Agnico to spend $65 million

During the next four years, Agnico-Eagle Mines (TSE) will spend close to $65 million on development at its LaRonde mine in northwestern Quebec.

At the annual meeting, shareholders were told the money would be used to deepen the No. 1 shaft to 1,600 ft. and the No. 2 shaft to 4,200 ft. A new shaft, the No. 3, will be constructed to a depth of 5,700 ft. Three drills will be used to complete underground drilling at LaRonde and the company thinks it may be able to double reserves.

More than 152,000 oz. gold and 9.2 million lb. copper were produced last year — a new record for the division. Cash operating costs dropped to US$199 per oz. and important new gold and base metal discoveries were made. To develop these and other discoveries, including the 20 North and 20 South, Agnico raised almost $200 million last year. About 4.8 million shares were sold through a public offering for net proceeds of $62.5 million last July, while another $133.7 million was raised last January with the issuance of convertible notes.

According to preliminary reserve estimates, the 20 North zone contains 1.5 million tons averaging 0.5 oz. gold per ton and 20 South has 4.5 million tons averaging 0.07 oz. Both zones also have silver, copper and zinc values. Meanwhile, at the Joutel division, also in northwestern Quebec, development is taking place at the Vezza project. The deposit has a mineral inventory of 2.8 million tons averaging 0.15 oz. gold.

The first of two phases of development is under way, consisting largely of shaft-sinking to 1,000 ft. from 800 ft. below surface. In addition, exploration drifts will be placed on three levels. Results from drilling and from a 15,000-ton bulk sample should be known by January.

The first phase is expected to cost $9.2 million, with another $8.8 million required to enter production.

Following its acquisition of the remaining outstanding shares of Goldex Mines earlier this year, Agnico has embarked on an $18-million underground program at the Goldex Extension gold project, near Malartic, Que. The work entails deepening the shaft by 1,100 ft. to 2,600 ft., driving the Goldex Extension main access on the 2,400-ft. level and completing definition drilling to improve and upgrade the mineral inventory. The inventory now stands at 25.4 million tons averaging 0.07 oz. gold.

The program is expected to last 2-3 years.