Proactive Investors - Agnico Eagle Mines Ltd (TSX:TSX:AEM) told investors that the addition of underground mining to complement its open pit operation at its Detour Lake mine in Ontario has the potential to increase average gold production at the mine to 1 million ounces per year.
The Canada-based gold producer said on Wednesday that it has completed an updated life of mine plan (2024 LOMP) which updates the open pit mine production profile and includes updated costing.
It has also completed a preliminary economic assessment (2024 PEA) which considers concurrently operating the existing open pit and a proposed underground mining project plus mill throughput optimization to 29 million tons per year.
Agnico Eagle said that the underground project and mill optimization have the potential to increase production at Detour Lake to approximately 1 million ounces of gold per year over a 14-year period starting in 2030.
It said the underground project would provide earlier access to a high-grade core of mineralization at depth below the reserve pit through underground development and displace lower-grade open pit production to the end of life.
When compared to the projects 2022 LOMP, the 2024 PEA shows the life of mine payable gold production increases by 27% to 22 million ounces which includes an increase of 0.7 million ounces from the open pit and 4 million ounces from the underground project.
The 2024 PEA also extends Detour Lake’s mine life by two years to 2054.
Agnico plans to develop the underground project in stages, having approved a $100 million investment over the next three years to further study and de-risk the underground project, including the development of an exploration ramp and the collection of a bulk sample.
At the same time, the company is planning an expansion drill program which is targeting upside exploration potential along the western plunge of the mineralization.
“With the development of an underground mine to complement the existing open pit mine, we see the opportunity to transform the asset into one of the top five gold mines in the world by output,” Agnico CEO Ammar Al-Joundi said in a statement.
“The long mineral reserve life and significant production base at both Detour Lake and Canadian Malartic provide a solid foundation for Agnico Eagle's production profile and strongly positions the company for decades to come.”
Agnico’s shares traded lower post-announcement, down 1.1% at C$87.65.