Agnico continues to enhance Nunavut platform

 

Last updated 11/8/2015 at Noon



Agnico Eagle Mines Ltd. Oct. 28 reported that its operations produced a record 441,124 ounces of gold during the third quarter at an all-in sustaining cost of US$759 per oz. As a result of the strong quarter, the Toronto-based miner increased its 2015 gold production guidance to 1.65 million oz. Agnico reported a third quarter net income of US$1.3 million (or US1 cent per share), compared with a net loss of US$15.1 million (US7 cents per share) for the same period last year.

Third-quarter 2015 cash provided by operating activities was US$143.7 million, compared with US$71.2 million in the third quarter of 2014.

"In the third quarter of 2015, we set a new record for quarterly gold production and lowered unit costs, which resulted in strong operating cash flow.

This has allowed us to continue to invest in our exploration and development pipeline, which represents the long-term future of our business," said Agnico Eagle CEO Sean Boyd. With its largest producing mine (Meadowbank) and two significant development and exploration projects (Meliadine and Amaruq) located in Nunavut, Agnico Eagle said it has the potential to build an operating platform in this northern Canada territory with the ability to generate strong production and cash flows over several decades.

The Meadowbank Mine produced 99,425 oz. of gold during the third quarter 2015 at total cash costs of US$598 per ounce, compared with 91,557 oz. of gold at total cash costs of $777/oz. for the same period last year.

The higher production this year is attributed to a roughly 15 percent increase in grade and slightly better recoveries.

In 2013, about 246,000 oz. were removed from mineral reserves at the Vault deposit due to a change in the gold-price assumption used to calculate mineral reserves at Dec. 31, 2013.

Amaruq, located roughly 50 kilometers (30 miles) northwest of Meadowbank, hosts an inferred mineral resource 9.7 million metric tons grading 6.47 grams per metric ton (2 million oz.) gold, according to an update calculated after the first phase of 2015 drilling was completed in June.

A second phase of drilling was completed in mid-October, bringing total drilling at Amaruq for the year to 108,000 meters in 378 holes.

The phase 2 drilling program included step-out drilling to link Whale Tail and Mammoth Lake mineralization; testing the down-plunge extent of the ore shoot in the east of Whale Tail; and extending the I, V and R zones.

This drilling has confirmed earlier indications that the Whale Tail and Mammoth zones are a single mineralized system at least 2,300 meters long.

A new intercept fills a former gap between Whale Tail and the Mammoth Lake mineralization.

Hole AMQ15-450 yielded 4.5 g/t gold over 16.9 meters at 166 meters depth.

This area will continue to be investigated when drilling resumes in February.

Within the Whale Tail deposit is a thickened higher-grade ore shoot that is at least 1,000 meters long.

This cigar-shaped shoot extends from surface (Whale Tail West) plunging shallowly eastward to a depth of 380 meters (Whale Tail East).

Six recent intercepts within this shoot, from west to east, are hole AMQ15-369 that cut 8.4 g/t gold over 18.4 meters at 176 meters depth; AMQ15-463 yielded 6.8 g/t gold over 29.7 meters at 293 meters depth; AMQ15-422 that cut 5.7 g/t gold over 29.9 meters at 270 meters depth; AMQ15-442 that intersected 8.1 g/t gold over 12.9 meters at 296 meters depth; AMQ15-470 that cut 6.9 g/t gold over 16.1 meters at 357 meters depth; and hole AMQ15-444 that cut 6.3 g/t gold over 14.8 meters at 359 meters depth, and 5.8 g/t gold over 10.3 meters at 378 meters depth.

Recent drilling and mapping has shown that the V zone is a significant mineralized structure dipping shallowly to the southeast, with locally abundant visible gold.

Hole AMQ15-390 cut the structure yielding 30.1 g/t gold over 5.2 meters at 40 meters depth.

Roughly 100 meters to the south of this intercept, AMQ15-461 cut 7.9 g/t gold over 23.4 meters at 115 meters depth.

AMQ15-491, drilled 150 meters southwest of AMQ15-390, cut 21.1 g/t gold over 3.6 meters at 155 meters depth.

Agnico believes that the V zone could potentially be a second source of open pit ore at Amaruq.

Agnico plans to resume drilling at Amaruq in February.

In March, Agnico filed an updated technical report for its Meliadine gold project in Nunavut that is based on extracting only the 3.3 million oz. of gold in proven and probable mineral reserves (13.9 million metric tons at 7.44 g/t gold), which is all contained in the Tiriganiaq and Wesmeg deposits.

The property also hosts 3.3 million oz. of measured and indicated mineral resources (20.2 million metric tons at 5.06 g/t gold), and 3.5 million oz. of inferred mineral resources (14.1 million metric at 7.65 g/t gold).

At the end of the third quarter, roughly 1,960 meters of a planned 2,500 meters of underground development for the year had been completed.

This development will allow for more cost-effective exploration and conversion drilling of the deeper parts of the Tiriganiaq and Wesmeg/Normeg deposits and help to optimize potential mining plans.

On Oct. 5, the Nunavut Water Board issued the permit for Meliadine pre-development work, and the license required for production activities is expected in the second quarter of 2016.

Agnico staked 68,012 hectares of claims on the western continuation of the greenstone belt that hosts the Meliadine deposits.

This summer, an airborne magnetic and electromagnetic survey was flown and roughly 800 rock samples were collected from the properties.

Initial results have identified a 2,000-meter-long structure from which 21 rock samples returned values above 1 g/t gold, including seven values in excess of 10 g/t gold.

Agnico said assembling and analyzing the data collected this summer will assist in preparing a drill program for 2016 to further investigate the higher potential areas on the new properties.

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.

 

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