Silver Lake Ontario Inc.

Thank you very much, operator, and good morning, everyone. And thank you for joining us today.

As the operator shared with me on this call is Graham du Preez, the Harte Gold CFO and myself and Graham will be reviewing the key year end financial highlights. Harte Gold released its fourth quarter and full year 2020 financial results at market close yesterday.

You can find our consolidated financial statements in the MD&A on the Harte Gold website or under our profile on SEDAR. I would like to start by speaking about the fantastic news that we announced this past Friday in which we closed yesterday.

We are pleased to welcome New Gold as the newest Harte Gold shareholder. New Gold has made a $24.8 million strategic investment in the company to acquire a 14.9% interest in Harte Gold.

New Gold's investment represents a value accretive transaction that accelerates Harte Gold's stabilization and growth strategy. De-risks the balance sheet and further diversifies the company's shareholder base.

We see the relationship with New Gold as another important partnership and as such, we have provided New Gold with the following subject to them maintaining a minimum 10% ownership. Immediate access to operating and other important information.

The right to nominate one director to the Board of Directors, commencing at the Harte Gold 2022, AGM and the right to participate in future equity financings to maintain its pro rata interest. New Gold is also subject to an 18 month standstill as we continue to stabilize and soon expand our operations.

Not only does this investment represent a significant cash injection, it is a notable vote of confidence in the asset potential from an established well respected Canadian mid tier gold producer. The investment strengthens the company's shareholder registry with the introduction of New Gold.

And the investment is a further catalyst to accelerate underground mine development and continued mine rate expansion. The Harte Gold will use the proceeds for the following.

Mine development which essentially are the decline ramps in the access haulage drive, the planned Sugar Zone expansion to 1,200 tonnes per day set for the beginning of 2023 and the scheduled March 31, 2021 principal debt payment to BNP Paribas. Most importantly, the investment represents a collaborative and individual partnership between two credible management teams that each has their own collective and individual strong track record of delivering long term value to its stakeholders, which include operational turnaround stories.

Last Friday, we also announced that we received non binding indicative -- non binding indicative proposal from BNP Paribas to reschedule payments under the company's senior debt facility, which would defer approximately $50 million in debt payments currently planned in 2021 and 2022. This proposal would provide Harte Gold further financial flexibility, it would strengthen the company's liquidity, freeing up more cash to allow us to continue to focus on repairing, stabilizing, growing and soon expanding our operations and cash flow.

Under the proposal, the maturity of the BNP term loan would also be extended from June 2020 forward to June 2025. And the maturity of the US$ 20 million revolver would be extended from June 2022 to June 2023.

That table on the right that you see is actually in US dollars. Negotiations are ongoing and positive and subject to a number of conditions, including, most importantly, extension of the Appian credit facility from June 2023 to June 2025, for which Appian support is sought, and shareholder approval will be required.

Shareholder approval will be targeted at our shareholder meeting in June or shortly thereafter for this Appian extension. On to the Q4, 2020 operational financial highlights look the health and well being of our employees, contractors and impacted communities and environment remains of paramount importance to Harte Gold.

COVID health and safety protocols remain in place and have been effective. I am pleased to announce that for the second half of 2020 since the restart of operations in late July, there were no lost time incidents.

Now, I'm going to turn to the operations results. And even though it's a little bit odd in the sense that I have shared with the market on February the 8th our January production results in about two weeks time I plan to share our Q1 operating results.

But this call is a full year 2020 review. So in that context 2020 was a unique year for Harte Gold.

It was one year ago in March 2020 in response to the ongoing concerns around the threat of COVID-19 and to ensure the safety of all stakeholders and local communities while managing cash. Harte Gold announced the temporary suspension of its operation for approximately four months.

In late July 2020, the company then announced the successful restarted the mining operations, followed by the restart of the processing plant in August. For year 2020, production was just over 25,500 ounces exceeding the upper end of the revised guidance of 24,000 ounces for that year.

