Tag Archives: gold mining

Agnico Eagle Arctic gold mining asset management program lowers costs, downtime

Agnico Eagle is reflecting on a series of gains it has made on the asset management front, just over three years after beginning a project focused on maximising the value of its assets, ensuring peak performance and building resiliency while managing risk.

This journey started at its Arctic gold mining operations in Nunavut.

Facing logistical hurdles such as reliance on marine sealift and air cargo, coupled with the lack of a robust clean energy infrastructure, a new asset management program was introduced in 2020. This program focused on its Meliadine mine and Meadowbank complex, aiming to develop a collaborative framework based on the global standard: ISO 55000 for Asset Management.

In 2022, Agnico Eagle’s Asset Management team focused on effective communication and implementing new tactics across various departments. The goal was to blend the concepts of ISO 55000 standards with the unique challenges it faces, while enhancing value of its assets.

Rick Derkach, from the Asset Management team, highlights this journey, saying: “We wanted to add value to our mining operations by aligning with Agnico Eagle’s values and business strategies, aligning organisational objectives to tactical plans for maintenance and reliability. We carefully collaborated, creating detailed plans to support the new practices. Our intention was to make sure that these new practices would remain effective by standardising activities, ensuring resiliency year-after-year for any operations within Agnico Eagle.”

The collaborative effort involved over 15 internal departments and more than 40 individuals, forming partnerships with equipment manufacturers and suppliers. The Asset Management team notes: “Our impact extended across the equipment to safety, environmental considerations and a sustainable business plan. Through improved efficiency and innovation, we focused on optimising assets, reducing costs of ownership, and enhancing engagement with all our internal and external partners.”

Focusing on managing assets throughout their life cycle, Agnico Eagle made informed decisions on new investments, maintenance, refurbishment and retirement. This approach resulted in multi-million-dollar cost avoidance and the introduction of new processes for fleet renewal and new equipment purchases, emphasising cost, risk and performance management, while establishing equipment standards that can be reused across its divisions.

To support inventory control challenges, the team developed maintenance activity-related Bill of Material plans to support high value, long-lead time components. This increased accuracy of part requirements supported the Supply Chain, Inventory Management teams to better assess and align parts required for its asset maintenance activities.

One critical challenge addressed was the timely transportation of materials to Arctic operations within a defined operating window, due to sea-ice breakup. Through strategic planning, the Asset Management team implemented an 18-plus month forecasting tool for major and minor component changes, supporting parts orders.

Agnico Eagle also controlled and standardised its data usage, creating applications to improve data integrity for business analytics. This enhanced transparency and facilitated better decision-making.

The scope of the Asset Management team’s project reached across various services within the Nunavut division, collaborating with procurement, finance, operations, IT and operational technology, data management, training, regulatory compliance, risk management, and strategic planning. This resulted in substantial cost savings and avoidance events, the company said. The team’s strategies and tactics helped create a portfolio of tools for Agnico Eagle to deploy – tools that establish operational behaviours and program foundations that ultimately promote best practices in managing physical assets globally.

The team promoted a workplace culture centred around asset management, fostering collaboration and accountability. Noted by many partners in this journey from Nunavut, and across the organisation, the results increased inter-departmental relationships and synergies, creating an enhanced cultural environment of autonomy, mastery and purpose which greatly supported the nuances of asset management.

The hard work of the Nunavut Division and the supporting Service Groups, teamed with Asset Management, earned Agnico Eagle two awards in 2023. Nationally, within Canada, from PEMAC – Asset Management Association of Canada, and internationally from IAM – The Institute of Asset Management, United Kingdom, in the category of “Asset Management Excellence – Team Achievement Award for 2023”.

The company concluded: “These awards underscore the collaborative effort and extensive engagement of Agnico Eagle’s most important asset, our employees, who have played a crucial role in developing essential programs to help us build a high quality, easy to understand business, generating long-term value, and creating a great place to work, while contributing positively to our communities and the future of Agnico Eagle.”

World Gold Council formalises ESG standards for miners

The World Gold Council (WGC), the market development organisation for the gold industry, has announced the launch of its Responsible Gold Mining Principles.

The principles are a framework that set out expectations for consumers, investors and the downstream gold supply chain as to what constitutes responsible gold mining, the WGC said.

Working with the world’s leading gold mining companies – the WGC’s members – the council has set out the principles it believes address key environmental, social and governance (ESG) issues for the gold mining sector.

The principles focus on 10 key areas. Under the governance section, this includes ethical conduct, “understanding our impacts” and the supply chain. Social concerns include safety and health, human rights and conflict, labour rights and working with communities. The remaining three in the environmental bracket are environmental stewardship, biodiversity, and water, energy and climate change.

It is the World Gold Council’s aim that the Responsible Gold Mining Principles become a credible and widely recognised framework through which gold mining companies can provide confidence that their gold has been produced responsibly, the WGC said, acknowledging that ESG considerations are becoming increasingly important to consumers.

