Canadian Malartic is one of the world’s largest gold mines. The open-pit mine and 60,000-tpd-capacity processing plant produced 714,784 ounces of gold in 2021 (100% basis). Open pit mine life is expected to last through 2029, and the ongoing development of the underground Odyssey project will extend overall mine life to 2039. Proven and probable mineral reserves total 1.77 million ounces of gold (50 million tonnes at 1.09 grams/tonne gold) on a 50% basis, as of December 31, 2021.
In recent years at the open-pit operation, the Barnat extension project allowed the Partnership to access the Barnat deposit. Pre-commercial production activities started at Barnat in late 2019, following completion of the deviation of Highway 117 in late 2019; Commercial production was declared at Barnat on September 30, 2020.
In 2022, approximately one-third of the mine’s production is expected to be sourced from the Canadian Malartic pit and two-thirds from the Barnat pit.
In February 2021 following the completion of an internal technical study, the Partnership approved construction directly to the east of the Canadian Malartic/Barnat pit of the Odyssey project — an underground mining complex that will exploit three main deposits: East Gouldie, East Malartic and Odyssey. Average annual payable production from the Odyssey project is expected to be approximately 545,400 ounces of gold from 2029 to 2039, with total cash costs per ounce of approximately $630. Sustaining capital expenditures are expected to gradually decline from 2029 to 2039, with an expected average of approximately $56 million per year.
In 2022 and 2023 there will be a reduction in the mill throughput to 51,500 tpd (100% basis) to optimize the processing plan to improve the production profile during the transition from the open pit to the underground Odyssey project. This optimization is also expected to result in enhanced financial metrics and cash flow. The mill throughput is forecast to return to full capacity of approximately 60,000 tpd (100% basis) in the second half of 2024 as the underground mining operations ramp up.
Based on current mineral reserves, production from the Canadian Malartic and Barnat open pits extends to 2029. Run-of-mine ore from the pit is expected to decrease starting in 2022, as the ore production from the underground starts gradually in 2023 to reach a rate of 3,500 tpd in 2024. The underground is expected to reach full production of approximately 19,000 tpd by 2031.
Geology
The property lies in the southern margin of the eastern portion of the Archean-age Abitibi volcanic belt, mainly within the Pontiac Group of metasedimentary rocks. The Canadian Malartic property, together with the adjacent Rand Malartic and Midway properties, cover in excess of 25 km along the Cadillac-Larder Lake deformation zone. The properties are underlain to the north by the Cadillac Group, in the centre by the Piché Group and in the south by the Pontiac Group. The mineralized zones are mostly located in the northern part of the Pontiac Group and in the Piché Group in proximity to the Cadillac-Larder Lake deformation zone.
The geological settings of the East Malartic and Odyssey deposits are similar to those found in the western portions of the property, with both deposits located at the contact of the Cadillac-Larder Lake deformation zone and the Pontiac Group sedimentary rocks, and having a near-vertical orientation. In contrast, the East Gouldie deposit is located approximately 700 metres south of the Odyssey deposit entirely within the Pontiac Group greywacke and dips approximately 60 degrees north.
Mineralization
The deposits being mined by open pit at Canadian Malartic are part of a large-tonnage, low-grade Archean gold system, consisting of a widespread shell of disseminated gold-bearing pyrite mineralization hosted by porphyritic felsic to intermediate intrusions and altered metasediments. The system is open to the west and to the south at depth. Mineralization in the Barnat deposit is largely along the southern edge of the Cadillac fault zone. The Canadian Malartic and Barnat deposits contain the bulk of the current mineral reserves and are part of one large pit.
At the Odyssey project, gold mineralization in the East Malartic and Odyssey deposits is similar to the deposits in the western portion of the property. In contrast, gold mineralization in East Gouldie is higher grade and is hosted in highly strained intervals of greywacke with 1% to 2% disseminated pyrite and strong silica alteration, and moderate sericite and carbonate alteration.
