The Goldex mine is part of the chain of operations and properties that Agnico Eagle owns in the Abitibi region of northwestern Quebec. Underground mining from the M and E satellite zones and processing in the mill started in September 2013. Commercial production was achieved in October 2013.
2016 production and costs
Production - 120,704 oz gold
Production costs - $525/oz gold
Total cash costs - $532/oz gold Gold reserves
Goldex, located 60 km east of the Company’s LaRonde mine, has proven and probable reserves of 0.9 million ounces of gold (16.8 million tonnes grading 1.64 grams/tonne gold) as of December 31, 2016. Reserves in the M and E Zones are estimated to support an underground mine through 2017, with annual production of approximately 105,000 ounces gold. In July 2015, the Goldex Deep 1 project was approved. The development of the Dx and D Zones will add another eight years of production at Goldex using the same mining methods, with annual average production of 118,000 oz gold from early 2018 through 2019.
The Goldex property is located in the Dubuisson Township of Quebec and forms part of the southern Abitibi Greenstone Belt. The sequence of intermediate to mafic and ultramafic volcanic rocks that underlie the property dips steeply to the northeast. They are intruded by a large table-shaped quartz-diorite body – known as the Goldex Granodiorite – that also dips steeply to the northeast.
Goldex is a large, relatively low-grade body defined by the intensity of stockwork veins and gold grades rather than by individual veins. Most of the gold occurs as microscopic particles associated with pyrite, while the rest of coarse native gold grains. There are several zones of gold mineralization with isolated ore-grade intercepts over mineable widths on the property, and all of them except the South Zone are hosted by the Goldex Granodiorite. We are currently mining the M and E Zones, both of which contain gold-bearing quartz-tourmaline-pyrite veins and veinlets.
Commercial production of the Goldex M and E Zones was achieved in October 2013. The operation uses largely the same underground infrastructure as the original 2008 mine, but different underground mining methods and reducing the mining rate.
The M and E zones are mined using long-hole stoping in primary and secondary stopes – with a new ore and waste pass system – with paste backfill to ensure long-term stability.
In July 2015, the Deep 1 project was approved to develop the lower part of the Dx Zone and upper part of the D Zone for production beginning in 2018. The planned mining method is long-hole stoping with cemented paste backfill, the same method currently being used at Goldex. The mining rate for Deep 1 is expected to be approximately 6,000 tonnes/day. An automated conveyor system ("Rail-Veyor") is being installed underground as part of the development.
The processing plant treats ore from the M and E Zones. Ore is treated using a two-stage crushing process, followed by a two-stage grinding circuit that consists of a semi-autogenous grinding (SAG) mill and a ball mill. Most of the ground ore is fed to a gravity circuit that recovers about two-thirds of the gold, which is then smelted on site to form doré bars. Flotation recovers the rest of the gold, producing a gold-bearing pyrite concentrate.
This concentrate is then thickened and trucked to the LaRonde complex, where it is fed to a cyanide leach circuit. Gold-bearing leachate is fed directly into the carbon-in-pulp circuit to recover precious metals, which are smelted into doré bars. In 2018, we anticipate that M and E Zone ore will be replaced by Dx and D Zone ore from the Deep 1 project.
In July 2015, the Company approved the Goldex Deep 1 project. The Dx and D zones are being developed between 850 and 1,200 metres depth, preparing for eight years of production beginning in 2018. In 2017, the Company expects to spend $0.2 million on 3,000 metres of exploration drilling and $3.8 million on 51,500 metres of conversion drilling at Goldex. Studies are ongoing to evaluate the potential to increase throughput from the Deep 1 Zone and the potential to mine a portion of the Deep 2 Zone, both of which could enhance production levels or extend the current mine life at Goldex and reduce operating costs.
We acquired the Akasaba West gold-copper deposit in 2014. Located less than 30 km from Goldex, the deposit could create flexibility and synergies for the Company's operations in the Abitibi region by utilizing extra milling capacity at both Goldex and LaRonde, while reducing our overall costs. Akasaba West currently hosts probable gold reserves of approximately 142,000 ounces (4.9 million tonnes at 0.89 g/t gold and 0.50% copper) and an indicated gold resource of approximately 53,000 ounces (2.5 million tonnes at 0.66 g/t gold and 0.40% copper) as of December 31, 2016.
Permitting of the Akasaba West project is progressing at both the provincial and federal government levels with permitting activities expected to continue until 2018. Based on an internal technical study, the Akasaba West deposit has the potential to produce approximately 20,000 to 25,000 ounces of gold and 8.5 to 10.0 million pounds of copper per year for four to five years. The average total cash costs on a by-product basis to produce gold are estimated to be approximately $400 per ounce. Capital costs (including closure costs) are estimated to be approximately C$50 million. The Company expects to begin sourcing open pit ore from Akasaba West in 2019.