Meadowbank owner doubles profit in spite of fire

A worker at Agnico-Eagle’s Meadowbank mine watches molten gold pouring out of the company’s milling operation. (PHOTO COURTESY OF AGNICO-EAGLE)

Agnico-Eagle Mines Ltd, owner of the Meadowbank gold mine near Baker Lake, racked up a net income $45.3 million, or $0.27 per share, in the first quarter of it’s lastest financial year, despite a fire this past March that hampered production at Meadowbank.

“Thanks to a quick response by the team at Meadowbank, the damage caused by the recent fire was limited and we are already back running at full capacity at the mine,” Sean Boyd, Agnico-Eagle’s vice-chairman and chief executive officer, said in a news release.

Dues to surging gold prices and a rate of production that’s 34 per cent higher than last year, the company’s net income this year double the $22.3 million, or $0.14 per share, they reported in the first quarter of 2010.

The company also enjoyed record production at its Pinos Altos mine in Mexico and its Kitilla mine in Finland.

At Meadowbank, where gold production started in March 2010, the company’s production costs were $943 per ounce, higher than expected.

The company says the installation of a secondary crushing facility and the return of the full workforce in April will help them reduce that to about $700 an ounce, the company said.

Meanwhile, at its Meliadine property near Rankin Inlet, Agnico-Eagle’s drilling program has produced a new gold reserve estimate of 2.6 million ounces, with an additional 1.6 million ounces of indicated resources.

By late fall of this year, Agnico-Eagle hopes to have begun construction on a 27-km all-weather road from Rankin Inlet to the mine site.

If the company receives the necessary permits and licences, they’ll make a final decision on production at Meliadine by the first quarter of 2013, and if everything falls into place, construction of a combined underground and open-pit mine at at Meliadine would be completed by 2015.