Telbel, Agnico mines aging but LaRonde responding well

Two “good news” features manifesting themselves at the recent annual meeting of Agnico-Eagle Mines (TSE) should have a positive impact on the current year’s performance.

The first was that Paul Penna, chairman and president, has recovered from a severe bout of sickness and is set to put the ship back on course.

The second was that LaRonde mine in northwestern Quebec has responded well since milling started in October, 1988, and is expected to produce 120,000 oz. gold in 1991 at an estimated cash cost of $260 per oz. Comparable figures for 1990 were 98,326 oz. and $291.

Not all the news was rosy. In 1990, the company marked its third consecutive non-profitable year, this time for $47.7 million, including $36.9 million in writeoffs. Loss per share was $1.82, compared with 66 cents in 1989.

Additionally, the original Agnico-Eagle mine in Joutel Twp. in northwestern Quebec, in production since 1974, and the contiguous Telbel mine, which has been producing since 1984, are showing signs of age with difficult ground conditions at depth and more expensive ore extraction.

Production here fell from 72,000 oz. in 1989 to 64,200 oz. in 1990. Cash operating costs for the Joutel division were the same for both 1989 and 1990, at $356 per oz.

Total gold production by the company from Joutel Twp. and LaRonde in 1990 was 162,443 oz., from an average ore grade of 0.14 oz. per ton and at an average cash cost of $272 per oz. Production for 1991 will be an estimated 200,000 oz.

Proven and probable ore reserves at Joutel are 1.5 million tons grading 0.21 oz. and at LaRonde, 6.6 million tons at 0.17 oz. Milling rate at Joutel is currently 1,200 tons per day (down from its 1,800-ton rated capacity) and at LaRonde, 2,000 tons per day.

Agnico’s silver division at Cobalt, Ont., has been inactive since the last stockpiled ore was milled in 1989 and no resumption is foreseen until there is a substantial rise in the silver price. Penna indicated that a silver price of $10 per oz. would be needed before operations could resume.