Tag Archives: Agnico Eagle Mines

Gold price rise revealing exploration deficit, Wood Mackenzie says

Even though the resurgent gold price has garnered a renewed sense of optimism in the gold industry, a lack of exploration spend from miners means it is facing a potential period of secular decline over the long-term, according to Wood Mackenzie’s gold team.

Exploration budgets were slashed following the fall in the gold price from the highs that were reached in 2011/2012 and they have since failed to recover, according to Wood Mackenzie.

“The slight rebound in exploration spend we have seen over the past couple of years has largely been focused on brownfield projects and near-mine development,” the analysts said. “This has not been sufficient to replenish mined ounces and, as such, peak gold supply is now a very real possibility.”

Over the past couple of months, with gold breaking through $1,500/oz, it seems that exploration activity may be turning a bit of a corner.

The analysts provided evidence:

  • In late June, Agnico Eagle Mines started an exploration drilling program at its Amaruq site in an effort to convert underground indicated resources;
  • On September 4, Polyus announced the completion of an exploration drill program at its Sukhoi Log project (pictured) that totalled 203,647 m and is planning 30,000 m of infill drilling in 2020; and
  • On September 10, Newcrest reported that its exploration program on the Havieron project, located 45 km east of Telfer in Australia, has four operating drill rigs, which have cut 6,166 m and a fifth drill will begin in September.

It will be some time, however, before this activity translates into reserves and ultimately into production.

Proposed exploration budgets for the largest producers in 2019 remain fairly conservative compared with the levels reached in 2012, according to the analysts. It would therefore seem unlikely that the trend in declining reserves will be abated this year.

Producers have been very vocal in reaffirming their strategy of cost control, portfolio management and capital discipline, particularly since the run up in the gold price, ensuring they do not get criticised for the same type of costly M&A and marginal project spend they carried out in the previous gold price highs.

“How steadfast miners will be to this strategy into 2020 and beyond, if prices continue to remain well supported, remains to be seen,” the analysts said.

Due to insufficient exploration spend, gold reserves have depleted significantly with the global average mine life falling from 16 years in 2012, to an estimated 11 years in 2018, they said. However, the largest producers are not facing quite such an acute situation, with their collective average mine life still over 16 years. “It is perhaps therefore not so surprising that they can afford a more calculated approach to replenishing reserves.”

To secure their longevity as pillars of the gold industry, Wood Mackenzie said it has seen heightened M&A activity and miners focusing on their core assets. While this may help to bolster balance sheets through improved operational performance and realised ‘synergies’, it seemingly does little to address the problem the industry is facing with regards to how to sustain current production levels.

“We have, as of late, noticed an uptick in some majors opting to increase their footholds in a select few juniors with promising exploration opportunities,” the analysts said.

Agnico Eagle, AngloGold Ashanti, Kinross and Newcrest are actively investing in, or entering into joint-ventures with junior gold companies to create long-term value.

Agnico Eagle announced a proposal on June 24, 2019 for an all-share acquisition of Alexandria Minerals Corporation at a $0.05 per share premium to the Chantrell Ventures Corp offer; however, O3 Mining acquired Alexandria on August 1, 2019.

AngloGold Ashanti upped its stake in Pure Gold Mining to 14.3% on July 16, 2019, which owns the Madsen gold project in Red Lake, Ontario.

Kinross purchased the near-surface, early-stage Chulbatkan project in Russia from N-Mining Limited for a total consideration of $283 million on July 31, 2019.

And, Newcrest entered into a 70-30 joint venture with Imperial Metals on August 16, 2019, where Newcrest will be the operators of the Red Chris mine, a potential ‘Tier One’ asset in British Columbia, Canada, the gold miner has said.

The analysts said: “We expect to see this trend of increased M&A activity to continue, particularly amongst the more mid-tier gold producers as they look to solidify their own positions in the industry. This will likely encompass mergers with peers to unlock shareholder value and the acquisition of assets that majors have determined to be non-core.

“This may help to progress some later stage projects into production that have been sitting on the shelf for a number of years, but we are not anticipating a knee jerk reaction to current prices. Smaller projects which have a short payback period, in a low sovereign risk jurisdiction, are an attractive proposition and we could see a number of these projects being fast tracked into production.”

And, going forward, to address the predicament of declining reserves, if prices remain elevated miners may be inclined to review their reserve and resource price assumptions, the analysts said.

Autonomous haulage trials produce “favourable” results at Agnico Eagle LaRonde

Agnico Eagle, during the June quarter, continued to test out autonomous mining at its LaRonde Zone 5 underground gold operation in Quebec, Canada, and, so far, the results have been encouraging.

The company has been increasing the network and communications capacity at the deep underground mine in the last year or so, with an LTE network now deployed in Zone 5.