Companies implementing the Responsible Gold Mining Principles will be required to obtain external assurance from a third party, independent assurance provider. This will provide further confidence to purchasers of gold that the gold they buy is responsibly mined and sourced, it said.

Gary Goldberg, CEO of Newmont Goldcorp, who oversaw this initiative on behalf of the Board of the World Gold Council, said: “Adherence to strong ESG principles should be a key part of any responsible gold mining business and, as such, the members of the World Gold Council have collaborated, along with key industry stakeholders, to develop the Responsible Gold Mining Principles.

“Given the Members’ sustained focus on improving ESG performance, the formalisation of the Responsible Gold Mining Principles is a natural evolution of our daily working practices. It is my hope that these principles will be widely adopted, not only by member companies, but by the industry more broadly.”

Terry Heymann, Chief Financial Officer of the WGC, said it was the council’s aim that the principles reinforce trust in gold and the gold mining industry.

“Consumers, investors and the downstream gold supply chain will be able to know, with confidence, that their gold has been responsibly sourced,” he said. “The principles incorporate feedback from more than 200 organisations and individuals over two rounds of consultation and are designed to support the efficient operation of the gold market.”

Dynacor studying gold ore processing plant for artisanal miners in Senegal

Dynacor Gold Mines has signed a letter of intent with KN Equipments Inc and Fonds Souverain d’Investissements Stratégiques of Sénégal (FONSIS) that could see the building of an upgradable ore-processing plant, in Senegal.

The ore purchasing and processing company, which currently services artisanal and small-scale miners (ASM) in Peru (facility pictured), said the joint venture agreement sets in motion a strategy to expand its business globally.

The initial plan is for a 100-150 t/d facility, costing some $10 million, with the design to double capacity to 300 t/d.

The agreement, which follows a series of visits to meet with the Senegalese government, would see Dynacor operate the plant and own the majority of the company with 51% ownership, while KN Equipments and FONSIS would own the balance at 25% and 24%, respectively.

This is subject to a seven month due diligence period, due to complete before the end of 2019. Dynacor noted.

“The teams are to conduct a complete accounting of potential production sites, the total number of ASM and all other pertinent data concerning the feasibility of this project,” the company said. As the new company would be the sole professional ore-processing facility in Senegal, Dynacor said it sees strong demand for its “reputable and knowledgeable service”.

Jean Martineau, President and CEO of Dynacor, said: “The new company would bring a logical combination of Dynacor’s ore processing leadership and 20-plus year experience together with KN Equipment’s presence in Senegal, a long-standing history of manufacturing milling processing equipment and the financial strength of the Senegalese sovereign fund FONSIS.

“As part of Dynacor’s strategic plan to become an internationally recognised ore-processing company servicing the ASM industry worldwide, we believe this new low-risk project affords us the opportunity to significantly enhance Dynacor’s growth and leadership role on a global basis.”

Mamadou Mbaye, Executive Vice President of Fonsis, said: “Fonsis plays an important role as it backs the strategy of the Ministry of Mines and Geology. This project will help formalise gold mining activities for small and medium size legal mines.”

Robert Nieminen, President of KN Equipments, added: “As we have more than three years of providing manufacturing and mining maintenance service in Senegal, our company is quite well versed in the country’s ASM space and its demand for the new company and the value it will deliver.”

Pure Gold looks at mine electrification options for Madsen underground project

In another sign that the underground mining space is increasingly going electric, Pure Gold Mining has said it intends to use a combination of diesel and battery-powered load and haul equipment at its Madsen underground gold project in Ontario, Canada.

The company said all ramp and level waste development would be performed by an owner-operated fleet of one- and two-boom electric hydraulic drill jumbos, 3 cu.m capacity LHDs, 20-t haul trucks, scissor lift/bolters and other rubber tyred support equipment.

Pure Gold said: “Mining will be facilitated by a combination of diesel and battery-powered equipment, with diesel equipment being utilised for upper levels of the mine prior to refurbishment of the existing shaft and installation of a new double-drum production hoist.”

Following the refurbishment, battery-powered equipment is likely to be used, with the company explaining that its use will “eliminate emissions associated with the movement of ore and waste and will result in materially reduced ventilation and heating requirements”.

This information came out in the company’s press release announcing a feasibility study on Madsen, a former operating gold mine in the renowned Red Lake district.

Based on a probable mineral reserve of 3.5 Mt at 9 g/t, containing 1 Moz of gold, the company outlined a 12-year operation at Madsen, producing an average of 80,000 oz/y at an all-in sustaining cost of $787/oz.

The initial capital requirement of C$95 million ($71 million) would be paid back with an after-tax net present value (5% discount) of C$247 million (using a gold price of $1,275/oz), the company said.

Darin Labrenz, President and CEO of Pure Gold, said: “The Madsen-Red Lake orebody is an exceptional foundation on which to build a gold mining company. With access to existing infrastructure, a high-grade reserve, and exceptional growth potential, Madsen is one of the outstanding gold deposits in Canada.”

He added: “The completed study outlines a long life high-margin mine, with low initial capital requirements and a fast timeline to production. In addition, specific exploration targets and satellite resources not considered in the feasibility study suggest an opportunity for near-term growth to potentially further enhance the economics of the project.”

