Agnico to invest 30M USD for 2022 exploration

Agnico Eagle Mines Ltd., a well-established gold producer in Nunavut (Canada), recently added 30 million USD to the 2022 exploration budget for two operations in the Far North Canadian territory


Apart from being politically-attractive and stable, Nunavut also has great geological potential. In 2021, two of three mines in Nunavut produced 774,000 ounces of gold. 

“With these positive results, we are adding 30 million dollars to our exploration budget in 2022 as we aim to accelerate the realization of the full potential of existing operations and key projects in the company’s pipeline,” said Agnico Eagle (NYSE:AEM) President and CEO Ammar Al-Joundi.

Meliadine expansion

Meliadine is in the permitting phase and awaiting approval regarding the properties that are yet to be developed in the South area of the mine. Mine managers are also looking at technology that would enable Agnico to become more efficient. 

The first half of 2022 involved a lot of field work, deep exploration, and conversion drilling at the pump deposit. The organization was able to complete 51 holes from the surface (16,890 meters), which they will further expand at the Pump South and North zones. 

Agnico is looking into adding another 6 million USD for drilling an additional 40,000 meters by the second half of 2022. This aims to support mineral resources to mineral reserves conversion.

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Exploration at Hope Bay

Last February, Agnico decided to extend the suspension of production at the Hope Bay mine in northern Nunavut. With production suspended, the organization made substantial progress on the ongoing exploration. They drilled about 136 drill holes (46,658 meters) during the first half of 2022.

“The company’s ambitious exploration programme for 2022 is yielding exciting results. In addition, we continue to generate significant exploration results at producing assets including Fosterville, Meliadine, LaRonde and Kittila. With these positive results, we are adding $30 million dollars to our exploration budget in 2022 as we aim to accelerate the realization of the full potential of existing operations and key projects in the company’s pipeline,” Ammar Al-Joundi added.

Agnico is expected to spend at least 56 million USD at Hope Bay this year to further support new exploration and research about the mineral resources that can be found in the area. 

COVID-19 Response

Agnico Eagle is closely monitoring their employees’ health and well-being in light of the COVID-19 Pandemic. The management ensured that all health protocols and safety precautions that could prevent the virus from spreading across their operations were followed by all of their employees, communities, and stakeholders. They are also currently coordinating with public health authorities and the governments of the countries where they operate.

Agnico’s performance in the gold sector

Agnico Eagle is currently one of the top gold producers in the industry. This can be attributed to the fact that the company is focused on further improving and enhancing their growth per share. They are one of the most disciplined sector-wide teams from an M&A standpoint. The organization has mines that are over 20 years old which is to say that they are already well-established in the industry. 

Agnico has three new gold producing mines which are located in Detour, Fosterville, and Macassa. The company’s net income was 275.85 million in the second quarter of 2022. They were able to produce 858,170 Au ounces, 588K Ag ounces, 2,568 MT of Zinc, and 778 MT of Copper. 

Agnico’s flagship, the LaRonde mine has produced over 6.6 million ounces of gold since it first opened in 1988. They have been consistent with their earnings and cash flow. The Canadian Malartic is one of the world’s largest gold producers. This mine produced 55,000 tonnes of gold daily back in 2020. 

Agnico to use battery electric underground technology

Agnico Eagle decided to test the Sandvik LH518B underground loader at the Fosterville Gold Mine. This loader is equipped with an advanced Lithium-Iron Phosphate battery. It produces zero underground exhaust emissions and emits significantly less heat than its diesel counterparts.

“As a company, we’re committed to exploring new technologies to further enhance our extensive health and safety programs and to fully integrate sustainability into everything we do. And so, we’re delighted to be putting the LH518B into service at Fosterville. We’re interested to see just what kind of difference it can make in terms of efficiency and the underground working environment, and we look forward to working closely with Sandvik.” Fosterville Gold Mine general manager Lance Faulkner said.

The Sandvik LH518B underground loader allows higher acceleration than conventional loaders. Furthermore, it is equipped with AutoSwap technology which allows for fast battery swapping with minimum amount of manual handling. 

“It’s crucial that new technologies are sustainable and safe, but also that they contribute to the efficiency and smooth running of our mining operation. From what we have heard about the new Sandvik loader, it will deliver on all three fronts,” Faulkner stated.

The LH518B has minimal infrastructure requirements. It consumes less maintenance parts and requires fewer major component change-outs. Testing the loader is part of Agnico Eagle’s aims to be sustainable in an attempt to curb the long-term effects of climate change.

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