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(Kitco News) - Agnico Eagle (NYSE: AEM) (TSX: AEM) announced today that the company has completed a new internal study on the Odyssey mine, which forms part of the company's 100% owned Canadian Malartic complex, to reflect progress to date and the new economic environment.
“Over the last three years, we have significantly de-risked the project while improving its production profile and increasing its overall value. We have added approximately 1.7 million ounces of gold to the mine plan and extended the mine life to 2042,” the company said in a statement.
Agnico Eagle noted that forecast payable gold production for the Odyssey mine increased by 23% compared to the internal study completed in 2020, supported by a larger mineral resource estimate at year-end 2022.
With a larger mineable gold mineral resource, the Odyssey mine life has been extended by three years to 2042 and the average annual payable production is now approximately 558,000 ounces of gold from 2029 to 2041 (compared to 547,000 ounces of gold from 2029 to 2039 in the 2020 study).
Importantly, the company believes that the exploration successes in the Odyssey internal zones, East Gouldie and Camflo provide opportunities to complement the forecast gold production and potentially extend the mine life.
However, the project’s total cash costs per ounce are now forecast to be approximately $768 from 2029 to 2042, compared to $630 from 2029 to 2039 in the 2020 study.
“Costs estimates, including underground development and mining costs, processing costs and equipment procurement, reflect the new cost environment following three years of high inflationary cost pressures,” the company said.
Agnico Eagle pointed out that using a gold price of $1,650 per ounce and a C$/US$ foreign exchange rate assumption of 1.32, the Odyssey mine has an after-tax IRR of 24% and an after-tax NPV (5% discount rate) of $1.60B.
In the 2020 study, the Odyssey project had an estimated after-tax IRR of 17.5% and an after-tax NPV (5% discount rate) of $1.14B, using a gold price of $1,550 per ounce and a C$/US$ foreign exchange rate assumption of 1.30.
The company also reported that the project construction and mine development remains largely on schedule, adding that capital expenditures from 2021 to June 2023 are expected to be approximately $429 million, approximately 11% higher than estimated in the 2020 study, given inflation and supply chain challenges.
Canadian Malartic, 25 km west of Val-d’Or in northwestern Quebec, is the second-largest operating gold mine in Canada. Agnico Eagle acquired Yamana Gold's 50% interest in Canadian Malartic on March 31, 2023, resulting in a 100% interest in the Canadian Malartic and Odyssey mines.
Agnico Eagle is a senior Canadian gold mining company, producing precious metals from operations in Canada, Australia, Finland and Mexico.
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