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Northern Ontario & Quebec benefit from Agnico Eagle’s pipeline of projects

May 4, 2023

Throughout 2022, Agnico Eagle Mines Limited delivered solid operating performance in a challenging cost and workforce environment with strong production and cost control, increasing mineral reserves and mineral resources, progressing expansion projects and delivering the best safety performance in the Company’s 66-year history.  
The year also saw important strategic acquisitions aimed at furthering Agnico Eagle’s core strategy of consolidating positions in premier mining jurisdictions, with the integration of Kirkland Lake Gold, and the acquisition of Yamana Gold’s Canadian assets (including the other half of the world-class Canadian Malartic mine).
The company finished the year strong despite a challenging cost environment – Payable gold production in the fourth quarter of 2022 was 799,438 ounces at production costs per ounce of $834, total cash costs per ounce of $863 and all-in sustaining costs (“AISC”) per ounce of $1,231.  
Record annual gold production and operating cash flow resulted from solid operational performance across the recently integrated asset portfolio –Payable gold production in 2022 was 3,135,007 ounces at production costs per ounce of $843, total cash costs per ounce of $793 and AISC per ounce of $1,109. Including the full year of production from the legacy Kirkland Lake Gold mines, which were acquired on February 8, 2022, total payable gold production in 2022 was 3,280,731 ounces at production costs per ounce of $821, total cash costs per ounce of $780 and AISC per ounce of $1,090, in line with the mid-point of 2022 production guidance and slightly above the top end of the cost guidance announced in February 2022.
Gold mineral reserves increased to a record level – Year-end 2022 gold mineral reserves increased by 9% to 48.7 million ounces of gold (1,186 million tonnes grading 1.28 grams per tonne (“g/t”) gold).  The year-over-year increase in mineral reserves is largely due to significant additions at Detour Lake as well as successful conversion of mineral resources at several other operations.  
At year-end 2022, measured and indicated mineral resources were 44.2 million ounces (1,178 million tonnes grading 1.17 g/t gold) and inferred mineral resources were 26.3 million ounces (311 million tonnes grading 2.63 g/t gold).

On March 31, 2023, the company announced the successful completion of the acquisition of Yamana Gold Inc.’s interests in its Canadian assets, including the Canadian Malartic mine.  
As part of the Arrangement, Pan American Silver Corp. has acquired all the issued and outstanding common shares of Yamana. With the completion of the Arrangement, Agnico Eagle now owns 100% of the Canadian Malartic mine, 100% of the Wasamac project located in the Abitibi region of Quebec and several other exploration properties located in Ontario and Manitoba.  

Over the last 18 months, Agnico Eagle has solidified its presence in the Abitibi gold belt, a region of low political risk and high geological potential, and where it has a strong competitive advantage from having operated there for more than 50 years.  Agnico Eagle’s production in the Abitibi gold belt is forecast to be approximately 1.9 million ounces to 2.1 million ounces of gold per year through 2025.  In addition, the Company has the unique ability to monetize future additional mill capacity at the Canadian Malartic mine, given its extensive operations and strategic land position in the region.
Agnico Eagle’s 2023 production and costs guidance, which assumed 50% ownership of Canadian Malartic for the first three months of 2023 and 100% ownership for the last nine months of the year, is in line with the actual completion date of the Arrangement.


Detour Mine pic  

In 2023, Agnico Eagle will focus on optimizing its expanded strategic positions in the Abitibi region of Ontario and Quebec (“Abitibi Gold Belt”), with the aim of increasing profitable production.
At Detour Lake Mine in Northern Ontario, mill expansion activities progressed as planned in 2022. These activities, combined with strong operational performance, resulted in record annual gold production of 732,572 ounces for the full year 2022, which Agnico Eagle believes makes Detour Lake the largest gold mine in Canada. For 2023, the focus remains on optimizing mill processes and improving runtime to achieve, and potentially surpass, 28.0 million tonnes per year (“Mtpa”) throughput.
Exploration success at Detour Lake in 2022 resulted in the addition of 5.6 million ounces of gold in mineral reserves to 20.7 million ounces of gold (850.4. million tonnes grading 0.76 g/t gold) and 3.2 million ounces in measured and indicated mineral resources to 18.5 million ounces of gold (731.5 million tonnes grading 0.79 g/t gold) compared to December 31, 2021.  
In 2023, exploration is expected to focus on extending mineralization to the west and establishing an initial underground mineral resource in order to support potential underground mining operations.  
Later in 2023, the Company expects to provide an update on the pathway to potentially increase production to one million ounces of gold per year.

