Blackwater Gold mine construction 95 per cent complete

Despite two wildfire events that set back the Blackwater Gold mine project by six weeks, construction is now 95 per cent complete.

The open-pit gold/silver mine 160 kilometres southwest of Prince George remains fully funded and is on target for its first pour before the end of the year.

In an update sent Thursday to the Citizen, Artemis Gold of Vancouver reports the 135-km 225-kilovolt transmission line between the mine site and BC Hydro’s Glenannan substation is now complete and was successfully energized with renewable grid power on Tuesday.

You can watch that happen on this video.

The tailings storage facility will be completed later this month, and the initial mining fleet commissioned to Blackwater has begun pre-stripping the mine. Construction of the haul roads is well advanced, with the first ore expected to be received at the run of mine pad within the next month.

Blackwater’s operations camp has been built and operational staff have moved into the facility.

Wildfire events over the past 17 months forced evacuations of the construction site and resulted in delays that halted construction during some of the most productive weeks of the build, resulting in increased fixed overhead costs and deferred operating cash flows for the lost construction days in that 1 ½-month period.

To make up for that lost time, mine management took measures to speed up schedule timelines, which added to the cost of construction.

Artemis has updated its initial capital guidance cost estimate from $730 million to $750 million. The projected cost of construction up to the first pour has increased close to seven per cent, from $780 million to $800 million.

The initial capital guidance estimate excludes other corporate cost variances including the impact of delayed first revenue, higher market interest rates on loaned facilities and other non-capital items.

“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 seven per cent increase in initial capital guidance,” said Artemis Gold chairman/CEO Steven Dean.

“This is testament to the team’s financial discipline and deep project development experience. The additional standby 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”.

Artemis has worked out terms of a loan from the National Bank of Canada to provide as much as $65 million in additional stand-up debt funding as well as a $10 million unsecured loan to cover capitalized interest and fees.

That’s in addition to the company’s existing $360 million project loan plus capitalized interest of up to $25 million, as well as cost overrun funding of $40 million.

The Blackwater site has an estimated eight million ounces of gold reserves and 60 million ounces of silver reserves.

Gold mining during the first year of operation is expected to yield 381,000 ounces of average annual production, increasing to 438,000 ounces by Year 3.