Tag Archives: Agnico Eagle Mines

Quebec miners shut down operations following COVID-19 government order

The latest provincial government-mandated restrictions to address the COVID-19 situation have seen miners down tools at operations in Quebec, Canada.

Announced on March 23, the order was for the shutdown of all non-essential businesses and services for a period of three weeks, starting on midnight on March 24.

While mining was listed as one of the priority services, those in the mining sector have been instructed to minimise activities.

Yamana Gold, which along with Agnico Gold Mines’ jointly owns the Canadian Malartic mine (pictured), said it would ramp down operations at the mine following discussions with representatives of the Government of Quebec to “obtain additional clarity in regard to the order”.

The operation, Canada’s largest gold mine, will be on care and maintenance and minimal work will be taking place until the date specified in the order (April 13), it said.

Yamana said it was demobilising employees and contractors in a safe and orderly manner, leaving only a small number of employees on site to maintain property and equipment and oversee all environmental responsibilities and obligations.

“A return to full capacity at Canadian Malartic is expected to occur in an expedited manner as soon as the temporary restriction is lifted,” it said.

Yamana’s partner, Agnico Eagle Mines, also announced its LaRonde Complex and Goldex Mine, in the Abitibi region of Quebec, would be ramped down in an orderly fashion while ensuring the safety of employees and the sustainability of the infrastructure.

“Each of these operations are to be placed on care and maintenance until April 13, 2020, and, as instructed, minimal work will take place during that time,” the company said.

With its Meliadine and Meadowbank mining operations in Nunavut being serviced out of Quebec, it said it will also slow activities there.

Eldorado Gold, meanwhile, has temporarily minimised operations at its Lamaque underground mine until April 13.

As of today, it will ramp down operational activity and maintain only essential personnel on site responsible for maintaining appropriate health, safety, security and environmental systems, it said.

“The company remains committed to resuming operations in a timely manner once the suspension is lifted,” Eldorado Gold added.

The news came on the same day it announced the receipt of a Certificate of Authorization from the Quebec Ministry of Environment to allow for the expansion of underground production from the Triangle deposit at Lamaque from 1,800 t/d to 2,650 t/d, once operations resume. This expansion could see annual average gold production rise to 170,000 oz, from close to 130,000 oz.

Hecla Mining has also slowed operations at its Casa Beradi gold mine in the province, with the company saying it will have limited operations in place to protect the facilities and environment while the suspension is ongoing.

Rio Tinto, which operates aluminium operations in the province, said it was working with the government to comply with its directive.

“Rio Tinto understands that the Quebec government has designated industrial complexes including the aluminium sector and the mining industry as essential industries but instructed that they must reduce their business activity to the minimum,” it said.

Over the border in Ontario, there has been a more mixed response to the COVID-19 situation, led by the provincial government taking a different tack to politicians in Quebec.

Some mines, such as Kirkland Lake Gold’s Detour Lake operation and Wesdome Gold Mines‘ Eagle River complex, have reduced the amount of workers on site, whereas others like Newmont (at Musselwhite) have put operations into care and maintenance mode.

Ontario’s government has issued a similar notice to its neighbour about non-essential businesses, but its definition is different.

Businesses that ensure global continuity of supply of mining materials and products, including metals such as copper, nickel and gold, and that support supply chains in northern Ontario including mining operations, production and processing; mineral exploration and development; and mining supply and services that support supply chains in the mining industry including maintenance of operations, health and safety, are all considered ‘essential’.

This extends beyond mining companies, too, with Maestro Digital Mine one of the recent Ontario-based suppliers to confirm it was “deemed an essential service”. It said it would continue to provide support to the underground mining sector, “keeping miners safe with gas sensors and airflow sensors” during this time.

Northvolt charging up Epiroc battery-electric mining solutions

Northvolt has recently delivered its largest order of lithium-ion battery systems to date to Epiroc, as the two companies’ partnership continues to blossom.

The delivery of systems – which will be integrated into Epiroc’s mid-sized drilling family, Scooptram ST14 LHD and Minetruck MT42 – is the latest in a series made for Epiroc since 2018 and represents the first commercial roll-out of the latest generation of battery system from Northvolt, the Swedish battery developer and manufacturer said.

In an online post from Northvolt, the company interviewed Anders Lindkvist of Epiroc’s underground division to hear about the delivery and find out what it means for the original equipment manufacturer.

