Agnico-Eagle Mines Ltd. announced it is suspending mining operations and gold production at its Goldex mine in Val d’Or, Quebec effective immediately. This decision follows the receipt of an opinion from a second rock mechanics consulting firm which recommended underground mining operations be halted until the situation is investigated further.

While the company continues to assess the situation, it appears a weak volcanic rock unit in the hanging wall of the Goldex deposit has failed. This rock failure is thought to extend between the top of the deposit and surface. As a result, this structure has allowed ground water to flow into the mine. This water flow has likely contributed to further weakening and movement of the rock mass.

“Considering the safety of the company’s employees, and the integrity of the mine’s infrastructure and that of the surrounding area, the decision was made to stop production indefinitely,” said Sean Boyd, vice chairman and CEO.

It is estimated the mill will continue to process feed from the remaining surface stockpile until the end of October.

The company will assess the potential for restarting the mining operations next year on the western side of the deposit where the ore zone is narrower and still considered to be relatively stable, however, there is no guarantee that this will occur.

Ongoing investigative and remediation efforts include:

  • Drilling from underground into the volcanic rock unit to determine whether additional fracturing has occurred and the extent of movement in the rock mass;
  • Installing additional instrumentation to monitor for further soil and rock movements;
  • Backfilling the surface depression to reduce the potential for further soil migration; and
  • Considering backfilling and mining options for the deposit.

Through the period of investigation and remediation, the company anticipates underground exploration drilling of the deeper D Zone will continue. The company is also implementing a plan to minimize the impact on the current workforce of 233 permanent employees during the investigation and remediation phase. The plan will include:

  • Re-deployment of employees to the remediation and investigation project team;
  • Extensive maintenance programs of all mobile equipment not being used during the investigation and remediation phase;
  • Internal transfers within the company’s Canadian operations; and
  • Employee training and skills upgrading programs to facilitate potential transfers to other Agnico-Eagle operations.

In the past week, rock subsidence has been confirmed above the north-eastern limit of the deposit. The exact location and extent of this subsidence is unknown and remains to be determined by diamond drilling and other methods. However, as a result of these findings, previously planned grouting and water re-injection efforts have been suspended and work will be reoriented to preserve the surface infrastructure in the area.

Agnico-Eagle will write off its $260 million investment in Goldex. All of the remaining 1.6 million oz of proven and probable gold reserves at Goldex (approximately 10 years of mine life), other than the ore stockpiled on surface, will be reclassified as mineral resources.