Artemis Gold Kicks Off Ore Processing at Blackwater Mine

Artemis Gold Inc. (TSX-V: ARTG) has reached a significant milestone in the development of the Blackwater Mine, commencing ore processing at the site. This marks a crucial step towards the first gold pour, which is targeted for January 2025. The company's stock price has been volatile in recent months, reflecting investors' anticipation of this event and the potential impacts on the company's cash flows and earnings.



The Blackwater Mine, located in central British Columbia, is one of the largest open-pit gold deposits in Canada, with a significant Mineral Resource of 9.5 million ounces, Measured and Indicated*. The project has Federal and Provincial Environmental Assessment (EA) approvals in place, allowing for near-term construction and the possibility of accelerated production timelines. Artemis Gold acquired the Blackwater Gold Project from New Gold Inc. in 2024, with an initial cash payment of $140 million and the issuance of Consideration Shares equal to the lesser of (a) the number of Consideration Shares having an aggregate deemed price of $20 million and (b) 9.9% of the issued and outstanding Artemis common shares as at Closing.

The commencement of ore processing at the Blackwater Mine is expected to have a positive impact on Artemis Gold's projected cash flows and earnings in both the short and long term. The increased revenue from the sale of gold and silver doré will contribute to the company's top line, improving its financial performance. Additionally, the commencement of operations will lead to a significant improvement in cash flow from operations, which is crucial for the company's liquidity and working capital management. As the mine ramps up to full production, capital expenditures are expected to decrease, further enhancing cash flow.

However, the company faces several operational milestones and risks that could impact its stock performance. The project is currently over 95% complete, with the first gold pour targeted for late Q4 2024. The transmission line has been energized, and the tailings storage facility is expected to be complete by the end of October 2024. The initial mining fleet has been commissioned, and pre-stripping of the mine is well advanced. Plant commissioning is underway, and the Company expects to receive the first ore to the run of mine ("ROM") pad over the course of the next month. These milestones indicate that the project is on track for full-scale production.



The Blackwater Mine has experienced two separate wildfire events during the construction phase, which halted construction at the site for a total of approximately one and a half months during the most productive months of the build. These events resulted in additional fixed overhead drag on the project and deferred the benefit of operating cash flows. Management has been working diligently on cost savings throughout its construction budget to minimize the impact of these cost drivers. As a result, the Company has updated its initial capital guidance to first gold pour from $730 million to $750 million to $780 million to $800 million (an increase of approximately 7%). The Company has also secured additional stand-by debt funding of up to $65 million, plus up to $10 million in capitalized interest and fees, on a subordinated and unsecured basis to provide additional financial flexibility.

In conclusion, the commencement of ore processing at the Blackwater Mine is a significant milestone for Artemis Gold, with the potential to positively impact the company's cash flows and earnings in both the short and long term. However, the company faces several operational milestones and risks that could impact its stock performance. Investors should closely monitor the company's progress towards full-scale production and the potential impacts on its financial performance.

* Refer to Mineral Resource table on page 11.