“The development of the battery system solution we’re integrating into Epiroc machines, both in terms of hardware and software, has been a true collaboration between Epiroc and Northvolt,” Lindkvist said. “The most recent delivery represents a major update compared to the earlier ones.

“Implemented into the new design are a lot of improvements in terms of reliability and serviceability. These design improvements come from the learnings taken from the common trial, which Northvolt and Epiroc have been involved in over the last 18 months. The changes appear promising.”

Demonstration activities which Lindkvist spoke of began with machine testing at Epiroc’s facilities in Örebro. But, in Spring 2019, testing stepped up to involve the first real-world test for the new battery-powered machines when Epiroc, as part of the EU funded Sustainable Intelligent Mining Systems (SIMS) program, brought several electric machines into commercial operation at Agnico Eagle’s Kittilä gold mine in Finland.

The fleet, running on earlier generation batteries supplied by Northvolt, included a Minetruck MT42, an underground truck which has a 42 t payload capacity – making it one of the largest battery-operated mine trucks on the market.

Commenting on these recent experiences, Lindkvist said: “We’ve gained a deeper knowledge of the limitations of batteries and greater perspective on how to handle and operate them. The limitations are fewer than on diesel engines, but they are different, so these need to be addressed with different actions. This was something we started to learn with our first-generation electric machines, but we now have a much deeper knowledge of the issues.”

Machine performance

“The performance we’re getting from the machines is at the level we expected,” explains Lindkvist. “Actually, battery running time appears longer than estimated, and we have not yet finalised the tuning of energy management which could optimise performance further.”

With battery cell development and optimisation of battery management systems as Lindkvist noted, driving time is likely to increase further still.

“Additionally, we’ve collected feedback from operators who experience the machines to be more powerful,” noted Lindkvist. “Other benefits are becoming clear too – such things as the quietness of operations, and possibility to talk to bystanders next to machines, seem more important than we thought.”

New solutions for an electric future

Close collaboration between Epiroc and Northvolt’s industrial battery design and development teams has been critical, Northvolt says. For Epiroc, an interesting dimension to the partnership is how it has shifted the company’s approach to “surrounding product development”.

Lindkvist said: “Epiroc has a typically involved itself with implementing well-proven solutions; it is very exciting to work with technology in the forefront. Combine this with the rapid growth of Northvolt, in an area where much is happening, and you get a very inspiring and innovative collaboration.”

Looking ahead, the path is bright. Evaluation of electric machine performance and operations will continue with the demonstration project in Finland, and validation of the new battery systems will be undertaken, according to Northvolt.

“As validation is concluded, this new generation system will be available for delivery to customers all over the world,” Lindkvist says. “This will be the moment when we grow to substantial volumes and this is very significant for Epiroc.”

Epiroc already has a sense of demand for these machines. In September 2019, the company announced orders for battery-electric mining equipment from customers in several countries including Finland, Australia and Canada. The orders were for Epiroc’s latest generation of electric machines consisting of 14 t and 18 t loaders, the Minetruck MT42 and a mid-sized drilling family including face drilling, production drilling and rock reinforcement rigs.

Epiroc aims to be able to offer its complete fleet of underground mining equipment as battery-electric versions by 2025.

“We will continue to diesel engine versions, but the volume of machines running on battery power will grow fast as customer readiness develops further,” Lindkvist says.

Successful electrification of mines, of course, relies on more than just machines. To operate a battery-electric fleet effectively, mines need to be designed differently, charging stations and ancillary equipment must be in place and operating profiles for efficient machine usage need to be established.

“Fortunately, the ongoing work of Epiroc is helping to fill out an in-depth understanding of what an electric mine may look like,” Northvolt says.

While underground mines might be some of the first to go electric, in large part thanks to the potential reductions in ventilation underground that create a strong business case, electric machines will soon become common above ground, too, according to Northvolt.

It says: “Epiroc has observed that ongoing success in the underground mine market is proving the viability of the technology and its competitiveness against performance of diesel-powered equipment – points which serve to strengthen the case for developing surface mining solutions.”

This is an edited version of a post that first appeared on Northvolt’s website here.

ICMM looks to align mining industry on cleaner, safer vehicles

When the International Council on Mining and Metals (ICMM) launched its Innovation for Cleaner, Safer Vehicles (ICSV) program just over a year ago, some industry participants may not have realised how much progress could be made so quickly by taking a collaborative approach.

