Ascot Resources Ltd. (
TSX: AOT; OTCQX:
AOTVF) (“
Ascot” or the
“
Company”) today provides an update on
construction financing and development plans for its Premier Gold
Project (“
PGP” or the “
project”,
located on Nisga’a Nation Treaty Lands in the prolific Golden
Triangle of northwestern British Columbia. In December 2020, as
part of a total construction finance package of US$105M (see News
Release dated December 10, 2020), the Company secured a US$80M
senior credit facility (the “
Senior Facility”)
with Sprott Private Resource Lending II (Collector), LP
(“
Sprott”). After drawing down the initial US$20M
tranche under the Senior Facility, Ascot was required to satisfy
various conditions before drawing down the remaining US$60M.
However, the Company has been unable to reach an agreement with
Sprott on the satisfaction of the drawdown conditions for the
remaining US$60M of the Senior Facility. Therefore, the initial
US$20M drawdown will remain outstanding and Ascot will pursue
alternative financing options to replace the remainder of the
Senior Facility.
Until alternative financing can be secured Ascot
will continue advancing the project with available liquidity. The
Company anticipates that commencement of underground development
and advancement of other key construction areas will continue as
previously planned. However, certain work packages may be placed on
hold until the Company is able to secure alternative funding. While
the resulting implications to the project are uncertain at this
time, it is possible that there will be a delay to the initial
production target of Q1 2023.
Derek White, President and CEO, commented,
"Since the original Senior Facility agreement was signed in
December 2020, we at Ascot have worked tirelessly to continue
de-risking and advancing PGP. We made significant progress on the
Early Works program last year. We obtained the Mines Act Permit and
the Environmental Management Act Permit Amendments in December 2021
and January 2022, respectively, and successfully completed C$145M
in equity financing. However, we have not been able to come to an
agreement with Sprott on the satisfaction of the drawdown
conditions for the remaining tranches of the Senior Facility, and
therefore have prudently begun pursuing alternative financing
options.
The Premier Gold Project remains one of the most
advanced gold development projects in Canada. Given the significant
de-risking that has been achieved so far, we believe the project
presents an attractive financing opportunity for alternative
funding. In the meantime, we will use our current cash balance of
approximately C$90M to continue advancing PGP including the
commencement of underground development and other critical
construction areas. As we pursue alternative funding options and
progress construction concurrently, we will update the market in
due course with respect to any impacts to project schedule and cost
if applicable.”
BACKGROUND ON THE SENIOR
FACILITY
Upon closing of the Senior Facility agreement in
December 2020, Ascot drew an initial tranche of US$20M. The
remaining US$60M was to be drawn upon meeting various conditions
including receipt of the Mines Act Permit and the Environmental
Management Act Permit Amendments, obtaining additional funding
necessary to reach project completion, and Sprott’s approval of the
detailed mine plan.
In a recent review of the detailed mine plan,
Sprott proposed certain technical conditions to be achieved. In
particular, one condition requires Ascot to have a significant
portion of its 12-month ore inventory classified in the Proven
Reserve category. Currently, all Reserves at PGP are classified as
Probable. The Company cannot guarantee the reclassification of
Reserves can be achieved in the required timeframe. Therefore, the
Company considers it prudent to seek alternative financing
options.
CURRENT FINANCIAL POSITION AND NEXT
STEPS FORWARD
The Company currently has an unaudited cash
balance of approximately C$90M which will enable the progression of
certain critical areas of project construction in 2022. In order to
commit to the entire outstanding project scope, Ascot will pursue
alternative financing options to make up for the unfunded balance.
The Company will also be exploring various royalty and/or stream
options at PGP as an additional source of funding.
The commencement of underground development into
the Big Missouri deposit starting at the S1 portal remains on track
for late April 2022 and will continue unabated for the time being.
The progression of other key construction areas will also continue
this year. Certain work packages may be put on hold until the
Company is able to secure an alternative finance package.
The delay of any work packages may result in
delays to the overall project and the start up of production beyond
the previous target of Q1 2023. The impact of delays, however,
could potentially be partially offset by the ramp up from initial
production to commercial and full-scale production, which the
Company anticipates will be accelerated as underground development
continues on schedule.
