Agnico-Eagle Mines reported that as of
December 31, 2007, its proven and probable
gold reserves hit a record of 16.7 million
oz, an increase of 33% over the year
end 2006 level. The company said the
strong growth in gold reserves of 4.5 million
oz—prior to considering 2007 gold
production—resulted from successful definition
drilling at its development projects,
which converted 1.6 million oz to reserves,
along with the acquisition of the Meadowbank
project in northern Canada as part of
its takeover of Cumberland Resources.
Gold resources also continued to grow
to record levels, according to the company,
with indicated mineral resources now
standing at 2.8 million oz and inferred
mineral resources at 4.7 million oz.
Considering the growth in gold reserves
and resources at several key projects, company
officials are optimistic that the company’s
target range of 18–20 million oz
may be surpassed within the next two years
as promising results continue to be
encountered outside of the current gold
reserve and resource envelopes.
At a recent investors’ conference, Vice-
Chairman and CEO Sean Boyd said that
the company’s current projects also have
the potential to increase gold production
fivefold by 2010 to 1.4 million oz, and further
drilling could result in several 5-million-
oz gold deposits. Gold production for
2008 is forecast at 360,000 oz, a 50%
increase over last year’s output.
Some of the more recent exploration
successes include the northwest quadrant
of the company’s Pinos Altos property in
Mexico, where the initial inferred resource
estimate on the Creston Colorado zone is
7.7 million mt, grading 1.4 g/mt gold, or
400,000 oz. A scoping study for a standalone
operation is under way there.
Deep drilling at the Kittila property in
Finland confirmed the depth extension of
the main Suuri deposit to approximately
1,000 m—approximately 350 m below the
current reserves and resources.
These results have not been incorporated
into the current resource estimates,
according to the company.
The company’s exploration budget for
2008 is more than $65 million—highest
in the company’s history—which will
include approximately 270 km of drilling
using 25 drill rigs.
Agnico-Eagle’s project capital investment spending
will decline significantly after 2008 as new
mines are brought to the
production phase. The company’s current projects have the potential,
when
completed, to increase gold production fivefold
by 2010.
• At Goldex, also located in Quebec, proven
and probable gold reserves stand at 1.7
million oz from 22.9 million mt grading
2.3 g/t. The mine is forecast to produce
average annual output of 175,000 oz with
total cash costs expected at $230/oz.
Shaft sinking is finished and the processing
plant is scheduled for completion in
the first quarter of 2008. The company
has invested $160 million to date in this
project, with another $23 million to come
before completion in April 2008.
• The Lapa property, 11 km east of the
LaRonde mine, contains probable gold
reserves of 1.2 million oz in 3.9 million
mt grading 9.1 g/t, and is expected to
produce average production of 125,000
oz/y at estimated total cash costs of
$300/oz. Shaft sinking has been completed
and level development is under
way at the $165-million project.
• At the $190-million Kittila mine project
in Finland, exploration is ongoing to convert
a large gold resource to reserves. The
deposit is open on strike and at depth,
with current probable reserves of 2.6
million oz contained in 16 million mt
grading 5.1 g/t. After anticipated completion
in September 2008, the mine is
targeted to produce 150,000 oz/y with
estimated total cash costs of $300/oz.
• The company’s Pinos Altos project in
Mexico contains probable gold reserves
of 2.2 million oz gold and 65.7 million
oz of silver in 20 million mt at 3.5 g/t
gold and 102.3 g/t silver. Construction is
scheduled to start in the first quarter of
this year, with a total project capital costs
estimated at $230 million. Annual output
will be an estimated 190,000 oz at
total cash costs of $210/oz. A $14-million
exploration program is under way
there, and drilling from an underground
decline will also begin in the first quarter
of 2008.
• The Meadowbank project is anticipated
to produce 435,000 oz/y of gold during
its first four years of production at an
approximate cash cost of $240/oz; average
life-of-mine production will be
around 360,000 oz/y with cash costs of
$300/oz. The company has spent $110
million to date, with another $280 million
required before completion in January
2010.
As featured in Womp 08 Vol 2 - www.womp-int.com
