Ascot Resources’ (TSX: AOT) shares fell over 10% on Tuesday despite announcing a private placement for gross proceeds of C$20 million ($14.6m). The Canadian miner is currently focused on commissioning its 100%-owned Premier gold miner in British Columbia, which poured first gold in April.
The placement consists of approximately 30.24 million flow-through (FT) units and 11.63 hard-dollar (HD) units of the company, at per-unit prices of C$0.496 and C$0.43 respectively. Each unit contains one common share and one common share warrant that is exercisable at C$0.52 for two years.
The underwriters, led by BMO Capital Markets and Desjardins Capital Markets, are also granted an over-allotment option to buy an additional 15% of the number of units offered.
Proceeds from the FT units will be used by Ascot for development expenses, while those from HD units will go toward the ongoing commissioning and ramp-up of the Premier gold mine.
Located in the Golden Triangle of BC, about 25 km from the town of Stewart, the Premier mine kicked off its commissioning earlier this year, and is now expected to enter commercial production by the third quarter.
The commissioning follows years of work by Ascot to revitalize what was once the largest gold mine in North America. The Premier project houses an underground gold mine that operated from 1918 to 1952, producing over 2 million oz. gold and 45 million oz. silver during that period.
As of 11:20 a.m. ET, shares of Ascot Resources were down 11.1% at C$0.42 apiece on the TSX, near the lower end of its 52-week trading range of C$0.34-C$0.91. The company’s market capitalization stood at C$264.2 million ($193.6m).