And in the fourth quarter of 2020 Harte produced 10,835 ounces of gold from the Sugar Zone mine, a record quarterly amount for the company since operations commenced in early 2019. The average grade for the year was 6.3 grams a tonne which was a 37% improvement over the same period over 2019 and a large contributor to this was the improvement with the plan higher grade material we target in the fourth quarter of last year, averaging 7.7 grams per tonne and that's a considerable positive delta over the 5.7 grams per tonne in Q3, 2020.

The daily my production of Sugar Zone mine was 519 tonnes per operating day in 2020. That's adjusted for the temporary shutdown and the subsequent successful restart of the operations in late July.

The transition to owner-operator mining was completed at the end of 2020. And the acquisition through lease arrangements of the underground mobile equipment formerly owned by Redpath was completed in Q4, 2020.

The majority of the mine workforce was transitioned to Harte Gold payroll as Harte Gold employees, mostly in the last part of Q3, 2020. The mine delivered record revenues of $53.5 million in 2020.

The full year operating cash flow was $18 million, a significant increase over the $1.5 million in 2019. And in the fourth quarter of last year, our cash costs US 1,122 per ounce, all in sustaining as we do a lot of development work with US 2,060 per ounce, both improvements on the previous Q3, 2020 and Q4, 2019.

Again, you will see our guidance going forward which those numbers plan to come down much further. With that, for now, I'd like to hand over the call to Graham Preez to discuss our year end financial highlights.

Graham?

Thank you, Frazer. 2020 was a transitional year for us, one in which we were disrupted by an operational shutdown due to COVID-19.

But also one in which we made significant investments into developing the Sugar Zone mine for the next stage of incremental growth. Harte Gold Q4, 2020 financial performance showed improvements in a number of areas.

For the full year 2020, we generated $53.5 million in revenue, 7.5% higher than the comparable period in 2019. And that was primarily due to higher realized gold prices, which was partially offset by lower sales due to the suspension of operations during Q2, 2020 in response to COVID-19.

We generated $18 million in mine operating cash flow, up from $1.5 million in 2019. Mine operating cash flow is calculated as revenue before hedge payments; lease royalties, selling expenses and production costs.

This figure represents a good proxy for the cash flow generation potential at the asset level. The full reconciliation of this and other non authorized measures can be found in the company's MD&A.

The company generated the negative EBITDA of $600,000 in 2020, compared to negative EBITDA of $9.6 million in 2019. It is important to note that EBITDA takes into account costs for gold hedge payment, exploration costs, and general and administrative expenses.

Finally, a net loss of $40.2 million was recorded compared to a net loss of $61.6 million in full year 2019. In Q4 2020, we increased our revenue to $22 million, up more than 50% from Q4, 2019.

We generated $8.7 million in mine operating cash flow, up from $2 million in the corresponding period. We also generate positive EBITDA of $1.9 million, up from negative EBITDA of $900,000 in Q4, 2019, and we generated net earnings of $10.6 million, compared to a net loss of $7.1 million in Q4, 2019.

In 2020, we continue to prioritize mine capital development a further $23.9 million was invested compared to $17.5 million in 2019. The company closed 2020 with $8.2 million in cash and cash equivalents, an increase of $2.1 million -- from $2.1 million at December 31, 2019.

Finally, as Frazer previously mentioned, the company recorded the cash operating cost of US$1,155 per ounce and all-in sustaining cost of US$2, 340 per ounce compared to US$1,326 per ounce US$2,406 per ounce respectively in 2019. Thank you everyone.

This concludes the financial part of the presentation. I will now pass it back to Frazer to comment on 2021 outlook and guidance.

Thanks for that, Graham. Look, I've got a few final slides here.

I'll just speak to I think for some of you that have been in on our calls before, you'll have seen these, but I just wanted a chance to summarize again, how we're mapping to our strategy. One is targeting operational excellence.

Look, we are not there yet. But we're certainly made significant progress to doing things that we believe would be best practice, and stabilizing at 800 tonnes per day.

Of course, on these calls, whenever I talk about ore tonnes, I trust to appreciate I'm using that just as a proxy. I mean, really, this is all about generating margin ounces and cash flow.

We are also in the process, while we stabilize at 800. And you will see the Qq1 results shortly in terms of our journey towards that 800 that we target for this year.

