From Earlier: Agnico-Eagle Mines Announces 2011 Exploration Delivers Reserve Growth At Meliadine And Kittila
Agnico-Eagle Mines Limited (NYSE: AEM) is providing its 2011 reserve and resource statement, an update on the 2011 exploration program results, as well as an outline for its exploration program in 2012.
Agnico-Eagle's 2011 proven and probable gold reserves of 18.8 million ounces compares with the 2010 total of 21.3 million ounces. The 2011 gold production, the October 2011 suspension of mining at Goldex and the associated reclassification of its reserves to resources, combined with higher costs at Meadowbank which resulted in a new mine plan and lower reserves, each negatively impacted the 2011 total.
The overall gold resources were positively impacted by the results of exploration drilling at Kittila, Meliadine, and Pinos Altos.
The Company's measured and indicated resources have increased by 3.2 million ounces of contained gold over the 2010 statement to a total of 9.6 million ounces of gold (168 million tonnes grading 1.78 g/t). The increase in measured and indicated resources includes the addition of 1.4 million ounces of gold from the reclassification of Goldex proven and probable reserves and an additional 1.2 million ounces of measured and indicated gold resource (48 million tonnes grading 0.74 g/t) from the acquisition of the La India property. Inferred resources of 9.7 million ounces of gold in 2011 have decreased by 0.2 million ounces of contained gold over the year, primarily as a result of successful conversion drilling at Kittila and La India, offset by decreases at Meadowbank.
The Company anticipates the year-end 2012 reserves to grow to approximately 20 million ounces of gold, or an increase of approximately 12%, net of production, through an extensive exploration drilling campaign.
The 2012 exploration program will be primarily focused on accelerating the drilling programs at Kittila, Meliadine and Mascota/Bravo, conversion of resources at La India and further exploration of Tarachi. These programs will form part of the feasibility studies at each of these properties, which would add significant upside potential for the Company's near term growth production profile. In 2012, Agnico-Eagle's exploration budget is approximately $106 million, with about 38% expected to be spent on mine-site and advanced project exploration, as shown in the table.
Agnico-Eagle spent approximately $108 million on regional and minesite exploration during 2011, including 390,000 metres of drilling. An additional $35 million was spent on a bulk sample and other activities at Meliadine, the results of which are expected in the second quarter of 2012. Much of the exploration expenditures were spent on grassroots and brownfields exploration (approximately $76 million) and resulted in 216,046 metres of drilling. The Company plans to continue to focus its exploration efforts at Meliadine, Kittila, and its assets in Mexico.
At the Meliadine project, the 2011 exploration program included $40 million spent on 104,502 metres of core drilling, with the majority of it focused on infill drilling at Tiriganiaq. As of year-end 2011, about one third of the 2011 assays remain pending due to a backlog at the independent laboratory. These intersections were not included in the current reserve and resource statement but are expected to be received by the second quarter of 2012.
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