AGNICO EAGLE RELEASES DETOUR LAKE PROPOSED UNDERGROUND MINING PLAN DEMONSTRATING STRONG RETURNS AND PATHWAY TO ANNUAL GOLD PRODUCTION OF ONE MILLION OUNCES
Stock Symbol: AEM (NYSE and TSX)
(All amounts expressed in
The Company has recently completed an updated mineral reserve and mineral resource estimate ("MRMR") and an updated life of mine plan (the "2024 Life Of Mine Plan" or the "2024 LOMP") for its
The 2024 LOMP updates the open pit mine production profile and incorporates updated costing. The Company has also completed a preliminary economic assessment (the "2024 PEA") which contemplates the concurrent operation of the open pit and a proposed underground mining project (the "
"At
Highlights from the 2024 PEA include:
-
Pathway to produce one million ounces per year at
Detour Lake - The PEA 2024 delivers on the Company's objectives to increase returns and lengthen the mine life.
The Underground Project provides earlier access to a high grade core of mineralization at depth below the reserve pit through underground development and displaces lower grade open pit production to the end of life. The project also sets the stage for future underground expansion along the western plunge of the mineralization - The updated MRMR delineates a subset of the mineral resources with a gold cut-off grade of 1.22 grams per tonne ("g/t"), which is amenable to underground mining within, and proximal to, the open pit mineral resource. The mineral resource estimate from the high-grade mineralized corridors totals 1.2 million ounces of gold (19.0 million tonnes grading 1.93 g/t gold) of indicated mineral resource and 7.1 million ounces of gold (107.7 million tonnes grading 2.05 g/t gold) of inferred mineral resource
- In the 2024 PEA, the
Underground Project incorporates in the mine plan approximately 55% of the in-situ high-grade mineral resources, including approximately 0.7 million ounces of gold in indicated mineral resources (9.0 million tonnes grading 2.36 g/t of gold) and 3.9 million ounces in gold of inferred mineral resources (48.5 million tonnes grading 2.50 g/t of gold) - Relative to the 2022 LOMP, the life of mine payable gold production increases by 27% to 22 million ounces of gold in the 2024 PEA, including an increase of 0.7 million ounces of gold from the open pit and the addition of 4.0 million ounces of gold from the
Underground Project - The 2024 PEA assumes an underground mining rate of approximately 11,200 tonnes per day ("tpd") (equivalent to 4.0 Mtpa) starting in 2030, combined with a mill expansion to 79,450 tpd (equivalent to an annualized 29 Mtpa) starting in 2028. Annual production is expected to increase by approximately 43% or 300,000 ounces of gold per year, from 2030 to 2043 to approximately one million ounces per year when compared to average annual production in years 2024 to 2029
- The 2024 PEA extends
Detour Lake's mine life by two years to 2054. The Company believes that there is a good upside potential for additional exploration to add ounces to the mine plan in future years, which could result in an increase in production in the period between 2044 and 2054 or extend the life of the mine - The large MRMR base provides a foundation for the Company's production profile for decades to come
- The PEA 2024 delivers on the Company's objectives to increase returns and lengthen the mine life.
-
The Underground Project and mill optimization bring value forward and improve valuation- Overall, the inclusion of a portion of the large mineable mineral resource, increased mill throughput rate and current high gold price environment contribute significantly to increase the economic value of
Detour Lake , more than offsetting inflationary cost increases since the 2022 LOMP - The average total cash costs for the
Underground Project , combined with the mill optimization to 29 Mtpa, are expected to be$690 per ounce - Development capital expenditures for the
Underground Project and mill optimization to 29 Mtpa are forecast to be approximately$731 million . Sustaining capital expenditures are forecast to be approximately$631 million over the life of theUnderground Project , or between$40 million to$45 million per year from 2030 to 2043 -
The Underground Project and mill throughput optimization to 29 Mtpa are expected to generate an after-tax internal rate of return ("IRR") of approximately 18% using a gold price assumption of$1,900 per ounce and a C$/US$ foreign exchange rate of 1.34. At current gold prices of approximately$2,300 per ounce and a C$/US$ foreign exchange rate of 1.34, theUnderground Project and mill throughput optimization to 29 Mtpa are expected to generate an after-tax IRR of approximately 25% -
The Detour Lake mine is forecast to generate strong free cash flow through the construction phase of theUnderground Project
- Overall, the inclusion of a portion of the large mineable mineral resource, increased mill throughput rate and current high gold price environment contribute significantly to increase the economic value of
-
Phased approach to further study and de-risk the project, with limited investment over next three years
- The Company has approved a
$100 million investment from 2024 to 2026 to develop a 2.0 kilometre exploration ramp to a depth of approximately 270 metres to collect a bulk sample and to facilitate infill and expansion drilling of the current underground mineral resource. Another zone to the east will be tested through a high intensity drilling program in 2025. The analysis of the bulk sample and results from the high intensity drilling program will help validate the continuity of the mineralization and the accuracy of the geological model - The exploration ramp will be sized to accommodate a potential production phase and is included in the initial capital expenditure estimate of approximately
$731 million
- The Company has approved a
-
Significant exploration potential to grow underground mineral resources
- The 2024 PEA is based on a mineral resource estimate which relies on a drill database cut-off as at
October 16, 2023 . The Company has since drilled an additional 131,500 metres in 142 holes atDetour Lake to the end ofMay 2024 in an ongoing exploration program which has returned some of best intercepts to date atDetour Lake . The recent exploration results show potential to significantly expand the underground mineral resource at shallow depth, west of the pit - As part of the Company's exploration budget, over the next three years, an exploration program of
$65 million will be carried out atDetour Lake to accelerate conversion and expansion drilling of the current underground mineral resource. Exploration in 2024 is continuing to test and extend the western plunge of the main deposit
- The 2024 PEA is based on a mineral resource estimate which relies on a drill database cut-off as at
-
Continue to enhance value through optimization studies and exploration focus
- Concurrent with the enhanced exploration program and the development of the exploration ramp, the Company will continue to evaluate the optimization of the open pit, underground mining and mill processes to further improve project returns, including the potential to increase the mill throughput beyond the currently contemplated 29 Mtpa
- The Company will continue to advance regional exploration activities on satellite targets on the Company's large land position around the
Detour Lake and adjacent Detour East properties that could potentially extend the mine life
Detour Lake Technical Presentation
Agnico Eagle's senior management will host a conference call on
Via Webcast:
A live audio webcast of the conference call will be available on the Company's website www.agnicoeagle.com.
