G O L D C O R P
Corporate Presentation
October 2018
www.hartegold.com TSX: HRT | FRANKFURT: H4O | OTC: HRTFF
Corporate Presentation October 2018 www.hartegold.com TSX: HRT | - - PowerPoint PPT Presentation
CANADAS NEXT HIGH -GRADE GOLD MINE G O L D C O R P Corporate Presentation October 2018 www.hartegold.com TSX: HRT | FRANKFURT: H4O | OTC: HRTFF FORWARD LOOKING STATEMENTS This presentation contains forward-looking information under
www.hartegold.com TSX: HRT | FRANKFURT: H4O | OTC: HRTFF
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All figures in CAD, unless otherwise noted All tonnages in metric, unless otherwise noted 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
"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"
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.
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CORPORATE STRUCTURE INSTITUTIONAL SUPPORT Analyst Following: Major Shareholders*: Headquartered: Toronto, Ontario, Canada Market Cap: C$265 million (C$0.46/share)
19.9%
Shares Outstanding: 581 million (Basic) 643 million (Fully Diluted) Symbol: TSX: HRT FRANKFURT: H4O OTCBB: HRTFF
Head Office (Toronto)
0.9% 7.2%
Debt Financing For Up To US$70 Million:
US$20 million US$50 million
* As at Q2 2018, source: Bloomberg
Buy C$0.75 Buy C$0.80 Buy C$1.20
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83,850 HECTARES (>200,000 ACRES) CLAIMED ON A MAJOR GREENSTONE BELT IN AN ESTABLISHED MINING REGION
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Resource update: tripled resource PEA: $425 M pre-tax NPV5%, 60% pre-tax IRR1
IBA signed with Pic Mobert First Nation (PMFN)
1) 5% discount rate at gold price US$1,350/oz and CAD:USD 0.8000
Declare commercial production: Q4 2018
Resource Update: Q1 2019
Updated mine plan, final technical report: Q1 2019
Permits received for full production
Comprehensive debt financing package, up to US$70 M Announced first gold pour
100,000 meter drill program – near-mine and exploration targets
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SUGAR ZONE IS ONE OF THE HIGHGEST GRADE DEPOSITS GLOBALLY
Note: Data set includes worldwide FS, PFS and PEA stage projects Source: SNL, public company information
0.0 4.0 8.0 12.0 16.0
Measured + Indicated Resource Grade (g/t Au) Sugar Zone Project (as at time of PEA, May 2018): 8.5 g/t Indicated Resource, 94th percentile SUGAR ZONE RESOURCE ESTIMATE
Category Tonnes Grade (g/t) Contained Au (oz) Indicated 2,607,000 8.5 714,200 Inferred 3,590,000 6.6 760,800
Development Projects Worldwide
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HARTE GOLD PROVIDES SHAREHOLDERS LEADING EXPOSURE TO RESOURCE AND PRODUCTION GROWTH
* Selected single asset producers and < 200 Koz producers ** Average resource increase divided by exploration budget for that period Source: Analyst estimates, public company information
Resource Growth (2016 – 2018) Production Growth (2019E – 2021E)
(100%) (50%) 0% 50% 100% 150% 200% 250% 300% 350% (50%) 0% 50% 100% 150% 200% 250%
Leading resource and
production growth RESOURCE AND PRODUCTION GROWTH OF SELECTED PRODUCERS* `
Gold production increasing to >100,000 oz/yr by 2021 (PEA)
Resources tripled after 2017 drilling (138,000 m at Sugar / Middle Zones)
130,000 m drilling currently underway at Sugar, Middle, Wolf an Fox zones
Resource update targeted for early 2019
Only ~10%
the
land package has been explored!
Bubble size illustrates ounces delineated for exploration dollars spent**
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400 800 1,200 1,600 Cash Operating Cost
HARTE GOLD IS PROTECTED TO GOLD PRICE VOLATILITY
Low cost operation, simple metallurgy
Tabular ore body, steeply dipping – amenable to longhole stoping
Widths and modelled grades confirmed through Bulk Sample and Phase I Production
Near surface – ramp access, minimal distance to mill
Operating costs in CAD dollars
Several opportunities under review to lower costs further!
