The Artemis Gold board has approved an expanded Phase 2 (“EP2”) development of the Blackwater Mine located in central British Columbia.
EP2 represents a significant addition to processing plant capacity from the previously announced Phase 1A project, which is currently in construction, growing from an expected eight million tonnes per annum (“Mtpa”) before the end of 2026 to 21 Mtpa before the end of 2028. Once EP2 is in production, the Blackwater Mine is expected to produce an average of 500,000 to 525,000 ounces of gold for the first 10 full years. The EP2 investment decision is conditional upon receipt of formal confirmation of adequate hydro-electricity supply from BC Hydro, expected in early 2026.
The company estimates that EP2 will be completed at a capital cost of $1.44 billion which compares favourably with prior expansion study estimates and industry benchmarks on a per tonne of throughput capacity basis (EP2 capital intensity $110 per tonne of additional annual throughput). EP2 is expected to be funded primarily from operating cash flows and is supported by the Company’s strengthened balance sheet which provides financial flexibility to fund growth.
The EP2 project is consistent with the staged development strategy and plan for the Blackwater Mine as contemplated in the current technical report entitled “Blackwater Gold Mine, British Columbia, NI 43-101 Technical Report on 2024 Expansion Study” with an effective date of February 21, 2024 (the “2024 Expansion Study”). The strong gold price environment and the previously announced Phase 1A expansion have allowed the Company to optimize EP2 at a larger scale compared to the previous Phase 2 expansion plan in the 2024 Expansion Study. EP2 is based on the Blackwater Mine’s existing Proven and Probable Mineral Reserves as outlined in the 2024 Expansion Study and no changes have been made to the Mineral Reserve and Mineral Resource estimates.
EP2 increases gold production to over 500,000 ounces per year and economies of scale provide for lower unit operating costs, which will cement the Blackwater Mine’s position as one of the lowest-cost and highest-margin gold operations globally and transforms the mine into one of the three largest single gold mines in Canada. All-in sustaining costs1 (“AISC”) are expected to be in the range of US$800 to US$1,100 per ounce of gold sold in the next 10 years. At current spot gold prices of approximately US$4,200 per ounce, this translates into an AISC margin1 of over US$3,000 per ounce of gold sold, or approximately 75% margin on revenue.
Early works for EP2 are set to commence in January 2026, with major works construction scheduled to begin in Q3 2026 and continue for approximately two years. At peak construction, EP2 is expected to generate 1,500 direct construction jobs, plus additional indirect jobs and indirect and induced economic activity. This is in addition to the approximately 900 contractors and direct employees currently working at the Blackwater Mine to operate Phase 1. Once EP2 is completed, the Blackwater Mine is expected to employ approximately 1,200 direct employees and contractors.
Artemis Gold CEO Dale Andres said: “The Blackwater Mine is a world-class, large-scale asset in a tier-one mining jurisdiction that is delivering low-cost production and strong cash flows. Our consistent long-term vision for the Blackwater Mine has been to grow low-cost production to at least 500,000 gold ounces per year through staged, capital-efficient expansions funded primarily by cash flow from operations. EP2 delivers on our long-term vision and now is an opportune time to embark on this next phase of growth. We have a strong and experienced team in place who successfully delivered Phase 1, and we have strong cash flows and a solid balance sheet that will allow us to build EP2 without diluting our equity holders.
“We look forward to continuing to work collaboratively with our Indigenous partners, local communities and the provincial and federal governments to responsibly develop the Blackwater Mine. EP2 will expand the Blackwater Mine to be one of the largest gold mines in Canada and will generate significant economic and other community benefits for many years to come.”
Artemis Gold President Jeremy Langford said: “The decision to proceed with EP2 is another major milestone for the Company. Since achieving commercial production in May, we have been working diligently on optimizing and right sizing the EP2 plant design to deliver the next stage of growth for the Blackwater Mine, in parallel with advancing Phase 1A design and construction.
“We are being disciplined in our approach to planning for the successful delivery of EP2, allowing for sufficient time through Q3 2026 to advance engineering and procurement together with early works activities which allow us to hit the ground running when major works construction activities are scheduled to commence in Q3 2026.”