Ascot halts Premier gold mine operations in BC just months after first pour

The Toronto-quoted shares of Ascot Resources (TSX: AOT; US-OTC: AOTVF) cratered Friday after suspending operations at its Premier gold mine less than five months after celebrating its first gold pour.

Insufficient ore feed from the Big Missouri and Premier Northern Lights (PNL) deposits, 25 km from the town of Stewart in British Columbia’s Golden Triangle, missed production targets and forced the halt. as Ascot will need to secure additional funding to complete the necessary work, it said it in a release.

Ascot estimates that three to six months of additional development will be required before it can resume operations. The company seeks funding to complete this work and has entered discussions with secured creditors. At the end of August, Ascot had about $15 million in cash, enough to cover costs during the winter suspension and maintain environmental compliance programs, it said.

“Despite strong mill performance, the delay in mine development poses a significant challenge,” BMO Capital Markets mining analyst Brian Quast told clients in a note Friday. Even so, the company's progress in the mine’s commissioning process means it maintains an ‘outperform’ rating and a $1.25 target price, Quast said.

Ascot shares opened Friday at 27¢ apiece, about 39% below Thursday’s closing price Thursday of 44¢ and quickly dropped to a more-than-five-year low of 14¢ before climbing to 18¢ by midafternoon. It has a market capitalization of $129 million.

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