We are also starting to put plans in place to derisk and in some areas even accelerate, if it makes sense, our 1,200 tonne per day expansion that we shared in January, with January the 20th with our feasibility study results. As for the capital structure, this investment by New Gold is just one part of that.

I'm very focused on other as well as the rescheduling with BNP. The first is concluded, the second one, of course, is not as I shared earlier, but that'll be subject to the Appian extension and shareholder approval, which I'm optimistic about.

But I also have other plans in terms of further tidying up that capital structure and reducing wherever we can our debt payments. And then exploration, I have not spoke a lot about I'll get to that in a few slides near the end.

But there will be a press release I plan to put out in about a month's time. It's been a while since we've really shared that story and where we are with that.

So that'll be coming at that time. The overall corporate strategy I'm working on with the board in terms of the growth of this company and what's next for that.

I will not be sharing that on this call. But that will be coming in due course.

I think the outlook, the two or three numbers to take away from this, the 800 tonnes per day run rate. That's the 60,000 to 65,000 ounces we're targeting this year, the guidance we gave out earlier and really getting to an US$800 to US$850 cash costs.

Whereas the expansion study gets us to the run rate that we would expect this mine to be able to sustain going forward 1,200 tonnes per day or looked at another way about 100,000 ounces a year at about a US$750 per ounce cash cost. Next, -- and then, these are some of the metrics I'll share them again.

In terms of mine development and meters, achieved today on the ramp and the access to the ore bodies, a critical lead indicator for us to open up more and more working phases that provide intern flexibility for ore blasting and haulage. Our mill production rate, again, our mill is not the critical path that is not the bottleneck in this operation, come 2023 it could well be as we get up to 1,200 that's not the situation now, it's really the mine where we focus most of our energy to get that ore up as well as some of the waste.

However, that being said the mill production rate continues to climb. And again in a few weeks time you'll see what that number is for the entire quarter rather than just the January 700 number you see there.

The grade I just want to share a grade is going to go up and down in this mine; it's the nature of the mine generally the grade is higher as we get deeper. And we are close to that reserve grade now but we will have pockets and times when we're around 5.5 to 6 and other times we're around 7.5 to 8.

But it will -- the plan is to still target and achieve the average reserved grade just over seven grams per tonne. And another way to look at it is around since for this year, going from about 3,200 ounces a month in 2020 to about 5,200 ounces a month, that's 60,000 to 65,000 ounces in 2021.

And I won't go over this too much it's not really a feasibility study update. I think you would have seen this, three or four numbers of might be of interest.

With an IRR of 89% and an NPV of over $400 million. It was a no brainer for us, obviously, to pursue this expansion for $21 million, of which we're starting to lay out the groundwork for that now, with maybe $2 to $3 million spent this year and the majority of that spent in 2022.

To get us to that 100,000 ounces a year roughly profile during the 2023 to 2027 window. Think pictorially, see the understand the ore body we have here, not overly complicated really, there are three zones, Sugar, North Sugar South and Middle.

Middle, we will get to towards the end of this year. Most of the production this year is really coming from the north and south with two ramps going down to each of those ore bodies, the different colors representing as we progress deeper into the ore body, how we target each of them in successive years, in a narrow vein, long haul ore body.

And again, as we get more exploration success and get deeper and find it appropriate, just like others have done in the area, whether it's Island Gold, or Wesdome or Campbell or any place that's what happens, the deeper you get, you drill off, so there's no reason not to expect that this ore body will get deeper. And we will continue to progress.

But for now, this represents the snapshot of the entire nine year life of mine plan that we shared in the feasibility study expansion results in January 2020. And filed on SEDAR and a technical report in March of this year.

And this slide and some of you have seen it; this to me is never a promise, but certainly exciting shows we're in the right zip code, postal code. In terms of other very exciting stories, there's obviously everyone knows the story of Hemlo that was owned by three different companies 35 years, now down to one small underground mine, but producing over 21 million ounces from that deposit.

That's only about 50 kilometers west of us. But what we're trying to show on this slide are two or three important metrics, we're on the left, ounces per vertical meters, some people look at tonnes per vertical meter, it's essentially the same thing.

