The Golden Triangle is among North America’s richest mineral regions, containing several historic gold and silver mines. Even before Canada was officially a country, the area now known as the Golden Triangle was a hub for prospectors looking to strike it rich. Billions of dollars of undiscovered gold, silver, and copper still sit within an unexplored area that was once remote. However, only now can these world-class deposits be finally tapped.
The Premier Gold Project (“PGP”) and Red Mountain Gold Project (RMP) owned by Ascot Resources is a proliﬁc area known as the Golden Triangle. In January 2021, just months after Ascot received a USD105 million construction finance package for the PGP, the Company was able to strike several high-grade gold and silver areas in its 2020’s drilling campaign; The drill site is strategically located to the west of the Premier deposit and mill, potentially adding to existing resources outlined in the feasibility study. This early success, as well as the rising price of gold, make Ascot Resources one firm that investors should be watching this year.
Ascot Resources (AOT) is a publicly-traded exploration and development mining company listed on both the TSX and the OTCQX. It is not, at this time, mining for gold — instead, as it is in its exploration and development stage, its goals are to prove the quantity and quality of the gold on its assets, and in return, the value of its assets, through drilling and analyzing the minerals on the property as well as to develop the PGP into an operational, gold producing mine again. Since 2017, it has made efforts to restart the PGP, with an on-site historic processing plant. The Premier Gold Mine was once the largest gold mines in North America, it is located 25 kilometers from Stewart, British Columbia, in Southern area of a resource-rich region called the Golden Triangle.
The PGP has a strong economic evidence to support the firm’s initiative, including a post-tax base of NPV5% of CAD 341 million and IRR 51% (derived from USD 1400 per ounce gold price and USD 17 for silver, accounting for an exchange rate of 0.76 CAD to USD).
Currently, Ascot is securing basic engineering and permit amendments to restart the mine. It is also carrying out ongoing exploration initiatives, including several gold and silver deposits throughout 25,000 hectares of mineral concessions with over 70% of unexplored grounds.
What is the Golden Triangle and Why Should Investors Care?
The Golden Triangle is a historic 500-kilometer mineral belt located in northern British Columbia. It extends south from Atlin, British Columbia, to the Yukon border, stretching past Kitsault and ending southeast of Stewart, British Columbia — an area known for its abundance of gold and silver deposits.
Notably, the PGP has well-developed and existing infrastructures includes a paved highway leading to main distribution routes, a nearby deep-water port in Stewart BC that does not freeze in the winter, a concentrated load site, and sizeable hydropower plants for facilitating mining and mineral exploration.
Ascot’s PGP and RMP hold a 25,000-hectare land package containing four deposits — Premier, Silver Coin, Big Missouri, and Red Mountain — and many brownfield and greenfield exploration targets. In April 2020, the Company charted several engineering firms to conduct the feasibility study, the final study needed to secure the capital to begin mine construction. The results indicated that the PGP contain the mineral resources required to begin mining.
Besides the PGP and RMP, the Company is advancing several exploration targets that will contribute considerably to the project’s resource base. Ascot intends to engage in ongoing drilling to broaden its base and generate value through new findings.
In May 22, 2020, Ascot has filed on SEDAR the Premier & Red Mountain Gold Project Feasibility Study NI 43-101 Technical Report (“FS”) prepared by Sacre-Davey Engineering Inc..
Base case After-tax NPV5% of C$341 million and IRR 51% (based on US$1400/oz gold price, $17/oz silver price and CAD to US exchange rate of 0.76.) The FS is based on a proven and probable reserve of 6.2 million tonnes (“Mt”) from the Project. In addition to the reserves, the Company has inferred resources of 5.1Mt at 7.25 grams per tonne (“g/t”) gold at Premier, with approximately 2.2Mt of this resource material at similar grade, near the planned development, which may potentially be converted to reserves during operations.
Back in August 2019, Ascot contacted Ms. Sue Bird, a professional engineer at Bird Resource Consulting Corp. (BRCC), to enlist her expertise as an independent qualified person to revise earlier estimates. Ms. Bird’s conclusions regarding the Gold Triangle’s resources, in addition to the existing infrastructure and easy accessibility, make it an ideal gold mining region. As Ascot continues developing the mine’s largest deposits while also exploring other large targets, it is expected to see a significant level of high-quality ore.
Ascot Resources Attracting Significant Interest From Investors
Ascot is not just another exploration company attempting to prove to the market that the PGP contain a sufficient quantity and grade of gold to justify building a mine. Historically, the Premier mine produced nearly 2 million ounces of gold. For this reason, Ascot is restarting the Premier’s mill and supplying it from the PGP, which completed feasibility studies in April 2020 and the Ascot owns in entirety.
Ascot started 2021 strong, with notable results from its 2020 drill program, particularly the “Day Zone” within the PGP, which yielded 23.20g/t Au and 9.6g/t Ag over 2.00m and 2.31g/t Au and 125.1g/t Ag over 5.93m in P20-2263 and P20-2271, respectively. After continued drilling, the Company found a notable amount of high-grade gold ore. For context, gold grade is how much gold an ore contains. It is an important variable used to determine a mine’s feasibility. The discovery of the high-grade gold is a strong indicator of the mine’s profitability.
A number of institutional investors who saw the promising returns early on were quick to offer Ascot strong support. In December 2020, the Company secured USD 105 million to finance the Premier’s reopening, jumpstarting its position as one of Canada’s leading gold producers.
In addition to the mine’s production value, the rising price of gold makes the PGP initiative even more lucrative. The price of gold has historically increased, but due to a number of ongoing factors caused by the COVID-19 pandemic, such as government stimulus, expanding deficits, and more, experts expect the price to soar. Higher valuations of US stocks are also a potential factor behind gold’s climb this year, as several benchmarks suggest above-average market values.
Investors should keep an eye on Ascot Resources if they are interested in gold.
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