Agnico Study Flags Increased Output, Longer Mine Life at Canadian Malartic Complex — Commodity Comment

By Robb M. Stewart

Agnico Eagle Mines said Tuesday it anticipates increased production and an extended mine life at its Canadian Malartic mining complex in northwestern Quebec, with the potential for future production growth in the region.

On study highlights:

Agnico said that a new internal study of the Odyssey mine, which is part of its Canadian Malartic complex, forecast payable gold production for the Odyssey mine has increased by 23% compared with an earlier study completed in 2020.

The study highlights include the potential for a significant conversion of mineral resources and mine life extension to 2042, the Canadian mining company said.

It said the mine plan now includes about 0.2 million ounces of gold in mineral reserves, 4.8 million ounces of gold in indicated mineral resources and 4.0 million ounces of gold in inferred mineral resources.

Agnico said the mine has an improved production profile, opportunities to add production in years 2025 to 2028.

The Canadian Malartic complex is forecast to generate positive free cash flow during the transition from open pit to underground mining, even at an assumed gold price of $1,650 an ounce, the company said. Agnico added recent drill results in the Odyssey internal zones indicate the potential to further increase production during the 2023-2028 transition period.

From 2029 onwards, gold production at the Canadian Malartic complex is forecast to average 558,000 ounces of gold a year over 13 years at total cash costs per ounce of $768, it said.

Project construction and mine development remains largely on schedule, and capital expenditures from 2021 to June 2023 are expected to be about $429 million, about 11% higher than estimated in the 2020 study, which Agnico said reflected inflation and supply chain challenges.

The larger mineable resource partially offsets inflation on capital expenditures, the company said. From the second half of 2023 to 2028, development capital expenditures are forecast to be About $1.28 billion, and from 2029 to 2042 development capital expenditures of $0.14 billion are expected for access to the East Malartic deep area. Sustaining capital expenditures are forecast to be about $66 million a year.

Agnico said it expects to have up to 40,000 metric tons a day of excess mill capacity at the Canadian Malartic complex starting in 2028 as processing of open pit ore and low-grade stockpiles transitions to the higher-grade Odyssey mine. The additional mill capacity provides options for organic growth at Odyssey, property-wide exploration upside and from the development of other projects in the company's regional pipeline, Agnico said.

The Canadian Malartic Complex is one of the world's largest gold mining operations, and currently comprises the open-pit Canadian Malartic mine and the underground Odyssey mine.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

June 20, 2023 07:43 ET (11:43 GMT)

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