Ascot Resources Ltd. (
TSX: AOT; OTCQX:
AOTVF) (“
Ascot” or the
“
Company”) is pleased to announce the Company’s
unaudited financial results for the three months ended June 30,
2022 (“
Q2 2022”), as well as a summary of recent
development highlights at the Company’s Premier Gold Project
(“
PGP” or the “
project”), located
on Nisga’a Nation Treaty Lands in the prolific Golden Triangle of
northwestern British Columbia. For details of the unaudited
condensed interim consolidated financial statements and
Management's Discussion and Analysis for the three months ended
June 30, 2022, please see the Company’s filings on SEDAR
(www.sedar.com).
Derek White, President and CEO, commented, "We
continue to make progress towards arranging alternative financing
to fund the remaining construction at PGP, and in the meantime much
headway has been made during Q2 2022 on various construction
activities. Approximately 95% of the remaining fixed equipment for
the project has been ordered, which partially insulates Ascot from
continued inflationary pressures in the mining industry.
Underground development, benefitting from
excellent ground conditions, has been going very well and to date
has progressed approximately 320 metres. Development is now
accessing initial ore in the A Zone of the Big Missouri deposit,
which will enable direct sampling and confirmatory work on ore
grades, geometries, and stope shapes.
On the exploration front, drilling continues to
impress at the emerging Sebakwe Zone, with the first batch of assay
results from this season yielding coarse, visible gold and
high-grade intercepts up to 193 g/t gold. We expect the second
batch of assays from the drill program at Sebakwe in the
near-term.”
All amounts herein are reported in $000s of
Canadian dollars (“C$”) unless otherwise
specified.
Q2 2022 AND RECENT
HIGHLIGHTS
- On April 4,
2022, the Company provided an update on construction financing and
development plans for PGP, including an update on the availability
of further drawdowns under the construction finance package of
US$105M (see News Release dated December 10, 2020), where the
Company had 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, which was available until
June 30, 2022. 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 remains outstanding and
Ascot is pursuing alternative financing options to replace the
remainder of the Senior Facility.
- In April 2022,
Ascot held a Public Information Session in Stewart, B.C. for the
surrounding communities. In June 2022, Ascot attended the Nisga’a
Business Forum in Gitwinksihlkw and supported the Prince Rupert
Salmon Festival hosted by the Nisga’a Gitmaxmak’ay cultural
dancers.
- On May 9, 2022,
the Company announced the start of the 2022 exploration drilling
program, which comprises approximately 18,000 metres and is equally
split between exploration and in-fill holes. Exploration drilling
is largely concentrated on the Sebakwe and Day Zones and in-fill
drilling focuses exclusively on the Big Missouri deposit.
- On May 16, 2022,
the Company announced the hiring of Vice President, Operations and
General Manager, and the commencement of underground development
work at PGP.
- On June 23,
2022, the Company provided an update on the development, financing,
and exploration of PGP, noting that construction had been
significantly advanced in many key project areas. The Company had
been working with a number of potential financing partners
including project lenders and streaming/royalty companies in order
to secure sufficient financing to complete its project
construction. These discussions are ongoing and the Company is
confident a financing solution can be achieved in the foreseeable
future. Until this funding is secured and in order to preserve
Ascot’s current cash balance, the Company began decelerating
various construction activities and placing certain work packages
on hold. Importantly, the underground mine development work and
exploration program remain on track. The deceleration of project
construction provided more time for mine plan and sequencing
optimization, and enabled exploration drilling to determine the
size, extent and high-grade continuity of the emerging Sebakwe Zone
at the Premier deposit. Given the delays in construction areas
which require seasonal conditions, the target for first gold pour
will be delayed from the first quarter of 2023 until between late
2023 and early 2024. Ascot is developing a more detailed
construction sequence based on this new timeline and will continue
to assess any potential cost implications associated with this
delay.
- After completion
of the portal preparation work in April 2022, underground mine
development work and installation of surface infrastructure
commenced in May 2022. To date, surface facilities including
ventilation, water supply and handling, ventilation, gensets,
compressor, material handling and stockpiles, offices, and
satellite communications have all been established. Underground,
approximately 320 metres have been developed in all headings,
including muck bays, sumps, ore access drift, and the main ramp.
Ground conditions have been excellent and heading advance and
productivity have been going well. Development is now accessing
initial ore in the A Zone of the Big Missouri deposit.
- As of June 30,
2022, the Company progressed detailed engineering to approximately
95% completion and overall construction to approximately 33%
completion. Ascot has ordered approximately 95% of the remaining
fixed equipment for the project. Key orders remaining in the plant
relate mostly to piping, instrumentation, and bulk
consumables.