The ICMM has proven influential across the mining industry since its foundation in 2002 in areas such as corporate and social governance, environmental responsibility, and stakeholder relations, yet it has rarely, until this point, engaged directly as an industry group with original equipment manufacturers (OEMs) and service providers.

Close to 12 months after being established, it’s clear to see the program and the council itself has been successful in bridging a divide.

It has been able to corral a significant portion of the mining and mining OEM market players into a major industry discussion on core focus areas set to dominate the sector for the next two decades.

Now 27 of the world’s leading mining companies and 16 of the best-known truck and mining equipment suppliers are collaborating in a non-competitive space “to accelerate the development of a new generation of mining vehicles that will make vehicles cleaner and safer,” the ICMM says.

The ICSV program was created to address three of the most critical safety, health and environment performance issues in the ICMM’s mission towards zero harm and decarbonisation. Achieving this goal would involve the industry introducing and adopting the next generation of equipment to respond to the challenges.

More specifically, the program aims to:

  • Introduce greenhouse gas emission-free surface mining vehicles by 2040;
  • Minimise the operational impact of diesel exhaust by 2025; and
  • Make collision avoidance technology (capable of eliminating vehicle related collisions) available to mining companies by 2025.

In all three, it seeks to address the industry’s innovation challenge of ‘who motivates who’ or the chicken and egg analogy, according to Sarah Bell, Director, Health, Safety and Product Stewardship for the ICMM.

“You can imagine a mining company saying, ‘we can’t adopt technology that doesn’t yet exist’ or an OEM saying, ‘we can’t invest in development because we’re getting mixed market signals’. This is, of course, why this program has been set up in the way it has,” she told IM. “Bringing both the mining company and OEMs together, they have been able to work through these normal innovation challenges and align on defining the direction of travel and critical complexity to be solved for each of the ambitions set.”

High-level participation

The list of companies the ICMM has been able to involve in this program is impressive.

It is being guided by a CEO advisory group of six; three from the mining community – Andrew Mackenzie (CEO, BHP), Mark Cutifani (CEO, Anglo American) and Nick Holland (CEO, Gold Fields) – and three from the mining equipment supply side – Denise Johnson (Group President of Resource Industries at Caterpillar), Max Moriyama (President of the Mining Business Division at Komatsu) and Henrik Ager (President of Sandvik Mining and Rock Technology).

On the mining company front, ICMM membership makes up around 30% of the total metal market share, with some 46% in copper, 27% in gold and 42% in iron ore. Participating OEMs and third-party technology providers, meanwhile, include the three majors above, plus Cummins, Epiroc, Wabtec Corporation (formerly GE), Hexagon Mining, Hitachi Construction Machinery, Liebherr, MacLean Engineering, MTU, Modular Mining Systems, PBE Group, Nerospec, Future Digital Communication and Miller Technology.

Bell says the high-level participation builds the “widespread confidence” needed to accelerate investment in these three key areas”, while the ICMM’s focus on the leadership side of the technology integration equation and change management has proven “absolutely key”.

She clarified: “This collaboration operates under anti-competition and anti-trust rules. Our role is to convene the parties, motivate action and promote solutions.”

The program offers a “safe space for the OEMs and members to work openly in a non-competitive environment”, she added, explaining that the aim is not to come up with “preferred technologies”, but define the “functional and operational pathways required to meet the ambitions set”.

Vehicle interaction (VI)

Some of the ambitions look easier to achieve than others.

For instance, collision avoidance and proximity detection technology has made huge strides in the last decade, with the ICMM arguing its 2025 target is like a “sprint”, compared with the “10,000 m race” that is minimising DPM underground by 2025 and the longer-term aim to introduce GHG-free surface mining vehicles by 2040.

“There are regulations that require implementation of collision avoidance and proximity detection technology by the end of 2020 in South Africa,” Bell said. This will undoubtedly provide a catalyst for further developments to speed up.

The ICSV program is also leveraging the work of the Earth Moving Equipment Safety Round Table (EMESRT) in its development of fundamental functional/performance requirements for operators and technology providers.

These requirements were updated and released by EMESRT in September and are known as ‘PR5A’.

