Artemis Gold is currently building one of Canada's largest gold mines, and hardly anyone is noticing. At the same time, the company will have low costs and high cash flows. The share offers a moderate valuation and thus potential for long-term investors.
Barely any presence on the World Wide WebJudging by its weak presence on YouTube or its low follower count on the well-known U.S. investor portal Seeking Alpha as a benchmark, Artemis Gold ($5.40 CAD | ARTG) is virtually non-existent. The company would have deserved more attention, because it is currently building one of Canada's largest gold mines. In addition, the stock market value amounts to one billion Canadian dollars. The price potential on a 12 to 18 month horizon is above average.
Management is looking for a new taskArtemis Gold is - similar to SilverCrest Metals, Integra Resources or i-80 Gold - one of those successful spin-outs that were created as a "waste product" of a company takeover. The story is actually always the same: A junior mining company is swallowed up by a larger competitor. This usually leaves "leftovers" to be exploited. One of these "leftovers" is the often high-caliber management, well supplied with money but unemployed.
Like a goldfish eating a sharkIn the case of Artemis, here's how it went down: gold producer Atlantic Gold, active in the Canadian province of Nova Scotia, was swallowed by St Barbara in the summer of 2019 for $802 million. Management subsequently formed Artemis Gold, with Steven Dean as chairman and CEO. Prior to the IPO in late September 2019, there was a $32.6 million private placement. Then, in August 2020, something happened that looked to most observers like a goldfish eating a shark: Artemis Gold bought the Blackwater project in the province of British Columbia from New Gold - a mid-tier but relatively highly leveraged gold producer - for $190 million in cash, $15 million in treasury shares and an 8% gold stream.
With 8.2 million ounces of gold reserves and well advanced in the permitting process, Blackwater is a "world-class project." There was one small problem, however: according to an old feasibility study, the mine is expected to cost $2 billion to build. Peter Arendas, commenting on the acquisition from New Gold's perspective in 2020 on Seeking Alpha, put it this way, "Without question, this project is beyond New Gold's capabilities. ...
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