November 2008

Up to the challenge

Agnico-Eagle confronts obstacles head-on at Meadowbank

By M. Eisner

Aerial view of Meadowbank gold project shows East Dewatering Dike nearing completion.

Much like the best-laid plans, even the best-laid roads can go awry — particularly when they must traverse through the isolated and harsh terrain of the Canadian North.

The Meadowbank gold project, purchased by Agnico-Eagle Mines from Cumberland in 2007, is situated in the Kivalliq district of Nunavut, approximately 70 kilometres north of the Hamlet of Baker Lake (the geographic centre of Canada), located inland from the western shore of Hudson Bay. The project currently consists of 10 Crown mining leases and three Nunavut Tunngavik Inc. exploration concessions covering a total of 30,521 hectares.

“The mine has probable gold reserves of almost 3.5 million ounces — 29.3 million tonnes of ore at a grade of 3.67 grams per tonne — and is expected to produce an average of 360,000 ounces of gold per year over a nine-year mine life,” said Martin Bergeron, Agnico-Eagle general manager for Western Canada and Nunavut. “Total cash costs are estimated to average $350 per ounce during this time.” Initial production is expected to begin by January 2010. Denis Gourde, Meadowbank’s general manager, attested to the team’s diligent work in order to meet the pending deadline. He added that this has meant confronting a number of challenges.

Overcoming roadblocks

The first and most significant challenge facing the Meadowbank team was coordinating the transportation of materials needed to access, build and operate a new gold mine at this remote greenfield site. All the basic supplies have to be brought in, including an estimated 50 million litres of diesel fuel per year.

“There are no roads to Baker Lake,” revealed Bergeron. “The hamlet can only be reached year-round by air and during a short sealift season by tugs and barges. We can bring equipment and supplies by ocean cargo during a three-month period, from approximately mid-July until the third or fourth week of October, when the lake and channel from Chesterfield Inlet are ice-free.” Meadowbank is linked to Baker Lake by a private-access, all-weather road constructed by Nuna Logistics for Agnico-Eagle. “At 110 kilometres, it is currently the longest road in Nunavut,” said Larry Connell, the company’s regional manager, Environment, Social and Government Affairs.

When Agnico-Eagle acquired Meadowbank from Cumberland in 2007, it was decided that the necessary efforts would be made to bring all equipment and materials to Baker Lake by ocean cargo, so as to avoid schedule delays and the high cost of air transport. However, as with almost everything else in this northerly climate, schedules are largely dictated by the weather. Last year, some of the barges that were brought north in late October were forced to remain frozen in both Rankin Inlet and Baker creating a logistical backlog and additional costs. “Some of the necessary equipment did not make it in time for the shipping season and consequently had to be flown in by air, which was very costly,” added Bergeron. In response, Agnico-Eagle has assigned more resources to the upfront logistics planning process in 2008 and hopes to reduce the amount of air cargo required to keep the project on schedule.

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