Nunavut’s Meadowbank helps Agnico Eagle exceed expectations

The Meadowbank gold mine near Baker Lake. (FILE PHOTO)

Thanks in part to record gold production and lower costs at the Meadowbank gold mine, Agnico Eagle Mines Ltd. sailed back into stable profitability during the first quarter of 2014, the company reported May 1.

Agnico’s financial statements for the first three months of 2014 show the company produced an adjusted net income of $106.8 million, or 61 cents a share.

Over the same period in 2013, Agnico reported net income of $23.9 million or 14 cents a share — when gold prices were 23 per cent higher.

The company said this year’s improved financial performance in the face of lower gold prices is due to record company-wide production rates — which includes a production record at Nunavut’s Meadowbank mine — and lower costs.

At Meadowbank, the company churned out 156,444 ounces of gold with a cash cost per ounce of only $434.

“This compares with payable production in the first quarter of 2013 of 81,818 ounces of gold at total cash costs per ounce of $1,069,” the company said.

That’s because Agnico Eagle is mining higher grade ore from Meadowbank’s Portage and Goose deposits right now.

When the Goose pit is exhausted, the company will start mining later this year from the lower grade Vault pit at Meadowbank.

Overall, the company produced 366,412 ounces of gold at a cash cost of $537 an ounce.

The company, in 2013, estimated the production of between 1,175,000 and 1,205,000 ounces for 2014, but the company now says they expect to exceed that range.

At the same time, Agnico Eagle expect cash costs to come out lower than the earlier projected range of $670 to $690 per ounce.

In mid-April, Agnico Eagle struck a deal with Yamana Gold Inc. to purchase 100 per cent of the shares of Osisko Mining Corp.

When that agreement is completed, Agnico will indirectly own 50 per cent of the Malartic mine in the Abitibi region of Quebec.

As for the Meliadine project near Rankin Inlet, Agnico Eagle continues to expand its potential reserve estimates and is working on an updated technical report they expect to complete by the end of 2014.

The company also expects to complete a final environmental impact statement by the end of June 2014.