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Since March 2019, Artemis has invested ~$13 million into Velocity Minerals (TSX-V: VLC), a gold exploration and development company focused in eastern Europe. The investments included three equity financings and a convertible debenture. Proceeds from the VLC Investment are being used to fund the advancement of Velocity’s flagship deposit, the Rozino gold project located in southeast Bulgaria (“Rozino”) towards feasibility and permitting, including resource expansion and definition drilling, engineering studies, environmental monitoring and assessment, acquisition of peripheral properties and for general working capital purposes. The Artemis team sees many opportunistic characteristics in the Rozino project that are similar to Atlantic Gold’s producing Moose River Consolidated Mine (“MRC”).

Artemis Equity Ownership & Rights

  • 32.3% ownership of VLC issued & outstanding shares
  • 37% ownership on a partially diluted basis with the exercise of warrants
  • The ability to nominate up to 2 directors depending on ownership level
  • Pro rata participation rights in equity securities offerings as long as Artemis owns 10% or more of Velocity

Velocity Highlights

  • 70% interest in the Rozino project and an option to earn 70% in multiple deposits in Bulgaria.
  • Partnered with an established private Bulgarian miner (Gorubso) thus gaining access to an existing permitted carbon-in-leach (CIL) processing plant.
  • Goal to build a production profile of >200,000 ounces per year, sustainable over more than 10 years

Velocity Project Map

Rozino August 2020 PFS Highlights

  • A Pre-Feasibility Study (PFS1) for the Rozino Project was released in August 2020, which is summarized below:
  • After-tax NPV (5%) of US$123m with an after-tax IRR of 27% at US$1500/oz gold
  • Average Annual Gold production of 53,000 ounces per year at an AISC2 of ~US$755/oz
  • Low initial pre-production capex of US$87.1m
  • Low Life of mine (LoM) strip ratio of 2.2:1 and a 1.22 g/t Au LoM gold grade
  • 3.0 year payback period

Opportunities to Enhance Economics

  • Potential for additional resources at Rozino: Near surface, moderate grade mineralization on the southeastern boundary of the deposit is not included within the current Indicated Resource estimate.
  • Discovery of near surface mineralization at Kazak: Located within 2km of the Rozino deposit, initial drill results from Kazak returned a best drill hole intersect of 13.0m @ 1.20 g/t gold, including 5.0m @ 2.24 g/t gold. Gold is present within a steep shear zone hosted within the basement and drilling has bracketed over 250m of continuous mineralization to-date. A number of additional targets defined by gold in soil anomalies and geological mapping and surface rock chip sampling will be tested in early 2021.
  • Advanced under cover exploration between Rozino & Kazak: the host sediments to Rozino have been identified between the Rozino deposit and Kazak as a series of faulted domains within a major WNW – ESE trending shear zone termed the BRSZ. Post-mineral sediments and recent alluvials cover the BRSZ area making target geochemically blind and a program of reconnaissance drilling is required to identify drill targets.  An aggressive program of systematic drilling within the BRSZ is planned for the 1st half of 2021 with the aim of generating additional resources to be incorporated within the planned Rozino Feasibility Study.
  • Ivaylovgrad Exploration Corridor: The BRSZ forms part of a 20km long shear Zone that defines and controls a number of discrete sedimentary basins similar to the Rozino sedimentary basin that hosts the deposit. Geochemical prospecting has identified a number of gold anomalies that require further systematic exploration. The discovery of significant intersects at Kazak has shown the potential for basement hosted shear zone gold mineralization terrain that has not been previously explored. Velocity plan to initiate a regional generative program both within and adjacent to the Tintyava Property in 2021 with the aim of discovering additional resources within trucking distance of the Rozino Flotation Plant.
  • Potential for Improved Recoveries: Additional metallurgical testwork is recommended in the FS to undertake additional variability testwork to obtain more confidence in the grade-recovery function and the oxidation-recovery relationship.  If gold recovery at lower grades is better than expected, there could be more value derived from lower grade ore. 
  • Silver upside: The metallurgical testwork indicates the presence of silver in the bulk concentrate and doré that could potentially add value. 

(1)  All In Sustaining Cost (AISC) is defined as all cash costs related to mining and processing to final product. It includes on-mine and off-mine costs (direct and indirect).  Sustaining capital costs related to continuing the business including exploration, development and equipment required to sustain production are included. Taxes, working capital, M&A, disposals and acquisitions as well as new mine development capital costs are excluded. Taxes, working capital, M&A, disposals and acquisitions as well as new mine development capital costs are excluded.  AISC is an industry financial measure that has no definition under Canadian GAAP. (2)  Base case parameters assume a gold price of US$1,500/ounce and an exchange rate (CAD$ to US$) of 0.75.  All amounts are reported in Canadian dollars unless otherwise specified.  Financial results on 100% equity basis.
As a result, AISC cannot be compared between companies or individual operations.

Rozino Mineral Resource Estimate

Probable Mineral Reserves (effective date 20th August 2020).

Ore Type Reserve Category Tonnes (Mt) Gold Grade
(g/t)
Contained Gold Metal
(koz)
Metallurgical Recovery
(%)
Recoverable Gold Metal
(koz)
Oxide Probable 1.9 1.07 64 67.4 43
Transitional Probable 1.8 1.15 68 70.7 48
Sulphide Probable 8.1 1.27 332 83.3 277
Total Probable 11.8 1.22 465 79.3 368
  1. The Mineral Reserve disclosed herein has been estimated in accordance with CIM Definition Standards.
  2. Mineral Reserves discard cut-off grade was 0.5 g/t gold.
  3. Mineral Reserves are based on $1,500/oz gold price.
  4. Mineral Reserves account for mining dilution and ore loss.
  5. Probable Mineral Reserves were based on indicated Mineral Resources.
  6. Sum of individual amounts may not be equal to rounding.
Cut-off Grade
(g/t Au)
Indicated Mineral Resource Estimate
Tonnes 
(Mt)
Gold Grade
(g/t)
Gold Metal 
(koz)
0.2 27.2 0.72 630
0.3 20.5 0.87 573
0.4 15.5 1.04 518
0.5 12.0 1.22 471
  1. Effective date April 15, 2020.
  2. The selected base case Mineral Resources are reported at a cut-off grade of 0.3 g/t gold.
  3. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.
  4. The Mineral Resources have been classified and reported in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum “CIM Definition Standards - For Mineral Resources and Mineral Reserves” ("CIM Definition Standards").
  5. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. 
Cut-off Grade
(g/t Au)
Inferred Mineral Resource Estimate
Tonnes
(Mt)
Gold Grade
(g/t)
Gold Metal
(koz)
0.2 0.49 0.70 11
0.3 0.38 0.80 10
0.4 0.29 0.90 8
0.5 0.23 1.00 7
  1. Effective date April 15, 2020.
  2. The selected base case Mineral Resources are reported at a cut-off grade of 0.3 g/t gold.
  3. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.
  4. The Mineral Resources have been classified and reported in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum “CIM Definition Standards - For Mineral Resources and Mineral Reserves” ("CIM Definition Standards").
  5. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.  Inferred Mineral Resources are considered too speculative geologically in nature to enable them to be categorized as Mineral Reserves and there can be no certainty that all or any part of an inferred mineral resources will ever be upgraded to Indicated Mineral Resources or Measured Mineral Resources.  

All scientific and technical information herein related to Velocity Minerals Ltd. (“Velocity” or “VLC”) has been reviewed and approved by prepared by Stuart Mills, a qualified person for the purposes of National Instrument 43-101 Standards of Disclosure for Mineral Projects.