Underground operations resume at LaRonde

Agnico-Eagle Mines‘ (AGE-T) has resumed full-scale underground mining operations at its LaRonde gold mine in northwestern Quebec.

Underground production had been scaled back by about 30% to 5,000 tons per day after an explosion that killed an underground drilling and cabling contractor in early February. Milling operations remained unaffected during an inspection of the operation by local authorities.

The explosion occurred while explosives were being loaded into a work area. The death is reportedly the third at LaRonde in 16 years.

Agnico’s fourth-quarter gold production slipped by 6.5% to 70,299 oz. Byproduct credits totalled 1.2 million oz. silver (compared with 1.1 million oz. in the final quarter of 2002); 24.7 million lbs. zinc (26.6 million lbs.); and 5.7 million lbs. copper (4 million lbs.).

The company’s revised production goal for 2004 is 300,000 oz. gold, 4.7 million oz. silver, 120 million lbs. zinc, and 24 million lbs. copper, all at a total cash operating cost of US$155-165 per oz., based on byproduct credits that are well below current spot prices.

A year ago, a major underground rockfall occurred at LaRonde, followed by an excess of downtime at the mill and delays in mining higher-grade ore blocks.

After falling 65, or 3.7%, to $16.90 on news of the fatality on Feb. 4, Agnico shares rebounded and were trading 21 higher at $17.78 in afternoon trading in Toronto following the resumption news on Feb. 9.