The mining newspaper for Alaska and Canada's North

Mining Explorers 2014: Agnico hits high-grade gold at Amaruq

Excited about new discovery just a few kilometers north of its Meadowbank Mine, producer expands drilling program by 500 percent

From expanding reserves at its proposed Meliadine gold mine to early-stage exploration at an enticing gold discovery a few miles up the road from its Meadowbank Mine, 2014 is emerging as a year marked with exciting growth for Agnico Eagle Mines Ltd.

In addition to growth through the bit of a drill, Agnico expanded its reserves and production profile through acquisitions.

In June, the producer and Yamana Gold Inc. finalized the purchase of Osisko Mining Corp. Agnico and Yamana each own 50 percent of Osisko and have formed a joint committee to operate the Malartic mine in Quebec.

The partners also will jointly explore and potentially develop other Quebec and Ontario exploration assets resulting from the Osisko purchase. In August, Agnico reported that one drill each was turning at the Upper Beaver and Kirkland properties that came with the Osiko purchase. Exploration programs and budgets for the Kirkland Lake camp were expected to be announced later this year.

While Agnico also operates gold mines in Quebec, Mexico and Finland, the company continues to focus on Nunavut as a core part of its growth strategy.

"Our drilling costs in Nunavut are less than they are in Mexico. So, this is why we say Nunavut is a big part of our strategy at Agnico; there's lots of gold there, its resource rich," Agnico Eagle President and CEO Sean Boyd explained during a Sept. 4 presentation at the Bank of America Merrill Lynch 20th Annual Canada Mining Conference.

A Whale Tail at Amaruq

Amaruq, an early-stage gold project located on Inuit-owned land 50 kilometers (31 miles) northwest of Meadowbank, has bolstered Agnico's confidence in Nunavut's gold riches.

"This project further enhances our northern strategy. Given the size and scope of the discovery, studies are currently underway to evaluate how Amaruq could be incorporated into the Meadowbank operational plan and possibly linked with the Meliadine project," explains Agnico Eagle CEO Sean Boyd.

The project, formerly dubbed IVR in reference to three of the original gold-bearing zones identified on the property, was renamed Amaruq in September.

Agnico Eagle's recent work has revealed the potential for multiple mineralized zones within a two-kilometer-wide (1.24 miles) northeast-southwest corridor that can be traced for at least 10 kilometers (6.2 miles). Based on current information, Agnico said all four structures identified to date - I, V, R and Whale Tail - are open in all directions including at depth.

High-grade results from drilling at R zone include: IVR14-031, with 26.1 g/t gold (54.4 g/t uncapped) over 4.8 meters at 89 meters depth; and IVR14-028, with 27.6 g/t gold over 3 meters at 58 meters depth.

The most recent intercept in the R zone, hole IVR14-057, encountered 5.6 g/t gold over 12.8 meters at 159 meters depth.

I zone is hole IVR14-050, which returned 7.6 g/t gold over 3.3 meters at 37 meters depth.

Whale Tail, a new zone that has been traced over a strike length of more than 1,000 meters, is the most tantalizing discovery at Amaruq.

"This year, the most exciting part is the Whale Tail zone. On the eastern side we are getting very high grades (over) four or five meters; on the western side we are getting 20-30-plus meter thicknesses in the five- to six-grams-tonne range," Boyd explained.

Highlights from drilling at Whale Tail include:

Hole IVR14-054 intersected four apparently parallel zones grading: 7.7 g/t gold over 6.5 meters at 52 meters below surface, 7.1 g/t gold over 9.6 meters at 104 meters depth, 7.3 g/t gold over 5.4 meters at 115 meters depth, and 3.1 g/t gold over 5.2 meters at 132 meters depth.

Across a 400-meter-wide lake, Hole IVR14-058 intersected what is interpreted as the same structure 500 meters along strike to the northeast, grading 4.9 g/t gold over 16.7 meters at 109 meters depth, including 8.1 g/t gold over 8.0 meters at 113 meters depth.

Some 70 meters farther east, hole IVR14-060 intersected 10.1 g/t gold over 3.8 meters at 86 meters depth.

Hole IVR14-081, drilled to test vertical continuity of Whale Tail, intersected 6.0 g/t gold over 23.7 meters at 122 meters depth; and 7.2 g/t gold over 7.5 meters at 289 vertical depth, representing the deepest intercept so far on the project.

On the next section, 70 meters to the west of drill hole IVR14-054, hole IVR14-056 returned two intercepts grading 3.6 g/t gold over 9.0 meters at only 9 meters depth including 5.3 g/t gold over 4.5 meters and a second intercept of 7.3 g/t gold over 3.5 meters at 43 meters depth. On the next section, 70 meters to the west of drill hole IVR14-056, hole IVR14-079 returned an intercept grading 8.1 g/t gold over 21.6 meters at only 35 meters depth, including 27.3 g/t gold over 4.5 meters.

IVR14-103, drilled on the southwest side of Whale Lake, cut 55.6 meters grading 6.1 g/t gold, from a depth of 278 meters.

