Stock Symbols: AEM (NYSE)
AGE (TSX)
(All amounts expressed in U.S. dollars unless otherwise noted)
TORONTO, June 19 /PRNewswire-FirstCall/ - Agnico-Eagle Mines Limited
today announced that it would provide an update on its regional strategy at
today's Annual Meeting of Shareholders. The meeting is being held at the
Toronto Hilton (Toronto 1 Room, 145 Richmond Street West, Toronto, Canada) at
10:30 a.m. (EST). For those unable to attend, the meeting can be heard via
webcast on the Company's website www.agnico-eagle.com.
Highlights of the presentation include:
- Excellent progress on expansion of the current LaRonde operation
(LaRonde I) with ramp up of ore production and underground
development and commissioning of lower level crushing plant.
- High gold grades continue to be encountered in Zone 7 drilling where
development for current year mine production is underway.
- Completion of scoping study on LaRonde's deep gold resource (LaRonde
II) initiates work on a bankable feasibility study, to be completed
in the third quarter of 2004, on new production shaft.
- LaRonde II drilling continues to confirm higher gold grades at depth
with 0.29 ounces of gold per ton intercepted over 66 feet.
- Internal economic study on Goldex shows strong internal rate of
return at current gold price; further sampling being contemplated to
validate and confirm grades realized in 1996 bulk sample.
- Drilling in all directions on Lapa results in 25% increase in
inferred gold resource with deposit still open for expansion;
decision on potential underground exploration and development program
expected by the fourth quarter of 2003.
"We have achieved our objective of steady state production of over 7,000
tons per day at our LaRonde I operation and expect to achieve record quarterly
gold production in the third and fourth quarter of 2003 as lower level ore
handling construction is now complete and larger, higher grade ore blocks are
ready for extraction," said Sean Boyd, President and Chief Executive Officer.
"We are now in a position to leverage our regional competitive advantages of a
dominant land position, regional infrastructure and a strong technical team to
bring three potential new mines into production," added Mr. Boyd.
LaRonde I Beginning to Hit Targets Again
The second quarter of 2003 at the 100% owned LaRonde I mining operations
has been characterized by record productivity in terms of underground
horizontal mine development, underground ore production and mill throughput.
Thus far in the second quarter, horizontal development in the lower level
gold/copper areas of LaRonde I has been higher than target and this has
resulted in a slight increase in the proportion of ore derived from the lower
level to 45%. With construction of the lower level crushing plant now
complete, approximately 75% of ore production, over the last two quarters of
2003, is expected to be derived from the lower level of the mine where higher
gold grades have been outlined. As a result, gold production is expected to
increase in the third and fourth quarters and the Company expects to achieve
its objective of full year 2003 gold production of 300,000 ounces.
In addition, mill performance has shown steady improvement throughout
2003 with record mill throughput of almost 7,300 tons per day in April and
7,600 tons per day in May, with peak daily milling rates of 8,600 tons per
day.
Zone 7 Drilling Continues to Deliver High Gold Grades
Definition and delineation drilling from the lower level haulage drifts
continued during the second quarter. This is particularly encouraging in that
the results that follow are better than expected and have not been
incorporated in the Company's 2003 production target of 300,000 ounces. These
drill holes were located in areas currently under development for production
in 2003. To date, development within Zone 7 on Level 215 has confirmed the
higher grades indicated by this drilling:
-------------------------------------------------------------------------
Gold
True (oz/ton)
Drill Hole Thickness From To (Cut to Silver Copper(%) Zinc(%)
(ft) 1.0 oz) (oz/ton)
-------------------------------------------------------------------------
3206-18 11.2 742.1 758.9 0.20 1.42 0.99 2.23
-------------------------------------------------------------------------
3206-23 9.8 635.8 646.3 0.15 0.93 0.29 2.60
-------------------------------------------------------------------------
3212-09 9.2 323.2 333.3 0.24 0.91 0.99 2.05
-------------------------------------------------------------------------
3212-11 11.5 412.4 427.5 0.50 1.64 0.79 6.90
-------------------------------------------------------------------------
3215-30 9.2 534.4 543.6 0.15 0.68 0.78 0.30
-------------------------------------------------------------------------
3215-61 9.2 516.7 526.6 0.12 0.59 0.30 2.75
-------------------------------------------------------------------------
Feasibility Study Initiated on LaRonde II for new Production Shaft
The Company has completed a scoping study of the various alternatives for
mining the approximate 5 million ounces of gold reserve/resource, now referred
to as LaRonde II (100% owned), below and to the west of the Penna Shaft. A new
10,000 foot shaft was determined to be the most economic in terms of upfront
capital costs, lead time to production and ongoing operating costs.
