Artemis Gold updates Blackwater mine construction, British Columbia

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Artemis Gold Inc. [TSXV-ARTG] provided an update on fourth-quarter construction progress at the Blackwater mine approximately 160 km southwest of Prince George, central British Columbia. The project remains fully financed, within the guidance for initial capital expenditure, and on schedule for first gold pour in the second half of 2024.

At December 31, 2023, overall construction was 59% complete, and approximately $389 million of the guided initial capital expenditure of $730 million to $750 million had been spent. The lag between the spend and percentage of completion is as planned and consistent with a typical project S curve. By the end of Q4 2023, the company had entered into contractual commitments for $615 million (or 84% of the lower end of the guided initial capital expenditure).

The majority of the balance of uncommitted expenditures for the guided initial capital relates to owners cost and earthworks associated with mining prestrip and construction of the tailings storage facility (TSF) and other civil structures.

Artemis Gold chairman and CEO Steven Dean commented, “We remain focused on a disciplined approach to development and remain on track for the first gold pour in H2 2024.”

Earthworks continued in priority infrastructure areas, with approximately 640 hectares logged and cleared. All access roads needed for phase 1 construction are now operable. Construction of the site water management facilities, including the water management pond, and the Davidson Creek diversion is well advanced. Work associated with the transmission line is progressing in accordance with the project schedule.

Process plant construction progressed well on a number of fronts, including the mill building foundation preparation, reagents building foundations, ball mill pedestals, carbon-in-leach (CIL) and detox tank erection, advancement of the primary, secondary and tertiary crushers structures, and the reclaim tunnel civil works. Hydro testing within the CIL tank area has commenced.

Construction of the run-of-mine (ROM) wall and the initial ROM dump slab earthworks has been completed. The focus has now moved to concrete formwork to allow for the installation of the primary crusher ROM slab and crusher vault. Steel structures for the secondary and tertiary crusher and screening station have been advanced, and installation of the crushing mechanical packages commenced in Q4. The erection of the mill building and installation of the ball mill also commenced in late Q4.

The construction fleet now includes 60-tonne and 100-tonne rigid frame haul trucks and 150-tonne excavators, providing more material movement capability to key areas. Assembly and commissioning of the owner’s mining fleet are well advanced, including two 400-tonne hydraulic backhoe excavators. Five 240-tonne rigid frame haul trucks have been delivered to site, four of which have been substantially assembled. The remainder of the fleet to support operations will arrive predominately across the first half of 2024. Fleet assembly is expected to be completed well before the commencement of prestripping, and equipment will be made available to support earthworks, if needed.

At the end of December 2023, the Sedgman EPC (engineering, procurement and construction) contract work was 75% complete over all, with engineering, procurement and construction substantially complete. Key mechanical equipment packages, including the primary, secondary and tertiary crushers, conveyor assemblies, dry screens and ball mill, are all on site and are in various stages of installation. Electrical machinery control centres are also in various stages of delivery and installation.

At December 31, 2023, Artemis Gold had estimated remaining phase 1 capital expenditures of $341-million to $361 million. At the same date, the committed sources of financing totalled $432 million, comprising cash and cash equivalents of $157 million. Remaining drawdowns from the project loan facility of $235 million (including up to $25 million of capitalized interest); a cost overrun facility of $40 million.

In addition, the company had 26.2 million warrants outstanding, which are exercisable at $1.08 per warrant before August 27, 2024, for anticipated proceeds of $28 million.

Artemis Gold has put in place a modest hedging program to secure the returns on capital invested in the early years of operations and further derisk servicing of the company’s project loan facility during the payback period.

With phase 1 fully financed and 59% complete at the end of December 2023, a study to evaluate the benefits of advancing the phase 2 expansion earlier than contemplated in the September, 2021, feasibility study is progressing well. The results of this expansion study are expected to be released later in Q1 2024.

Artemis Gold president and chief operating officer Jeremy Langford commented: “The fourth quarter was highlighted by our work force eclipsing one million hours worked without an LTI – an important achievement that reflects the hard work and commitment of our dedicated work force. As we enter Q1 2024, our short-term priorities will be to further progress the TSF infrastructure areas, advance the construction of the 225-kilovolt transmission line, and complete all essential concrete works within the process facility.

“In parallel with this, the teams will look to progress the structural, mechanical, platework, piping and electrical construction activities within the process plant and electrical substation areas. Operations team members are scheduled to commence preproduction planning, which will prepare the teams for initial mining operations and plant commissioning.”

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