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    ARTG   CA04302L1004

ARTEMIS GOLD INC.

(ARTG)
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Artemis Gold Inc. Announces Feasibility Study for Blackwater Project

09/13/2021 | 07:00am EDT

Artemis Gold Inc. announced the results of its 2021 Feasibility Study for the staged development of the 100% owned Blackwater Gold Project in central British Columbia. The results of the Study supersede the 2020 Prefeasibility Study ("2020 PFS") dated August 26, 2020 entitled "Blackwater Gold Project British Columbia NI 43-101 Technical Report on Pre-Feasibility Study" filed on SEDAR by Artemis on September 18, 2020. The results of the FS reflect several positive changes in the approach to the planned development of the Blackwater Project compared with the 2020 PFS. The scope changes incorporated in the Study include: Higher initial throughput: Phase 1 throughput has been expanded 9% to 6 million tonnes per annum ("Mtpa") with a larger crushing circuit, providing greater operational throughput upside potential in the early years, up from 5.5Mtpa in the 2020 PFS. Streamlined Phase 2 & 3 Expansions: a greatly reduced footprint of the FS Stage 1 facility, and the installation of a higher-capacity gyratory crusher in the proposed Stage 1 development. Importantly this allows for a streamlined and construction-ready approach to the Phase 2 Expansion throughput of 12Mtpa. The increase in up-front investment of CAD 53 million reduces expansion capital to: CAD 347 million (a reduction of CAD 79 million from CAD 426 million in the 2020 PFS) for the Phase 2 expansion to 12Mtpa. CAD 374 million (a reduction of CAD 24 million from CAD 398 million in the 2020 PFS) for the Phase 3 expansion to 20Mtpa. Net impact is a slight increase in total life of mine ("LOM") capital to fund the 3 Phases of development to CAD 1,417 million, up from CAD 1,415 million in the 2020 PFS. Accelerated Phase 2 & Phase 3 expansions: Phase 2 expansion begins with an expansion to 9Mtpa in year 5 (up from 5.5Mtpa in year 5 in the 2020 PFS), ramping up to 12Mtpa in year 6. Phase 3 expansion begins with an expansion to 15Mtpa in year 10 (up from 12Mtpa in year 10 in the 2020 PFS), ramping up to 20Mtpa in year 11; An Environment, Social Governance ("ESG") commitment in the Stage 1 development phase: an initial investment to replace diesel and propane-powered components within the process plant facility reduces the carbon footprint of the Project; Phase 3 throughput of 20Mtpa is supported by two mineral processing trains, reduced from three in the 2020 PFS: results in lower overall maintenance and labour costs, with improved economies of scale at higher throughput rates; Estimate accuracy increased with reduced risk: the FS costing accuracy has improved to +15% /-10% (from +25%/-10% in the 2020 PFS). Engineering undertaken in connection with the guaranteed maximum price ("GMP") memorandum of understanding ("MOU") on each of the process plant and the power transmission line have de-risked these components since the 2020 PFS. The achievement of negotiated fixed-price EPC contracts for these components of capital cost (targeted for Fourth Quarter 2021/Q1 2022) will also mitigate the potential for capital cost and schedule overruns on up to approximately 50% of the initial development capital estimate; Compelling economics even after reflecting current inflationary pressures, timelines and additional management driven environmental investments: the initial development capital has increased 9% to CAD 645 million, up from CAD 592 million, which provides a 9% increase in Phase 1 annual throughput, with current pricing, and environmental investments. The net result is an after-tax net present value at a 5% discount rate ("NPV5%") of CAD 2.15 billion, an after-tax Internal rate of return ("IRR") of 32%, and an after-tax payback period of 2.3 years, essentially in line with the 2020 PFS. Key Economic Outputs of the Study: Base case after-tax NPV5% of CAD 2.15 billion reflecting current market consensus long term forecast gold price of USD 1,600/oz and 0.79 USD/CAD exchange rate (CAD 2,025/oz, effectively the same CAD gold price as the 2020 PFS of CAD 2,028/oz) increasing to CAD 2.76 billion at a USD 1,800/oz gold price; Base case after-tax IRR of 32%, approximating the 2020 PFS after-tax IRR of 35% after incorporating higher initial development capital and ESG investments. Levered1 after-tax IRR of 43%; Initial development capital cost of CAD 645 million to develop a 6Mtpa Phase 1 open pit mining and processing operation (up from a 5.5Mtpa operation in the 2020 PFS); Exceptional after-tax payback period on initial capital cost of 2.3 years; Optimized mine plan increases average grade to 1.62 g/t Au over the first five years of production, up from 1.57 g/t Au in the 2020 PFS, combined with average throughput of 6.6Mtpa increases average annual gold production by 29% (compared with the 2020 PFS) to 321,000 ounces of gold at an all-in sustaining cash cost ("AISC2") of CAD 732/oz generating annual free cash flow ("FCF3") of CAD 301 million.


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Financials (USD)
Sales 2021 - - -
Net income 2021 - - -
Net cash 2021 162 M - -
P/E ratio 2021 -
Yield 2021 -
Capitalization 803 M 806 M -
EV / Sales 2021 -
EV / Sales 2022 -
Nbr of Employees 10
Free-Float 64,3%
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Number of Analysts 8
Last Close Price 5,23 $
Average target price 9,71 $
Spread / Average Target 85,7%
Managers and Directors
Steven G. Dean Chairman & Chief Executive Officer
Chris Batalha Chief Financial Officer & Secretary
Jeremy Langford Chief Operating Officer
William P. Armstrong Independent Director
Robert George Atkinson Vice Chairman
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