The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Mining Explorers 2019 – Published Nov. 1, 2019
Underground development at Meliadine, one of two Agnico Eagle gold mines to reach commercial production in Nunavut during 2019.
An aerial view of the Meadowbank mill and facilities, which is now processing ore from Amaruq, a satellite gold mine about 50 kilometers to the northwest.
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. With two new gold mines established in Nunavut this year, 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 mines in the territory that are expected to push the company's 2019 gold production to 1.75 million ounces.
Agnico poured the first bar of gold at Meliadine in February and by mid-year this operation had produced 78,694 oz of the precious metal, this includes 47,281 oz of pre-commercial production and 31,413 oz of commercial production from May 14 through the end of June.
In July, Agnico Eagle continued to forecast 230,000 oz of gold production this year at Meliadine.
While ramping up production, Agnico is carrying out roughly 10,000 meters of exploration drilling and 12,500 meters of resource conversion drilling at Meliadine this year.
Going into 2019, Meliadine hosted 16.7 million metric tons of proven and probable mineral reserves averaging 6.97 grams per (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.
One hole drilled during the second quarter, M19-2524-W2B, cut 4.6 meters averaging 9.2 g/t gold starting at a depth of 812 meters, the deepest reported intercept at Meliadine. Two other intercepts demonstrate the potential for a new parallel zone as exploration continues at depth. Roughly 200 meters to the west, M19-2518-W2A cut 2.8 meters of 6.5 g/t gold at a depth of 675 meters; and about 225 meters to the east, M19-2520 cut 2.8 meters of 5.3 g/t gold at a depth of 705 meters depth.
Agnico said additional drilling is being carried out to define the extent of this discovery, which is expected to contribute to Meliadine inferred resources by year's end.
As Meliadine was hitting its stride, Agnico Eagle ramped up production at Amaruq, a satellite project about 50 kilometers (31 miles) northwest of Meadowbank.
Since reaching commercial production in 2010, Meadowbank has churned nearly 4 million ounces of gold. With crews mopping up the last of the Meadowbank reserves, Agnico will use the 11,000-metric-ton-per-day mill there to process ore trucked down from Amaruq.
Going into 2019, Amaruq has 24.9 million metric tons of proven and probable reserves averaging 3.59 g/t (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.
Dewatering the Whale Tail pit, which is the source of the first ore from Amaruq, took longer than anticipated. As a result, less ore is being mined from Whale Tail this year than originally forecast.
Due to this slowdown, 2019 production guidance for the Meadowbank has been lowered to 200,000 oz, from the previously forecast 230,000 oz.
In late June, roughly 39,200 metric tons of low-grade ore from Whale Tail was processed at the Meadowbank mill to test the characteristics of the Amaruq ore. This sample, which met recovery expectations, yielded the first 2,147 oz of pre-commercial production gold from Amaruq.
As Amaruq gold production ramped up, Agnico completed roughly 32,800 meters of exploration drilling, largely in areas around Whale Tail and V Zone, and 20,300 meters of drilling focused on upgrading the resources within the deposits.
So far, the Whale Tail deposit has been defined for 2,300 meters along strike and to a depth of 915 meters.
Resource conversion drilling carried out this year has cut high grades in several areas of this deposit and identified the extension of high-grade mineralization below the proposed pit outline.
Exploration drilling in the central Whale Tail deposit encountered Whale Tail North Zone, where hole AMQ19-2039 cut 3.3 meters of 11.7 g/t gold starting at 284 meters. The company said this new zone should add to the inferred resources at year-end.
For the second half of 2019, exploration drilling is focused on expanding and upgrading resources in the deposit and parallel Whale Tail North structure.
Drilling also targeted V Zone, which is about 400 meters northeast of Whale Tail that consists of a series of parallel stacked structures striking northeast from near surface to as deep as 707 meters.
Agnico said conversion drilling during the second quarter continued to return positive results along the interpreted V Zone ore shoot that will likely help to upgrade this area to indicated resources.
Additional drilling is expected to extend the high-grade V Zone ore shoot to the east and west.
Two other holes explored the gap between Whale Tail and the V Zone. One such hole, AMQ19-2043 cut 3.3 meters of 9 g/t gold starting at 328 meters and another, AMQ19-2040, cut three meters of 7.1 g/t gold at 445 meters.
Agnico said these holes demonstrate a potential to link the potential underground operations of Whale Tail and V Zone.
Agnico is also funding exploration at Aura Silver Resources Inc.'s Greyhound property located 32 kilometers (20 miles) south of Meadowbank. Agnico earned an initial 51 percent interest in a portion of Greyhound in 2017, a stake that can be increased to 70 percent with additional spending. This year's program included drilling zones identified by an induced polarization (IP) geophysical survey conducted in 2018.
Agnico also holds two exploration projects in Alaska – Delta, a volcanogenic massive sulfide project in Interior, and Helm Bay, a high-grade orogenic gold target in Southeast.
Significant historical work has been carried out at Delta. The project hosts a historical resource of 15.4 million metric tons averaging 3.8 percent zinc, 1.7 percent lead, 0.6 percent copper, 1.7 g/t gold and 62 g/t silver.
The Helm Bay property covers an area of Cleveland Bay, a few miles north of Ketchikan, where small-scale mining of narrow, high-grade gold veins was carried out at the turn of the 20th century. Agnico staked this property in 2017.
In the Yukon, Agnico Eagle owns a 19.9 percent stake in White Gold Corp., an exploration company with roughly 1 million acres of gold prospective lands in Yukon's White Gold District, and Jennings, a porphyry molybdenum-tungsten project in the southern part of the territory.
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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