Meadowbank updates its reclamation cost
Agnico Eagle securities exceed minimums
Walter Strong
Northern News Services
Published Monday, December 8, 2014
NUNAVUT
The most current Meadowbank mine closure and reclamation cost estimate has increased to approximately $84.8 million, according to a Dec. 2 Golder Associates report.
"This new estimate looks at the current mine site and projects disturbance from continued mining forward to the current end of mine life in 2018," said Dale Coffin, Agnico Eagle corporate director of public affairs and communications.
This is a 15 per cent increase over the previous estimate of $73.7 million. The higher costs are mostly related to increased cost estimates associated with bulk soil excavation and worker accommodations during reclamation.
Agnico Eagle Mines Ltd., the Meadowbank mine owner and operator, has already made over $91 million in combined securities against anticipated mine closure and reclamation costs.
All the securities are made in the form of irrevocable letters of credit (ILOC) held by Canadian banks.
Coffin provided a breakdown of which government agencies hold the financial securities.
The largest ILOC - $43.9 million - is held by the Government of Canada.
A further $14.9 million is posted with the Kivalliq Inuit Association (KIA).
The Federal Department of Fisheries and Oceans holds $25.75 million, "to secure against re-establishing fish habitat in the open pits to offset the initial habitat losses caused by mining," Coffin said.
Smaller amounts are held by the territorial government at $5.6 million, the KIA at $950,000, and the Ministry of Aboriginal Affairs and Northern Development at $430,000.
The Golder report forms part of Agnico Eagle's current application to have the Nunavut Water Board renew its Type A water licence.
Both the Nunavut Water Board and Aboriginal Affairs and Northern Development Canada will review the new total as part of the water licence review policy, expected to be complete before the middle of next year.
It is a normal part of a mine's life cycle to have reclamation costs increase and increased securities posted over the working life of a mine. Mine site closure and reclamation costs gradually increase as the environmental footprint of a mine's growth increases during its working life.
When construction at Meadowbank got underway in 2008, the cost estimate was $26 million.
Last year, Meadowbank produced 430,613 ounces gold, at total cash cost of $744 per ounce.
The mine employs approximately 672 workers, and has been undertaking one of the most cash intensive exploration programs in the North this year.
