The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
North of 60 Mining News - April 26, 2024
Agnico's Meadowbank Complex in Nunavut produced 127,774 oz of gold during the first quarter.
For Agnico Eagle Mines Ltd., the remote but highly mineralized territory of Nunavut offers high rewards, as long as the high risks that come with building and operating mines in Canada's remote North are managed.
Given the nearly 900,000-ounce-of-gold-per-year pace of production at its Meliadine and Amaruq mines so far this year, coupled with new gold discoveries that bode well for its Hope Bay mine project, Agnico has a grasp on what it takes to reap the rewards and mitigate the risks associated with mining in Nunavut.
In its first quarter results, Agnico reported that Meliadine and Amaruq produced a combined 223,499 oz of gold, and that its exploration drilling at Hope Bay bodes well for the potential of a larger operation when the company restarts operations at this idling gold mine.
"Nunavut delivered an outstanding first quarter both on cost control and gold production," Dominique Girard, COO of Agnico Eagle's Nunavut operations, informed investors and analysts on April 26.
Girard said the success in Nunavut can be summarized in four key points described by Meliadine General Manager Jean-Claude Blais:
• Focus on what matters.
• Empower and staff a dedicated team to succeed.
• Be open-minded to challenge the status quo.
• Execute like hell.
"So, here's why they succeed and we're very proud of that," said Girard.
Agnico's Meliadine mine in Nunavut's Kivalliq region has been a solid asset that has delivered more than 1.5 million oz of gold since going into production in 2019.
The aurora borealis lights up the night sky over the mill at Agnico's Meliadine gold mine.
In its guidance published in February, Agnico forecast that Meliadine will produce between 360,000 and 380,000 oz of gold this year. The 95,725 oz produced during the first quarter puts the operation on pace to exceed the top end of this guidance.
The company attributes this strong quarterly output to both the open pit and underground mines at Meliadine, outperforming the plan. This included significant improvements and record tonnage hauled out of the underground mine following the January implementation of optimization initiatives.
The processing plant also continued to demonstrate overall strong performance, with record monthly volume processed in January of 191,000 metric tons.
This level of throughput is expected to become commonplace with the completion of a phase-two mill expansion at Meliadine, which is expected around mid-year. Commissioning of the expanded mill is underway, and the company expects to ramp up throughput to the 6,000-metric-ton-per-day nameplate capacity by year's end.
On the exploration front, Agnico completed 24,500 meters of drilling at Meliadine during the first quarter. The company reports that this drilling cut significant gold mineralization in the Wesmeg and Wesmeg North deep extension. Highlights include:
• 5.8 meters averaging 10.2 grams per metric ton gold from a depth of 349 meters in hole M23-3732B (Wesmeg).
• 3.6 meters averaging 11.1 g/t gold from a depth of 401 meters, and 7.4 meters averaging 6.1 g/t from a depth of 467 meters in hole ML300-10340-D11 (Wesmeg North).
Amaruq – a satellite mine that is part of the Meadowbank Complex – is the current star in Agnico's Nunavut portfolio.
Ore mined from Amaruq is trucked about 50 kilometers (31 miles) for processing through the mill at Meadowbank, Agnico's first mine in Nunavut.
In its guidance, Agnico forecast that the mill at the Meadowbank Complex will produce between 480,000 and 500,000 oz of gold this year. Much like Meliadine, however, the 127,774 oz produced during the first quarter outpaces the top end of this guidance.
Agnico attributes this roughly 511,000-oz-per-year gold production pace to higher gold grades at Amaruq, which was expected under the mine plan, along with strong mill throughput.
"The open pit operation continued to deliver solid haulage performance during the first quarter of 2024, with reduced weather delays also contributing to the positive production results," the company penned in its first quarter results.
Agnico also reported encouraging results from underground mining at Amaruq.
"The underground operation achieved its strongest quarter, setting quarterly performance records for the cemented rock fill, production drilling and development in the first quarter of 2024," the company wrote.
Agnico currently forecasts that Meadowbank Complex will produce roughly 500,000 oz of gold from Amaruq ore again in 2025 before dropping down to around 450,000 oz in 2026.
Since gaining ownership of the Hope Bay gold mine project through the acquisition of TMAC Resources Inc. in 2021, Agnico has been investing the time and money needed to explore the project's larger potential before restarting operations.
Aerial view of the surface facilities at the Hope Bay gold mine in 2019.
"We don't see Hope Bay as a small thing," Agnico Eagle Mines President and CEO Ammar Al-Joundi informed investors and analysts.
The focus of Agnico's exploration at Hope Bay has shifted from expanding resources at Doris, the site of the mining carried out by TMAC, to Madrid, which lies about nine kilometers (5.5 miles) south of Doris.
Going into 2024, Hope Bay hosted 16.22 million metric tons of measured and indicated reserves averaging 6.52 g/t (3.4 million oz) gold.
The project hosts an additional 10.73 million metric tons of measured and indicated resources averaging 3.64 g/t (1.26 million oz) gold; plus 12.11 million metric tons of inferred resource averaging 5.41 g/t (2.11 million oz) gold.
Based on the current resources and the success of recent drilling, Agnico is evaluating the potential of expanding Hope Bay to a 4,000- to 6,000-metric-ton-per-day operation, substantially larger than the 2,000 t/d processing plant currently in place.
In preparation for expanded operations at Hope Bay, the company completed 30,600 meters of drilling during the first quarter, focused primarily on a gap area between the Patch 7 and Suluk zones of the Madrid deposit.
In February, the company reported strong gold mineralization was encountered during 2023 drilling at Patch 7. Highlights include:
• 14 meters averaging 14.5 g/t gold from a depth of 677 meters in hole HBM23-105.
• 28.6 meters averaging 17.6 g/t gold from a depth of 445 meters in hole HBM23-143.
Drills have continued to cut high-grade gold in this resource expansion area of Madrid. Highlights from 2024 drilling in this area so far include:
• 18.8 meters averaging 11.7 g/t gold from a depth of 672 meters in hole HBM24-160.
• 17.7 meters averaging 25 g/t gold from a depth of 547 meters in hole HBM24-171.
• 16.4 meters averaging 18.7 g/t gold from a depth of 590 meters in hole HBM24-174.
Agnico is focusing its 2024 drilling at Hope Bay on testing the thick intercepts of high-grade gold encountered in the gap between Suluk and Patch 7.
Agnico Eagle Executive Vice President of Exploration Guy Gosselin says the high-grade nature of these "spectacular exploration results" in the gap between Suluk and Patch 7 "could significantly improve the scenario for future project development" at Hope Bay.
Because of the above-average grades and the thickness of gold mineralization encountered in the gap so far, Agnico plans to intensify drilling in this area that could feed ore into a larger future mine at Hope Bay.
"We've said from the beginning, if we go ahead with Hope Bay, it's going to be between 300,000 and 400,000 ounces a year. So, these are important drill results," said Al-Joundi
The company expects to report results from an internal technical evaluation for a larger mine at Hope Bay in 2025.
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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