Via URL Entry:
To join the conference call without operator assistance, you may register and enter your phone number at https://emportal.ink/45cKG9E to receive an instant automated call back. You can also dial direct to be entered to the call by an Operator (see "Via Telephone" details below).
Via Telephone:
For those preferring to listen by telephone, please dial 416.764.8659 or toll-free 1.888.664.6392. To ensure your participation, please call approximately five minutes prior to the scheduled start of the call.
Replay Archive:
Please dial 416.764.8677 or toll-free 1.888.390.0541, access code 971569#. The conference call replay will expire on
The webcast, along with presentation slides, will be archived for 180 days on the Company's website.
Operating and Financial Parameters Highlights – 2022 LOMP, 2024 LOMP and 2024 PEA
The life of mine totals, from the second quarter of 2024 to the end of life, for the operating and financial parameters of the 2022 LOMP, the 2024 LOMP and the 2024 PEA are set out in the table below.
The forecast parameters surrounding the 2024 PEA were based on a preliminary economic assessment, which is preliminary in nature and includes 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 preliminary economic assessment and the qualifications and assumptions made by the qualified persons who undertook the preliminary economic assessment are set out in this news release. The results of the preliminary economic assessment had no impact on the results of any pre-feasibility or feasibility study in respect of
LIFE OF MINE TOTALS (All numbers are approximate) |
Unit |
2022 LOMP |
2024 LOMP |
2024 PEA |
Mill at 28 Mtpa |
Mill at 28 Mtpa |
Underground Mill at 29 Mtpa |
||
Economic Assumptions |
||||
Gold Price |
$/oz |
$ 1,500 |
$ 1,900 |
$ 1,900 |
Exchange Rate USD:CAD |
|
1.30 |
1.34 |
1.34 |
Effective Tax Rate (as % of free cash flow |
% |
26.7 % |
27.7 % |
28.7 % |
Production |
||||
|
|
2052 |
2053 |
2054 |
|
|
|
|
|
Tonnes Mined |
Mt |
736.2 |
755.7 |
755.7 |
Gold Grade |
g/t |
0.77 |
0.77 |
0.77 |
Strip Ratio |
t:t |
1.71 |
1.76 |
1.76 |
Underground |
|
|
|
|
Tonnes Mined |
Mt |
— |
— |
52.8 |
Gold Grade |
g/t |
— |
— |
2.46 |
Mill Metrics |
|
|
|
|
|
kt |
781.2 |
818.6 |
871.5 |
Gold Grade |
g/t |
0.75 |
0.75 |
0.85 |
Recovery |
% |
91.6 % |
91.3 % |
92.2 % |
Average Mill Throughput |
Mtpa |
28.0 |
28.0 |
29.0 |
Gold production |
||||
|
Moz |
17.3 |
18.0 |
18.0 |
Underground |
Moz |
— |
— |
4.0 |
Operating Costs |
||||
Minesite costs per tonne1 |
C$/t |
$ 21.8 |
$ 22.1 |
$ 24.9 |
Total Cash Cost*,1 |
$/oz |
$ 761 |
$ 752 |
$ 741 |
Capital Expenditures |
||||
Total Open Pit Development*,2 |
($ millions) |
$ 1,550 |
$ 2,252 |
$ 2,252 |
Total Open Pit Sustaining*,2 |
($ millions) |
$ 2,973 |
$ 3,601 |
$ 3,601 |
|
($ millions) |
$ — |
$ — |
$ 731 |
Total Underground Project Sustaining2 |
($ millions) |
$ — |
$ — |
$ 631 |
Total Capital Expenditures2 |
($ millions) |
$ 4,523 |
$ 5,852 |
$ 7,215 |
Note: * Capitalized deferred stripping at
______________________ |
1
Minesite costs per tonne and total cash costs per ounce are non-GAAP measures that are not standardized financial measures under International Financial Reporting Standards ("IFRS"). For a discussion of the composition and usefulness of certain of these non-GAAP measures and a reconciliation of this historical measure to production costs, see "Reconciliation of Non-GAAP Financial Performance Measures" and "Note Regarding Certain Measures of Performance" in the Company's Management Discussion & Analysis for the periods ended |
2
Sustaining capital expenditures and development capital expenditures are non-GAAP measures that are not standardized financial measures under IFRS. For a discussion of the composition and usefulness of these non-GAAP measures and a reconciliation of these historical measures to production costs, see "Reconciliation of Non-GAAP Financial Performance Measures" and "Note Regarding Certain Measures of Performance" in the Company's Management Discussion & Analysis for the periods ended |
The major variances between the 2024 LOMP and 2022 LOMP include:
- Total gold production – Gold production increased by 4% or 0.7 million ounces of gold primarily due to the replacement and identification of further open pit mineral reserves in 2022 and 2023
-
Total cash costs per ounce – Total cash costs per ounce decreased by 1%, or
$9 per ounce, as a result of the reclassification of$444 million (approximately$26 per ounce) from operating costs to capital expenditures, the assumption of a weaker Canadian dollar assumption, strong cost control programs, partially offset by higher costs associated with three years of inflation -
Total Capital expenditures – Total capital expenditures increased by 25%, or
$1,329 million , primarily due to the reclassification of$444 million in operating costs to capital expenditures, increased maintenance costs associated with higher wear and tear at the mill of approximately$162 million due to the higher throughput rate and the update in costs associated with three years of inflation, partially offset by the assumption of a weaker Canadian dollar assumption
The major variances between the 2024 PEA and 2024 LOMP include:
-
Total gold production – Gold production increased by 22% or 4.0 million ounces of gold primarily due to the addition of production from the
Underground Project -
Total cash costs – Total cash costs decreased by 1%, or
$11 per ounce, as a result of higher gold grades from theUnderground Project and lower processing cost per tonne due to the increased in mill throughput, partially offset by higher unit operating cost per tonne from theUnderground Project -
Total Capital expenditures – The increase in total capital expenditures of approximately
$1,364 million reflect the development capital of approximately$731 million and the sustaining capital expenditures of$631 million for theUnderground Project and the mill optimization to 29 Mtpa
__________________________ |
Performance" in the Company's Management Discussion & Analysis for the periods ended |
Overall, the inclusion of the large mineable mineral resource, increased mill throughput rate and higher gold price environment contribute significantly to the increased economic value of
The Company believes that there is a good upside potential for additional exploration to add ounces to the mine plan in future years, which could result in continued mine production and a resulting increase in annual gold production in the period 2044 to 2054 or an extension of the life of mine.
