No doom and gloom in Agnico-Eagle"s crystal ball for 2009
[2008-12-23 17:04:13]
Bucking the tide of gloom and doom in the international mining sector, Toronto's Agnico-Eagle announced Thursday it was paying its 27 th consecutive annual cash dividend, and accelerating its gold production growth.
In a news release, Sean Boyd, vice chairman and CEO of Agnico-Eagle, said the company will start off the year ahead "with a strengthened balance sheet and the expectation that over the next 15 months we will complete the construction of three more gold mines."
"We also anticipate further increases in gold reserves and resources in 2009 as we continue with an extensive exploration program on our large gold deposits," he said. "We also look forward to providing the results of our ongoing studies on four internal production growth opportunities that give the potential to enhance our superior growth beyond 2010."
Agnico also announced that payable gold production is expected to total 590,000 ounces in 2009, a 100% increase over this year, as the company's fourth and fifth gold mines-Lapa and Pinos Altos-- are expected to be commissioned next year. Total per ounce cash cost guidance is expected to average $325 in 2009.
The company plans to grow gold production to more than 1.2 million ounces of year over the period of 2010-2018 with total cash costs estimated at $325/oz.
Despite a sharp downturn in byproduct metals prices, Agnico's proforma cash balance at the end of September was $440 million. The company also has $250 million in available credit.
Project capital expenditures are budgeted at $432 million in 2009, reducing to $146 million in 2010 as the new mines are commissioned. "Over this period, the company expects to generate internal cash flow from the sale of approximately 1.9 million ounces of gold and the associated byproduct metals," according to the news release.
Agnico's Kittila mine in northern Finland is now operating, as a scoping study is underway on how to achieve a significantly higher rate at the mine, anticipated to produce 125,000 ounces of gold next year at total cash costs of $333/oz. Kittila has probable gold reserves of 3 million ounces.
Located east of LaRonde in northwestern Quebec, the Lapa mine project is expected to begin production in mid-2009 with 2009 gold production estimated at 55,000 ounces. The mine is expected to average 115,000 ounces of annual gold production from 2009 to 2015.
Mexico's Pinos Altos Mine project in the state of Chihuahua in northern Mexico is scheduled to begin production in the second half of 2009. The mine is expected to produce an average of 165,000 ounces of gold annually between 2009-2018.
The start-up of the Meadowbank gold mine in Nunavut is expected in the first quarter of 2010 with an average annual gold production of 335,000 ounces from 2010 to 2018. A scoping study is underway to consider an increase from 8,500 tpd to 10,000 tpd.
The company is also maintaining its exploration program
