Ascot Resources (TSX: AOT) or AOTVF is NIA's #1 overall stock suggestion for 2020. NIA's previous eight #1 overall stock/option suggestions for each new year have achieved an average gain of 474.79% in an average time period of 11.625 months. Most recently, NIA's #1 overall stock suggestion for 2019 Fiore Gold (TSXV: F) gained by 173.91% in 9 months from NIA's suggestion price!
NIA's President owns 150,000 shares of AOT that he purchased in the open market. The last NIA stock suggestion that its President invested in was Lifeway Foods (LWAY), which NIA suggested on June 7, 2019 at $2.10 per share prior to it rising by 126.19% to $4.75 per share in only 10 trading days!
Only on two previous occasions has NIA's President invested into NIA's #1 overall stock suggestion for the new year and on both occasions he earned 7 figure profits! He previously invested into NIA's #1 overall stock suggestion for 2012 Broadvision (BVSN), which gained by 588.54% in 3 months. He also previously invested into NIA's #1 overall stock suggestion for 2011 Great Panther Silver (TSX: GPR), which gained by 390% in 5 months.
Although NIA is extremely bullish on gold headed into 2020, AOT is not a bet on the price of gold rising in value. Although a rising gold price in 2020 will certainly add to AOT's gains, in the unlikely event that gold declines in price in 2020, we believe AOT will rise in value anyway! AOT is currently trading at severely oversold levels and will have its biggest catalysts in history over the next six months.
Gold projects that are located in the U.S., Canada, or Australia currently have median gold grades of 1.41 g/t. AOT has a total gold resource of 12,405,500 tonnes grading 7.29 g/t gold for 2,908,300 oz of contained gold! AOT's gold grades are 5.17X higher than the median gold project located in the three largest developed gold producing countries! On a global basis, AOT is currently ranked among the Top 15 highest grade gold projects worldwide!
When a gold project has a 7 figure resource grading 7 g/t or higher, there is about a 60% chance that it will be brought into production. If a gold project with a large resource grading 7 g/t or higher is located in the U.S., Canada, or Australia, it then has about a 75% chance of being brought into production. If the gold project also has major infrastructure already in place including extensive underground workings, tailings facility, power, road, mill, and water treatment plant... the odds of being brought into production rise to well above 90%! If in addition to all of this, the gold project has 2 million ounces of historical gold production, its odds of being brought back into production reach 99%.
AOT's 25,000 hectare Premier Gold Mine in Stewart, BC has had an enormous 940,000m of total drilling to-date at its four key deposits: Big Missouri, Silver Coin, Premier, and Red Mountain. AOT is led by Derek White who successfully built Quadra FNX into a $3 billion market cap copper miner, sold it to KGHM in 2012, then from 2012 through 2015 was CEO of KGHM International the #1 largest copper miner in all of Europe!
This summer, Derek led a massive 42,000m infill drilling campaign across AOT's Big Missouri, Silver Coin, and Premier deposits. In December, we expect AOT's recent infill drilling to payoff big when the company begins to announce resource updates for those deposits. Currently, they contain 644,000 oz of measured & indicated gold and 1,218,000 oz of inferred gold. We expect to see a large percentage of their inferred gold get upgraded to the measured & indicated category. Look for their measured & indicated gold resource to more than double in size. This will cause AOT's total measured & indicated gold resource to reach approximately 2 million oz!
This is very important because when AOT releases its Premier Gold Mine feasibility study in 1Q 2020, only measured & indicated gold will qualify to be upgraded to proven & probable reserve status! NIA anticipates that AOTs feasibility study will cause a large upward revaluation in AOT's market cap. We anticipate that AOT's feasibility study will show very low initial CAPEX to restart production at the Premier Gold Mine because the company only needs to refurbish infrastructure that already exists. Normally, initial CAPEX for a mine of this type would probably be in the USD$300-$400 million range but for AOT it may only be USD$50-$75 million.
We expect the feasibility study to project annual gold production in the 150,000-200,000 oz range, which means AOT once in production will likely generate annual revenue of between USD$225-$300 million based on a gold price of $1,500 per oz. With gold grades of above 7 g/t, AOT will likely have high operating margins and be deserving of an above average enterprise value/revenue ratio of 5 to give AOT a valuation once in production of between USD$1.125-$1.5 billion!
AOT's current market cap at $0.56 per share is only CAD$130 million (USD$98.62 million). For comparison, Barkerville Gold Mines Ltd (TSXV: BGM) is currently trading with a market cap of CAD$256 million (USD$194.2 million) or roughly double AOT's valuation! Look for AOT's market cap to rapidly catch up to BGM's market cap in the weeks ahead. BGM's August 19th PEA projects annual gold production of 185,000 oz, which is within the range that AOT's Premier Gold Mine will likely produce. The big difference between AOT and BGM is initial CAPEX. BGM's PEA estimates initial CAPEX for its Cariboo mine of USD$235 million. We expect AOT's initial CAPEX to be much lower, yet AOT's Premier Gold Mine will produce the same amount of gold per year as Cariboo at higher gold grades! With higher gold grades, AOT's Premier Gold Mine will likely have higher operating margins!
AOT will soon deserve a market cap that is much higher than BGM due to much better project economics!
NIA's President has purchased 150,000 shares of AOTVF 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.