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Interview with Stephen G. Roman, Chairman, President and CEO of Harte Gold (TSX: HRT, FSE: H4O, OTC: HRTFF): Generating Cash Flow through Bulk Sample Program then into Commercial Production upon Receipt of Commercial Permits

on 7/19/2016
We spoke with Stephen G. Roman, Chairman, President and CEO of Harte Gold (TSX: HRT, FSE: H4O, OTC: HRTFF), about the progress of the advanced exploration and bulk sample program at their 100% owned Sugar Zone Deposit located in Ontario, 60 kilometers east of the Hemlo Gold Camp. So far they have produced more tons than expected, and the grades have been higher than expected. The company is generating a free cash flow now through this bulk sample program and would like to be able to continue mining until they get their commercial permits, and then move right in to commercial production. According to Mr. Roman, they expect to generate over 5 million of profit at the end of this bulk sample phase and then once they go into commercial production, they expect to generate significant profits, doing between 70 and 80 thousand ounces a year of production. We learned from Mr. Roman that the company has excellent exploration upside and on July 20th they will start drilling targets between Wolf Zone and Sugar Zone with the aim to be well over a million ounces by the end of the year.

Dr. Allen Alper: This is Dr. Allen Alper, Editor-in-chief of Metals News interviewing Stephen G Roman, Chairman, President, and CEO of Harte Gold Corp. I hear there are great things happening at Harte Gold. Would you like to tell our readers about your resources and your plans for this year?

Mr. Stephen G. Roman: I’m pleased to. We put out a press release last week, and had our annual meeting. We updated our shareholders on the progress of our advanced exploration and bulk sample program. We've now been shipping ore to Barrick Gold for processing. In the month of June, we shipped about 2500 tons. The grades have been holding up as we anticipated and averaging over our projected 10 grams/tonne.

Dr. Allen Alper: That's excellent!

Mr. Stephen G. Roman: Yes. It's very exciting. The grades are excellent and the orebody seems to be thicker than we expected as well. We've been mining, doing development drifting on the orebody to open it up ready for stoping. We've encountered areas as wide as 7 meters. Average width has been well over 3 meters so far, and typically widening out where we've been mining, to about 7 meters.

For the amount of development we've done, we've produced more tons than expected. The grades have been higher than expected. So far, everything is going very well at the mine site. We've completed the planned development 375 level as well as the 360 level. These levels are 15 meters, or about 50 feet apart. Now we're developing the 345 level.

We’re currently opening up the deposit, in order to start our production stoping. Today we're doing our first production blast, using the long hole mining method. Going forward over the next few months, we will produce production ore and more tons. We expect to ship about 500 tons a day to the Barrick mill, of production ore from our stopes.

The mining is going exceptionally well. We plan on doing more underground development as part of this program, and continuing the ramping over to the southern flank of the deposit, in order to have more area opened up for commercial operations. Currently, we've applied for an additional 30 thousand tons, over and above our 70 thousand ton sample that's permitted now. The plan is to continue mining until we get our commercial permits if possible.

Dr. Allen Alper: That's really great!

Mr. Stephen G. Roman: Now, more very exciting news! We made a discovery a couple of years ago that we call the Wolf Zone. The Wolf Zone is about 2 kilometers away, to the north east from the Sugar Zone deposit where we're mining now. The area in between the Wolf Zone and the Sugar Zone was basically untested, with exploration or drilling. We’ve recently completed a geophysical survey between these two deposits. We covered the north end of the Sugar Zone, so that we would have a reference point, and covered the south end of the Wolf Zone. We did a deep IP survey, Induced Polarization, in that large blank area. We've come up with about half a dozen large anomalies. We expect to start exploration drilling on the 20th of July, and systematically hit some of these targets.

Potentially, we can add new resources here, between now and the end of the year. We currently have 5000 meters of drilling budgeted, which we're going to start this month.

Dr. Allen Alper: 5000! That sounds very promising, sounds like you have a great program going.

Mr. Stephen G. Roman: My target is to be well over a million ounces by the end of the year. In addition to the area between the Wolf and the Sugar Zone, which if you take that entire strike length, would be at least 3 kilometers long. In that area, we have great resource expansion potential. We've also drilled a hole down to a thousand meters below the Sugar Zone, and we hit the ore body a thousand meters down. That means from our current resource, which starts at surface to about 400 meters, that area, that additional 600 meters down to 1000 meters, is open. Because we've hit it at 1000 meters, we presume the ore body remains open at depth.

