Artemis Gold Inc. [ARTG-TSXV] released the results of an economic study which indicates that the Blackwater Gold Project in central British Columbia could deliver $2.3 billion in provincial government revenues over the life of the project and provide 825 jobs during the construction and expansion phases.
The study also envisages $13.2 billion in added value in B.C. from an operation that is expected to consist of an open pit gold and silver mine that will begin life with a nominal milling rate of 15,000 tonnes per day or 5.5 million tonnes per year.
Artemis bought the Blackwater Project from New Gold Inc. [NGD-TSX, NYSE American] in August, 2020.
“The results of the economic impact study confirm what the development of the Blackwater Gold Project will deliver as a new economic engine for central British Columbia and Canada,” said Artemis President and CEO Steven Dean.
He said the project has the potential to economically contribute to local, provincial and federal levels for more than 25 years.
The agreement with New Gold involved an initial payment of $140 million, 7.4 million common shares at $2.70 per share, and a $50 million cash payment on the first anniversary of the closing of the deal. In connection with the deal, New Gold pledged to acquire 8% of the refined gold production. However, once 279,908 ounces has been delivered to New Gold, the gold stream will reduce to 4%.
New Gold will make payments for the purchased gold equal to 35% of the U.S. dollar value of the quoted gold price two days before delivery. In the event that commercial production at Blackwater is not achieved by the seventh, eight, and ninth anniversary of closing, New Gold will be entitled to receive additional cash payments of $28 million on each of those dates.
At a 0.20 g/t gold equivalent (AuEq) cut-off, Blackwater is estimated to host a measured and indicated resource of 12.4 million AuEq ounces (597 million tonnes at 0.65 g/t AuEq, 0.61 g/t gold, and 6.4 g/t silver.
The project is about 160 km southwest of Prince George and 446 km northeast of Vancouver. It is accessible by a major highway and access/service roads.