7 October 2019
Agnico Eagle Mines Limited today reports that commercial production was achieved at the Company's Amaruq satellite deposit at the Meadowbank Complex on September 30, 2019.
The 100% owned Amaruq satellite deposit is located approximately 50 kilometres northwest of the Meadowbank mine, which in turn is located approximately 110 kilometres by road north of Baker Lake in the Kivalliq District of Nunavut, Canada. Development of the Amaruq project was approved in February 2017 by the Company's Board of Directors as a satellite deposit to supply ore to the existing Meadowbank mill.
"Congratulations to all of our employees at Amaruq for achieving commercial production in line with the original schedule despite ongoing challenges related to dewatering and adverse weather conditions in the second and third quarters of 2019. We would also like to thank the various government agencies and the local communities for their continued support in Nunavut," said Sean Boyd, Agnico Eagle's Chief Executive Officer. "With the start of production at both Amaruq and Meliadine in 2019, the Company is well positioned to deliver on its goal of generating net free cash flow in the second half of this year. This is expected to allow us to reduce net debt and potentially increase the dividend while continuing to steadily grow our business", added Mr. Boyd.
The Amaruq mining operation uses the existing infrastructure at the Meadowbank mine (mining equipment, mill, tailings, camp and airstrip). Additional infrastructure has been built at the Amaruq site (truck shop/warehouse, fuel storage and an additional camp facility). Amaruq ore is transported using long haul off-road type trucks to the mill at the Meadowbank site for processing.
Amaruq ore processing commenced in August 2019 using low-grade stockpiles. In the third quarter of 2019, production at the Meadowbank Complex totaled 48,869 ounces of gold, which included 13,588 ounces from Meadowbank and pre-commercial payable gold production at Amaruq of 35,281 ounces, compared to pre-commercial production guidance of 40,000 gold ounces. Pre-commercial production gold sales totaled 32,042 ounces. An update on total project capital costs will be provided with the Company's 2019 third quarter results scheduled for release on October 23, 2019.
During the third quarter of 2019, mining activities at Amaruq continued to be affected by slower than expected dewatering activities (largely related to heavier than expected rainfall). Dewatering is now substantially complete (approximately one month later than previously expected). Given the slower than expected ramp up of mining activities, the Company took the opportunity to accelerate planned maintenance to the milling and crushing circuits, which was originally scheduled for 2020. As a result, the mill was temporarily shut down in mid-September and is expected to restart on or about October 14, 2019. During the shutdown ore continues to be mined and trucked to the Meadowbank mill, where it is being stockpiled for future processing.
As a result, production guidance at the Meadowbank Complex for 2019 is now anticipated to be 200,000 ounces of gold (previous forecast of 230,000 ounces). Despite the lower forecast for the Meadowbank Complex, the Company's full year 2019 production guidance of 1.75 million ounces of gold remains unchanged.
(All amounts expressed in U.S. dollars unless otherwise noted)