Credit: Hexagon Mining

Bell delved into some detail about these requirements:

“The EMERST requirements are designed around a nine-level system that seeks to eliminate material unwanted scenarios such as – equipment to person, equipment to equipment, equipment to environment and loss of control,” she said.

“The fundamental change with this newly released set of functional requirements by EMESRT is that the mining industry users have defined the functional needs for levels 7-9 (operator awareness, advisory controls, and intervention controls). That stronger level of collaboration hasn’t necessarily been there.”

EMESRT and its guidelines have been given an expanded global platform through the ICMM’s ICSV, with the program, this year, providing the convening environment for users and technology providers to help finalise these updated requirements, according to Bell.

With all of this already in place, one could be forgiven for thinking the majority of the hard work involved with achieving the 2025 goal is done, but the working group focused on VI knows that while OEMs continue to retrofit third-party vehicle collision and avoidance systems to their machines the job is not complete.

“Let’s think about the seatbelt analogy: you don’t give buyers of vehicles a choice as to whether they want a seatbelt in their car; it just comes with the car,” Bell said.

“At the moment, by design, vehicles don’t always have this collision and avoidance systems built in, therefore there is a big opportunity for collaboration between OEMs and third-party technology providers.”

Underground DPM goals

“The DPM working group have recognised that, in the case of the DPM ambition, ‘the future is already here, it’s just unevenly distributed’,” Bell said.

“Bringing together the OEMs and the mining companies this year through the ICSV program has enabled the group to explore the variety of existing solutions out there today,” she added.

These existing solutions include higher-tier engines, battery-electric equipment, tethered electric machinery, fuel cell-equipped machines for narrow vein mining and solutions to remove DPMs and other emissions from the environment like Johnson Matthey’s CRT system.

And, there are numerous examples from North America – Newmont Goldcorp at Borden, and Glencore and Vale in Sudbury – South America – Codelco at El Teniente Underground – and Europe – Agnico Eagle Mines at Kittilä (Finland, pictured) – to draw from.

Bell also mentioned some examples from Australia where regulatory changes have seen miners apply existing technology and carry out changes in their work plans and maintenance practices to minimise DPM emissions.

Haulage and loading flexibility, battery charging and mine design have all come under the spotlight since these new generation of ‘green’ machines have emerged, so achieving the 2025 goal the ICSV stated is by no means a foregone conclusion.

“There remains more work to do in achieving diesel-free vehicles underground,” Bell said.

The interested parties are aware of this and the program’s DPM maturity framework is helping miners and OEMs plot a course to reaching the target, she explained.

“The DPM maturity framework promotes existing solutions available today that would enable a mining operation to reduce their DPM emissions to a level that would meet the ambition level (shown as Level 4 – transition to zero),” she said.

These frameworks are useful for starting a “change conversation”, Bell said, explaining that mining companies can assess within their organisations where they currently sit on the five-level chart and discuss internally how to move up the levels to meet their goals.

These same frameworks look beyond minimising “the operational impact” of DPM emissions underground, with Bell explaining that Level 5 of the maturity framework involves “non-DPM emitting vehicles”.

GHG-free surface mining vehicles

Even further in the distance is the longer-term target of introducing greenhouse gas emission-free surface mining vehicles by 2040.

This ambition, more than any other, is less clearly defined in terms of technological solutions across the industry.

While battery-electric solutions look like having the goods to reach DPM-free status underground with expected developments in battery technology and charging, the jury is still out on if they can create a GHG-free large-scale open-pit mining environment.

The world’s largest battery-electric haul truck – eMining’s 63-t payload eDumper (pictured) – may have proven its worth at a Ciments Vigier-owned quarry in Switzerland, but the world’s largest open-pit mines require a solution on another scale altogether.

As Bell said: “There is a lot of work to do to develop batteries at scale for surface fleet that suit the different operating conditions.

“That’s a key point because that lends itself to the fact that we don’t want one solution; we will need multiple solutions. We don’t want to stifle innovation; we want to encourage it.”

ICMM member Anglo American has hinted that hydrogen power could be one solution, and the miner is looking to show this next year with the development of its hydrogen-powered 300-t payload haul truck.

There has also been in the last 18-24 months a mini renaissance of trolley assist projects that, ABB’s Gunnar Hammarström told IM recently, could, in the future, work in tandem with battery-powered solutions to provide a GHG-free solution.

