Published: June 29, 2020 |

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Artemis Gold has signed an asset purchase agreement with New Gold to acquire the Blackwater Gold Project in central British Columbia.

“The proposed acquisition of Blackwater is the first meaningful step in our strategy to develop a first tier gold deposit in one of the world’s premier low risk mining jurisdictions. As with our team’s previous success in developing the Moose River Consolidated Mine in Nova Scotia for Atlantic Gold, our focus will be the methodical de-risking of the project development to enhance NPV, optimize IRR and minimise equity dilution to shareholders,” said Steven Dean, chairman and CEO of Artemis.

Artemis Strategy to Development

Artemis will be targeting improved economics and financeability against the 2014 feasibility study based on Artemis due diligence including the following:

• Reducing initial capital expenditures by staging the mine throughput ramp-up while remaining committed to the full-scale project
 
• Targeting lower initial start-up capital expenditure with 1-2 subsequent expansion stages to the 20 mtpa feasibility study case, estimated to be funded from future operating cashflows
 
• The company’s MIK (Multiple Indicator Kriging) approach to resource modelling may further optimize tonnes and grades within the pit
 
• The 2014 feasibility study resource modelling identifies a large higher-grade zone of mineralization near-surface within the southern half of the pit design which will be the focus of further mine planning analysis by Artemis
 
• The application of our grade control drilling approach and modeling methodology may optimize mine scheduling, grade cut-off strategies, and better define ore and waste boundaries within the pit
 
• Methodical de-risking of key project risks

While the company considers the 2014 feasibility study to be current, it plans to prepare an updated pre-feasibility study based on its revised approach to developing the project over the next three months and will file the technical report within 180 days of this announcement of mineral resources and mineral reserves.

Commitment to Indigenous Groups

Artemis respects the rights and interests of Indigenous groups who may be impacted by the project and intends to fully honor New Gold’s existing agreements, including the participation agreement with the Lhoosk’uz Dené Nation and the Ulkatcho First Nation. New Gold has engaged extensively with other Indigenous groups who may be impacted by the project, including Nadleh Whut’en First Nation, Saik’uz First Nation, Stellat’en First Nation and Nazko First Nation, and Artemis is committed to continuing that engagement. Establishing a working relationship built on trust, respect and integrity with these Indigenous groups will be a priority of the company.

“The proposed acquisition of Blackwater is the first meaningful step in our strategy to develop a first tier gold deposit in one of the world’s premier low risk mining jurisdictions. As with our team’s previous success in developing the Moose River Consolidated Mine in Nova Scotia for Atlantic Gold, our focus will be the methodical de-risking of the project development to enhance NPV, optimize IRR and minimize equity dilution to shareholders,” said Steven Dean, chairman and CEO of Artemis.

“Furthermore, the additional attribute of having an environmental assessment approval in hand significantly curtails the timeline to construction and ultimate production. This value cannot be underestimated in today’s world. We look forward to completing the acquisition in due course, working with the various key stakeholders to continue to advance Blackwater through the development stage and into operation,” added Dean.

Artemis Project Development De-Risking Approach

In addition to the technical and financially based optimization development strategy outlined below, management plans to pursue its proven de-risking and structuring strategies in developing the project:

• Securing a fixed price construction and performance contract for the processing plant and associated infrastructure
 
• Securing project debt finance for the majority of the initial project capital expenditures
 
• Considering a small amount of gold price hedging to reduce revenue pricing risk and optimize financing terms
 
• Considering contracting ownership of key infrastructure, including the power line, to third parties
 
• Undertaking a high-density grade control drilling program on a portion of the first year’s mill tonnage prior to commencement of construction to achieve higher confidence for tonnes and grade, and advance reconciliation to the global resource model

Location

The project is located in central British Columbia, approximately 160 km southwest of Prince George and 446 km northeast of Vancouver. The project is accessible by major highway and access road.

Artemis is acquiring New Gold’s 100 percent recorded interest in 328 mineral claims covering an area of 148,688 ha distributed among the property and the Capoose, Auro, Key, Parlane, and RJK claim blocks. Surface rights over the project area are controlled by the Crown.

Environmental and Permitting

The project received a federal decision statement and a provincial environmental assessment certificate in June 2019, which are major milestones in respect of de-risking the project to ultimate permitting and construction.

Additional permits and authorizations are required from both the provincial and federal governments prior to the mine proceeding to the construction and operation phase, including provincial permits under the Mines Act and the Environmental Management Act for discharge, and federal authorizations under the Fisheries Act and Explosives Act. Management will be working closely with New Gold to transition efforts to date to Artemis to ensure management are able to progress the permitting timeline.

Agreements with Indigenous Groups

In 2019, New Gold executed a participation agreement with the Lhoosk’uz Dené Nation and the Ulkatcho First Nation, the two Indigenous groups whose traditional territories overlap the project’s mine site. New Gold has continued to engage with other Indigenous groups who may be affected by the project, including the Nadleh Whut’en First Nation, Saik’uz First Nation, Stellat’en First Nation and Nazko First Nation. Engagement and negotiations with these groups will be a priority for the company as management progresses towards closing and through to final permitting of the project.

Next Steps

In the coming months, the company will be focused on the following activities:

• Completion of the financing
 
• Completion of all other conditions required to achieve the closing of the acquisition
 
• Engagement and transition initiatives with respect to further permitting requirements
 
• Establishing relationships and continuing engagement and negotiations with Indigenous groups who may be affected by the project
 
• Completion of an updated pre-feasibility study over the next three months.

About Artemis Gold
Artemis Gold is a well-financed, growth-oriented gold development company aimed at creating shareholder value through the identification, acquisition and development of gold properties in mining friendly jurisdictions.

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