In-Depth with Ascot Resources CEO Derek White: Plans on Restarting Premier

Trevor Hall [00:00:07] Good day, everybody. Welcome to Mining Stocks Daily. It's Friday and we're trying to get back in the groove here. That means it's time for an in-depth interview. We've had so many interviews aired this week from all the content discussions we had from both VRIC and the Roundup Conference last week in Vancouver. Thanks for tuning in. You know, we're not done. There's more content to share even next week. This is going to be the only piece we share today. We actually had the opportunity to sit down with Derek White, who's the CEO of Ascot Resources, to talk about the premier project up there in the Golden Triangle. A lot of eyes on the stock here in the last few weeks and a lot of good drill results. So it's good to catch up with Derrick. So before we get into that discussion, I do want to thank our sponsors for Mining Stock Daily. That includes Corvus Gold and Tako Resources, Pacific Empire Minerals and Western Copper and Gold. Thank you so much for your support. If you would like to engage the show, please be sure to drop me an e-mail. trevor@clearcreekdigital.com. Always happy to take your questions and inquiries and comments. And it's always really nice to when people reach out and just drop me a note, say that they listen every morning, so appreciate that very much. Special thanks to the Junior Mining Network for airing all of our shows. Glad that can be a partnership. Fantastic resource for all the press releases every morning. Make sure you go check out their website. If you haven't done so already. Now that I'm thinking about it, please be sure to listen to Mickey Fulp and I as we give the Metals, Money and Markets Weekly podcasts out on Kitco every Friday. That's going to come out this afternoon, Friday afternoon after the market close. You can always find that kickco.com. Always a good time to chat with the mercenary geologists to see what the numbers ended up the week with. And this week was certainly interesting, wasn't it? All right. So let's get to the conversation with Derek. Thank you so much for tuning in. Without further ado, here's Derek White from Ascot Resources.

Trevor Hall [00:02:09] Welcome back to Mining Stock Daily. This is Trevor Hall from the Association for Mineral Exploration Roundup 2020. And now I'm welcome, I'm happy to welcome a new guest to the show. That's Derek White. He's the president and CEO of Ascot Resources. Ascot trades on the TSX with the symbol AOT and also on the OTCQX market for those friends in the U.S. with AOTVF, they have a very interesting project and we're going to kind of cover that. It's basically for deposits feeding 1 mill that it's not necessarily being optimized, but they do plan to get it back up and running. But Derek, thanks so much for joining us and giving us a new brief update of what Ascot accomplished in the last year. And it's certainly been a lot of eyes on the stock in the last few weeks.

Derek White [00:02:56] Trevor, thanks very much for having me on the show. You know, Ascot strategy is really not that complicated. We inherited, I guess, a 3000 ton a day mill unrelated infrastructure near Stuart, B.C. or Hydro, Alaska. And in this part of the world, infrastructure is pretty expensive because of the mountainous terrain. And the idea here was to feed that mill with high-grade deposits. And there happened to be four areas where there's deposits of high grade close to the mill that we can feed this mill. And to give you an idea, you know, we just put out a new resource a couple of days ago and we have, roughly speaking around 8 grams a ton gold grades. And that allows us to produce in the neighborhood of around 200,000 ounces a year. And we like this opportunity because not only do we have a lot of exploration side, we have around 25,000 hectares close to the town of Stuart. But we also have the ability to sort of back that up with the mine plan for a reasonable sized gold mine. And because the grades are pretty high and the capital cost is quite low, we're feeling pretty optimistic in the coming events really for us, and in continuation of 2019, it was when we started roughly two years ago, it was to get a high-grade resource and we were shooting for at least, you know, 2 million ounces of mineable plan and then maybe another million ounces of indicated resources that we could grow from. And I think we really kind of achieved that over the last year. The last step of that was the infill drilling that completed last September. And we did 53,000 meters of drilling and that allowed us to get that resource up, and the next really big milestone for us is to release the feasibility study because unlike a lot of greenfield projects, this was the largest gold mine in North America for about 30 years. It's owned by the Guggenheim family and shut down and then got restarted as an open pit, and a new mill was built in 1990 that got shut down, and we're really just refurbishing that. So our timeframe to production, the cost of capital to get the mine started is a fraction of what it normally would be.

Trevor Hall [00:05:06] I want to ask you about the latest drill results because, I mean, those were some high-grade numbers. Can you walk us through some of those some of those results?

