Excerpt from Stockwatch Gold-TodayTax loss ended yesterday was the end of the downdraft?
Gold Summary for Dec. 30, 2021
2021-12-30 18:45 ET - Market Summary
by Stockwatch Business Reporter
New York spot gold rose $10.50 to $1,815.30 on Thursday. The TSX-V rose 9.66 points to 933.94 while the TSX gold index added 4.08 points to 292.28. Argonaut Gold Inc. (AR) reversed its southward trek, adding four cents to $2.38 on 2.27 million shares. Argonaut traded above $4 in mid-November and near $3.15 in mid-December, when it revealed that its Magino gold project was costing a gold mine to build, with a $290-million overrun on its initial $510-million budget. Agnico Eagle Mines Ltd. (AEM) was one of many Canadian gold miners to move higher today. It added $1.53 to end the day at $67.02 on 925,000 shares.
Steven Dean's Artemis Gold Inc. (ARTG) slid 64 cents to $6.70 on 913,000 shares following word that the memorandum of understanding with Ausenco Engineering Canada Ltd. has expired. The unconsummated engineering, procurement and construction (EPC) agreement was signed in March, the result of a "multiparty competitive bid process," to cover building the Blackwater gold mine in central British Columbia for a guaranteed maximum price.
Mr. Dean, chairman and chief executive officer, was mum about what went wrong beyond saying that the agreed upon period to negotiate a formal contract had expired. Negotiations continue, he says, with "various parties" to firm up a new arrangement for construction of the mine facilities, and he expects to sign agreements in the next several weeks with suppliers of long-lead items to support Artemis's timelines for construction.
Mr. Dean was chattier when the arrangement had been signed early this year. He hailed the understanding as a "significant investment of time and effort" by the company and the multiple bidders, gushing that the now failed agreement served as further validation of the initial capital costs estimated in the company's 2020 prefeasibility study, at least with respect to the processing plant and associated facilities.
Artemis's prefeasibility study, completed in the summer of 2020, proposed a 15,000-tonne-per-day mine that would cost $592-million to build, and which would be expanded in two stages to 55,000 tonnes per day by year 11 at a further cost of $824-million. Blackwater does have a lot of ore to extract and process -- 334 million tonnes at 0.75 gram of gold and 5.8 grams of silver per tonne -- enough to support a discounted net present value of $2.25-billion after taxes.
And so, negotiations for a new EPC deal are under way, although given the inflationary uncertainties of late it is unclear if the "various parties" now touted are equal in number with the "multiple bidders" that were around when Mr. Dean and his crew rolled out their first (not so) binding memorandum of understanding.