The use of this advanced communications infrastructure should help facilitate the use of autonomous mining equipment at the operation, Agnico said; a theory it is currently testing out.

Agnico said, in its June quarter results, trials of automated mining equipment (two trucks and one scooptram) continued over this period, with testing taking place on weekend night shifts when underground activity is at reduced levels. Trials initially began in the December quarter of 2018.

The company said: “Testing has yielded favourable results as autonomous mucking and hauling of ore from underground to surface was successfully achieved.”

Trials are set to continue throughout this year, the company said.

Agnico Eagle brings Meliadine gold mine in ahead of schedule and budget

Agnico Eagle Mines says it has achieved commercial production at its Meliadine gold mine, in Nunavut, Canada, ahead of the original schedule and below initial guidance.

The company hit this mark on May 14, less than nine years after the company acquired the project and just over two years since the board of directors approved the mine’s construction.

Meliadine is Agnico Eagle’s largest gold deposit in terms of mineral resources, boasting 3.18 Moz of gold in the measured and indicated categories and 2.60 Moz in the inferred category.

Sean Boyd, Agnico Eagle’s Chief Executive Officer, said: “With Meliadine ramping up production over the balance of the year and Amaruq (also in Nunavut) on schedule to achieve commercial production in the third (September) quarter of 2019, the company is well positioned to achieve its gold production target of 1.75 Moz for 2019.”

The current mine plan at Meliadine outlines a phased approach to the development. The Phase 1 mill capacity is expected to be around 3,750 t/d, with ore being sourced entirely from underground accessed by two ramps. The mill capacity in Phase 2 is expected to increase to approximately 6,000 t/d, with ore being sourced from both the underground and open pits starting in year five.

The mill will employ conventional carbon-in-leach processing technology, with metallurgical recoveries expected to average 96%, resulting in average annual gold production of approximately 400,000 oz/y in years two through 14.

Initial ore processing commenced in early February using low-grade stockpiles, with pre-commercial payable gold production totalling 47,281 oz, compared with guidance of 60,000 oz.

Total project construction costs (after crediting pre-commercial gold sales) came in below the 2017 guidance of $900 million, according to Agnico, explaining that a further update on capital costs will be provided with the June quarter results.

Expected production at Meliadine for 2019 remains unchanged at approximately 230,000 oz of gold (including pre-commercial production) at total cash costs of $612/oz.

Ericsson and Ambra expand 5G partnership for mine automation

Ericsson and Ambra Solutions have announced a global cooperation agreement to lead automation for the mining industry, providing 5G-ready network solutions to automate ventilation systems, real-time personnel and vehicle tracking, and remote control of machinery like LHDs, haul trucks, drills and other mining equipment.

Ambra has selected Ericsson as a radio partner of choice, with the 5G-ready Ericsson Radio System portfolio enabling Ambra, a turnkey engineering services systems integrator, to simplify network deployments and replace up to 60 Wi-Fi access points with a single Ericsson solution, it said.

Eric L’Heureux, CEO, Ambra Solutions, said: “We are excited to expand our partnership with Ericsson to a global footprint. The Ericsson products are optimal to deliver the most demanding applications used by the mining 4.0 industry. The reliability of Ericsson products enables more predictable, secure and lower-cost connectivity, and mining companies want to use a reliable product that is available worldwide.”

Mission-critical Private LTE, deployed for Ambra’s mining customers, provides new capabilities and possibilities to cost-effectively enable digitalisation of mining-related tasks for open-pit or underground mines, Ericsson said. “Prior to this modernisation, specialised tasks and applications were difficult or simply impossible to achieve across the entire mining coverage area when using legacy ‘leaky cable’ or Wi-Fi connectivity.”

Shannon Lucas, Head of Customer Unit Emerging Business for Ericsson North America, said: “The global mining industry has been vulnerable to challenges of energy consumption, equipment loss, and human safety. We have designed an easy-to-use cellular connectivity solution to address these issues and deliver efficiency through digital transformation, while creating a path to 5G.

“Ambra will sell this solution as part of its portfolio and will partner with Ericsson customers (global service providers) to deliver it, which opens up exciting new opportunities and revenue streams for the service provider.”

Ericsson and Ambra partnered last year to deliver the world’s deepest underground LTE network for the Agnico Eagle mining complex, LaRonde Zone 5, in Abitibi, Quebec, Canada. Located 3.5 km below the surface, the mission-critical private network provides data and voice services across the LaRonde mine site and enables several internet of things (IoT) use cases to improve safety and mining operations. Since then, several applications have been deployed using Ericsson solutions to deliver automation of ventilation systems, real-time personnel and vehicle tracking and remote controlling of machinery like LHDs, haul trucks, drills and other mining equipment.

Agnico said recently that it was looking to expand this 5G network in the ramp area from level 269 to surface and at LaRonde 3.

