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Agnico Eagle approves massive expansion
Company plans to employ 2,000 at two mines by 2019

Shane Magee
Northern News Services
Saturday, February 18, 2017

KANGIQLINIQ/RANKIN INLET
Agnico Eagle Mines Ltd. announced it will spend US$1.2 billion to expand its gold mining operations in the Kivalliq region.

NNSL photo/graphic

Agnico Eagle project geologist Robert Fraser, left, and driller's helper Samuel Ivuneryuk with Orbit-Garant Drilling examine a core. - photo courtesy of Agnico Eagle Mines Ltd.

The Toronto-based company plans to have two gold mines operating in the territory by 2019 and employing around 2,000 people, about 36 per cent of them Inuit. The company employed 1,400 directly or indirectly at the start of this year, according to company spokesperson Dale Coffin.

The plan would see a new mine constructed at a cost of US$900 million near Rankin Inlet that is projected to operate for 14 years, while also mining a deposit near an existing mine.

Rankin Inlet Mayor Robert James said he was pleased to hear the news in an interview Feb. 16, the day after the company's board of directors announced its decision.

"It certainly bodes well for the future of Rankin Inlet," James said. "It's going to mean an increase in the quality of life I think. There's going to be lots of jobs and it looks like it's going to be continuing, not just a couple of years."

The projects are expected to contribute US$9.5 million in payroll and property taxes to the Government of Nunavut.

In a statement, Premier Peter Taptuna called it great news for Nunavut's economy.

"We need continued investments like these in order to move the dial forward on our economic growth," Taptuna stated. "The direct result of economic growth means more Nunavummiut, and especially Inuit, are afforded job opportunities."

He said the move will benefit other businesses in construction, road maintenance, food and other services that support a mine.

"That's tremendous news," said Tom Hoefer, executive director of the NWT and Nunavut Chamber of Mines. "I think it reflects well on the great mineral potential in Nunavut."

The new mine would increase the number of operating mines to four in 2019.

The new mine would be built at Agnico Eagle's wholly owned Meliadine project, a 111,757 hectare property near Rankin Inlet that already has the required permits and licenses.

Construction from 2017 to 2019 is projected to employ 300 people, with an operations workforce of 900. Completion of construction is a year ahead of a previously released schedule.

It's expected that 5.3 million ounces of gold will be produced over the 14-year life of the mine.

The Amaruq satellite deposit, also wholly owned by Agnico Eagle, is about 50 kilometres northwest of the existing Meadowbank site, north of Baker Lake.

The company approved spending about US$330 million to bring Amaruq online pending required permits, which the company expects to have in place by mid-2018. Public hearings for the permitting process are expected to be held later this year, according to Agnico Eagle.

It plans to build an access road and use existing Meadowbank milling, tailings and camp infrastructure.

Meadowbank was expected to stop production sometime in 2018, so the move is expected to extend the life of the facility.

Amaruq is expected to begin operating in the second half of 2019, employing about 1,040 people over the six-year life of the mine. It expects to produce about 1.98 million ounces of gold.

Agnico Eagle stated it will fund the expansion work through existing cash or its line of credit.

"We believe that between the Meliadine project and the Amaruq satellite deposit at Meadowbank, the company has a significant mining platform that has the potential to produce gold for several decades," Agnico Eagle CEO Sean Boyd stated in a news release.

The company also released its financial results for the final three months of 2016, indicating net income of US$4.5 million, up from a net loss of $15.5 million during the same period in 2015.

Overall, the company stated it ended 2016 with a net income of $158.8 million, up from $24.6 million in 2015 primarily because of higher gold and silver prices.

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