The graph below provides a breakdown of the annual gold production in the 2024 LOMP and 2024 PEA and shows the key operational and financial parameters over the main production phases of the 2024 PEA.
________________________ |
3 Free cash flow is a non-GAAP measure that is not a standardized financial measure under IFRS. For a discussion of the composition and usefulness of this non-GAAP measure, see "Note Regarding Certain Measures of Performance" in this news release. |
Updated MRMR Estimate at
The MRMR estimate at
In contrast with the year-end 2023 MRMR estimate, the MRMR estimate at
The parameters of the updated MRMR estimate are in the notes of the table below and in the Appendix.
The updated MRMR estimate as at
|
As at |
As at |
Variance |
||||
Category |
Tonnes |
Gold Grade (g/t) |
Contained Gold (000 oz) |
Tonnes |
Gold Grade (g/t) |
Contained Gold (000 oz) |
Contained Gold (000 oz) |
Mineral Reserves |
|||||||
Total Proven & Probable1 |
818,621 |
0.75 |
19,672 |
819,049 |
0.76 |
19,928 |
-256 |
Mineral Resources |
|||||||
Measured and |
647,093 |
0.58 |
12,116 |
728,681 |
0.77 |
17,955 |
|
Measured and |
19,025 |
1.93 |
1,183 |
— |
— |
— |
|
Total Measured & Indicated |
666,118 |
0.62 |
13,299 |
728,681 |
0.77 |
17,955 |
-4,656 |
Inferred Low Grade2 |
27,798 |
0.54 |
483 |
58,317 |
0.62 |
1,156 |
|
Inferred High Grade3 |
107,658 |
2.05 |
7,085 |
21,801 |
2.23 |
1,561 |
|
Total Inferred |
135,456 |
1.74 |
7,568 |
80,127 |
1.05 |
2,717 |
4,851 |
Notes: |
1. Proven and Probable mineral reserves are reported at a cut-off grade of 0.30 g/t gold. |
2. |
3. High-grade mineral resources are reported at a cut-off grade of 1.22 g/t gold. |
The main variances in the MRMR estimate are set out below:
-
Mineral Reserves – The slight decline of 0.26 million ounces of gold in the
March 31, 2024 estimate, compared to theDecember 31, 2023 estimate, is primarily due to mining depletion totalling 171,000 ounces of in situ gold -
Measured and Indicated Mineral Resources – The decline of 4.7 million ounces of gold (or 26%) in the
March 31, 2024 estimate compared to theDecember 31, 2023 estimate is primarily due to the updated open pit costs leading to a shallower mineral resource pit, offset partially by an optimized cut-off grade. The variance is also explained by a local reclassification of indicated mineral resources within the high-grade corridors to inferred mineral resources where tighter drill spacing is required to return these areas to indicated mineral resources that could be potentially mined by underground methods. The decline in measured and indicated mineral resources is partially offset by the initial declaration of an underground indicated mineral resource totalling 0.7 million ounces of gold (10 million tonnes grading 2.0 g/t gold) atMarch 31, 2024 -
Inferred Mineral Resources – The increase of 4.9 million ounces of gold (or 179%) in the
March 31, 2024 estimate, compared to theDecember 31, 2023 estimate is primarily due to the mineral resource reclassification within the pit resource and the addition of underground inferred mineral resource below the shallower resource pit - The proportion of underground mineral resources has increased in the
March 31, 2024 estimate, compared to theDecember 31, 2023 estimate, as they are now being reported below a shallower resources pit. Future exploration, conversion drilling, bulk sampling and geological and structural studies are expected to improve and add evidence of high-grade continuity in the next iterations of theDetour Lake model
Additional details on the
Pathway to transform
Underground Project Overview
Mineable Resource
Potential Underground Mineral Resource below the Mineral Reserve Pit1 |
||||||
|
|
|
|
|
|
|
|
As at March 31, 20242 |
Included in 2024 PEA |
||||
|
Mt |
g/t |
|
Mt |
g/t |
|
Indicated High Grade Mineral Resources |
|
|
|
|
|
|
Inside |
9.0 |
1.83 |
0.5 |
4.5 |
2.34 |
0.3 |
Outside |
10.0 |
2.02 |
0.7 |
4.5 |
2.37 |
0.3 |
Total |
19.0 |
1.94 |
1.2 |
9.0 |
2.36 |
0.7 |
Inferred High Grade Mineral Resources |
|
|
|
|
|
|
Inside |
50.8 |
2.06 |
3.4 |
24.3 |
2.46 |
1.9 |
Outside |
56.8 |
2.04 |
3.7 |
24.2 |
2.53 |
2.0 |
Total |
107.7 |
2.05 |
7.1 |
48.5 |
2.50 |
3.9 |
Note: |
1. Reported in-situ before mining recovery |
2. March 31, 2024 mineral resources are reported at a cut-off grade of 1.22 g/t gold, inferred resources are undiluted |
3. Subset of mineral resources included in the PEA are reported at a cut-off grade of not less than 1.5 g/t gold |
Mining
The preliminary mining concept for the
Production could begin as early as 2030 and ramp up to the designed rate 11,200 tpd by 2033, which is expected to be sustained throughout the mine life until 2044.
