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ME2018: Agnico Eagle Mines Ltd.

 

Last updated 11/1/2018 at 9:23am

Agnico Eagle develops two new gold mines in Nunavut Amaruq, Meliadine

Agnico Eagle Mines Ltd.

A roughly 67,000-meter surface drill program carried out this year at Amaruq is expanding gold mineralization well below the open pits Agnico Eagle currently has planned for the Whale Tail and V Zone deposits.

Agnico Eagle Mines Ltd. reported substantial progress this year at its Amaruq and Meliadine gold mine development projects in Nunavut that are expected to boost the company's annual gold production to 2 million ounces by 2020.

Meadowbank, currently the company's only operating mine in Nunavut, began production in 2010 and is now nearing the end of its gold reserves. The mill and other facilities there, however, will continue operations thanks to Amaruq, a satellite deposit about 50 kilometers (31 miles) to the northwest.

The first ore from Amaruq is scheduled to be delivered to the 11,000-metric-ton-per-day at Meadowbank during the third quarter of 2019, which coincides with the end of production from Meadowbank Mine.

Amaruq is expected to produce 2.1 million oz of gold during the first five years of operation.

This start-up plan only considers mining roughly 40 percent of the 20.1 million metric tons of probable reserves averaging 3.67 grams per metric ton (2.4 million oz) gold; and 8.8 million metric tons of indicated resources averaging 3.62 g/t (1 million oz) gold outlined so far at Amaruq.

In preparation for mining and resource expansion, the company began developing an underground exploration ramp at the Whale Tail deposit in early January and anticipates that about 1,200 meters of underground development will be completed by the end of the year. The main purpose of building the ramp is to carry out additional exploration drilling and evaluate the potential for underground mining activities at both the Whale Tail and V zones.

Meanwhile, an initial 67,000-meter surface drill program is expanding gold mineralization well below the planned pit depths at both the Whale Tail and V Zone deposits.

One hole, AMQ18-1677, cut narrow, very high-grade gold between 540 and 627 meters depth. These intercepts include 2.8 meters averaging 23.1 g/t gold starting from a depth of 540 meters; 2.9 meters of 18.6 g/t gold starting at 580 meters; and 3.3 meters of 16.6 g/t gold starting at 598 meters. A lower intercept from the same hole cut 7.2 meters of 6.4 g/t gold at a depth of 627 meters.

A branch from the same hole, AMQ18-1677A, cut 8.5 meters of 13.8 g/t gold starting at 641 meters. Agnico said this intercept confirms the width of the model, but the gold grade was higher than anticipated.

Two holes encountered mineralization west of the current underground mineral resources, which is one of the goals of the 2018 exploration drill program. Hole AMQ18-1669A cut 2.8 meters averaging 6.5 g/t gold starting at 582 meters depth; and AMQ17-1607C cut 3.3 meters of 8.5 g/t gold at 673 meters.

For the remainder of 2018, drilling continues to focus on expanding and upgrading the resources at Whale Tail, as well as explore a parallel structure to the north at depth. Drilling is also testing the depth and lateral extent of V Zone.

Agnico's Meliadine project remains ahead of schedule, and the company anticipates the underground gold mine to go into operation by mid-2019.

Located near Rankin Inlet, the 111,757-hectare (276,157 acres) Meliadine project hosts Agnico Eagle's largest gold deposit in terms of mineral resources.

At the end of 2017, Meliadine hosted 16 million metric tons of proven and probable mineral reserves averaging 7.12 g/t (3.7 million oz) gold; 25.3 million metric tons of indicated resources averaging 3.77 g/t (3.1 million oz) gold; and 13.8 million metric tons of inferred resources averaging 6.04 g/t (2.7 million oz) gold.

When Agnico's board of directors approved the construction of Meliadine early in 2017, the mine was forecast to begin operations in the second half of 2019. However, given the progress of construction and development activities through mid-2018, the company said it now expects to begin operations in the second quarter of 2019.

Gold production is estimated to total roughly 170,000 oz in 2019 and about 385,000 oz in 2020.

Combined, Agnico's two new mines in Nunavut will be significant contributors to the company's gold production in the coming years.

Agnico Eagle is also funding exploration at Aura Silver Resources Inc.'s Greyhound property located 32 kilometers (20 miles) south of Meadowbank. Agnico earned an initial 51 percent interest in a portion of Greyhound in 2017, a stake that can be increased to 70 percent with additional spending. This year's program, managed by Agnico, included surface mapping, geophysical surveys, till sampling and drilling on gold targets at two distinct areas around Aura Lake.

The company also holds two exploration projects in Alaska – Delta, a volcanogenic massive sulfide project in Interior, and Helm Bay, a high-grade orogenic gold target in Southeast.

Significant historical work has been carried out at Delta and a historical resource of 15.4 million metric tons averaging 3.8 percent zinc, 1.7 percent lead, 0.6 percent copper, 1.7 g/t gold and 62 g/t silver was previously calculated for the project.

Agnico Eagle is compiling historical data on the project and plans to begin drilling there next year.

The Helm Bay property covers an area of Cleveland Bay, a few miles north of Ketchikan, where small-scale mining of a narrow, high-grade gold vein was carried out at the turn of the 20th Century. Agnico Eagle staked this property in 2017 and this year the company completed surface and underground sampling, along with geophysics, in preparation for drilling in 2019.

Agnico Eagle develops two new gold mines in Nunavut Amaruq, Meliadine

Agnico Eagle Mines Ltd.

With underground development and other activities running ahead of schedule, Agnico Eagle now expects to begin operations at its Meliadine gold mine in Nunavut during the second quarter of 2019.

Agnico also owns a 19.9 percent stake in White Gold Corp., an exploration company with roughly 1 million acres of gold prospective lands in Yukon's White Gold District.

-SHANE LASLEY

Agnico Eagle Mines Ltd. - TSX/NYSE: AEM

Vice Chairman and CEO: Sean Boyd

President: Ammar Al-Joundi

Senior VP, Exploration: Alain Blackburn

145 King St. East, Ste. 400, Toronto, ON M5C 2Y7

Tel: 416-947-1212

 

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