We're in the same range as what Island Gold; Alamos Island Gold is at 800 to 1,000 or Wesdome, Eagle River. So that's the big bold number on top.

The second number to look at is the grade. What's interesting, if you look at Island Gold, 14 years they're producing the first nine is also -- was under six grams a tonne and the next five or approaching 10 grams a tonne and their future is even higher.

So that shows similar to what we see in our ore body. Grades tend to get higher as you get deeper.

And in some instances, the stokes actually get wider as well, as you get deeper. And I've had good conversations with the CEO of New Gold, Renaud Adams, who was the CEO of Richmont at the time, and he was part of that Island Gold contest started before they sold to Alamos and share similar views on what can be done in terms of mine exploration as we get deeper.

And then really the last number, just show it's the same thing here in terms of, we are two years in and mines I'm showing you are 14 to 35 years. So arguably, we are still in our infancy.

But we are catching up, we are getting deeper. The Island Gold story really changed when they drilled off their 600 and 800 meter below surface platform.

We are just approaching 300 meters below the surface. So in addition to regional exploration, I think mine exploration where we have sufficient funds to be able to do that, and we'll talk about that later this year will be another piece of this puzzle.

So again, I will not talk too much to this apart from this is a section long view of the entire mine, most of it in the Sugar Zone right now. As I said later this year will hit the Middle Zone.

I'm quite excited by what could happen at Sugar Zone self extension, as well as between Middle and North. But we have some more work to do on that.

We'll decide how we manage our cash. And when's the right time to start a mine exploration program, which currently we do not have in the budget this year.

We do you would be aware of course if we go to the next slide do have a regional exploration program. And that's the $5 million from flow through that was raised in 2019.

It was not spent in 2020. But due to COVID situation we were given a one year extension on that we will be spending out this year.

The main takeaway here we now have 17 kilometers of previously unknown Greenstone belt that the Ontario Geological Survey thought was [tonne light] years ago. And of those 17 kilometers of Greenstone belt, we've identified 11 kilometers that continuous mineralized trend so far with some good gold showing.

So we are drilling along there right now. And by mid to late April will give an update on what the strategy is on the exploration as well as our drilling results.

So with that, I'd like to draw the call to an end. We want to try to keep it about 25 minutes.

Certainly open it up to any questions if anyone has those, whether it's about guidance this year, the Q4 year end results and/ or the Strategic Investment Proposal we have from BNP. So, operator back to you.

Hi, Frazer. I just want to get a little more detail on expenditures; earlier in the year and you provided a table with capital expenditures year-by-year through -- right through the expansion of 1,200 tonnes per day.

So maybe if you can just refresh that for me and just clarify for us what kind of capital expenditures as much on sustaining as expansion, how that's going to look this year and subsequent years?

Sure, so this year, thanks for that Pierre. This year, I really break down the capital into three buckets.

One is the mine development, which is the ongoing 4.5 by 5 meter ramps decline down and access, and that's a run rate of between $20 million to $25 million a year, that's a pretty standard run rate. As we decline deeper into the ore body and push along strike.

The other two, what is sustaining capital, and sustaining capital for us, we have about $18 million this year about $28 million next year, that really of which underground capital is part of it. But as a separate number, in addition to that, that really is about tails management as we do our tails lifts on the tails dams and the associated water management.

It's about additional mobile equipment as we bring in different pieces of underground gear not a lot. But as we get deeper your cycle times get longer.

So we have to backstop that with additional equipment, and major component change outs. And as well as the paste backfill plan that is one that I know has confused some people to understand why next year, that number looks big, it's about $28 million.

It includes the paste backfill plan that instead of filling your underground stokes with unconsolidated waste rock, we will start to set up so that at the beginning of 2023, we can use paste fill. The reason that -- that's about $15 million for memory, the reason that is not part of our expansion capital, the 2021 is expansion is really what is required to get from 800 to 1,200.

And that paste backfill plan really, arguably should have been in place to be able to sustain an even an 800 tonne per day. But we have great ground conditions.

We were fortunate we're able to buy ourselves some time. So it's going in a bit later, but it's actually captured under sustaining capital.

