Nunavut’s Meadowbank helps Agnico-Eagle survive volatile gold prices
Mining firm earns $47.3 million in third-quarter 2013
Led by more efficient gold production and higher grades at Nunavut’s Meadowbank mine, Agnico-Eagle Ltd. enjoyed a profitable third quarter this year, the company’s financial statements reported Oct. 23.
In the period covered by July, August and September of 2013, Agnico-Eagle reported net income of $47.3 million, or 27 cents per share.
That’s down from the $106.3 million the company reported for the same period in 2012, a reflection of declining world prices for gold and silver
But it’s an improvement over the net loss of $24.4 million the company posted in the second quarter of 2013, a result produced by a maintenance shutdown of its mine in Kittila, Finland, lower prices for gold and silver, and other factors.
And the company’s stronger performance in this year’s third quarter was primarily due to better and more efficient production at Nunavut’s Meadowbank mine.
“We are very pleased. We had across-the board-solid performance from a number of our mines, particularly Meadowbank with its higher grades and the ability of the mining team to move more tons and process more tons,” said Sean Boyd, the president and chief executive officer of Agnico-Eagle.
Boyd said the company’s cost of production at Meadowbank fell from $100 per tonne last year to about $82 this year.
“Meadowbank has probably been the most inventive and creative in terms of their approach in making the exercise more efficient and engaging the entire work force in looking for ways that we can reduce expenditures and actually improve our ability to produce more gold,” Boyd said.
He also pointed out that because of unstable gold prices, it’s been a rough year for his industry.
“It’s a very tough market for gold, very volatile,” Boyd said.
But he said his view of the global economy is that governments must continue to pump liquidity into their economies to promote economic growth, and that “this is a good environment for gold.”
“Our view is that gold over the next five years will stay in the range of $1,800 to $1,200 [per oz.], Boyd said.
As for Agnico-Eagle’s Meliadine project near Rankin Inlet, Boyd said management will likely go to the company’s board on the issue of a mine construction decision around the end of next year.
That would occur after the production of an updated feasibility study that would incorporate new information that would be generated after completion of an underground ramp into the Tiriganiaq ore body at Meliadine.
“That’s critical, because it gets us a better look at the best part of the ore body, which is the highest grade underground portion of Tiriganiaq,” Boyd said.