Ascot Resources seeks TSX exemption for $37 million financing

The Premier gold project is located 25 kilometres from the town of Stewart, British Columbia. Credit: Ascot Resources

Ascot Resources (TSX: AOT) said on Monday it has submitted financial hardship exemption application to the Toronto Stock Exchange with respect to its recently proposed financing to get its Premier gold project back on track.

On Oct. 21, the company announced that it had negotiated with its main creditors for a senior debt financing of $11.25 million and arranged for a private placement of shares priced at C$0.16 apiece totalling a maximum of C$35 million (now increased to C$42 million).

Total proceeds, totalling approximately C$52 million ($37m), will be used by Ascot to resuscitate its Premier gold project in British Columbia’s Golden Triangle, which made its first pour in April of this year and was initially targeted for commercial production in the third quarter.

However, in September, the company revealed that the Northern Lights and Big Missouri deposits have not been advancing on schedule, leading to insufficient ore feeds to the Premier mill and missed production targets. As a result, it decided to place the Premier project on care and maintenance until further development is completed, which at the time was estimated to take 3-6 months.

“This financing package will enable the company to undertake the mine development activities necessary to advance PNL and BM in order to sustainably provide feed to the mill,” Ascot CEO Derek White said in the Oct. 21 news release.

“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. Ascot is focused on getting the operation back on track as we move to restarting gold production in Q2 of 2025.”

The project, located 25 km from the town of Stewart, is home to a former underground gold mine that opened in 1918 and included four deposits – Silver Coin, Big Missouri, Premier and Red Mountain.

While in operation, it was the largest gold mine in North America until its surface buildings burned down, leading to its closure in 1952. By then, the Premier mine had produced over 2 million oz. gold and 45 million oz. silver.

TSX exemption

Absent the financial hardship exemption, Ascot’s financing would require approval from holders of a majority of its outstanding shares, excluding Ccori Apu SAC, Equinox Partners LLC and any subscriber to the equity financing.

As stipulated under Section 604(a)(i) of the TSX Company Manual, the transaction would materially affect control of the company, since the participation of Ccori Apu in the equity financing would bring its total shareholding to 23% on a partially diluted basis.

Under Section 607(g)(i), a shareholder vote is also required when the number of listed securities issuable exceeds 25% of the number of shares outstanding prior to the transaction. Under Section 607(g)(ii), approval is also required when the share issuance to insiders exceeds 10% of the outstanding share capital during any six-month period.

Shareholders are also required to vote when the per-share price under the equity financing, as well as the exercise of the warrants, is lower than the market price (as defined by TSX). When the market opened on Monday, Ascot’s shares traded at C$0.25 apiece, before falling 10.4% to C$0.21 by 1:15 p.m. ET. The company’s market capitalization is at C$152.5 million ($109.5m).

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