STABLE EQUITY MARGINS AT CURRENT GOLD PRICES Gold price: C$1,600/oz Operating Margin: C$705/oz
Operating Cost: C$634/oz Sustaining Cost: + C$261/oz
AISC: C$895/oz
Figures in CAD, based on PEA Estimates
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H2 2018 H1 2021 H2 2019 Today
PROVIDES EARLY CASH FLOW AND LONGER TERM GROWTH Phase 1: 540 tpd (2018 - 2019) Phase 2: 800 tpd (2020) Phase 3: 1,400 tpd (2021+)
increased throughput
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SCALABLE MINE PLAN DESIGNED TO MATCH UNDERGROUND DEVELOPMENT
20 40 60 80 100 120 140 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Production (koz Au) Phase 1 & 2 (800 tpd) Phase 3 (1,400 tpd)
Throughput and Grade Production Forecast
0.0 2.5 5.0 7.5 10.0 150 300 450 600 2018 2020 2022 2024 2026 2028 Grade (g/t Au) Throughput (ktpa) Phase 1 & 2 (800 tpd) Phase 3 (1,400 tpd) Diluted Head Grade Exploration Potential Resource Growth
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Construction / Commissioning
complex is complete
critical infrastructure is complete Permitting
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SIGNFICANT DRILLING COMPLETED IN 2018 TO SUPPORT THE FOLLOWING:
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AREAS TARGETED FOR NEAR MINE DRILLING “LOW HANGING FRUIT”
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POSITIVE DRILLING TO IMPROVE RESOURCE GRADE AND ADD OUNCES TO THE MINE PLAN Wolf Zone Sugar Zone Deposit
Au gpt
100 3 10 10.47gpt Au/1.40m 1.59gpt Au/3.30m 3.83gpt Au/10.66m 6.15gpt Au/6.17m 0 m 250 m 1,000 m 500 m 750 m 12.89gpt Au/2.28m 18.65gpt Au/2.23m
Middle Zone Fox Zone
23.64 gpt Au/2.28m (UZ) 19.47 gpt Au/1.59m (UZ) 17.94 gpt Au/1.40m (UZ) 10.98 gpt Au/1.43m (FZ) 10.75 gpt Au/1.58m (FZ)
OPEN OPEN
49.96gpt Au/1.42m 14.79gpt Au/3.03m FW 6.42 gpt Au/4.23 m FW 5.41 gpt Au/7.66 m 11.27 gpt Au/5.81m 16.46 gpt Au/6.55m 21.16 gpt Au/4.78m 12.14 gpt Au/3.10m 17.49 gpt Au/4.70m 9.28gpt Au/1.59m 8.87gpt Au/1.87m
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FINAL DRILLING FOR 2018 WILL TEST CONTINUITY OF MINERALIZATION AT DEPTH
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SEVERAL OPPORTUNTIIES NOT CAPTURED IN THE PEA
$150 $300 $450 $600 $750
US$1,250/oz Gold Price US$1,350/oz Gold Price Improve Head Grade Upgrade Resources Mine Plan Optimization Exploration Upside
Pre-Tax NPV5% ($ Millions) Opportunities To Further Enhance Value
Sugar Zone NPV Potential
$344 $425
?
?
head grade: 7.0 – 8.0 g/t mineable resource by 534,000 ounces mining dilution, lower mining costs
PEA Pre-Tax NPV5%
? ? ?
