Artemis Gold Inc. (TSX-V: ARTG) says it is still aiming to pour first gold at its new Blackwater gold mine by the end of this year, despite construction delays caused wildfires in the region that will increase the project’s capital costs by about $50 million.
The Blackwater gold mine, located 160 kilometres southwest of Prince George, will be the first new gold mine to be built in B.C. since the opening of the Brucejack mine in 2017.
The new mine was 95 per cent complete by the end of September, the company said in a news release, and the mine is now connected to the BC Hydro grid.
A new 135-kilometer long transmission between the Blackwater mine and BC Hydro’s Glenannan substation began providing power to the mine site on October 8, and a tailings pond is expected to be finished by the end of this month.
Construction on the new mine has suffered setbacks forest fires. Twice in the past year and a half, construction had to be halted due to forest fires in the region, resulting a loss of a month and a half in construction time.
“This resulted in additional fixed overhead drag on the project, and the benefit of operating cash flows has been deferred by the period of productive construction days lost,” Artemis said in a press release. “Management also invested in certain schedule acceleration initiatives to offset the delays, which have added to the cost of construction.
“In order to accelerate the commissioning of the process facility to align with the other major construction milestones already achieved, the company has taken responsibility for plant commissioning from the EPC contractor and will commence owner commissioning and remaining construction activity effective immediately.”
The construction delays have contributed to a capital cost increase. Artemis said it is upping its capital guidance to between $780 million to $800 million – a seven per cent increase over the previous capital guidance of $730 million to $750 million.
The company has secured extra debt financing of up to $65 million from the National Bank of Canada.
“I am proud of the fact the project team has managed to limit the impact of the wildfires, two force majeure events beyond management’s control, to only a 7 per cent increase in initial capital guidance,” said Artemis CEO.
“This is testament to the team’s financial discipline and deep project development experience. The additional stand-by funding provided by one of the company’s existing relationship lenders provides us with 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.”
The delays and increased capital costs appear not to have fazed investors. Since the beginning of 2024, Artemis’s share price has doubled, from about $6.40 per share at the beginning of January to $13.35 October 9.
