Agnico Eagle plans to spend $1.2 billion to open two new Nunavut gold mines

By Jim Bell, Nunatsiaq News - February 16, 2017

After 10 years in Nunavut, Agnico Eagle Mines Ltd. will invest more than $1.2 billion to construct two new Kivalliq region gold mines that will likely produce local jobs and contract opportunities for many more years to come.

The company pressed the start button Feb. 15 on its long-awaited Meliadine mine near Rankin Inlet and its proposed satellite mine at Amaruq near the company’s existing operation at Meadowbank, which is nearing the end of its life.

To do that, they’ll invest $900 million between now and 2019 to construct Meliadine and about $330 million to bring the Amaruq deposit into commercial production, with the expectation that they can start shipping gold from each project by the third quarter of 2019.

“That’s a significant investment and that speaks to the confidence that we have in our abilities and our willingness to do business in Nunavut,” Agnico Eagle’s CEO, Sean Boyd, told Nunatsiaq News.

“But we also look at Nunavut as a place where we can build a platform for as long as we built a platform in Quebec, which is multiple decades. We’re happy to be in Nunavut, we’re happy to be contributing”

Agnico Eagle has operated its flagship La Ronde mine in Quebec for more than 28 years, since 1988, and estimates there are nine years left in its life-cycle.

Right now, the company estimates Meliadine’s mine life at 14 years, during which time it expects to produce at least 5.3 million ounces of gold.

At Amaruq, they forecast the production right now of about 1.98 million ounces of gold over a mine life of about six years.

Agnico Eagle already possesses all permits and licences required to build the Meliadine mine, having received a project certificate for it in March 2015 from the Nunavut Impact Review Board. And in January 2016, they completed the negotiation of a revised Inuit impact and benefits agreement with the Kivalliq Inuit Association.

As for Amaruq, Agnico Eagle filed an environmental impact statement with the NIRB in July 2016 for the gold-rich Whale Tail Pit deposit, the first stage in development of Amaruq.

That proposal is now working its way through the regulatory system, with a public hearing expected in the third quarter of 2017 and a project certificate expected by the third quarter of 2018, Agnico Eagle said in a release.

If the Amaruq project stays on schedule, the site could start producing ore around the same time the aging Meadowbank mine starts to wind down.

The company would use the existing mill at Meadowbank to process that ore.

But the company will continue to explore intensively around the Amaruq area to add to their resource estimates and extend its mine life.

“We’re basically at a six-year mine life for Amaruq, which means we have to continue to drill that heavily over the next few years to grow that deposit and extend the mine life there,” Boyd said.

He said they will continue to explore also around Meliadine, where they will operate an underground mine only for the first four years, with open pits to be developed starting in the fifth year.

At Meliadine, they’ll use about 300 workers during construction, about 75 of whom will be Inuit. During the mine’s operation, they’ll use about 900 workers, 350 of whom will be Inuit.

The company also estimates that the two projects together will:

• generate $500 million a year of spending on goods and services;

• create employment for about 2,000 people, about 714 of whom will be Inuit and 500 of whom will be contractors;

• generate $66 million worth of payroll per year for the Kivalliq region;

• generate $7 million per year in payroll taxes for the Government of Nunavut;

• generate $60 million per year in payroll taxes for the Government of Canada; and,

• generate $2.5 million per year in property taxes for the Government of Nunavut.

Boyd said a team from Agnico Eagle will travel to the Kivalliq region next week. There they’ll meet with people in Rankin Inlet and Baker Lake to provide information and answer questions.

“For Nunavut and for Canada it’s great if Canadian companies can work together with Canadians and the people of Nunavut and develop those resources in a responsible way. That’s the way Agnico is viewed in Nunavut and hopefully we can continue to grow this business over the next several year,” Boyd said.