Ascot Resources has decided to halt mill operations at the Premier Gold Mine in British Columbia, Canada, to concentrate on mine development activities.
This move comes less than five months after the mine’s first gold pour.
The mine is located 25km from the town of Stewart on Nisga'a Nation Treaty Lands, in the prolific Golden Triangle of north-western British Columbia.
Over the past two months, the mill has produced 3,430oz of gold, significantly outperforming the whole of Q2.
Despite the success, the company has identified a lag in mine development, particularly at the Big Missouri mine and the Premier Northern Lights (PNL) ramp, which has impacted the number of stoping areas available.
The company has determined that the current amount of mine development is insufficient to sustainably feed the mill.
Ascot is on track to receive first development ore from PNL this month but acknowledges that further development is needed to access deeper ore, thus extending the timeline for the PNL mine's ramp-up.
The decision to suspend operations at the Premier Gold Mine is aimed at allowing the company to focus on mine development until the Big Missouri and PNL mines can consistently provide enough ore to profitably run the mill.
Ascot intends to seek funding to support the necessary mine development work.
The initial estimate suggests that three to six months of development, primarily at the PNL mine, will be required, pending further investigation and cost analysis.
As of the end of August, Ascot reported a cash reserve of nearly C$15m ($11.06m), which is expected to cover the costs of properly pausing operations for the upcoming winter and maintaining environmental compliance programmes.
Ascot president, CEO and director Derek White said: “This is difficult news for all of our stakeholders, and especially all of our employees and contractors who have worked extremely hard during the commissioning period.
“The company believes we need to focus on mine development to prioritise asset value and ensure we have the best path forward to sustainable and profitable operations.”
The company is currently in talks with its secured creditors over obligations during the suspension period.
In a press statement, the company said: “There is no certainty the company will be able to raise the funds required to complete the necessary mine development work and to restart operations.
“While the company expects that operations will be sustained once restarted following development work, there is no certainty that this will be the case.”
