g o l d c o r p...scalable mine plan: 1,400 tpd, +100,000 ounces of annual production simple mine...
TRANSCRIPT
Annual General Meeting
June 21st 2018
G O L D C O R P
TSX: HRT2
FORWARD LOOKING STATEMENTS
All figures in CAD, unless otherwise noted
Figures in USD were converted at CAD/USD 0.8000
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 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.
TSX: HRT3
COMPANY SNAPSHOT
CORPORATE STRUCTURE INSTITUTIONAL SUPPORT
Analyst Following:
Major Shareholders1:
Headquartered:
Toronto, Ontario, Canada
Market Cap:
C$210 million (C$0.37 June 19th)
19.9%
Shares Outstanding:
575 million (Basic)
637 million (Fully Diluted)
Symbol:
HRT: TSX
H4O: FRANKFURT
HRTFF: OTC
Head Office(Toronto)
2.1%
0.9%
7.2%
Debt Financing For Up To US$70 Million:
US$20 million
US$50 million
TSX: HRT4
Stephen G. Roman Chairman, President & CEO;
BA
35+ years
Discovered Gold Eagle, sold to Goldcorp ($1.5B)
Verena Minerals / Belo Sun
– Volta Grande, Black Fox,
Gabriel Resources Limited
PDAC “Bill Dennis Award”
winner, Prospector of the
Year, 2016
EXPERIENCED MANAGEMENT TEAM
Roger J. EmdinVice President, Operations;
P.Eng.
30+ years
Senior management and operating experience
Experience with large
operating mines including
Glencore’s Nickel Rim
South Mine
Chairman CEMI – Center
for Excellence in Mining
Innovation
George FlachIndependent Consultant;
B.Sc. P.Geo.
30+ years
Discovered / developed gold projects in West
Africa
20Moz Gold Fields
Tarkwa, 4Moz Bogosu
and 2Moz Benso mines in
Ghana
2Moz Goulagou mine in
Burkino Faso
Rein LehariChief Financial Officer;
CPA, CA
30+ years
Previously Partner, PricewaterhouseCoopers
Business valuation, M&A,
corporate finance
TSX: HRT5
EXPERIENCED MANAGEMENT TEAM (Cont’d)
Steve BallGeneral Manager, Sugar
Zone Mine; P.Eng.
30+ years
Technical, operations, human resources,
corporate affairs and
project management
Formerly Mine Manager
at Vale’s narrow vein
Coleman Mine and
Voisey’s Bay
Shawn HowarthVice President, Corporate
Development; MBA, B.Eng.
15+ years
Experience in corporate finance, corporate
strategy and valuations
Formerly an investment
banker with Standard
Chartered Bank
Tim CampbellVice President & Secretary;
BA Hons.
20+ years
Government & Permitting
First Nations & Community
consultation
Corporate finance
Regulatory compliance
Bob KusinsResource Geologist;
P.Geo.
35+ years
Underground mine geologist, geological
database management,
modelling and resource
estimation
Formerly Chief
underground geologist at
Barrick’s Hemlo Mine
TSX: HRT6
MILESTONES ACHIEVED DURING 2018
Resource update: tripled resource
PEA: $425 million pre-tax NPV5% at US$1,350/oz, 60% pre-tax IRR1
Comprehensive debt financing package for up to US$70 million
IBA signed with Pic Mobert First Nation (PMFN)
1) 5% discount rate at gold price US$1,350/oz and CAD:USD 0.8000
Final permitting expected: July 2018
Full Production: H2 2018
HARTE GOLD HAS DELIVERED ON ALL TARGETS TO-DATE
Resource Update: Q4 2018
TSX: HRT7
FULLY FUNDED TO PRODUCTIONDEBT FINANCING PACKAGE WITH SPROTT AND APPIAN
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
TSX: HRT8
H2 2018
H1 2021
H2 2019
Today
PHASED MINE PLAN INCREASING TO 1,400 TPDPROVIDES EARLY CASH FLOW AND LONGER TERM GROWTH
Phase 1:540 tpd
(2018 - 2019)
Phase 2:800 tpd(2020)
Phase 3: 1,400 tpd(2021+)
Low risk ramp-up to commercial production
Existing surface and underground mining infrastructure is sufficient to supportincreased throughput
Throughput increased by adding second ball mill and leach circuit
Expansion to the Middle Zone allows for multiple stoping areas
TSX: HRT9
