Agnico expects to suspend silver production in June

After shutting down its three producing silver mines in the Cobalt, Ont., region and laying off about 40 employees, the Toronto-based company is running stockpiled material through the Penn mill.

When that material is used up, milling operations will stop until silver prices are high enough to support a profitable mining venture.

“We didn’t like to do what we did (close the Cobalt mines in January), but you can’t keep throwing out money that you aren’t going to recoup,” said secretary-treasurer Barry Landen who anticipates more layoffs if the mill is shut down.

In 1988, the Langis, Castle and Beaver-Temiskaming mines produced 1.35 million oz silver, at a cost per ounce that has yet to be determined by the Toronto company.

If the 300-ton-per-day Penn mill is shut down as expected, Agnico- Eagles’ silver output would drop this year to around 600,000 oz. “This is a temporary measure and depends very much on the price of silver,” said Landen. “We probably need a silver price of around $9(US) in order to break even,” he said.

Even though analysts are not anticipating any sudden increases in silver prices, the Penn mill may yet remain open if Agnico-Eagle can confirm surface drilling results at the nearby Langis project.

Located about 17 miles north of Cobalt, it is the site of a new 1,200-ft production shaft that is just weeks away from reaching a silver zone discovered back in 1986, according to Agnico. As reported (N.M., July 6/87) , the zone has been traced for at least 3,000 ft with a vertical thickness of 850 ft. Intersections pulled from underground holes include 61 oz over 11.0 ft, 39 oz over 31 ft and 50 oz over 27 ft.

“If we get some good results from underground exploration, the mill may yet remain open,” said comptroller Sean Boyd.

]]>