Artemis drilling raises confidence in high-grade starter pit at Blackwater gold project

Grade control drilling at Artemis Gold‘s (TSXV: ARTG) Blackwater project in central B.C. has confirmed that the starter pit outlined in a 2020 prefeasibility study contains wide, near-surface intervals of elevated gold grades.

Highlights of the reverse-circulation drill program include: 27 metres of 12.5 grams gold per tonne starting at 24 metres depth; 33 metres of 10.4 grams gold per tonne starting at 33 metres; and 21 metres of 12.4 grams gold per tonne starting at 18 metres.

The 561-hole, 33,216-metre program brought drill density down to 12.5 by 12.5 metres spacing (from 50-metre centres previously) and was focused on early stage mine planning.

“These initial results from the grade control drilling program indicate the potential for more tonnage and more contained ounces within the high-grade starter zone, which could also potentially reduce the strip ratio at the beginning of the mine life,” Steven Dean, Artemis’ chairman and CEO, stated in a news release.

“The grade control drilling program at Blackwater is similar to the practice successfully applied at Atlantic Gold, providing substantially more data to optimize mine planning. This program is also designed to further demonstrate the strong continuity of high-grade mineralization at the start of the mine life and provide a higher confidence level in the Phase 1 mining schedule outlined in the company’s 2020 prefeasibility study, further de-risking the start up of operations.”

A feasibility study for Blackwater is slated to be released in mid-2021. Results from the grade control program will be incorporated.

The program targeted a zone within 60 metres from surface containing more than 5 million tonnes of high-grade ore to improve short-term mine planning at the start of production.

The company reports that 75% of the assays from the drill program, which began in the final quarter of 2020 and concluded in March, are in hand. The LeachWELL assay method was used to increase the sample size to 1 kg (from the standard 50 g) in order to reduce variability and increase repeatability of assay results and understanding of the leachability of the ore. LeachWELL assay results suggest a gold recovery of 96.7% and silver recovery of 72.2%.

As it prepares the feasibility study for Blackwater, located about 160 km southwest of Prince George, Artemis has been busy on the development and financing fronts.

In March, the company awarded a $236-million EPC contract to Ausenco for the project, and last month received a credit-approved mandate letter and term sheet from Macquarie Bank and National Bank of Canada to arrange a $360 million loan facility for project construction. Artemis expects to finalize a definitive credit agreement by the end of the third quarter.

The company is aiming to complete the permitting process for Blackwater in the first quarter of 2022 to start construction in the second quarter.

Artemis released a prefeasibility study for the project last August, shortly after acquiring it from New Gold (TSX: NGD). The study outlined a staged development starting with a $592 million, 5 million tonne per year open pit operation producing 248,000 oz. gold per year for the first five years of a 23-year mine life. Phase 2 and 3 expansions to 12 million tonnes per year ($426 million) then 20 million tonnes per year ($398 million) would follow, with production rising to 420,000 oz. per year for five years, then falling to 316,000 oz. annually.

Artemis was spun out of Atlantic Gold before it was acquired by Australian miner St. Barbara in 2019.