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Blackwater Gold mine project set to go, all it needs is permit approval

Steven Dean is like a drag racer sitting at the start line behind the wheel of billion dollar machine waiting for the green light to drop.

The chairman…

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This article was originally published by Bussiness In Vancover

Steven Dean is like a drag racer sitting at the start line behind the wheel of billion dollar machine waiting for the green light to drop.

The chairman and CEO of Artemis Gold Inc., has been stuck in staging for 2 ½ years, ready to hit the throttle on a project to build one of the largest gold mines in Canada.

Located 160 kilometres southwest of Prince George, the Blackwater Gold open-pit gold-silver mine is expected generate thousands of jobs and deliver wealth to a forestry-dependent region left reeling in the wake of a series of recent mill closures.

“This mine has been in permitting phase for almost 10 years – it’s been a tough and long road for us and the previous owner New Gold, but I think we are close to getting the permits we need, particularly the provincial ones,” said Dean, who stated his case for faster approval of the project to B.C. Premier David Eby and his cabinet last week at the BC Natural Resources Forum in Prince George.

“I had some good conversations with the premier. Very definitely they are hearing the message from industry and from the community that there’s got to be a more efficient way, from a time and cost perspective, to bring forth the benefits, social and environmental, of economic development.”

In 2019, B.C. became the first government to adopt the United Nations Declaration on Rights of Indigenous Peoples, which gives First Nations more decision-making authority on any developments that affect their traditional territory. Blackwater is one of the first major-project test cases under the new legislation and Dean admits that has contributed to delays in approval.

“Blackwater was in some ways caught in that period of change and I’m hoping that some of the initiatives we’re about to adopt and agree to and announce are precedent-setting in a way that will allow for the future a better mode of engagement for everybody, including First Nations,” said Dean.

“This change has foisted a huge responsibility on them as well. Their engagement in the process of permitting is an enormous task and I feel for them and their administration. It’s a huge and exhausting job and I’m really proud of the people working for their nations who are by and large doing a great job.”

Dean said all the company has done all it can to have all the pieces in place and construction will begin as soon as Blackwater obtains its Mines Act permit.

Key to the $2.5 billion project will be a new 133-kilometre BC Hydro transmission line which will allow Blackwater to build one of the mining sector’s first fully-electric ore processing plants. The carbon-neutral setup will replace traditional diesel/propane fuelled processing and adds to the cost of construction but it will reduce the carbon footprint of the mine.

The Vancouver company has signed an agreement with Caterpillar Inc., that gives Blackwater an option to buy an electric-powered zero-emission mining fleet of 200-tonne dump trucks.

“I think Caterpillar sees the poster-child potential of this mine because to charge those batteries we’ll be pugging into a grid that has a 98 per cent renewable energy base,” said Dean. “You can have electric trucks in Africa or even the U.S. or parts of Australia but you’re plugging those into an energy source which is coal, where this is truly green. It’s our single biggest advantage in this province and the government will showcase it to the world.”

A feasibility study predicts the mine will produce 321,000 troy ounces of gold annually over the first five years. Over its expected 22-year lifespan, the company hopes to extract 11.7 million ounces of gold and 122.4 million ounces of silver. Dean says it could be producing for 30 or 40 years, which could mean career-spanning occupations for some workers.

Exploration has been recorded on the 15,000-hectare property since 1973. Richfield Ventures acquired the site in 2009 and sold to New Gold in May 2011. Artemis bought the project from New Gold in August 2020 for $150 million. New Gold also received 7.4 million common shares of Artemis in the deal and will get eight per cent of the gold produced by the project, dropping to four per cent once a 280,000-ounce threshold has been reached.

The deposit stretches is about one kilometre wide, 500 metres wide and between 300 and 400 m deep. No mine of that scale has been built in B.C since the Mount Milligan gold-copper mine southwest of Mackenzie opened in 2013. The Blackwater ore is considered relatively low-grade but the large area it encompasses and near-surface deposits make the project economical.  

In January 2020, Blackwater announced it had signed agreements between the province and the Lhoosk’uz Dené and Ulkatcho nations, upon whose lands the mine sits, and the company will share a portion of the provincial mineral tax revenue collected from mining operations. Over the life of the mine that tax total is expected to reach $722 million.

“We enjoy a good relationship with (both nations) and they say if we can get the mine going it will be a generational change for their membership,” said Dean. “Whether it be the health and wellness benefits to those nations, whether it be the economic benefits, the jobs, training, the business opportunities related to the mine’s construction as well as operation, I can imagine that being generation-changing and that’s exciting and very cool.”

Blackwater is also collaborating with the Nadleh Whut’en, Saik’uz, Stellat’en and Nazko nations to develop and enhance impact benefit agreements.

Site preparation began last fall and 103 workers (35 per cent Indigenous, 30 per cent women) have cleared the area and set up a water treatment facility where the expanded 495-person work camp now sits.

Phase 1 will take two years to complete as a cost of about $645 in capital. It will involve a construction workforce of about 500 (400 contractors, 100 directly hired) and an operational staff of about 300. The mine site is 110 km south of Vanderhoof on a logging road, a 2 ½-hour trip.

Development will take pace in three or four phases. The truck and shovel operation is expected to start mining ore in the third quarter of this year.

At full capacity it will have 400 or 500 operators. Support services, contractors and fabricators in Prince George and Vanderhoof will be among the indirect jobs created.

Dean said the company plans to announce details of a precedent-setting caribou herd restoration initiative which will involve restoration efforts to remove the impacts of industries and their activities along migration route that connects to Tweedsmuir Provincial Park.

“We’re making some ground-breaking initiatives in relation to fish and to wetlands that really show how committed we are to the environment, not just our impacts but historic impacts from cattle and other industrial activity,” said Dean.

The Perth, Australia native says Blackwater Gold will be unprecedented in its efforts to meet strict environmental standards and embrace its social responsibilities.

“We’re no longer our grandfather’s industry,” he said.

“We are very much a modern mining approach, partly driven by regulation and the way governments want to see things, but also because the world has changed and corporate policies have changed. Our own shareholders, the big investors, are weighting environmental social governance higher than they have in the past.”  
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