And then the expansion I think we've clearly talked to before but that expansion capital really is predominantly about the mill expansion, that's the $16 million of that $21 million, which is really and additional ball mill and new cone Crusher, extra flotation cleaner cells and new thickener so that as we increase somewhat the size of the footprint of the process plant, and its capacity to go from 800 to 1,200 today, so I don't know if that answered your question clearly enough, but that's the sort of immediate next couple of years and how that three capital buckets let's call it I break them down that way.

So just to be clear mine development $20 million to $25 million sustaining $18 million this year. How much are you spending on expansion this year out of that $21 million?

What -- how is that grouped?

Yes, so just get careful; the $21 million that's for over the next two years, two and a little bit. And of that this year, maybe only three and four max, $3 million, $3.5 million.

And then $16 million, $17 million of that expansion will be next year.

Okay. So the big spending or bigger spending happens in 2021 and 2022.

By 2023, you are most -- you are mostly spent for --

You are pretty well -- so for 2023 you are back to two buckets sustaining capital and mine development. That's correct.

Got it. Okay.

So that takes the question and Frazer in terms of especially with the investment by New Gold in cash, where it is -- have you and cash flow from operations, are you okay with that to be able to pay for this? Or are you going to have to top up with financing in some kind?

Look, I'll always be very focused on managing our liquidity going forward. This investment is very important.

It doesn't take us right through the full expansion. But it certainly goes a long way.

Because we still have debt repayments, there's certainly less now if we can get agreement without BNP&P. So that'll be helpful.

But I think we will still look at as we and especially if we decide to further derisk and accelerate that expansion with the next time is to do something. There are lots of opportunities we're looking at.

Another one is mine exploration, but I don't want to muddle things up right now with that, because we have not made a decision yet online exploration, which obviously, would require additional funds as well.

Right, because I guess you have, what is it something like, $4 million and then $12 million next year in repayments at least I guess.

Yes, so that -- well, again, let's assume everything goes through and the shareholders vote on it, then you will see that in terms of that, it's about $10 million only in the next -- not after the March payment, and about US$10 million in 2022 for debt payments so as opposed to $48 million right now. So that's the push out few million but we still have $10 million next year, if this proposal goes through, and it's voted on by the shareholders, but that's a lot better than what it currently stands at.

Right and so right now your exploration budget is it $5 million?

Correct.

Okay. And I guess that'll, that could adjust depending on success?

Yes, of course, it could adjust depending on success, correct.

Now, just maybe clarify, in terms of the 810 per day, are you there or what's the near term looking like in terms of getting there and achieving [Indiscernible]?

Well, I can't tell tales out of school, Pierre. But like I said, in two weeks time, you'll see the Q1 results, but let's just put it this way.

I'm pleased with how that is trending. We have more work to do.

But it's very; January's probably not a bad indicator. And you'll see how we put those results out as we continue to get there and put the last pieces in place to continue to meet our guidance this year.

Good morning, Frazer. I'm great.

Congratulations for that. I have just one question.

Is the new joint venture partner are they be involved technically with us on our exploration and our mine development?

Well, that's a good question. Brian.

I will be a bit careful. I know what you mean.

I wouldn't use the term joint venture. It's not a joint venture per se like that.

This is a financial investment they could, for all I know in a year to stay and go bigger and go home. But as far as sharing best practice and ideas, Brian, one thing I will share even if they had not made this investment.

The one good thing about the mining industry, I find that we tend to collaborate on a lot of best practice ideas in terms of operating exploration. We're not closed door that way within reason.

That being said, with this investment, access to information, of course, there can be added benefits that can be a win-win for both parties as we continue to succeed and drive the share price up for all shareholders. So I think they'll certainly be an advantage there.

And it's formalized in their investor rights agreement, and our subscription agreement on what the formal obligations are. And of course, I'll have the appropriate conversations with New Gold and Renaud while making sure I'm not offside of any governance issues.

Okay, well, thank you very much, operator. And in closing, again, all this will be posted on our website.

I appreciate your time this morning. Hopefully, it's been informative, and we will be talking sooner than later.

Thank you very much.