Mine plans to increase spending
Agnico earmarks $64 million for Nunavut projects
Karen K. Ho
Northern News Services
Wednesday, August 12, 2015
RANKIN INLET
Agnico Eagle Mines Limited announced plans to spend $64 million more on its Nunavut projects following news of a strong second quarter.
Agnico Eagle stated its three projects in Nunavut gave the company "the potential to build an operating platform that could have the ability to generate strong production and cash flows over several decades," according to a news release.
The company's chief executive officer Sean Boyd said during a conference call July 30 that Agnico Eagle was increasing this year's spending on the Meliadine gold project by $22 million.
"That's essentially to utilize the remaining work season on the site and economic analysis for decisions we'll make on the bigger picture in Nunavut for the first half of next year," he said of the gold mine project, located 25 km by road from Rankin Inlet.
Agnico Eagle signed an Inuit Impact Benefit Agreement with the Kivalliq Inuit Association for the Meliadine gold project July 13. After 40 months of negotiations, the signing ceremony saw the handoff of an initial payment of $1.5 million to the association. At the signing, Boyd said to those gathered that the company intended to be a strong presence in the Kivalliq region for years to come.
As for Meadowbank, Boyd said the company plans on spending $27 million to develop the vault pit extension at Meadowbank to help extend the mine life by a year until the third quarter of 2018.
The mine life was originally scheduled to last to 2020, but in 2012 the company announced that was cut short three years to 2017, due to the high cost of production per ounce of gold and a $600 million loss in the fourth quarter of 2011.
Notably, the company plans on spending an extra $20 million on exploration this year, with $15 million earmarked for Amaruq, located approximately 50 km northwest of the Meadowbank mine.
Agnico spokesperson Dale Coffin told Kivalliq News that the low Canadian dollar against the U.S. dollar, as well the low rates for the Euro and Mexican peso, have actually been to the company's advantage.
"The gold price is roughly what it was in 2010," he said. "But the differential (between the Canadian and U.S. dollar) gives us about a $1,400 gold price. It gives Canadian producers, not just Agnico, who have operations in Canada, a strong advantage."
The company also expects to save money on fuel costs while purchasing fuel for next year's work season due to current low oil prices.
- with files from Michele LeTourneau
