Goldshore Resources Inc. press release
AGNICO EAGLE PROVIDES UPDATE ON CANADIAN MALARTIC COMPLEX -INTERNAL STUDY DEMONSTRATES IMPROVED VALUE, EXTENDS MINE LIFE AND SUPPORTS POTENTIAL FUTURE PRODUCTION GROWTH IN THE ABITIBI GREENSTONE BELT; POSITIVE EXPLORATION RESULTS EXPECTED TO RESULT IN INCREASED MINERAL RESERVES AND MINERAL RESOURCES; ADDITIONAL PROPERTY SCALE TARGETS BEING EVALUATED
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Canada NewsWire
Stock Symbol: AEM (NYSE and TSX)
(All amounts expres sed in U.S. dollars unless otherwise noted)
TORONTO , June 20, 2023 /CNW/ - Agnico Eagle Mines Limited (NYSE: AEM) (TSX: AEM) ("Agnico Eagle" or the "Company") is pleased to provide an update on the Odyssey mine, which forms part of the Company's 100% owned Canadian Malartic complex. Since the development of the Odyssey project was approved in February 2021 , mineral resources have grown significantly and contributed to an increased mine life. Project construction activities have progressed well despite a challenging construction environment, with first production from underground being achieved on schedule in March of this year.
"Since the initial discovery of the East Gouldie deposit in late 2018, the Company has made tremendous progress bringing the Odyssey mine into production, initiating the transition from the largest open pit gold mine in Canada to the largest underground gold mine in Canada. Over the last three years, we have significantly de-risked the project while improving its production profile and increasing its overall value. We have added approximately 1.7 million ounces of gold to the mine plan and extended the mine life to 2042," said Ammar Al-Joundi , Agnico Eagle's President and Chief Executive Officer. "We continue to aggressively explore the property and evaluate regional projects that could allow us to utilize the anticipated future excess mill capacity which is expected to be approximately 40 thousand tonnes per day starting in 2028. In the Abitibi Gold Belt, we have a significant competitive advantage, being the employer of choice and having infrastructure and a project pipeline that supports our unique ability to generate organic growth at reduced capital intensity and a lower environmental footprint, which we believe will generate significant shareholder value," added Mr. Al-Joundi
The Company completed a new internal study on the Odyssey mine (the "2023 Study") to reflect progress to date and the new economic environment. Highlights include:
Significant conversion of mineral resources and mine life extension to 2042 – Forecast payable gold production 1 for the Odyssey mine increased by 23% compared to the internal study completed in 2020 (the "2020 Study"), supported by a larger mineral resource estimate at year-end 2022. The mine plan now includes approximately 0.2 million ounces of gold in mineral reserves (2.8 million tonnes grading 2.22 grams per tonne "g/t" gold), 4.8 million ounces of gold (45.5 million tonnes grading 3.31 g/t gold) in indicated mineral resources and 4.0 million ounces of gold (53.5 million tonnes grading 2.32 g/t gold) in inferred mineral resources Improved production profile and opportunities to add production in years 2025 to 2028 – The Canadian Malartic complex is forecast to generate positive free cash flow during the transition from open pit to underground mining, even at a $1,650 per ounce of gold price assumption. Recent positive drill results in the Odyssey internal zones indicate the potential to further increase production during the 2023-2028 transition period. From 2029 onwards, gold production at the Canadian Malartic complex is forecast to average 558,000 ounces of gold per year over 13 years at total cash costs per ounce 2 of $768 Project significantly de-risked, including 60% of surface construction completed in 2.5 years – The project construction and mine development remains largely on schedule. Capital expenditures from 2021 to June 2023 are expected to be approximately $429 million , approximately 11% higher than estimated in the 2020 Study, given inflation and supply chain challenges Larger mineable resource partially offsets inflation on capital expenditures – From the second half of 2023 to 2028, development capital expenditures 3 are now forecast to be approximately $1.28 billion . From 2029 to 2042, development capital expenditures of $0.14 billion have been added to access the East Malartic deep area and sustaining capital expenditures 3 are now forecast to be approximately $66 million per year. On a per ounces basis, development capital expenditures have increased by 13% to approximately $216 per ounce, while sustaining capital expenditures have increased by 22% to approximately $109 per ounce, each compared to the 2020 Study, primarily as a result of inflationary cost pressures, partially offset by the larger mineable resources Improved valuation with excellent potential for growth – The larger mineable mineral resource, construction progress and current higher gold price environment more