Agnico-Eagle targets Meadowbank project
Agnico-Eagle Mines of Toronto signed a merger agreement with Vancouver’s Cumberland Resources in early February. The move would increase both Agnico’s gold production and reserve numbers.
Cumberland owns 100% of the Meadowbank gold project in Nunavut. The deposit has proven and probable reserves of 21.3 million tonnes grading 4.2 g/t Au, or 2.9 million oz of gold. Production is to begin in early 2010 at a rate of 400,000 oz/y for the first four years.
Agnico is proposing to exchange 0.185 of one of its common shares for each Cumberland share. The deal is a 23-28% premium on Cumberland’s share price, making the deal worth $710 million.
Updated plans for Galore Creek
Vancouver-based Novagold Resources is moving its Galore Creek copper-gold project toward production in 2011 or 2012. The deposit is located in the northwest corner of British Columbia.
The feasibility study, completed by Hatch Ltd. in October 2006, indicates that an investment of US$1.8 billion will be necessary to build an open pit mine and 65,000-t/d plant with a mine life of at least 20 years. About 20% of the amount will be spent in 2007-08 to build infrastructure including an access road, tunnel and powerline. Annual production will be approximately 432.0 million lb of copper and 400,000 oz of gold equivalent in the first five years. Proven and probable reserves are pegged at 540.7 million tonnes grading 0.557% Cu, 0.303 g/t Au and 5.32 g/t Ag.
NovaGold also expects to receive the environmental certificate and construction permits for Galore Creek in 2007. The company will update the resource estimate, arrange project financing, and begin building the needed infrastructure if the directors make a positive development decision. The initial construction is expected to begin in Q2 2007, and the second phase of construction–building the mine and processing facilities–is to begin in 2009.