Ascot Resources has signed non-binding letters of intent for around C$200m ($147m) in project financing for the development of the Premier Gold Project (PGP) in British Columbia, Canada.
PGP is located on Nisga’a Nation Treaty Lands in the prolific Golden Triangle of north-western British Columbia.
The proposed finance package will include a $110m gold and silver streaming agreement with Sprott Resource Streaming and Royalty and its affiliates.
It also includes a C$45m strategic equity investment by Ccori Apu, a portion of which will be structured as Canadian Development Expenditures flow through shares.
The majority shareholders of Ccori Apu are also shareholders of Compañía Minera Poderosa (Poderosa), which owns and operates a high-grade gold mine in northern Peru.
Ascot is expected to provide an update on the construction plans for PGP and the path towards production, which is anticipated in early 2024.
The company maintains its previously announced targeted project timeline, with plant pre-commissioning to start in Q4 2023 and the first gold pour anticipated to occur in early 2024.
Ascot president and CEO Derek White said: “In combining the new $110m stream from Sprott Streaming with the strategic equity investment from Ccori Apu, Ascot is able to advance towards production with minimal debt.
“We are delighted to see Ccori Apu’s interest in our project and welcome their involvement and experience as successful operators in high-grade, underground gold mining as we advance PGP.
“The company considers Ccori Apu’s investment as a strong vote of confidence from an experienced underground gold mining company.”
Ascot will receive around C$200m in project financing to construct PGP, to repay the outstanding principal and accrued interest of the senior credit facility.
The company will also use the financing for production payment agreement from Sprott Private Resource Lending II (SRL), to enter into production with minimal debt.
Ascot will receive $110m from Sprott Streaming, in exchange for delivery of 8.75% and 100% of gold and silver production, from PGP and RMP, respectively.
The company will amend the existing 10% gold streaming agreement with SRSR on the Red Mountain Project (RMP), to make it a part of the deal with Sprott Streaming.
It will receive a C$45m investment from Ccori Apu, a portion of which will be structured as CDE flow through, such that the total gross proceeds to Ascot is C$50m.
Ccori Apu will obtain a 19.9% pro forma ownership of Ascot common shares upon closing and will hold the right to nominate up to two members to Ascot’s Board of Directors.
Ascot said that a $10m convertible facility from Beedie Investments (Beedie) remains outstanding and Beedie will sign an inter-creditor agreement with SRSR.
Blake, Cassels & Graydon served as legal advisor to Ascot, Morrison Park Advisers served as an exclusive financial advisor to the company on the strategic investment by Ccori Apu, and Auramet International as financial advisor on investment by Stream.
