Scottie finds ‘good financing market’ for BC gold project

Scottie Resources (TSXV: SCOT; US-OTC: SCTSF) is raising money to advance its eponymous gold project in British Columbia’s Golden Triangle after releasing an initial economic study last month showing the former mine might produce 65,400 oz. a year.

The company said it plans to raise $23.5 million through a non-brokered private placement to advance the potential open-pit and underground operation into a larger district-scale project, CEO Brad Rourke said this week.

“We just released our preliminary economic assessment a couple of weeks ago and are currently marketing it in Europe on a conference tour,” Rourke told The Northern Miner by email. “The money coming in will fully fund us for the next year, where we plan to drill about 35,000 metres, initiate a feasibility study and continue baseline environmental studies.”

The recent study outlines initial capital spending of $128.6 million to build a direct-ship ore development scenario with an after-tax net present value (NPV) at a 5% discount rate of $215.8 million using a gold price of US$2,600 per ounce. A scenario with toll-milling via a nearby plant boosts the NPV to $380.1 million, although no toll-milling arrangement is currently in place. The company is targeting feasibility study completion in the first half of 2027.

Shares offer

The financing, expected to close by Dec. 6, includes 15.7 million shares priced at $1.50 each.

“The financing market is good, albeit the charity flow-through component is seemingly challenged due to insufficient donors to keep up with demand,” Rourke said. “This will reset in the new year.”

Shares in Scottie Resources have gained nearly two-thirds this year to $1.57 apiece in Toronto on Thursday morning, valuing the company at $101 million. Gold company stocks have surged this year, with most producers’s shares more than doubling compared with the yellow metal’s 55% price gain.

“People should be piling into Scottie now that we are fully financed to drill our largest program ever and simultaneously closing the development gap towards production estimated in 2028,” Rourke said. “In addition, we still have more than 60% of our drilling from this year to release.”

Rourke also said that with Ascot Resources (TSX: AOT; US-OTC: AOTVF) attempting to restart its Premier gold project, “regional consolidation also remains plausible.” Ascot this month made a $14.9-million rights offering to help restructure the company after putting its Premier gold mine into care and maintenance this year when talks broke down with its contractor, Procon Mining.

1.7-year payback

The Scottie PEA shows that at US$4,000 per oz. gold, the NPV rises to $668.3 million for direct-ship and $831.7 million for toll milling. The payback period for a seven-year mine life is estimated at 1.7 years in the standalone direct-ship scenario and 0.9 years under the toll-milling opportunity.

The study estimated operating costs for a combined open-pit and underground mining operation processing material at a rate of 900 tonnes per day via ore‐sorting, then direct shipment of upgraded concentrate. Life-of-mine operating costs average $185.38 per tonne sorted. The all-in sustaining cash cost for the direct-ship model is estimated at US$1,452 per oz., improving to US$935 per oz. under the toll-milling scenario.

The Scottie project hosts 3.6 million inferred tonnes grading 6.1 grams gold per tonne for 703,000 oz. contained metal, assuming a combined open-pit and underground mining scenario, the company said in its initial resource issued in May. The estimate includes 528,000 oz. at 8.7 grams gold per tonne in underground resources and 174,000 oz. at 3.2 grams in a shallow pit-constrained resource across the Scottie Gold Mine and Blueberry Contact zones.