than offset cost inflation and contributed to an increase in project value when compared to the 2020 Study. Using a gold price assumption of $1,650 per ounce and a C$/US$ foreign exchange rate assumption of 1.32, the Odyssey mine has an after-tax IRR of 24% and an after-tax NPV (at a 5% discount rate) of $1.60 billion . At current spot gold prices, the after-tax IRR and NPV are approximately 33% and $2.46 billion , respectively Opportunity to further enhance value – The Company expects to have up to 40,000 tonnes per day ("tpd") of excess mill capacity at the Canadian Malartic complex starting in 2028 as processing of open pit ore and low-grade stockpiles transitions to the higher-grade Odyssey mine. This additional mill capacity provides significant optionality for organic growth at Odyssey, property-wide exploration upside and from the development of other projects in the Company's regional pipeline
| | | 1 Payable production of a mineral means the quantity of a mineral produced during a period contained in products that have been or will be sold by the Company whether such products are shipped during the period or held as inventory at the end of the period. | | 2 Total cash costs per ounce is a non-GAAP ratio that is not a standardized financial measure under the financial reporting framework used to prepare the Company's financial statements and, unless otherwise specified, is reported on a by-product basis in this news release. See "Note Regarding Certain Measures of Performance". | | 3 Sustaining capital expenditures and development capital expenditures are non-GAAP measures that are not standardized financial measures under IFRS. See "Note Regarding Certain Measures of Performance". |
"Since the acquisition of the initial 50% interest in the Canadian Malartic mine in 2014, the aggressive exploration program outside the Canadian Malartic open pit has identified more than 6.2 million ounces of gold in indicated mineral resources, 9.2 million ounces of gold in inferred mineral resources and 0.2 million ounces of gold in mineral reserves (in Odyssey South) as at December 31, 2022 . The 9.0 million ounces of gold in the mine plan of the 2023 Study includes 100% of the December 2022 mineral reserves, 78% of the total indicated mineral resources and only 43% of the total inferred mineral resources. The potential for further conversion of inferred mineral resources is significant and is expected to add mine life and continue to increase value," said Guy Gosselin , Agnico Eagle's Executive Vice President, Exploration. "Near term exploration upside is excellent along the lateral extensions of the East Gouldie horizon and in the Odyssey internal zones. The consolidation of additional ground adjacent to the Canadian Malartic and Odyssey mines in recent years, including the Rand Malartic, Midway and Camflo projects, has increased our land position by more than 50% to 13,580 hectares which includes a continuous 16.5 kilometre segment of the gold-rich Cadillac- Larder Lake break. We believe the Rand Malartic and Midway projects and the ground surrounding the past producing Camflo and Malartic Goldfields mines offer further, excellent potential to make a discovery, and continued exploration efforts in the future could provide optionality to utilize available excess processing capacity at the Canadian Malartic mill," concluded Mr. Gosselin.
The Company's near-term exploration focus remains on continuing to infill drill the Odyssey South zone and adjacent internal zones, infill drill the core portion of the East Gouldie zone and undertake the investigation of the lateral extensions along the favourable mineralized horizon to the east and the west. A first phase of 60 drill holes was completed at the Camflo project and regional exploration continues along strike to the east on the Rand Malartic project heading towards the Midway/LTA project. Highlights include:
Odyssey South and Odyssey internal zones – Underground infill drilling continues to return strong results in the Odyssey South deposit and in the internal zones at Odyssey, which are being investigated for their potential to provide additional mineral resources near existing and planned infrastructure at relatively shallow underground depths
East Gouldie – Infill drilling continues to provide positive results as the exploration program transitions its primary focus towards investigating the extensions of the favourable horizon to the east and to the west in the East Gouldie Corridor for potential mineral resource expansion and to identify potential new mineralized zones
Camflo – More than 14,000 metres of drilling in 60 drill holes have been completed year to date with three drill rigs in the first phase of drilling completed in April. This was the first exploration drilling in the near-surface portion of the Camflo deposit since the closure of the historical underground mine in 1992. Recent results demonstrate the potential for near surface mineralization around historical zones 1 and 8 with highlight results returning 3.3 g/t gold over 38.7 metres at 53 metres depth and 1.5 g/t gold over 81.0 metres at 192 metres depth. Potential ore mined at Camflo could be processed at the existing Canadian Malartic mill, located 4 kilometres away
