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'It's not just about getting bigger' - Agnico Eagle Mines CEO on M&A

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(Kitco News) - Ammar Al-Joundi, president & CEO of Agnico Eagle Mines, says what differentiates the company from its peers is a focus on the region in which it is operating.

Al-Joundi spoke to Kitco mid-September at the Gold Forum Americas 2023 held in Colorado Springs, CO.

"What really makes a good miner, is do you know the ground better, do you know the suppliers better, do you know the contractors better, the permitting better and all of that you get from experience," Al-Joundi said. "Where many of our peers are global miners and they'll go anywhere in the world to build a mine, we're regional."

The third-biggest told producer earlier this year gained full ownership of Canada's largest gold mine, Canadian Malartic in Quebec. Al-Joundi was asked how he sees its future development.

"What really excited us about Malartic, of course, was the geologic potential in our backyard but also the mill capacity," he said, noting the "huge" 60,000 tpd mill will give the company 40,000 tpd of spare capacity as it transitions from open pit to underground.

"What this means is we have 40,000 tonnes a day of mill capacity in arguably the most prospective region in the entire world to mine for gold, so it's not just the mine; it's the infrastructure and, by the way, the best way to make return on capital and risk-adjusted return on capital is to use existing infrastructure."

Al-Joundi hinted that gold juniors with deposits in the Abitibi region of Quebec could use the mill's spare capacity and he wouldn't rule out the possibility of toll milling arrangements, takeovers, or joint ventures. "I promise you we're looking at it," he said.

"In this business, it's not just about getting bigger. That's a problem, sometimes. It's really about trying to make money for our shareholders, and we're trying to make them the most money with using as little of their capital as possible, because it's a return on capital."

When asked what might spark more interest in gold miners, Al-Joundi said it partly hinges on the Federal Reserve. Interest rate hikes have kept generalist investors out of the precious metal sector.

"[But] the Fed's going to finish...then I think gold is going to go up, and I think the generalist investors will come in."

Kitco Mining's coverage of the Gold Forum Americas 2023 was sponsored by Metalla Royalty & Streaming Ltd.

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