Mining
Canadian Malartic is a large open-pit operation using large-scale excavators and trucks, on the southern edge of the Town of Malartic. Since start-up, mining activities have been mindful of the need to limit noise levels from the mining operations, with drilling and blasting activities designed to control blast-induced vibrations and noise pressure on the neighbouring townsite. A 135-metre-wide buffer zone (the “green wall”) has been developed along the northern limit of the open pit to mitigate the impacts of mining activities on the residents of Malartic. This ridge has been planted with shrubs, trees and grasses, and further enhanced by the addition of a park alongside, a bike trail and sculptures.
Mining at the Odyssey project will be done using underground methods. The mine design at the Odyssey project includes a 1,800 metre deep production-services shaft with an expected capacity of approximately 20,000 tonnes per day. Mining activities are expected to primarily use a sublevel open stoping mining method with paste backfill. Longitudinal retreat and transverse primary-secondary mining methods will also be used dependent on mineralization geometry and stope design criteria. The project is expected to use a combination of conventional and automated equipment, similar to what is currently used at the LaRonde Complex.
Processing
Ore is processed at the Canadian Malartic mineral processing complex, which has a 60,000-tonnes/day nominal throughput capacity. Ore is transported to a crushing circuit and the crushed ore is stockpiled in a covered pile, then conveyed to the semi-autogenous grinding circuit followed by three identical ball mills, each in closed circuit with hydro-cyclones. The slurry is thickened to about 50% solids before being fed to the leach tank circuit for conventional cyanidation followed by carbon-in-pulp processing technology. The product is doré bars containing gold and silver.
To reduce the environmental impact, tailings are thickened and detoxified prior to being pumped to a tailings impoundment facility. Excess water is mainly re-used in the plant or treated prior to being discharged to the receiving environment.
Exploration
The primary exploration target at Canadian Malartic from 2019 to the present has been the East Gouldie deposit, which was discovered in late 2018 at underground depths approximately 1.5 kilometres east of the Canadian Malartic/Barnat open pit and south of the East Malartic and Odyssey underground deposits. The East Gouldie deposit has a strike length of 1,400 metres in an east-west direction, dips 60 degrees north, and extends from 700 metres to 1,900 metres depth below surface. The deposit is a silicified and carbonatized mineralized envelope with fine disseminated pyrite developed in sheared greywacke units.
In 2021, twelve surface drills completed 123,680 metres of drilling and two underground drills completed 9,722 metres of drilling. The focus of the surface drilling was to infill and extend the East Gouldie deposit and test the Odyssey internal zones. The underground drilling was primarily focused on conversion of mineral resources at the Odyssey South deposit.
East Gouldie hosts indicated mineral resources of 745,000 ounces of gold (6.0 million tonnes grading 3.88 g/t gold) and inferred mineral resources of 3.0 million (30.8 million tonnes grading 3.07 g/t gold) (reflecting Agnico Eagle's 50% interest), as of December 31, 2021.
East Malartic was previously a gold-producing property, located directly adjacent to and east of the Canadian Malartic mine, and west of the Odyssey deposit. On a 50% basis, the East Malartic deposit has an indicated mineral resource of 364,000 ounces of gold (5.5 million tonnes grading 2.04 g/t gold) and an inferred mineral resource estimated at 2.6 million ounces of gold (42.6 million tonnes grading 1.92 g/t gold) to a depth of 1,800 metres, as of December 31, 2021.
The Odyssey deposit lies approximately 1.5 km east of the current limit of the Canadian Malartic open pit and is grouped into two elongated zones — Odyssey North and Odyssey South, approximately 500 metres apart — that strike east-southeast and dip steeply south. On a 50% basis, the indicated mineral resources at the Odyssey deposit are estimated at 66,000 ounces of gold (1.1 million tonnes grading 1.92 g/t gold), and inferred mineral resources are estimated at 891,000 ounces of gold (13.4 million tonnes grading 2.07 g/t gold) as of December 31, 2021.
The East Gouldie, East Malartic and Odyssey mineral resources do not form part of the Canadian Malartic mine’s mineral reserve and mineral resource estimate.
In March 2019, the Partnership acquired a 100% interest in the Rand Malartic property, which extends 1.7 km immediately eastward from the Odyssey project and provides an additional 262 hectares of prospective ground with the same favourable geological settings as the Odyssey and East Gouldie deposits. The East Gouldie eastern extension continues to be investigated up to the eastern boundary of the Canadian Malartic property and onto the adjacent Rand Malartic where the zone was intersected more than 1.2 km away from the current mineral resources limit.
