Harte Gold strikes it rich with mine financing deal: Commercial production starts at new White River-area gold mine in July.

• Position: MINING

Harte Gold struck a US$70-million debt financing deal in May to fund the construction of its underground gold mine, 25 kilometres north of White River.

The Toronto-headquartered gold miner reached an agreement with Sprott Private Resource Lending L.P. and Appian Natural Resources on a package to develop its Sugar Zone Project.

At the same time, Harte released a preliminary economic assessment (PEA) of its Sugar Zone Mine, projecting a 12-year mine life, starting in July, to be brought into production in phases as new deposits are tapped into on the company's sprawling 80,000-hectare property.

The deal with Sprott was expected to close May 31 with $20 million being immediately available on that date.

The rest will come in tranches with monthly drawdowns, as required.

The loan agreement with Appian closed May 11 with $20 million available up front.

"Over the past six months, the company has conducted an extensive review of its debt financing alternatives," said Harte Gold president Stephen Roman in a May 3 news release.

"We are very pleased to have reached an agreement with both Sprott and Appian on a financing solution which provides immediate liquidity for continued development while maintaining maximum flexibility and a lower cost of capital, compared to most project debt transactions executed the past few years.

"Most importantly, the financing announced ... represents a fully funded solution with enough liquidity to support ramp-up of our operations and cover any unforeseen downturn in commodity prices, without having to approach the equity markets or any other financing dilutive to shareholders."

The PEA projects the average yearly gold production at die mine to be 80,700 ounces with all-in sustaining costs of US$708.

An estimated 904,000 ounces of gold will be recovered over the mine's 12-year run.

The mine will be developed in phases beginning with its...