But we need to drill it, and we have the budget now to be able to do that, and prove up more ounces, and of course make the company that much more valuable.

That's where we are now, and it's all very exciting. Our gold market has cooperated, and things look better on that front. We are currently receiving between 1600 and 1700 dollars Canadian per ounce of gold. Our costs are in Canadian. Now, we've kicked off the commercial production applications, which would initially see us coming in at 600 tons per day. We have a mill designed that will use gravity and flotation. We don't need a cyanide circuit, which would simplify the entire permitting process, and make for an inexpensive milling operation.

Dr. Allen Alper: That's really great! That's excellent!

Mr. Stephen G. Roman: We're moving the project along very quickly. We expect to have a significant amount of news, on our exploration program, over the next few months.

Dr. Allen Alper: That's exciting! Could you update our readers on your background, and your team?

Mr. Stephen G. Roman: I've been involved in developing exploration and mining projects my entire career. I was awarded with two colleagues the Bill Dennis Award as Prospector of the Year, for 2016, at the Prospectors and Developers Association Convention, in March. I've put together a very solid team of professional engineers, geologists, environmental specialists, etc. including Roger Emden, VP Projects, Bob Kusins, P. Geo. Our VP of Exploration, George Flach, and I have worked together since the '80s, developing and finding large gold deposits in West Africa.

Our team is excellent. The CFO, Rein Lehari is a former Price Waterhouse Cooper's accountant. Tim Campbell, our VP and Corporate Secretary has been involved in public company development for 20 years. We have a Board that includes: the former president of the Iron Ore Company of Canada, the former CFO of Placer Dome, metallurgists that used to work for Falconbridge, and built their Dominican Republic operations.

We are capable of moving projects from the exploration phase, right through to the production phase. We've done that previously. We have an excellent project at Harte Gold that could be the foundation for building a larger company.

Dr. Allen Alper: Sounds like you have an excellent background, an outstanding team, and an outstanding Board. It's really a first class group that you're running. That's really great!

Mr. Stephen G. Roman: Thank-you very much.

Dr. Allen Alper: I wonder if you could tell us a bit more about your finances, and your capital structure.

Mr. Stephen G. Roman: Currently, we're a Toronto Stock Exchange, senior board listed company. The symbol is HRT. We have about 330 million shares outstanding. We have been financing the development of this project over the last few years, through share issuance. The market has been quite abysmal over the last few years, but the company is generating a cash flow now through this bulk sample program. We expect to generate over 5 million profit at the end of this bulk sample phase, which will be used for further underground development and exploration. Once we go into commercial production, we expect to generate significant profits, with a mine output of 70 thousand ounces a year.

The plan is to move it through that phase, and then eventually start buying our shares back, with an issuer bid. We would like to tighten up the current shares outstanding. I can say that between myself and my associates, we've been financing the company during this phase and have a solid investor base.

Dr. Allen Alper: That sounds great! Sounds like an excellent position to be in, and the timing is getting better and better.

Mr. Stephen G. Roman: Definitely a better gold market!

Dr. Allen Alper: Could you tell me the primary reasons why our-high-net worth readers/investors should invest in your company?

Mr. Stephen G. Roman: I would say for our high-net-worth investors, the company is just getting off the ground. We are into the development phase of our assets at the moment. We have excellent exploration upside. We know that our deposit is going to grow substantially, through additional drilling, so we're adding value to the company through adding more ounces. With the cash flow already starting, we are at the point where we're self-funding. We don't have to keep coming back to the market. The project is generating enough revenue that we can use that for exploration, and that was actually the premise for starting the operation because we didn't know how long the market would be depressed.

With positive cash flow, we definitely would be attractive to high-net-worth individuals that are looking for a big lift on their share valuation. We're currently trading around 29 to 30 cents a share, Canadian dollars. One thing I have to mention is that, it's mostly smaller retail investors that own this stock. Now, with analysts starting to follow us, we expect more institutional support, which could have a dramatic impact on our stock.

I think it's a good time to invest in Harte Gold. As exploration is being done during the summer, we expect the momentum on the story to continue to build

Dr. Allen Alper: That sounds exciting!

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