At the Canadian Malartic property in 2022, the Company expects to spend approximately $11.9 million (50% basis) for 136,800 metres (100% basis) of exploration and conversion drilling focused on aggressive infill drilling at the East Gouldie deposit to improve confidence in the mineral resource, to continue the conversion of inferred mineral resources to indicated mineral resources and to refine the geological model. With ramp development under way as part of the Odyssey Mine project, the Company will be able to continue underground conversion drilling from the ramp in 2022. In addition, the Company is planning to spend approximately $4.1 million (50% basis) on 21,900 metres (100% basis) of exploration drilling to expand mineralization towards the east in the East Gouldie horizon and the new Titan zone at depth on the Rand property. Some drilling is also planned on the nearby East Amphi property to extend the Nessie and Kraken zones.
Development Project
Odyssey Project
In February 2021, the Partnership approved the construction of the underground Odyssey project, located east of the current mining operation, upon completion of an internal preliminary economic assessment. The results of this study were incorporated into the technical report for the Canadian Malartic operation titled “NI 43-101 Technical Report, Canadian Malartic Mine, Québec, Canada”, which was filed on SEDAR on March 25, 2021.
On a 100% basis, the preliminary economic assessment includes 410,000 ounces of gold in indicated mineral resources (6.2 million tonnes grading 2.07 g/t gold) and 6.9 million ounces of gold in inferred mineral resources (75.9 million tonnes grading 2.82 g/t gold) that represent approximately half of the Odyssey project's year-end 2020 total of 859,000 ounces of gold in the indicated category (13.3 million tonnes grading 2.0 g/t gold) and 13.6 million ounces of gold in the inferred category (177.5 million tonnes grading 2.4 g/t gold). The development of this project combines the exploitation of four main mining zones by ramp and shaft: Odyssey North, Odyssey South, East Malartic and East Gouldie.
Based on current mineral reserves, production from the Canadian Malartic and Barnat open pits extends to 2029. Run-of–mine ore from the pit is expected to decrease starting in 2022, as the ore production from the underground starts gradually in 2023 to reach a rate of 3,500 tpd in 2024. The underground is expected to reach full production of approximately 19,000 tpd by 2031.
Capital expenditures from 2021 to 2028 are expected to total approximately $1.34 billion (on a 100% basis), which includes $1,144 million in initial capital expenditures and $191 million in additional development capital expenditures. The gradual transition from open pit to underground mining allows for capital expenditures to be spread over eight years. In addition, proceeds from the early production, which is expected to begin in 2023, will significantly reduce the external cash requirements for the construction of the project.
From 2023 to 2028, gold production is forecast to be approximately 932,000 ounces at total cash costs of approximately $800 per ounce (all numbers on a 100% basis). Average annual payable production is approximately 545,400 ounces of gold from 2029 to 2039, with total cash costs per ounce of approximately $630. Sustaining capital expenditures are expected to gradually decline from 2029 to 2039, with an expected average of approximately $56 million per year.
The forecast parameters surrounding the Company’s proposed operations at the Odyssey project were based on the results of an internal technical study which were incorporated into section 24 of the NI 43-101 technical report for the Canadian Malartic operation that was filed on SEDAR on March 25, 2021. The report is preliminary in nature and includes inferred mineral resources that are too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves and there is no certainty that the forecast production amounts will be realized.
Underground development in 2021 was in line with expectations with 1,487 linear metres of ramp completed and 2,081 equivalent metres of lateral development achieved.
Production via the ramp is expected to begin gradually at Odyssey South in the first half of 2023, increasing to up to 3,500 tpd in 2024. Collaring of the shaft and installation of the headframe was initiated in 2021 and shaft sinking activities are expected to begin in the fourth quarter of 2022. The shaft will have an estimated depth of 1,800 metres and the first loading station is expected to be commissioned in 2027 with modest production from East Gouldie. The East Malartic shallow area and Odyssey North are scheduled to enter into production in 2029 and 2030, respectively.