Agnico pushes ahead strategic NU platform

Agnico Eagle Mines Ltd. Oct. 26 provided an update on its mine and projects in Nunavut, a jurisdiction it considers politically attractive and stable with enormous geological potential.

Home to the company's largest producing mine, two significant development assets and other exploration projects, the company believes Nunavut has the potential to be a strategic operating platform with the ability to generate strong production and cash flows over several decades.

Agnico's Meadowbank mine produced 72,731 ounces of gold during the third quarter, down significantly from the 99,425 oz. produced during the same period last year. This decreased production is primarily due to 23 percent lower grade ore.

Costs in the 2016 period were higher due to decreased production levels.

During the first nine months of 2016, Meadowbank produced 217,444 ounces of gold at a cost of US$774/oz. Agnico is investigating opportunities to extend production at Meadowbank through the end of 2018, which would help bridge the gap to development of Amaruq, a satellite project about 50 kilometers (31 miles) northwest of the mine.

The Whale Tail and IVR deposits at Amaruq host 19.4 million metric tons of inferred resources averaging 5.97 grams per metric ton (3.71 million ounces) gold, according to a resource calculation that includes drilling through June 30.

During the third quarter, Agnico completed 49,298 meters of drilling in 190 holes at Amaruq. Several holes of this program cut strong gold mineralization below the resources at Whale Tail.

Hole AMQ16-966 cut 5.9 meters averaging 11.7 g/t gold from a depth of 535 meters depth and 7.6 meters of 8.2 g/t gold from 607 meters depth.

Nearby, AMQ16-1031 cut 5.1 meters of 11.2 g/t gold from 536 meters and 8.6 meters of 3.8 g/t gold from 571.

Roughly 280 meters to the west, AMQ16-1045 cut the deepest mineralization in the Whale Tail deposit to date; 3.3 meters of 5.4 g/t gold from 658 meters depth and 16.1 meters of 5.5 g/t gold from 725 meters. The lower intercept extends the deposit by roughly 190 meters below previous Whale Tail intercepts, and is some 350 meters below the current Whale Tail inferred mineral resources outline.

This deep exploration program is expanding the underground potential of the Whale Tail deposit.

The Whale Tail deposit has been defined for 2,200 meters along strike length and to a depth of 732 meters.

Shallow infill drilling at the V zone, a potential second source of open-pit ore at Amaruq, has confirmed high-gold grades over multiple lenses. Hole AMQ16-994 cut 3.9 meters of 14.6 g/t gold from a depth of 17 meters.

Roughly 770 meters to the northeast, AMQ16-1028 had two intersections in the upper V zone lens: 3.9 meters of 22.5 g/t gold at 43 meters depth and 7.4 meters of 6.1 g/t gold at 74 meters.

Agnico said other high-grade intervals confirm the extension of the zone toward the northeast, which is expected to result in an expansion of inferred mineral resources at the V zone.

Through the end of September, Agnico had drilled 514 holes (124,299 meters) at Amaruq this year and the 2016 program carried through to mid-October.

An updated resource estimate that includes the drilling completed since mid-year is slated for completion in February.

Drilling, which is expected to resume in early February, will focus on infilling the in-pit portion of the IVR deposit during the first half of 2017.

Permits for underground development and the excavation of a bulk sample at Whale Tail are expected in early 2017; and the certificates and licenses required to develop an open-pit at this satellite deposit are anticipated around mid-2018.

The Meliadine gold project near the town of Rankin Inlet in eastern Nunavut is Agnico's largest development project based on mineral reserves and resources.

Going into 2016, Meliadine hosted 14.5 million metric tons of mineral reserves averaging 7/32 g/t (3.4 million oz.) gold; 20.8 million metric tons of measured and indicated mineral resources averaging 4.95 g/t (3.3 million oz.) gold; and 14.7 million metric tons of inferred resources averaging 7.51 g/t (3.6 million oz.) gold.

Through the first three quarters, Agnico had completed 3,124 meters of 4,300 meters of underground development planned for 2016.

Internal technical studies aimed at optimizing Meliadine for potential production start-up are slated for completion by the end of the year.

-SHANE LASLEY