Artemis okays $1.4B Blackwater expansion

Artemis Gold (TSXV: ARTG) said Wednesday it will proceed with a $1.4-billion (US$1.1-billion) second-stage expansion at its Blackwater mine in central British Columbia, a move the company says would lift the operation into the ranks of Canada’s three largest single-mine gold producers.

Dubbed EP2, the plan is to add a new processing facility beside the existing plant to lift total capacity to 21 million tonnes per year from 6 million now. A vertical mill underway in a separate project is slated to finish by late next year, while the EP2 build would take a further two years to late 2028. The new EP2 plant is designed to handle 13 million tonnes a year, up from 9 million tonnes outlined earlier.

“Our consistent long-term vision for the Blackwater mine has been to grow low-cost production to at least 500,000 gold oz. per year through staged, capital-efficient expansions funded primarily by cash flow from operations,” CEO Dale Andres said in a news release.

Artemis said the expansion is to drive average annual output to 500,000–525,000 oz. over the first full 10 years and targets all-in sustaining costs of US$800–$1,100 per ounce. The mine, 450 km northeast of Vancouver, entered commercial production in May as B.C.’s first new gold mine since 2017. For the eight months to Dec. 31, Blackwater is expected to produce 160,000–200,000 oz. at all-in sustaining costs of US$670–$770 per ounce.

Artemis shares closed down 0.8% or 30¢ at $37.15 in Toronto on Wednesday. It has a market capitalization $8.6 billion.

Profitable expansion

The company estimates the EP2 capital outlay to be funded mainly from operating cash flow and the balance sheet. Front-end engineering and execution plans are complete, with early works expected to begin next month, pending provincial approval for hydro-electric power. Major construction is planned for the third quarter of 2026, with first gold in the third quarter of 2028, President Jeremy Langford said. At peak, construction would employ about 1,500 people, with additional indirect jobs.

During the two-year EP2 construction period, Artemis forecasts mine output of 275,000–425,000 oz. at AISC of $800–$900 per ounce. At the EP2 processing rate, mine life is projected through 2043, with the final five years processing stockpiles.

The company also sees further upside from a potential third expansion, mainly through debottlenecking and optimization across the Phase 1/1A and EP2 circuits. The 2024 expansion study outlined a path to 25 million tonnes per year, with scope to go higher as the mine plan is re-optimized and resources grow.

Blackwater’s EP2 plan is underpinned by proven and probale reserves of 334 million tonnes grading 0.75 gram gold per tonne for 8 million oz. contained metal. These sit within a broader measured and indicated resource of 597 million tonnes at 0.61 gram per tonne for 11.7 million ounce. Artemis said it expects to update the reserve and resource next year.