Agnico Eagle Mines Ltd. says it won’t be producing gold at its Hope Bay property in western Nunavut throughout 2022.
That means no royalty payments or contracts tied to production at the company’s Doris mine, where production was first suspended in October.
Company spokesperson Sonja Galton said the company is focusing on exploring and expanding the property.
The company had to weigh the “importance of growing Hope Bay’s gold resources to support future expansion as opposed to maintaining low-volume/high-cost mine production operation,” Galton wrote in an email.
Exploration equipment will remain at the Doris mine, and the underground area at the mine will remain open for exploration activities.
Nunavut Tunngavik Inc. and the Kitikmeot Inuit Association will not receive royalties while production is stopped, but Galton said royalties will resume if exploration goes well and the company decides to produce more gold.
Both the company’s direct employees and employees of contractors in the Kitikmeot region hired by Agnico Eagle will be affected by production temporarily ending, Galton said. But she said the company will be hiring workers and businesses from the region for its exploration work.
Hiring is set to begin in March, depending on how the COVID-19 pandemic is playing out in the territory, she said.
Galton said the company is planning to send some of its workers in Hope Bay to other mine sites in Canada, and the rest will be laid off within the next four weeks.
Agnico Eagle bought TMAC Resources Inc. in February 2021, acquiring the 80-kilometer-by-20-kilometer Hope Bay property.
The company planned to spend $16.2 million to conduct nearly 70,000 meters of drilling at Hope Bay, according to the company’s website, but Galton said that number is not confirmed yet.
This year’s exploration activities are still under review, and so Galton said she didn’t know how much it will cost the company.