Ascot Resources Ltd. (TSXV:AOT) has announced a 2017 exploration program at its Premier property located near Stewart, BC. The property hosts the past
producing Premier Mine which historically produced 2.1 million oz Au and 44.9 million oz Ag. The company recently completed a successful 2016 exploration
drill campaign, which delivered similar grades and mineralization as the Premier Pit area. Leveraging 2016’s success, Ascot has planned an extensive
2017 drill program consisting of both surface exploration and underground development aimed to further define existing targets (Figure 1) with the
ultimate goal of defining an initial high-grade resource of 2-3 million oz Au.
Premier property is set-up for success. The property is located north of Stewart, BC, which hosts the old Premier Mine that historically
produced 2.1 million oz Au and 44.9 million oz Ag. The property is equipped with a mill building, lab, tailings area, power-to-site and crusher setup,
along with other necessary infrastructure. The property’s high-grade nature, and mineralization continuity demonstrates the property's potential.
Ascot’s 2016 explorations program delivers. In 2016, Ascot spent C$5.5 million and completed 69,123m (279 holes) of exploration drilling
around the Premier pit as well as testing of three main target areas: Northern Lights, BC Silver and Sebakwe. The program successfully demonstrated
continuity in the mineralization, delivering similar grades and mineralization as can be found in the Premier Pit area. The final set of results from
the 2016 program were highlighted by (P16-1216) 13.71 g/t Au over 14.80m, including 125.50 g/t Au over 1.50m in the 609 zone.
Extensive 2017 program planned at Premier. In March 2017, Ascot is planning to start a 120,000m drill program aimed to further define
existing targets and an initial resource of 2-3 million oz of high-grade Au, including another 20,000m of drilling to explore grassroots targets to
the north of the property. The company will also be conducting an underground program with the goal of defining an initial reserve of 600,000 to 750,000
oz Au through 27,000m of underground drilling targeting the high-grade Lunchroom, Obscene and 602 zones. In total, the budget for the program is ~C$20.3
million; C$13 million for surface drilling and C$7.3 million for underground, assuming permits are obtained.
Valuation highlights exploration success. Based on the low-grade resource at Dilworth, north of the Premier mine, Ascot trades at C$53.5/oz,
which is roughly in line with peers. However, based on the resource goal (and ignoring the existing low-grade resource) it trades between C$80-118/oz,
a premium to peers, reflecting the project's likely high-grades, existing infrastructure and key shareholders. Ascot is financially able to conduct
all proposed 2017 work programs, in addition to making the final option payment on the property in June 2017 of C$6.85 million. We believe the 2017
drill program will continue the success demonstrated in the 2016 program, and results should support Ascot’s valuation.
Derek Macpherson | VP Mining Analysis
Sunneva Bernhardsdottir | Associate, Mining Analysis
Victoria Ellis Hayes | Associate
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