Agnico -Eagle Announces Significant Resource Growth in Meliadine’s Wesmeg and Normeg Zones, New Positive Results at Depth in Rimpi Zone at Kittila , and Progress at La India and Tarachi
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AGNICO-EAGLE ANNOUNCES SIGNIFICANT RESOURCE GROWTH IN MELIADINE’S WESMEG AND NORMEG ZONES, NEW POSITIVE RESULTS AT DEPTH IN RIMPI ZONE AT KITTILA, AND PROGRESS AT LA INDIA AND TARACHI
TORONTO (November 19, 2012) - Agnico-Eagle Mines Limited (NYSE:AEM) (TSX:AEM) (“Agnico-Eagle” or the “Company”) is pleased to provide an update of the 2012 exploration programs. The primary focus of this year’s activities has been on Meliadine (Canada), Kittila (Finland), the conversion of resources at La India (Mexico), and further exploration of the early-stage deposit at Tarachi, which is adjacent to La India.
Highlights of the 2012 exploration program to date include:
- At Meliadine:
- Wesmeg/Normeg indicated resources increase by approximately 40% to 5,532,000 tonnes grading 2.69 g/t (479,000 ounces) gold and inferred resources increase by 85% to 5,343,000 tonnes grading 4.43 g/t (761,000 ounces) gold
- Three high-grade ore shoots confirmed at Normeg, two of which are newly discovered
- Tiriganiaq deposit continues to return high-grade gold intercepts in both resource conversion and exploration drill programs
- Road construction is almost 50% complete, on budget and on schedule for completion in April 2013
- At Kittila:
- 8.3 g/t gold over 35.3 metres is thickest high-grade intercept reported to date in the Rimpi deposit, 912 metres below surface
- At La India:
- New conversion and exploration drilling results in the North deposit, while construction is underway for anticipated commercial production in second half of 2014
- At Tarachi:
- 2012 exploration program demonstrates that the mineralized envelope is larger and more continuous
“Our 2012 drilling program has continued to demonstrate significant exploration upside at Meliadine, Kittila and La India/Tarachi,” said Sean Boyd, President and CEO. “As a result, our 2013 exploration program will be primarily focused on adding value at these key assets,” added Mr. Boyd.
Meliadine – 2012 Exploration Program Completed; Normeg/Wesmeg Resources Increase
The $40-million 2012 exploration drilling program for the Meliadine project in Nunavut was completed in September. From June through September, the resource to reserve conversion program mainly focused on infill drilling at Tiriganiaq, Wesmeg and the F zone, while the regional exploration program focused on the Normeg and Discovery zones. The location of selected drill-hole collars is shown on the geology map below.
Eighty percent of the assay samples collected during the 2012 drill program have already been received, allowing for an interim estimate to be made of the resources in the Wesmeg and Normeg zones as of September 11, 2012. The remaining assay results from all zones will be available by the end of November, for inclusion in the year-end reserves and resources estimate to be released in mid-February, 2013.
[Meliadine local geology map]
Wesmeg and Normeg Zones Show Significant Growth in Resources
The high-grade Normeg zone was discovered in 2011, and is located between the Tiriganiaq and Wesmeg zones. Normeg and Wesmeg lie within a few hundred metres of the Tiriganiaq deposit (which contains almost all of Meliadine’s current reserves) and are close to the planned mine infrastructure. The proximity of the three zones likely enhances the flexibility of potential mining scenarios at Meliadine, with the updated feasibility study on the project expected in 2014.
Extensive drilling in 2012 has significantly expanded the Wesmeg mineralization, allowing an interim resource estimate to be made as of September 11, 2012. Furthermore, an initial inferred resource estimate at the Normeg zone has also been completed. The table below summarizes the new interim resources for the two zones, estimated using three-year trailing average assumptions of $1,342 per ounce of gold and C$1.03 per US$1.00 exchange rate as of May 1, 2012.
