Notwithstanding CEO Sean Boyd's insistence that “it's not a race, we're not racing anywhere”, Canadian gold-miner Agnico-Eagle is unarguably making excellent time, with one new mine under its belt this year and another four to come over the next 18 months, not to mention an extension at its flagship La Ronde mine, in Quebec.

At the same time, the company is aggressively exploring its assets in Canada, Mexico and Finland, and hopes to prove that at least three of its projects contain gold reserves of 5-million ounces, a distinction already boasted by LaRonde, which, at around that level, is Canada's biggest gold deposit by reserves.

Agnico-Eagle poured its first gold at the Goldex mine, in Quebec, last month, and hosted an event to mark the official opening of the mine on Thursday.

On external growth prospects, the miner takes a more cautious line, and Boyd is quick to point out that, with its growth pipeline, “we don't need to do a large acquisition to bring in other production”.

“We're a little bit different from some companies who have played this bull market by trying to just grow quickly through acquisition...our philosophy has always been to make sure that whatever we do, it just strengthens the foundation,” he said on Thursday at the Goldex mine.

Instead, the company would continue to look for “strategic investments”, in assets it viewed as having upside potential.

“We hope to be able to take small investments in those things, hopefully get on the boards of those companies, and have time to understand what the opportunities are, understand what the risks are, and then make a decision whether we get more heavily involved,” he said.

“We'll try to buy early stage, things that we can get built, but also to keep investing back into the project to realise the ultimate potential.”

UNDERGROUND POTENTIAL

Agnico-Eagle plans to start producing at its Kittila mine, in Finland, towards the end of the third quarter of this year, followed by a start-up at the Lapa project, in Canada, and the Pinos Altos gold/silver mine, in Mexico, in mid-2009.

Finally, the giant Meadowbank project, in Canada's icy Nunavut territory, is expected to come on line in January 2010, and currently has an estimated life-of-mine production rate of 360 000 oz/y over nine years.

Although it still has four new mines to start up, the company is already considering expansion potential, including possible underground development at both Kittila and Meadowbank, which have been initially designed as open pits.

“We're going to go after the pipeline of projects as aggressively as we went after LaRonde,” Boyd said.

He points out that the Penna shaft at La Ronde – which, at 2,25 km is the deepest single shaft in the Western hemisphere, was originally planned at only about 1 600 m, “and in the middle of it we just had to keep going, because the deposit kept growing”.

The company is hitting encouraging intersections at depth at both Kittilia and Meadowbank, and both deposits remain “wide open”.

“We think there's good potential at some point to have to go underground there as well.”

The firm is also conducting a scoping study this year on an area at Pinos Altos which it believes could be developed as a stand-alone, heap-leachable openpit, and "we hope to be able to fast track that at some point,” Boyd added.

ON SCHEDULE AND IN BUDGET

Goldex, which is still undergoing commissioning, will eventually ramp up to a steady state production rate of about 175 000 oz/y, at total cash costs of $230 per ounce.

The mine is located about 60 km east of LaRonde, in the Abitibi region of Quebec.

The Goldex mill is currently processing stockpiles, and running at about 5 000 t/d, but will increase to throughput of 7 000 t/d as mining operations ramp up.

Because of the mine's proximity to the town of Val d’Or, the firm has built a large dome (see picture) to house ore stockpiles, with the aim of reducing dust emissions.

Impressively, the project, which was approved two years ago, was completed without time or capital overruns.

Costs were kept in check partly because the projec got under way before the cost inflation plaguing miners at the moment really gained momentum, but also because the company was able to use its own teams to complete a lot of the lateral development, reducing contractor costs, Boyd said.

At the company's other projects, currency fluctuations pose the main threat to budgets, thanks to the firm's exposure to changes in the value of the Canadian dollar and euro versus the US dollar.

"We could see a 15% increase in that US dollar number over the next few years, if we maintain at current spot prices...but we're not seeing major changes in the overall capex for the company."

Agnico-Eagle shares rose 2,32% on Friday, to C$66,50 a share by 14:03 in Toronto.

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