Ascot Resources (TSX: AOT) appears to have hit the end of the line, despite hopes for a full mine restart. The company this morning indicated that it has returned its Premier Gold Project to care on maintenance.
The placing of Premier into care and maintenance follows Ascot being unable to successfully negotiate a mining cost structure with their mining contractor, Procon Mining. The company has been in negotiations related to proposed price increases since early May, with the two sides unable to meet terms deemed satisfactory to both parties.
The delays have led to a search for alternative mining contractors, which has been unsuccessful, and has caused delays in mobilizing a mining fleet to the Big Missouri deposit, which is said to be a critical part of the restart plan. In turn, this means that the mill will not be able to return to operation in early August as previously announced.
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Overall, the delays have forced the Premier project into care and maintenance in an effort to reduce capital expenditures, while Ascot has now appointed a special committee to conduct a strategic review process. The review is expected to result in the assessment of alternatives to advance Premier towards production.
“Over the next couple of months, we will be assessing our options to help us access the capital needed to successfully bring the project into sustainable production,” commented Jim Currie, CEO of Ascot Resources.
The strategic review follows Ascot raising $49.5 million in new funding back in November after placing the operation into care and maintenance in September, prior to a soft restart of on-site activity in December. A further $61.1 million was then raised in April as part of an effort to return to full operation.
Ascot Resources last traded at $0.07 on the TSX.
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