The Blackwater gold mine in central British Columbia is currently at 95% completion and remains on track for first pour late in the fourth quarter despite construction delays, owner Artemis Gold (TSXV: ARTG) said.
In an update this week, the Vancouver-based gold developer said it has completed the 135-kilometre 225kV transmission connecting the Blackwater mine to BC’s renewable 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 the initial capital guidance to first gold pour has now been updated from C$730-C$750 million to C$780-C$800 million, for an increase of approximately 7%, due to additional overhead from construction delays.
According to the company, the Blackwater mine experienced two separate wildfire events during the past 17 months which halted construction at the 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 C$65 million. This funding is in addition to the company’s existing project loan facility of C$360 million, as well as a cost overrun facility of C$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 said in a news release.
In early Friday’s trading, Artemis Gold’s stock rose 2.8% at C$13.72 following the Blackwater progress update. The share jump brings the company’s market capitalization to C$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 C$500 million at an all-in sustaining cost of $712 per oz. Expansion plans are also underway to extend the life of mine to 23 years.
