Mali frees Resolute executives after $160 million deal, AFP reports
The three executives, including CEO Terry Holohan, were freed from detention on Wednesday.
The Toronto-quoted shares of Ascot Resources (TSX: AOT) cratered Friday after suspending operations at its Premier gold mine less than five months after celebrating its first gold pour.
Insufficient ore feed from the Big Missouri and Premier Northern Lights (PNL) deposits, located 25 km from Stewart in British Columbia’s Golden Triangle, led to missed production targets and a halt in operations. Ascot will need to secure additional funding to complete the necessary work, it said in a statement.
Ascot estimates that three to six months of additional development will be required before it can resume operations. The company seeks funding to complete this work and has entered discussions with secured creditors. At the end of August, Ascot had about C$15 million in cash, enough to cover costs during the winter suspension and maintain environmental compliance programs, it said.
“Despite strong mill performance, the delay in mine development poses a significant challenge,” BMO Capital Markets mining analyst Brian Quast told clients in a note Friday. Even so, the company’s progress in the mine’s commissioning process means it maintains an ‘outperform’ rating and a C$1.25 target price, Quast said.
Ascot shares opened Friday at C$0.27 apiece, about 39% below Thursday’s closing price of C$0.44 and quickly dropped to a more-than-five-year low of C$0.14 before climbing to C$0.18 by midafternoon. It has a market capitalization of C$129 million.
Ascot expected to declare commercial production by this quarter, with total output from the restarted Premier project forecast to reach 1.1 million oz. gold and 3 million oz. of silver.
The Premier mine poured 3,430 oz. of gold in the past two months. However, Ascot said mine development had fallen behind schedule by one to two months, and the delay in the PNL ramp-up, now extended to December, has further impacted production.
CEO Derek White admitted the disappointment, particularly for employees and contractors.
“The company believes we need to focus on mine development to prioritize asset value and ensure we have the best path forward to sustainable and profitable operations,” White said in the release.
While in operation, Premier was the largest gold mine in North America until fire destroyed its surface buildings and closed operations in 1952. By then, it had produced over 2 million oz. gold and 45 million oz. silver.
As of April, mining resumed at the Big Missouri deposit, followed by planned mining at Premier later this year to feed a refurbished 2,500 tonne-per-day processing plant. It uses conventional crushing, grinding, and gravity circuits as well as a standard CIL process to produce doré bars. Next year, mining is to focus on the Silver Coin deposit, followed by Red Mountain closer to 2028/29.
The project hosts 7.3 million measured and indicated tonnes grading 7.85 grams gold per tonne and 29 grams silver for 1.9 million oz. gold and 5 million oz. silver, plus 5.4 million inferred tonnes grading 7.11 grams gold and 27.1 grams silver, for 1.3 million oz. gold and 4.8 million oz. silver, according to the company’s 2020 resource estimate.
