Ascot Mining has decided to dispose of its stake in Canadian resource company Mineral Hill Industries to eliminate US$500,000 in associated debt.

The company said the decision was made in response to the challenging market conditions for junior resource companies, which favour production and cash flow.

“After much struggle, Ascot is now in an enviable position because it has a functioning gold mine and an operating mill,” said chief executive of Ascot David Jackson.

“In recognition of current market sentiment, the Company believes that shareholders will benefit far more by the Company focusing its resources toward increasing gold production and cash-flow.”

The company will now focus on improving operations and further exploration at the Chassoul project in Costa Rica.

Back in January, Ascot issued convertible bonds totalling US$500,000 and warrants over two million of its shares in connection with the acquisition of the stake, which will now be cancelled.

The company has also agreed with the convertible bond holder, Terra Equity, to exchange its financial obligations for the Mineral Hill interest with immediate effect.

The company said that it will continue to maintain “close management ties” with Mineral Hill with a view to developing new projects in the Americas.

Source: Proactive Investors