The company said on Monday (November 11) that it has applied to the Toronto Stock Exchange (TSX) for a financial hardship exemption. This would allow it to secure financing under conditions that typically require shareholder approval.
With a combined target of approximately C$52 million, Ascot said it is looking to advance the development of Premier Northern Lights, restart the mill at the site and restart the Big Missouri mine.
Ascot said in this week’s press release that its financing is structured in two main components: an equity financing through a brokered private placement, and debt financing secured with its existing creditors.
For the equity financing, Ascot has set up an agreement with a syndicate led by Desjardins Capital Markets and BMO Capital Markets. These parties will act as agents for a brokered private placement of common shares.
Ascot is aiming to raise between C$25 million and C$42 million by offering shares at C$0.16 each. Closing is contingent on multiple conditions, including the completion of definitive agreements for the debt financing and TSX approvals.
On the debt side, Ascot has entered into non-binding term sheets with Sprott Private Resource Streaming and Royalty (B), as well as Nebari Gold Fund 1, Nebari Natural Resources Credit Fund II and Nebari Collateral Agent.
Sprott has agreed to modify an earlier agreement and provide US$7.5 million to Ascot in advance; the deal also increases the stream percentage Sprott has on Ascot’s gold and silver production. Ascot has the option to buy back this additional share for US$9.7 million by December 31, 2026, while Sprott can trigger a buyback starting on January 1, 2027.
When it comes to the Nebari entities, they have given Ascot more lenient debt repayment terms, although Ascot has agreed to various points, including a higher interest on its existing cost-overrun credit agreement. Nebari will also receive a US$1 million alignment fee from Ascot, to be paid in common shares of the company.
Ascot has emphasized that these financing arrangements remain subject to the completion of definitive agreements, as well as the TSX’s financial hardship exemption approval. The company has also indicated that further changes could arise as it works to finalize the necessary approvals and terms with its secured creditors.
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.
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