Ascot seeks TSX exemption for $52M financing to revive Premier

Ascot Resources (TSX: AOT; US-OTC: AOTVF) said on Monday it’s applied to the Toronto Stock Exchange for a financial hardship exemption with respect to its recently proposed financing for its Premier gold project in British Columbia.

The company announced a $40-million financing last month to get Premier back on track for production next year. Proceeds will now total roughly $52 million, with a debt portion reduced to US$7.5 million from US$11.25 million previously announced, and an equity raising of $42 million, up from the original range of $25 million to $35 million.

Absent the financial hardship exemption, Ascot’s financing would require approval from holders of a majority of its outstanding shares, excluding Ccori Apu SAC, Equinox Partners LLC and any subscriber to the equity financing.

That’s because the transaction would materially affect control of the company, since the participation of Ccori Apu in the equity financing would bring its total shareholding to 23% on a partially diluted basis. The financing also meets other conditions that would normally require a shareholder vote, related to the percentage of outstanding shares pre-financing being issued, insider participation and pricing.

Ascot will use the funds to resuscitate its Premier, located in B.C.’s Golden Triangle. The project made its first pour in April of this year and was initially targeted for commercial production in the third quarter. The company was forced put the project on care and maintenance in September due to insufficient ore feeds from the Northern Lights and Big Missouri deposits. Further development of the deposits is expected to take 3-6 months before the operation can be restarted.

“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,” Ascot CEO Derek White said in the Oct. 21 news release. “Ascot is focused on getting the operation back on track as we move to restarting gold production in Q2 of 2025.”

The project, located 25 km from the town of Stewart, is home to a former underground gold mine that opened in 1918 and included four deposits – Silver Coin, Big Missouri, Premier and Red Mountain.

While in operation, it was the largest gold mine in North America until its surface buildings burned down, leading to its closure in 1952. By then, the Premier mine had produced over 2 million oz. gold and 45 million oz. silver.

Secured creditors

Assuming it receives conditional acceptance from the TSX, Ascot expects the financing to close around Nov. 18.

Ascot’s in a precarious position as it owes vendors roughly $27 million, with $2 million of the its accounts payable over 90 days past due.

Its secured creditors, including Sprott Private Resource and Streaming Royalty, have agreed they won’t pursue any rights to collect amounts they are contractually due until Nov. 18. If the proposed financing goes through, they will extend the waivers until May 31, 2025. 

When the market opened on Monday, Ascot’s shares traded at 25¢ apiece, before falling 10.4% to $0.21 by 1:15 p.m. ET. The company’s market capitalization is at $152.5 million.