Ascot Resources Ltd (TSE: AOT) (OTCMKTS: AOTVF) has a new financing plan to get its flagship British Columbia gold mine back on track. But, there is no absolute certainty that the plan will be successful.
The precious metals miner revealed Monday that it aims to raise C$40 million through a combination of loans from its creditors and a private placement from a group of investors.
Last month, Ascot ceased operations at its Premier gold mine in BC’s Golden Triangle region due to insufficient ore feed from the site’s two primary deposits. Subsequently, production targets were missed.
Although Premier’s first gold pour was celebrated earlier this year, the company realized that three to six months of additional development work was needed for the project. Ascot shares plummeted when this was revealed and had already been steadily declining since April.
“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,” chief executive Derek White said. Ascot aims to restart gold production during the second quarter of next year, according to White.
Aerial shot of the Premier gold operation. Photo credit: Ascot Resources
Read more: Mid-tier gold producer reconsiders production guidance after Q3 setbacks
Read more: Calibre celebrates completing major heap leach pad expansion at the Pan Mine
Premier has a lengthy history
Mining activity at the site started all the way back in 1919 when gold was first discovered by prospectors. The operation flourished during the 1920s and 1930s in particular.
However, the operation’s success was brought to a standstill in the early 1950s when a fire destroyed all of the surface buildings and infrastructure. It produced over 2 million ounces of gold and 45 million ounces of silver before that incident.
Years later in 1989, the former operator Westimin Resources built a new mill and mined gold until 1996. Operations then remained stagnant until Boliden AB (STO: BOL), the new owner of Westmin, optioned the project to Ascot in 2007.
It has been Ascot’s primary focus ever since.
In addition to Premier, Red Mountain and the Swamp Point sand and gravel project in northern BC, Ascot is developing an exploration-stage asset south of the border.
That is Washington’s Mt. Margaret copper-molybdenum-gold-silver deposit. Washington is not as renowned for mining as other American states, but it is home to operations held by a select few operators like Adamera Minerals Corp (OTCMKTS: DDNFF) and Calibre Mining Corp (TSE: CXB) (OTCMKTS: CXBMF).
Calibre Mining is a sponsor of Mugglehead news coverage
rowan@mugglehead.com
