Agnico gets good results at Laronde

While a number of the newer gold mines in this country have been falling short of expectations, Agnico-Eagle’s (TSE) Donald J. Laronde mine in Quebec’s Bousquet area, now owned outright following the company’s amalgamation with Dumagami Mines, is going great guns. March has seen a number of new production records established. Gold output reached 10,500 oz., plus an estimated 175,000 lb. copper, while the tonnage milled also reached an all-time high of 71,000 tons, an average of 2,290 tons daily. Grade, too, inched ahead to a record 0.16 oz. gold per ton.

The proportion of underground production has been climbing significantly and is now averaging 1,600 tons daily. With mining of open pit ore scheduled for completion by month’s end, the percentage of higher-grade underground ore should continue to rise, although there are still some 250,000 tons of open pit ore grading 0.11 oz. stockpiled on surface.

There has also been a marked production improvement at the company’s Telbel operation at Joutel, Que., which should have President Paul Penna smiling once again, for there have been some trying mining problems at that mine for some time now, limiting the amount of ore being fed to that plant.

In the 3-month period to March 31, production at the Telbel division will approximate 19,000 oz., its best quarter in some time. Mill throughput here is now averaging around 1,350 tons daily.

This brings Agnico’s combined first-quarter output to about 44,500 oz., equal to about 75% of the company’s total for all 1988. With the higher tonnages now being treated, costs are coming down at both operations. The Dumagami target is US$210 per ounce while plans for the combined operations call for an overall cost of US$245 per oz. in 1991.

Management is also pleased with recent developments now taking place at its Goldex Mines’ (TSE) project at Val d’Or, where a $2- million underground drilling program is under way. This is shaping up as a large-tonnage, low-grade operation. Recent holes have been showing quite a bit more visible gold, a trend which could hasten a production decision.

The parent company, which has approximately 1.5 million warrants outstanding, should get a real financial shot-in-the-arm if all are exercised — about $24 million. One warrant plus $16 entitles the holder to purchase 1.7 shares of Agnico- Eagle, good until April 16.

The company has declared a dividend of US10 cents per share, payable May 1 to shareholders of record April 3. This is its tenth dividend.