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Increased overall land position to 83,850 hectares 35 Km strike length to be explored Near-mine targets Sugar, Middle, Wolf and Fox Zones Eagle and Highway Zones permitted for exploration, drilling is underway
Sugar Zone Middle Zone Wolf Zone
EM Targets Eagle Zone Fox Zone Lynx Zone Highway Zone Fisher Zone
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Stephen G. Roman
Chairman, President & CEO; BA 35+ years
sold to Goldcorp ($1.5B)
– Volta Grande, Black Fox, Gabriel Resources Limited
winner, Prospector of the Year, 2016
Roger J. Emdin
Vice President, Operations; P.Eng. 30+ years
Glencore’s Nickel Rim South Mine
for Excellence in Mining Innovation
George Flach
Independent Consultant; B.Sc. P.Geo. 30+ years
gold projects in West Africa
Tarkwa, 4Moz Bogosu and 2Moz Benso mines in Ghana
Burkino Faso
Rein Lehari
Chief Financial Officer; CPA, CA 30+ years
PricewaterhouseCoopers
corporate finance
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Steve Ball
General Manager, Sugar Zone Mine; P.Eng. 30+ years
human resources, corporate affairs and project management
at Vale’s narrow vein Coleman Mine and Voisey’s Bay
Shawn Howarth
Vice President, Corporate Development; MBA, B.Eng. 15+ years
finance, corporate strategy and valuations
banker with Standard Chartered Bank
Tim Campbell
Vice President & Secretary; BA Hons. 20+ years
consultation
Bob Kusins
Resource Geologist; P.Geo. 35+ years
geologist, geological database management, modelling and resource estimation
underground geologist at Barrick’s Hemlo Mine
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shipped to Barrick’s Hemlo Mill for processing
completed to support commercial mining
Geology: Continuity, widths and modelled grades have been confirmed Mining: Long-hole mining, minimal dilution Processing: Simple metallurgy, high recoveries Costs: Mining costs confirmed
Mine Development > 2,500 m Ore Shipped 67,454 DMT Grade 8.5 g/t Reconciliation with Barrick + 5% Direct Mining cost C$85 / t
BULK SAMPLE HIGHLIGHTS (BARRICK’S HEMLO MILL)
Viewing stope along strike. Clean break, minimal dilution
Opened Longhole Stope
Steeply dipping ore, 65-70°
8 Meter Width Lower Zone Ore Face
100,000 TONNES OF MATERIAL MINED TO-DATE, DE-RISKING TO COMMERCIAL PRODUCTION
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CLOSED DEBT FINANCING PACKAGE WITH SPROTT RESOURCE LENDING AND APPIAN CAPITAL Sprott Facility
Appian Subordinated Loan
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$70 million
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Input Unit Value
Gold Price US$/oz $1,250 Exchange Rate CAD:USD 0.80 Average Annual Throughput (2019+) tpa 403,000 Average Daily Throughput (2019+) Tpd 1,100 Total Processed Tonnes 4,539,800 Diluted Head Grade g/t 6.5 Gold Recovery % 95.4% Mine Life Years 12 Total Ounces Recovered Ounces 904,000 Average Annual Production (Phase I & II) Ounces 54,500 Average Annual Production (Phase III) Ounces 106,900 Average Annual Production (LOM) Ounces 80,700 Peak Annual Production (2024) Ounces 121,400 Mining Costs C$/tonne $90.83 Processing Costs C$/tonne $28.71 Site G&A C$/tonne $8.46 Total Costs C$/tonne $128.01 LOM Average Cost* US$/oz $507 LOM AISC* US$/oz $708
Macro and Physical Parameters Cost Parameters Cash Cost Summary
* Converted from CAD to USD at 0.8000
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Unit Gold Price Sensitivities US$1,150/oz PEA Pricing US$1,350/oz
Macro Parameters Gold Price
US$/oz
$1,150 $1,250 $1,350 Exchange Rate
CAD:USD
0.80 0.80 0.80 Pre-Tax NPV and IRR NPV @ 5%
M C$
$263 $344 $425 IRR
%
40% 50% 60% Post-Tax NPV and IRR NPV @ 5%
M C$
$189 $244 $299 IRR
%
34% 42% 50%
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HARTE GOLD’S ALL IN SUSTAINING CASH COSTS ARE IN THE TOP QUARTILE OF PRODUCERS
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
Cumulative Production 25% 50% 75%
100%
$500
AISC (US$/oz)
$2,500 $3,000 $1,000 $1,500 $2,000 0%
Sugar Zone, Harte Gold*
AISC of US$708 / oz over mine life
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