The ability for industry to pilot and validate technology options like this “within the boundaries of anti-competition” is crucial for its later adoption in the industry, Bell said.

She said a key enabler of industry decarbonisation is access to cost competitive clean electricity, which would indicate that regions like South America and the Nordic countries could be of interest in the short and medium term for deploying pilot projects.

It is this goal where the industry R&D spend could potentially ramp up; something the ICMM and the ICSV is aware of.

“For the OEMs and mining companies to effectively minimise capital expenditure, optimise R&D expenditure and reduce the change management required by the industry, there needs to be a careful balance of encouraging innovation of solutions, whilst managing the number of plausible outcomes,” Bell said.

In terms of encouraging the development of these outcomes, carbon pricing mechanisms could provide some positive industry momentum. Vale recently acknowledged that it would apply an internal carbon tax/price of $50/t when analysing its future projects, so one would expect other companies to be factoring in such charges to their future mine developments.

Industry-wide GHG emission caps could also provide a catalyst. In countries such as Chile – where up to 80% of emissions can come from haul trucks, according to ICMM Senior Programme Officer, Verónica Martinez – carbon emission reduction legislation could really have an impact on technology developments.

Forward motion

While 2019 was a year when the three working groups – made up of close to 50 representatives in each work stream – outlined known barriers or opportunities that might either slow down or accelerate technology developments, 2020 will be the year that regional workshops convened to “encourage first adopters and fast followers” to move these three ambitions forward take place, Bell said.

A knowledge hub containing the previously spoken of maturity frameworks (delivered for all three groups) will allow the wider industry outside of the ICMM membership to gain a better understanding of how the miner-OEM-service provider collaboration is working.

Bell said the ICMM already has a number of members testing these group frameworks on an informal self-assessment basis to understand “how they are being received at an asset level and feedback insights to the group in an effort to understand how we may portray an industry representative picture of where we are today”.

Such strategies bode well for achieving these goals into the future and, potentially, changing the dynamic that has existed between end users and suppliers in the mining sector for decades.

Bell said: “The feedback that we got from OEMs is that mining companies had completely different objectives, but they have now greater confidence that we are aligned on the direction of travel towards the ambitions set.”

TOMRA seminar highlights sensor-based ore sorting benefits

TOMRA recently held a seminar on sustainable mining solutions and sensor-based sorting that, it said, addressed major challenges of the mining industry, including increasing pressure to be more financially streamlined and radically more efficient, while addressing environmental and sustainability concerns.

Sensor-based sorting (SBS) is proving to be an increasingly important tool both to formulate optimal solutions for greenfield projects and to help conquer challenges for keeping brownfields operations viable, converting the mining operation’s resource into value, according to TOMRA.

During this seminar at the Colorado School of Mines, TOMRA’s specialists were joined by guest speakers to examine all aspects of a sensor-based sorting operation with a broad range of topics including sorting technology, applications, plant design, test work and economic considerations.

The 62 participants came from all across the US and Canada, and included representatives from mining companies, engineering firms and students and professors eager to learn more about the applications and technology.

Corby Anderson, Harrison Western Professor at the Colorado School of Mines, opened the seminar with an introduction of recycling, recovery and sorting. The next talk focused on sensor-based sorting technologies and their applications, as well as highlighting fully operational SBS plants in the mining industry.

TOMRA’s Mathilde Robben explained the importance of setting objectives for SBS and the financial and technical aspects to evaluate.

“The most critical factors to consider when assessing the feasibility of sorting are throughput requirements, particle size and potential water usage, as well as the mineralogy of the ore,” TOMRA said, adding that having a clear understanding of where sorting can benefit in the process is paramount when planning to use this technology.

Test work is the best way to determine if SBS will work for an application, and TOMRA’s Chris Korsten explained the company’s test work philosophy to identify the best solution that will meet the mining operation’s specific conditions and objectives.

Guest speaker Erik Stepperud of Hazen Research, the industrial R&D company specialising in the mining, chemical, energy and environmental industries, shared his expertise in assays and interpretation of test results, while Craig Murray of the Saskatchewan Research Council spoke about testing and support services for projects using sorting technology.

Downstream impacts

When designing optimal sorting plants, it is critical to understand the necessary auxiliary components for materials handling, such as screens, washing and conveying, and where to place the sorter in the flowsheet to optimise the process and get the most out of SBS, according to TOMRA.

