Agnico Eagle Mines Releases Update on Amaruq Project

Company has 13% increase in mineral resources at Amaruq

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On Sept. 15, Agnico Eagle Mines Limited (AEM, Financial) (TSX:AEM) provided an update on exploration drilling results at its Amaruq gold project in the Kivalliq District of Nunavut, about 2,600 kilometers northwest of Toronto.

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Source: Wikipedia

The Amaruq gold project hosts the Whale Tail gold deposit as well as the I, R,V, and Mammoth 1 and 2 zones and several other targets. The original property where the company is drilling to develop the project was acquired in 2013.

The company remains focused on the Amaruq project because of its potential and its proximity to Agnico Eagle's Meadowbank mine and mill. The Amaruq project is located 50 kilometers northwest of Meadowbank.

The Amaruq continues to grow, and yesterday Agnico released an update on the project that includes an expanded mineral resource estimate based on drilling through June 30.

Highlights include:

  • Overall mineral resources increased by 13% at the Amaruq project – Drilling in the first half of 2016 has resulted in an updated inferred mineral resource estimate of 3.71 million ounces of gold (19.4 million tonnes grading 5.97 grams per tonne ("g/t") gold) as of June 30. This represents an increase of 432,000 ounces (on a contained gold basis) compared to the Dec. 31, 2015 estimate.
  • Open pit mineral resources increased by 33% – The updated estimate includes a 598,000-ounce increase (on a contained gold basis) in open pit inferred mineral resources to 2.42 million ounces gold (13.6 million tonnes grading 5.53 g/t), compared to the Dec. 31, 2015 estimate.
  • 319% expansion in the IVR deposit mineral resources; V Zone confirmed as potential second source of open pit ore – Contained gold in inferred mineral resources at the IVR deposit increased by 649,000 ounces (an increase of 319%) to 852,000 ounces (3.9 million tonnes grading 6.84 g/t gold) compared to the Dec. 31, 2015 estimate. The IVR deposit contains 549,000 ounces of gold (2.5 million tonnes grading 6.71 g/t gold) within the overall open pit mineral resources. The majority of this mineral resource is contained in the V Zone, which has been traced down to 542 metres below surface and remains open at depth.

The local geology map of the Amaruq Project:

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Source: Agnico Eagle Mines Limited's website

"The 2016 exploration program at Amaruq has resulted in an increase in gold resources and the delineation of a potential second source of open pit ore at the V Zone. In just a short period of time, we have seen Amaruq advance from a grassroots discovery to a significant development project with 3.7 million ounces of gold resources,"Â said Sean Boyd, Agnico Eagle's vice-chairman and CEO.

The 2016 drilling and exploration program is expected to be completed by mid-October using seven diamond drill rigs, and the results will be incorporated by Agnico in an updated mineral resource estimate and released with the company's year-end results in February 2017.

The part of the updated mineral resources estimate that refers to Amaruq will include an initial estimate of indicated mineral resources.

By next February, we will know more about the potentials of Amaruq projects since it will move one step higher from the category of inferred resources to the category of indicated resources.

But investors should remember that mineral resources that are not mineral reserves have not yet demonstrated economic viability.

The miner says that Amaruq is expected to provide a new source of ore for the Meadowbank mill starting in 2019.

Disclosure: I have no positions in Agnico Eagle Mines Limited.

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