Agnico Eagle has succeeded in extending the life of the Meadowbank gold mine into 2019 and will get its Meliadine gold deposit into production sooner than expected next year.
Those details were confirmed on Feb. 14 when the mining company released its 2017 production results, financials and updated forecast for its operations.
Meliadine, located 25 km north of Rankin Inlet, is now on pace to produce gold in the second quarter of 2019 instead of the third quarter as previously predicted.
“When we were sitting here a couple of years ago, there was certainly an expectation that there could have been a sizable production gap in Nunavut between the end of Meadowbank and the potential start-up of Amaruq and Meliadine,” said Sean Boyd, vice-chair and CEO of Agnico Eagle. “So our team in Nunavut has done an exceptional job at optimizing the plan and closing that gap… we’re well advanced in construction and that’s really the key component that drives the timing of start-up. So that’s why we’re comfortable accelerating production by a quarter.”
The high-grade Meliadine project, the jewel of a 275,000-acre property, contains 3.4 million ounces of gold in proven and probable reserves. Close to 1,000 workers will be needed at the site. In 2017, Agnico Eagle spent nearly $372 million of the $900 million needed to get Meliadine up and running. The mine will be underground for the first five years, when 3,750 tonnes of ore per day will be extracted, and by year five the goal is 6,000 tonnes per day from both underground and open pit operations. Agnico Eagle is aiming for 400,000 ounces of gold per year from Meliadine, which has a 14-year mine life.
The Amaruq gold deposit, situated 50 km northwest of the Meadowbank mine, is still anticipated to be in operation by the third quarter of 2019. Agnico Eagle is targeting 350,000 ounces of gold annually from Amaruq, which sits on a 288,000-acre property. The mining company spent $78 million at Amaruq in 2017. The total capital cost to build the mine is estimated at $330 million. The site hosts 2.1 million indicated ounces gold and more that is inferred, not yet proven.
“I think for us it’s important to continue to explore on the Amaruq land package, and in and around (the future) Whale Tail (mine) and the V zone,” Boyd said. “We would expect to be able to add to our (gold) ounces and add to our reserves.”
Boyd was complimentary of Nunavut as a mining jurisdiction.
“It’s also, we would like to reiterate, a great place to do business. It’s really open for business for mining and we can see Agnico Eagle being in Nunavut for several decades,” he said.
The global miner enjoyed a record year for overall gold production in 2017, reaching 1.7 million ounces from its projects in Nunavut, Quebec, Mexico and Finland. The company’s worldwide gold production for 2018 is now projected at 1.53 million ounces. In 2019 its forecast stands at 1.7 million ounces. By 2020, Agnico expects to hit two million ounces of gold.
Agnico Eagle recorded net income of $243.9 million in 2017, partly due to production costs per ounce of gold coming in at $621, the same as 2016.