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Gold Giant Seeks New Growth

Gustavo Noriega - Agnico Eagle
Operations Director

STORY INLINE POST

Wed, 10/19/2016 - 12:40

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Q: How does increasing Agnico Eagle's participation in the Mexican market boost its gold production, and how do its strategies enable the company to address operational and production challenges?

A: Agnico Eagle is a company created under Mexican laws with Canadian capital. With close to 60 years of experience in the mining industry on a global level and nine in Mexico, our philosophy has been to grow not only in terms of operations, but also by developing our database of collaborators and promoting progress in the communities surrounding our mines. Our objective is to build a sustainable, high quality, and low risk business, which is why we have focused on a sustained growth that allows us to find quality gold deposits and invest consistently in exploration activities, even when market conditions represent a challenge for the industry.

Our vision has been to grow our presence in Mexico. We began operations in the country in 2009 with the Pinos Altos mine, our cornerstone operation in the Sierra de Chihuahua, and that we have turned into one of the primary producing gold mines in the country. It contains proven and probable reserves of 1.5 million ounces of gold and 37.5 million ounces of silver. Later, we developed the Crestón Mascota satellite operation, with proven and probable reserves of 0.2 million ounces of gold and 1.6 million ounces of silver. In 2014, we inaugurated the La India mine, located 200km east of Hermosillo, Sonora. This mine has proven and probable reserves of 0.9 million ounces of gold. Agnico Eagle has become one of the largest producers of gold in Mexico, reaching 350,000 ounces annually between the three operations. For our business, Mexico not only represents almost 20 percent of total production, but it is also an important investment destination in which we work every day to discover new mineral deposits.

Q: What is the decision making process in the adoption of new technologies and processes, and what stepping stones are used to increase efficiency in production?

A: We are always seeking to maximize our resources and we use cutting edge technology in all our operations. Cost per ounce of the three mines is variable and depends a great deal on market value, which is one of the challenges we face nowadays in the industry. However, we have competitive operations. We invest in a way that allows us to optimize and accelerate our processes, and an example of this is in our new mill in Pinos Altos.

Q: What strategies are implemented to maintain good relations with key suppliers?

A: For our company relationships with all agents involved in the development of our operations, including suppliers, are extremely important. This forms an integral part of our operative and growth strategy. Our objective is to operate within a work environment with high health and safety standards. We believe that by working together we can succeed and promote the wellbeing of our partners and suppliers. In order to achieve these goals, we implement engineering principles for the design and operation of our installations. We offer adequate training to all employees for the development of their careers at all levels of exploration, construction, development, and operation. We have workplace health and industrial hygiene programs, and we offer the necessary tools to carry out the work in a safe and efficient manner. We also operate under a preventive culture with a high level of preparation in order to overcome potential emergency situations.

Q: What is your assessment of the success of the allocation of the mining fund?

A: For Agnico Eagle, our relationship with the players involved, especially with the communities surrounding our mines, is extremely important. We have a commitment to generate prosperity and we firmly believe in promoting a culture of excellence based on the pillars of trust, respect, equality, family, and responsibility. Proof of this can be seen by the fact that we have received certifications like Socially Responsible Company (ESR) from the Mexican Center of Philanthropy, and the Clean Industry award from PROFEPA. We have also been awarded the Gilberto Rincón Gallardo distinction from the Ministry of Labor for being an Inclusive Company and a Family Friendly Company, and we have been recognized for having implemented the Gender Equality Model by the National Women’s Institute. As well as obtaining the H Certificate for clean camp services, we have recently been recognized as the most advanced company in Mexico that is working to eliminate child labor with the “Mexico without Child Labor” award given by the Ministry of Labor.

We are also working actively with all three levels of government in order to achieve progress in the communities in which we operate. Agnico Eagle Mexico forms part of the committee charged with defining the allocation of the Regional Sustainable Development Fund for Mining States and Municipalities. We represent companies in Chihuahua with the goal of ensuring that the funds are returned to the communities, boosting the development of mining states and communities.

Q: What are the main priorities for Mexico’s operations that reflect the opportunities and commitments of the company to the local mining market?

A: We are seeking new properties and we have some internal projects in early stages. We have redoubled our efforts in exploration, and without doubt, adding an advanced exploration project to our portfolio is a priority. Although it is true that we have been successful in exploration and we have managed to increase reserves in our projects, Pinos Altos, La India, and now El Barqueño have all been acquisitions. We will continue exploring while simultaneously evaluating properties to acquire in a more advanced stage. In order to achieve this we must have the absolute support of the company and have the resources to make an important acquisition and continue with planned exploration. However, it is true that the Mexico Division has to compete with other divisions for projects in Europe and North America. This is why it is necessary to work closely with our representative organization, as well as with the federal government, in order to regain the competitiveness of Mexico as a mining country, not only in terms of the quality of deposits or personnel training, but also in terms of competitiveness as a country. This competitiveness is essential for any activity. In the interests of all parties, we must make this sector attractive for national investors and for those who are prepared to invest in the mining industry in Mexico.

Gold Giant Seeks New Growth

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