The Lapa project is now under construction with initial production expected mid-year 2009. It is located in the Abitibi region of northwestern Quebec, only 11 km east of the LaRonde mine. Lapa has 3.8 million tonnes of probable reserves grading 8.9 g/t and containing 1.1 million ounces of gold. It has further ore potential with current focus at depth.
The Lapa mine project is located in northwestern Quebec, approximately 11 kilometres east of Agnico-Eagle's operations at LaRonde, providing operating synergies. Shaft sinking has been completed to a final depth of 1,370 metres and lateral mine development work is underway. Ore from Lapa will be trucked to the LaRonde processing facility, which is being modified to treat the ore, recover the gold and store the tailings. In April 2006, 2,800 tonnes of development ore was extracted at Lapa and sorted through a sampling tower to form a representative appraisal. Together with the results of a diamond drilling program, the ore was estimated to contain on average 10.65 grams per tonne of gold. These results, and results from other sampling methods, predicted higher gold grades than the Company's reserve model from February 2005. These results were incorporated into a revised feasibility study.
A revised feasibility study on the Lapa mine project was completed and reviewed by independent third parties. The study's base case projects the mine reaching full production in the fourth quarter of 2008 with an after tax rate of return of 21.8%, based on a gold price of $450 per ounce, and a C$/US$ exchange rate of 1.25. Based on current estimates of mineral reserves and grades, annual gold production is expected to average 125,000 ounces annually at total cash costs of $300 per ounce.
Total capital costs to bring the Lapa mine into production are projected to be $165 million. Based on an operation of up to 1,500 tonnes of ore per day, the revised feasibility study incorporates minesite operating costs of C$65 per tonne and average sustaining capital expenditures of approximately $4 million per year.
The property’s history of exploration and development dates back to 1933 when mineralization was reported in the first drill holes that ever tested the property and a shaft was sunk in the eastern Zulapa portion of the current property. Between 1937 and 1943, Lapa Cadillac Mines extracted almost 50,000 ounces of gold from the property. The mine later closed due to a lack of wartime labour and recovery problems. From 1981 to 1988, Breakwater Resources completed an aggressive exploration program on the western Tonawanda portion of the property that culminated in a small exploration ramp that tested the Highway (or A) Zone underground. In 1999, a wildcat exploration program deep along the A-zone structure by Cambior Exploration intersected values up to 9.9 grams of gold per tonne over 8 metres along a new mineralized horizon called the Contact Zone. After optioning the property from Breakwater Resources in 2002, Agnico-Eagle has undertaken an aggressive diamond drilling exploration program and metallurgical exploratory work and acquired 100% ownership in June 2003.
 The Lapa property straddles the Cadillac-Larder Lake Fault Zone, a regionally extensive structure that is spatially related to numerous gold prospects and past producers including the historic Lake Shore, Macassa and Kerr Addison gold mines in Kirkland Lake and Larder Lake, Ontario. On the Lapa property, the Fault Zone is almost entirely taken up by the Archean-age Piché Volcanic Group (mafic to ultramafic schists) and marks the southern contact between the Cadillac Group sediments (wacke, conglomerate and iron formation) to the north and the Pontiac Group (wacke) to the south. All the rock units are subvertically dipping and trend just slightly northwest-southeast. Locally the Piché Group is folded. The gold mineralized zones are often located in the hinges of some of the fold structures. Numerous late northeast and northwest striking minor faults are interpreted to displace the geology and mineralization over a few feet.
Gold mineralization on the Lapa property is spatially related to deformed zones within the Piché Group volcanic rocks. Gold mineralization is now known to occur in three styles – as quartz veins or cylindrically shaped sulphide mineralized pods following the fold planes, as tabular-shaped zones of mineralized quartz veins and veinlets within biotite-altered sulphide mineralized volcanic, or as biotite-mica altered zones associated with sheared feldspathic dykes. The Contact Zone in particular is located at the altered and weakly deformed north contact between the Piché Group and the Cadillac Group sediments. Mineralization typically presents itself as smoky blue-grey quartz veinlets with very fine sulphide disseminations and occasional fine free gold present in both the quartz and in the biotite-sericite altered deformed volcanic host rock. To date, a potentially economic lens of mineralization making up the Contact Zone has been traced for up to 600 metres horizontally and over 900 metres vertically. The zone itself is approximately 3 metres in thickness along its eastern margin but reaches thicknesses of 8 metres to 30 metres along the western portion of the deposit. It is currently open at depth in all directions.
Lapa 2007 Mineral Reserves and Resource*
|
Gold
(g/tonne) |
Silver
(g/tonne) |
Copper
(%) |
Zinc
(%) |
Tonnes
(000's) |
Gold Ounces
(000's) |
| Proven Reserve |
10.65 |
|
|
|
2.8 |
1 |
|
Probable Reserve |
8.86 |
|
|
|
3,756 |
1,070 |
| Indicated Resource |
4.48 |
|
|
|
865 |
124 |
|
Inferred Resource |
8.96 |
|
|
|
759 |
219 |
|