Ascot soars on $40M Premier gold restart plan in BC

Ascot Resources (TSX: AOT; US-OTC: AOTVF) said on Monday it plans to raise at least $40 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 US$11.3 million loan with the company’s main creditors and a minimum $25 million private placement of shares priced at 16¢ that can rise to $35 million depending on demand.

This funding package will enable the company to restart the mine’s output by next June and advance the Premier Northern Lights (PNL) and Big Missouri (BM) deposits, CEO Derek White said in a release. The project lies 25 km from Stewart, B.C. near the south end of the Alaskan panhandle. 

“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,” White said. 

Stock surges

Shares in Ascot shot up 22% on Monday in Toronto to 22¢ apiece, valuing the company at $155.4 million. In September, the stock plummeted to its lowest in over five years, 14¢ apiece, after Ascot said PNL and BM hadn’t been advancing on schedule. 

The Premier mill had insufficient ore feeds and missed production targets. As a result, it placed the Premier project on care and maintenance until further development is completed. That’s estimated to take three to six months.

At the time, the company had $15 million in cash, which was enough to ensure the suspension of operations for the winter season. But additional funding was required to complete the necessary mine development work and restart operations.

First gold

The company achieved first pour at Premier in April and had initially expected to declare commercial production at the historical mine during this year’s third quarter.

Mining is expected to occur from total probable reserves of 3.6 million tonnes grading 5.45 grams gold per tonne and 19.1 grams 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.