Corporate Presentation

Transcription

1 G O L D C O R P Corporate Presentation May 2018

2 FORWARD LOOKING STATEMENTS This presentation contains forward-looking information under Canadian securities legislation. Forward-looking information includes, but is not limited to, statements with respect to completion of any financings; Harte Gold s development potential and timetable of its operating, development and exploration assets; Harte Gold s ability to raise additional funds necessary; the future price of gold; the estimation of mineral reserves and mineral resources; conclusions of economic evaluation; the realization of mineral reserve estimates; the timing and amount of estimated future production, development and exploration; costs of future activities; capital and operating expenditures; success of exploration activities; mining or processing issues; currency exchange rates; government regulation of mining operations; and environmental and permitting risks. Generally, forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". All information contained in this news release, other than statements of current and historical fact, is forward looking information. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Harte Gold to be materially different from those expressed or implied by such forward-looking statements, including but not limited to those risks described in the annual information form of Harte Gold and in its public documents filed on SEDAR from time to time. Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made. Although management of Harte Gold has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Harte Gold does not undertake to update any forward-looking statements, except in accordance with applicable securities laws. Readers should also review the risks and uncertainties sections of Harte Gold s annual and interim MD&As. 2 All figures in CAD, unless otherwise noted Figures in USD were converted at CAD/USD All tonnages in metric, unless otherwise noted

3 COMPANY SNAPSHOT CORPORATE STRUCTURE Headquartered: Toronto, Ontario, Canada INSTITUTIONAL SUPPORT Analyst Following: Symbol: HRT: TSX H4O: FRANKFURT HRTFF: OTC Market Cap: C$240 million (C$0.42 May 4 th ) Shares Outstanding: 572 million (Basic) 637 million (Fully Diluted) Major Shareholders 1 : 19.9% 7.2% 2.1% 0.9% Debt Financing For Up To US$70 Million: US$50 million US$20 million Head Office (Toronto) 3

4 MILESTONES FOR 2018 HARTE GOLD HAS DELIVERED ON ALL TARGETS TO-DATE Resource update: tripled resource Comprehensive debt financing package for up to US$70 million PEA: IBA Full Production $425 million pre-tax NPV 5% at US$1,350/oz, 60% pre-tax IRR 1 signed with Pic Mobert First Nation (PMFN) permitting expected: June 2018 starting: July ) 5% discount rate at gold price US$1,350/oz and CAD:USD

5 FULLY FUNDED TO PRODUCTION COMPREHENSIVE FINANCING PACKAGE FOR UP TO US$70 MILLION Sprott Facility Up to US$50 million under a senior secured credit facility Appian Subordinated Loan US$20 million loan, subordinated to Sprott facility Benefits Flexible principal and interest schedule supports ramp-up of operations Sufficient liquidity to protect against unforeseen downturn in commodity prices No equity commitment No hedging, no cashflow sweeps and no debt service reserve account No off-take or royalty No commitment to draw full US$70 million 5

6 PEA SUMMARY Macro and Physical Parameters Cost Parameters Capital Cost Parameters 6 Cash Cost Summary Input Unit Value Gold Price US$/oz $1,250 Exchange Rate CAD:USD 0.80 Total Tonnes Processed Tonnes 4,539,800 Average Annual Throughput (2019+) tpa 402,617 Diluted Head Grade g/t 6.5 Gold Recovery % 95.4% Mine Life Years 12 Total Ounces Recovered Ounces 904,000 Average Annual Production ( ) Ounces 54,500 Average Annual Production ( ) Ounces 106,900 Average Annual Production (LOM) Ounces 80,700 Peak Annual Production (2024) Ounces 121,400 Mining Costs C$/tonne $90.83 Processing Costs C$/tonne $28.71 Site G&A C$/tonne $8.46 Total Costs C$/tonne $ Underground Development M C$ $176 Equipment M C$ $5 Infrastructure M C$ $24 Tailings Expansion M C$ $18 Mill Construction M C$ $59 LOM Average Cost US$/oz $507 LOM ASIC US$/oz $708

