- FACILITY PROVIDES AN ADDITIONAL $40
MILLION STANDBY COST OVERRUN FACILITY:
- BLACKWATER PROJECT UPDATE
All figures presented in Canadian Dollars,
unless specified otherwise
VANCOUVER, BC, Feb. 24, 2022 /CNW/ - Artemis Gold Inc. (TSXV:
ARTG) ("Artemis" or the "Company") is pleased to
announce that it has executed a credit-approved commitment letter
and term sheet ("Commitment Letter") from Macquarie Bank
Limited ("Macquarie") and National Bank of Canada ("National Bank") to jointly
underwrite a $360 million Project
Loan Facility ("PLF"), to fund a significant component of
the estimated construction costs of the Company's Blackwater Gold
Project ("Blackwater", or the "Project") in central
British Columbia. The PLF also provides for up to
$25 million in capitalized interest
and a $40 million standby cost
overrun facility ("Standby COF"). The Standby COF is an
addition to the terms previously announced on April 9, 2021, and represents a further
enhancement of these financing facilities to de-risk development in
the current economic environment.
The execution of the Commitment Letter represents a strong
statement of support of the technical and economic merits of
Blackwater by Macquarie and National Bank, and achieves
another important milestone towards de-risking the development of
Blackwater.
Currently Artemis remains confident in the $645 million initial capital cost estimate
outlined in the 2021 Feasibility Study technical report entitled
"Blackwater Gold Project NI 43-101 Technical Report on Updated
Feasibility Study" dated September 10,
2021 ("FS"). Potential future inflationary pressures
remain a risk for development projects and accordingly the Standby
COF provides another important risk management tool at management's
disposal at a competitive cost of capital. The PLF remains subject
to customary conditions precedent, including but not limited to the
finalization of definitive documentation.
Highlights of the PLF
Key Terms of the PLF include the following:
- Facility Amount - $360 million,
plus up to $25 million for
capitalized interest prior to Project completion, plus a Standby
COF in the amount of $40 million. The
Company may cancel the Standby COF once Project development reaches
completion.
- Interest Rate –Canadian Dealer Offered Rate ("CDOR"),
plus a margin of 4.5% pre-project completion, reducing to 4.0%
post-completion. Any amounts drawn on the Standby COF will carry
the above pricing plus an additional 2%.
- Fees – Customary Upfront and standby fees for a facility of
this nature.
- Repayment and Maturity – Principal and capitalized interest
will be repayable in quarterly installments over six years, with
reduced repayments during the period when the Company expects to
undertake its expansion of the Project from phase 1 to phase 2. The
PLF can be prepaid at anytime without penalty.
- Liquidity – Minimum required proceeds of $10 million, Debt Service Reserve of principal
and interest owing in the upcoming quarter.
- Hedging - A hedging program is expected to be put in place
following the execution of a definitive credit agreement pending
certain conditions being met. In order to limit the Company's
exposure to lower gold prices early in the mine life including
during pay-back and in support of overall project economics, the
extent of the hedge program may range from 185,000 gold ounces (at
a hedge price of C$2,632 per gold
ounce[1]) to 250,000 gold ounces (at a hedge price of C$2,369 per gold ounce1).
Closing of the PLF will be subject to completion of final due
diligence, definitive documentation and other typical conditions
precedent for a financing of this nature. The Company is
targeting the execution of a definitive credit agreement during Q2
2022.
Steven Dean, Chairman and CEO
commented, "The committed underwriting of the PLF by two
renowned global banks is another important step towards de-risking
the development of Blackwater. This underlines the robust economics
and debt carrying capacity of the Project, further evidenced by the
addition of the standby cost overrun facility to the original PLF
proposal.
We remain confident in the current initial capital cost
estimate of $645 million in the
Feasibility Study as at September
2021, but without the benefit of a crystal ball the risk of
the impact of future inflationary pressures on our capital
estimates is not entirely within our control. The standby cost
overrun facility gives management another important risk management
tool at a very competitive cost of capital during a period of
variable inflation and supply chain challenges.
