i-80 Gold kicks off underground development at Archimedes

[Ben Graham]

i-80 Gold (TSX: IAU) (NYSE-A: IAUX) surged to a six-month high on Friday after the company announced the start of construction at its Archimedes project as planned, with expected production in the fourth quarter of 2026.

In a press release, the Nevada-focused gold miner confirmed it has secured all environmental permits required to proceed with underground mining activities at Archimedes. Previously, the company had been permitted for open-pit mining at Archimedes.

With respect to underground mining, i-80 is following a phased approach, so that it could begin mining the upper zone while simultaneously pursuing and permits for the lower zone. The new permits would allow for underground mining above the 5,100-foot elevation, supporting development and production mining into the first half of 2028.

Meanwhile, permitting activities below the 5,100-foot elevation are underway with an estimated completion in the first half of 2027, the company said.

Shares of i-80 Gold closed Friday’s session 9.3% higher at C$1.18 apiece, its highest since February. The Reno-based miner has a market capitalization of C$930.4 million.

Phase 1 growth

Part of the Ruby Hill complex in Nevada, Archimedes represents i-80 Gold’s second planned underground mine, located approximately 180 km from its wholly owned Lone Tree autoclave and carbon-in-leach (CIL) processing facility.

CEO Richard Young calls the receipt of permits and commencement of construction at Archimedes “a major milestone” for i-80 Gold, and a key part of the company’s three-phased development plan to increase annual gold output to 600,000 oz. by 2030.

Currently in Phase 1, the development plan includes the ramp-up of the Granite Creek underground mine, construction of Archimedes, as well as the refurbishment and commissioning of the Lone Tree facility. Once complete, these growth initiatives are expected to increase the company’s annual gold output from less than 50,000 oz. to150,000-200,000 oz. by 2028, Young said.

At Archimedes, underground development above the 5,100-foot elevation is expected to be completed by mid-2027, and will include two underground portals, the main haulage decline, a series of raises for ventilation and secondary access, exploration bays and supporting infrastructure, i-80 said.

Meanwhile, the Lone Tree refurbishment Class 3 engineering study remains on schedule for completion in the fourth quarter of 2025, followed by the feasibility study for Granite Creek Underground, scheduled for the first quarter of 2026.

Next steps

Starting in Q4 2026, material mined at the Archimedes upper zone is expected to be processed at a third-party autoclave processing facility in the region until the Lone Tree facility is commissioned, which is anticipated in early 2028. Additionally, operations at the property are expected to be supplemented by on-site heap leaching during the initial years.

According to a preliminary economic assessment for the Ruby Hull property filed this year, the Archimedes project has an initial mine life of 10 years, with an average annual gold output of approximately 100,000 oz. at an all-in-sustaining cost of $1,877/oz. following the ramp-up to steady state.

At a base case gold price of $3,000/oz., Archimedes is expected to have an after-tax net present value of $644 million, assuming a 5% discount rate, with an internal rate of return of 81%. Mine construction capital is estimated to be $47 million, and life-of-mine development and closure costs are estimated at $106 million.

The PEA uses an indicated resource of 436,000 oz. and an inferred resource of 988,000 oz. contained in the Archimedes deposit. However, i-80 said it has planned infill and exploration drilling to upgrade and expand the resources, providing potential to extend the current mine life.

The company also said that the timing of the infill drill program and Archimedes feasibility study has been accelerated by approximately 12 months compared to the timing outlined in the PEA. This is expected to increase the cost of drilling by approximately $10 million-$25 million, mostly due to the higher-elevation drilling that requires longer drill holes, it added.