Tag Archives: Detour Lake

Agnico eyes 1 Moz/y gold operation status at Detour Lake with future underground mine

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Agnico Eagle is evaluating the potential for Detour Lake in Ontario, Canada, to become a million ounce per year gold operation after the completion of a recent slew of studies.

The 2024 Life of Mine plan builds on the company’s previously filed technical report on Detour Lake as well as the mine plan update released by the company in July 2022. It updates the open-pit mine production profile and incorporates updated costing. The company has also completed a preliminary economic assessment (PEA) which contemplates the concurrent operation of the open pit and a proposed underground mining project, combined with mill throughput optimisation to 29 Mt.y. The 2024 PEA demonstrates that the Underground Project and the mill optimisation have the potential to increase the Detour Lake mine’s overall production to an average of approximately 1 Moz/y of gold over a 14-year period, starting in 2030. The current open-pit operation produced 677,446 oz of gold in 2023.

The 2024 PEA assumes an underground mining rate of approximately 11,200 t/d starting in 2030, combined with a mill expansion to 79,450 t/d starting in 2028. Annual production is expected to increase by approximately 43%, or 300,000 oz/y of gold, from 2030 to 2043. The PEA extends Detour Lake’s mine life by two years to 2054, with the company saying it 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 preliminary mining concept for the Underground Project is based on transverse longhole open stoping, as this mining method is best suited for the sub-vertical mineral deposit. Sublevels will be 40 m apart, with the stope size averaging approximately 30,000 t. Primary stopes will be backfilled with cemented paste fill, while secondary stopes will be backfilled with either cemented paste fill or waste rock fill according to the sequence and waste material available. Approximately 130 stopes will be mined annually to sustain a mining rate of approximately 11,200 t/d (equivalent to an annualized production rate of 4 Mt/y).

The Underground Project is expected to use a combination of conventional and automated equipment, similar to the company’s Odyssey mine at the Canadian Malartic complex in Quebec. Ore and waste handling will be conducted by LHDs and trucks with a capacity of 21 t and 60 t, respectively. The ore handling system to surface will consist of ore passes, an underground jaw crusher located at level 760 and a conveyor system with a capacity of 15,000 t/d. The conveyor will be installed in a dedicated conveyor ramp, with the portal located near the primary crusher on surface, east of the open pit. A service ramp, with the portal located near the west end of the open pit, will be the main underground access for the workforce, equipment and materials.

Production could begin as early as 2030 and ramp up to the designed rate 11,200 t/d by 2033, which is expected to be sustained throughout the mine life until 2044.

The Detour Lake 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 t/d in 2020 to approximately 69,700 t/d in 2023 and is expected to reach 76,700 t/d by the end of 2024. The company believes that further process optimisation can be achieved with minimal investment to reach a mill throughput rate of 79,450 t/d by 2028. The main initiatives to realise this potential include:

  • The implementation of advanced process control systems to optimise 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; and
  • Further optimisation to the maintenance practices and improved mill runtime.

An investment of approximately $12 million is included in the 2024 PEA to execute these initiatives.

Ammar Al-Joundi, Agnico Eagle’s President and Chief Executive Officer, said: “At Detour Lake, the company continues to build on the unique potential of this world-class asset. With the development of an underground mine to complement the existing open-pit mine, we see the opportunity to transform the asset into one of the top five gold mines in the world by output. We believe the Underground Project has relatively low execution risk, and has the potential to generate a strong risk-adjusted return on capital while maintaining exploration and production upside for decades in one of the best mining jurisdictions in the world.

“We have adopted a phased and disciplined approach to develop this potential, with the approval of a $100 million investment over the next three years to further study and de-risk the Underground Project, including the development of an exploration ramp (2 km) and the collection of a bulk sample. Concurrently, we are planning a conversion and expansion drill program to realise the upside exploration potential along the western plunge of the mineralisation. The long mineral reserve life and significant production base at both Detour Lake and Canadian Malartic provide a solid foundation for Agnico Eagle’s production profile and strongly positions the company for decades to come.”

The average total cash costs for the Underground Project, combined with the mill optimisation to 29 Mt/y, are expected to be $690/oz. Development capital expenditures for the Underground Project and mill optimisation to 29 Mt/y are forecast to be approximately $731 million. Sustaining capital expenditures are forecast to be approximately $631 million over the life of the Underground Project, or between $40 million-$45 million per year from 2030 to 2043.