Derek White [00:05:14] Sure. So there's the four deposits that sort of surround the mill. Three of them are located on what we call the Premier group of property or properties. And the other one is located at the former IDM Red Mountain and each one of the deposits is a little bit different. In the Premier Mine, you know, really we were drilling into an area called the Peru zone and we were hitting sort of that eight to 10 ground material and we were really looking for continuity to bring it into the mine plan. And in addition, there's an area a little bit to the south of the Premier project where we were actually planning to do geotechnical drilling for looking at a portal access. And we also had some sort of 10 to 15 ground material.

Trevor Hall [00:05:57] Oh, shucks.

Derek White [00:05:59] So it sometimes goes to show you, you know, when you think you're doing engineering, drilling, you're really doing exploration.

Trevor Hall [00:06:04] Right.

Derek White [00:06:05] And vise versa. So that you know, that that mine historically was a very, very high-grade mine. And what we're finding is we go to the west, we're getting an extension of that mineralization. And so right now, we feel pretty good about that. And we want to do some follow up drilling next summer to really move more to the west where we were doing that geotechnical drilling because we think there's quite a lot more to be added there. The next deposit was a mine that ran in the 1990s and said the mill with about nine grams a ton. We acquired that in 2018. It's called the Silver Coin. It's about five kilometers from the mill. It has portal access so all areas have underground access that are ventilated and dewatered. And in this case, we did some infill drilling and we were also able to find a core area with some pretty high grade. So you're talking we had a couple of drill holes where we were hitting eight to 10 meters of sort of, you know, 10 grams a ton, which is quite nice. And really the job there was to take the historical drilling and add to it so that we could get a measured and indicated resource, which we've pretty well done at Silver Coin. And then lastly, the Big Missouri was an area the previous management was trying to build a big open pit. They had a resource that was done, I guess in 2016 or 17. It was about 90 million tons of low grade. But inside that low grade, there was a high-grade envelope around that what we called the S1 pit. And today we were able to put a resource of about three million tons of, you know, kind of 8 grams. And really, it's a flat-lying structure that's pretty accessible from the pit. And it certainly got a lot of infill to go into the future. We did about 24,000 meters, but we hit a lot of intersections and again, 5 to 10 meters wide of that sort of seven to 10-gram material.

Trevor Hall [00:07:45] Well, coming back to this hub and spoke idea, I mean, it's a logical way to define what you're doing. You have the four deposits, one mill, the deposits are basically surrounding the mill. So like just like a bike bicycle tire, it's going to be feeding in the mill. But the interesting thing about this mill that you were sharing before we started recording is it's going to be fairly low CapEx because the infrastructure is already there. I mean, you just need to replace some parts. It's not like you're building the dang thing.

Derek White [00:08:13] So, you know, the things that we have really going for us are, number one, we have road access to Stuart. So it's about a 20-minute drive to Stuart.

Trevor Hall [00:08:19] And not everybody in the Golden Triangle, Hillcrest.

Derek White [00:08:22] And you know, the last mill, the last mill of this size that was built was Pretivm's Brucejack Mine. It's about 40 kilometers north from where we were. And, you know, really that probably cost between 800 and a billion dollars to build. And so we're looking at a fraction of that cost. So what we have to do really to get this going. We have power that comes from Stuart, but we also had a brand new power plant put about 700 meters from the mill. So we have two power sources, we have roads, we have underground infrastructure and Beliden that owned this, sold the ball mill and the SAG mill back in the late 90s, early 2000s. And really that's where replacing the grinding and crushing circuit. But to do that, we're just installing what was already there. There's no real design here. And we've had a construction group go inside. So in our feasibility study, unlike a normal Greenfields project, we're just refurbishing what was already there.

Trevor Hall [00:09:14] Is there a road to Red Mountain?

Derek White [00:09:16] There is not a road to Red Mountain. So there's a highway which is about 10 kilometers away. And Red Mountain had put a five by five-meter access in. But right now, there is no road there. So right now, what we're doing is applying for the road access. And so we go up to build that road. And generally the nice thing, you know, one of the things about the Golden Triangle is although it has spectacular-grade, certain of the deposits are known for their nuggety effect, which means you can have spectacular-grade. And the idea here is to diversify the mining risks. So by having four deposits, we don't have to have them all going at one time. Any two of these mines could feed the mill at 2,500 tons a day to 3,000 tons a day. And so the idea is to get going from the Premier mines, get those started, feed the mill for two years and then build the road and bring the ore in from Red Mountain. And why do we do that? It's because the Red Mountain has one zone. And this is really more of a reserve now. That's called the mark zone, which is 10 grams a ton. It's 16 to 40 meters wide. You know, very low mining cost. And it obviously can really help her NPV. And so in year three of the mine plan, we want to bring that material in and we'll adopt the mill. It's a finer grain. But we feel pretty good about that.