The feasibility study supports a high-grade 800 t/d underground mining operation with designed stopes containing 1 Moz of probable reserves, the company said. Madsen benefits from significant mining, milling and tailings infrastructure already in place, resulting in one of the lowest capital intensity, undeveloped gold projects in the world, according to Pure Gold.

Mining will be conducted from new ramp development using a combination of cut and fill and longhole mining methods. A new hoist house and double drum production hoist will use the existing shaft infrastructure to hoist ore and waste from the mine, commencing in year four of operations.

The Madsen implementation schedule spans a period of 13 months, with underground mine development commencing approximately nine months before the first gold pour. The initial capital outlay of C$95 million (including contingency) supports the construction of an underground mine and associated infrastructure, including the expansion of existing milling capacity to 800 t/d of ore.

Assuming the project execution starts in April, the first gold production would be expected in May 2020.

JDS Energy and Mining led the feasibility study, which included contributions from consultants such as Knight Piésold, Nordmin Engineering, MineFill Services, Integrated Sustainability, Lorax Environmental Services, Ginto Consulting and Equity Exploration Consultants.

More major gold M&A as Newmont agrees to buy Goldcorp for $10 billion

Newmont Mining has agreed to acquire Goldcorp in a friendly all-stock deal valuing the Canada-headquartered company at $10 billion.

Under the terms of the agreement, Newmont will acquire each Goldcorp share for 0.3280 of a Newmont share, which represents a 17% premium based on the companies’ 20-day volume weighted average share prices.

The deal comes just weeks after Barrick Gold merged with Randgold Resources to create a new industry giant.

“The agreement will combine two gold industry leaders into Newmont Goldcorp, to create an unmatched portfolio of operations, projects, exploration opportunities, reserves and people in the gold mining sector,” Newmont said.

“Newmont Goldcorp’s world-class portfolio will feature operating assets in favourable jurisdictions, an unparalleled project pipeline, and exploration potential in the most prospective gold districts around the globe. In addition to providing shareholders the largest gold Reserves per share, Newmont Goldcorp will offer the highest annual dividend among senior gold producers.”

Gary Goldberg, Newmont’s Chief Executive Officer, said: “We have a proven strategy and disciplined implementation plan to realise the full value of the combination, including an exceptional pool of talented mining professionals, stable and profitable gold production of 6-7 Moz over a decades-long time horizon, the sector’s largest gold reserve and resource base, and a leading project and exploration pipeline.

“Our cultures are well aligned, with strong commitments to zero harm, inclusion and diversity, and industry-leading environmental, social and governance performance. We expect to generate up to $100 million in annual pre-tax synergies, with additional cost and efficiency opportunities that will be pursued through our proven full potential continuous improvement programme.”

Newmont Goldcorp’s reserves and resources will represent the largest in the gold sector, located in favourable mining jurisdictions in the Americas, Australia and Ghana, representing approximately 75%, 15% and 10%, respectively.

Newmont Goldcorp will also prioritise project development by returns and risk, while targeting $1.0 to 1.5 billion in divestitures over the next two years to optimise gold production at a sustainable, steady-state level of 6-7 Moz annually.

Goldcorp’s President and Chief Executive Officer, David Garofalo, said: “Newmont Goldcorp will be one of Canada’s largest gold producers and will have its North America regional office in Vancouver, and expects to oversee more than three million ounces of the combined company’s total annual gold production.”

Following the merger, Newmont Goldcorp’s management team will be appointed on a “best talent” basis, Newmont said, with Gary Goldberg as Chief Executive Officer and Tom Palmer as President and Chief Operating Officer.

As part of a planned and orderly leadership succession process, Goldberg and Newmont’s board have been engaged in discussions anticipating a CEO succession in early 2019. In October 2018, the company also announced Palmer’s promotion to President and Chief Operating Officer.

To ensure a smooth and successful combination, Goldberg has agreed to lead Newmont Goldcorp through closure of the transaction and integration of the two companies. The company expects this process to be substantially completed in the December quarter of 2019, when Goldberg plans to retire and Palmer will become President and Chief Executive Officer.

The Board of Directors will be proportionally comprised of Newmont and Goldcorp Directors, with Noreen Doyle as Chair and Ian Telfer as Deputy Chair.

Goldcorp’s Vancouver, Canada, office will become Newmont Goldcorp’s North America regional office, while Newmont Goldcorp’s South America regional office will be in Miami, US, the Australia regional office will be in Perth, and the Africa regional office will be in Accra, Ghana. Newmont Goldcorp will be a Delaware corporation with its corporate headquarters in Colorado, US.

The Boards of Directors of both companies have unanimously approved the transaction, including in the case of Goldcorp, on the unanimous recommendation of a special committee of independent directors of Goldcorp.

The transaction is expected to close in the June quarter, but closing is subject to approval by the shareholders of both companies; regulatory approvals in a number of jurisdictions including the European Union, Canada, South Korea and Mexico; and other customary closing conditions.