Sugar Zone gold project is an underground mine located near White River, Northern Ontario, Canada. Harte Gold is the developer of the project, for which the preliminary economic assessment (PEA) was completed in May 2018.
The project is planned to be developed in three phases, of which the first phase was completed in October 2017. Commercial gold production from the phase one development was commenced with an average milling rate of 575 tonnes per day (tpd) in January 2019.
Harte Gold completed the feasibility study for the 800tpd phase two development in April 2019, which predicted 61,000oz of gold production a year over a mine life of 14 years.
The mine can be further expanded for 1,200tpd operations, which would increase the annual gold production to 95,000oz.
Sugar Zone gold project geology and mineralization
The Sugar Zone gold project is spread over 549 contiguous unpatented mining claims and four mining leases covering an area of approximately 79,355ha. It is located in the Dayohessarah Greenstone Belt of late Archean age that is part of the Abitibi-Wawa sub-province of the Superior Province.
Gold mineralization at Sugar Zone is hosted in quartz veins, stringers, and flooded zones. The mineralization is hosted by north-northwest striking lithological units, and is further classified into upper, lower, and footwall mineralized subzones. The three zones range in thickness from approximately 1.5m to 10m, and are separated by 20m to 30m of unmineralized meta-volcanics.
Sugar Zone gold project reserves
The Sugar Zone gold project is estimated to contain 3.9 million tonnes of probable reserves containing 890,000oz of gold grading 7.1g/t Au.
Mining and ore processing at Sugar Zone
Longitudinal long-hole retreat stoping method, with paste backfill used as the primary fill type, has been selected as the mining method for the Sugar Zone underground project.
The mine produces at a nominal rate of 575 tonnes per day (tpd) in the first phase. The throughput will be increased to 800tpd in the second phase, which is expected in 2020. The production will be further increased to 1,200tpd in the third phase.
The processing plant will produce both doré bar and a bagged gold concentrate, by applying gravity concentration and flotation, during the initial two phases.
Harte Gold intends to produce only a doré in the third phase, which will add a second ball mill, gravity circuit, a concentrate leaching circuit, and a cyanide leach solution handling/gold recovery circuit to the processing plant.
Sugar Zone gold project construction
The construction of the crusher and mill complex was completed in August 2018. The crushing spread and mill complex were commissioned using on-site generators.
Detailed engineering of the processing plant began in the first quarter of 2017, while long lead equipment purchases were made in the second quarter of 2017. The expanded processing plant and flotation concentrate leaching circuit are expected to be installed by the end of 2020 and will come online in 2021.
The works also included the construction of a 44km power line from White River to the mine site.
Harte Gold secured a $50m senior secured debt facility from Sprott Private Resource Lending under a committed agreement for the phase one construction of the Sugar Zone project.
Harte Gold also entered a committed agreement with Appian Natural Resources Fund for $20m subordinated loan for the project.
It further secured $72.5m of senior debt facilities from BNP Paribas and $10m of equity investment from Appian Natural Resources Fund in May 2019, for the phase two of the project.
The Sugar Zone gold project is readily accessed from Trans Canada via Highway 631, a secondary paved highway, followed by a gravel haulage road extending for approximately 20km.
A temporary 600-13.8kV step-up transformer is set up to meet the power required for the initial underground mining operations.
Redpath was awarded the contract for conducting underground development works at Sugar Zone, while Foraco International was engaged to conduct long-hole drilling for stope development.
P&E Mining Consultants prepared the PEA of the project and was also engaged to update the mineral resource estimates. Halyard was commissioned to design and construct the on-site mill. Amec Foster Wheeler was engaged to evaluate geochemical properties of the waste rock, mineralized material, and tailings.
Technica Mining was awarded the contract for mining 70,000t bulk sample under a $20m fixed price. The contract fee was issued in the form of Harte Gold common shares at $0.15 a share.
Tulloch Engineering was engaged to draft a preliminary civil design for 3.5km of the access road to the Sugar Zone property in 2013. Kabi Lake Forest Products was responsible for the construction of the 20km access road, site infrastructure, and general surface contracting.