The indicated gold resources of the Wesmeg zone have increased by 40% and now contain 5,532,000 tonnes grading 2.69 g/t (479,000 ounces), while the inferred gold resources of Wesmeg and Normeg have increased by 85% and now contain 5,343,000 tonnes grading 4.43 g/t (761,000 ounces). Normeg’s inferred gold resources contain 1,354,000 tonnes grading 7.88 g/t (343,000 ounces) and are open at depth in three lenses.
Mineral resources at Wesmeg and Normeg zones of the Meliadine deposit
| Zone | December 31, 2011 | September 11, 2012 | ||||
|---|---|---|---|---|---|---|
| Gold (ounces) | Tonnes | Gold grade (g/t) | Gold (ounces) | Tonnes | Gold grade (g/t) | |
| Indicated Resources | ||||||
| Wesmeg | 343,000 | 3,534,000 | 3.02 | 479,000 | 5,532,000 | 2.69 |
| Inferred Resources | ||||||
| Wesmeg | 411,000 | 3,700,000 | 3.45 | 417,000 | 3,988,000 | 3.25 |
| Normeg | - | - | - | 343,000 | 1,354,000 | 7.88 |
| Total inferred (Wesmeg + Normeg) | 411,000 | 3,700,000 | 3.45 | 761,000 | 5,343,000 | 4.43 |
The cut-off grade for the Wesmeg zone is 1.69 g/t gold for open pit resources and 4.02 g/t gold for underground resources. The cut-off grade for the Normeg zone is 4.02 g/t gold.
A composite of the interim resources is shown on the Wesmeg and Normeg longitudinal section (below). These resources will be updated again with additional assays as part of the year-end 2012 resources update for the whole Meliadine project, using revised economic assumptions.
Drilling earlier in 2012 extended Normeg to the west at shallower depths. More recent results have broadened the Normeg zone at depth, and extended it eastward at shallow depths. As shown in the Wesmeg-Normeg longitudinal section and the drill results table (below), Normeg appears to consist of at least three parallel high-grade ore shoots that plunge moderately to the east separated by lower grade mineralized rock. Three new intercepts have broadened the lower reaches of the first-discovered shoot (“Normeg 1”) at approximately 400 metres depth, including holes M12-1765, M12-1775 and M12-1800. The thickest high-grade intercept is from hole M12-1806 at almost 140 metres depth in a separate ore shoot farther east (“Normeg 3”). Between those two lenses, there appears to be another shoot (“Normeg 2”) that was intersected by holes M12-1794 and M12-1840 between 100 and 170 metres depth. (Note that hole M12-1794 intersected both Wesmeg and Normeg.)
The lenses that make up Normeg have grown to a combined strike length of approximately 2,500 metres that is roughly parallel to the Wesmeg zone. The Normeg 1 shoot extends from surface to at least 425 metres depth, approximately 75 metres south of the Tiriganiaq zone resource envelope, and is open at depth. The Normeg 2 shoot is about 100 metres south of Tiriganiaq, and Normeg 3 is about 125 metres south of Tiriganiaq. Drilling in 2013 will follow up on this new high-grade discovery.
[Wesmeg-Normeg Composite Longitudinal Section]
Significant recent Normeg drill results From Depth of Estimated Gold grade Gold Program To Drill Hole Zone (metre midpoint true width (g/t) grade (g/t) (metres)
s) below (metres) (uncapped) (capped)*
| surface (metres) | ||||||||
|---|---|---|---|---|---|---|---|---|
| M12-1765 | 920 | Exploration | 474.5 | 477.5 | 418 | 2.6 | 69.0 | 13.7 |
| M12-1775 | 920 | Exploration | 541.5 | 545.5 | 415 | 3.8 | 72.3 | 10.3 |
| and | 910 | Exploration | 559.6 | 563.0 | 426 | 3.2 | 48.2 | 18.8 |
| M12-1794 | 920 | Exploration | 134.0 | 138.5 | 99 | 4.3 | 12.8 | 11.3 |
| M12-1800 | 910 | Exploration | 483.0 | 490.0 | 384 | 6.3 | 5.4 | 5.4 |
| including | 910 | Exploration | 486.0 | 490.0 | 387 | 3.6 | 7.7 | 7.7 |
| M12-1806 | 920 | Exploration | 176.4 | 188.4 | 138 | 11.5 | 18.1 | 7.3 |
| including | 920 | Exploration | 176.4 | 179.4 | 136 | 2.9 | 66.3 | 23.3 |
| M12-1840 | 910 | Exploration | 196.0 | 199.5 | 169 | 3.0 | 14.3 | 11.5 |
- Holes at Normeg deposit use a capping factor of 40.0 g/t gold.
