply of new gold
struggles to increase YoY, yet the supply of new fiat
currencies such as the USD continues to flood the market, as
printing presses work 24/7 to print new dollars.
Investor’s takeawayInvestors would be wise to have some gold in their portfolio, as a hedge against a collapse in paper money and the global economy. Physical gold is always the safest and purest way to play. Next can be the gold backed ETFs, followed by gold miner ETFs, and finally gold miners. Smaller gold producers with exploration upside For investors wanting to leverage their gold exposure, investing into gold producers and successful explorers can achieve this. One example that comes to mind would be Alkane Resources Ltd. (ASX: ALK). Alkane Resources has gold production at their Tomingley Gold Mine, successful gold exploration, and a 100% ownership of the Dubbo Rare Earth Project. They are very well funded to achieve success with cash, bullion and investments of A$91.7 million. Alkane Resources Tomingley Gold Mine forecast to produce 30-35,000 oz Au at AISC A$1,250-$1,400 in FY 2020 Source Alkane Resources has very significant exploration upside at their Kaiser-Boda target zone (part of the Northern Molong Porphyry Project)
Apart from a producing gold mine (Tomingley Gold Project) and their Tomingley corridor exploration projects; Alkane Resources has very significant exploration upside at the Kaiser-Boda target zone (within the Northern Molong Porphyry Project), which has been mapped over a north-south strike length of a massive 6km long and 1km wide. Alkane Resources recently announced: “Further extensive porphyry Gold-Copper mineralisation at Boda“. What’s striking about this announcement was the long length of mineralisation, and it started near surface. For example, 965.7m grading 0.21g/t gold, 0.11% copper from 7.3m, and 153.0m grading 0.40g/t gold, 0.13% copper from 480m. In March 2020, Alkane Resources announced another very long drill result also at the Kaiser-Boda target zone. Drill hole KSDD007 resulted in 1,167m @ 0.55g/t Au, 0.25% Cu from 75m. Another was KSDD003, 507m @ 0.48g/t Au, 0.20% Cu from 211m. Gold copper porphyry style deposits can be very large making them economic despite lower gold grades, due to efficiencies of scale and copper by-products credits. Alkane Resources’ Managing Director, Nic Earner, stated: “We’re delighted to confirm further extensive mineralisation at the Boda Prospect. Our drilling to date demonstrates broad, ore-grade mineralisation over at least a 300m north-south by 400m wide zone with over 800m depth, with the mineralisation open along strike and at depth, and a significant higher grade core with exceptional characteristics.” A summary image of Alkane Resources extensive exploration projects and mine in Australia
Source Closing remarks There has probably never been a better time to buy gold or a quality gold miner. For investors wanting higher risk and reward the small gold producers, with growing production and exploration upside offer an exciting opportunity. As financial and debt markets melt down, very few sectors will show positive returns, let alone a chance to double or triple. And remember gold is very rare, and as BoA says: “The Fed can’t print gold.” And ‘yes’, US$3,000/oz gold by October 2021 is very possible. Frank Basa on intersecting high-grade gold near surface
at Granada Gold Property “The deposit that we have was actually mined as a high-grade mine historically. Was about 10 grams a ton…The previous operator took out 14,500 ounces at 5 grams a ton. We decided to work on that extension going east…We are getting grades like 11-13 grams a ton. We are going to carry out near surface drill program and extend that. The structure is 5.5 km long and we have looked at only 500m of it. We are shovel ready. We have all the permits and we can ship the rock anytime to any mill in Quebec.” States Frank Basa, President, CEO and Director of Granada Gold Mine Inc. (TSXV: GGM), in an interview with InvestorIntel’s Tracy Weslosky. Frank went on to say that its not normal to have to an open pit mine grading 5 grams a ton as most mines have about 1 gram a ton. He added the mine doesn’t have any overburden. Frank also provided an update on Granada Gold’s latest drill results. He said that the drill results were very good. The company drilled 33 meters of over 10 grams a ton near the surface. To access the complete interview, click here Disclaimer: Granada Gold Mine Inc. is an advertorial member of InvestorIntel Corp. Alf Stewart on Searchlight’s “very strong gold system” in
Saskatchewan “There is another gold property near Flin Flon…It has three former gold producers on it. It is at a driving distance from a major mining center in Canada. The main mine on the property was developed in the 1980s. They did 1.5 km of underground development and never produced. The gold price at that time was $350/oz. Today looking at the gold price. If we take $350 historical gold price in US dollars, convert into Canadian dollar today, it is around $900. But the gold price today is $2100 Canadian. Over twice the historical price when this property was developed.” States Alf Stewart of Searchlight Resources Inc. (TSXV: SCLT), in an interview with InvestorIntel’s Peter Clausi at PDAC 2020. Alf also spoke on the English Bay property just outside of La Ronge, Saskatchewan. He said, “It is a very unique situation, privately developed, its never been in the public market and it looks like a very strong gold system. There are 37 drill holes on the property, 5000 meters of drilling. Of those 37 drill holes, 20 have intersected gold along a consistent 400 meter long zone.” To access the complete interview, click here Disclaimer: Searchlight Resources Inc. is an advertorial member of InvestorIntel Corp. InvestorIntel’s Gold
Watchlist Update for Friday, March 27, 2020, 16:05 EST InvestorIntel’s Gold Watchlist Update video includes the Top 5 Performers of the Day, the Top 5 Performers for the Week and a review of 20 gold companies InvestorIntel is following in the market (Source: Yahoo Finance). InvestorIntel’s Gold Watchlist Update for Thursday, March 26, 2020, 23:20 EST InvestorIntel’s Gold Watchlist Update video includes the Top 5 Performers of the Day, the Top 5 Performers for the Week and a review of 20 gold companies InvestorIntel is following in the market (Source: Yahoo Finance).
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