Mill Optimization to Throughput of 79,450 tpd (or 29 Mtpa)
The processing facility consists of two independent milling circuits, including gravity separation, concentrate leach, agitated tank leaching, carbon-in-pulp, solvent extraction and electrowinning. Over the last four years, the processing plant has undergone significant modifications to de-bottleneck existing circuits and improve throughput while maintaining recovery and reliability. The 2024 PEA contemplates that underground ore will be blended with the open pit ore and processed through the existing plant.
Through investments in the crushing and grinding circuits and continuous improvement efforts, the mill throughput rate has increased from approximately 62,900 tpd in 2020 to approximately 69,700 tpd in 2023 and is expected to reach 76,700 tpd by the end of 2024. The Company believes that further process optimization can be achieved with minimal investment to reach a mill throughput rate of 79,450 tpd by 2028. The main initiatives to realize this potential include:
- The implementation of advanced process control systems to optimize circuit charge, mass flow balance and recovery
- Further improvements to the crushing and grinding circuits, including the implementation of variable frequency drives for the secondary crushers and pebble crushers and redesigned SAG discharge screens
- Further optimization to the maintenance practices and improved mill runtime
An investment of approximately
The tailing management facilities currently planned for the 2024 LOMP are expected to have the capacity to accommodate the additional tailings generated from the processing of the
2024 PEA Production Profile
The integrated mining sequence has been optimized to include production from the
The 2024 PEA combined open pit and underground production profiles are set out in the table below.
2024 PEA Operating Metrics |
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
2024 PEA |
||||||||
|
O/P Production* |
U/ |
Mill Production |
||||||
|
Tonnes |
Gold |
Strip |
Tonnes |
Gold |
Throughput |
Gold |
Rec.** |
Gold |
|
Mt |
g/t |
t:t |
Mt |
g/t |
Mt |
g/t |
% |
koz |
2024 Q2-Q4 |
31.4 |
0.69 |
1.71 |
— |
— |
21.0 |
0.88 |
91.6 |
540 |
2025 |
30.2 |
0.84 |
3.57 |
— |
— |
28.2 |
0.88 |
92.3 |
735 |
2026 |
30.8 |
0.83 |
3.41 |
— |
— |
28.5 |
0.89 |
92.1 |
751 |
2027 |
25.7 |
0.74 |
4.18 |
— |
— |
28.7 |
0.76 |
91.6 |
640 |
2028 |
38.3 |
0.67 |
2.50 |
— |
— |
29.0 |
0.77 |
91.5 |
658 |
2029 |
43.4 |
0.71 |
2.09 |
— |
— |
29.0 |
0.88 |
91.8 |
749 |
2030 |
54.2 |
0.80 |
1.42 |
0.8 |
3.68 |
29.0 |
1.17 |
92.9 |
1,015 |
2031 |
44.9 |
0.85 |
1.79 |
2.8 |
2.89 |
29.0 |
1.30 |
93.3 |
1,127 |
Avg. 2032-2043 |
37.0 |
0.77 |
1.37 |
4.0 |
2.42 |
29.0 |
1.15 |
93.1 |
1,001 |
2044 |
12.3 |
0.88 |
0.20 |
0.7 |
2.17 |
29.0 |
0.74 |
91.5 |
635 |
Avg. 2045-2053 |
— |
— |
— |
— |
— |
29.0 |
0.40 |
89.0 |
332 |
2054 |
— |
— |
— |
— |
— |
11.1 |
0.44 |
88.0 |
139 |
Total LOM |
755.7 |
0.77 |
1.76 |
52.8 |
2.46 |
871.5 |
0.85 |
92.2 |
21,988 |
* |
** Represents metallurgical recovery percentage |
Operating Costs
A breakdown of the unit operating costs for the open pit, underground, processing and site general and administrative expenses are set out in the table below.
2024 PEA Unit Operating Costs |
Unit |
Metric |
Period |
Royalty in-kind |
% |
2.0 % |
Life of Mine |
Royalty |
% |
0.8 % |
Life of Mine |
Open Pit Mine Costs |
C$/t ex-pit |
$ 3.89 |
2024 to 2044 |
Underground Mine Costs |
C$/t mined |
$ 38.70 |
2030 to 2044 |
Rehandling Costs |
C$/t moved |
$ 2.28 |
2045 to 2054 |
Processing Costs |
C$/t milled |
$ 9.94 |
2024 to 2054 |
Site General and Administrative Expenses |
C$/t milled |
$ 3.59 |
2024 to 2054 |
Operating Costs (net of deferred stripping) |
C$/t milled |
$ 24.90 |
2024 to 2054 |
A breakdown of the operating costs, total cash costs by periods for the 2024 PEA is set out in the table below.
2024 PEA Operating Cost Metrics |
|
|
|
|
|
|
Minesite costs |
Cash Costs |
|
C$/t milled |
$/oz |
2024 Q2-Q4 |
|
|
Average of Years 2025-2029 |
|
|
2030 |
|
|
2031 |
|
|
Average for Years 2032-2043 |
|
|
Average for Years 2044-2054 |
|
|
LOM |
|
|
The average total cash costs for the 2024 PEA, including open pit and underground production and the mill throughput at 29 Mtpa, are expected to be
Capital Expenditures
Under the 2024 PEA, the
A breakdown of the development capital expenditures and sustaining capital expenditures for the open pit and for the underground by periods is set out in the table below.