7 PHASED MINE PLAN INCREASING TO 1,400 TPD PROVIDES EARLY CASH FLOW AND LONGER TERM GROWTH Today H Phase 1: 540 tpd ( ) Low risk ramp-up to commercial production H H Phase 2: 800 tpd (2020) Existing surface and underground mining infrastructure is sufficient to support increased throughput Phase 3: 1,400 tpd (2021+) Throughput increased by adding second ball mill and leach circuit Expansion to the Middle Zone allows for multiple stoping areas 7

8 SIMPLE MINE DESIGN CONTINUOUS AND TABULAR ORE BODY SUPPORTS SIMPLE MINE DESIGN AND EXTRACTION Sugar Zone Stope Design Length: 50 m 15 m level interval (floor to floor) Planned dilution: 11.6% Unplanned dilution factored into the model: 26% Lower Zone Ore Face 8 Meter Width Middle Zone Stope Design Length: 30 m 20 m level interval (floor to floor) Planned dilution: 12.4% Unplanned dilution factored into the model: 16% Opened Longhole Stope Steeply dipping ore, Bulk sample and mining to-date has shown significantly less dilution Viewing stope along strike. Clean break, minimal dilution 8

9 Production (koz Au) Throughput (ktpa) Grade (g/t Au) PRODUCTION PROFILE TO +100,000 Oz/Year SCALABLE MINE PLAN DESIGNED TO MATCH UNDERGROUND DEVELOPMENT Throughput and Grade Phase 1 & 2 (800 tpd) Phase 3 (1,400 tpd) Diluted Head Grade Production Forecast Phase 1 & 2 (800 tpd) Phase 3 (1,400 tpd)

10 AISC (US$/oz) Sugar Zone, Harte Gold* Seabee, SSR Macassa, Kirkland Lake Island Gold, Alamos Hope Bay, TMAC Hemlo, Barrick Eagle River, Wesdome FIRST QUARTILE CASH COST PRODUCER AISC CASH COST OF US$708/OZ OVER LIFE OF MINE AISC Curve Illustrating Sugar Zone Vs. Other Selected High Grade Canadian Underground Mines $3,000 $2,500 $2,000 $1,500 $1,000 $500 0% 25% 50% 75% 100% Cumulative Production Source: SNL Market Intelligence, 2017 gold production ranked all in sustaining costs * Projected positioning based on LOM all in sustaining costs relative to current producers 10

11 Pre-Tax NPV 5% ($ Millions) OPPORTUNITIES TO ENHANCE PROJECT VALUE SEVERAL OPPORTUNTIIES NOT CAPTURED IN THE PEA $750 $600 head grade: g/t mineable resource by 534,000 ounces? mining dilution, lower mining costs?? $450 $425? $344? $300 $150 US$1,250/oz Gold Price US$1,350/oz Gold Price Improve Head Grade Upgrade Resources Mine Plan Optimization Sugar Zone NPV Potential Exploration Upside 11 PEA Pre-Tax NPV 5% Opportunities To Further Enhance Value

12 ADDING ADDITIONAL RESOURCE TO MINE PLAN 534,000 OUNCES OF MINERAL RESOURCE NOT INCLUDED IN PEA MINE PLAN 0 m 250 m 500 m 750 m 1,000 m 12

13 MINE DESIGN GRADE DISTRIBUTION MINE DESIGN ILLUSTRATED BY GRADE Southeast Northwest Sugar Zone South Ramp Sugar Zone North Ramp Middle Zone Ramp Infill Drilling Underway 13

14 NEAR-MINE AND PROPERTY-WIDE EXPLORATION 35 Km strike length to be explored 80,000 hectare land package Near-mine targets Sugar, Middle and Wolf Zones K7 Several regional exploration targets identified 14

