Gold is absolutely exploding this morning and is currently up by $17.58 to $1,546.49 per oz! NIA's Ascot Resources (TSX: AOT) is getting ready to explode well above $1 per share in the days ahead!
AOT has bigger short-term catalysts ahead for it than any other gold stock. AOT is about to release its three huge resource updates for: Premier/Northern Lights, Big Missouri, and Silver Coin any day now! We already know that AOT's infill drilling results intercepted extremely high gold grades across all three projects, so on a very conservative basis we look for approximately 50% of the inferred gold contained at Premier/Northern Lights, Big Missouri, and Silver Coin to be upgraded to the indicated resource category, thereby making it eligible to become proven & probable reserves in AOT's feasibility study set for release this quarter!
If we are correct this will increase the indicated gold resource of AOT's three major high grade gold projects located directly adjacent to the Premier Mill by 94.56% to 1.253 million oz! Including AOT's recently acquired Red Mountain project located 20km away from the Premier Mill plus AOT's Martha Ellen (a smaller gold deposit located north of Big Missouri), AOT will have a total measured & indicated gold resource of 2.059 million oz Including silver, AOT will have over 2.1 million oz of measured & indicated gold equivalent!
If AOT following its three imminent resource updates reaches a total measured & indicated resource of 2.1 million oz of gold equivalent, we believe AOT's feasibility study coming this quarter will be likely to define a proven & probable gold reserve of approximately 1.7 million gold equivalent oz. This is based on AOT's recently acquired IDM Mining releasing a feasibility study for Red Mountain in mid-2017 on a standalone basis that found 81% of its measured & indicated resource to be economically viable.
AOT's current Premier Gold Mine resource is ranked among the Top 15 highest grade gold projects under development worldwide. The only other publicly traded Canadian gold explorer with an advanced gold project ranked among the Top 15 highest grade gold projects under development worldwide is Pure Gold Mining (TSXV: PGM) and it just reached an enterprise value yesterday of CAD$229.63 million or USD$177 million.
PGM only has a 1 million oz proven & probable gold reserve valuing its project at USD$177 per oz of reserves. If AOT this quarter releases a feasibility study that finds 1.7 million economically viable high grade oz of gold equivalent a valuation of USD$177 per oz would give AOT an enterprise value of USD$300.9 million or CAD$390.42 million! With 232.48 million shares outstanding this will value AOT at $1.68 per share!
A valuation for AOT of $1.68 per share is extremely conservative because we expect AOT to produce 2.5X more gold per year than PGM!
PGM's mill is only capable of processing 800 tpd of ore and will produce an average of 80,000 oz of gold annually.
AOT's Premier Mill is capable of processing 2,850 tpd of ore and we expect AOT to operate at a rate of 2,500 tpd. Historically, the Premier Mill has achieved gold recoveries of 91%. If AOT processes 2,500 tpd of 7.5 g/t gold with 91% recoveries it will produce an average of 200,000 oz of gold annually for 2.5X higher gold production than PGM!
Based on estimates of AOT's average annual gold production, AOT could deserve a near-term enterprise value that is 2.5X higher than PGM's current enterprise value of CAD$229.63 million. This would give AOT an enterprise value of CAD$574.075 million, which would value AOT at $2.47 per share!
NIA's President has purchased 150,000 shares of AOT in the open market. Past performance is not an indicator of future returns. NIA is not an investment advisor and does not provide investment advice. Always do your own research and make your own investment decisions. This message is not a solicitation or recommendation to buy, sell, or hold securities. Never make investment decisions based on anything NIA says. This message is meant for informational and educational purposes only and does not provide investment advice.
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