Preliminary total capital expenditures including shaft sinking, underground
development and surface infrastructure are estimated to be $50 per ounce of
gold resource while operating costs are expected to be approximately C$48 per
ton of ore processed.
The Company will initiate a bankable feasibility study, expected to be
completed in the third quarter of 2003, which will form the basis for a
production decision. This will allow sufficient time to further define and
determine the western limit of the orebody with extensive drilling from the
Level 215 exploration drift and to do the more detailed engineering required
for a bankable feasibility study.
LaRonde II Drilling Continues to Confirm Large Scale and Grade of Gold
Resource
Drilling in Zone 20 North from the Level 215 exploration drift continued
to confirm the trend to thicker mineralization and higher gold grades in
LaRonde II. The results are summarized below:
-------------------------------------------------------------------------
Gold
True (oz/ton)
Drill Hole Thickness From To (Cut to Silver Copper(%) Zinc(%)
(ft) 1.5 oz) (oz/ton)
-------------------------------------------------------------------------
3215-60A 65.6 2802.8 2921.9 0.29 0.08 0.02 0.01
-------------------------------------------------------------------------
3215-62 26.2 1442.9 1472.4 0.14 0.88 0.84 0.04
-------------------------------------------------------------------------
3215-63 91.9 1817.6 1938.3 0.11 0.73 0.47 0.10
-------------------------------------------------------------------------
including 29.5 1817.6 1856.9 0.21 0.45 0.23 0.03
-------------------------------------------------------------------------
The Company is conducting an 87,000 foot diamond drilling program in 2003
on LaRonde II from the Level 215 exploration drift, designed to convert the
existing mineral resource into mineral reserves and to expand the known
mineral resource envelope. The results obtained in drill hole 3215-60A
continue to confirm a potential higher grade core to the west in Zone 20 North
at depth. The confirmation of this higher grade core could have a significant
impact on the LaRonde II mining sequence and economics.
Goldex Study Demonstrates Positive Economics
The Company has completed an internal economic study on its 100% owned
Goldex deposit, located 35 miles east of LaRonde, which demonstrates a pre-tax
internal rate of return (IRR) of 11% using drill indicated grades of 0.068
ounces of gold per ton and estimated capital expenditures of $130 million
based on a 7,500 ton per day operation. Using average grades derived from
previous bulk samples of 0.074 ounces of gold per ton, the pre-tax IRR
improves to 15%. Agnico-Eagle has tax pools in excess of $400 million which
can be used to shield income from Goldex. Under these assumptions, production
from the mine is expected to average approximately 170,000 ounces at a cash
cost of $190 per ounce.
Given the material impact that the grade assumption has on the economics
of the project, the Company is contemplating additional sampling to determine
whether the increase in grade realized in past bulk samples is representative
of the entire orebody. Within the 1996 bulk sample area, the drill indicated
gold grade averaged 0.048 ounces per ton in comparison to the realized grade
of 0.074 ounces per ton, suggesting that drilling may understate the grade.
The size of the 1996 bulk sample was 113,400 tons. A decision on further
sampling is expected by the fourth quarter 2003.
Lapa Gold Resource Growing and Still Open for Expansion
Agnico-Eagle continued an aggressive exploration program on its 100%
owned Lapa deposit, located 7 miles east of LaRonde, with five drills
currently in operation. The inferred mineral resource has increased by 25%
from 3.3 million tons grading 0.25 ounces of gold per ton to 4.0 million tons
at the same grade, using a cutting factor of 1.5 ounces per ton. Contained
gold ounces have increased from 815,000 ounces to 1,015,000 ounces.
The estimate is based on a $300 per ounce gold price, a cutoff of 0.13
ounces per ton and a Canadian dollar/US dollar exchange rate of 1.50. High
assay values were capped at 1.5 ounces of gold per ton. The estimate used a
polygonal interpolation method with intercepts projected onto a vertical
longitudinal section. Drill hole composites were adjusted so that a minimum
measured orthogonal thickness of 9.2 feet was reached. A specific gravity of
2.8 was used to estimate the tonnage of the polygon volumes. Inferred class
polygons were limited to approximately 150 feet beyond a drill hole.