Recent exploration drilling is also extending the Wesmeg deposit at depth, such as the intercepts of holes M12-1822 and M12-1843 at more than 300 metres depth, shown on the Wesmeg-Normeg longitudinal section and in the drill results table below. The highest grade recent intercept is drill hole M12-1794 at approximately 200 metres depth, and only 55 metres south of the Normeg 2 shoot. Drilling to date has revealed that the north and south trends of the Wesmeg zone have a combined strike length of almost 5,000 metres, extending from surface to at least 350 metres depth. The 2013 drill program will focus on developing the indicated resources from surface to 200 metres depth for the Wesmeg open pit design. Step-out drilling to the east will also be pursued in 2013.
Significant recent Wesmeg drill results
| Drill Hole | Zone | Program | From (metres) | To (metres) | Depth of midpoint below surface (metres) | Estimated true width (metres) | Gold grade (g/t) (uncapped) | Gold grade (g/t) (capped)* |
|---|---|---|---|---|---|---|---|---|
| M12-1794 | 650 | Exploration | 208.0 | 216.0 | 151 | 7.9 | 8.5 | 7.2 |
| including | 650 | Exploration | 209.7 | 212.8 | 151 | 3.0 | 15.4 | 12.1 |
| M12-1822 | 625 | Exploration | 437.0 | 441.0 | 304 | 3.9 | 6.0 | 6.0 |
| M12-1843 | 600 | Exploration | 375.9 | 386.9 | 338 | 9.3 | 5.1 | 5.1 |
- Holes at Wesmeg deposit use a capping factor of 30.0 g/t gold.
Tiriganiaq Drill Program Extends Deposit and Expected to Increase Reserves at Year-End
The Tiriganiaq zone continues to form the largest portion of the mineral portfolio at Meliadine, as this zone contained most of the gold in reserves as of December 31, 2011. The large 2012 drill program at Tiriganiaq has focused on continuing to convert resources into reserves. Recent drilling has yielded significantly high grades and thicknesses below open pit depths but within the resources envelope, as shown in the Tiriganiaq longitudinal section and the table of drill results (below). The hole collars are located on the Meliadine geology map. Hole M12-1688 in the central part of the zone had two intersections at approximately 340 and 370 metres depth, while on the western side of the zone, hole M12- 1725 (preliminary results) had a high-grade, thick intersection at 300 metres depth and hole M12-1791 intersected high grades at 525 metres depth. The conversion program is expected to result in an increase in reserves in the year-end 2012 mineral statement (in mid-February 2013).
Exploration drilling has extended the Tiriganiaq deposit beyond the resources envelope to the east and west, and confirmed the high-grade nature of the underground portions of the deposit, which remains open at depth. Some of the best recent intersections extend the mineralization envelope on the western side of the zone, such as holes M12-1750 and M12- 1764 between 400 and 550 metres depth.
