Agnico Eagle upbeat on Australia growth prospects

Image from Agnico Eagles Mines via flickr.

Gold miner Agnico Eagle is bullish on the prospects for its Fosterville mine and growth in Australia, its chief executive said on Friday after his first visit there since merging with Kirkland Lake Gold.

The mine in Australia’s Victoria state fits with the Canadian company’s strategy of focusing on politically stable regions that have strong geological potential to support many mines over several decades.

“With Fosterville we think we know we have an exceptional ore body and an exceptional team, and it is our intention to be here hopefully for decades – multiple mines for multiple decades,” Agnico Eagle President Ammar Al-Joundi told reporters.

Looking to expand its footprint next to Fosterville, Kirkland Lake last year bid for four exploration blocks that the Victorian government offered and won three of them in October.

Agnico Eagle plans to spend $60 million exploring in Australia this year, of a total exploration budget of $324 million.

Al-Joundi predicted there will be more mergers and acquisitions in the industry, but more disciplined than during the last gold price boom in 2010, which spawned billions of dollars in writedowns, although Agnico Eagle itself is more focused on expanding its own operations.

He said the world was looking very different now than in the last 20 years “when it seemed that everybody liked each other”, and metals buyers would now put a premium on resources in strategic locations.

“The stability of where you operate is going to be a real differentiator, and it should be,” Al-Joundi said, adding that Agnico Eagle was taking a measured approach to exploration in Colombia, which he said had “tremendous mineral potential”.

“Is it yet in a position where we feel we can go in and be there for 50 years? Not yet.”

(By Sonali Paul; Editing by Alexander Smith)

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