Ascot Provides an Update on Funding For Future Mine Development & Restart of Operations
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VANCOUVER, British Columbia, Oct. 21, 2024 (GLOBE NEWSWIRE) -- Ascot Resources Ltd. (TSX:AOT, OTCQX:AOTVF) ("Ascot" or the "Company") is pleased to announce a plan to raise approximately C$40 million in funding to advance the development of the Premier Northern Lights mine ("PNL"), restart the mill and restart the Big Missouri mine ("BM") from the current state of temporary care & maintenance.
The Company has been in discussions with its main creditors, Sprott Private Resource Streaming and Royalty (B) Corp., Nebari Gold Fund 1, LP, Nebari Natural Resources Credit Fund II, LP and Nebari Collateral Agent LLC (collectively the "Secured Creditors") who have entered into a non-binding indicative term sheet with the Company to provide up to US$11.25 million in new senior debt on the terms, and subject to the conditions, described in such term sheet, including those set out below (the "Debt Financing"). As part of the Debt Financing, the Secured Creditors would extend their existing waiver and forbearance conditions until May 31, 2025.
The Company has also entered into an agreement with a syndicate of agents co-led by Desjardins Capital Markets and BMO Capital Markets (collectively the "Agents") in respect of a private placement, to be marketed on a best-efforts basis, of common shares of the Company (the "Common Shares") at a price of C$0.16 per Common Share (the "Offer Price") to raise a minimum of C$25,000,000 and up to a maximum of C$35,000,000 (the "Equity Financing").
The Secured Creditors have indicated their commitment to provide the Debt Financing, subject to the satisfaction of certain conditions precedent, and certain of the Company's major shareholders, including Ccori Apu S.A.C., have indicated their commitment to provide a significant portion of the equity capital. Together, the Company anticipates that the new debt and equity capital will enable management to execute their development plans.
The Debt Financing and the Equity Financing are cross conditional (as described below) and are subject to successful negotiation and execution of definitive agreements and receipt of regulatory approvals, including the necessary Toronto Stock Exchange ("TSX") approvals and exemptions. The execution of definitive documentation in respect of the Debt Financing and the closing of the Equity Financing are expected to occur on or about November 18, 2024.
Derek White, Chief Executive Officer of Ascot commented: "This financing package will enable the Company to undertake the mine development activities necessary to advance PNL and BM in order to sustainably provide feed to the mill. While the timeframe and funding required to undertake this work has been challenging for the Company, recent actions were required to ensure sustainable feed for profitable mill operations. Ascot is focused on getting the operation back on track as we move to restarting gold production in Q2 of 2025."
There is no certainty that: (i) the conditions of the Equity Financing or Debt Financing will be met, (ii) the Company will be able to otherwise raise the funds required, (iii) the necessary mine development work will be completed or (iv) the Company will be able to restart operations. Further, while the Company expects that operations will be sustained once restarted following development work, there is no certainty that this will be the case.
Debt Financing
The Debt Financing is expected to have the following terms and conditions, among others, with the final terms and conditions to be contained in the definitive documentation for the Debt Financing:
A minimum Equity Financing of C$25 million to be completed by Ascot
The Debt Financing shall be secured on a senior basis in priority to all other claims or obligations of the Company to the satisfaction of the Secured Creditors
The Debt Financing shall be documented through an amendment to the existing Cost Overrun facility ("COF"), which shall also include, among others, the following:
A Tranche 2 of US$11.25 million will be deposited in an escrow account and released in stages on satisfying certain key performance indicators and receipt of any regulatory approvals or court orders, to the extent required, to establish the seniority of Tranche 2. Tranche 2 will be subject to an OID and an arrangement fee
Interest on Tranche 2 shall accrue at a rate equal to 12% plus the three-month term SOFR reference rate administered by CME Group Benchmark Administration ...