2024 PEA Capital Expenditures |
|
|
|
|
|
|
|
|
|
|
|
|
|
Underground |
Closure |
||
Time Period |
Development |
Sustaining |
Development |
Sustaining |
|
|
(C$ millions) |
(C$ millions) |
(C$ millions) |
(C$ millions) |
(C$ millions) |
2024 Q2-Q4 |
$ 214.4 |
$ 315.4 |
$ 26.3 |
$ — |
$ 2.0 |
2025 |
$ 421.9 |
$ 285.4 |
$ 41.2 |
$ — |
$ 5.0 |
2026 |
$ 367.0 |
$ 339.6 |
$ 134.3 |
$ — |
$ 5.0 |
2027 |
$ 469.9 |
$ 250.6 |
$ 168.7 |
$ — |
$ 3.1 |
2028 |
$ 217.9 |
$ 334.4 |
$ 191.0 |
$ — |
$ 3.6 |
2029 |
$ 105.6 |
$ 348.9 |
$ 241.7 |
$ — |
$ 4.7 |
2030 |
$ 139.3 |
$ 259.4 |
$ 176.7 |
$ 40.2 |
$ 4.6 |
2031 |
$ 171.2 |
$ 206.4 |
$ — |
$ 80.7 |
$ 3.5 |
Avg. 2032-2043 |
$ 75.8 |
$ 184.5 |
$ — |
$ 59.0 |
$ 3.8 |
Avg. 2044-2055 |
$ — |
$ 26.2 |
$ — |
$ 1.5 |
$ 13.9 |
2055+ (NPV (5%) of costs after 2055) |
$ — |
$ — |
$ — |
$ — |
$ 110.8 |
Total LOM |
$ 3,017.0 |
$ 4,825.0 |
$ 979.8 |
$ 846.0 |
$ 339.7 |
Permitting and Indigenous Communities
The permitting of the
Consultation with the Indigenous communities started in late 2022. The Company continues to engage with these communities on a regular basis to maintain their support and address their concerns associated with the expanded production.
Incremental Valuation Impact of the
The incremental valuation impact of the
Using a gold price assumption of
The economics of the
Sensitivity to Gold Price
|
Gold Price |
|||
|
|
|
|
|
IRR |
16.5 % |
18.3 % |
20.0 % |
24.6 % |
NPV (5% discount rate) (billions $) |
|
|
|
|
Sensitivity to C$/US$ Exchange Rate
|
Exchange Rate |
|||
|
1.32 |
1.34 |
1.36 |
1.38 |
IRR |
17.8 % |
18.3 % |
18.8 % |
19.3 % |
NPV (5% discount rate) (billions $) |
|
|
|
|
Sensitivity to Operating Cost and Capital Expenditures
|
(20) % |
(10) % |
— % |
10 % |
20 % |
Underground Project Operating Costs |
|||||
IRR |
20.5 % |
19.5 % |
18.3 % |
17.2 % |
16.0 % |
NPV (5% discount rate) (billions $) |
|
|
|
|
|
Underground Project Capital Expenditures |
|||||
IRR |
22.6 % |
20.3 % |
18.3 % |
16.6 % |
15.1 % |
NPV (5% discount rate) (billions $) |
|
|
|
|
|
Phased approach to further study and de-risk the project, with limited investment over next three years
The 2024 PEA demonstrates strong returns, combined with significant exploration upside and growth potential. On this basis, the Company has approved the next phase of work to further study and de-risk the
Of the $100 million, approximately
Over the next three years, an exploration program of
Exploration Highlights
Since the last significant update of mineral reserves and mineral resources as at
The aggressive exploration campaign at
Most recently, tighter-spaced drilling at underground depths has demonstrated good grade continuity and thickness consistency, further supporting the underground mining concept.
Selected recent and previously released holes from mid-2022 to 2024 are presented in the plan map and longitudinal section below and in the Appendix.
[
The recompositing of several previously released intersections within the mineral resources of the
At greater depth and towards the west, ongoing exploration drilling also demonstrates the extension of these high-grade mineralized corridors. Interpretation work has resulted in improved modelling that is identifying higher grade mineral resources both inside and outside the mineral resources pit that can be used to optimize the project in further studies. Examples of intersections of the high-grade corridors at underground depths in the
Highlights from exploration drilling during the second quarter of 2024 in the
[
The Company is on track to spend approximately
In addition, the Company expects to spend approximately
Key regional targets include: northwest of the
With recent exploration success and results of the PEA study, the Company is contemplating to increase the drilling program and budget in the second half of 2024 to continue the infilling and extension of the mineral resources with the main objective of further conversion and derisking of the high grade corridors below and to the west of the Mineral Reserve open pit.
About Agnico Eagle
Agnico Eagle is a Canadian based and led senior gold mining company and the third largest gold producer in the world, producing precious metals from operations in
Further Information
For further information regarding Agnico Eagle, please contact the Investor Relations team at investor.relations@agnicoeagle.com or call (416) 947-1212.
Note Regarding Certain Measures of Performance
This news release discloses certain financial performance measures and ratios, including "total cash costs per ounce", "all-in sustaining costs per ounce", "free cash flow", "sustaining capital expenditures", "development capital expenditures", and "minesite costs per tonne" that are not standardized measures under IFRS. These measures may not be comparable to similar measures reported by other gold mining companies.
For a discussion of the composition and usefulness of certain of these non-GAAP measures and a reconciliation of these historical measures to production costs, see "Reconciliation of Non-GAAP Financial Performance Measures" and "Note Regarding Certain Measures of Performance" in the Company's Management Discussion & Analysis for the periods ended
Free cash flow
Free cash flow is calculated by deducting estimated operating expenditures and estimated capital expenditures from estimated revenue.
The Company believes that free cash flow is useful in that it allows for the evaluation of the Company's ability to repay creditors and return cash to shareholders without relying on external sources of funding. This generally accepted industry measures also provides investors with information about the Company's financial position and its ability to generate cash to fund operational and capital requirements as well as return cash to shareholders. Management uses this measure in conjunction with other data prepared in accordance with IFRS, and believes it is helpful to investors so they can understand and monitor the cash generating capability of the Company. Free cash flow capital balances are not standardized measures under IFRS and, as reported by the Company, may not be comparable to similarly labelled measures reported by other companies.
