Nunavut miner churns out record amount of gold
Agnico Eagle Mines Ltd. buoyed as its two new operations hit commercial production
Haul tracks are seen at Agnico Eagle’s Meadowbank mine at shift change. The company reports that it has produced a record amount of gold over the past three months. Meadowbank’s deposit is no longer being mined, but the mine’s infrastructure is now being put to work processing gold from the nearby Amaruq satellite deposit. (Photo courtesy of Agnico Eagle Mines Ltd./Flickr)
Agnico Eagle Mines Ltd. produced a record amount of gold over the past three months, thanks to its Meliadine mine in Nunavut hitting its stride.
The company’s third-quarter earnings show a net income of $76.7 million. That’s up from $17.1 million over the same period last year.
The company’s net income for the first nine months of 2019, meanwhile, is $141.5 million, up from $67 million one year ago.
Agnico Eagle’s first Nunavut mine, Meadowbank, is also receiving a new lease on life, now that its Amaruq satellite deposit began commercial production earlier this month. Ore is being hauled about 50 kilometres from Amaruq to Meadowbank’s existing processing facility.
Meliadine achieved commercial production in May. The company says that since the new mine is already able to process more than its expected capacity of 3,750 tonnes per day, it’s looking to accelerate the mine’s expansion by two years.
“With record performance at several of our operations and the ongoing ramp up of our two new mines in Nunavut, we achieved record quarterly gold production in the third quarter of 2019. As expected, this strong result, combined with the completion of the extensive construction spending program in Nunavut, resulted in the generation of substantial free cash flow in the quarter,” said Sean Boyd, Agnico Eagle’s chief executive officer, in an Oct. 23 news release.
“With the expectation of growing production and strong free cash flow generation, we are in a good position to continue to invest in our project pipeline, improve our financial flexibility and grow our dividend. We are pleased to announce a 40 percent increase in our quarterly dividend.”
Agnico Eagle has nudged up its production estimates for 2019, to between 1.77 million and 1.78 million ounces of gold, up from 1.75 million ounces of gold.
From a financial perspective, Agnico Eagle is a bigger operation than the Government of Nunavut. But they sort of fly under the radar, making a donation here, a donation there. They did make a $1 million donation not long ago, and it’s hard to argue with a million bucks, but extrapolating the recent quarterly numbers to an annual basis that’s around one third of one tenth of one percent of the company’s annual revenue, and only about a third of one percent of their annual net income.
Don’t forget the big buck AEM spends on GN taxes, and the big buck to the wanna be Inuit orgs.
Yeah, I’m not forgetting them. I honestly don’t know how much they pay in taxes to the GN, and how much the KivIA receives in royalties from them. But, I do know the $76.7 million in net income over the 3 month period is after those expenses.
Agnico operates 8 mines, not just the two in Nunavut, so that Quarterly revenue is only partly coming from Nunavut.
I understand that the numbers are for AEM as a whole, and that AEM operates in more than just Nunavut. Although I think they currently have 6 operating mines, not 8?
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I’d just like to see somebody do a really in-depth review of one of the mining companies to see if Nunavut really is getting enough benefit for what they’re giving up. At the Meadowbank site, AEM pulled out what, like $3 billion worth of gold from the ground? And now they’re pulling more from Meliadine. I know that it’s capital-intensive, and they had major costs, but after the dust settles what did Nunavut get? How much employment, taxes, royalties, donations. I’m not taking a position for or against AEM right now, I’d just like to know more.
The workers should get bonuses. A Xmas bonus. I’m sure every other mine gets Xmas bonus why not inuit.
Reading the article, I was happy/glad for the company. Then I read the comments and I really do agree with some them. Of a net income of $76.7 Million, I wonder how much is going to the government? What is the government doing to help people? The communities? Is the company donating a lot or rarely? There hasn’t been much change since they started mining here.
After reading the comments I start to think that they haven’t answered our (people who live here or around here) problems, struggle, what ever you want to call it. They’ve answered their own and they’ve created more problems for us, more problems that we had before they arrived.
The Mine is such a polarizing subject that seems to be unsolved, even after years since they began.
That revenue is from Agnico’s 8 mines, not just the two in Nunavut. One thing that many do not realize is that if the company made no revenue off its operations, they’d be better off buying bonds from the Canadian government and never worry about risks like a cratering gold price or a longer than anticipated shutdown to protect caribou migration, or a shortened sea-lift season… Sometimes, the risks taken pay off and revenues are good, and sometimes the risks taken result in a loss. The government still collects taxes, employees still get payed, unless things get so bad that the mine closes and everyone loses. Your neighbour buys a lottery ticket and two things will happen: either she wins and some will complain she’s not being generous enough, or she won’t win anything but the convenience store that sold them the ticket still collect. 😉
Hello,
I was curious as to the amount of time it took to develop and find the current site they are at. What was the amount of money put into setting up the operation? Was it this year the mine became profitable, or are they still working towards that.
Solution to housing problem: The ship coming up to the mine arrives empty to pick up the ore. Okay, instead of Nunavut gov’t benefiting financially, why doesn’t the mining co. purchase all the housing material as a payment instead of cash and deliver it like for free to the north. And the Nu gov’t just pay for the construction of the much needed housing. If not, how is Nu gov’t benefiting from the payouts for it’s hungry citizen(s).
There is no empty ships that comes up to the mine to pick up ore.
The ore is processed at the site. The mill makes gold bars they send out to the South on chartered aircraft.
The only ships are sealifts full of supplies and equipment.
I agree with beneficiary, why can’t they come up with something like that?
In 2015, the then conservative government enacted the Extractive Sector Transparency Measures Act. This federal legislation requires all companies engaged in resource extraction in the country to report their payments to various levels of government and indigenous groups for all manner of things like royalties and taxes. Therefore, the direct monetary payments made to GN, NTI, RIAs, and GC are all there.
Lord knows if you had to tease this information out of a GN finance document (revenue not segregated) or an NTI Annual report (last 2 years missing on their website), or a RIA financial statement (practically unobtainable) it would take forever.
Annual reports can be viewed on the Government of Canada-Natural Resources Canada website. WTG NRC -Who says the only good thing that comes from NRC is the Geological Survey of Canada?
I am a long time resident of the “South,” that is Southwestern Ontario. The rent rates are high here too. The aspects of poverty: homelessness, food shortage, unemployment is staggering here too. My heart goes out to All the people of Nunavut and All the Territories. The companies establish a line which carries these precious metals from a mine source?? Then a second line should be built which sends all the wealth required to these communities directly, BEFORE TAXES are paid to the Government. Our brothers and sisters in the Territories should be living absolutely RENT FREE, and TAX FREE. All the utilities and amenities should be FREE to them. The peoples of the TERRITORIES are not selfish or greedy. They do not take more than their share. I have never lived in the Territories however, your stories and legacy trickle down to us through creative art in all the tangible forms. Thank you from my heart, my soul and from a Canadian “southerner.” Keeping shouting and fighting to protect what is rightfully YOURS.