Nunatsiaq Online
NEWS: Nunavut July 29, 2016 - 8:30 am

With an eye to the future, AEM reports good earnings this year

Nunavut gold mine operator gains approval for Vault Pit, files EIS for Whale Tail

NUNATSIAQ NEWS
Agnico Eagle workers with core samples taken from the company's highly promising Amaruq property, about 50 km from Meadowbank in the Kivalliq region. This past February, the company announced that they believe Amaruq holds at least 3.3 million ounces of gold and that they expect to produce gold in Nunavut for the next
Agnico Eagle workers with core samples taken from the company's highly promising Amaruq property, about 50 km from Meadowbank in the Kivalliq region. This past February, the company announced that they believe Amaruq holds at least 3.3 million ounces of gold and that they expect to produce gold in Nunavut for the next "several decades." (PHOTO COURTESY OF AGNICO EAGLE)

As Agnico Eagle Mines contemplates expansion of gold mining activities near Nunavut’s Meadowbank gold mine, the company on July 27 reported solid earnings for the second quarter of 2016.

“Given these strong results and a more robust gold price environment, we have significantly improved our financial position, while continuing to make important investments in several of our growth projects,” Sean Boyd, Agnico Eagle’s CEO said in a release.

The company posted net income of $19 million for the second three-month period of their 2016 financial year — April, May and June

That compares with net income of only $10.1 million for the same period in 2015.

And for the first six months of 2016, Agnico Eagle reports net income of $46.8 million, compared with $38.8 million for the same period in 2015.

Because of that, and increased optimism that their rate of gold production will increase in the future, the company has raised its quarterly dividend by 25 per cent, to 10 cents a share from eight cents.

In an interview July 28 with Andrew Bell of the Business News Network, Boyd said Agnico Eagle hopes to expand gold production by 30 to 40 per cent over the next five years from roughly the same number of mines they operate now.

Agnico Eagle owns mines in four regions: Scandinavia, Mexico, the Abitibi region of Quebec and Nunavut.

But the company appears to be pinning their highest hopes on Nunavut, where it has begun the process of creating a satellite mining operation at Amaruq, about 50 km from Meadowbank.

“The biggest swing factor comes from our Nunavut base,” Boyd said in the interview.

That’s because — pending regulatory approvals — they hope to create a satellite mine at Amaruq, about 50 kilometres northwest of Meadowbank, in 2019, Boyd said.

Agnico Eagle would ship ore from Amaruq to its mill at Meadowbank for processing.

This past June 30, Agnico Eagle filed a project description and environmental impact statement with the Nunavut Impact Review Board for the Whale Tail Pit, part of their Amaruq property.

Located entirely on 480 square km of Inuit-owned land leased from the Kivalliq Inuit Association, the Whale Tail Pit project would see the extraction of 8.3 million tonnes of ore from the Amaruq area over a three to four year period, Agnico Eagle said in its project description.

The company also says that development of the Amaruq property will extend Meadowbank’s operating life and help preserve jobs in the region during the gap in time between the eventual wind-down of Meadowbank and the start-up of a mine at its Meliadine property near Rankin Inlet.

“Agnico Eagle is optimistic that permits will be received in a timely matter and are therefore planning on Whale Tail Pit construction and progressive closure at Meadowbank that will reduce a potential employment gap from one year to a shorter period of time,” the project description said.

As for Meliadine, which now hosts an estimated resource of 10 million ounces of gold, Agnico Eagle’s board will make a production decision in early 2017, Boyd told BNN.

Meanwhile, Carolyn Bennett, the minister of Indigenous and Northern Affairs, and four other federal ministers, issued a decision July 26 that authorizes amendments to Agnico Eagle’s project certificate for Meadowbank to allow development of the company’s Vault Pit expansion project.

This now allows the company to extend Vault Pit into Phaser Lake, which will be dewatered to allow for the extraction of another 400,000 tonnes of ore.

The company will perform a “fishout,” in which fish are taken out of the lake and transferred to another body of water.

The NIRB, which had recommended approval of the Vault Pit expansion earlier this year, is now making arrangements to hold a project certificate workshop for the project.

 

 

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