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Artemis Gold Inc
Symbol ARTG
Shares Issued 124,199,936
Close 2020-11-11 C$ 5.06
Market Cap C$ 628,451,676
Recent Sedar Documents

Artemis Gold to drill 35,000 m at Blackwater

2020-11-11 08:05 ET - News Release

Mr. Steven Dean reports

ARTEMIS PRESENTS KEY DATA ON NEAR SURFACE HIGH GRADE MINERALIZATION AT BLACKWATER

Artemis Gold Inc. has provided key data on the near-surface high-grade starter pit mineralization and the commencement of its grade control drilling program at the company's Blackwater gold project in central British Columbia, Canada.

The company has budgeted for a 35,000-metre reverse circulation drill program targeting mineralization planned to be mined during the first year of production within phase 1 of the Blackwater development plan as set out in the company's 2020 prefeasibility study on the project ("Blackwater Gold Project British Columbia NI 43-101 Technical Report on Pre-Feasibility Study" with an effective date of Aug. 26, 2020, available on the company's website and on SEDAR). The primary objectives of the program are to:

  • Optimize grade selectivity and mine schedule for managing the tonnes and grade of mineralized material to be processed in the first year of operations;
  • Increase data density by up to 16 times over current diamond drilling data;
  • More accurately delineate ore and waste boundaries to mitigate ore dilution;
  • Improve drill and blast designs;
  • Derisk uncertainty regarding ore mined and milled during ramp-up from a project financing perspective;
  • Provide a larger sample size to reduce the grade variability of mineralization.

Steven Dean, chairman and chief executive officer, commented: "The grade control drilling program at Blackwater is similar to the practice successfully applied at Atlantic Gold, providing substantially more data to optimize mine planning. This program is also designed to further demonstrate the strong continuity of high-grade mineralization at the start of the mine life, and will provide a higher confidence level in the phase 1 mining schedule outlined in the company's 2020 PFS, thereby maximizing competitive terms from project financing partners.

"As outlined in the attached bench plans, longitudinal and cross-sections [available on-line], the project exhibits excellent continuity of high-grade mineralization near surface as well as in many other sections of the orebody. Through our staged approach, we will be able to take advantage of the high-grade mineralization in the early years of the mine life, thereby improving payback, IRR and phase 1 free cash flows, driving best-in-class economics for this very large-scale project."

Summary of selected drilling to date

Near-surface intercepts

Some of the high-grade mineralized zones intersected in previous drill programs as conducted by the previous owner of Blackwater, New Gold Inc., are presented in the "Near-surface intercepts in Section N5892825" table. These high-grade mineralized zones are also illustrated in the Stage 1 pit design for bench 1570 (see figure 1, available on-line). This bench is one of seven benches planned to be mined in the first year of operations based on the company's 2020 PFS. The 2020 PFS mine plan, on bench 1570 of the phase 1 open pit, reports mineral reserves of 1,365,000 tonnes at grade of 1.45 grams per tonne gold equivalent at an over 0.50 g/t (gram per tonne) gold equivalent (AuEq) (1) cut-off grade, available for processing, with an additional 795,000 tonnes grading 0.36 g/t AuEq (1) to be stockpiled for processing in phase 4.


                            NEAR-SURFACE INTERCEPTS IN SECTION N5892825 (2)
    
Drill            Hole                From       To       Interval         Au         Ag        AuEq (1)
hole             type    Depth          m        m              m        g/t        g/t         g/t

BW0213            DDH      471         28       49             21       1.91       4.33        1.93
BW0283            DDH      518       25.5       55           29.5       1.93      10.23        1.99
BW0297            DDH      474          7       24             17       2.07       9.04        2.12
BW0304            DDH      503         23       28              5       2.05       7.00        2.10
BW0315            DDH      528         43       52              9       3.89       9.23        3.94
BW0557            DDH      254         37       68             31       1.01       6.63        1.05
BW0587            DDH      252         38       61             23       6.11      22.07        6.24
Incl. 1 m                              53       54              1      65.80     230.00       67.18
and 1 m                                56       57              1      26.10      53.90       26.42
BW0598            DDH      244         11       16              5       1.16       7.52        1.21
BW0609            DDH      241         37       49             12       2.00      16.64        2.10
BW0624            DDH      251         31       39              8       1.74       2.29        1.75
BW0657            DDH      249         46       51           5.25       1.08       7.77        1.12
BW1012            DDH      200         12       20              8       1.50      11.86        1.57
                                       25       33              8       1.63       9.24        1.68
                                       36       84             48       2.76       7.85        2.81
BW1013            DDH      200        7.5      200          192.5       2.76       8.45        2.81

Source: Artemis Gold Inc.

Note: Drill hole intercepts reflect between 70 and 90 per cent of the true widths of the orebody.


