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By Shane Lasley
Mining News 

Nunavut mines push record gold for Agnico

Gold output set to top 2M oz/year with Amaruq, Meliadine

 

Last updated 3/1/2019 at 4:56am

Amaruq, Meliadine gold mine projects Nunavut

Agnico Eagle Mines Ltd.

As the sun sets on the Meadowbank Mine, Agnico Eagle is ramping up operations at two new gold mines in Nunavut.

When Agnico Eagle Mines Ltd. established a foothold in Nunavut roughly a decade ago, the gold mining company saw the northern Canadian Territory as a politically attractive and stable jurisdiction with enormous geological potential. Today, this vision is being realized.

"We see tremendous potential there and this is an inflection point and a turning point in the future of Agnico as we are opening up a brand-new area where we see tremendous exploration potential, combined with the ability to do business and build new mines," Agnico Eagle Mines President and CEO Sean Boyd commented on the company's Nunavut platform.

This inflection point comes at a time when Agnico is winding down Meadowbank, its first gold mine in Nunavut, and gearing up operations at Meliadine and Amaruq, two new gold mines in the territory that are expected to push the company's 2019 gold production to 1.75 million ounces in 2019.

"With the start of new operations at both Meliadine and Amaruq this year, we anticipate record gold production in 2019 with further production growth in 2020 and beyond," Boyd penned in a statement. "This growing production platform should result in increased cash flow allowing us to advance our project pipeline, reduce debt and increase dividends."

In 2020, the first full year for these new Nunavut operations, Agnico anticipates its gold production to hit 2 million oz.

Smooth Meadowbank-Amaruq transition

Meadowbank, Agnico's initial foothold in Nunavut, surpassed 4 million oz of gold production late in 2018.

This operation produced 248,997 oz of gold in 2018, its last full year of production, and is projected to produce another 65,000 oz by around mid-year. This is roughly 5,000 more oz than the company had originally planned from the remaining Meadowbank ore, due to slightly higher grade gold in the remaining stockpiles and some extra material remaining in the ground.

Though Agnico is mopping up the last of the ore at Meadowbank, the 11,000-metric-ton-per-day mill there will continue churning out gold for years to come. This gold will come from ore mined at Amaruq, a satellite deposit about 50 kilometers (31 miles) northwest of the Meadowbank mill.

Going into 2019, Amaruq has 24.9 million metric tons of proven and probable reserves averaging 3.59 grams per metric ton (2.88 million oz) gold. In addition, the Amaruq open-pit hosts 4.2 million metric tons of measured and indicated resources averaging 3.34 g/t (455,000 oz) gold; and 899,000 metric tons of inferred resource averaging 4.2 g/t (121,00 oz) gold.

The first open-pit ore mined from the Whale Tail deposit at Amaruq is expected to arrive at Meadowbank during the second quarter of 2019 and commercial production of Amaruq gold is expected to begin just after mid-year.

Agnico had originally forecast the Amaruq would produce 760,000 oz over its first three years but a more robust mine plan has this new mine churning out 788,500 oz between now and the end of 2021. This includes 165,000 oz of gold in only about six months of production this year.

Over the past five years, Agnico has been coordinating the end of production from Meadowbank ore and the start of mining at Agnico.

While this transition was not simple, everything came together better than the company had hoped. This is largely due to being able to find enough ore at Meadowbank to feed the mill until Amaruq was ready, along with the exploration, permitting and development at Amaruq staying on track.

The ability to dovetail the winding down of Meadowbank to the start of mining at Amaruq ensures that workers continue to get paychecks and Agnico does not risk losing part of its Meadowbank workforce due to downtime.

"This was an exceptional transition, and an exceptional plan that involves a lot of good thinking, but most importantly, a lot of teamwork because really what you had is you had basically a dozen drill holes in 2013 with the first drilling done in August of 2013, and literally six years later, you've got a mine starting up," Boyd said.

With open-pit mining getting underway at Amaruq, Agnico is looking into developing an underground mine at the Meadowbank satellite.

In addition to its surface mineable resources and reserves, Amaruq hosts 4.6 million metric tons of underground measured and indicated resources averaging 4.56 g/t (676,000 oz) gold; and 11.7 million metric tons of underground inferred resource averaging 5.19 g/t (1.95 million oz) gold.

Agnico began developing an underground exploration ramp at Whale Tail early in 2018.

The company said an underground mine at Amaruq could run partially concurrent with the open-pit operation. The underground working could potentially be used to mine the bottom of the Whale Tail open-pit resource, which would provide quicker access to higher grades and reduce overall stripping costs.

A production decision for the Amaruq underground project is expected to be made later this year, and approximately 1,440 meters of underground ramp development is planned for 2019.

Meliadine ahead of schedule ... again

As swiftly as ramp up to production is moving along at Amaruq, this is not Agnico's next mine in Nunavut. That honor goes to Meliadine, which was 97 percent constructed at the beginning of this year.

Going into 2019, Meliadine hosted 16.7 million metric tons of proven and probable mineral reserves averaging 6.97 g/t (3.75 million oz) gold; 26 million metric tons of measured and indicated resources averaging 3.81 g/t (3.18 million oz) gold; and 13.5 million metric tons of inferred resource averaging six g/t (2.6 million oz) gold.

The Meliadine project includes seven gold deposits, six of which are part of the current mine plan. Tiriganiaq, which extends for 3,000 meters along strike and to a depth of at least 750 meters, is the largest of these deposits and hosts the bulk of the mineral reserves.

Due to construction continually running ahead of schedule, the production start date for Meliadine has been moved up several times over the past year. Commercial operations are now slated to begin early in the second quarter.

"We're commissioning the plant as we speak and we would expect to be pouring gold this month," said Boyd.

As a result of the early start, Meliadine is now expected to produce 230,000 oz of gold this year, a roughly 35 percent increase over Agnico's previous forecast of 170,000 oz.

Gold production records

With the earlier than expected start at Meliadine and the more robust mine plan at Amaruq, Agnico Eagle is looking at the highest gold production in the company's 60-year history.

Meadowbank, Amaruq, Meliadine gold mine projects Nunavut

Agnico Eagle Mines Ltd.

Agnico Eagle is currently commissioning the mill at Meliadine, a gold mine near Rankin Inlet, Nunavut that is expected to produce 230,000 ounces of gold this year.

"We expect to produce 1.75 million ounces of gold, which is a record for Agnico Eagle. And we're doing that with the unit cost in 2019 stable, but with slightly declining unit costs beyond 2019, as we ramp up production further. This has largely driven this growth off of the expanded platform in Nunavut," Boyd said.

The company expects to set another gold production record in 2020 as the two current mines on its Nunavut platform contribute gold for the entire year and is looking at ideas to continue to set new gold production records moving forward.

"Moving to the project pipeline, there is an opportunity as we said to go beyond 2 million ounces when we move beyond 2020. So, we're focused now on analyzing those opportunities from both a rate of return perspective, but also from the perspective of the potential to positively impact their business as we move forward," Boyd said. "Part of that work includes additional drilling and updating studies."

 

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