By Dr. Allen Alper, PhD Economic Geology and Petrology, Columbia University, NYC, USA
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
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
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
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
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!
Tel: (416) 368-0999
Fax: (416) 368-5146
8 King Street East
Toronto, ON M5C 1B5