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Highlights
- Ascot Resources Ltd. plans to raise capital to advance its Premier Northern Lights and Big Missouri mines.
- The company is working on debt financing and equity placement deals to support the projects.
- Ascot Resources anticipates regulatory approvals by November 2024 to proceed with funding.
Ascot Resources Ltd. (TSX:AOT) is focused on the mining sector, particularly in gold production. The company has announced a plan to raise significant capital to advance the development of its Premier Northern Lights (PNL) and Big Missouri (BM) mines, both of which are currently in a state of temporary care and maintenance. These mines are central to the company’s ongoing development plans in the region.
Debt Financing and Secured Creditor Support
To fund the development, Ascot has been negotiating with several major creditors, including Sprott Private Resource Streaming and Royalty Corp., Nebari Gold Fund 1, LP, Nebari Natural Resources Credit Fund II, LP, and Nebari Collateral Agent LLC. These creditors have collectively indicated their willingness to provide new senior debt funding, which is expected to total approximately US$11.25 million. The proposed debt financing will be subject to various conditions, including creditor approval and regulatory processes.
The creditors are expected to extend their existing waiver and forbearance conditions until May 2025, allowing Ascot more flexibility in advancing its projects. The debt financing proposal is currently outlined in a non-binding term sheet, with final agreements still under negotiation.
Equity Financing for Additional Capital
In addition to debt financing, Ascot Resources has entered into an agreement with a syndicate of agents, led by Desjardins Capital Markets and BMO Capital Markets, for a private placement of common shares. This equity financing is expected to raise between C$25 million and C$35 million, with the offer price set at C$0.16 per share. The company’s major shareholders, including Ccori Apu S.A.C., have also expressed their intention to contribute significantly to the equity capital.
The combination of debt and equity financing is essential for Ascot to execute its development plans for the Premier Northern Lights and Big Missouri mines. These projects are key to the company’s strategy of restarting operations and expanding its gold production capacity.
Regulatory and Approval Timelines
Both the debt and equity financings are cross-conditional, meaning that each is dependent on the successful execution of the other. Ascot Resources anticipates completing these financings by November 2024, subject to finalizing the required agreements and receiving approvals from the Toronto Stock Exchange (TSX) and other relevant authorities.
The capital raised through these financings will be crucial for Ascot as it seeks to restart its milling operations and ramp up production at its key mining sites.
