Agnico Eagle Mines Ltd. (AEM) reported it achieved commercial production from the Amaruq satellite deposit at the Meadowbank Complex on September 30. Located 110 kilometers (km) by road north of Baker Lake in the Kivalliq District of Nunavut, Canada, development of the Amaruq project was approved in February 2017 by the company’s Board of Directors as a satellite deposit to supply ore to the existing Meadowbank mill.
Despite ongoing challenges related to dewatering and adverse weather conditions in the second and third quarters, AEM CEO Seab Boyd said the operation was still able to achieve commerica production on time with its original schedule. “With the start of production at both Amaruq and Meliadine in 2019, the company is well-positioned to deliver on its goal of generating net free cash flow in the second half of this year,” he added.
The Amaruq mining operation uses the existing infrastructure at the Meadowbank mine (mining equipment, mill, tailings, camp and airstrip). Additional infrastructure has been built at the Amaruq site (truck shop/warehouse, fuel storage and an additional camp facility). Amaruq ore is transported using long haul off-road type trucks to the mill at the Meadowbank site for processing.
Amaruq ore processing commenced in August using low-grade stockpiles. In the third quarter of 2019, production at the Meadowbank Complex totaled 48,869 ounces (oz) of gold, which included 13,588 oz from Meadowbank and pre-commercial payable gold production at Amaruq of 35,281 oz, compared to pre-commercial production guidance of 40,000 oz of gold. Pre-commercial production gold sales totaled 32,042 oz.
During the third quarter of 2019, mining activities at Amaruq continued to be affected by slower than expected dewatering activities, largely related to heavier than expected rainfall. Dewatering is now substantially complete, about one month later than previously expected. Given the slower than expected ramp up of mining activities, the company took the opportunity to accelerate planned maintenance to the milling and crushing circuits, which was originally scheduled for 2020. As a result, the mill was temporarily shut down in mid-September and was expected to restart on or about October 14, according to the company. During the shutdown ore continues to be mined and trucked to the Meadowbank mill, where it is being stockpiled for future processing.
As a result, production guidance at the Meadowbank Complex for 2019 is now anticipated to be 200,000 oz of gold versus the previous forecast of 230,000 oz. Despite the lower forecast for the Meadowbank Complex, the company’s full-year 2019 production guidance of 1.75 million oz of gold remains unchanged.