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With the start-up of Meadowbank, AEM has reached the end of a significant construction phase, during which it spent more than $2 billion since the beginning of 2006. With most of the mines nearing steady-state operation in 2010, capital expenditures of approximately $463 million in 2010 and $178 million in 2011 will be used primarily for expansions.
Meadowbank
Meadowbank is the largest and most recent of our mine-building projects. The mine poured its first gold on February 27, 2010.
In 2009, operations at the Portage open pit began with the mining of 2.3 million tonnes of ore, compared to a planned mining of 2.0 million tonnes. By year-end, approximately 600,000 tonnes of ore were stockpiled. The power plant was completed and commissioning of the process plant was under way. All of the materials necessary for the first nine months of operation were also delivered to the minesite.
Commercial production is budgeted for April 2010. For this partial year, payable gold production is forecast to be approximately 300,000 ounces, reflecting the commissioning period. From 2011 to 2014, the expected average gold production is approximately 400,000 ounces, annually, at total cash costs per ounce averaging $454.
We are studying the potential of increasing the average daily production rate at Meadowbank from 8,500 tonnes to 10,000 tonnes, which would increase the average annual gold production to more than 400,000 ounces. The additional production would come initially from the accelerated development of the Goose Island and Portage open pits, and potentially from an underground operation on the southern end of the deposit via ramp access. Study results will be reviewed in mid-2010.
LaRonde
In 2006, AEM began to construct a deep extension of the LaRonde mine to access higher-grade ore and extend the life of the operation through to 2022. The work involved sinking an 835-metre-long internal shaft extending downward from the Penna Shaft, and constructing ramps to enable mining to a depth of three kilometres or more.
Initial production from the extension is expected in late 2011, with the full production rate reached in 2014. Post-2013, the plan is to produce 6,000 tonnes of ore per day at an average gold grade of approximately 6.0 grams per tonne, resulting in annual production of approximately 380,000 ounces. For the same period, annual byproduct production is expected to average 1.0 million ounces of silver, 5,700 tonnes of copper, and 12,300 tonnes of zinc.
Goldex
In 2009, the Board of Directors approved an expansion of the production rate of the Goldex mine from 6,900 tonnes to 8,000 tonnes per day. The $10-million project, mainly involving the addition of a surface crushing plant, will result in an additional 20,000 ounces of gold per year over the mine life. Construction began in late 2009, and the ramp-up to 8,000 tonnes per day should be complete in late 2011. We expect to extend the mine life of Goldex beyond 2017, in spite of the increased mining rate, by focusing on converting resources, such as the nearby “M” and “S” zones, into reserves.
Pinos Altos
An expansion project was approved in 2009 to begin construction of a 4,000-tonne-per-day open pit heap leach operation on the Creston Mascota deposit, approximately seven kilometres northwest of the main Santo Nino deposit. The capital cost of the stand-alone project is estimated at $64 million. Creston Mascota has about 362,000 ounces of gold and 3.7 million ounces of silver in probable reserves. Production should start in early 2011 and last for at least five years at a rate of 46,000 ounces of gold annually.
We are also considering increasing the Pinos Altos processing plant rate from 4,000 tonnes per day to a possible 6,000 tonnes per day, reflecting a 125% increase in reserve tonnage since the beginning of 2007. Results of the scoping study are expected in the third quarter of 2010.
Kittila
A scoping study is under way to assess the economic feasibility of increasing annual gold production by at least 50% to between 225,000 ounces and 300,000 ounces. This would require sinking a new shaft to access the deeper ore and expanding the Kittila mineral-processing plant. The results of the study will be reviewed in early 2011.
Meadowbank
Meadowbank is the largest and most recent of our mine-building projects. The mine poured its first gold on February 27, 2010.
In 2009, operations at the Portage open pit began with the mining of 2.3 million tonnes of ore, compared to a planned mining of 2.0 million tonnes. By year-end, approximately 600,000 tonnes of ore were stockpiled. The power plant was completed and commissioning of the process plant was under way. All of the materials necessary for the first nine months of operation were also delivered to the minesite.
Commercial production is budgeted for April 2010. For this partial year, payable gold production is forecast to be approximately 300,000 ounces, reflecting the commissioning period. From 2011 to 2014, the expected average gold production is approximately 400,000 ounces, annually, at total cash costs per ounce averaging $454.
We are studying the potential of increasing the average daily production rate at Meadowbank from 8,500 tonnes to 10,000 tonnes, which would increase the average annual gold production to more than 400,000 ounces. The additional production would come initially from the accelerated development of the Goose Island and Portage open pits, and potentially from an underground operation on the southern end of the deposit via ramp access. Study results will be reviewed in mid-2010.
LaRonde
In 2006, AEM began to construct a deep extension of the LaRonde mine to access higher-grade ore and extend the life of the operation through to 2022. The work involved sinking an 835-metre-long internal shaft extending downward from the Penna Shaft, and constructing ramps to enable mining to a depth of three kilometres or more.
Initial production from the extension is expected in late 2011, with the full production rate reached in 2014. Post-2013, the plan is to produce 6,000 tonnes of ore per day at an average gold grade of approximately 6.0 grams per tonne, resulting in annual production of approximately 380,000 ounces. For the same period, annual byproduct production is expected to average 1.0 million ounces of silver, 5,700 tonnes of copper, and 12,300 tonnes of zinc.
Goldex
In 2009, the Board of Directors approved an expansion of the production rate of the Goldex mine from 6,900 tonnes to 8,000 tonnes per day. The $10-million project, mainly involving the addition of a surface crushing plant, will result in an additional 20,000 ounces of gold per year over the mine life. Construction began in late 2009, and the ramp-up to 8,000 tonnes per day should be complete in late 2011. We expect to extend the mine life of Goldex beyond 2017, in spite of the increased mining rate, by focusing on converting resources, such as the nearby “M” and “S” zones, into reserves.
Pinos Altos
An expansion project was approved in 2009 to begin construction of a 4,000-tonne-per-day open pit heap leach operation on the Creston Mascota deposit, approximately seven kilometres northwest of the main Santo Nino deposit. The capital cost of the stand-alone project is estimated at $64 million. Creston Mascota has about 362,000 ounces of gold and 3.7 million ounces of silver in probable reserves. Production should start in early 2011 and last for at least five years at a rate of 46,000 ounces of gold annually.
We are also considering increasing the Pinos Altos processing plant rate from 4,000 tonnes per day to a possible 6,000 tonnes per day, reflecting a 125% increase in reserve tonnage since the beginning of 2007. Results of the scoping study are expected in the third quarter of 2010.
Kittila
A scoping study is under way to assess the economic feasibility of increasing annual gold production by at least 50% to between 225,000 ounces and 300,000 ounces. This would require sinking a new shaft to access the deeper ore and expanding the Kittila mineral-processing plant. The results of the study will be reviewed in early 2011.