Forward-Looking Non-GAAP Measures
This news release contains information as to estimated future total cash costs per ounce, minesite costs per tonne and free cash flow. The estimates are based upon (i) the total cash costs per ounce and minesite costs per tonne that the Company expects to incur to mine gold at its mines and projects and, (ii) free cash flow that the Company expects to achieve at its mines and projects; consistent with the reconciliation of these metrics referred to above, they do not include production costs attributable to accretion expense and other asset retirement costs, which will vary over time as each project is developed and mined. It is therefore not practicable to reconcile these forward-looking non-GAAP financial measures to the most comparable IFRS measure.
Forward-Looking Statements
The information in this news release has been prepared as at
Notes to Investors Regarding the Use of Mineral Resources
The mineral reserve and mineral resource estimates contained in this news release have been prepared in accordance with the Canadian securities administrators' (the "CSA") National Instrument 43-101 – Standards of Disclosure for Mineral Projects ("NI 43-101").
In 2019, the
Investors are cautioned that while the
Further, "inferred mineral resources" have a great amount of uncertainty as to their existence and as to their economic and legal feasibility. It cannot be assumed that any part or all of an inferred mineral resource will ever be upgraded to a higher category.
The mineral reserve and mineral resource data set out in this news release are estimates, and no assurance can be given that the anticipated tonnages and grades will be achieved or that the indicated level of recovery will be realized. The Company does not include equivalent gold ounces for by-product metals contained in mineral reserves in its calculation of contained ounces. Mineral reserves are not reported as a subset of mineral resources.
Mineral reserves are reported exclusive of mineral resources. Tonnage amounts and contained metal amounts set out in this table have been rounded to the nearest thousand, so may not aggregate to equal column totals. Mineral reserves are in-situ, taking into account all mining recoveries, before mill or heap leach recoveries. Underground mineral reserves and measured and indicated mineral resources are reported within mineable shapes and include internal and external dilution. Inferred mineral resources are reported within mineable shapes and, unless otherwise noted, include internal dilution. Mineable shape optimization parameters may differ for mineral reserves and mineral resources.
The mineral reserves and mineral resources tonnages reported for silver, copper and zinc are a subset of the mineral reserves and mineral resources tonnages for gold. The Company's economic parameters set the maximum price allowed to be no more than the lesser of the three‐year moving average and current spot price, which is a common industry standard. Given the current commodity price environment, Agnico Eagle continues to use more conservative gold and silver prices.
NI 43-101 requires mining companies to disclose mineral reserves and mineral resources using the subcategories of "proven mineral reserves", "probable mineral reserves", "measured mineral resources", "indicated mineral resources" and "inferred mineral resources". Mineral resources that are not mineral reserves do not have demonstrated economic viability.
A mineral reserve is the economically mineable part of a measured and/or indicated mineral resource. It includes diluting materials and allowances for losses, which may occur when the material is mined or extracted and is defined by studies at pre-feasibility or feasibility level as appropriate that include application of modifying factors. Such studies demonstrate that, at the time of reporting, extraction could reasonably be justified. The mineral reserves presented in this news release are separate from and not a portion of the mineral resources.
Modifying factors are considerations used to convert mineral resources to mineral reserves. These include, but are not restricted to, mining, processing, metallurgical, infrastructure, economic, marketing, legal, environmental, social and governmental factors.
A proven mineral reserve is the economically mineable part of a measured mineral resource. A proven mineral reserve implies a high degree of confidence in the modifying factors. A probable mineral reserve is the economically mineable part of an indicated and, in some circumstances, a measured mineral resource. The confidence in the modifying factors applied to a probable mineral reserve is lower than that applied to a proven mineral reserve.
A mineral resource is a concentration or occurrence of solid material of economic interest in or on the Earth's crust in such form, grade or quality and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade or quality, continuity and other geological characteristics of a mineral resource are known, estimated or interpreted from specific geological evidence and knowledge, including sampling.
A measured mineral resource is that part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristics are estimated with confidence sufficient to allow the application of modifying factors to support detailed mine planning and final evaluation of the economic viability of the deposit. Geological evidence is derived from detailed and reliable exploration, sampling and testing and is sufficient to confirm geological and grade or quality continuity between points of observation. An indicated mineral resource is that part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristics are estimated with sufficient confidence to allow the application of modifying factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. Geological evidence is derived from adequately detailed and reliable exploration, sampling and testing and is sufficient to assume geological and grade or quality continuity between points of observation. An inferred mineral resource is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and grade or quality continuity.
Investors are cautioned not to assume that part or all of an inferred mineral resource exists, or is economically or legally mineable.
A feasibility study is a comprehensive technical and economic study of the selected development option for a mineral project that includes appropriately detailed assessments of applicable modifying factors, together with any other relevant operational factors and detailed financial analysis that are necessary to demonstrate, at the time of reporting, that extraction is reasonably justified (economically mineable). The results of the study may reasonably serve as the basis for a final decision by a proponent or financial institution to proceed with, or finance, the development of the project. The confidence level of the study will be higher than that of a pre-feasibility study.
Scientific and Technical Information
The scientific and technical information contained in this news release relating to operations has been approved by
Additional Information
Additional information about the
Note Regarding Drill Results Tables
The pierce points for the drill results in this news release are shown on accompanying composite longitudinal sections. The drill collar coordinates for each hole are set out in a table in the Appendix. Intercepts reported show uncapped grades over estimated true widths, based on geological interpretation that is being updated as new information becomes available with further drilling.
