Harte Gold's biggest creditor has granted the White River-area miner extra time to find a financial partner and meet its debt obligations.
The mining company issued a Nov. 1 news release that its forbearance agreement with BNP Paribas has been amended from Oct. 29 to Nov. 30.
Toronto-headquartered Harte Gold runs the Sugar Zone Mine 25 kilometres north of White River. The underground mine started commercial production in 2019.
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.
Harte and BNP Paribas entered into this initial forbearance plan last July which lasted until Sept. 30. Two previous extensions were announced in September and October.
Financially struggling Harte launched a strategic review process earlier this year after the operation fell short in some key performance areas. The company also mentioned that it might not reach its gold production target for 2021.
Among the outcomes of this review is that the operation could be sold or a financing partner comes aboard. Harte reiterated what it said in previous news releases that the strategic review process "has not yet resulted in any binding offers being received by the company," but discussions continue with a number of parties on potential transactions.
Since entering into commercial production in 2019, Harte has been plagued by a number of operational difficulties and has been unable to maintain its schedule of loan payments to its biggest lender, BNP Paribas. BNP helped Harte refinance its debt.
Still another lender, Appian Capital, put together a $40-million financing package last year to help Harte to restart operations after a pandemic-related shutdown. Appian served up a default notice to Harte in August.