[Tiriganiaq Longitudinal Section]
Significant Tiriganiaq zone drill results
| Drill Hole | Zone | From (metres) | To (metres) | Depth of midpoint below surface (metres) | Estimated true width (metres) | Gold grade (g/t) (uncapped) | Gold grade (g/t) (capped)* |
|---|---|---|---|---|---|---|---|
| M12-1371B | 1153 | 337.1 | 346.5 | 313 | 6.5 | 13.2 | 13.2 |
| and | 1000 | 412.7 | 423.0 | 381 | 6.9 | 14.0 | 14.0 |
| M12-1589 | 1251 | 254.3 | 258.0 | 232 | 3.2 | 14.1 | 8.1 |
| and | 1153 & 1154 | 287.0 | 297.0 | 265 | 6.8 | 6.0 | 6.0 |
| M12-1644 | 1154 | 335.0 | 351.0 | 320 | 10.0 | 10.9 | 10.9 |
| including | 1154 | 341.0 | 347.8 | 322 | 5.1 | 15.9 | 15.9 |
| M12-1688 | 1100, | 366.0 | 374.5 | 344 | 6.6 | 14.5 | 14.0 |
| and | 1025, 1050, 1075 &1087 | 389.0 | 408.7 | 369 | 16.0 | 10.4 | 9.1 |
| M12-1722 | 1000 | 246.9 | 250.0 | 208 | 2.7 | 16.9 | 16.9 |
| M12-1725** | 1000 & 1025 | 333.0 | 344.2 | 299 | 9.7 | 13.0 | 12.6 |
| including | 1000 | 336.0 | 342.2 | 300 | 5.1 | 21.4 | 21.4 |
| M12-1729 | 1000 | 467.0 | 471.5 | 411 | 3.3 | 22.4 | 20.8 |
| M12-1750 | 1153 & 1251 | 438.5 | 446.0 | 397 | 6.1 | 53.5 | 18.0 |
| and | 1100 | 487.4 | 492.5 | 436 | 4.7 | 28.2 | 27.0 |
| M12-1759 | 1015 & 1000 | 464.8 | 471.4 | 407 | 6.5 | 8.9 | 8.9 |
| M12-1764 | 1015 & 1025 | 599.6 | 607.0 | 553 | 6.2 | 6.5 | 6.5 |
| including | 1025 | 599.6 | 604.0 | 553 | 3.7 | 9.3 | 9.3 |
| M12-1791 | New Zone | 545.0 | 550.3 | 525 | 4.0 | 13.8 | 13.8 |
*Holes at Tiriganiaq deposit use a capping factor ranging from 15 to 120 g/t gold depending on the zone.
**Results preliminary awaiting QAQC confirmation.
F Zone Exploration Results
The F Zone deposit on the Meliadine property is located approximately one kilometre to the southeast of Wesmeg and two kilometres from Tiriganiaq. Exploration drilling in 2012 has demonstrated that the F zone deposit is still open at depth and that it could become a significant contributor to the total reserves and resources of the Meliadine project in the near term. Its proximity to Tiriganiaq, Wesmeg and Normeg deposits further enhance the flexibility of mining scenarios on the Meliadine property.
At the F zone, drilling since June has resulted in intercepts well below the current resource envelope. Hole M12-1771 had a high-grade intercept at 464 metres depth, approximately 150 metres below the resources envelope in this area. Hole M12-1758 is even deeper, with an intercept at 523 metres depth. Beyond the eastern extent of the F zone resources are more intercepts at shallower depths, such as holes M12-1674 and M12-1732 between 40 and 75 metres depth. Recent intercepts are shown in the table below, the hole collars are on the Meliadine geology map, and the pierce points are on the F zone longitudinal section.
[F zone Longitudinal Section]
Significant recent F zone drill results
| Drill Hole | Zone | From (metres) | To (metres) | Depth of midpoint below surface (metres) | Estimated true width (metres) | Gold grade (g/t) (uncapped) | Gold grade (g/t) (cappped)* |
|---|---|---|---|---|---|---|---|
| M12-1636 | 4130 | 160.8 | 166.0 | 129 | 5.1 | 18.1 | 12.1 |
| M12-1674 | 4140 & 4130 | 91.0 | 99.0 | 76 | 7.8 | 5.4 | 5.4 |
| including | 4130 | 94.4 | 99.0 | 77 | 4.5 | 7.9 | 7.9 |
| M12-1732 | 4130 | 48.0 | 53.0 | 41 | 4.7 | 6.0 | 6.0 |
| M12-1758 | 4120 & 4130 | 617.4 | 624.6 | 523 | 6.9 | 4.5 | 4.5 |
| including | 4130 | 617.4 | 621.0 | 522 | 3.5 | 7.6 | 7.6 |
| M12-1771 | 4130 | 555.1 | 559.1 | 464 | 4.0 | 13.4 | 13.4 |
| M12-1779 | 4120 & 4130 | 400.0 | 407.0 | 347 | 6.7 | 7.5 | 7.5 |
| including | 4120 | 404.0 | 407.0 | 350 | 2.9 | 10.3 | 10.3 |
- Holes at F zone deposit use a capping factor of 35.0 g/t gold.
