The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Agnico Eagle Mines Ltd. July 29 reported net income of US$10.1 million (US5 cents per share) for the second quarter of 2015, compared with net income of US$22.2 million (12 cents per share) for the same period last year.
Cash provided by operating activities was US$188.3 million, up slightly from US$182.7 million provided by operating activities during the same period a year ago.
Agnico said a 24 percent jump in gold production was the primary reason for the increased cash this year.
"With continued strong operating performance, favorable local currency foreign exchange rates, and near-term opportunities to increase production at several of our mines, we remain well-positioned to manage the current price volatility in the gold market," said Agnico CEO Sean Boyd. Agnico's Meadowbank Mine in Nunavut produced 91,276 ounces of gold at cash costs of US$688 per oz. during the second quarter.
This compares with 118,161 oz at cash costs of US$563 during the same period of 2014.
The lower production and higher costs this year are primarily due to the processing of lower grade ore and lower recoveries.
Agnico announced that an extension of the Vault pit at Meadowbank has been approved, which is expected to extend the life of the mine by about one year, to the third quarter of 2018.
The added year is expected to help bridge the gap between the end of production at Meadowbank and the potential start of a satellite operation at Amaruq.
Though Amaruq has yet to be approved for construction, exploration of this project located 50 kilometers (about 30 miles) northwest of Meadowbank is indicating the potential for both open pit and underground mining.
The Whale Tail deposit at Amaruq has been defined for at least 1,200 meters along strike and to a depth of 450 meters.
Recent work confirms that this deposit consists of multiple lenses of mineralization with a high-grade wide core.
In February, Agnico reported an initial inferred mineral resource containing 1.5 million oz of gold 6.6 million metric tons at 7.07 grams per metric tons (1.5 million oz) gold for Amaruq, based on drilling from 2013 through October 2014.
Roughly 50,000 meters of drilling completed through the end of June will be incorporated into an updated Amaruq mineral resource that is expected later this summer.
A roughly US$15 million phase-two exploration program is now underway.
Some 50,000 meters of drilling - as well as prospecting and geochemical sampling - is planned for phase two.
Agnico also reported that it is evaluating potential expanded production scenarios for its Meliadine gold project near Rankin Inlet, Nunavut.
In March, the company published an updated technical report for Meliadine that investigated extracting only the 3.3 million oz of gold in proven and probable mineral reserves (13.9 million metric tons of ore at 7.44 g/t gold), which is all contained in the Tiriganiaq and Wesmeg deposits.
The Meliadine 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 tons at 7.65 g/t gold).
In order to keep the Meliadine project on track for a potential late 2019 startup, Agnico increased the 2015 capital budget by US$22 million.
Agnico said it is looking into options and alternatives to capitalize on its large and growing mineral resource base in Nunavut and to maximize value.
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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