Gold miners expand production in Nunavut, estimated reserves in BC

Canadian gold mining company Agnico Eagle announced that it will invest more than $1.2 billion in two new mines in the Nunavut Territory beginning this year. The company’s mine at Meliadine is approved and licensed for development while a satellite deposit at Amaruq is expected to be approved next year. The company expects to produce at least 5.3 million ounces of gold over fourteen years at Meliadine, and 1.98 million ounces at Amaruq over six years. Further exploration could result in an extension of the mine’s life and higher production numbers.

The COE of Agnico, Sean Boyd, told BNN that the two deposits are “wide open, so we expect them to grow.” He called the new development “low-risk, high-value growth” because it builds on what the company has been doing for “many, many years.” An existing mine at Meadowbank, 60 kilometres away and in operation since 2010, is expected to wind down production in 2018. It will be used to process ore mined at Amaruq.

Alnico Eagle, North America’s fourth-largest gold miner by market value (Bloomberg), estimates that the two projects will generate $500 million in spending on goods and services, create employment for approximately 2,000 people, including 500 contractors, and generate about $130 million in payroll and taxes per year. A spokesperson for Agnico Eagle in Nunavut called it a “huge opportunity” for the region, with job creation and training opportunities. Both mines are expected to be producing gold by late 2019.

The company reported production of 1.6 million ounces of gold in 2016 with a realized price of $1,266 per ounce.

Gold pour photo courtesy of Agnico Eagle

Another major Canadian gold mining company, Seabridge, also announced an expansion, this one pertaining to estimated mineral resources at its KSM project in British Columbia. The Deep Kerr Deposit is reportedly the world’s largest undeveloped gold project based on mineral reserves. A statement from Seabridge says that inferred reserves now total 19 million ounces of gold and 17.3 billion pounds of copper, an increase of 3 million ounces of gold and 2.1 billion pounds of copper over last year’s estimate. The company projects that the mine will have a life of fifty-two years. Exploration continues at the site, with the estimated deposit growing year by year.

Canada is currently ranked the world’s fifth-largest gold producer, after China, Australia, Russia and the United States.

According to the World Gold Council, global demand for gold, including gold-backed exchange-traded funds (ETF), jewellery, central banks, technology, and bar and coin, gained 2 per cent in 2016, reaching a three-year high of 4,308.7t.

Gold prices are trending upwards in 2017, with some experts predicting prices to rise 15 per cent over the year. Prices peaked in 2011 at more than $1,900, fell below $1,100 in 2015, then rose to $1,400 in the summer of 2016. The price is currently about $1,240 per ounce.

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