Artemis Gold Inc. (TSX-V: ARTG) (“Artemis Gold” or the “Company”) announces that as a result of internal engineering analysis, it has committed to additional investments as part of its Phase 1 development of the Blackwater Mine (“Blackwater”) in order to facilitate the potential fast-tracking of the Phase 2 expansion.

In support of these additional investments, the Company has amended the gold stream agreement with Wheaton Precious Metals Corp. (“Wheaton”) which will provide an additional US$40 million (C$54million) in funding at a very low cost of capital.

The additional investments during Phase 1 include additional structural steel and increased conveyor belt widths in the crushing circuits, as well as the introduction of variable-speed-drives to the ball mill. Electrical components have also been upgraded to facilitate the Phase 2 requirements and to include optionality in relation to the use of redundancy back-up power sources. Other optimizations include upsizing of the oxygen plant coupled with down-shaft-sparging of oxygen to the pre-leach and carbon-in-leach (“CIL”) trains, along with the optimization of the CIL layout in order to facilitate non-intrusive expansion to Phase 2, as well as full conversion of the detoxification process to remove the need for tanker-supplied liquid sulphur dioxide.

These investments in the Phase 1 initial capital are expected to allow the Company to further optimize throughput in the early years of operation. This is particularly significant as it is expected that early ore types fed to the mill will be considerably softer than the maximum ore hardness contemplated across the life of mine plan in the September 2021 Feasibility Study.

The cost of these additions, together with over-budget expenditures on permitting costs and additional bonding costs connected to those permits, will require additional funding of approximately C$50 million.

Steven Dean, Chairman and Chief Executive Officer of Artemis Gold, said “We have been exploring these options internally for some time. This announcement is the logical next step and importantly provides the additional funding to further pursue these optimizations at a low cost of capital with a great partner in Wheaton, without a material dilution of the net asset value per share for shareholders.”

The amendment to the Gold Stream Agreement has been achieved with a simple increase in the number of ounces to be delivered to Wheaton prior to the reduction in Wheaton’s stream participation from 8% to 4% (previously expected to occur in 2034 based on the September 2021 Feasibility study schedule), which effectively provides Wheaton with an interest in approximately 92,000 additional gold ounces to be delivered starting in approximately 2034 (subject to certain delivery thresholds being met).

This mechanism is akin to a pre-pay and grants no additional stream percentage participation in Blackwater by Wheaton.

“Since Wheaton’s acquisition of the Gold and Silver Streams on Blackwater in 2021, we have been impressed with the progress the Artemis Gold team has made in de-risking the project and advancing construction activities,” said Randy Smallwood, Wheaton’s President and Chief Executive Officer. “Wheaton is excited to continue working beside our partner, Artemis Gold, and to contribute to the success at Blackwater.”

With the commitment of the additional US$40 million funding under the Gold Stream, the optimized initial capital for Phase 1 construction of Blackwater is fully funded. In addition to receiving its initial US$35.2 million deposit under the Silver Stream on June 9, 2023, the Company has also now received its initial US$10 million deposit under the amendment to the Gold Stream.

The initial capital to complete to first gold pour is now estimated to range between C$730 million and C$750 million, of which the Company had incurred approximately C$150 million as at the end of May 2023. The Company’s cash balance at the end of May 2023 totalled approximately C$47 million.

Overall project construction as of May 31, 2023, stands at approximately 20% complete.

While the Company believes it has captured all known inflationary impacts plus contingencies to completion to gold pour in this estimate, it will provide updates on any material changes to this estimate on a quarterly basis through to commissioning and first gold pour in H2 2024.

The Company intends to commission an optimization engineering study to formally outline the benefits of the installation of the additional equipment outlined above and to confirm the benefits of advancing the Phase 2 expansion earlier than contemplated in the September 2021 Feasibility Study. The results of this study are expected to be released in Q4 2023.

The current gold price in Canadian dollars of approximately C$2,700 supports this initiative as that price is 33% higher than the C$2,025 equivalent price used in the September 2021 Feasibility Study. Note also that the vast majority of Blackwater’s operating costs are expected to be denominated in Canadian dollars.