Agnico Eagle reports good financial performance in 2014

Agnico Eagle’s exploration work at Amaruq, about 50 km northwest of the Meadowbank mine, will expand in 2015 following a decision by the Nunavut Impact Review Board to allow amendments to existing permits and licences without a Part 5 environmental review. (FILE PHOTO)

Agnico Eagle Mines Ltd., operator of Nunavut’s Meadowbank gold mine near Baker Lake and the Meliadine gold project near Rankin Inlet, posted earnings of $83 million for the year 2014, the company said in financial statements released near the end of the day Feb. 11.

That’s a big improvement over the $686.7 million net loss they reported in 2013.

And the company’s president and CEO, Sean Boyd, said reduced fuel costs and favorable currency exchange rates, including a lower Canadian dollar, will help them in 2015.

“With projected year-over-year production growth of 12 per cent, lower fuel costs and weaker local currencies anticipated in Canada, Mexico and Finland, we expect to have another strong year in 2015,” Boyd said in the news release.

Minus certain non-recurring items, the company earned $16.6 million in the fourth quarter of 2014. That compares favorably with a net loss of $780.3 million reported over the same period of 2013.

Boyd, in an interview with the Business News Network broadcast Feb. 12, said the company holds high hopes for the Amaruq deposit, located north of Meadowbank. After about 18 months of exploration, AEM estimates the site holds 1.5 million ounces of gold.

AEM plans to spend at least $20 million there this year and has expanded the Amaruq camp to accommodate 80 workers.

And he says that the company’s Nunavut operations, buoyed by their finds at Amaruq, will form an important part of the company’s focus in 2015.

“Given the strong potential to expand the initial 1.5 million ounce resource at Amaruq, and the recent positive permitting news at Meliadine, we expect to unlock additional value from our Nunavut platform in 2015,” Boyd said in the news release.

This past Jan. 27, Bernard Valcourt, the minister of Aboriginal Affairs and Northern Development, said yes to a recommendation from the Nunavut Impact Review Board that the Meliadine project, located about 26 km from Rankin Inlet, go ahead subject to terms and conditions.

The next step for Meliadine is a project certificate workshop, followed by issuance of a project certificate a couple of months from now.

A project certificate would allow the company to apply for all the other licences and permits they need to build and operate a gold mine at Meliadine, including a type A water licence from the Nunavut Water Board.

Agnico Eagle will spend $64 million on Meliadine this year, on more exploration, camp operations, permitting, technical work and construction activities, the company said in its news release.

The company cautions that for now, any further work at Meliadine beyond 2015 “will be subject to board approval and prevailing market conditions.”

As for the promising Amaruq deposit, the NIRB has recommended that amendments to licences and permits required for further work there go ahead without a Part 5 environmental review.

That screening decision — issued Feb. 10 — recommended that Agnico Eagle’s proposed work on Amaruq proceed subject to 73 terms and conditions.

Of those, 59 terms and conditions date to an earlier NIRB decision issued in 2011, and 14 are new.

The company wants to build and operate a 53-km access road from Meadowbank to the Amaruq site, do exploration on additional Crown and Inuit-owned lands and install a camp at a nearby area called “IVR.”

As of Feb. 12, the price of gold stood at around $1,220 an ounce.

The company estimated that its “all-in sustaining cost” of producing gold, at all its operations, stood at $954 an ounce in 2014.

Boyd told BNN he hopes that figure will drop to between $850 and $900 an ounce in 2015.

Agnico Eagle now operates nine mines in Canada, Mexico and Finland.