Regional exploration – Drilling has resumed on the Rand Malartic property to investigate exploration targets potentially analogous to the Odyssey South and Odyssey North deposits in a series of porphyry intrusions that extend from the Odyssey mine towards the east and the past producing Malartic Goldfields mine on the Midway and LTA properties
New Internal Study Reflects Significant Project Advancements Since Early 2021
Following the completion of the 2020 Study, the Odyssey project was approved for development in February 2021 (see Company news release dated February 11, 2021 ). The 2023 Study updates the larger mineable mineral resource and incorporates both the higher gold price environment and higher costs and capital expenditures resulting from inflationary pressures over the past several years as well as multiple significant advancements at the project, including:
A larger mineable mineral resource extended the mine life to 2042 Approximately $429 million is projected to be spent on construction and development activities through June 30, 2023 , and approximately 60% of the surface construction has been completed Capital expenditures and operating cost estimates have been updated to reflect the current inflationary environment The Odyssey mine is now fully permitted with the mine production certificate of authorization received in October 2022 and the mining lease granted in November 2022 Shaft sinking commenced in March 2023 , along with the first production from the Odyssey South deposit, with total production of approximately 50,000 ounces expected in 2023 Infill and expansion drilling at Odyssey since 2020 has resulted in a significant increase in mineral reserves and mineral resources, with the addition of 197,000 ounces of mineral reserves (2.8 million tonnes grading 2.22 g/t gold), the successful conversion of an additional 5.3 million ounces of measured mineral resources and indicated mineral resources to a new total of 6.2 million ounces of mineral resources (64.2 million tonnes grading 2.99 g/t gold), with 9.2 million ounces (132.4 million tonnes grading 2.17 g/t gold) in the inferred mineral resources category Ongoing infill drilling at the East Gouldie deposit shows strong continuity of gold grades Confidence in the mine plan improved, with approximately 53% of mineable gold ounces now categorized as indicated mineral resources compared to approximately 5% in the 2020 Study Agnico Eagle acquired Yamana Gold Inc.'s 50% interest in Canadian Malartic on March 31, 2023 (the "Yamana Transaction"), resulting in a 100% interest in the Canadian Malartic and Odyssey mines With the Yamana Transaction, the Company now expects to have up to 40,000 tpd of excess mill capacity starting at the Canadian Malartic complex in 2028 as processing of open pit ore and low-grade stockpiles winds down and transitions to the higher-grade Odyssey mine. This additional mill capacity provides significant optionality for organic growth at Odyssey, property-wide exploration upside and from the development of other projects in the Company's regional pipeline
Aggressive Exploration Program Continues to Demonstrate Geological Upside Potential
With the discovery of East Gouldie in September 2018 , the Company focused on expansion drilling, quickly growing the inferred mineral resource at the Odyssey project from 4.1 million ounces (60.4 million tonnes grading 2.13 g/t gold grade) at year-end 2017 to 13.6 million ounces (237.5 million tonnes grading 1.78 g/t gold grade) at year-end 2020. The year-end 2020 mineral resources supported the 2020 Study. The 2020 Study forecasted total gold production of 7.3 million ounces of gold from 2023 to 2039, consisting of 0.4 million ounces of gold (6.2 million tonnes grading 2.07 g/t gold grade) of indicated mineral resources and 6.9 million ounces (75.9 million tonnes grading 2.82 g/t gold grade) of inferred mineral resources.
In 2021, the exploration focus at the Odyssey project shifted to conversion drilling to improve the geological confidence in preparation for production start-up. The Company was successful at converting and expanding the mineral resources, and as at December 31, 2022 , the combined East Malartic , East Gouldie and Odyssey deposits had 6.2 million ounces of gold (64.2 million tonnes grading 2.99 g/t gold) in indicated mineral resources and 9.2 million ounces of gold (132.4 million tonnes grading 2.17 g/t gold) in inferred mineral resources. In addition, an initial portion of the indicated mineral resources at the Odyssey South deposit was converted to probable mineral reserves as at December 31, 2022 , adding a total of 197,000 ounces of gold of probable mineral reserves (2.8 million tonnes grading 2.22 g/t gold).
Refer to the Appendix for details of the mineral reserves and mineral resources at the Canadian Malartic complex.
