Positive exploration update
Agnico Eagle Mines (AEM) continued to show positive exploration results as it announced a rise of 13% in mineral resources at its Amaruq project. The main aims of mining companies’ exploration programs are to discover new mineral resources and convert existing resources to reserves.
Agnico’s update indicates that it’s been successful in expanding its mineral resources estimate. The company said, “This deposit continues to grow and remains a focus for the Company given its potential and its proximity to Agnico Eagle’s Meadowbank mine and mill.”
After years of cutting back on sustained capital expenditure, precious metals miners (SIL) (GDX) have started to refocus on production growth as precious metals prices have remained buoyant in 2016. Rises in exploration and capital expenditure budgets were key themes of miners’ earnings in 2Q16.
Yamana Gold (AUY) recently provided a positive exploration update. Barrick Gold (ABX) is also pursuing growth through optimization and exploration. Kinross Gold (KGC) expects to convert a substantial part of Bald Mountain’s 4.0 million ounces of resources to reserves.
In this series, we’ll look at Agnico Eagle Mines’ upside from exploration. We’ll look into the details of the exploration update provided by the company. These opportunities could drive the company’s medium- to long-term production growth.
Before we start with the update, let’s look at Agnico’s absolute and relative performances year-to-date.