Qualified Person
John Kiernan, P.Eng., Chief Operating Officer of
the Company is the Company’s Qualified Person (QP) as defined by
National Instrument 43-101 and has reviewed and approved the
technical contents of this news release.
On behalf of the Board of Directors of
Ascot Resources Ltd.“Derek C. White”President &
CEO
For further information
contact:
David Stewart, P.Eng.VP, Corporate Development & Shareholder
Communicationsdstewart@ascotgold.com778-725-1060 ext. 1024
About Ascot Resources Ltd.
Ascot is a Canadian junior exploration and
development company focused on re-starting the past producing
Premier gold mine, located on Nisga’a Nation Treaty Lands, in
British Columbia’s prolific Golden Triangle. Ascot shares trade on
the TSX under the ticker AOT. Concurrent with progressing the
development of Premier, the Company continues to successfully
explore its properties for additional high-grade underground
resources. Ascot is committed to the safe and responsible
development of Premier in collaboration with Nisga’a Nation as
outlined in the Benefits Agreement.
For more information about the Company, please
refer to the Company’s profile on SEDAR at www.sedar.com or
visit the Company’s web site at www.ascotgold.com, or for a virtual
tour visit www.vrify.com under Ascot Resources.
The TSX has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release.
Cautionary Statement Regarding
Forward-Looking Information
All statements and other information contained
in this press release about anticipated future events may
constitute forward-looking information under Canadian securities
laws ("forward-looking statements"). Forward-looking statements are
often, but not always, identified by the use of words such as
"seek", "anticipate", "believe", "plan", "estimate", "expect",
"targeted", "outlook", "on track" and "intend" and statements that
an event or result "may", "will", "should", "could" or "might"
occur or be achieved and other similar expressions. All statements
other than statements of historical fact included herein are
forward-looking statements, including statements in respect of
securing alternative financing options, the re-classification of
categories of Resources and Reserves, drill results, the
advancement and development of the PGP and the timing related
thereto (including timeline for production), the exploration of the
Company’s properties and management’s outlook for the remainder of
2022. These statements involve known and unknown risks,
uncertainties and other factors that may cause actual results or
events to differ materially from those anticipated in such
forward-looking statements, including risks associated with the
business of Ascot; risks related to exploration and potential
development of Ascot's projects; business and economic conditions
in the mining industry generally; fluctuations in commodity prices
and currency exchange rates; uncertainties relating to
interpretation of drill results and the geology, continuity and
grade of mineral deposits; the need for cooperation of government
agencies and indigenous groups in the exploration and development
of properties and the issuance of required permits; the need to
obtain additional financing to develop properties and uncertainty
as to the availability and terms of future financing; the
possibility of delay in exploration or development programs and
uncertainty of meeting anticipated program milestones; uncertainty
as to timely availability of permits and other governmental
approvals; risks associated with COVID-19 including adverse impacts
on the world economy, construction timing and the availability of
personnel; and other risk factors as detailed from time to time in
Ascot's filings with Canadian securities regulators, available on
Ascot's profile on SEDAR at www.sedar.com including the Annual
Information Form of the Company dated March 21, 2022 in the section
entitled "Risk Factors". Forward-looking statements are based on
assumptions made with regard to: the estimated costs associated
with construction of the project; the timing of the anticipated
start of production at the project; the ability to maintain
throughput and production levels at the Premier Mill; the tax rate
applicable to the Company; future commodity prices; the grade of
Resources and Reserves; the ability of the Company to convert
inferred resources to other categories; the ability of the Company
to reduce mining dilution; the ability to reduce capital costs; and
exploration plans. Forward-looking statements are based on
estimates and opinions of management at the date the statements are
made. Although Ascot believes that the expectations reflected in
such forward-looking statements and/or information are reasonable,
undue reliance should not be placed on forward-looking statements
since Ascot can give no assurance that such expectations will prove
to be correct. Ascot does not undertake any obligation to update
forward-looking statements. The forward-looking statements
contained in this news release is expressly qualified by this
cautionary statement.
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