Ascot Resources Ltd. (
TSX: AOT; OTCQX:
AOTVF) (“
Ascot” or the
“
Company”) is pleased to announce the Company has
completed final documentation for a total of approximately C$200
million in project financing for construction of the Premier Gold
Project (“
PGP” or the “
project”),
located on Nisga’a Nation Treaty Lands in the prolific Golden
Triangle of northwestern British Columbia. As announced in the News
Release dated December 12, 2022, the finance package consists of
US$110 million as a deposit (the “
Deposit”) in
respect of gold and silver streaming agreements (the
“
Stream”) with Sprott Private Resource Streaming
and Royalty B Corp. (“
Sprott Streaming”) and a
strategic equity investment (the “
Strategic
Investment”) by Ccori Apu S.A.C (“
Ccori
Apu”) of C$45 million, a portion of which will be
structured as Canadian Development Expenditures flow through shares
(“
CDE flow through”), such that the total gross
proceeds to the Company is C$50 million. With the finance package
closed, Ascot is able to proceed with re-mobilizing of contractors
for project construction in 2023 ahead of initial gold production,
which is anticipated in early 2024.
Derek White, President and CEO of Ascot
commented, “We commend our financing partners Sprott Streaming and
Ccori Apu for working diligently over the past month to
expeditiously close the C$200 million financing package. We view
the financing package as attractive as it preserves Ascot’s
operational flexibility and enables the Company to advance towards
production with minimal debt. With funding secured, we look forward
to refocusing our efforts on project construction this year and
becoming Canada’s next gold producer.”
Michael Harrison, Managing Partner at Sprott
Streaming, commented, “We are very pleased to enter into this
partnership and support Ascot Resources with the development of the
Premier and Red Mountain Gold Projects. With substantial
infrastructure in place and excellent exploration potential, we are
financing Ascot to production to contribute to the local
communities and Nisga’a Nation and expect a long mine life. Sprott
Streaming continues to provide funding to advance quality projects
and provide project financing to bring mines into production.”
Victor Ostolaza, Attorney of Ccori Apu,
commented, “Our investment in Ascot expresses our belief in the
potential of the Premier Gold Project and in the management team
tasked with leading its development. We have ample experience in
underground gold mining and are confident that the project will be
the next success story in Canadian mining. We are thrilled to be
part of Ascot and look forward to collaborating in the creation of
value.”
GOLD AND SILVER STREAM – SPROTT
STREAMING
Ascot has executed definitive documentation for
the Stream with Sprott Streaming covering the PGP and Red Mountain
Project (“RMP”) properties. Sprott Streaming will
provide to Ascot an upfront payment (the
“Deposit”) of US$110 million and terminate the
existing 10% streaming agreement it has on RMP in return for the
delivery to Sprott Streaming of 8.75% and 100% of gold and silver
production, respectively, from PGP and RMP in exchange for the
reduction of the Deposit and ongoing payments from Sprott Streaming
equal to 10% of prevailing gold and silver prices, including after
the Deposit is reduced to nil. Silver production from the Silver
Hill Target at the northeastern part of the PGP property, where
Ascot has identified a distinct style of high-grade silver
mineralization, has been excluded from the Stream.
From January 1, 2025 until December 31, 2026,
Ascot has the right to buyback 50% of the stream from Sprott
Streaming for US$80 million in cash (the
“Buyback”). Once 150,000 ounces of gold have been
delivered (“Delivery Threshold”) to Sprott
Streaming, the stream deliveries for gold and silver shall be
reduced by 50% to 4.375% and 50%, respectively. In the case that
the Buyback is exercised, then the remaining Delivery Threshold at
that time will be reduced by the Buyback percentage, and once the
threshold is met the stream deliveries for gold and silver shall be
reduced by a further 50% to 2.1875% and 25%, respectively. The
Delivery Threshold and the Buyback shall apply to both PGP and RMP.
Sprott Streaming has been granted first-ranking security to secure
the obligations under the Stream, which security will be
subordinated to any operating loan on the earlier the Buyback being
exercised or the Deposit being reduced to zero. The Stream also
contains certain customary covenants.
A portion of the gross proceeds have been used
to repay the existing senior credit facility and production payment
agreement with Sprott Lending.
STRATEGIC EQUITY INVESTMENT – CCORI
APU
Ccori Apu’s shareholders are the majority
shareholders of Compañía Minera Poderosa S. A.
(“Poderosa”), a publicly traded gold mining
company listed on the Lima Stock Exchange. Poderosa owns and
operates a high-grade, underground gold mine in northern Peru. The
mine produces approximately 300,000 ounces of gold annually by
feeding the Marañón and Santa María process plants with high-grade
gold ore averaging 17 grams per tonne from the surrounding
underground gold deposits. Ccori Apu has invested a total of C$45
million in the Strategic Investment. A portion of the common shares
sold were structured as CDE flow through, such that the total gross
proceeds to Ascot was C$50 million. Ccori Apu’s ownership of Ascot
is 19.9% upon closing and it received participation rights to
maintain its pro rata ownership in subsequent equity issuances.
Ccori Apu has the right to nominate up to two people to Ascot’s
Board of Directors as long as its ownership remains above 10% of
Ascot common shares outstanding. If Ccori Apu’s ownership falls
below 10%, it will have the right to nominate one person to Ascot’s
Board of Directors, and if its ownership falls below 5% then it
will not have the right to nominate anyone to Ascot’s Board of
Directors.
The Strategic Investment consisted of 48,500,000
Common Shares of the Company at a price of C$0.41 per Common Share
for gross proceeds of C$19,885,000 and 60,000,000 Common Shares of
the Company that qualify as “flow through shares”, as defined in
the Income Tax Act (Canada) (the “CDE Common
Shares”), at a price of C$0.50 per CDE Common Share for
gross proceeds of C$30,000,000. The Common Shares and CDE Common
Shares were offered by way of private placement pursuant to
applicable prospectus exemptions and will be subject to hold
periods in accordance with applicable securities laws.
The net proceeds from the sale of the Common
Shares will be used for capital costs at the Premier Gold Project
and for general corporate purposes.
An amount equal to the gross proceeds from the
issuance of the CDE Common Shares will be used to incur “Canadian
development expenses” as defined in the Income Tax Act (Canada)
(“Qualifying Expenditures”). The Qualifying Expenditures will be
incurred on or before June 30, 2024 and will be renounced by the
Company to the subscribers with an effective date no later than
June 30, 2024 to the initial purchasers of the CDE Common Shares in
an aggregate amount not less than the gross proceeds raised from
the issue of the CDE Common Shares.
ADVISORS
Morrison Park Advisers Inc., along with its
affiliate Summa Advisors in Peru, is acting as exclusive financial
advisor to Ascot in connection with the Strategic Investment by
Ccori Apu and Auramet International LLC is acting as financial
advisor to Ascot in connection with the Stream. Blake, Cassels
& Graydon LLP is acting as Ascot’s legal advisor. Fasken
Martineau Dumoulin LLP is acting as Sprott Streaming’s and Ccori
Apu’s legal advisor.
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 that relate to Ascot.
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 Communications dstewart@ascotgold.com
778-725-1060 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
proposed use of proceeds, 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 and beyond. 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; the possibility that the transactions described herein
are not completed; 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 structure of the
Strategic Investment and the Stream, the completion of the
Strategic Investment and the Stream on the terms described herein,
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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