ARTEMIS GOLD INC. is pleased to announce the signing of an Asset Purchase Agreement with New Gold Inc. to acquire the Blackwater Gold Project in central British Columbia.
Key Acquisition Terms:
|* Refer to Mineral Resource table on page 11.|
Artemis Strategy to Development
Artemis will be targeting improved economics and financeability against the 2014 Feasibility Study (defined below) based on Artemis due diligence including the following:
While the Company considers the 2014 Feasibility Study to be current, it plans to prepare an updated Pre-Feasibility Study based on our revised approach to developing the Project over the next three months and will file the technical report within 180 days of this announcement of mineral resources and mineral reserves.
Commitment to Indigenous Groups
Artemis respects the rights and interests of Indigenous groups who may be impacted by the Project and intends to fully honour New Gold’s existing agreements, including the Participation Agreement with the Lhoosk’uz Dené Nation and the Ulkatcho First Nation. New Gold has engaged extensively with other Indigenous groups who may be impacted by the Project, including Nadleh Whut’en First Nation, Saik’uz First Nation, Stellat’en First Nation and Nazko First Nation, and Artemis is committed to continuing that engagement. Establishing a working relationship built on trust, respect and integrity with these Indigenous groups will be a priority of the Company.
Steven Dean, Chairman and CEO of Artemis noted: “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. As with our team’s previous success in developing the Moose River Consolidated Mine in Nova Scotia for Atlantic Gold, our focus will be the methodical de-risking of the project development to enhance NPV, optimize IRR and minimise equity dilution to shareholders.
Furthermore, the additional attribute of 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. We look forward to completing the Acquisition in due course, working with the various key stakeholders to continue to advance Blackwater through the development stage and into operation.”
Artemis Project Development De-Risking Approach
In addition to the technical and financially based optimisation development strategy outlined below, management plans to pursue its proven de-risking and structuring strategies in developing the Project:
While managing and reducing development risk, these strategies are designed to:
All technical information on Blackwater is based on a Feasibility Study technical report entitled “Blackwater Gold Project, British Columbia, NI 43-101 Technical Report on Feasibility Study” with an effective date of January 14, 2014, filed on SEDAR by New Gold on January 22, 2014. To the best of Artemis’ knowledge, information, and belief, the Feasibility Study is considered current pursuant to NI 43-101 and there is no new material scientific or technical information that would make the disclosure of the mineral resources, mineral reserves or results of the Feasibility Study inaccurate or misleading.
Selected 2014 Feasibility Study Parameters and Outputs
|** Refer to Non-GAAP Measure Disclosure on page 8.|
The Project is located in central British Columbia, approximately 160 km southwest of Prince George and 446 km northeast of Vancouver. The Project is accessible by major highway and access road.
Artemis is acquiring New Gold’s 100% recorded interest in 328 mineral claims covering an area of 148,688 ha distributed among the Property and the Capoose, Auro, Key, Parlane and RJK claim blocks. Surface rights over the Project area are controlled by the Crown.
Environmental and Permitting
The Project received a federal Decision Statement and a provincial Environmental Assessment Certificate in June 2019, which are major milestones in respect of de-risking the Project to ultimate permitting and construction.
Additional permits and authorizations are required from both the provincial and federal governments prior to the mine proceeding to the construction and operation phase, including provincial permits under the Mines Act and the Environmental Management Act for discharge, and federal authorizations under the Fisheries Act and Explosives Act. Management will be working closely with New Gold to transition efforts to date to Artemis to ensure management are able to progress the permitting timeline.
Pursuant to the Agreement, Artemis will acquire all of New Gold’s property, assets and rights related to the Project. The Acquisition will be completed through BW Gold Ltd. a wholly owned subsidiary of Artemis. Following the Closing, BW will hold a 100% interest in the Project.
Consideration for the Acquisition will be comprised of (i) the Initial Payment of $140 million at Closing, (ii) approximately $20 million in Consideration Shares (described below), (iii) a cash payment one year following Closing of $70 million less the aggregate deemed issue price (as described below) of the Consideration Shares, and (iv) a secured gold stream participation in favor of New Gold as described below. New Gold will also have a first ranking security interest over the Blackwater Project until the Second Payment is made.
Artemis expects to fund the Initial Payment through an equity financing to be completed prior to Closing. Although management is confident it will be successful in funding the Initial Payment through the Financing, in the event of a shortfall, Mr. Ryan Beedie, who is also expected to participate in the Financing, has provided a commitment letter to fund the Initial Payment to the extent necessary. Artemis will announce further details regarding the Financing once available.
The deemed issue price of the Consideration Shares will be the lowest price at which common shares of Artemis are sold pursuant to the Financing. The number of Consideration Shares to be issued to New Gold will be the lesser of (i) the number of Artemis common shares having an aggregate deemed issue price of C$20 million, and (ii) 9.9% of the issued and outstanding Artemis common shares as at Closing.
At Closing, Artemis will enter into a gold stream agreement with New Gold whereby New Gold will purchase 8.0% of the refined gold produced from the Blackwater Project. Once 279,908 ounces of refined gold have been delivered to New Gold, the gold stream will reduce to 4.0%. New Gold will make payments for the gold purchased equal to 35% of the US dollar gold price quoted by the London Bullion Market Association two days prior to delivery. In the event that commercial production at Blackwater is not achieved by the 7th, 8th, or 9th anniversary of closing of the Acquisition, New Gold will be entitled to receive additional cash payments of $28 million on each of those dates.
Closing of the Acquisition is subject to the satisfaction of customary closing conditions for a transaction of this nature, including obtaining certain regulatory approvals and the approval of the TSX Venture Exchange. The Financing will be subject to disinterested shareholder approval by the shareholders of Artemis due to the participation by insiders in the Financing. Artemis will announce further details regarding the shareholder meeting to be held to consider the Financing once available. The Acquisition is expected to close in 60 to 90 days, or such other date as the parties may agree. Furthermore, as required under applicable securities laws, the Company will file an updated technical report on the Project, in accordance with NI 43-101, within 180 days of this press release.
Agreements with Indigenous Groups
In 2019, New Gold executed a Participation Agreement with the Lhoosk’uz Dené Nation and the Ulkatcho First Nation, the two Indigenous groups whose traditional territories overlap the Project’s mine site. New Gold has continued to engage with other Indigenous groups who may be affected by the Project, including the Nadleh Whut’en First Nation, Saik’uz First Nation, Stellat’en First Nation and Nazko First Nation. Engagement and negotiations with these groups will be a priority for the Company as management progresses towards Closing and through to final permitting of the Project.
In the coming months, the Company will be focused on the following activities:
Updates will be provided in due course.
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We acknowledge the [financial] support of the Government of Canada.