The share price of Harte Gold plunged on Monday as the troubled miner warned shareholders that its current strategic review process was not likely to yield a transaction and that it needed more financing to maintain operations at the Sugar Zone mine, in Ontario.

The Toronto-based gold miner’s stock fell to a low of C$0.02 a share, as holders of Harte Gold’s equity securities were cautioned that trading in securities was “highly speculative and that the trading prices for securities might bear little or no relationship to the actual realisation of value”.

Harte Gold said that BNP Paribas had further extended the forbearance agreement to November 30. The extended agreement would allow the miner to continue its sale and investment solicitation process, but this has not yielded any results yet.

Discussions were ongoing with several parties with respect to a potential transaction, but Harte Gold warned that it did not seem likely that the strategic review process would result in a transaction that would provide any value for holders of its equity securities.

To preserve liquidity to support the strategic review process, the company had continued to defer the implementation of mitigation measures that were aimed at addressing production issues at Sugar Zone. The company has also reduced certain capital expenditures.

Based on the current cash flow forecast, Harte Gold said it would require additional financing before year-end to continue operations and to conclude the strategic review process. At the end of the third quarter, Harte Gold had C$11.4-million cash on hand.

Meanwhile, reporting third-quarter financial and operational results, the company said that the Sugar Zone mine produced 15 260 oz of gold in the September quarter, compared with 11 283 oz in the second quarter and 6 218 oz in the third quarter of 2020. Production was positively impacted by increased throughput and grade. 

The third quarter proved to be an operationally successful quarter and a notable improvement from the previous quarter, in part owing to ongoing operational improvements and focused capital and sill development.

Harte Gold reiterated that there were critical areas of the operation that had to be addressed in order to see a sustainable, consistent increase in production. These areas include bolstering the mine workforce, accelerating infill drilling, accelerating mine capital development, and reinforcing the underground mobile equipment.

"These initiatives require additional capital. In the absence of securing the financial liquidity to address these initiatives, the company continues to expect that future production will be negatively impacted," it said.

Harte Gold reported revenue of C$32.2-million from the sale of 14 669 oz of gold and posted a net loss of C$3.1-million.