APPENDIX A – Detour Lake Mineral Reserves and Mineral Resources (as at
|
|
MINERAL RESERVES |
|||||||||
|
|
As at |
|||||||||
MINERALIZED ZONE |
PROVEN |
PROBABLE |
PROVEN & PROBABLE |
||||||||
GOLD |
Mining |
000 Tonnes |
g/t |
000 oz Au |
000 |
g/t |
000
|
000 |
g/t |
000
|
Recovery %2 |
(Above 0.5 g/t) |
O/P |
71,477 |
1.13 |
2,593 |
467,151 |
0.90 |
13,563 |
538,629 |
0.93 |
16,156 |
91.9 |
(Below 0.5 g/t) |
O/P |
50,174 |
0.42 |
684 |
229,819 |
0.38 |
2,832 |
279,993 |
0.39 |
3,516 |
90.0 |
Detour Lake Total3 |
121,651 |
0.84 |
3,277 |
696,970 |
0.73 |
16,395 |
818,621 |
0.75 |
19,672 |
|
|
|
MINERAL RESOURCES |
|||||||||||
|
|
As at |
|||||||||||
MINERALIZED ZONE |
MEASURED |
INDICATED |
MEASURED & INDICATED |
INFERRED |
|||||||||
GOLD |
Mining |
000 Tonnes |
g/t |
000 oz Au |
000
|
g/t |
000
|
000
|
g/t |
000
|
000
|
g/t |
000
|
|
O/P |
35,586 |
1.08 |
1,235 |
620,524 |
0.57 |
11,412 |
656,110 |
0.60 |
12,647 |
78,647 |
1.52 |
3,850 |
|
U/G |
— |
— |
— |
10,008 |
2.02 |
652 |
10,008 |
2.02 |
652 |
56,809 |
2.04 |
3,718 |
Zone 58N |
U/G |
— |
— |
— |
2,868 |
5.80 |
534 |
2,868 |
5.80 |
534 |
973 |
4.35 |
136 |
Detour |
|
35,586 |
1.08 |
1,235 |
633,400 |
0.62 |
12,598 |
668,985 |
0.64 |
13,833 |
136,430 |
1.76 |
7,704 |
1
|
2 Represents metallurgical recovery percentage |
3 Gold cut-off grades: Detour Lake O/P Mineral Reserves is 0.30 g/t; Detour Lake O/P Mineral Resources is 0.25 g/t; U/G Mineral Resource is 1.22 g/t |
CIM definitions (2014) were followed in the estimation of mineral reserves and mineral resources. Mineral reserves are reported exclusive of mineral resources. Tonnes and gold ounce information is rounded to the nearest thousand. Discrepancies in totals are due to rounding.
Cut-off grades were calculated including the costs of: mining, milling, general and administrative costs, royalties and capital expenditures and other modifying factors (e.g., dilution, mining extraction, mill recovery), and were also calculated using an optimized variable cut-off grade over time. Dilution is estimated at an average of 7%.
The open-pit mineral resources for
The underground mineral resources for
Mineral resources for Zone 58N are based on a cut-off grade of 2.2 g/t with an assumed mining dilution of 12%.
The mineral resources were estimated using a gold price of
Assumptions used for the
The above gold price assumptions are below the three-year historic average (from
|
As at |
As at |
||||
Category |
Tonnes (000s) |
Gold grade (g/t) |
Contained (000 oz) |
Tonnes (000s) |
Gold grade (g/t) |
Contained (000 oz) |
Mineral Reserves |
|
|
|
|
|
|
Proven |
121,651 |
0.84 |
3,277 |
118,703 |
0.85 |
3,230 |
Probable |
696,970 |
0.73 |
16,395 |
700,346 |
0.74 |
16,698 |
Total Proven & Probable |
818,621 |
0.75 |
19,672 |
819,049 |
0.76 |
19,928 |
Mineral Resources |
|
|
|
|
|
|
Measured |
35,586 |
1.08 |
1,235 |
30,861 |
1.45 |
1,434 |
Indicated |
633,400 |
0.62 |
12,598 |
700,688 |
0.76 |
17,055 |
Total Measured & Indicated |
668,985 |
0.64 |
13,833 |
731,549 |
0.79 |
18,489 |
Inferred |
136,430 |
1.76 |
7,704 |
81,101 |
1.09 |
2,853 |
Note: Mineral reserves are not a subset of mineral resources. Tonnage amounts and contained metal amounts presented in this table have been rounded to the nearest thousand, so aggregate amounts may differ from column totals. Mineral reserves are in-situ, taking into account all mining recoveries, before mill or heap leach recoveries.
