Agnico-Eagle reports healthy profit in 2012

Agnico-Eagle’s Meadowbank gold mine near Baker Lake is back on track, the company’s president and chief executive officer, Sean Boyd, said Feb. 14. (FILE PHOTO)

Nunavut’s Meadowbank gold mine exceeded expectations in 2012.

That was part of the good news delivered by Sean Boyd, Agnico-Eagle Mines Ltd.’s president and chief executive officer, during a Feb. 14 news conference on the company’s performance.

For 2012, Agnico-Eagle recorded a net income of $310.9 million.

And Agnico-Eagle’s gold production for the full year was a record 1,043,811 ounces, compared to 985,460 ounces in 2011.

This performance was a huge improvement over 2011, when Agnico-Eagle recorded a net loss of $568.9 million.

Meadowbank was a “large contributor to our turnaround,” Boyd said.

That resulted from record production at Meadowbank, he said.

The mine’s lifespan has now been lengthened into 2018, one year longer than the 2017 wrap-up date that the company had decided on in 2012.

Agnico-Eagle announced last February that it would close the operation three years earlier than first planned, in 2017, a decision which sent shock waves through nearby Baker Lake.

The improvement at Meadowbank in 2012 were a result of a new mine plan developed at the beginning of the year, Boyd said, which has pushed production up to more than 11,000 tonnes of ore a day and upped its output of gold.

Overall, Agnico-Eagle reported a quarterly net income of $82.8 million — much better than in the fourth quarter of 2011, when it reported net quarterly loss of $601.4 million which included a $907.7 million “impairment loss” on the Meadowbank mine due to lower production, problems with ore bodies and high production costs.

In total, the company, during 2011, wrote down the book value of Meadowbank by about $900 million, reducing its valuation from $1.7 billion to $762 million.

As for the Meliadine gold mine project near Rankin Inlet, an updated study is expected to be completed on this project in 2014.

While first the gold production is unlikely to take place before 2018, this project has the potential to be Agnico-Eagle’s largest single gold producer, the company’s year-end financial update said.