  

Intercepts commencing at 50 to 100 m downhole

Certain high-grade mineralized zones commencing at 50 to 100 m downhole intersected during New Gold's previous drill programs are also presented in the "Intercepts in Section N5892825 (commencing between 50 and 100 m down drill hole) (2)" table. These high-grade mineralized zones are also illustrated in the open-pit design for bench 1480 (see attached figure 2, available on-line), one of eight benches planned to be mined in year seven of operations per the 2020 PFS. Within this bench, the mineral reserve reports up to 4,554,000 tonnes at a grade of 1.39 g/t gold equivalent (AuEq) (1) of mineralized material at a greater than 0.50 g/t AuEq (1) cut-off grade available for processing with an additional 2,406,000 tonnes grading 0.36 g/t AuEq (1) to be stockpiled for processing in phase 4.

          INTERCEPTS IN SECTION N5892825 (COMMENCING BETWEEN 50 AND 100 M DOWN DRILL HOLE) (2)
  
Drill             Hole                  From         To   Interval         Au         Ag       AuEq (1)
hole              type      Depth          m          m          m        g/t        g/t        g/t

BW0283             DDH        518         58         67          9       1.44      26.34       1.60
BW0304             DDH        503         99        107          8       1.30      10.20       1.36
BW0315             DDH        528         59         65          6       1.22       4.58       1.24
BW0548             DDH        257         85         96         11       5.73      22.37       5.86
Incl. 1 m                                 94         95          1      25.60       8.60      25.65
BW0557             DDH        254         74        125         51       3.94      20.62       4.06
Incl. 1 m                                 84         85          1      28.20      47.60      28.49
BW0566             DDH        251         69        100         31       2.03       7.72       2.08
BW0587             DDH        252         89        122         33       1.11       7.14       1.15
BW0591             DDH        258         83         88          5       9.13       4.38       9.16
Incl. 1 m                                 86         87          1      40.50      10.10      40.56
BW0601             DDH        255         73        176        103       2.74       6.47       2.78
BW0609             DDH        241         52         72         20       3.15      19.11       3.26
                                          76         89         13       5.62      46.96       5.90
BW0613             DDH        254         61        174        113       4.68       9.01       4.73
Incl. 1 m                                129        130          1      51.00      16.90      51.10
BW0623             DDH        238         61        116         55       4.36      14.54       4.44
Incl. 1 m                                 76         77          1      39.80      32.70      39.99
BW0624             DDH        251         53        104         51       5.52      13.96       5.60
Incl. 1 m                                 81         82          1      33.10      37.20      33.32
and 1 m                                   83         84          1      25.50      85.60      26.01
BW0641             DDH        250         78         95         17       1.46      12.96       1.54
BW0655             DDH        232         65         79         14       1.35      14.14       1.43
                                          85         94          9       2.90      23.19       3.04
BW1012             DDH        200         91        188         97       2.07       6.00       2.11
      
Source: Artemis Gold Inc.

Note: Drill hole intercepts reflect between 70 and 90 per cent of the true widths of the orebody.


  

As illustrated in the attached tables, the higher grade near-surface mineralization supports an average grade of 1.57 g/t Au processed in phase 1 and an average grade of 1.50 g/t Au processed for the first seven years of operation (all of phase 1 and the first two years of phase 2 per the 2020 PFS).

Figure 3 (available on-line) contains a longitudinal section and two cross-sections, which further illustrates the continuity of high-grade mineralization throughout the estimated Blackwater mineral resource per the 2020 PFS.

Details of the program

The first 35,000-metre grade control program is focused on delineating an area in the southwestern portion of the Blackwater pit (scheduled in the 2020 PFS to be mined in year one of operations), which returned significant near-surface high-grade mineralized intercepts noted in the attached tables (see figure 4, available on-line).

The program will provide up to 16 times higher data density than used for the mineral resource estimate from the 2020 PFS to allow optimization of grade selectivity and mine schedule for managing ore to be processed. This practice significantly derisks mine performance, particularly in the initial years of production.

A grade control drilling program will be part of normal mining operations once in production, with drilling typically staying ahead of ore mining by six to 12 months.

Exploration upside

Blackwater has a high level of drilling density with more than 300,000 metres of diamond drilling previously completed on the project, ultimately supporting its current 2020 PFS mineral resource estimate (with 75 per cent of the measured and indicated mineral resource in the measured category). However, despite the extent of the drilling to date, the deposit remains open to potentially substantial expansion. As illustrated in figure 5 (attached, available on-line), the deposit remains open to the north, northwest and at depth in the south.

Management plans to complete a limited diamond drill program in 2021 to test for extensions to the known mineralization of the deposit in the directions that remain open.

Gold price sensitivity

On Aug. 26, 2020, the company issued a news release disclosing the results of the 2020 PFS. The base case scenario from the 2020 PFS was based on a $1,541 (U.S.) gold price and a 76-U.S.-cent-to-$1-(Canadian) exchange rate resulting in an after-tax NPV (net present value) (5 per cent) of $2.2-billion. The "Blackwater Canadian-dollar after-tax NPV (5 per cent) sensitivity based on changes to U.S.-dollar gold price and U.S.-/Canadian-dollar exchange rate -- 2020 PFS" table is presented to illustrate the sensitivity on the after-tax NPV (5 per cent) for the project to changes in the price of gold and U.S.-/Canadian-dollar exchanges rates.

