Joutel find may give new life to Agnico mine

Encouraged by a strengthening gold price, investors pushed Agnico-Eagle Mines (TSE) to its 52-week high of $6.25 when news of a gold discovery at the Joutel division in northwestern Quebec hit Bay Street.

At a depth of 2,000 ft., hole 92-30W intersected 0.35 oz. gold over a true width of 25.9 ft. The intersection is 1,600 ft. west of the No. 1 shaft and 1,500 ft. east of the Eagle West open pit.

Management says the discovery could give the aging Joutel operations a new lease on life, especially if the gold price, which recently climbed above US$350, continues to improve.

“We are certainly not going ahead with our planned phase-out,” said President Paul Penna, referring to earlier plans to wind down underground operations at Joutel.

Over the past three years, Agnico’s exploration staff has been combing the Joutel area in an aggressive search for new ore to feed the mill. In 1990, they found the Eagle West zone. The open pit, expected to be depleted sometime next year, now produces about 40,000 oz. gold annually. Penna said the recent high-grade discovery could prove to be part of a mineralized trend west of the main orebody that Joutel geologists call “zone 4.” In previous drilling, this zone returned narrow widths of 0.03-0.09 oz. at surface, 0.26 oz. at 1,000 ft. and 0.77 oz. at 2,400 ft.

He said Agnico would move the rig 350 ft. east to test for strike extensions of the mineralization at a depth of 2,000 ft. and would later drill three or four wedges from the trunk hole. If the zone proves continuous, further testing would be conducted from an existing exploration drift on the 2,400-ft. level.

Penna notes that the zone could be readily accessible from the main shaft, saving development time and money.