BLACKWATER PROJECT
Project Highlights
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Staged Development Unlocks Value of the Blackwater Gold Project:
The Company’s revised development approach includes:
- Reduced Initial Development Capital: Initial development capital reduced to $592 million for a 5.5 Million tonne-per-annum throughput operation with free cash flow from operations used to finance growth to full-scale project throughput of 20 million tonnes per annum.
- Focus on High-Grade Starter Zone in years 1-7: With a smaller throughput to start, Artemis can focus on a 50.5 million tonne high-grade starter zone in the southwestern part of the deposit with an average grade of 1.5 g/t gold and a strip ratio of <2.0, for a shorter payback period, a higher after-tax IRR and improved free cash flow at the start of the mine life to finance expansion.
- Improved Gold and Silver Recoveries: Metallurgical optimization has identified improved gold and silver recoveries through the incorporation of gravity separation, increased cyanide utilization and a longer leach retention time.
- Improved Gold price and Exchange rates: A stronger gold price and a weaker CAD:US exchange rate both contribute to more robust project economics.
Key Results of the PFS, Life of Mine (including the New Gold Inc. Stream, defined below)
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*Operational strip ratio is calculated as total waste mined divided by ore mined
**Please refer to Non-IFRS measures notice at the end of this news release.
***Free Cash Flow is calculated as project operating cash flow minus sustaining/closure capital and tax
Levered Case assumptions and parameters are disclosed below under “Economic Results”. The Leveraged Case reflects the impact of debt. Financing of the Project is not a measure of the economic viability and technical feasibility of the Project, but a measure of the Company’s ability to secure debt financing for the Project.
The tables below show the sensitivity of after-tax NPV and IRR to changes in the US dollar gold price and the CAD/USD exchange rate.
Sensitivity on Base Case After-Tax NPV (5%) ($000) to Changes in US$ Gold Price and USD/CAD Exchange Rate (Base Case Highlighted)
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Table 3 – Sensitivity on Base Case After-Tax IRR to Changes in US$ Gold Price and USD/CAD F/X
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Artemis Gold agrees to buy Blackwater project from New Gold
Allen Sykora Tuesday June 09, 2020 09:49
Kitco News
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(Kitco News) - Artemis Gold Inc. (TSX: ARTG) has agreed to acquire the Blackwater gold project in central British Columbia from New Gold Inc. (TSX: NGD, NYSE American: NGD) in a deal in which total consideration will exceed C$200 million and include a gold stream, the companies announced Tuesday.
Artemis said the company is getting a "world-class asset" with federal and provincial environmental-assessment approvals already in place, meaning possible near-term construction.
New Gold said it will receive C$190 million in cash, including C$140 million upon closing of the transaction and C$50 million 12 months later. New Gold will also get an 8% gold stream, which will be reduced to 4% once 279,908 ounces have been delivered. The stream is subject to a transfer price equal to 35% of the spot gold price.
New Gold said it will also receive additional cash payments if certain agreed-upon production dates are not achieved in future years. Further, New Gold will get C$20 million in Artemis shares upon closing. The latter will be subject to New Gold not acquiring more than 9.9% of Artemis' outstanding shares, in which case the difference between C$20 million and the value of the shares issued to New Gold would be added to a second installment.
"The proposed acquisition of Blackwater is the first meaningful step in our strategy to develop a first-tier gold deposit in one of the world's premier low-risk mining jurisdictions," said Steven Dean, chairman and chief executive officer of Artemis.
He added that "having an environmental-assessment approval in hand significantly curtails the timeline to construction and ultimate production. This value cannot be underestimated in today's world."
Artemis said it will undertake a fresh study aiming to improve economics from a 2014 study. The 2014 report projected life-of-mine gold and silver production of 7 million ounces and 30 million ounces, respectively. The study also projected a 17-year mine life with direct processing for the first 14 years and then processing of a stockpile.
Renaud Adams, chief executive officer of New Gold, said the transaction strengthens his company's balance sheet at a time when it has recently updated life-of-mine plans to focus on profitability and free cash flow.
"We believe that surfacing value for Blackwater today while retaining exposure to the project through a retained gold stream and an equity position in Artemis, allows the company to transition to the next phase of our growth plan as we continue to reposition the company for shareholder value creation," Adams said. "Artemis has clearly expressed its commitment to building and operating Blackwater that is supported by its management team's strong track record in the industry."
New Gold said the transaction, subject to certain conditions such as Artemis shareholder approval, is expected to close in the third quarter.
For Kitco News