Ascot raises $29 million to get Premier gold project back on track
Mon Oct 21 2024
Ascot Resources (TSX: AOT) said on Monday it plans to raise at least C$40 million ($29 million) to get its Premier gold project in British Columbia’s Golden Triangle back on track after shutting it down just months into its first gold pour.
The financing will consist of a new $11.25 million loan with the company’s main creditors and a minimum C$25 million private placement of shares priced at C$0.16 that can rise to C$35 million depending on demand.
Sign Up for the Precious Metals Digest
This funding package, said Ascot chief executive Derek White, will enable the company to undertake mine development activities necessary to advance the Premier Northern Lights (PNL) and Big Missouri (BM) deposits located 25 km from Stewart, BC.
In September, Ascot revealed that the PNL and BM deposits have not been advancing on schedule, leading to insufficient ore feeds to the Premier mill and missed production targets. As a result, it decided to place the Premier project on care and maintenance until further development is completed, which is estimated to take 3-6 months.
At the time, the company had C$15 million in cash, which was enough to endure the suspension of operations for winter season, but additional funding was required to complete the necessary mine development work and restart operations.
Ascot’s shares plummeted to its lowest in over five years (C$0.14) following that announcement, and since then has been hovering between C$0.16 and C$0.19 a share. Monday’s financing sent the stock to C$0.22, for a market capitalization of C$155.3 million.
“While the timeframe and funding required to undertake this work has been challenging for the company, recent actions were required to ensure sustainable feed for profitable mill operations,” CEO White said in Monday’s news release, adding that Ascot is focused on returning to gold production in the second quarter of 2025.
The company achieved first pour at Premier in April and had initially expected to declare commercial production at the historical mine during the third quarter of 2024. Mining is expected to occur from total probable reserves of 3.6 million tonnes grading 5.45 g/t gold and 19.1 g/t silver, containing 637,000 oz. of gold and 2.23 million oz. of silver.
Once upon a time, the Premier mine was the largest gold mine in North America until fire destroyed its surface buildings. Before its closure in 1952, it had produced over 2 million oz. of gold and 45 million oz. of silver.
Source: https://www.mining.com/