The growth of the mineral resources and mineral reserves at Odyssey from 2017 to 2022 and the related mineable ounces included in the Odyssey mine production profile are represented in the figure below and summarized in a table in the Appendix:
[](https://mma.prnewswire.com/media/2105724/Agnico_Eagle_Mines_Limited_AGNICO_EAGLE_PROVIDES_UPDATE_ON_CANAD.html)
The 2023 Study is based on year-end 2022 mineral resources and mineral reserves and resulted in an increase of 23% in mineable gold ounces. The Company now forecasts total production of 9.0 million ounces of gold from 2023 to 2042, consisting of 0.2 million ounces of gold (2.8 million tonnes grading 2.22 g/t gold) of probable mineral reserves, 4.8 million ounces of gold (45.5 million tonnes grading 3.31 g/t gold) of indicated mineral resource and 4.0 million ounces of gold (53.5 million tonnes grading 2.32 g/t gold) of inferred mineral resources. Approximately 53% of gold ounces included in the mine plan are now categorized as indicated mineral resources (compared to approximately 5% in the 2020 Study), significantly improving the geological confidence of the mineable resource and de-risking future production. With only 43% of the total inferred mineral resources included in the mine plan, the Odyssey mine shows potential to continue to extend and grow its production profile.
The forecast parameters for the 2023 Study include inferred mineral resources that are too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves and there is no certainty that the forecast production amounts will be realized. The basis for the 2023 Study and the qualifications and assumptions made by the qualified person are set out in this news release. The results of the 2023 Study had no impact on the results of any pre-feasibility or feasibility study in respect of the Odyssey project.
As at December 31, 2022 , East Gouldie hosted indicated mineral resources of 5.3 million ounces of gold (50.2 million tonnes grading 3.29 g/t gold) and inferred mineral resources of 2.6 million ounces of gold (32.4 million tonnes grading 2.54 g/t gold). An addition of mineral reserves is expected at the Odyssey mine at year-end 2023 with the conversion of indicated mineral resources at the East Gouldie deposit.
The strong conversion of mineral resources positioned the Company well to transition into production. The exploration focus will shift again towards expanding the mineral resource base at the Odyssey mine and within the Canadian Malartic property and assessing the potential to add in-mine mineralization to further extend the mine life and grow annual production.
New Internal Study Extends Mine Life and Reflects Stronger Economics
Mining Concept Unchanged
The Odyssey mine concept remains unchanged and based on a sublevel open stoping mining method with paste backfill. Longitudinal retreat and transverse primary-secondary mining methods will be used dependent on mineralization geometry and stope design criteria.
The mine is expected to utilize a combination of conventional and automated equipment, similar to the equipment currently employed at the LaRonde complex. On the two main levels with loading pockets, trucks and hammers are expected to be remotely operated 24 hours a day and 7 days a week from a surface control room, increasing equipment utilization rates. The Company continues to evaluate opportunities to optimize the project and integrate battery powered equipment.
Many of the design criteria and parameters are similar to Agnico Eagle's existing operating mines in the region. Underground production will originate from four different mining zones, namely Odyssey South, East Gouldie, Odyssey North and East Malartic. Run-of-mine ore from the pit will start to decrease in 2023 and the underground is expected to reach a production rate of approximately 19,000 tpd by 2031.
Production via the ramp at Odyssey South commenced on schedule in the first quarter of 2023 and is expected to ramp-up to approximately 3,500 tpd in 2024. Full production from this zone is scheduled to be maintained from 2024 to 2027. The Company believes that production from Odyssey South could be extended from additional mineralization in the previously described internal zones.
Production from East Gouldie is now expected to start in the first half of 2027 via ramp. The first loading station of the production shaft at Level 114 is expected to be completed and commissioned in mid-2027. Production from East Gouldie will then be hauled to surface via shaft and is expected to ramp-up through 2028 to reach a run-rate of approximately 12,500 tpd. The larger mineral resource base at East Gouldie resulted in the extension of planned production from this zone to 2042. The Company believes that the mine life could continue to be extended further based on the significant upside in the geological potential along strike to the east and west and at depth.
Production from Odyssey North is now expected to start in 2028 and ramp up to a run rate of approximately 3,500 tpd by 2030. Full production is expected to be maintained from this zone until 2038.
Production from East Malartic is now scheduled to start in 2030 and progressively increase to a run rate of approximately 3,200 tpd. Production from East Malartic has also been extended to 2042 and has the potential to be further extended alongside any East Gouldie mine life extension.