Focus moves to Amaruq mine
Agnico Eagle Mines Ltd. delays Meliadine
Michele LeTourneau
Northern News Services
Monday, February 29, 2016
KIVALLIQ
Agnico Eagle Mines Ltd. is going ahead with construction of a 50-km road between its Meadowbank mine and the Amaruq satellite property near Baker Lake, while delaying start-up at its Meliadine gold project near Rankin for a year.
Positive outlook
Nunavut can expect a positive outlook as public sector projects and mineral exploration help turn the economy around, states a Conference Board of Canada report.
The public sector will be investing in infrastructure in the next few years, including the construction of the $143-million Canadian High Arctic Research Station in Cambridge Bay and the $300-million upgrade to the Iqaluit airport. Both projects are slated to continue until 2017.
On a more positive note, exploration spending is on the rise in Nunavut, going to $203 million in 2015 from $158 million in 2014.
Source: Conference Board of Canada
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"This will allow us to work on the economics of both projects, Amaruq and Meliadine, while maintaining our disciplined approach to growing the business at a manageable pace," corporate director of communications Dale Coffin told Nunavut News/North last week.
Dominique Girard, the company's vice-president of Nunavut operations, does not see the postponement of the Meliadine start-up as having a big impact.
"Instead of starting somewhere in 2019 we're now into 2020. It gives us more time to be better prepared to do it at the right pace," he said.
"But we're still spending $96 million this year to do approximately 3,000 metres to be closer to the ore body, to help us to do better drilling, to continue in our understanding of the ore body."
Girard adds the decision also has to do with economics and board approval along the line.
Kivalliq Inuit Association has an Inuit Impact Benefit Agreement (IIBA) with the company, signed last summer in Rankin Inlet.
President David Ningeongan says the association has been informed of the delay.
"This delay by (Agnico Eagle) will not significantly affect Inuit benefits but rather may possibly improve the project overall via a greater understanding of the (ore) deposit," he said.
"This extra time will not only help (the company) to firm up the projects economics but it may also help businesses in the region get better prepared for contracting and employment opportunities."
Further, Ningeongan sees the delay, which falls within Nunavut Impact Review Board and IIBA parameters, as an opportunity.
"I am hopeful that Agnico Eagle will use this extra year to better deliver on its promises to better involve Inuit in its future employment opportunities, beyond entry-level unskilled jobs, through targeted training and career path development," he said.
"The extra time should encourage the upward mobility of Inuit and better prepare Inuit for employment and provide Inuit training opportunities. I am also hopeful that (the company) will work with the Inuit-firm community and make its best efforts to award contracts to Inuit firms - especially in goods and service areas where Inuit firms hold the capacity and capability to provide the goods and services needed at the Meliadine project."
Meadowbank, Agnico Eagle currently employs 1,120 people, including contractors, of which 829 are Agnico employees and 303 or 36 per cent are Agnico Inuit employees. At Meliadine, there are a total of 35 Agnico employees, including eight people, or 23 per cent, which are Inuit. There are 148 people employed by contractors, of which 24 people, or 16 per cent, are Inuit.
As Ningeongan noted last July at after the IIBA signing, 50 per cent Inuit employment at the future Meliadine mine is the minimum right at the beginning.
"The commitment is if we can achieve a higher number, we're certainly going to push for that," he said at the time.
When fully operating, the combination open-pit and underground Meliadine mine is expected to employ 850 people.
As for the delay, Ningeongan notes Agnico Eagle has been mining for a long time.
"I would trust that they have the understanding of when to bring a mine into commercial production," he said.
Ultimately, says Girard, the company just wants to be in better shape to make the best decisions over time.
"There are still many internal (ways), and also using external help, to improve the economics of the project, which at the end makes a more sustainable project, which is positive," he said.
Last year, Meadowbank's mine life was extended by a year to 2018, while Amaruq will not start up until a year later.
"The gap that's going to occur when the mining operation tops at Meadowbank and when we can actually begin mining from Amaruq. That's where the challenge is and where we're going to be working to see how we can narrow that gap," said Coffin
Girard adds, "In the Nunavut big picture we see a very good potential to be there a long time and have a solid operation. It is a big part of our strategy in Nunavut. With Meliadine and Amaruq together we're going to be up to 700,000 to 800,000 ounces (per year), which is a big part of our portfolio."
The Meliadine mine is expected to produce 350,000 ounces annually over the nine years of its life.
