Agnico-Eagle bullish on LaRonde results

The latest drill results from the LaRonde gold-silver-copper mine of Agnico-Eagle Mines (TSE) should soon enable the company to boost its resource estimate, says President Paul Penna.

Drilling at the mine, situated in Cadillac, Que., has resulted in gold mineralization at Zone 20 being extended deeper and to the west of the limits of the known resource. In addition, gold mineralization has been encountered in the centre of the previously untested 4,000-ft. gap that had separated the earlier-known gold sections of Zone 20 North.

A drill hole aimed at the centre of Zone 20 North returned 51 ft. of massive sulphides with gold and base metal values. The 26-ft. zinc-silver component of the section returned 3.54 oz. silver per ton and 9.85% zinc, while the 10-ft. gold component returned 0.28 oz. gold per ton, 0.91 oz. silver, 0.4% copper and 0.06% zinc. The two component sections were separated by 15 ft. of lower-grade gold and zinc mineralization. The results from this hole indicate the potential for one large gold-copper zone with a vertical extent of more than 4,400 ft.

Zone 20 North has now been encountered from 2,600 to 7,040 ft. below surface.

West of Zone 20 North and 7,040 ft. below surface, a drill hole returned 0.22 oz. gold per ton, 0.38 oz. silver, 0.55% copper and low-grade zinc over a true width of 22 ft. Significantly, the distance between this intersection and the nearest intersection with similar grades is more than 1,400 ft., which is more than the entire length of Zone 5, which accounts for the greatest share of current production.

“These latest drill results continue to demonstrate the tremendous potential of the LaRonde mine to expand its gold reserves,” Penna stated in a release, adding that follow-up drilling is ongoing and an expanded mineral resource estimate is expected to be announced during the year.

The current resource at LaRonde is estimated at 21.9 million tons containing 3.4 million oz. gold, 67 million oz. silver, 135 million lb. copper and 2.7 billion lb. zinc.

The 1996 exploration program features 2,000 ft. of level development and almost 117,000 ft. of drilling, at a total cost of $2.6 million. Included is the extension of the two exploration crosscuts to position drills for more detailed drilling of the various mineralized zones, particularly Zone 20 North.

Meanwhile, Agnico-Eagle’s books reveal that the first quarter was profitable to the tune of $1.8 million, or 5 cents a share, compared with net income (restated to conform with the company’s new accounting practices) of $4.9 million, or 13 cents a share, in the first quarter of 1995. Operating cash flow also declined in the first quarter to $6.2 million, down from $11.8 million the previous year. Income from production was $20 million, compared with $21.4 million in 1995.

The company cites increased exploration expenses, reduced interest income, lower copper and gold production and weaker copper prices as reasons for its weaker performance in the quarter, compared with the year before.

Agnico-Eagle has strengthened its association with several companies, notably Sudbury Contact Mines (TSE). Together with Long Shots, another associated company, Agnico-Eagle will own an aggregate of 35.2% of Sudbury’s common shares.