IQALUIT
Nunavut Tunngavik Inc. (NTI) and Agnico Eagle Mines have a commercial agreement regarding the next stage of mining at the company's gold mind near Baker Lake.

An Agnico Eagle employee examines a fish compensation spawing platform near Agnico Eagle Mine's Meadowbank gold mine near Baker Lake. Environmental considerations were a large part of Nunavut Tunngavik Inc.'s decision to enter into a commercial agreement with the company on the Vault gold deposit, also known as the Meadowbank Gold Mine area. - photo courtesy of Agnico Eagle Mine

Agnico Eagle and NTI also signed agreements allowing for mineral exploration on 110,240 hectares of Inuit-owned lands in the Kivalliq region.

This is the first time NTI has entered into a commercial agreement with Agnico Eagle.

The agreement includes a 12 per cent net interest in gold production at the mine, said Cathy Towtongie, NTI president.

"I am pleased that NTI and Agnico Eagle Mines are working well together as partners in mineral development," said Towtongie.

"Any mine needs certainty. And we Inuit need certainty."

Under existing royalty agreements involving the federal government, Towtongie reported that NTI has already received $2.6 million over the last two years.

"We've put those payments into our revenue resource trust," Towtongie said.

"NTI doesn't use it for travel or meetings. It's in (trust) until such time as it reaches $100 million, and then Inuit will vote. There's a policy in place for spending."

This was the first commercial agreement NTI negotiated directly with Agnico Eagle.

Previous revenue agreements involved the federal government through Aboriginal Affairs and Northern Development.

Under the agreement, NTI will receive the 12 per cent net tax on profit Agnico Eagle previously paid to the federal government.

The agreement with NTI smooths the way for Agnico Eagle to proceed with production at the Vault deposit, a 114 hectare parcel approximately 9 km northeast of the Meadowbank Mine processing plant.

The open-pit operation will be Meadowbank's final stage in its productive lifespan.

Meadowbank is expected to continue operation through 2017.

Meadowbank is Agnico Eagle's largest gold producer, with 1.8 million ounces of gold in proven and probable reserves, according to company documents.

2013 produced better than expected gold grades from mining its Goose and Portage pits.

The company was able to reduce tonnage while producing a full-year record payable gold production of 430,613 ounces at a total cash cost per ounce of $774.

In 2003, Meadowbank processed 4,143,000 tonnes of ore - 11,350 tonnes per day - in 2013.

Agnico Eagle, which employs more than 670 people at the Meadowbank site, continues to explore for further gold deposits in the region.

"Agnico Eagle is very pleased to have concluded these agreements with NTI, as this will allow us to further expand our regional exploration programs both at our Meadowbank mine as well as at the Meliadine project," said Agnico Eagle spokesperson Dale Coffin.

"While we are not anticipating an increase to our exploration budgets over the short-term, the agreements do allow us to plan ahead and to look for more potential target areas outside of our current land packages.

"With one mine in operation and a second project in the advanced development phase, there is good reason to think there is more deposits to find."