While the Covid-19 pandemic did serious harm to many businesses, Agnico Eagle Mines managed to achieve record gold production at its Kivalliq sites and on the whole across all of its operations in 2021.
Meliadine gold production in 2021 was a record 367,630 ounces, compared to 312,398 ounces a year earlier. The company achieved that milestone while lowering the production cost per ounce of gold to $644 in 2021 from $786 per ounce in 2020, while total cash cost per ounce was reduced to $634 from $774. A strengthening Canadian dollar compared to the U.S. dollar accounted for some of that success, as did higher gold grades and elevated throughput levels.
Due to a Covid-19 outbreak in December, the Nunavummiut workforce was again sent home with pay and Agnico Eagle reduced some site activities. Normal operating levels resumed as of mid-January.
“The company expects that its efforts to help protect the Northern communities from this Covid-19 variant will have a slightly negative effect on production in the first quarter of 2022,” Agnico Eagle stated while reporting its 2021 fourth quarter and full year results on Feb. 24. “Plans are being reviewed to re-integrate the local workforce as soon as possible.”
Agnico Eagle also has more promise on the exploration side with an eastern extension of the Tiriganiaq mineralization discovered at depth in the fourth quarter of 2021. Some of the highlights there include 15.8 grams of gold per tonne over three metres at 487 metres depth and 15.7 grams of gold per tonne over 6.6 metres at 508 metres depth.
At the Amaruq deposit, where gold is milled at the nearby Meadowbank complex, production amounted to a new benchmark of 322,852 ounces of gold in 2021, a major advance from the 198,418 ounces extracted in 2020. Production cost per ounce of gold fell to $1,259 in 2021 compared to $1,436 the previous year. Total cash cost per ounce dropped to $1,201 in 2021 from $1,404 in 2020.
However, the temporary suspension of mining activities due to Covid-19 in December is leaving an impact at Amaruq as gold production in the first quarter of 2022 is expected to be approximately 60,000 ounces.
Nevertheless, construction of the underground mine infrastructure remains on budget and on schedule, according to Agnico Eagle. Commercial production is targeted for the second half of 2022.
The Toronto-based miner produced just over two million ounces of gold company-wide in 2021, a record figure.
Fourth quarter net income was $101.1 million. The cost of paying some of the workforce to stay home during the fourth quarter — primarily Nunavummiut — was $2.2 million.
For the full year 2021, Agnico Eagle generated $543 million in net income, up from $511.6 million in 2020.
Gold sold for between (U.S.)$1,700 and $1,900 per ounce in 2021, according to price charts.
At the management level, Ammar Al-Joundi, a former chief executive officer at Barrick Gold, has been appointed Agnico Eagle’s president and CEO, replacing Anthony Makuch, who assisted in the recent merger between Agnico Eagle and Kirkland Lake Gold, which created the world’s third-largest gold producing company with assets in Canada, Australia, Finland and Mexico.