Ascot Resources Ltd. (TSX-V:AOT), which has been working to restart the historic Premier gold mine near Stewart, is further consolidating properties in the area with the acquisition of another gold project – Red Mountain.
Ascot will acquire Red Mountain through the friendly takeover of IDM Mining Ltd. (TSX-V:IDM) for $45 million, the companies announced earlier this week.
IDM shareholders will receive Ascot shares in exchange for IDM shares, at 0.07% per share. Both gold projects are near Stewart in the Golden Triangle.
Ascot owns several exploration projects, including the Premier-Dilworth project. Premier is an historic underground gold mine that operated from 1918 to 1952.
The Red Mountain project, which has an estimated capital cost to develop of $135 million, is small but considered a high-grade deposit.
The Red Mountain project entered a provincial environmental assessment review last year.
The consolidation of the two companies, their properties and management teams will result in “operational and development synergies,” the companies said in a joint news release.
The Premier property already has some infrastructure, including a processing mill, tailings pond, power and water treatment.
“At this time in the gold sector, scale is important and together with the Red Mountain project, the larger company will hopefully become a prominent gold developer in terms of both grade and tonnage,” Ascot CEO Derek White said in a press release.