Monday, 5th June 2006 (2510 views)

Agnico-Eagle Mines has announced a number of major steps in its strategy of expanding gold output and gold reserves.

It is to begin construction on the Kittila gold mine in northern Finland, which is expected to produce an average 150,000 ounces of gold each year at average total cash costs of approximately $250 per ounce. Production will begin at the mine by the middle of 2008 and extend over 13 years.

In addition to this the company's Lapa gold project in Quebec is to be completed for an additional investment of $90 million. It will produce an average 125,000 ounces of gold annually at average total cash costs of approximately $210 per ounce. Production here is expected to begin by the fourth quarter of 2008 and continue for seven years.

The company has also announced its intention to increase expenditures on its Pinos Altos project in Mexico in order to conduct an extensive exploration programme and complete a feasibility study by the end of the second quarter of 2007, and to raise $250 million in a marketed equity offering to fund its growth initiatives and for general corporate purposes.

Sean Boyd, vice chairman and chief executive of Agnico-Eagle, said: "With today's project decisions, Agnico-Eagle has set the stage for a significant increase in its gold output with four gold projects under construction and a potential fifth new mine entering the feasibility stage.

"Our existing cash position and strong cash flows combined with the proceeds of the proposed $250 million equity issue should enable us to finance our growth and maintain a strong financial position," he added.

Agnico-Eagle is a Canadian gold producer. It has operations in Quebec and exploration and development activities in Canada, Finland, Mexico and the United States.

 

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