Infrastructure Progress
In addition to exploration drilling, the 2012 program at Meliadine included work on the updated feasibility study and infrastructure. Construction of the road, which was permitted in February 2012, is almost 50% complete, within budget and on schedule to be completed by the end of April 2013. The three bridges have all been completed, as well as 7 kilometres of the 23 kilometres of all-weather road required to connect the Meliadine camp with the coastal community of Rankin Inlet. The expansion of the camp and its facilities is fully completed, and it can now accommodate up to 200 workers.
Kittila’s Rimpi Zone Continues To Expand Northward
The Kittila orebody, located in Finnish Lapland, is the Company’s largest asset by gold reserves as of December 31, 2011. It is comprised of three main deposits, Suuri, Roura and Rimpi, which have a combined strike length of almost four kilometres, as well as reserves and resources that currently extend to a depth of more than 1,000 metres. The focus of the 2012 exploration program has been the Rimpi Trend, located on the northern part of the Kittila deposit. Recent exploration results show Rimpi extending to the north and downward, suggesting a strong potential for the large, long-life Kittila orebody to expand further toward the north in the future.
Some of the most recent deep intercepts in the Rimpi deposit, as shown on the Kittila longitudinal section and the drill results table below, have grades higher than the current reserves grade (4.66 g/t gold) over considerable widths. Drill holes RIE12-012 and RIE12- 016B (preliminary results) returned among the highest grades and greatest widths ever reported from Rimpi at a depth of about 910 metres, close to the deepest edge of the resources envelope. Holes RIE11-019B, RIE12-1016 and RIE12-1016B (preliminary results) intersected mineralization below the resources as deep as 1,078 metres, which is more than 150 metres below the resources envelope, demonstrating that the Rimpi deposit continues to plunge northward in several lenses. Results already reported from the 2012 program and other holes that are in progress in this sector are expected to contribute to increased mineral reserves and resources at Rimpi in the year-end statement in mid- February 2013. A meaningful increase in the Rimpi mineralization could have a significant impact on Kittila’s future production profile, as well as determine the sequence and scope of phased expansions over the long-term.
[Kittila longitudinal section]
Significant recent Rimpi zone exploration drill results
| Drill Hole | Zone | From (metres) | To (metres) | Depth of midpoint below surface (metres) | Estimated true width (metres) | Gold grade (g/t) (uncapped)* |
|---|---|---|---|---|---|---|
| RIE11-019B | Rimpi | 1,170.0 | 1,191.0 | 1,030 | 14.3 | 3.9 |
| RIE12-012 | Rimpi | 936.0 | 1,005.0 | 912 | 35.3 | 8.3 |
| RIE12-016** | Rimpi | 985.0 | 996.0 | 930 | 5.4 | 3.8 |
| and | 1,044.0 | 1,050.0 | 979 | 3.0 | 6.4 | |
| and | 1,156.0 | 1,170.0 | 1,078 | 7.5 | 4.3 | |
| RIE12-016B** | Rimpi | 934.0 | 1,016.0 | 911 | 40.0 | 5.6 |
| including | 934.0 | 951.0 | 884 | 9.2 | 10.2 | |
| including | 988.0 | 1,002.0 | 928 | 7.7 | 6.9 | |
| and | 1,139.0 | 1,149.0 | 1,050 | 5.8 | 3.9 |
*All grades are uncapped at Kittila ** Preliminary results
The drilling focus at Kittila in the first half of 2013 will remain on Rimpi, aimed at demonstrating continuity of the mineralization at different depths, with the goal of significantly increasing the reserves and resources to the north. In the second half of 2013, one of the deep drill rigs will move underground to start drilling the Suuri and Roura deep extensions from the new exploration ramp. As of December 31, 2011, the Rimpi zone had probable gold reserves containing 317,000 ounces (2.3 million tonnes grading 4.28 g/t), indicated gold resources of 77,000 ounces (1.0 million tonnes at 2.37 g/t), and inferred gold resources of 745,000 ounces (4.0 million tonnes grading 5.81 g/t).