A summary of the drill results since the last update follows:
-------------------------------------------------------------------------
True Gold(oz/ton) Gold(oz/ton)
Drill Hole Thickness(ft) From To Cut(1.5 oz) Uncut
-------------------------------------------------------------------------
118-03-16A 24.6 3948.4 3980.6 0.31 0.31
-------------------------------------------------------------------------
118-03-16C 9.6 3822.1 3835.3 0.43 0.54
-------------------------------------------------------------------------
118-03-19A 8.9 2875.6 2891.7 0.07 0.07
-------------------------------------------------------------------------
118-03-20 9.8 2109.6 2132.5 0.17 0.17
-------------------------------------------------------------------------
118-03-21A 19.7 3291.0 3314.9 0.08 0.08
-------------------------------------------------------------------------
118-03-22A 9.8 2942.5 2962.9 0.07 0.07
-------------------------------------------------------------------------
118-03-23 1700.4 1700.4 low value low value
-------------------------------------------------------------------------
The orebody, which remains open at depth, to the east and to the west,
will continue to be tested from surface by five drills, one of which will be
used to extract samples for additional metallurgical testing. The Company will
also evaluate the possibility of an underground exploration and development
program, with a decision expected by early fall 2003. With these drilling
results, the Contact Zone has been traced over a vertical distance of 2,100
feet and a strike length of 1,400 feet.
The illustrations that detail the results presented in this news release
can be viewed and downloaded from the Company's website www.agnico-eagle.com
(Press Releases) or:
http://files.newswire.ca/3/LapaLongitudinal.pdf
http://files.newswire.ca/3/Longitudinal20N.pdf
http://files.newswire.ca/3/Longitudinal7.pdf
http://files.newswire.ca/3/RegionalPlan.pdf
Scientific and Technical Data
A qualified person, Guy Gosselin, P.Eng., LaRonde Division's Chief
Geologist verified the LaRonde I and II data disclosed in this news release.
All Lapa drill core is BQ caliber and is logged at the LaRonde Mine by a
senior project geologist for the Company's Exploration Division, who is fully
qualified per the standards outlined in National Instrument 43-101. The drill
core is sawed in half with one half sent to a commercial laboratory and the
other half retained for future reference. Upon reception of the assay results,
the pulps and rejects are recovered and submitted to a second laboratory for
check-assay purposes. The gold assaying method uses a 30-gram sample by Fire
Assays or Metallic Sieve finish as requested by the project geologist. The
laboratories used are Bourlamaque Assay Laboratories Ltd., Val d'Or, Quebec,
and Expert Laboratories Inc., Rouyn-Noranda, Quebec.
A qualified person, Marc Legault, P.Eng., Agnico-Eagle's Manager, Project
Evaluations supervised the calculation of the Lapa mineral resource estimate
disclosed in this news release.
Forward Looking Statements
This news release contains certain "forward-looking statements" (within
the meaning of the United States Private Securities Litigation Reform Act of
1995) that involve a number of risks and uncertainties. There can be no
assurance that such statements will prove to be accurate; actual results and
future events could differ materially from those anticipated in such
statements. Risks and uncertainties are disclosed under the heading "Risk
Factors" in the Company's Annual Information Form (AIF) filed with certain
Canadian securities regulators (including the Ontario and Quebec Securities
Commissions) and with the United States Securities and Exchange Commission (as
Form 20-F).
About Agnico-Eagle
Agnico-Eagle is a long established Canadian gold producer with operations
located in northwestern Quebec and exploration and development activities in
eastern Canada and the southwestern United States. Agnico-Eagle's operating
history includes over three decades of continuous gold production, primarily
from underground mining operations. Agnico-Eagle's LaRonde Mine in Quebec is
Canada's largest gold deposit. The Company has full exposure to higher gold
prices consistent with its policy of no forward gold sales. It has paid a cash
dividend for 23 consecutive years.
SOURCE Agnico-Eagle Mines Limited
-0- 06/19/2003
/CONTACT: Barry Landen, V.P. Corporate Affairs,
Agnico-Eagle Mines Limited, (416) 947-1212/
(AGE. AEM)
CO: Agnico-Eagle Mines Limited
ST: Ontario
IN: MNG
SU:
-30-
RD
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1476 06/19/2003 09:31 EDT http://www.prnewswire.com
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