Agnico says the Underground Project and mill throughput optimisation to 29 Mt/y are expected to generate an after-tax internal rate of return of approximately 18% using a gold price assumption of $1,900/oz and a C$/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, the Underground Project and mill throughput optimisation to 29 Mtpa are expected to generate an after-tax IRR of approximately 25%.

Agnico Eagle’s Detour Lake mine adds Cat 798 haul trucks to fleet

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With the aim of ramping up production at the Detour Lake gold mine in Ontario, Canada, Agnico Eagle Mines has commissioned four Cat® 798 AC haul trucks at the open-pit operation.

These trucks, which come with a 372-t payload and are electric drive, were introduced to the market in 2019, joining the mechanical-drive Cat 797F in the 400-short-ton size class.

Agnico said these new vehicles were introduced to the fleet in the March quarter, with an additional two units planned to be commissioned in the June quarter.

In the March quarter of 2023, the Detour Lake mill set a record for first quarter throughput and activities continued to focus on mill process optimisation and improving availability with the goal of achieving and potentially exceeding throughput of 28 Mt/y. This helped the company produce 161,857 oz of gold in the three-month period.

While the company’s near-term focus is on open-pit operations at the mine, it is also looking to integrate additional drill data into a revised mineral resource model that will be used to evaluate potential underground mining scenarios.

The population of Cat 798 AC trucks has been growing in the last few years, with the Antamina, Toquepala and Cuajone copper mines in Peru. Last year, Finning announced it would deliver 13 Caterpillar 798s to Codelco’s Ministro Hales open-pit copper mine, while BHP, Caterpillar and Finning International announced, in August, that a haul truck fleet replacement process at the Escondida mine, the world’s largest copper producer, would also the OEM and dealer provide Cat 798s to the operation.

Quebec miners shut down operations following COVID-19 government order

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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.

Detour Lake acquisition to make Kirkland Lake Gold plus-1.5 Moz/y producer

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Kirkland Lake Gold and Detour Gold Corp have entered into a definitive agreement will see the ASX- and TSX-listed miner become a plus-1.5 Moz/y gold producer through the all-share acquisition of Detour and its Detour Lake gold mine, in Ontario, Canada.

Under the terms of the transaction, which values Detour at C$4.9 billion ($3.3 billion), all the issued and outstanding common shares of Detour Gold will be exchanged at a ratio of 0.4343 of a Kirkland Lake Gold common share for each Detour Gold common share. Upon completion of the transaction, existing Kirkland Lake Gold and Detour Gold shareholders will own around 73% and 27% of the pro forma company, respectively.

Kirkland Lake says Detour Lake is a uniquely large-scale, long-life Canadian mine, with current production of around 600,000 oz/y and substantial growth potential.

The deal also solidifies Kirkland Lake’s position as a senior gold producer with pro-forma 2019 output targeted at more than 1.5 Moz and analyst consensus 2019 free cash flow of almost $700 million, Kirkland said.

The deal also increases Kirkland Lake’s mineral reserve base, adding 15.41 Moz to Kirkland Lake Gold’s mineral reserve base and extending its reserve life index by eight years.

The financial strength and technical expertise of the combined company is expected to support the continued optimisation and potential expansion of Detour Lake, Kirkland Lake said, explaining that opportunities exist to significantly increase production at improved unit costs and to expand current mineral reserves and mineral resources.

It also provides exploration upside, with Detour Gold’s land position covering 1,040 km2 along the northernmost sections of the prolific Abitibi Greenstone Belt (including 646 km² on existing Detour Lake property).

Tony Makuch, President and Chief Executive Officer of Kirkland Lake Gold, said: “The acquisition of Detour Gold is an excellent fit for Kirkland Lake Gold. We have already taken two mining operations, Macassa and Fosterville, and transformed them into high-quality assets that generate industry-leading earnings and free cash flow. The addition of Detour Lake provides an opportunity to add a third cornerstone asset that is located in our back yard in northern Ontario.

“Detour Lake will provide the pro forma company with a 20-plus year mine life which provides unparalleled optionality and excellent growth potential for the benefit of all shareholders. The management team at Detour Gold has done an exceptional job in making improvements and building momentum at the mine.

“Once the transaction is completed, we will continue efforts to optimise current operations and commence engineering work to evaluate expansion opportunities at Detour Lake, which we anticipate could lead to significant production growth, improved unit costs and higher levels of mineral reserves and mineral resources.”