15 PROPERTY WIDE EXPLORATION SEVERAL ZONES SHOWING HIGH POTENTIAL FOR SIGNIFICANT MINERALIZATION Lynx Zone On strike, characteristics similar to Sugar and Middle zones Moose Zone Host rock similar to Barrick s Hemlo mine K7 Zone New zone discovered, anomalous gold intersected 200 meters below surface Eagle Zone Property wide 2017 geophysics identified strong electromagnetic anomaly with VMS potential Marten Zone 15 IP anomaly featurs host rock similar to Barrick s Hemlo mine Fisher Zone Initial drill program intersected 40 meters of anomalous gold on strike with the Sugar Zone Scale Kilometers

16 IBA SIGNED WITH PIC MOBERT FIRST NATION Impact Benefits Agreement ( IBA ) signed with Pic Mobert First Nation ( PMFN ) Applies to other future mines that may be developed on the 80,000 hectare Sugar Zone property Proves a framework within which Harte Gold and PMFN will continue to work together during the production phase of the Sugar Zone Mine Key terms consistent with industry norms: 4.0% NPI, based on World Gold Council definition of all in sustaining cost metrics Annual monitoring fee Employment opportunities Stock options for 500,000 common shares at $0.40/share 16

17 KEY TAKEAWAYS Fully funded to production Scalable mine plan: 1,400 tpd, +100,000 ounces of annual production Simple mine design, well understood orebody. 100,000 tonnes mined to-date AISC US$708/oz first quartile cash cost producer $425 million pre-tax NPV 5% Several opportunities to continue to grow value: Improvements to grade with continued infill drilling Include 534,000 ounces of resource currently not in the mine plan Optimize mine plan, reduce dilution, lower mining costs 17

18 G O L D C O R P Appendix: PEA Summary 18

19 NPV AND IRR SUMMARY Unit Gold Price Sensitivities US$1,150/oz PEA Pricing US$1,350/oz Macro Parameters Gold Price US$/oz $1,150 $1,250 $1,350 Exchange Rate CAD:USD Pre-Tax NPV and IRR 5% M C$ $263 $344 $425 IRR % 40% 50% 60% Post-Tax NPV and IRR 5% M C$ $189 $244 $299 IRR % 34% 42% 50% 19

20 RESOURCE ESTIMATE (FEBRUARY 2018) 1.5 Moz Au INDICATED AND INFERRED RESOURCE Resource Modelling Includes drilling up to December 6, m minimum width Indicator Modified Ordinary Kriging Block size 2x4x1.5m Cut-Off Grade 3 g/t Au cut-off Mineral Resource Estimate at 3.0 g/t Au Cut-Off Category Indicated Inferred Zone Tonnes Grade (g/t Au) Contained Au (ounces) Sugar Zone 2,148, ,700 Middle Zone 460, ,500 Total Ind. 2,607, ,200 Sugar Zone 1,802, ,300 Middle Zone 1,788, ,500 Total Inf. 3,590, ,800 Mineral Resource Classification Sugar Zone Middle Zone Variography / Grade Capping Grade capping Lower Zone: 75 g/t Au Upper Zone: 20 g/t Au Middle Zone: 47 g/t Au Variograms show continuity out to 75m 20 Legend: Yellow = Indicated Mineral Resources, Grey = Inferred Mineral Resources. Scale in metres

21 PEA MINEABLE RESOURCE ESTIMATE 934,000 OUNCES OF POTENTIALLY MINEABLE RESOURCE FACTORED INTO PEA MINE PLAN Potentially mineable resource: 941,000 ounces at a diluted grade of 6.5 g/t Varying cut-off grades: 3.5 g/t Au for stopes 1.4 g/t Au for low grade development 534,000 ounces of Mineral Resources not included in the PEA mine plan Areas excluded: Potentially Mineable Mineralization for Mine Planning Category Indicated Inferred Zone Resource Classification and Mine Plan Illustration Sugar Zone Tonnes Diluted Grade (g/t Au) Middle Zone Contained Au (ounces) Sugar Zone 2,057, ,000 Middle Zone 451, ,000 Total Ind. 2,508, ,000 Sugar Zone 731, ,000 Middle Zone 1,260, ,000 Total Inf. 1,991, ,000 Inferred Resources below the Sugar Zone North Ramp Middle Zone ramp at ~750 metres Infill drilling is underway in these areas, with an expectation that grade will improve Infill Drilling Underway 21