APPENDIX B – Exploration Details
Selected Recent and Previously Reported Exploration Drill Results at
Drill hole |
Zone |
From |
To |
Depth of midpoint |
Estimated |
Gold grade (g/t) |
DLM22-448* |
West Pit Extension |
1,099.8 |
1,105.4 |
955 |
4.8 |
32.3 |
DLM22-458* |
West Pit Extension |
526.0 |
565.0 |
481 |
32.7 |
6.0 |
and |
West Pit Extension |
583.0 |
593.0 |
517 |
8.5 |
2.7 |
and |
West Pit Extension |
621.0 |
657.0 |
560 |
30.6 |
0.8 |
and |
West Pit Extension |
670.0 |
707.0 |
602 |
31.5 |
1.1 |
DLM22-532W* |
|
903.0 |
934.0 |
738 |
28.9 |
10.2 |
DLM22-533* |
West Pit Extension |
838.2 |
880.7 |
744 |
35.3 |
2.6 |
and |
West Pit Extension |
923.2 |
927.0 |
800 |
3.2 |
13.7 |
DLM22-555** |
|
369.4 |
447.9 |
335 |
70.6 |
2.3 |
including* |
|
392.0 |
436.0 |
340 |
39.4 |
3.8 |
DLM22-556* |
|
572.8 |
594.3 |
463 |
19.8 |
4.7 |
DLM22-559* |
|
707.0 |
722.9 |
602 |
14.0 |
4.6 |
DLM22-580* |
West Pit Extension |
751.0 |
775.2 |
660 |
21.3 |
4.2 |
DLM23-601* |
|
370.6 |
387.8 |
311 |
15.4 |
4.6 |
and** |
|
442.3 |
494.0 |
380 |
46.8 |
1.5 |
DLM23-603* |
|
313.0 |
383.0 |
292 |
61.7 |
1.8 |
and |
|
488.0 |
508.0 |
410 |
18.0 |
3.0 |
DLM23-616* |
|
599.0 |
625.2 |
439 |
25.3 |
2.9 |
and |
|
656.0 |
677.0 |
474 |
20.3 |
3.2 |
DLM23-629** |
|
306.0 |
379.0 |
281 |
65.2 |
6.8 |
and** |
|
467.0 |
519.0 |
397 |
47.3 |
2.1 |
and** |
|
611.8 |
635.9 |
495 |
22.3 |
2.3 |
DLM23-631* |
|
345.2 |
374.7 |
294 |
26.3 |
3.0 |
and** |
|
434.6 |
500.0 |
378 |
59.2 |
1.1 |
and** |
|
558.0 |
593.1 |
460 |
32.1 |
2.4 |
DLM23-641** |
|
527.0 |
577.0 |
431 |
46.3 |
4.5 |
including* |
|
527.0 |
559.0 |
424 |
29.6 |
6.7 |
DLM23-665* |
West Pit Extension |
1,225.6 |
1,242.0 |
1,061 |
14.4 |
2.8 |
DLM23-666* |
West Pit Extension |
339.0 |
357.1 |
291 |
15.8 |
3.0 |
and |
West Pit Extension |
385.0 |
411.0 |
331 |
22.8 |
3.7 |
and |
West Pit Extension |
428.0 |
436.0 |
359 |
7.1 |
10.6 |
DLM23-690* |
West Pit Extension |
882.8 |
889.0 |
754 |
5.8 |
2.9 |
and |
West Pit Extension |
934.0 |
965.0 |
799 |
29.2 |
2.4 |
DLM23-733A* |
West Pit Extension |
602.0 |
617.1 |
545 |
12.6 |
18.3 |
DLM23-735* |
West Pit Extension |
260.7 |
287.0 |
236 |
22.4 |
6.0 |
and |
West Pit Extension |
305.5 |
314.0 |
265 |
7.3 |
6.4 |
and |
West Pit Extension |
331.0 |
334.0 |
284 |
2.7 |
11.7 |
DLM23-796A*** |
West Pit Extension |
815.2 |
822.1 |
708 |
6.1 |
4.7 |
and |
West Pit Extension |
1,038.5 |
1,047.5 |
883 |
8.1 |
3.9 |
DLM24-815*** |
West Pit Extension |
325.0 |
339.0 |
277 |
12.2 |
2.8 |
DLM24-818* |
West Pit Extension |
405.9 |
436.2 |
369 |
25.4 |
3.9 |
DLM24-851*** |
West Pit Extension |
350.0 |
392.3 |
322 |
36.1 |
2.6 |
DLM24-857*** |
West Pit Extension |
452.7 |
455.7 |
391 |
2.6 |
524.9 |
†
Results from |
* Previously released in Agnico Eagle news releases dated |
** Recompositing of previously released intersections in Agnico Eagle news releases dated |
*** Newly released results. |
Exploration Drill Collar Coordinates at
Drill hole |
UTM East* |
UTM North* |
Elevation |
Azimuth |
Dip (degrees) |
Length |
DLM22-448 |
585276 |
5542425 |
292 |
185 |
-60 |
1,260 |
DLM22-458 |
587123 |
5541831 |
299 |
173 |
-68 |
1,200 |
DLM22-532W |
587560 |
5541980 |
288 |
179 |
-63 |
1,302 |
DLM22-533 |
585319 |
5542281 |
291 |
187 |
-59 |
1,126 |
DLM22-555 |
587643 |
5541890 |
287 |
175 |
-57 |
591 |
DLM22-556 |
587923 |
5541838 |
286 |
175 |
-57 |
1,125 |
DLM22-559 |
587441 |
5541927 |
288 |
175 |
-62 |
1,200 |
DLM22-580 |
587248 |
5541959 |
299 |
177 |
-69 |
1,299 |
DLM23-601 |
587784 |
5541797 |
286 |
181 |
-60 |
625 |
DLM23-603 |
587743 |
5541810 |
286 |
180 |
-60 |
849 |
DLM23-616 |
589267 |
5541626 |
283 |
180 |
-52 |
695 |
DLM23-628 |
589227 |
5541550 |
283 |
179 |
-58 |
675 |
DLM23-629 |
588609 |
5541481 |
285 |
178 |
-58 |
687 |
DLM23-631 |
587764 |
5541783 |
285 |
178 |
-58 |
603 |
DLM23-641 |
588168 |
5541559 |
288 |
178 |
-56 |
657 |
DLM23-665 |
585309 |
5542525 |
295 |
190 |
-61 |
1,458 |
DLM23-666 |
586885 |
5541753 |
297 |
175 |
-59 |
801 |
DLM23-690 |
586477 |
5542144 |
296 |
185 |
-68 |
1,137 |
DLM23-733A |
586562 |
5541903 |
292 |
181 |
-68 |
1,002 |
DLM23-735 |
587048 |
5541650 |
292 |
177 |
-62 |
402 |
DLM23-747 |
584911 |
5542490 |
294 |
186 |
-65 |
1,281 |
DLM23-796A |
586879 |
5542059 |
304 |
179 |
-65 |
1,254 |
DLM-815 |
587245 |
5541641 |
291 |
176 |
-57 |
507 |
DLM24-818 |
587246 |
5541689 |
291 |
176 |
-64 |
600 |
DLM24-851 |
586844 |
5541744 |
295 |
176 |
-60 |
474 |
DLM24-857 |
588927 |
5541584 |
283 |
176 |
-61 |
675 |
|
|
|
|
|
|
|
* Coordinate System: NAD 1983 |
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