Trevor Hall [00:10:23] The feasibility study, the work that's going on now, I mean, this is a full bankable feasibility study.

Derek White [00:10:27] Correct.

Trevor Hall [00:10:27] But you didn't do a PEA.

Derek White [00:10:30] Well, we started out you know, you have to remember this is a little different than a Greenfields project. So we've had one hundred years of mining history here. And we were originally talking about doing a PEA and mixing it together when we acquired the Red Mountain asset that already had a feasibility study. And so we had an idea of putting a feasibility study on an upgrading Red Mountain and then putting a PEA kind of as an optional part of that. And it became quite complicated and probably not really the best. So we were so close. We just said, look, we might as well just put out one thing, make it simple and just have one study which has everything there. And so what we're talking about is on all four deposits, a feasibility level study that shows the mine plan where all four deposits come into the mine on a common known basis.

Trevor Hall [00:11:13] So do you think the feasibility maybe by PDAC or after?

Derek White [00:11:21] You know, I think the big issue for us was, you know, we have to remember two years ago, we had no high-grade resources, zero. So in two years, we put together, you know, kind of a well, a 2 million ounce M&I, and inferred of another million ounces. And to do that, you know, there are stages in the mine planning. We finished the infill drilling at the end of September and it took us really October and November and part of December to get the mine block models and wireframes and everything ready, and then the mine planners are probably going to take about two to two and a half months to finish that. So I think we'd probably be a little bit after Pidact. We were pushing to try and get it for Pidact, but we're definitely shooting for before the end of March.

Trevor Hall [00:12:05] It's a Q1.

Derek White [00:12:06] Yeah, Q1 event.

Trevor Hall [00:12:08] OK. All right. That's a big catalyst coming down.

Derek White [00:12:11] Yeah. You know, I and I think, you know, with this for a lot of investors, you know, I appreciate there's a lot of projects out there. But, you know, if you look around and say how many projects could be in production quite quickly that have 200,000 ounces for at least 10 years for a fraction of the cost, and you get all the exploration upside here. We have 15 different targets of stuff that has nothing to do with these deposits. And so we feel that you know, especially in rising gold prices or in the prices we see today, that that can be pretty attractive.

Trevor Hall [00:12:40] One last question for you. And just in general about Golden Triangle, I mean, it's not without a challenge, as obviously. Right. I mean, obviously, Ascot has probably got a little bit better than a lot of other companies, especially on the exploration side. When you're speaking to investors who know what those red flags are when it comes to infrastructure and access and just short timing during the year where you can actually get in there and do the work, how do you bring them back to understand that this is a great jurisdiction, that it's healthy to put your money behind?

Derek White [00:13:12] Well, you know, I mean, at the end of the day, you know, I guess there's no test on what's the cash level produced. The two mines over the last hundred years that really stood out is SD Creek for Barrick, which is probably one of the most profitable gold mines in the world ever, and Premier in the nineteenth, the mine that we get. Guggenheim made a fortune out of this and they faced in that time much more difficult conditions than we face. I think the thing that you have to deal with is, number one because you're in a mountainous area, open-pit mining is going to be quite challenging because of the stripping. Not in every case, but that's the big thing. And also, if you have a lot of snow, you know, being underground, you can work year-round. That's the first thing. But it's really just having access to infrastructure. So, you know, when you have to cross mountains and glaciers and all that kind of stuff, the cost of doing that, you have to have a really world-class deposit to make that happen. And we're taking advantage of being close to the infrastructure. And I think where people get concerned is whether the CapEx is gonna blow out of the water because it got across five mountain ranges. In our case, we don't, there's already all the infrastructure there. So I think what I would say is, look, this is fantastic geology and it's proven up over the last hundred years to have unbelievable deposits, especially for precious metals. And if you can find a situation where you can get into production and mine that with low infrastructure access costs, that can make it just as good as anybody anywhere else.

Trevor Hall [00:14:34] Derek, I appreciate your time. I look forward to catching up with you here again, probably in a few weeks.

Derek White [00:14:39] Yeah.

Trevor Hall [00:14:40] See what other news has come down the pipeline and update our listeners and your shareholders as well. Until then, enjoy the rest of your time here in the conference. It's almost over.

Derek White [00:14:48] Thanks very much for having me on the show.

Trevor Hall [00:14:50] That's Derek White. He's the president CEO of Ascot Resources, which trades on the TSX with the symbol AOT and also on the OTCQX with AOTVF.