Agnico Eagle is set to open two new Nunavut gold mines this year

The company hopes high quality ore will offset the higher costs of operating at a remote site.

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Agnico Eagle Mines will boost its presence in Nunavut, opening two new gold mining sites there this year, according to a report from Reuters.

Over the past five years, Agnico Eagle shares have surged 71 percent, despite only a 0.3 percent gain in the benchmark S&P/TSK Global Gold Index, Reuters reported. This growth is reportedly due to both high-grade ores in the region, as well as Agnico’s mining experience in the Arctic.

Agnico Eagle cited the quality of ores in the region and the absence of competition in the region in its decision to invest further in Nunavut. It anticipates starting commercial production at two new gold mines in Nunavut: the Meliadine site and the Amaruq satellite site.

Meliadine is Agnico Eagle’s largest gold deposit in terms of mineral resources. With an anticipate mine life of 14 years and 3.8 million ounces of gold in proven and probable reserves, the site is a project that Agnico expects to be profitable despite its remoteness. The project is located near Rankin Inlet, along the western shore of Hudson Bay.

In 2018, Agnico Eagle spent $575.7 million on development of both the Meliadine and Amaruq mines, reports the ConstructConnect Journal of Commerce.

“The high grade [of the gold] allows [Agnico Eagle] to make up some of the ground lost to higher costs,” Craig Jerusalem, portfolio manager at CIBC Asset Management which owns Agnico shares, told Reuters this week.

In a February news release, Agnico Eagle’s CEO Sean Boyd confirmed the anticipated growth of the company’s gold production. “With the start of new operations at both Meliadine and Amaruq this year, we anticipate record gold production in 2019 with further production growth in 2020 and beyond,” said the Boyd.