Artemis on track for Q4 gold pour at Blackwater, at slighter higher costs

Artemis Gold (TSXV: ARTG) says its Blackwater gold mine in central British Columbia is on track for its first pour late this year, despite construction delays.

In an update this week, the Vancouver-based gold developer said the mine was 95% complete. It’s also finished the 135-km 225-kV transmission line connecting Blackwater to B.C.’s power grid.

It added that the tailings storage facility will be completed by the end of October, in advance of ore commissioning of the plant. The initial mining fleet has also been commissioned, and pre-stripping of the mine, as well as the construction of haul roads, are advanced, with first ore expected over the course of the next month.

However, Artemis also noted that initial spend to first gold pour has risen by about 7% —from $730-$750 million to $780-$800 million, due to construction delays.

According to the company, the Blackwater mine experienced two separate wildfire events during the past 17 months which halted construction at site for a total of approximately one and a half months. Management also invested in certain schedule acceleration initiatives to offset the delays, which added to the cost of construction.

As a result, Artemis has entered an agreement with National Bank of Canada to provide additional standby funding of up to $65 million. This funding is in addition to the company’s existing project loan facility of $360 million, as well as a cost overrun facility of $40 million that was drawn in earlier this month.

“The additional standby funding provided by one of the company’s existing relationship lenders provides us the financial flexibility to absorb the financial impact of these events, while managing project schedule targeting first gold pour in late Q4 2024 and ramp-up of operations beyond,” Artemis CEO Steven Dean commented.

Artemis Gold’s stock ended the day up 3% at $13.75. The share jump brings the company’s market capitalization to $3.1 billion.

The Blackwater mine, located 160 km southwest of Prince George, is expected to become the province’s first new gold mine since the Brucejack mine in 2017.

Once in production, it is expected to produce 500,000 oz. of gold equivalent in each of its first 10 years, generating annual free cash flow of about $500 million at an all-in sustaining cost of US$712 per oz. Expansion plans are also underway to extend the life of mine to 23 years.