Ascot launches $107M placement, restructures debt

[Ben Graham]

Ascot Resources (TSXV: AOT.H) is proceeding with a C$150 million ($107 million) private placement as part of ongoing efforts to keep its British Columbia-focused mining business running.

On Tuesday, the Vancouver-based miner said a group of brokerages led by Canaccord Genuity and Raymond James has agreed to market the placement on a best-efforts basis. It follows up on the company’s announcement on Oct. 23 of a planned capital restructuring, which also includes a C$14.9 million rights offering, followed by a proposed 50:1 share consolidation.

The C$150 million financing will take place post consolidation, and will involve the issuance of Ascot common shares priced at C$0.60 each and up to C$15 million in flow-through shares priced at C$0.73 each.

Ccori Apu, a significant shareholder of the company, has indicated that it would participate in the offering to maintain its 32% equity ownership, Ascot said.

Alongside the private placement, the company said it has reached terms with its senior lender Nebari on a debt restructuring, including an extension to the loan maturity and altered payment structures.

Ascot’s shares are currently trading at C$0.02 apiece. Trading of the stock was briefly halted last Friday ahead of an expected announcement on the C$150 million placement and restructuring, which did not come until Tuesday. On Monday, Ascot issued a statement saying that without these agreements, it would face the possibility of seeking creditor protection.

BC projects

Proceeds of the offering, Ascot said, will be used to further develop its mining projects in BC. Its flagship asset is the Premier gold project, which hosts a historic underground mine that it successfully rebooted last year, but operations were forced to a halt just after five months due to insufficient development.

In June this year, Ascot placed Premier under care and maintenance after experiencing several delays with its planned restart. A strategic review was also initiated at the time.

The Premier gold mine, located 25 km from the town of Stewart, BC, was once the largest in North America, producing 2 million oz. from 1918 to 1952.

Also near Stewart is the Red Mountain project, which Ascot acquired in 2019. The deposit was discovered in 1989 and was previously explored by Seabridge Gold and IDM.