The renewed strength in gold prices this year has reinvigorated the historic mining camps throughout the Abitibi region of Ontario and Quebec. Here’s a look at what a few Canadian companies are up to.
AGNICO EAGLE MINES
Over the past two decades Agnico Eagle Mines (TSX: AEM: NYSE: AEM) has grown from a small single asset producer to a senior gold producer, with eight mines in three countries. But the heart of the company remains its cluster assets in and around the area between Rouyn-Noranda and Val-d’Or in Quebec’s portion of the Abitibi.
In particular, its flagship LaRonde mine has produced over 5 million oz. gold since 1988 and remains a star performer, churning out 267,921 oz. gold, 916,000 oz. silver, 3,501 tonnes zinc and 4,941 tonnes copper last year at a US$590 per oz. cash cost. With a deepening project achieving commercial production in 2011, LaRonde has a mine life until at least 2024, with current reserves.
Its Canadian Malartic (co-owned fifty-fifty with Yamana Gold) is one of Canada’s largest gold mines, producing 571,618 oz. gold and 600,000 oz. silver in 2015 on a 100% basis.
Agnico also has its reopened Goldex mine, where production from deeper levels is expected from 2018 through 2024.
Agnico’s Lapa mine is nearing the end of its life this quarter, but the company is looking at ways to extend production into 2017.
GOLDEN VALLEY MINES
Glenn Mullan-led Golden Valley Mines (TSXV: GZZ) has an intriguing asset mix of shares in other leading juniors and a portfolio of grassroots precious and base metal properties in the Abitibi greenstone belt.
In particular, Golden Valley owns 5.6 million shares, or 49.4% of Abitibi Royalties (TSXV: RZZ), which owns royalties on parts of the Canadian Malartic mine, including a 3% net smelter return royalty on Odyssey North, where a resource calculation is expected by early next year. Golden Valley also owns 4.1 million shares of Sirios Resources (TSXV: SOI), which is exploring its Cheechoo gold project in Quebec’s James Bay region, and has an active joint venture with BonTerra Resources (TSXV: BTR) at the Lac Barry in Quebec.
The one-year stock chart for Golden Valley heartens shareholders, with prices climbing steadily from 9¢ in February to today’s levels above 30¢, for a $35-million market capitalization.
Sirios Resources’ president CEO Dominique Doucet (centre) examines core at the Cheechoo gold property in Quebec’s James Bay region. Credit: Sirios Resources.
KIRKLAND LAKE GOLD
Kirkland Lake Gold (TSX: KLG) is an established intermediate gold producer with assets in the Kirkland Lake gold camp and east of the Timmins gold camp, both in the Lower Abitibi greenstone belt. The company operates the Macassa gold mine complex as well as the Holt, Holloway and Taylor mines, and has guided 2016 production at 270,000 to 290,000 oz. gold.
Kirkland Lake Gold also owns five former high-grade gold mines in the Kirkland Lake camp and controls a 120 km strike length along the prolific Porcupine-Destor fault zone.
However, the excitement around Kirkland Lake these days is all about mergers and acquisitions. At press time, Gold Fields and Silver Standard Resources had each made informal $1.4-billion unsolicited share-and-cash bids for Kirkland Lake, which were rejected.
Instead, Kirkland Lake is urging its shareholders to recommit to the company’s existing proposal to merge with Australian gold miner Newmarket Gold, and create a company with a $2.4-billion market capitalization that would produce 500,000 oz. gold annually at seven mines and five mills in Canada and Australia.
PELANGIO EXPLORATION
Ingrid Hibbard’s Pelangio Exploration (TSXV: PX) is focused on its gold projects in Ghana, and is now reviewing what to do with its “legacy exploration projects” in Ontario’s Timmins, Red Lake and Hemlo camps.
In the Timmins area, Pelangio has two gold prospects — Poirier Gold and Thunder Gold — within a 1.5 km radius of Tahoe Resources’ Lakeshore gold mine headframe.
TAHOE RESOURCES
Tahoe Resources (TSX: THO; NYSE: TAHO) is one of the newest entrants to the Abitibi greenstone belt, with its April 2016 takeover of Lake Shore Gold and its Timmins West mine, and Bell Creek complex.
Tahoe reported in November that its Bell Creek shaft project is “off to an excellent start,” with the first vertical raise started near the end of the third quarter. Tahoe calls the shaft project “a key component of our growth program” that would add 40,000 oz. of new gold production annually starting in 2018.
Tahoe Resources operates in three countries — Guatemala, Peru and Canada — with five operating mines, and many exploration projects.
Mullan with an “a”, svp!