Ascot prepares for 
Sprott’s $20M investment

VANCOUVER — Ascot Resources (TSXV: AOT) is reconsidering plans on how to best advance its flagship Premier gold-silver project, 20 km northeast of Stewart, B.C., now that mining and exploration financier Eric Sprott wants to inject $20 million into the company.

The placement, which Ascot expects to close by August, would be divided into flow-through units and hard-dollar units, valued at $1.25 per share and $1.15 per share. Each unit comes with half a warrant, and each whole warrant is exercisable within two years for $1.50 per share.

Ascot’s chief financial officer Bob Evans tells The Northern Miner during a phone interview that the company is “delighted” to gain Sprott’s interest.

“Sprott has a reputation of being an asset finder and wealth creator, so for him to recognize the significance and potential of our property is good news for all our shareholders,” Evans says.

In April, the junior explorer began a 60,000-metre drill program at the project’s gold-silver Premier deposit, an epithermal breccia and stockwork vein system measuring 30 to 150 metres thick, 1.6 km along strike and up to 1.5 km down-dip.

View of mill site in 2009 at Ascot Resources’ Premier gold-silver mine in B.C. Credit: Ascot Resources.

By June, Ascot secured $4.2 million to cover costs of the program in a flow-through financing, which issued 3.8 million shares at $1.25 per share. Each share comes with half a warrant valued at $1.75 per warrant, and expires at the end of 2017.

Premier was mined by open pit and from underground from 1918 to 1968, 1976 to 1979, and 1989 to 1996, resulting in a combined production of 2.1 million oz. gold and 44.2 million oz. silver, from 8.6 million tonnes.

When the mine last closed, the deposit contained a 350,000-tonne historic resource of 7.19 grams gold and 37.7 grams silver. According to the company’s technical report, the system has been loosely tested from underground, with most work dating back to the 1920s to 1930s.

This year’s drill program had outlined a resource covering only 8% of Premier, but with the extra funds from Sprott, Evans says the company can look at more.

“We were going to drill off a small portion and proceed from there, but it’s not in our interest to do that anymore,” he says. “We’ll finish the program we’re doing, but we’re also going to step-out and see how significant this property really is — it’s what we always wanted to do, but never had the finances before to do it.”

Ascot’s report states that Premier shares similarities with Pretium Resources’ (TSX: PVG; NYSE: PVG) Valley of the Kings gold deposit at its Brucejack property, 40 km north, which has proven and probable reserves of 13.6 million tonnes grading 15.7 grams gold per tonne, 11 grams silver per tonne for 6.9 million contained oz. gold and 4.6 million contained oz. silver.

The deposits have similar geological environments and contain nuggety gold, Evans points out.

“We’ve had lots of drill hits at Premier that run over 100 grams gold, and a few other at 1,000 grams gold — that’s just the nature of the deposit we’re dealing with,” he says.

Recent drill results at Premier returned 104.74 grams gold over 3.1 metres in a broader interval of 5.53 grams gold and 84.1 grams silver over 66 metres. Previous drill holes in 2014 reported as much as 14,394.5 grams gold over 0.8 metre.

Evans notes that unlike Brucejack, Premier is road accessible and just a short drive from Stewart, which is one reason why he finds the project so appealing.

“We don’t need to set up a camp there. All of our drillers live in Stewart and drive right up to the property in the morning for work, then back home again at night,” he says. “If we were to build a mine, our whole capital costs would be a fraction of what Pretium paid for theirs, and that’s a big advantage.”

A pit at Ascot Resources’ past-producing Premier gold-silver project in British Columbia. Credit: Ascot Resources.

Ascot optioned the 100 sq. km property in 2009 from Swedish integrated miner Boliden (US-OTC: BDNNF) and explored lower-grade, gold-silver mineralization at the property’s Dilworth, Martha Ellen and Big Missouri prospects.

The structurally hosted, shallow-dipping zones extend more than 5 km, but are offset from one another through a series of structures.

By 2014, Ascot calculated the zones to have a combined resource of 93.5 million indicated tonnes of 0.82 gram gold and 6.9 grams silver for 2.5 million oz. gold. Inferred resources add 79.3 million tonnes of 0.59 gram gold and 7.2 grams silver. Both calculations assume a 0.3 gram gold cut-off.

In the same year, the company shifted its focus on the former mine to the south, after spending two years building a drill-hole database for the 4,500 historical holes.

“There was a vast amount of information on Premier, and it took a lot of work and time before we got to the point where we were comfortable exploring,” he says. “We had excellent results in the north, but what we’re finding at Premier is more impressive, so it makes sense for us to concentrate our work down there. But what we learned geologically in the north is really helping us with drilling at Premier.”