The Company is looking forward to continuing to work with
Macquarie and National Bank to finalize conditions precedent to a
definitive credit agreement in parallel with the execution of fixed
price EPC Contracts, and securing final major permits while
continuing to target breaking ground on major construction in the
summer of 2022".
Further updates regarding the development of the Project
include:
- The early works program at Blackwater is expected to commence
in Spring 2022 to prepare the site in order to accommodate the
start of major works construction activities.
- Expected award of fixed price engineering, procurement and
construction ("EPC") contracts for the process plant and
power transmission lines in Spring 2022.
- Artemis continues to target receipt of the BC Mines Act permit
in the summer of 2022 with major construction activities commencing
thereafter.
On behalf of the Board of Directors,
ARTEMIS GOLD INC.
On behalf of the Board of Directors
"Steven Dean"
Chairman and Chief Executive Officer
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Cautionary Note Regarding Forward-Looking
Information
This news release contains certain "forward
looking statements" and certain "forward-looking information" as
defined under applicable Canadian and U.S. securities laws
(together, "forward-looking statements").
Forward-looking statements can generally be identified by the use
of forward-looking terminology such as "may", "will", "expect",
"intend", "estimate", "anticipate", "believe", "continue", "plans",
"potential" or similar terminology. Forward-looking statements in
this news release include, but are not limited to, statements and
information related to the plans of the Company regarding the
Project and other statements regarding future plans, expectations,
guidance, projections, objectives, estimates and forecasts, as well
as statements as to management's expectations with respect to such
matters.
Forward-looking statements and information are not historical
facts and are made as of the date of this news release. These
forward-looking statements involve numerous risks and uncertainties
and actual results may vary. Important factors that may cause
actual results to vary include without limitation, risks related
to the ability of the Company to accomplish its plans and
objectives with respect to the Project within the expected timing
or at all; the timing of the finalization of definitive documents
related to the PLF and the satisfaction of other conditions
precedent; the timing and receipt of certain approvals, changes in
commodity and power prices, changes in interest and currency
exchange rates, risks inherent in exploration estimates and
results, timing and success, inaccurate geological and
metallurgical assumptions (including with respect to the size,
grade and recoverability of mineral reserves and resources),
changes in development or mining plans due to changes in
logistical, technical or other factors, unanticipated operational
difficulties (including failure of plant, equipment or processes to
operate in accordance with specifications, cost escalation,
unavailability of materials, equipment and third party contractors,
delays in the receipt of government approvals, industrial
disturbances or other job action, and unanticipated events related
to health, safety and environmental matters), political risk,
social unrest, and changes in general economic conditions or
conditions in the financial markets. In making the forward-looking
statements in this news release, the Company has applied several
material assumptions, including without limitation, the assumptions
that: (1) market fundamentals will result in sustained mineral
demand and prices; (2) the receipt of any necessary approvals and
consents in connection with the development of any properties; (3)
the availability of financing on suitable terms for the
development, construction and continued operation of any mineral
properties; and (4) sustained commodity prices such that any
properties put into operation remain economically viable. The
actual results or performance by the Company could differ
materially from those expressed in, or implied by, any
forward-looking statements relating to those matters. Accordingly,
no assurances can be given that any of the events anticipated by
the forward-looking statements will transpire or occur, or if any
of them do so, what impact they will have on the results of
operations or financial condition of the Company. Except as
required by law, the Company is under no obligation, and expressly
disclaims any obligation, to update, alter or otherwise revise any
forward-looking statement, whether written or oral, that may be
made from time to time, whether as a result of new information,
future events or otherwise, except as may be required under
applicable securities laws.
____________________________
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1
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The hedge prices assume
gold prices ranging from US$1,800 per gold ounce to US$2,000 per
gold ounce, translated to Canadian dollar equivalent at a CAD/USD
rate of 0.76.
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SOURCE Artemis Gold Inc.