Mining News: Agnico builds on Nunavut platform

Agnico Eagle Mines Ltd. July 26 reported positive results from its Meadowbank gold mine and two development projects in Nunavut. The Meadowbank Mine produced 95,289 ounces of gold in the second quarter, a nearly 32 percent increase over the 72,401 oz produced during the same period last year. The company now expects to extend production at Meadowbank through the end of 2018 and is evaluating opportunities to further extend production into 2019. Any such extensions would bridge the gap between the end of Meadowbank mining and the expected start of production at Amaruq, a satellite deposit that will be trucked to the Meadowbank mill facilities for processing. Agnico, which has been working closely with the Nunavut Impact Review Board and the Nunavut Water Board on the Amaruq permitting, expects open pit mining to begin at Whale Tail in the third quarter of 2019 followed by the V Zone pit in 2020. The company currently expects to produce 2 million ounces of gold between 2019 and 2024, which represents less than half of the currently known mineral resource base. Initial capital costs to develop Amaruq are estimated to be roughly US$330 million. At the end of 2016, Amaruq hosted 16.9 million metric tons of open pit indicated mineral resource averaging 3.88 grams per metric ton (2.1 million oz) gold; 4.9 million metric tons of open pit inferred mineral resource averaging 4.81 g/t (763,000 oz) gold; and 6.8 million metric tons of underground inferred mineral resource averaging 6.22 g/t (1.4 million oz) gold.

Agnico began a planned US$22-million, 75,000-meter drill program at Amaruq in February. The 36,000 meters of drilling completed during the second quarter focused primarily on infilling the Whale Tail and V Zone mineral resources, which was completed near the end of May. Drilling since the end of May has focused on exploration to extend the Whale Tail deposit at depth, particularly on the western side. The drilling at V Zone has identified high-grade gold intercepts just below the proposed pit outline. Hole AMQ17-1199 cut 10.4 meters of 20.4 g/t gold from a depth of 225 meters. AMQ17-1216, drilled 100 meters to the northeast, cut 3.1 meters of 20.6 g/t gold from a depth of 193 meters. This year’s drilling has also identified a new area south of the V Zone pit with the potential to extend the resource to the southeast at depth. AMQ17-1368 cut 3 meters of 30.1 g/t gold only 80 meters northeast of the Whale Tail pit. AMQ17-1370, cut the same structure about 175 meters to the east, returning 6.1 g/t gold over 5.9 meters. A new mineralized area has also been identified 200 meters west of V Zone. AMQ17-1266 cut 15.8 g/t gold; AMQ17-1387 cut 9 meters of 4.3 g/t gold; and AMQ17-1394 cut 3.1 meters of 8.6 g/t gold in this area. Drilling at Whale Tail has both confirmed and extended resources at the western end of the pit area. AMQ17-1303 cut three intercepts: 4.4 meters of 8.6 g/t gold from 15 meters; 6.3 meters of 6.9 g/t gold from 33 meters; and 5.5 meters of 5.8 g/t gold from 107 meters. Other nearby holes cut similar mineralization. The Whale Tail deposit has been defined for more than 2,300 meters along strike and to a depth of 732 meters. In addition to exploration, Agnico is investing roughly US$78 million on capital costs at Amaruq in 2017, primarily on completion of the all-weather exploration road, technical studies and acquiring materials and equipment for the 2018 construction season.

Agnico also reported that construction and development activities at its Meliadine gold project remain on schedule and on budget. The estimated capital budget for 2017 is unchanged at $360 million. The 2017 program includes: underground mine development; 26,500 meters of drilling; detailed engineering; new camp; and continued construction on the process plant, power plant, and multi-service buildings.

–SHANE LASLEY