The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Without funding for summer activities, project delayed a year North of 60 Mining News – June 24, 2022
Crews have completed 115 meters of underground mine development at Big Missouri, the first deposit to deliver ore to the mill at the Premier gold-silver deposit near Stewart, BC.
Abundant visible gold encountered at a depth of 316 meters in P22-2393, a hole testing the Sebakwe zone to the west of the historically mined Premier deposit.
Just as Ascot Resources Ltd. was entering the home stretch of reestablishing a mine at Premier, the company has been forced to curtail some of the summer construction work needed to put the historic Northern British Columbia gold-silver mine back into operation early in 2023.
This slowdown at Premier, which will likely delay the first gold pour by a year, is due to a lack of adequate financing to complete the tailings dam, new water treatment plant, and other projects that need to be finished during the summer.
"In the current inflationary environment and challenging financial markets, the company is seeking a financing package to provide sufficient capital to complete the project and commence production at PGP (Premier Gold Project)," said Ascot Resources President and CEO Derek White. "The company has a limited weather window to conduct certain outdoor construction activities and needs to ensure it has sufficient funding to complete these activities and the rest of the project."
Now approaching the end of June, the financing window for summer projects in Northern BC is nearly closed.
Ascot previously had an US$80 million financing package with Sprott Private Resource Lending II. After drawing down the first US$20 million, however, Ascot and Sprott could not come to an agreement on the benchmarks that must be met to have access to the remaining Premier mine development funds.
At an impasse with Sprott and time running short on being able to get the requisite summer work completed, in April Ascot decided to look elsewhere for the funds.
While the mine development company has been working with a growing number of potential financiers, it has not finalized a deal with a lender, precious metal streamer, or royalty company. With the weather window nearing its close, Ascot has decided to wind down some activities in order to preserve the roughly US$55 million (C$72 million) for key projects that will further de-risk the operation until it has the financing in place to complete all the development.
"Since the company has not completed alternative financing at this time, the decision was made to delay certain construction activities until the next weather window and focus financial resources on mining development and exploration activities," White said.
This includes the continuing development of an underground mine into the Big Missouri deposit, which got underway in April.
Big Missouri is slated to provide the first ore to an operation at Premier that is expected to produce roughly 1.1 million ounces of gold and 3 million oz of silver over the first eight years of mining.
Ascot plans to complete drilling from underground that will tighten the drill spacing in areas of high-grade gold mineralization encountered from the surface at Big Missouri in order to fine-tune the mine plan for the start of production.
So far, crews have completed 115 meters of underground development at Big Missouri. Ascot says the rock quality has been good so far, which bodes well for development advance rates. Development is now only about 180 meters from reaching the initial ore stopes at Big Missouri deposit in the A Zone.
Ascot says the underground development originally planned for 2022 will continue unabated, as it is a core de-risking activity for the project and will enable access to ore areas and further stope definition drilling from underground.
The company also plans to continue with the 18,000-meter drill program that got started in May.
So far, 12 holes have been completed at Sebakwe, a new zone that appears to represent an unmined structure immediately north of the Northern Light and Premier zones of the Premier deposit.
While assays are pending, Ascot is encouraged by what it is seeing in the core from Sebakwe drilling, especially in the abundant visible gold encountered in hole P22-2393.
Despite the progress it has made on the mill, water treatment plant, and tailings facility, however, the company is winding down further advancement of these projects for 2022. With the weather window closing to complete these projects this year, it is now anticipated that the Premier gold mine will not go into operation until late in 2023 or early 2024.
"We are disappointed to have to slow down the pace of project construction while we actively pursue alternative financing options for the remaining construction work at PGP," said White. "We have been approached by many interested parties and have progressed to advanced due diligence with various lenders and streaming/royalty companies. Although more time is required to secure this funding, all potential financiers have expressed their continued interest."
Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.
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