     BLACKWATER CAD$ AFTER-TAX NPV (5%) SENSITIVITY BASED ON CHANGES TO
          U.S.-DOLLAR GOLD PRICE AND U.S./CANADIAN-DOLLAR EXCHANGE
                              RATE -- 2020 PFS
                         (in thousands of dollars)
  
            
                                          U.S. $ gold price
U.S./Cdn$   $  1,050      $  1,300      $  1,541      $  1,800      $  2,050

0.60       1,672,105     2,654,199     3,600,002     4,616,021     5,596,249
0.65       1,324,653     2,232,499     3,105,715     4,043,857     4,949,033
0.70       1,026,286     1,870,434     2,681,774     3,553,299     4,394,022
0.76         721,073     1,498,745     2,246,820     3,049,606     3,824,263
0.80         540,655     1,281,108     1,992,942     2,755,653     3,491,850
0.85         329,112     1,037,579     1,708,917     2,427,104     3,120,118
0.90         141,887       825,454     1,456,039     2,135,194     2,789,605
0.95        (33,651)       631,179     1,229,101     1,873,937     2,493,860

Source: "Blackwater Gold Project British Columbia NI 43-101 Technical Report 
         on Pre-Feasibility Study," reported on Aug. 26, 2020.


  

What is not reflected in the sensitivity table is the potential to expand the current pit shell to capture additional measured and indicated mineral resources at a higher gold price. Figure 6 (available on-line) shows the additional measured and indicated mineral resources captured within a $2,000-(U.S.)-per-ounce pit shell. If the price of gold remains elevated and potentially moves higher, there is substantial potential to increase the mineral reserve estimate at Blackwater without any further exploration.

Conference call

With the commencement of the program, the Artemis executive team will be hosting a conference call on Nov. 16, 2020, at 12 p.m. EST (9 a.m. PST) to review the key data on the near-surface high-grade mineralization within the Blackwater starter pit, the objectives of the program and the exploration upside potential for the project.

Participants may join the call by dialling the following.

Participant dial-in numbers

International toll:  1-604-638-5340

Toll-free -- Canada/United States:  1-800-319-4610

Please provide the company name (Artemis Gold) to the operator. A recorded playback of the call will be available shortly after the call's completion for 30 days by dialling:

International toll:  1-604-638-9010

Toll-free -- Canada/U.S.:  1-800-319-6413

Enter the replay passcode: 5629, an MP3 recording will also be available on the Artemis website.

Technical disclosure

  1. All gold assays reported are based on a 50-gram fire assay atomic absorption spectrometry of one-kilogram pulverized subsample splits of crushed, sawn half HQ core. Samples were analyzed for silver by four-acid digestion ICP AES finish until July, 2012, after which time silver was analyzed by a four-acid digestion AAS. Intercepts are calculated using a 0.5 g/t AuEq cut-off grade with a maximum of two m of consecutive waste. Only intercepts greater than five m of length and weighted average grades above one g/t AuEq are reported.
  2. Duplicates, blanks and certified standards prepared by third party laboratories were routinely inserted by New Gold. Sample preparation and assaying of reported assay results were undertaken at the Vancouver laboratory of ALS Canada Ltd., an entity having no other relationship with the company. ALS employ a standard routine of duplicate and check assays and reference standards. Standards, blind blanks and duplicate assay results are within an acceptable range of tolerance. Core recovery is estimated for each metre and averages 92 per cent, median being at 96 per cent. Drill hole intercept included in this press release are reflecting between 70 and 90 per cent of the true widths of the orebody.
  3. Drill hole intercepts included in this press release are reflecting between 70 and 90 per cent of the true widths of the orebody.
  4. The AuEq values were calculated using $1,400 (U.S.)/oz. Au, $15 (U.S.)/oz Ag, a gold metallurgical recovery of 93 per cent, silver metallurgical recovery of 55 per cent and mining smelter terms for the following equation: AuEq is equal to Au g/t plus (Ag g/t multiplied by 0.006).
  5. Mineral reserves as reported in the 2020 PFS.
  6. In the opinion of the qualified persons (defined below), sufficient verification checks have been undertaken on the database that the data are virtually error-free and appropriate to support the technical figures in this press release.

Qualified persons

Marc Schulte, PEng, of Moose Mountain Technical Services, independent of the company and a qualified person (QP) as defined by National Instrument 43-101, has reviewed and approved the mineral reserves related disclosure in this news release. All other scientific and technical information in this news release has been reviewed and approved by Klaus Popelka, PGeo, manager resource geology for the company, and a QP as defined by National Instrument 43-101.

(1) Refer to notes 4 and 5 within the section entitled "Technical disclosure."

(2) Refer to notes 1, 2, and 3 within the section entitled "Technical disclosure."

We seek Safe Harbor.

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