La India – Construction On Schedule and Exploration Continues at Tarachi Deposit
The La India project is located in Mexico’s Sonora State approximately 70 kilometres northwest of Agnico-Eagle’s Pinos Altos mine. The La India project received Board approval on September 4, 2012, for construction and development as an open-pit heap-leach operation. Work on access road improvements, site earthworks, water supply development, communications, detailed engineering, and infrastructure is currently underway with the objective of achieving commercial production at La India in the second half of 2014.
The focus of the 2012 exploration program has been infill, extension and condemnation drilling at the La India deposit, as well as resource expansion of the Tarachi deposit.
La India Infill Drilling Expected to Increase Reserves and Resources at Year-End
A feasibility study completed in August 2012 estimated the initial probable gold reserves at the La India deposit to be 930,000 ounces (44.6 million tonnes grading 0.65 g/t), based on drilling through May. Subsequent infill drilling results have largely confirmed the grades and widths previously reported and are expected to result in an increase to the year-end reserves and resources in mid-February 2013. Selected recent results are presented in the following table, with the drill collars shown on the La India map (below) and described in the appendix of this release. All of the results listed below from the North Zone are in oxide mineralization, and these results are expected to be included in the year-end reserves and resources at La India.
Some of the best results of recent drilling at the La India deposit are from infill holes in the northern part of the North Zone, such as hole IN-12-368 at surface, hole IN-12-365 at 22 metres depth, and hole IN-12-359 at 16 metres depth. Hole IN-12-372 intersected mineralization 70 metres from resources envelope of the Main Zone at 94 metres depth.
Significant recent exploration drill results of the La India deposit
| Drill Hole | Zone | Program | From (metres) | To (metres) | Depth of midpoint below surface (metres) | Estimated true width (metres) | Gold grade (g/t) (capped*) |
|---|---|---|---|---|---|---|---|
| IN-12-351** | North Zone | infill | 31.5 | 49.5 | 40 | 17.7 | 2.15 |
| IN-12-353 | North Zone | infill | 11.0 | 26.3 | 16 | 15.1 | 1.49 |
| IN-12-359 | North Zone | infill | 12.0 | 26.0 | 16 | 12.1 | 2.48 |
| IN-12-365 | North Zone | infill | 0.0 | 48.5 | 22 | 46.4 | 2.13 |
| IN-12-368 | North Zone | infill | 0.0 | 11.0 | 4 | 9.1 | 4.17 |
| IN-12-372 | Main Zone | exploration | 82.0 | 107.0 | 94 | 25.0 | 1.05 |
| IN-12-373** | North Zone | infill | 9.0 | 40.0 | 19 | 30.3 | 0.95 |
| IN-12-378 | North Zone | exploration | 0.0 | 13.0 | 6 | 11.8 | 1.10 |
- Holes at the La India deposit use a capping level ranging from 2 to 15 g/t gold
** Results for these holes are preliminary awaiting QAQC confirmation.
[La India & Tarachi Project map; La India map]
The August 31, 2012 Technical Report for the La India project includes sulphide mineral indicated resources of approximately 22.8 million tonnes grading 0.5 g/t gold (370,000 ounces) and inferred resources of approximately 79.9 million tonnes grading 0.3 g/t gold (845,000 ounces). These sulphide resources were not included in any of the La India project feasibility study economic estimates or open pit designs. Preliminary metallurgical test work has indicated that some of these resources may be amenable to heap leaching, however further work is required to confirm that result. Further metallurgical testing is planned for 2013.
Tarachi – A Promising Early-Stage Deposit
The most significant exploration target and the key focus of the regional program on the La India property is the Tarachi porphyry gold deposit, 10 kilometres north of the La India mine project. The drill results presented in the table below have been received since the last update in September this year, and are mostly within or below the current resources envelope. The drill collars are shown on the Tarachi map and are described in the appendix of this release.
The 2012 drilling program has confirmed that the three resources envelopes that formed Tarachi’s 2011 resources are linked together into one envelope, thereby increasing the