Protection file

Harte Gold enters creditor protection

Australian Silver Lake Resources positions itself to acquire White River mining operation

Besieged White River gold miner Harte Gold enters creditors’ protection as an Australian mining company moves to take over the ailing company.

Toronto-based Harte Gold said in a Dec. 7 press release it will file an application with the Ontario Superior Court of Justice for an initial order under the Companies’ Creditors Arrangement Act. (LACC), while Perth-based Silver Lake Resources is working to acquire the Sugar Zone gold mine north of White River.

The sugar zone, an expanding underground operation, entered commercial production in 2019. The mine is located on an 81,000 hectare property, located on a mineral-rich greenstone belt.

A numbered subsidiary of Silver Lake Resources has entered into an agreement with Harte Gold to lend up to $ 10.8 million to finance mining operations in connection with the CCAA proceeding.

Harte was in danger of running out of money at the end of the year, which would have resulted in all operations being shut down.

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If the court approves the financing, it will provide Harte Gold with the liquidity necessary to continue operations at Sugar Zone until a transaction closes. The press release does not specify when this could take place.

Harte calls the demonstration funding “Silver Lake’s strong support to the Sugar Zone mine and the restructuring process.”

Silver Lake is a company listed on the Australian Securities Exchange and operates a series of gold and copper mines in Western Australia. This would be the company’s first potential foray into Canada.

The company emerged last month when it acquired US $ 63.2 million in credit facilities from BNP Paribas, Harte’s largest creditor.

Harte said if the court were to grant the CCAA request, it would trigger the start of a court-overseen solicitation-sale and investment process.

Silver Lake’s loan agreement with Harte is categorized as a “pursuit horse” method of offering, allowing other interested parties to “submit superior bids and allowing Harte to” determine the highest transaction and the highest deal. best available to the company and its stakeholders ”.

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In the statement, Harte called this turn of events a “culmination” of the strategic review process he launched last May. After considering all of the alternatives, Harte’s board of directors concluded that it was in the best interests of the company and its stakeholders to join the CCAA.

Trading in the common shares of Harte Gold on the Toronto Stock Exchange is expected to cease. The company said it expects its common shares to be delisted in due course.