Engineering & Mining Journal

JUN 2019

Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr

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Page 9 of 115

NEWS-LEADING DEVELOPMENTS 8 E&MJ • JUNE 2019 AEM Declares Commercial Production at Meliadine Agnico Eagle Mines Ltd. (AEM) reported that the Meliadine mine achieved com- mercial production on May 14. Located near Rankin Inlet, Nunavut, Canada, the Meliadine project was acquired in July 2010 and is Agnico Eagle's larg- est gold deposit in terms of mineral re- sources. The company owns 100% of the 111,358-hectare property. "Congratulations to all of our employ- ees at Meliadine for achieving commercial production ahead of the original schedule and below the initial capital budget," said Sean Boyd, Agnico Eagle's CEO. With Meliadine ramping up production and Amaruq on schedule to achieve com- mercial production in the third quarter of 2019, the company is on track to achieve its gold production target of 1.75 million ounces (oz) for 2019, Boyd added. Construction of the Meliadine project began in February 2017. Initial ore pro- cessing commenced in early February 2019 using low-grade stockpiles. Pre-commercial payable gold production totaled 47,281 oz, compared to guidance of 60,000 oz, while pre-production gold sales totaled 28,855 oz. Total project construction costs (after crediting pre-commercial gold sales) are below the 2017 guidance of $900 million. Expected production at Meliadine for 2019 remains unchanged at approx- imately 230,000 oz of gold (including pre-commercial production) at total cash costs of $612/oz. Umicore Acquires Cobalt Refinery, Signs Supply Agreement With Glencore Last week, Umicore purchased Freeport Cobalt's cobalt refining and cathode pre- cursor activities in Kokkola, Finland, for a total consideration of $150 million. The transaction, which is subject to custom- ary closing conditions, including regula- tory approvals, is expected to be finalized by the end of 2019. Following the refinery acquisition, Umicore and Glencore announced that they have entered into a long-term agree- ment to supply cobalt hydroxide to Umi- core's battery materials value chain. The cobalt will be sourced from Glencore's mining operations located in the Demo- cratic Republic of Congo (DRC). Umicore said it has assessed each operation in the DRC as fully compliant with its sustain- able procurement framework. The cobalt will be shipped to Umicore's cobalt re- fineries globally, including the Kokkola refinery once the ongoing acquisition pro- cess is complete. The agreement guarantees Umicore's security of supply for a substantial part of its longer-term cobalt needs for its expanding global battery materials value chain. The agreement also provides Glen- core long-term market access for its co- balt raw materials in line with Umicore's growing cathode materials sales. "Our partnership with Glencore as well as the acquisition of the Kokkola re- finery demonstrate our ability to execute our growth strategy for cathode materials with consistency. The agreement also re- confirms our strong commitment to pro- mote a sustainable battery materials val- ue chain globally," said Marc Grynberg, CEO of Umicore. With R&D, refining, precursor pro- duction, cathode materials production and battery recycling operations locat- ed in Europe, Umicore will be well po- sitioned to serve the that market with a fully integrated, sustainable and lo- cal battery materials supply chain. The Kokkola refinery is Europe's largest co- balt refinery. Its refining and precursor know-how complement company's ex- pertise and experience. The acquired operations will supply precursors for the cathode materials production in Nysa, Poland, which is due to start in the sec- ond half of 2020. Rafaella to Acquire Spanish Tin and Tungsten Project Rafaella Resources Ltd has entered into an agreement to acquire 100% of the shares of the private Spanish company Galicia Tin & Tungsten (GTT), which owns the mining licenses comprising the Santa Comba tin and tungsten project in north- west Spain. To support the development of Santa Comba, Rafaella has proposed a share placement to raise a targeted $2.6 million at 20c per share. Located close to deep-water ports, the Santa Comba project is permitted for both underground and open-pit mining. A recently discovered, large, near-sur- face resource on the property, amenable to open-pit mining, remains mostly un- drilled. Significant infrastructure is in place, according to Rafaella Resources, including an underground access ramp and an existing processing plant, which is near completion. GTT holds 15 granted mining licens- es, valid until 2068. Galicia is top-tier mining jurisdiction and the region is well- known for being rich in tungsten and tin. The Santa Comba underground mine pro- duced significant quantities on tungsten and tin between 1980 and 1985, before becoming uneconomic due to low metal prices. The recent increase in the prices for these metals has sparked renewed in- terest in the region. Rafaella Resources has secured an offtake and debt-financing agreement with a German-based consumer, H.C. Clark Tungsten GmbH, subject to the completion of a positive feasibility study. (News-Leading Developments - from p. 5) An aerial photo of the Meliadine mine shows the portal in Nunavut, Canada.

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