QAMANITTUAQ/BAKER LAKE
When Agnico Eagle shareholders dialed in to hear chief executive officer Sean Boyd deliver the company's 2016 mid-year exploration update July 28, it was good news on the Amaruq front.

Agnico Eagle project geologist Robert Fraser, left, and driller's helper Samuel Ivuneryuk, with Orbit-Garant Drilling, examine core from the Whale Tail deposit. - photo courtesy Agnico Eagle Mines Ltd.

"Basically, it's an update to the market, because as you mention, we were having a budget under a phased approach so this year we were conducting a first phase of drilling for about $20 million, drilling about 75,000 metres with that., as well as starting the road construction between Meadowbank and Amaruq," said vice-president of exploration, Guy Gosselin.

"So we just released the outcome for that first phase of drilling which showed us some good numbers. The original deposit, the Whale Tail, continues to grow."

Gosselin says the company is putting a lot of energy this year at that deposit with the goal to expand it.

"It's kind of a risk-reduction approach. You want to get closer spacing in between drill holes to better make up our mind about the optimum footprint. The better we understand the geology by getting closer-spaced drilling, it allows us better thinking and, as well, allows us to enter the permitting process."

Agnico's goal, and its challenge, is to narrow the gap between mining completing at the Meadowbank pits and beginning at the Amaruq site.

"What we're looking for are ways to work within the regulators' process to see where we can shorten time. We're not asking for favours or shortcuts but we're asking if there are ways to streamline the times that are required to review or to move to the next phase of permitting so that we can maintain the momentum we have with the workforce and avoid any lay-offs during that transition period," corporate director of communications Dale Coffin told Nunavut News/North.

Currently, that gap begins toward the end of 2018, when mining will finish at the Meadowbank deposits, and ends somewhere in mid-to-late 2019 when production can begin at Amaruq.

"We can look at ways of training and everything else to transition people to the new deposit. But if things get bogged down through the process it could create delays and that means pushing the start time later and later, so then we have to look at how we manage around that process."

But Agnico Eagle is experienced with the process, having gone through it from the ground up with Meadowbank and the Meliadine site near Rankin Inlet.

"We have a strong relationship with the regulators and an understanding of the process. We work very well within it and we're quite comfortable within it. To date, we've had great success and good working relationships," said coffin.

Additionally, Gosselin says if the permitting comes through on time, construction at Amaruq would begin in 2018.

"Then we would be able to use our workforce (and equipment) to do the construction," he said.

V Zones looks promising

According to the document released July 28, permitting is ongoing to allow for the development of an exploration ramp and the potential collection of a bulk sample. The permit is anticipated in late 2016 or early 2017.

As well, in order to mine the Whale Tail deposit, a project certificate for this satellite pit must be obtained from the Nunavut Impact Review Board (NIRB) along with an amendment of the existing Meadowbank Type A water licence.

When Amaruq is mined, ore processing will take place at Meadowbank using the existing infrastructure.

The company says it received a positive land use conformity determination from the Nunavut Planning Commission June 17 for the Amaruq Whale Tail pit project, confirming that the planned activity meets conformity with the existing land use plan.

June 30, Agnico submitted an application and environmental impact statement for the Whale Tail satellite pit with both NIRB and the Nunavut Water Board. This application is currently undergoing screening by NIRB which initiates the permitting process, a process that is expected to take approximately two years, according to the company.

"But we feel that eventually that pit (Whale Tail) could be bigger or deeper, or there could be something underneath. So basically, what we were first working on this year, to get a better understanding of the Whale Tail deposit. But at the same time, we continue to explore," said Gosselin.

Exploration is taking place in the eastern-most area of the property, called the V Zones. Recent drill results show that the V Zones are being evaluated as a potential second source of open pit ore.

"Basically, what we hit during our first original season when we went up there in 2013, we looked at it again with a better understand of the Whale Tail deposit, and we went back (to the V Zone) and now we have significantly expanded the size of the V Zone deposit."

At first, drilling at the V Zone deposit was at 100 metres, but Gosselin says they are going as deep as 400 metres below surface. Recent drilling has discovered an additional significant structure approximately 125 metres above and to the southeast of previously known V Zones structures, with a strike length of 300 metres from near surface to approximately 270 metres below surface.

"We will continue to drill in our second phase of drilling because now there's a supplemental $14 million US budget," he said.

That will bring the total budget in the Amaruq area to $34 million in 2016, excluding road construction.

Construction of the Amaruq exploration access road began in the first quarter of 2016, with 13 kilometres of the expected total length of 62 kilometres completed to the end of June.

All this positive news could mean a longer mine life, however Gosselin said "of course, we will look to optimize in the early days because we have a mill at Meadowbank that can process 11,000 tonnes per day."

"One of our challenges is to try to continue to feed that mill as much as we can. And eventually, of course, if we can get more and more and build a ten-year mine life that would be great," Gosselin said.

"Currently, as we released last year, we have resources of 3.28 million ounces of gold and if we can continue to grow to four or five million ounces, let's say, we should end up increasing the life of the mine. The more we can extend the life of the mine the more beneficial it will be for everyone, the suppliers, the employees and Agnico Eagle, as well."

Drilling is ongoing with six rigs on the property and phase two is underway.

"Despite a significant downturn in the gold price over the past few years, we continued to invest in our operations and advance our development projects, and we significantly increased exploration spending. As a result, we have made several new discoveries and we are now seeing the potential for many of these projects to have a positive impact on our production profile in the coming years," said Boyd, on the call with shareholders.

Meadowbank, Amaruq and Meliadine are just a few of several properties worldwide Agnico Eagle is working on.

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