Mining News: Agnico advances two new Nunavut mines

Agnico Eagle Mines Ltd. April 27 reported continued strong gold production from its Meadowbank Mine in Nunavut and good progress at Amaruq and Meliadine, two advanced gold projects in the territory. Meadowbank produced 85,370 ounces of gold during the first quarter, an 18 percent increase over the 72,311 oz recovered during the same period last year. While the gold production was up due to high-grade ore, Agnico Eagle CEO Sean Boyd said the amount of ore processed by the mill was less than expected due to challenging winter conditions at the mine. Meadowbank currently has enough reserves to last until about mid-2018. The company is currently studying areas to extend the mine-life into 2019, which is when the neighboring Amaruq project is expected to come online. Amaruq is to be developed as a satellite to Meadowbank, which lies about 50 kilometers (31 miles) to the southeast. Going into 2017, Amaruq hosted 16.9 million metric tons of open pit indicated mineral resource averaging 3.88 grams per metric ton (2.1 million ounces) gold; and 4.9 million metric tons of open pit inferred mineral resource averaging 4.81 g/t (763,000 oz) gold. Additionally, the property hosts 6.8 million metric tons of underground inferred mineral resource averaging 6.22 g/t (1.4 million oz) gold. The company anticipates it will have the permits for Amaruq by mid-2018 and production is currently forecast to begin in the second half of 2019. The initial plan calls for the production of roughly 2 million oz of gold between 2019 and 2024, with pre-mining activities starting in 2018 at the Whale Tail deposit. Amaruq is expected to average 396,000 oz of gold annually in years two through six. The Amaruq ore will be hauled to the Meadowbank mill, which is expected to operate at 9,000 metric tons per day. A road connecting Amaruq to Meadowbank is currently under construction and is expected to be completed by the end of this year. “We're currently about 40 kilometers or so along of the planned 64-kilometer road,” Boyd reported. Roughly US$78 million will be spent on capital costs at Amaruq in 2017, primarily on completion of the road, additional technical studies, and the procurement of materials and equipment for the 2018 construction season. Additionally, the company is planning to invest US$22 million this year on a 75,000-metre drill program at Amaruq. Roughly 17,900 meters has been drilled since this program began in April. Much of the drilling has targeted Whale Tail, the initial deposit to be developed at Amaruq. The highlight of this work came in hole AMQ17-1109, which cut 4.2 meters of 10.9 g/t gold from a depth of 139 meters. This intercept is just below the shallower part of the pit, suggesting a potential to increase the depth of the western part of the Whale Tail pit. To date, the Whale Tail deposit has been defined over at least 2,300 meters along strike and to a depth of 732 meters. The company is also drilling V Zone, a potential second source of ore at Amaruq.

At Meliadine, another Nunavut gold project about 25 kilometers (15 miles) from the town of Rankin Inlet, Agnico said it is on schedule to begin production in the second half of 2019. Meliadine is expected to produce roughly 5.3 million oz of gold over a 14-year span. This only represents about half of the reserves and resources identified there. In the first quarter of 2017, approximately 1,200 meters of underground development was completed, which is slightly ahead of schedule. Construction activities are progressing well with the commissioning of the concrete batch plant underway and the completion of full camp facilities expected by the end of May. “We're well positioned for a strong season of construction and development this year,” Boyd said.

–SHANE LASLEY