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 Thu Oct 23, 1997
Tracker 1997-50: Ascot's future hinges on drilling of the Laurani's Gold Zone
    Publisher: Kaiser Research Online
    Author: Copyright 1997 John A Kaiser

 Kaiser Bottom-Fish Tracker 1997-050

October 23, 1997

Ascot Resources Ltd (AOT-V: $0.18)

Tel: (604) 684-8950

Ascot's future hinges on drilling of the Laurani's Gold Zone

The market seems to have given up on John Toffan's Ascot since September 3 when Ascot and Corriente reported results from their Laurani project in Bolivia. So far Ascot has spent US $500,000 of the US $750,000 it must spend by the end of 1997 as part of its option to earn 50% by spending US $3 million by October 1998. Corriente Resources Ltd (CTQ-T: $1.75) holds the underlying option, which requires Ascot and Corriente to pay a total of US $2,950,000 by February 11, 1999 ($2,880,000 due on Feb 11/99). Results were reported for only one hole out of a 15 hole reverse circulation drill program, which yielded 246.8 g/t silver over 20 metres within a larger interval of 120 metres that graded 56 g/t silver. The silver grade increases with depth, but the two companies are still trying to decide whether this target merits further drilling. The main interest now seems to be focused on the Gold Zone in the west-central part of the property. Grab samples taken from seven mine dumps of small workings along the zone's 750 metre strike kicked back gold grades as high as 67.9 g/t. Further mapping and sampling is underway, and Ascot and Corriente are discussing a drill program on this target during the next few months to complete Ascot's remaining US $250,000 expenditure under the option agreement. Unfortunately, Ascot's working capital has sunk to about $500,000, which would leave the company with less than $200,000 if Laurani does not yield good gold intersections for the Gold Zone that facilitate a financing. A 2 million unit special warrant at $0.65 by Canaccord announced in late April predictably did not close. Ascot has 14,312,324 shares issued and 15,712,324 fully diluted, of which John Toffan owns 2.6 million. It is not clear whether earlier financial backers like George Oughtred and Ron Brimacombe still have any positions left in Ascot. The company has given up on its 75:25 diamond hunt JV with Major General on Victoria Island in Canada's Arctic, as well as its Burkina-Faso prospect in West Africa. If a further drill program at Laurani does not produce a discovery hole, Ascot will have a tough time raising additional funding from outside sources. In its annual meeting circular the company claims to have changed its philosophy from grassroots exploration plays to more advanced prospects. Unfortunately, such a strategy does not work when a treasury is running on near empty. To keep Ascot alive Toffan will probably have to dig deep into his own pocket, and given the stock's price trend and disappointing track record, bottom-fishers who decide to stick it out should brace for a round of dilution. I have featured Ascot as a bottom-fish for the past three years, and have concluded that if this kettle is to ever boil, I better stop watching it.

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