22 MINE DESIGN LONGHOLE STOPING PROVIDES A SAFE AND COST EFFICIENT METHOD Mine Design Parameters Longhole Stoping Mining Method Sugar Zone Middle Zone Level interval 15 m 20 m Stope strike length 50 m 30 m Limiting HR (hanging-wall) 7 7 Minimum mining width* 1.3 m true width 1.5 m true width HW & FW overbreak (unplanned) Total 0.50 m true width Total 0.50 m true width Minimum diluted mining width 1.8 m 2.0 m HW & FW overbreak Au grade 0.87g/t (Nth) / 0.31g/t (Sth) 0.47 g/t Average undiluted mining width 1.9 m 3.1 m Sugar Zone Existing Underground Development Average diluted mining width 2.4 m 3.6 m Unplanned Dilution (overbreak) 26% 16% Dilution from backfill 1.60% 2.40% Dilution planned (design) 10% 10% Mining Recovery 95% 95% 22

23 MINE DESIGN SCHEDULE MINE DESIGN ILLUSTRATED BY YEAR Sugar Zone South Ramp Sugar Zone North Ramp Middle Zone 23

24 PROCESS FLOWSHEET SIMPLE FLOWSHEET WITH LOW CAPITAL AND OPERATING COSTS Flowsheet Design Process Flowsheet Primary jaw crusher followed by secondary cone crusher Grinding: 800 tpd ball mill Gravity: Two Falcon concentrators Flotation: Six TC10 Outotec flotation cells Filtration Tailings thickening Gold room: Shaker table, drying oven and furnace 24

25 EXPANSION TO 1,400 TPD Estimate of $23 million to be spent in 2020 on expanding throughput capacity: Additional cone crusher Second ball mill in parallel Storage modifications and additional conveyors for the ball mill Three additional flotation cells Concentrate regrind and leaching equipment 25

26 C$/tonne US$/oz Au OPERATING COSTS OPERATING COSTS AND CONDITIONS WELL DEFINED THROUGH 70KT BULK SAMPLE PROCESS Underground Contract Mining Detailed bottom-up cost analysis, considering the following: Technica contract rates (bulk sample mining contract) First principles estimates Benchmark costs Comminution and Processing Detailed bottom-up cost analysis General and Administration Build-up including support staff, accommodation, travel, vehicles, consulting and office consumables Operating Cost Profile (US$/oz Au) 1,200 1, LOM Average Operating Cost ($/tonne basis) Mining Processing G&A 7 28 Mining Processing G&A LOM Average 26

27 Capital Costs (C$m) CAPITAL COSTS EXISTING MINE DEVELOPMENT REDUCES CAPITAL COSTS, ACCELERATES TIMELINE TO PRODUCTION Costs Remaining for 2018 Capital Cost Profile as at March 31 st Minimal underground development 80 Underground Development Process Plant Construction Six months of stoping already completed Process plant 80% complete Underground infrastructure work includes upgrading surface ventilation fans and underground power distribution 60 Infrastructure Equipment Tailings Expansion CAPEX remaining: $35.5 million, which includes paste plant, power line and tailings facility After Commercial Production: Largest sustaining cost is underground development Estimated $23 million to be spent in 2023 to expand plant capacity Tailings capacity to be increased over mine life to support incremental throughput

28 DEBT FINANCING PACKAGE Sprott Facility Up to US$50 million senior secured credit facility Tranche I: US$20 million Subsequent US$10 million tranches, as required 5 year term Interest rate LIBOR + 7.5% Appian Subordinated Loan US$20 million subordinated loan 6 month term, option to extend to January 25 th, 2019 Interest rate of 9.5%, increasing to 11.5% if extended Subordinated to the Sprott Facilty 28

29 G O L D C O R P 29