Agnico-Eagle Mines announced it will develop two satellite zones at its Goldex property in Val d’Or, Quebec, less than a year after water inflow and ground
stability problems forced the suspension of operations at the mine last October.
The Goldex mine was a low-cost gold producer for the company before mining of the Goldex Extension Zone (GEZ) was halted. In the meantime, while the
company performed monitoring, assessment and remediation work, it also got busy exploring its wholly owned property, resulting in a decision to develop the
two zones for production in early 2014.
Based on a preliminary economic assessment, the revived mine will have higher costs and a shorter life than the previous operation. But that could change
with further success of this year’s $18-million exploration effort, notably at the promising D zone where what the company calls a “large and growing
resource” is being outlined about 150 metres below the GEZ.
“We have seven drills on site to define and establish additional satellite zones,” said Goldex general manager Daniel Paré. “But we won’t have all the
results in until next year, so don’t expect any changes to the mining plan this year.”
The newly defined M and E zones host Measured and Indicated resources of 2.1 million ounces of gold (36.8 million tonnes at 1.8 g/t), plus an Inferred
resource of 1.6 million ounces (31.1 million tonnes at 1.6 g/t) that is not included in the new mine plan. At start-up in 2008, the GEZ had proven and
probable reserves containing 1.63 million ounces of gold (averaging 2.2 g/t), plus additional Indicated resources.
“We’ll be taking a different approach than we did with the GEZ, which was mined as a [single] open stope,” Paré said. “The new zones will be mined by
longhole open stoping, with paste backfill for additional ground support.”
The paste backfill plant to be built on site is expected to cost around US$24 million, making it the largest component of the estimated US$95 million
capital expenditure required to restore Goldex to production. Paré said roughly US$7 million will be spent on mobile underground mining equipment, with the
balance allocated for development and construction, and underground monitoring.
“The mine design and ground support plan have been thoroughly reviewed, including by a team of outside consultants, so we aren’t expecting any surprises,”
The revived mine will make use of existing infrastructure, including the shaft and mill. Based on a proposed daily rate of 5,100 tonnes, the mine is
expected to generate 300,000 ounces through to 2017.
Before the suspension, Goldex operated at 6,786 tonnes per day and was on track to produce 184,000 ounces of gold per year from the GEZ. The mine benefited
from operating synergies with Agnico-Eagle’s nearby LaRonde mine, which had processed Goldex concentrates so as to eliminate the need for a cyanide circuit
(the Goldex mill has only grinding, gravity and flotation circuits).
Under the M and E zone plan, mine site costs are estimated at C$41 per tonne, up from the C$20-per-tonne life-of-mine forecast before the closure, with
cash costs projected at US$900 per ounce. Nevertheless, the after-tax internal rate of return is still expected to exceed Agnico-Eagle’s 15 per cent
investment target rate, assuming a US$1,500-per-ounce gold price.