Artemis approves $1B Phase 2 expansion of Blackwater mine

[Ben Graham]

Artemis Gold (TSXV: ARTG) has approved a C$1.44 billion ($1 billion) Phase 2 expansion of its Blackwater mine, a move the company says would place the British Columbia operation among Canada’s three largest single gold producers.

The project — referred to as EP2 — involves further upgrading the Blackwater plant’s processing plant capacity, from 8 million tonnes per annum (mtpa) envisioned in the Phase 1A expansion to a combined 21 mtpa. At the moment, Blackwater is operating at 6 mtpa through the existing Phase 1 plant.

The Phase 1A expansion, comprising the addition of a vertical mill, is already under construction and is expected to be completed before the end of 2026. Phase 2, designed as a separate facility located adjacent to the Phase 1 plant, would take another two years and be completed by late 2028.

Once complete, the EP2 project is expected to take Blackwater’s average annual production to 500,000-525,000 oz. over the first full 10 years, Artemis said, while estimating all-in sustaining costs to fall within the $800-$1,100/oz. range within that period.

“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,” CEO Dale Andres stated in a press release this week.

Transformational expansion

According to Artemis, the resulting production and cost profile from EP2 would cement Blackwater’s position as “one of the lowest-cost and highest-margin gold operations globally”, and transform the mine into one of the three largest single gold mines in Canada.

The mine located 450 km northeast of Vancouver entered commercial production in May, becoming the first gold mine in the province since 2017. For the eight months to Dec. 31, it is expected to produce 160,000 to 200,000 oz. at AISC of $670-$770 per oz..

During the Phase 2 expansion period, its production is forecast to be 275,000-425,000 oz. at AISC of $800-$900/oz.

Artemis Gold hits new high on plans to boost Blackwater processing

First pour in Q3 2028

The EP2 project, with an estimated capital cost of C$1.44 billion, is expected to be funded primarily from operating cash flows and balance sheet, the Vancouver-based gold miner said.

The processing plant for EP2 has a design throughput capacity of 13 mtpa, which is larger in scale compared to the 9-mtpa plant outlined in its 2024 expansion plan.

Front-end engineering of the EP2 plant has already been completed this month, alongside execution plans, Artemis noted, adding that its management is anticipating early works next month, once it secures approval for sufficient hydro-electricity supply from the BC province.

Major works are expected to begin in the third quarter of 2026 and last approximately two years, with the first gold pour expected in Q3 2028, it added.

“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,” Artemis’ president Jeremy Langford said.

At peak construction, the EP2 project is expected to generate 1,500 direct construction jobs, plus additional indirect jobs and indirect and induced economic activity, according to company estimates.

More upside

At the EP2 processing rate, the mine life at Blackwater is expected to be through to 2043, with the final five years of processing from stockpiles.

In addition to Phase 2, Artemis has also planned a Phase 3 expansion, to be largely achieved through continued debottlenecking and optimization of the Phase 1/1A and EP2 processing plants. According to the 2024 expansion study, Phase 3 would result in a total processing capacity of 25 mtpa, with potential to increase due to re-optimization of the mine plan and resource expansion.

The EP2 project is based on Blackwater’s existing mineral reserves, totalling 8 million oz. contained within 334 million tonnes grading 0.75 gram per tonne. These are included within a broader measured and indicated resource estimate of 11.7 million oz. (597 million tonnes at 0.61 g/t gold). Artemis said is expects to provide an update to these estimates next year.