Artemis Gold raising $156 million for B.C. project

Artemis Gold raising $156 million for B.C. project
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VANCOUVER – Artemis Gold Inc.  [ARTG-TSXV; ARGTF-OTC] said Monday May 10 that it is raising approximately $100 million from a bought deal sale of 16.4 million common shares priced at $6.10 each to an underwriting syndicate co-led by National Bank Financial and BMO Capital Markets.

The company said it is also undertaking a non-brokered private placement whereby 9.2 million common shares will be issued to insiders of the company and to a president’s list, at the offering price, for gross proceeds of $56.1 million.

Artemis shares were active on the news, easing 7.3% or $0.48 to $6.12 on volume of 972,700. The shares are trading in a 52-week range of $7.64 and $1.23.

The announcement comes after Artemis recently signed a binding Memorandum of Understanding with an engineering firm that is proposing to build a processing facility at its Blackwater Gold Project in central British Columbia for a guaranteed maximum price of $236 million.

The Blackwater Gold Project is a planned open pit gold and silver mine expected to begin life with a nominal milling rate of 15,000 tonnes/day or 5.5 million tonnes/year. The project is located 160 km southwest of Prince George and 446 km northeast of Vancouver. It is accessible by a major highway and access/service roads.

The aim is to build the Blackwater Project into a new 250,000 ounce/year gold operation, growing to more than 400,000 ounces annually with growth financed from free cash flow,

Artemis bought the Blackwater Project from New Gold Inc. [NGD-TSX, NYSE American] in August, 2020.

The agreement with New Gold involved an initial payment of $140 million, 7.4 million common shares at $2.70 per share, and $50 million cash payment on the first anniversary of the closing of the deal. In connection with the deal, New Gold pledged to acquire 8% of the refined gold production. However, once 279,908 ounces has been delivered to New Gold, the gold stream will reduce to 4%.

New Gold will make payments for the purchased gold equal to 35% of the U.S. dollar value of the quoted gold price two days before delivery. In the event that commercial production at Blackwater is not achieved by the seventh, eight, and ninth anniversary of closing, New Gold will be entitled to receive additional cash payments of $28 million on each of those dates.

Net proceeds of the bought deal offering will be used to make the final cash payment to New Gold, and to fund permitting and development costs at Blackwater. The company said it has granted the underwriters an option to purchase an additional 15% of the bought deal offering to cover over-allotments.

At a 0.20 g/t gold equivalent (AuEq) cut-off, Blackwater is estimated to host a measured and indicated resource of 12.4 million AuEq ounces (597 million tonnes at 0.65 g/t AuEq, 0.61 g/t gold, and 6.4 g/t silver.


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