IVR14-116, drilled roughly 140 meters west of IVR14-03, cut 61.8 meters grading 5.2 g/t gold from a depth of 81 meters.

In addition to the drilling, a 600-meter-long boulder field containing large blocks of quartz vein material (locally with sulfides and visible gold) has been located about 3 kilometers (1.9 miles) west of the Whale Tail zone.

"We picked up boulders on surface that have visible gold in them, so it is very unique," Boyd said of an early September visit to Amaruq.

The blocky shape and large size of the boulders suggests they have not been transported far from their original location, an important discovery in a region lacking true exposed bedrock. Based on the nature of the boulders, the proximity of a significant electromagnetic conductor and Agnico's understanding of the glacial transport direction, a third drill rig has been mobilized to investigate this area.

Mammoth, located some four kilometers (2.5 miles) southwest of Whale Tail, and Whale Fin, situated about 1,000 meters south of Whale Tail, are two other promising targets of the 2014 program.

With an original budget of C$1.8 million to drill 5,000 meters, the 2014 program at Amaruq has been increased to roughly C$9.3 million to drill 25,000 meters. An inaugural mineral resource for the property is anticipated to be completed by the end of 2014.

To support the growing exploration program, a new 25-person exploration camp built at Amaruq is already being expanded to accommodate a crew of 60 by the spring of 2015.

Field work, including mapping and sampling, is currently underway focusing on geophysical anomalies highlighted by an airborne VTEM plus Time-Domain electromagnetic survey conducted earlier this year. A total of 510 surface rock samples have been collected so far in an area of about 1,300 hectares (32,123 acres), work that led to the discovery of the gold-bearing boulder field.

Agnico Eagle has begun collecting environmental baseline data at Amaruq in the second half of 2014, as well as beginning the preliminary engineering for road design. Qualified fisheries, geochemical, terrestrial and archaeological consultants have begun to review available baseline data from public sources and design field programs to gather additional data. Agnico said this baseline work could be used in future permitting for the Amaruq project.

The 408-square-kilometer (158 square miles) IVR property is located within Inuit Owned Lands and a 100 percent interest was acquired by Agnico in 2013 subject to a mineral exploration agreement with Nunavut Tunngavik Inc.

Elsewhere in Nunavut

In addition to finding success north of Meadowbank, Agnico is seeking near-mine exploration upside a few miles to the south.

In June, Agnico Eagle entered into an option agreement with Aura Silver Resources Inc. to earn up to a 70 percent interest in 17 claims of Aura's Greyhound property located 32 kilometers (20 miles) south of Meadowbank. In July, Agnico began an initial 1,000-meter drill program to test three precious and base metals targets: South Aura Lake; North Aura Lake and the Dingo prospect to the northeast. During this initial drill program, approximately 300 meters will be drilled for each area.

Agnico Eagle can acquire an initial 51 percent interest in the property by paying Aura C$250,000 and completing C$1.75 million in exploration expenditures before May 31, 2017, this interest can be increased to 70 percent by paying another C$250,000 and investing another C$5 million in exploration.

Agnico also terminated its partnership with Homestake Resource Corp. to explore the Homestake Ridge gold-silver project in northwestern British Columbia in September. The miner withdrew from the option before earning an interest in the property, leaving Homestake with full ownership of its namesake project. Prior to letting the option lapse, Agnico drilled 2,972 meters in six holes at Homestake.

The Meliadine project, which covers a nearly 80-kilometer (50 miles) stretch of land near the western shore of Hudson Bay in the central Kivalliq region of Nunavut, is the target of C$8.3 million of exploration during 2014.

The surface program, which wrapped up in August, included 130 exploration and conversion holes totaling 37,991 meters completed at Meliadine.

The exploration portion of this program made an important discovery that indicates the potential of a high-grade resource at Meliadine's Pump zone, including 5.2 meters of 19.8 g/t gold starting at a depth of 12 meters in hole M14-2220. Two other zones, Discovery and Wolf, also were targets of exploration drilling.

Conversion drilling targeted the project's Wesmeg-Normeg and Tiriganiaq zones.

Agnico anticipates the results from this drilling will continue the expansion of the company's largest and fastest-growing high-grade complement of reserves, plus resources.

Probable reserves total 2.8 million ounces of gold (12.0 million metric tons at a grade of 7.4 g/t), while indicated resources are 3.1 million oz of gold (19.0 million metric tons at 5.1 g/t) and inferred resources are 2.7 million oz of gold (11.7 million metric tons at 7.2 g/t).

Agnico Eagle is investing roughly another C$42 million on capital expenditures at Meliadine, a large portion of which is being spent on 1,400 meters of exploration ramp development. In addition to providing a platform for conversion drilling, the company said this ramp will help keep the advanced gold project on track for a potential 2018 start-up.

An updated technical study is expected by early 2015.

Meadowbank, which had proven and probable reserves of 1.75 million oz gold (16.8 million metric tons grading 3.2 g/t gold) at the end of 2013, was only targeted with roughly 2,000 meters of conversion drilling and 300 meters of regional exploration drilling during 2014.

Author Bio

Shane Lasley, Publisher

Author photo

Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.


Reader Comments(0)