Artemis Gold makes progress on Blackwater EP2 growth project, names Lycopodium as EPCM contractor
Artemis Gold Inc says major works construction has commenced on the EP2 growth project, part of its Blackwater operation in British Columbia, Canada, with the first concrete pour for the ball mill foundations completed ahead of schedule.
The early works program for EP2 commenced in January 2026 and is nearing completion, with engineering and procurement advancing well and all long lead equipment ordered. The company confirmed the engineering, procurement and construction management (EPCM) contract for this has been awarded to Lycopodium.
Site clearing and bulk earthworks for the processing plant expansion is advancing ahead of plan and completion of the 612-bed construction camp expansion is expected in early August.
The company has also secured supply assurances from BC Hydro that ensure the continued supply of low-cost renewable hydropower at the expanded throughput capacity.
EP2 was announced in the December quarter of 2025 and represents a significant addition to processing plant capacity above Phase 1A. When complete, Phase 1A and EP2 will expand throughput capacity by 250%, from the existing 6 Mt/y to 21 Mt/y by the December quarter of 2028. EP2 increases gold production to over 500,000 oz/y, and economies of scale provide for lower unit operating costs, which will 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, Artemis says. The project is on schedule and on budget and expected to be completed at a capital cost of $1.44 billion.
The company says it has materially derisked expected revenue from gold sales during the EP2 capital spend period by purchasing put options on 172,500 oz of gold at a strike price of C$5,300/oz ($3,782/oz), with expiry dates between July 2026 and June 2027 covering more than 80% of expected spot sales during that period. These derivatives provide downside gold price protection without giving up any gold price upside, thereby helping ensure the project can still be funded from operating cash flow if gold prices decrease materially.
Artemis Gold CEO, Dale Andres, said: “We are very pleased with the progress being made on our expansion projects, which once complete will transform Blackwater into one of the largest and lowest cost gold mines in Canada. The implementation of our gold price put strategy is prudent risk management, providing us with downside gold price protection while maintaining full upside price exposure on our spot sales.”
Artemis Gold President, Jeremy Langford, commented: “It’s been a busy and highly productive H1 2026 as we ramp up activities across Phase 1A and EP2 to deliver on this exciting next phase of growth at Blackwater. Phase 1A is progressing well, and we have been focused on laying the necessary groundwork to ensure we deliver EP2 on time and on budget. We have complemented the existing Artemis Gold project delivery team with several key additions. I am very encouraged by the progress made, with bulk earthworks well advanced and the first concrete pour for the ball mill completed ahead of schedule.”
At peak construction, EP2 is expected to generate 1,500 direct construction jobs, plus additional indirect jobs and indirect and induced economic activity. This is in addition to the approximately 900 contractors and direct employees currently working at the Blackwater Mine to operate Phase 1. Once EP2 is completed, the Blackwater Mine is expected to employ approximately 1,200 direct employees and contractors.
To date, the following milestones have been achieved:
- The EPCM contract has been awarded to Lycopodium, with initial design reviews for the processing facilities have been completed and the layout is finalised;
- A 612-person construction camp expansion is nearing completion, including kitchen, gymnasium and recreation facilities;
- Bulk earthworks are well advanced and scheduled for completion before the end of September; and
- The concrete batch plant has been commissioned and is operational. Award of concrete works for both the wet and dry facilities are complete. The ball mill raft concrete pour, which is the single biggest pour on the EP2 project at approximately 900 cu.m of concrete, has been completed. SAG mill blinding has been poured and steel fixing is under way.
In addition to this, the first tranche of additional mining equipment to support higher mining and processing rates has been ordered and is being assembled on site. Equipment being added during 2026 includes one 34 cu.m hydraulic shovel, five 240 t haul trucks, four production drills and two large graders. To date, both graders and three haul trucks have been assembled and are in service. The new shovel is expected to be in service by September 2026. The existing mine equipment fleet includes Caterpillar 793 trucks with a Cat 6060 and two Cat 6040 hydraulic shovels.
Updates to the resource model and optimisation of the mine plan for both the Phase 1A and EP2 expansions are being undertaken in 2026. To support these updates, various studies and work programs have commenced on asset optimisation and growth options at Blackwater beyond EP2. Opportunities under evaluation include:
- Future expansions – options to debottleneck both Phase 1A and EP2 to achieve 25 Mt/y are being studied, along with flowsheet and sizing considerations of another crushing and grinding line for potential further expansions to throughput capacity for a new Phase 3 in the future. These will continue to be evaluated in conjunction with potential mineralisation expansion and mine life extension opportunities;
- Material movement alternatives – the company continues to evaluate longer-term alternative methods for transportation of waste material such as crushing and conveying, electrification of the hauling fleet and automation of hauling operations, each of which could potentially reduce operating costs and in the case of the first two, lower the Blackwater Mine’s greenhouse gas emissions;
- Positive reconciliation – the company continues to see favourable grade control reconciliation, with the conversion of material previously classified as waste into low- and medium-grade stockpile material. This low- and medium-grade material is currently being stockpiled for processing later in the mine life;
- Mineralisation expansion – based on previous drilling, the mineralisation at Blackwater remains open to the north, northwest and at depth. Drilling to test the extension of mineralisation beyond the limits of the current reported mineral resource estimate is underway, with approximately 25,000 m of diamond drilling planned during 2026;
- District exploration – the broader Blackwater land package remains largely under-explored, with over 30 drill targets identified within potential trucking distance of the existing processing facilities. The regional drilling program resumed in the June quarter after a winter-spring break. The current program is expected to be part of a broader and longer-term regional exploration strategy over the next 5 to 10 years to fully test the highly prospective land package; and
- Increased mine life – in addition to the items above, the current reserve estimate is based on a $1,400/oz gold price. By applying a higher gold price for pit design and cut-off grade, some of Blackwater’s resources could potentially be converted into reserves to extend the mine life.
A new mineral resource and mineral reserve and updated annual production and cost guidance beyond 2026 will be provided in the March quarter of 2027 after this work is completed.
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