Canadian gold major Agnico Eagle Mines has added 50 000 oz to its gold production guidance for 2018, after a strong operational performance from its mines during the June quarter.

The NYSE- and TSX-listed miner, which operates in Canada, Finland and Mexico, increased its guidance to 1.58-million ounces of gold, from 1.53-million previously estimated, after the second-quarter production came to 404 961 oz at an all-in sustaining cost (AISC) of $921/oz.

The unit cost guidance for the full year remained unchanged, with total cash costs of between $625/oz and $675/oz and the AISC in a range of $890/oz to $940/oz.  

“Cash costs remained at the mid-point of our guidance, but we expect these costs to trend lower in the second half of the year,” CEO Sean Boyd said in a press statement on Wednesday.

Agnico Eagle reported quarterly net income of $5-million, or $0.02 a share, for the second quarter, compared with $54.9-million, or $0.24 a share, a year earlier. Excluding certain items, adjusted net income came to $2.6-million, or $0.01 a share, in the June 2018 quarter.

In the first six months of 2018, the company reported net income of $49.9-million, or $0.21 a share. This compares with the first six months of 2017, when net income was $130.8-million, or $0.57 a share.

‘ENORMOUS’ POTENTIAL IN NUNAVUT
Meanwhile, Boyd said that Agnico Eagle had made good progress on its development projects in Nunavut, northern Canada, which the group sees as a politically attractive and stable jurisdiction with “enormous geological potential”.

The company owns the Meadowbank mine and two significant development assets – Meliadine and the Amaruq satellite deposit 50 km from Meadowbank – as well as other exploration projects in Nunavut.

Boyd reported that construction of the Whale Tail pit at Amaruq had started, following the July 11 approval of a Type A water licence for the Whale Tail pit. In late July, the company started construction activities related to the Whale Tail dike and progressive overburden and waste stripping for Phase 1 of the Whale Tail pit.

He affirmed that the Amaruq project remained on budget with capital expenditures in 2018 forecast to be about $175-million.

At the Meliadine project, which is Agnico Eagle’s largest gold deposit in terms of mineral resources, underground development and surface construction are under way. At the end of June, construction was 74% complete.

The group is spending $398-million on Meliadine this year and the mine is on track to enter into production next year.

The shipping season is now under way at Meliadine, which should facilitate timely completion of the project allowing for the expected start of production in the second quarter of 2019," said Boyd.