Second source of ore
Another important highlight of Agnico Eagle Mines’ (AEM) exploration update was the confirmation of the V zone as a potential second source of open pit ore.
Agnico’s vice chair and CEO added, “The 2016 exploration program at Amaruq has resulted in an increase in gold resources and the delineation of a potential second source of open pit ore at the V Zone. In just a short period of time, we have seen Amaruq advance from a grassroots discovery to a significant development project with 3.7 million ounces of gold resources.”
Filling the gap
Drilling in the V zone has extended the zone laterally and to a depth of 540 meters locally. The Meadowbank mine is expected to be exhausted near the end of 2018.
The Amaruq project, which is located just 50 kilometers away from Meadowbank, is expected to start delivering ore at almost the same time.
Overall, Agnico’s Amaruq update is a positive and once again demonstrates the company’s ability to deliver value through exploration. The company’s 2016 drill program will near completion in mid-October, with four drill rigs exploring below the current Whale Tail open pit resource, two targeting the eastern and down-plunge extents, and one exploring regional targets.
Given the strong exploration results at Amaruq to date, there could be further potential upside to the deposit. AEM expects to provide a full update of resource estimates with year-end results in February 2017.
Exploration among peers
Agnico’s peers (RING) (GDX) are also exploring opportunities to increase their long-term production profiles. Kinross Gold (KGC) has received the requisite permits to increase exploration and expansion activities at Bald Mountain.
In its 2Q16 results, Goldcorp (GG) also announced that it would go ahead with its expansion projects at the Penasquito and Musselwhite mines. This was in keeping with its focus on growth.
With its falling production forecast, Barrick Gold (ABX) is also looking at exploration targets such as Alturas.