At the Odyssey Project underground development remains on schedule with initial production and start of shaft sinking expected in March 2023. Delineation drilling of the internal zones at Odyssey South in 2022 showed potential to add production in 2024 to 2026.  
Exploration in 2023 is expected to focus on further testing of the internal zones, expanding the East Gouldie Zone to the east and west and mineral resource conversion. Drilling will also be carried out to test other near surface and underground opportunities to leverage excess mill capacity and infrastructure

At Canadian Malartic, Agnico Eagle expects to have up to 40,000 tonnes per day (“tpd”) of excess mill capacity starting in 2028 and the LaRonde Complex could have up to 2,000 tpd of excess mill capacity at the LaRonde Zone 5 (“LZ5”) mill circuit starting in the second quarter of 2023.  
By maximizing the mill throughput in the region, Agnico Eagle believes there is potential to increase future gold production at lower capital costs and a reduced environmental footprint, which could also be beneficial to facilitating the permitting process.  
Additional production could begin at approximately 20,000 ounces in 2024 which will use this excess capacity and has the potential to increase up to approximately 500,000 ounces of gold per year by 2030.

Potential future sources of ore could include:
•   Macassa near surface deposits and the Amalgamated Kirkland (“AK”) deposit;
•  Upper Beaver and other Kirkland Lake satellite deposits;
•  Wasamac project
Pipeline projects continue
to advance –

Agnico Eagle has a number of advanced stage projects in the pipeline and the current focus is on how to advance these projects to production in a cost efficient and environmentally friendly manner. Highlights include:

•  AK and Near Surface Deposits at Macassa –
    These deposits are accessible from an existing surface ramp at Macassa and production from the Near Surface deposits are expected to begin in 2023.  Production from the AK deposit could potentially begin in 2024.  Alternatives to process these ores at the LaRonde Complex, which is approximately 130 kilometres away, and avoid capital costs associated with a mill expansion at Macassa are under review.  Average annual production from these two deposits could potentially be 20,000 to 40,000 ounces of gold, commencing in 2024.

• Upper Beaver Project –
    Upper Beaver has the potential to be a low-cost mine and scenarios are being modelled with annual production of 150,000 to 200,000 ounces of gold with moderate capital outlays.  Agnico Eagle believes initial production could potentially commence in 2029. Processing scenarios with the potential to reduce initial capital costs are being evaluated, including transporting the ore to the Canadian Malartic mill for processing.  An updated technical evaluation of the project is expected to be completed in late 2023.

• Wasamac Project –
    The Wasamac property was acquired as part of the Yamana Transaction and contains historical mineral reserves of 2.2 million ounces of gold.  Agnico Eagle believes this has the potential to be an underground bulk mining operation with production of up to 200,000 ounces of gold per year.  Technical aspects of the project with a focus on ore processing at the Canadian Malartic mill are being reviewed and are expected to reduce the project footprint and capital cost.  An internal evaluation of the project is expected in the fourth quarter of 2023.

• Hope Bay Project –
    Drilling in 2022 confirmed the potential to upgrade and expand mineral resources at Doris.  Exploration in 2023 will primarily shift to the Madrid deposit to further expand the mineral resources with a focus on defining areas of higher-grade mineralization and work continues on evaluating larger production scenarios (targeting 350,000 to 400,000 ounces of gold per year).

“2022 was another strong year from a safety and operational standpoint.  The company had its best safety performance in our 66-year history, we met production forecasts and managed our costs in a highly inflationary environment,” said Ammar Al-Joundi, Agnico Eagle’s President and Chief Executive Officer.  
“It was a transformational year for Agnico Eagle. The merger with Kirkland Lake Gold and the acquisition of Yamana’s Canadian assets will result in the consolidation of the Abitibi Gold Belt, one of the best gold regions in the world, and positions us well to continue to grow and create value for all our stakeholders for years to come. In 2023, our focus will be on optimizing and growing Detour Lake and Canadian Malartic and on establishing a plan to capitalize on existing infrastructure, including our excess mill capacity, in the Abitibi region of Quebec, with the potential to produce up to 500,000 ounces of gold per year by the end of the decade,” added Mr. Al-Joundi.

Andre Leite, Vice President of Ontario Operations will be speaking about Agnico Eagle’s Ontario operations during the Projects in the Pipeline Conference June 8th in Timmins. Andre will be speaking right after the Minister of Mines, George Pirie's Ontario State of Mining Address. The conference is filling quickly and seats are limited and includes a lunch. If you are interested in purchasing a ticket, you can get them online at   https://virtex.canadianminingexpo.com/expoactivity/activitypage/type/expoactivity_projects

For this article and more on Northern Ontario's mining industry click on the front cover picture below:

Front cover spring 2023

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