November 01, 2010
Ascot Mining Begins To Recover Its Poise, Following An Ownership Spat On One Of Its Properties
By Thomas Jones
Gold production seems to heal all wounds at the moment. After seeing its share price punished for the problems it has experienced on its La Toyota project, Ascot Mining has been given a real lift by the recent announcement that mill throughput at its Chassoul licence will shortly triple. The company’s shares rallied strongly. So, while legal proceedings at La Toyota have weighed on investor’s minds, and also upset short-term production targets, the company has limited the damage by accelerating production plans at its other projects. These are Tres Hermanos, El Recio and Chassoul itself. Like La Toyota, all are in Costa Rica.
Chassoul’s mill capacity has now trebled from 50 tonnes per day to 150 tonnes per day and, as a result, gold production should increase to 1,200 ounces per month beginning in November. The company has been issuing shares to contractors as consideration for services provided, but with the increase in both current and future production, as well as the possible provision of US$4.5 million in funding from private equity group Equita Global Financing, Ascot expects shareholder dilution now to ease.
Future production is set to receive a boost on three fronts. The company is targeting production of approximately 3,300 ounces of gold per month during the first quarter of 2011. The funds from Equita will initially be deployed to develop each of Tres Hermanos and El Recio into 50 tonnes per day operations, with ore trucked the short distance to the Chassoul mill for processing. Once production is established here, Ascot will look to increase production from the Chassoul mine itself, with a further 150 tonnes per day taking total Chassoul mine production to 300 tonnes per day.
Current operating costs at Chassoul are US$350 per ounce of gold produced, and are expected to remain around that level after contributions from Tres Hermanos and El Recio. Ascot sells its output at spot prices, and with gold having recently hit a high of US$1,376, operating margins are very healthy.
Narrow vein mining often discourages the definition of a major resource, and thus investors are understandably nervous that the veins will run out or become uneconomic. However, Ascot’s investors can take some comfort from the fact that a total of nine veins have been identified at Chassoul, and that current production is only coming from one of these - the Cajeta vein. Exploration is currently being conducted on the Pocote and Negra veins, and the company is interested in developing its understanding of how they relate to each other, and to Cajeta.
La Toyota was due to follow Chassoul into production, but a dispute over ownership has scuppered that plan, at least for the time being. Three hearings have so far been held on the La Toyota case, and so far the judgements have gone Ascot’s way. Consequently Ascot is confident of being able to resume operations at La Toyota at some point but a final judgement, and the execution of that judgement, may take a significant amount of time. The company cannot, at this stage, provide any realistic guidance on when the resumption of operations may occur.
Meanwhile, away from Costa Rica, Ascot continues to discuss the options available for it to form a closer alliance with TSX-V listed Mineral Hill Industries Ltd. Ascot announced back in May that it had agreed to exchange information on its properties with Mineral Hill, and while the companies share a common director in Andrew Von Kurssell, they also share a common corporate goal to diversify operations and expand internationally. Mineral Hill has lithium prospects in Quebec and Nevada and recently became the second largest land holder in Val d’Or, Quebec.
Since the troubles at La Toyota emerged, it’s been a long road back as far as finding favour on the stock markets has been concerned. However, Ascot must now feel vindicated by its earlier decision apparently to over engineer Chassoul’s mill and tailings dam, given expected production by the second quarter of 2011 will see its capacity well utilised. Further significant production gains will require considerable investment, but for now investors will just be enjoying the sight of gold bars rolling out the door.
Quelle: http://www.minesite.com/nc/minews/singlenews/...its-properties/1.html |
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