Agnico Eagle is on a path to upsize its Detour Lake mine, near the Quebec border, into a one-million-ounce per year gold producer.
The Toronto gold company has posted a preliminary economic assessment and a new mine plan that involves digging beneath its current open-pit operation to tap into a “high-grade core of mineralization” and follow a gold system that tracks west on its property.
Based on the numbers released in a new reserve and resource estimate, Agnico says there’s enough gold in the ground to keep operating until 2054, two more years than previously thought from the last mine plan published in 2022.
Agnico Eagle is one of Canada’s largest mining companies with mines and gold properties in the Abitibi region of northeastern Ontario and western Quebec, Canada’s Far North and Australia, Finland and Mexico.
The Detour Lake pit is 185 kilometres, by road, northeast of Cochrane.
By diving into underground mining and making improvements at its mill, the company said Detour Lake has the potential to produce one million ounces of gold a year, over a 14-year period, starting in 2030.
Yearly gold production would jump 43 per cent – or 300,000 ounces – a year from 2030 to 2043 to reach the million-ounce mark when compared to average annual production in years 2024 to 2029.
The forecasted cost to go underground and expand mill production to 29 million tonnes per year is US$731 million ($1 billion). Sustaining capital spending over the life of the underground mine amounts to US$631 million, about $40 million to $45 million a year from 2030 to 2043.
The gold cut-off grade is 1.22 grams per tonne, which is amenable to underground mining, the company said.
According to Ammar Al-Joundi, Agnico’s president-CEO, Detour Lake is a “world class asset” that presents them with a low-risk opportunity to build an underground mine to complement its existing pit operation and transform Detour “into one of the top five gold mines in the world by output.”
And there’s enough exploration and production upside to keep them mining for decades to come, he said in a statement.
To prove out this potential, Agnico Eagle will be spending US$100 million over the next two years to drive a two-kilometre-long exploration ramp down to a depth of 270 metres. The plan is carve out a bulk sample and establish underground drill platforms to confirm and find more gold.
The company is planning an infill and expansion drill program to follow gold mineralization, which extends and plunges to the west. The exploration budget for Detour is $65 million over the next three years.
The gold endowment at Detour Lake is so large and the exploration outlook so promising, Agnico thinks there are more ounces to be added to the mine plan in the future, which will either lead to another production boost between 2044 and 2054 or extend Detour’s operating life by a few more years.
The new gold resource estimate from the high-grade mineralized corridors totals 1.2 million ounces of indicted gold within 19 million tonnes, grading 1.93 grams per tonne (g/t), and 7.1 million ounces, inside 107.7 million tonnes grading 2.05 g/t on the inferred side. The underground portion makes up 55 per cent of those high-grade resources.