Particle size is critical to SBS, so designing optimal crushing and screening units is vital, and TOMRA invited expert speakers to cover these topics: Jörn Rohleder of Outotec, which specialises in designing leading technologies and services for the sustainable use of natural resources, discussed crushing design and Eli Cannell of Joest, a leader in vibration technology, elaborated on screening. Greg Black of Golden Eagle Technologies, meanwhile, covered the topic of dust extraction.

SBS can have a huge positive impact on the downstream operations of a flowsheet, as more waste is rejected from the process upstream. This means waste is not carried through the rest of the process, resulting in significant savings in energy, water and chemicals. A further benefit is the reduction of fine tailings that are environmentally challenging to manage.

The seminar was very well received, according to TOMRA, and achieved its goal of providing a pragmatic foundation on SBS projects. Genevieve Gosselin, Senior Technical Metallurgist at Agnico Eagle Mines, said, “The seminar gave us keys for the implementation of ore sorting in brownfields and greenfields mining projects”. Vera Gella, Metallurgist at BBA, said: “For us, the test work preparation and flowsheet design are most relevant to what we do every day and being able to quickly assess whether or not sorting is applicable to a given project. Like Jörn pointed out, if you pick the wrong crushing/SBS circuit design up front, it can drastically change the outcome of a project. It’s critical to think carefully about how to get the most out of your sorting circuit.”

It also raised awareness of aspects that participants may not have considered in the past. For Gosselin it was “how important the geology of the deposit is, and the need to evaluate this before starting bench and pilot scale testing”. Gella, on the other hand, was struck by the sustainability aspect, which is becoming increasingly important: “One of the things that we hadn’t thought about because our scope was focused on the economic tradeoff was the environmental impacts of SBS. The environment is becoming more and more of a focus for all stakeholders and will be a key driver for mining projects going forward.”

Agnico continuing to innovate at Kittilä gold mine as shaft project progresses

Agnico Eagle is likely to leverage more innovation at its Kittilä gold mine in northern Finland judging by André van Wageningen’s presentation at the FEM conference in Levi, this week.

In a talk titled, Building future mines through collaboration, van Wageningen, Engineering Manager of the Shaft project at Agnico Eagle Finland, said the company was testing out battery-electric equipment and could potentially apply LTE in the underground mine next year.

Much of the battery-electric machine testing the company is carrying out at the mine is in partnership with the EU-funded SIMS project, but van Wageningen said the company has also acquired two electric bolters outside of the program.

As recently as last week, Agnico tested out an Epiroc MT42 Minetruck and ST14 Scooptram at the mine (pictured), with van Wageningen saying the trials had, so far, gone well, with operators noticing less heat generation and vibrations, and better air quality within the operating environment.

“The battery capacity is of course the main concern,” he said in answer to an audience question about how the electrified equipment had so far performed. “Our mine is designed to drive up and…[the machines] have a limited capacity for [that].”

On the topic of collaboration, van Wageningen mentioned that if Agnico had decided on the use of battery-electric and electrified equipment four or five years ago, it would have likely deepened the shaft further and redesigned the mine to suit the reduced ventilation needs and required battery charging/changeout infrastructure.

“If you go for electrification, you either do it or you don’t as you have to build charging stations for this,” he said, adding that these need to be plotted around the mine in relevant locations to ensure the machines are as productive as possible.

As it stands, the company plans to go down to 1,040 m below surface as part of an expansion plan at the mine to increase production by 25% to 2 Mt/y of ore. This could see Kittilä add 50,000-70,000 oz/y of gold to its profile.

The company is building the 5.6 m diameter shaft by, first, raiseboring to 4 m diameter and then slashing to 5.6 m, van Wageningen said. The company is then concrete casting the shaft.

van Wageningen said Agnico has raisebored down to 875 m, and the 94 m headframe was likely to be finalised in the very near future.

The deepening of Kittilä and the evolution towards using autonomous underground machinery is probably behind the company’s plans to leverage LTE communications at the operation.

Agnico is already a leader when it comes to LTE, having become the first company to roll out the communications technology at an underground mine – the La Ronde Zone 5 operation in Quebec, Canada. This move was predicated on Agnico trialling autonomous equipment underground at the mine. In its June quarte results, the company said results from these trials had produced “favourable” results.

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.