TORONTO (Reuters) – Agnico Eagle Mines is doubling down this year on Nunavut, Canada’s least developed territory, betting that the high-grade gold ores and slim competition there will offset the risks of digging in the remote location in the far north.
For miners desperate to shore up reserves, the choice is often between safer jurisdictions with inhospitable geographies and easier-to-reach ores in politically challenging locations. Investors have been rewarded for backing Agnico’s strategy.
The company’s shares have surged 71 percent over the past five years, trouncing the 0.3 percent gain in the benchmark S&P/TSX Global Gold Index. They believe the company is making the right move again, thanks to high-grade ores in Nunavut and Agnico’s 12 years’ experience in the Arctic territory.
“Based on the geological potential, and the ability to grow the size of the deposit… and given there hadn’t been a lot of exploration work done, we concluded it was a good place to do business,” Agnico CEO Sean Boyd told Reuters in an interview.
“But it certainly hasn’t been easy.” The Toronto-based company begins operating the Meliadine mine and Amaruk, a satellite deposit near its closing Meadowbank mine, this year, lifting output to a record 2 million ounces by 2020 from 1.6 million last year.
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