Agnico-Eagle on track with Meadowbank for 2010 (October 16, 2008)

Gold-bearing Archean greenstone belts were first discovered in the Baker Lake area of what is now Nunavut in the 1980s. Fast-forward 28 years and Agnico-Eagle Mines (AEM-T) is in the midst of building an open-pit mine 70 km north of Baker Lake near the western shores of Hudson’s Bay.

If all goes according to plan, production at its 100%-owned Meadowbank property will start in the first quarter of 2010about six months ahead of schedule.

The deposit in Nunavut has probable reserves of 3.5 million oz. gold, with 29.3 million tonnes grading 3.7 grams gold per tonne. It is open on strike and at depth.

Meadowbank is forecast to produce an average of 360,000 oz. gold per year over a nine-year mine life. Total cash costs are anticipated to be in the US$300 per oz. range over the life of the mine.

Agnico says four gold deposits have been discovered along the gold trenda 25 km trend that incorporates 35,000 hectares. The known gold resources lie within 225 metres of the surface.

The deposit’s Cannu zone, identified in 2005, is a zone of high grade, near-surface gold mineralization. The Portage gold deposits have been pinpointed over a strike length of 1.85 km and cross lateral extents of between 100 metres and 230 metres. The Goose Island deposit is defined over a 750-km strike length and down to 500 metres at depth. Finally the Vault deposit is shallow dipping with a strike length of about 1,100 metres.

Agnico describes the geology of the deposits as hosted “within polydeformed rocks of the Woodburn Lake Group, which are part of the series of Archean Supracrustal assemblages forming the Western Churchill supergroup in northern Canada.”

A scoping study is underway to assess the potential of an underground operation at the southern end of the deposit.

“We think we’ve got an underground component at Meadowbank,” Agnico-Eagle’s chief executive, Sean Boyd, told investors and analysts at the Denver Gold Forum in September.

Exploration is continuing to extend zones and test new targets.

At press-time, Agnico-Eagle was trading at about $48.72 per share. Its 52-week trading range is $43.80-$82.80 per share and the company has 143.8 million shares outstanding.