Ascot Resources Ltd. (TSXV:AOT) announced it has commenced surface drilling as part of the 2017 exploration campaign planned at its Premier property
in British Columbia. As we discussed in a previous post,
the C$20 million program is expected to consist of both surface drilling and underground development. Initially, 120 km of surface drilling is targeted
at establishing an initial high-grade resource of 2-3 million oz Au. Later this year, Ascot expects to drill an additional 20 km to explore grassroots
targets at the north of the property, spending a total of C$13 million on surface drilling in 2017. At C$47/oz, Ascot currently trades at a discount
to peers (C$58/oz). However, based on the high-grade resource goal and ignoring the existing low-grade resource, the company trades at between C$70-105/oz,
a premium to peers. This valuation reflects the project’s likely high-grades, existing infrastructure and key shareholders. Based on Ascot’s cash position
at the end of 2016 (C$29.1 million), the company appears to be well-financed for its planned exploration and remaining option payment of C$6.85 million
(due June 2017). We believe Ascot is likely to continue the success demonstrated during the 2016 exploration program and that results from the 2017
drill program should support the company’s valuation.
Derek Macpherson | VP Mining Analysis
Sunneva Bernhardsdottir | Associate, Mining Analysis
Victoria Ellis Hayes | Associate
Red Cloud Klondike Strike Inc.
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Priced as of prior trading day's market close, EST (unless otherwise noted).
All values in USD unless otherwise noted.
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Company Specific Disclosure Details Ascot Resources Ltd. - TSXV:AOT - 3,4
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