Agnico Eagle may expand Nunavut exploration after striking 'promising' gold vein

Agnico Eagle may expand Nunavut exploration as it strikes gold vein

Meadowbank mine storage dome and facilities. (Courtesy of Agnico Eagles)

Canadian Agnico Eagle Mines (TSX:AEM)(NYSE:AEM) may expand summer exploration at its Amaruq project in Nunavut as the miner found a vein of gold near an existing deposit called Whale Tale.

While the findings are still being analyzed, the Toronto-based miner said last week that the new vein, located about 50 kilometres northwest of its Meadowbank mine and 300 metres underground, looks quite “promising.”

The company added that while Agnico will provide a detailed report of the resources at the site by the end of the summer, it is already considering expanding its summer exploration program.

"We will be reviewing our programs at both projects with a view to increase our drilling activities", said CEO Sean Boyd in a news release. “Studies are ongoing to evaluate the potential to develop the Amaruq deposit as a satellite operation to Meadowbank,” he added.

Meadowbank is Nunavut's only fully operational gold mine, but the company is close to start constructing a new one. The territory’s Impact Review Board granted the company in March a project certificate for a second mining operation known as Meliadine, near Rankin Inlet.

A decision on construction of Meliadine mine, however, will likely depend on the price of gold and other economic factors, Agnico has said.

For next year, the company anticipates reaching production of 1.6 million ounces, with the LaRonde, Kittila, La India, and Canadian Malarctic gold mines driving production growth.

The miner also has several projects in the pipeline that should drive long-term production growth beyond 2017, including a recently acquired Mexico-focused silver explorer.

Agnico Eagle joined the top 10 listed gold producers in the world last year.