Agnico Eagle talks LTE, automation and ore sorting in Q1 results

Agnico Eagle Mines highlighed a number of initiatives in its March quarter results as the company continues its ambitious growth plan to hit the 2 Moz production milestone in 2020.

The headline numbers might have disappointed investors – net income dropped to $37 million from $44.9 million a year earlier, on the back of lower gold sales volumes, realised gold prices and by-product revenue – but there was plenty to be excited about for the future.

Group output of 398,217 oz in the first three months of the year puts the company on track to achieve 2019 production of 1.75 Moz of gold (1.63 Moz in 2018), Agnico Eagle said, while the company’s Meliadine gold mine in Nunavut, Canada, was due to achieve commercial production next month. This is expected to be followed by the company’s nearby Amaruq project producing first gold in the September quarter.

On the technology front, Agnico reported on its communication infrastructure efforts at its deep LaRonde gold mine in the Abitibi region of Quebec, Canada.

Following the successful deployment of its LTE network at LaRonde Zone 5, the company deployed an LTE network at the LaRonde mine below level 269 in 2018. Extension of the network in the ramp area from level 269 to surface and at LaRonde 3 will take place throughout 2019, Agnico said.

“The LTE network facilitates the integration of automation technologies currently being tested at LaRonde Zone 5, which are expected to allow the company to maintain similar productivity levels at LaRonde 3 as it historically achieved in the shallower portions of the mine,” the company said.

And, on those automation trials at LaRonde Zone 5, Agnico said: “Integration and pilot testing of automated mining equipment (two trucks and one scooptram) continued in the first (March) quarter of 2019 and will be ongoing over the balance of the year.”

Last year, Agnico Eagle confirmed its ore sorting plans at its Pinos Altos operation in Mexico. This included the installation of a pilot plant at the mine.

The company said, in its March quarter results, samples will be processed from all of the orebodies at Pinos Altos and La India in 2019 to determine the merits of implementing the technology at its Mexican operations.

“To-date, sorting of open-pit ore from the Sinter deposit has yielded favourable preliminary results,” it said, adding that similar ore sorting pilot testing is being considered at the company’s other operating regions.

Newtrax AI helps out Agnico Eagles’s Goldex mine maintenance team

Newtrax Technologies says it has applied machine-learning algorithms to help Agnico Eagle Mines’ Goldex mine predict mobile equipment maintenance issues up to two weeks in advance.

With the two companies already having an existing relationship at the mine, in Quebec, Canada, Newtrax was approached in the fall to discuss the data Agnico had collected from sensors over the past six years. This amounted to 10 billion data points, according to Newtrax.

“This data was exactly what was needed to apply machine-learning algorithms in order to predict mobile equipment maintenance issues at least two weeks before they were supposed to happen,” Newtrax said.

Daniel Pinard, Team Lead, Special Projects with Agnico Eagle, said this predictive Newtrax AI solution allowed the company to intervene before incurring serious problems that could potentially break vehicle engines.

“Through the use of machine-learning algorithms with Newtrax, we were recently able to analyse an engine that had a potential problem and we saved it from failing. This helped Goldex mine avoid serious damage on that engine which saved them C$85,000 ($63,610).”

The Newtrax AI solution is unique in three ways, according to Michel Dubois, VP QA & Artificial Intelligence at Newtrax, “first, Newtrax has years of unique data that is extremely well suited for machine learning (ML)”.

This creates a source of training data for ML that is unique in the world, with the data growing every time a mining company decides to join in, he said.

“Second, we have a unique AI team who knows how to generate actionable results using existing AI algorithms. And, third, we have a unique approach where our AI specialists go underground and focus on quick wins, and they leverage those existing algorithms to solve high-value problems.”

This is the first ever applied case study for ML in the underground hard-rock mining industry with a defined return on investment, according to Newtrax.

Newtrax said it worked with artificial intelligence and ML researchers such as IVADO to apply existing algorithms to the data collected in mine sites.

Agnico Eagle Mines looks to ore sorting for higher-grade gold-silver feed at Pinos Altos

Agnico Eagle Mines is in the process of installing an ore sorting pilot plant at its Pinos Altos gold-silver operation in Mexico as it looks to improve the feed grade to its processing facilities.

The announcement came in the company’s September quarter financial results, which also mentioned a planned trial of automated underground mining equipment at the La Ronde Zone 5 mine in the Abitibi region of Quebec, Canada.

Agnico said testing of the ore sorter was expected to begin later this month and continue for some six months.

“Over this period, samples will be processed from all the orebodies to determine the merits of implementing the technology in Mexico,” the company said, adding that similar ore sorting pilot testing was being considered at the company’s other operating regions.

Pinos Altos is an open pit and underground operation that produced close to 250,000 oz of gold last year.