The company that Artemis Gold Inc. hired in 2022 for engineering, procurement and construction on its Blackwater Gold (BWG) mine south of Prince George is suing the project owner and a subsidiary for breach of contract and negligence.
“From the outset of the contract, and throughout the following nearly two years of the project, (Sedgman Canada Ltd)'s work was delayed and disrupted by numerous events for which it was entitled to extensions of time and additional compensation,” said Sedgman’s B.C. Supreme Court notice of civil claim, filed Friday, Dec. 19 in Prince George.
Sedgman said it agreed in September 2022 with BWG Gold Ltd. on the $318.2 million contract, which set Aug. 31, 2024 as the deadline for practical completion at the site, 160 kilometres southwest of Prince George.
But, in the lawsuit, Sedgman accuses defendants Artemis and BWG of various delays, interference and mismanagement, including failure to provide Sedgman site access, removing Sedgman personnel from the project, and making changes and acceleration directives that altered the contract and impacted the project schedule.
There were also wildfire-related evacuations in July 2023 and 2024 that required Sedgman to leave the site and then remobilize the project.
“Despite Sedgman suffering months of delay caused by BWG’s interference, and BWG’s public acknowledgments that wildfire incidents had delayed the project, BWG did not approve a single day’s extension of time for Sedgman to perform the work while the contract was in force,” Sedgman alleged.
Sedgman claimed it was still able to complete over 90 per cent of its work by October, but BWG took over the project “in breach of the contract and in bad faith” and made false claims about Sedgman being in material breach of its obligations. Further, Sedgman “put BWG on notice” that it had breached the contract and misappropriated $31.8 million in performance security funds.
“BWG’s high handed conduct is worthy of rebuke through punitive and exemplary damages,” said the lawsuit, filed by Sedgman lawyer Brook Greenberg of the Fasken Martineau DuMoulin firm in Vancouver.
Sedgman claims $88.9 million under a lien against the project, plus damages, costs and interest.
None of the allegations in the lawsuit has been proven in court. Artemis and BWG have yet to file a response.
Artemis, which is traded on the TSX Venture Exchange (ARTG), announced Nov. 21 that BWG was “in the final stages of construction and commissioning.” The update said the project remains fully funded, mining operations in the open pit commenced in the quarter and the 135 km power line and substation were feeding the site as planned.
Without naming Sedgman, Artemis alluded to the split in its Oct. 10 news release. Artemis said the project was 95 per cent complete, but wildfire delays halted construction a total one-and-a-half months during prime time.
“In order to accelerate the commissioning of the process facility to align with the other major construction milestones already achieved, the company has taken responsibility for plant commissioning from the EPC contractor and will commence owner commissioning and remaining construction activity effective immediately,” stated the release.
