Agnico pushes forward after strong quarter
Agnico plans to spend $64 million more on projects in the territory
Karen K. Ho
Northern News Services
Friday, July 31, 2015
KANGIQLINIQ/RANKIN INLET
Agnico Eagle Mines Limited is planning to spend $64 million more on its projects in Nunavut following news of continuing strong production in its second quarter.
An aerial view of Agnico Eagle Mines Ltd.'s Meadowbank gold mine near Baker Lake. The company recently announced it is spending an extra $64 million on its projects in the territory, including $27 million at Meadowbank. - photo courtesy Agnico Eagle Mines Ltd.
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In the news release, Agnico 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."
During the company's conference call on July 30, the company's chief executive officer, Sean Boyd, said it was increasing this year's spending at Meliadine by $22 million.
"That's essentially to utilize the remaining work season the site and economic analysis for decisions we'll on the bigger picture in Nunavut for the first half of next year," he said of the gold mine project connected to Rankin Inlet by a 25-kilometre all-weather access road.
Boyd also said Agnico 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.
Notably, the company plans on spending an extra $20 million on exploration this year, with $15 million earmarked for Amaruq, located approximately 50 kilometres northwest of the Meadowbank mine.
Agnico spokesperson Dale Coffin told News/North 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.
On July 30, the company also declared a quarterly dividend of $0.08 per share.
However, at press time, Agnico's stock (TSX: AEM) closed at $28.13, down $2.16 per share or 7.16 per cent.
