Skip to content
About | Contact | Advertise | Manage Subscriptions
  1. Home
  2. Industry News
  3. Mining

Australian gold miner throws a lifeline to keep White River mine afloat

Silver Lake Resources takes on Harte Gold's debt, looks to fulfil Sugar Zone's gold potential
Northern Ontario Business Staff
Harte Gold mill and portal (aerial)
(Harte Gold photo)

Australian gold mining company Silver Lake Resources has moved in on struggling Harte Gold in a possible takeover move of its Sugar Zone Mine outside White River.

Perth-based Silver Lake has acquired US$63.2 million in debt facilities from BNP Paribas, Harte's largest creditor.

In a news release, Silver Lake said it "intends to work cooperatively with Harte Gold and its stakeholders to deliver an outcome which will provide the best opportunity to realize the potential of the Sugar Zone mine and the associated land package."

Finding gold at the Sugar Zone Mine and on Harte's massive 81,287-hectare property hasn't been the problem since commercial production began three years ago.

But Toronto-based Harte has encountered a number of operational issues in growing the scale of production and has defaulted a number of times on its debt payments to BNP Paribas.

Harte and BNP Paribas entered into a forbearance agreement last July.

Sign up for the Sudbury Mining Solutions weekly newsletter here.

A forbearance agreement is a legal tool used by lenders when borrowers breach the terms of a loan. It grants the borrower some time to resolve financial issues and return to an acceptable payment schedule in return for certain conditions to be met.

Last week, BNP Paribas deposited US$2 million in Harte's bank account to keep mining operations going for the remainder of this year. But Harte's cash flow situation is so precarious that there are serious doubts that the Sugar Zone can continue production in 2022 unless a deep-pocketed financing partner or buyer is found. 

Harte has been looking for one since launching a strategic review process last May after coming up short in key performance areas and failing to reach goal production targets at the underground operation, 25 kilometres north of White River. Harte said it needs a cash injection to expand mining into new zones and boost the pace of production.

If Silver Lake were to acquire the Sugar Zone Mine and the property, it would be the company's first Canadian asset. 

Silver Lake is a public-traded company on the Australian Securities Exchange. It runs two operations in Western Australia; the Deflector gold and copper mine, located 450 kilometres north of Perth, and its Mount Monger complex, a series of underground gold mines under the regional city of Kalgoorie.