One of the reasons I went on a journey with Chris Svab to Stewart, B.C. near the Alaskan Panhandle, was interest in two gold mining projects with high grade results
Ascot Resources is building a mine on Red Mountain with the first gold pouring in early 2024.
The Ascot operation includes the former Premier mine, B.C.’s most prolific gold mine.
Ascot plans on producing 110,000 ounces of gold equivalent next year and 160,000 ounces annually after that. The two deposits mined are primarily gold with some silver.
To avoid huge debt for mine development and construction, Ascot sold a stream of gold and silver for $113 million cash.
The stream involves 8.75 per cent of gold production and 100 pet cent of silver up to 150,000 ounces, then declines by half. Ascot can buy the stream back.
Ascot is retrofitting the old Premier mill, closed since 1989, to reduce construction costs. A 2020 independent assessment estimated total mining cost per ounce at $770US — much less than average.
Ascot received an injection of cash from Peruvian miner Ore Peru for a 19.9 per cent interest in the company and no more debt.
The mine sites have four potential new sources of ore for expansion or longer mine life.
Proven as probable, reserves are 3.9 million ounces with another 11 million in inferred to measured categories.
At a recent 50 cents a share, Ascot has traded between 31 cents and 80 cents this year.
Three analysts on Yahoo Finance have a $1.05 consensus target with a low of 65 cents and a high of $1.50.
Scottie Resources is the second project of interest.
This company started exploration of the former Scottie Gold Mine which has 60,000 ounces gold left in reserves. The mine also has a 200 tonne per day mill.
Scottie is exploring in the old Scottie Mine and the Blueberry zone under what was a glacier, as well as other zones.
The operation along the Salmon River Valley completed over 80,000 feet of drilling since 2010. Another 37,000 will be done this year to extend deposits.
High grade gold values have been discovered to the 800 feet depth, with plans to reach the 1,100 foot level in 2023.
The strike length is 4,400 feet, with about 3,000 feet explored.
Scottie has yet to perform infill drilling to prove reserves are consistent and has yet to do a preliminary economic assessment, obtain permits and complete a bankable feasibility study before building a mine.
My guess: no mine will be built for the next five to nine years. But take-over activity may see Scottie sold first.
Priced at 24 cents a share, with a low of 15 cents and high of 31 cents in the last year, Scottie is a highly speculative company
CAUTION: Remember when investing, consult your adviser and do your homework before buying any security. Bizworld does not recommend investments.
Ron Walter can be reached at ronjoy@sasktel.net
The views and opinions expressed in this article are those of the author, and do not necessarily reflect the position of this publication.
