Ascot arranges $200M financing package for Premier construction

Ascot Resources (TSX: AOT; US-OTC: AOTVF) has entered into non-binding letters of intent for roughly $200 million in project financing for construction of the Premier gold project, in northwestern British Columbia. 

The proposed financing package will consist of a US$110 million gold and silver streaming agreement with Sprott Resource Streaming and Royalty and/or its affiliates and an equity investment by Ccori Apu S.A.C of $45 million, a portion of which will be structured as Canadian development expenditures flow-through shares, such that the total gross proceeds to the company is $50 million. 

Ccori Apu’s shareholders are the majority shareholders of Compañía Minera Poderosa S.A., which owns and operates a high-grade gold mine in northern Peru and produces approximately 300,000 oz. of gold per year. 

Ascot was forced to slow down construction at the project in June as it sought additional financing.  In April, the company was unable to satisfy drawdown conditions for the remaining US$60 million of an US$80-million senior credit facility with Sprott Private Resource Lending for construction after drawing down the first US$20 million. Drawdown conditions included certain technical conditions, such as one that required a significant portion of Ascot’s 12-month ore inventory to be classified as proven reserves. However, the company’s reserves at Premier are classified as probable. 

Ascot now anticipates achieving production at Premier in early 2024.

The Premier underground mine opened in 1918 and was the largest gold mine in North America until its closure in 1952 producing 2 million oz. of gold and 45 million oz. of silver. PGP comprises a land position of 81.3 sq. km with three key deposits and a number of exploration targets. The key deposits are Premier, Silver Coin and Big Missouri, which all had historical mining activities and underground access. The project is located on Nisga’a Nation Treaty lands in B.C.’s prolific Golden Triangle.

In 2020, Ascot released a feasibility study that outlined a $146.6-million capex for an eight-year project producing an annual average of 151,000 oz. of gold equivalent at an all-in sustaining costs of US$769 per oz. gold.