- On July 14,
2022, the Company announced the first batch of assay results from
the 2022 exploration drill program at PGP. These results were from
surface exploration drilling at the emerging Sebakwe Zone near the
Premier mill, and with assays of up to 193 g/t gold, they continue
to highlight the high-grade tenor of the Sebakwe Zone. The second
batch of drill results from Sebakwe is anticipated in the near
term, and a corresponding update news release is planned for the
upcoming weeks. The drill rig has been moved close to the S1 pit at
Big Missouri, drill testing the early stopes in the area north of
the S1 pit. Initial observations include quartz breccia with
sulfide mineralization at or very near the expected location where
high-grade mineralization has been wireframed from earlier drill
holes. Assay results from the Big Missouri drill holes are pending.
An assay lab is being set up in Stewart and it is anticipated to be
operational in the first half of August coinciding with first
access to ore in the underground development at Big Missouri. Ascot
has signed a priority service contract with this new assay lab, and
once it is in service, turnaround times are anticipated to be a
fraction of what was experienced previously.
FINANCIAL RESULTS FOR THE THREE MONTHS
ENDED JUNE 30, 2022
The Company reported a net loss of $1,054 for Q2
2022 compared to $3,751 for Q2 2021. The decrease in net loss is
attributable to a combination of factors including an increase in
the gain on valuation of the Company’s derivative liabilities and
an increase in flow-through premium recognition, partially offset
by an increase in foreign exchange loss due to the strengthening
U.S. dollar and senior debt deferred financing costs expensed in Q2
2022.
LIQUIDITY AND CAPITAL
RESOURCES
As at June 30, 2022, the Company had working
capital of $37,825 and cash & cash equivalents balance of
$60,212. In the first half of 2022, the Company issued
59,271,000 common shares, 13,710,500 warrants, 3,732,284 stock
options, 176,312 deferred share units, 721,432 Restricted Share
Units (“RSU”) and 162,162 performance share units.
Also, 906,750 stock options expired and 17,902 RSUs were exercised
during the first half of 2022.
MANAGEMENT’S OUTLOOK FOR
2022
As noted in the Company’s press release of April
4, 2022, the Company is undergoing a process to refinance its
Senior Facility with Sprott. As a result, the Company made the
decision to slow down certain work packages and the general project
construction until the refinancing has been completed.
Consequently, certain critical construction activities such as the
construction of the tailings dam and the new water treatment plant
will be deferred until the spring of 2023. The Company is now
targeting the start of production between late 2023 and early
2024.
Management is planning a number of activities
for the remainder of 2022, which include:
- Completion of an
optimized life of mine plan
- Completion of
refinancing of the Senior Facility
- Advancement of
underground ramp development with target delivery of ore for pre
commissioning by Q4 2023
- Completion of a
site preservation plan for a construction restart in Spring
2023
- Surface
exploration drilling with a focus on the Day and Sebakwe zones
- Stope definition
drilling at Big Missouri both from surface and underground
- Underground
diamond drilling to probe additional historical openings
- Health and
safety initiatives related to health screening and construction
protocols
- Permit
amendments due to slow down of certain construction activities
Figure 1 – S1 Portal at the Big Missouri
deposit at PGP, looking
southhttps://www.globenewswire.com/NewsRoom/AttachmentNg/922522a6-6fd4-4991-b853-8dc94c4d0402
Figure 2 – Underground development into
the A Zone at Big
Missourihttps://www.globenewswire.com/NewsRoom/AttachmentNg/f218b0d5-5da4-4fab-bb7a-a952accce598
Figure 3 – Tailings thickener and CN
destruct
tankshttps://www.globenewswire.com/NewsRoom/AttachmentNg/6473e186-a6c4-4f4d-8982-3363220b6a8e
Figure 4 – Big Missouri water pipeline
installationhttps://www.globenewswire.com/NewsRoom/AttachmentNg/5debd237-bbd9-4025-9e60-4f622971cc81
Figure 5 – New water treatment plant
clarifier foundation pedestals and lime silo
foundationshttps://www.globenewswire.com/NewsRoom/AttachmentNg/ed95f949-7ab0-4bb4-b97b-74672dad5228
Figure 6 – South tailings dam lift
earthworkshttps://www.globenewswire.com/NewsRoom/AttachmentNg/df7d2dfa-3e29-455f-beaa-110a10d0a47d
Figure 7 – Overview of tailings
management facility south
damhttps://www.globenewswire.com/NewsRoom/AttachmentNg/0ac11819-a67f-41ce-983b-1a6b6d7fa77a
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 the
use of proceeds of the Offering, the advancement and development of
the PGP and the timing related thereto, 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 information
contained in this news release is expressly qualified by this
cautionary statement.
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