PRODUCTION PROFILE TO +100,000 Oz/YearSCALABLE 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
Pro
du
ctio
n (
ko
z A
u)
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
Gra
de
(g
/t A
u)
Thro
ug
hp
ut
(ktp
a)
Phase 1 & 2 (800 tpd) Phase 3 (1,400 tpd) Diluted Head Grade
Exploration Potential
Resource Growth
TSX: HRT10
FIRST QUARTILE CASH COST PRODUCERAISC CASH COST OF US$708/OZ OVER LIFE OF MINE
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
AISC Curve Illustrating Sugar Zone Vs. Other Selected High Grade Canadian Underground Mines
Cumulative Production
25% 50% 75% 100%
$500
AIS
C (U
S$
/oz)
$2,500
$3,000
$1,000
$1,500
$2,000
0%
Su
ga
r Zo
ne
, H
art
e G
old
*
Se
ab
ee
, SSR
Ma
ca
ssa
, K
irk
lan
d L
ak
e
Ho
pe
Ba
y, TM
AC
Isla
nd
Go
ld,
Ala
mo
s
Ea
gle
Riv
er,
We
sdo
me
He
mlo
, B
arr
ick
TSX: HRT11
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 $1,350
Exchange Rate CAD:USD 0.80 0.80 0.80
Pre-Tax NPV and IRR
NPV @ 5% M C$ $263 $344 $425
IRR % 40% 50% 60%
Post-Tax NPV and IRR
NPV @ 5% M C$ $189 $244 $299
IRR % 34% 42% 50%
TSX: HRT12
OPPORTUNITIES TO ENHANCE VALUE
Improve head grade
Add resources to mine plan
Optimize mine plan
Increase drill density to improve overall grade
Infill drilling to date has returned very positive results
+500,000 ounces currently not factored into mine plan
Incorporate results from Wolf Zone and Footwall Zone
PEA contractor mining costs were conservative
Significant potential to optimize mine plan
TSX: HRT13
OPPORTUNITIES TO ENHANCE VALUEAREAS TARGETED FOR NEAR MINE DRILLING “LOW HANGING FRUIT”
Sugar Zone Middle Zone
1
3
Sugar Zone
Infill
Middle
Zone Infill
2
Middle
Zone
Footwall
2
Sugar Zone
Footwall
Indicated Resources
Inferred Resources
TSX: HRT14
SUGAR ZONE DEEP INFILL RESULTSPOSITIVE DRILLING TO IMPROVE RESOURCE GRADE AND ADD OUNCES TO THE MINE PLAN
TSX: HRT15
Wolf ZoneSugar Zone DepositSE NWMiddle Zone
Current Infrastructure
Planned Infrastructure
Previously Drilled
Au gpt100
0
3
10
FW 5.41gpt
Au/7.66m
Current Drilling
FW 38.06gpt
Au/2.29m
FW 6.42gpt
Au/4.23m
0 m
250 m
1,000 m
500 m
750 m
FW 10.75pt
Au/1.58m
FW 10.98gpt
Au/1.43m
FOOTWALL ZONE DISCOVERYENTIRELY NEW ZONE OF MINERALIZATION THAT COULD POTENTIALLY ADD SIGNIFICANT OUNCES
TSX: HRT16
MIDDLE ZONE INFILL RESULTSCONTINUED GROWTH OF HIGH GRADE AREA
TSX: HRT17
WOLF ZONENEW AREA OF MINERALIZATION, CONTINUES TO EXPAND
TSX: HRT18
ENHANCING PROJECT VALUESEVERAL OPPORTUNTIIES NOT CAPTURED IN THE PEA
$150
$300
$450
$600
$750
US$1,250/oz
Gold Price
US$1,350/oz
Gold Price
Improve Head
Grade
Upgrade
Resources
Mine Plan
Optimization
Exploration
Upside
Pre
-Ta
x N
PV
5%
($ M
illio
ns)
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%
?
?
?
TSX: HRT19
Increased overall land
position to 83,850 hectares
35 Km strike length to be
explored
Near-mine targets Sugar,
Middle and Wolf Zones
Several regional exploration
targets identified
NEAR-MINE AND PROPERTY-WIDE EXPLORATION
`Sugar Zone
Middle Zone
Wolf Zone
EM
Targets
Eagle Zone
Fisher Zone
Lynx Zone
Highway Zone
TSX: HRT20
CONSTRUCTION AND PERMITTING UPDATE
Construction Update
Mill construction substantially complete
Grid connection scheduled for end of July
Underground development to support commercial production is underway
Permitting
IBA signed with proximal First Nation Band
Crown consultation nearing completion
Closure Plan Amendment submitted to MNDM
MOECC operating permits are in technical review
Target date for final permits: end of July, to coincide with grid connection and mill start-up
TSX: HRT21
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 NPV5% at US$1,350/oz gold
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
TSX: HRT22
G O L D C O R P