August 2009

The Midas touch

Agnico-Eagle’s LaRonde mine extension

By P. Diekmeyer

The first station winze at 2570 meters below surface

Undertaking a CDN$337 million expansion inside an operating mine poses a few technological challenges. However, with engineering ingenuity, employee commitment and a top-notch supplier network, Agnico-Eagle’s LaRonde mine extension is set to make one of Canada’s largest underground operating gold mines even bigger.

When you have what mining sector veterans call a “company maker” among your holdings, you want to keep it in operation for as long as possible. Agnico-Eagle Mines obtained such a property when it acquired the Dumagami open pit and underground mine in 1988. So it came as no surprise several years ago when the company announced that the LaRonde mine (as the new property was later named) would be expanded.

The LaRonde initiative, which will include an upgrade of the mill facilities, is expected to cost CDN$337 million, and represents a major investment for Agnico-Eagle. However, the money being spent is expected to yield significant long-term benefits. Ore extraction from the extension shaft currently being dug is expected to start by 2011. When ancillary facilities are completed, the combined LaRonde operation is expected to yield an average of about 320,000 ounces of gold per year and will extend the mine’s useful life through to at least 2022.

LaRonde: a “company maker”

“LaRonde is one of Canada’s largest underground operating gold mines,” said Christian Provencher, the site’s general manager. “Extraction has continued at a steady and reliable pace for the last six years at more than 7,000 tonnes per day. Furthermore, the sinking of the extension shaft is almost complete and the project is proceeding both on schedule and on budget.”

The LaRonde mine is located in northwestern Quebec, near the villages of Preissac and Cadillac, in the southern portion of the Archaean-age Abitibi volcanic belt, within the Bousquet Formation of the Blake River volcanic group. According to Agnico-Eagle, the geology is east-west trending, steeply southward dipping and generally southward facing. As of the end of 2008, all of the mineral reserves and most of the mineral resources at LaRonde were located near the Penna shaft. These reserves and resources occur as several sulphide-rich lenses, which are found along five different stratigraphic horizons.

The company currently uses two main mining methods at the LaRonde site, depending on the thickness of mineralized zones. The first is longitudinal retreat in 15-metre sections and the second is transverse open stoping. The property has already yielded more than three million ounces of gold and holds approximately another five million ounces of proven and probable reserves. These are comprised of 35.8 million tonnes of ore with an average grade of 4.3 grams per tonne. Much of the production equipment at the site, including 17 load haul dumpers, is supplied by Sandvik Tamrock.

The other good news regarding ore from the LaRonde property is that it is fairly inexpensive to extract and process — which makes it an investor’s dream. During the first quarter of 2009, mine site costs were approximately CDN$72 per tonne and total cash costs were US$294 per ounce (net of by products), meaning that LaRonde is likely one of the lowest cost gold mines in the country.

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