Gold production
Québec-based gold producers espy opportunities within the province and beyond
When both of George Burns’ grandfathers worked as underground miners, they did everything manually. Today, from his vantage point as president and CEO of Eldorado Gold, Burns watches as the industry shifts towards mechanized, and increasingly remote, operations.
Eldorado Gold holds a diverse portfolio of assets in Canada, Turkey and Greece. One of its top mines is Lamaque, an underground mine in Val-d’Or that is expected to mine and process over 815,000 tons of ore at an average grade of 6.75 g/t Au. The company’s maiden PFS at Lamaque stated the peak production rate would be 130,000 oz/y; the mine now produces over 200,000 oz/y. At the mine, Eldorado has implemented modern technologies, such as drills and scoops that can be operated remotely from the surface, thereby making shift changes smoother and enabling some work to be done during the blasting and clearing process. “The industry is heading towards autonomous mining, in which certain parts of the cycle will happen without human interaction,” commented Burns. “I believe virtual and augmented reality will play important roles in the future.”
Another major gold producer that uses its mines in Québec as the testing grounds for innovative technologies is Agnico Eagle. Founded in 1957, the company now has 11 operating mines, including seven in Canada. Of these, Canadian Malartic (which Agnico Eagle holds 50% ownership in partnership with Yamana Gold), Goldex and LaRonde are all in Québec. The three mines are instrumental to Agnico Eagle’s overall production, which the company anticipates will hit 3.2 to 3.4 million ounces in 2022.
Extending over three kilometers underground, LaRonde is the deepest mine in the Americas. The mine achieved commercial production in 1988, but its operations are far from outdated. “To mine at these depths requires innovative technology, and Agnico Eagle was the first producer to deploy a private 4G LTE network in an underground mine in the world at LaRonde,” said Daniel Paré, the company’s vice president of operations in Québec. “It is our oldest mine, yet it is our most advanced in terms of technology.”
Québec will remain a jurisdiction of strategic importance for Agnico Eagle for years to come. Canadian Malartic was Canada’s largest operating open pit gold mine in 2021, producing 714,784 oz Au and representing 41% of Agnico Eagle’s annual production. With the underground Odyssey project currently under construction, Agnico Eagle and Yamana Gold are taking steps to extend the overall mine life to 2039. Furthermore, the company still focuses on acquiring early-stage opportunities and adding value through its mine building expertise. In this regard, Agnico Eagle conducted a joint venture with Maple Gold Mines on its Douay and Joutel gold properties. Additionally, the successful completion of the company’s merger with Kirkland Lake Gold in February 2022 will ensure eastern Canada remains a priority in years to come.
Hecla Mining is the largest silver producer in the US, and its 2022 acquisition of Alexco Resource Corp will make it the largest silver producer in Canada as well. When it comes to Hecla’s operations in Québec, however, gold carries the day. The company purchased its Casa Berardi gold mine in 2013, and in 2022 it is forecasted to produce around 132,000 oz Au. Nearly a decade ago, however, initial work suggested the mine should be shut down. “Since then, we have doubled production capacity and extended the mine life to 20 years,” commented CEO Phil Baker. “That is the type of opportunity the region provides. For that reason, we pay close attention to the activities of exploration companies in the region.”
It is this outlook on the geological promise of the province that has encouraged Hecla to pursue a host of exploration activities in Québec, including at Opinaca/Wildcat in James Bay and its Heva-Hosco property in Rouyn-Noranda. Opinaca/Wildcat is currently undergoing an evaluation phase, whereas surface work is the priority at Heva-Hosco in order to evaluate further drill targets. In addition, the company is open to JVs with exploration companies operating in Québec in the future.
“In mining, you create value through exploration. We are situated along a belt in Morocco that has not been looked at extensively in the past – only 35% of the South Atlas Fault has been explored.”
Benoit La Salle, CEO, Aya Gold & Silver
Québec’s global reach
In addition to attracting the attention of some of the largest producers in the world, Québec serves as a home base to mining companies that operate outside of its borders. Aya Gold & Silver, for example, has found commercial success in Morocco. Its Zgounder mine has been in production since January 2019 and saw a record year in 2021 with 1.5 million oz of silver production. In the first half of 2022, the company completed a feasibility study for its plant expansion to transform Aya Gold & Silver into an eight million oz producer in 2024.
In addition to being situated along a belt that has remained relatively underexplored and thus holds significant potential, CEO Benoit La Salle believes Zgounder’s location offers cost- and permitting-related benefits. In terms of costs, Aya Gold & Silver benefits from Morocco’s inexpensive energy and controlled salary rates. Additionally, the company enjoys the advantages of being in proximity to an industry hub. “Marrakesh is the equivalent of Val-d’Or for Québec, and everything the mining industry requires is manufactured there or in Southern Europe,” explained La Salle. “Our predominately local supply chain and workforce protect us from logistical difficulties and from major cost fluctuations.”
Furthermore, the CEO believes the permitting process is far more streamlined in Morocco as compared with the long list of bureaucratic steps companies must proceed through in Québec.
G Mining Ventures was established in 2020 with the aim of becoming the next intermediate gold producer, and through its Tocantinzinho asset in Brazil, the company is well on its way. G Mining Ventures published a recently updated feasibility study and completed a financing package that provided full construction funding; the US$481 million financing package announced in July 2022 brought in two new investors in Franco-Nevada and La Mancha, while demonstrating continued support from Eldorado Gold. Given these milestones, the company will make a construction decision on the project by the end of 2022.
Image courtesy of Agnico Eagle
Looking at the location of Tocantinzinho, which sits in a high rainfall environment that the company’s management team had operated in previously, CEO Louis-Pierre Gignac sees opportunities to tap into the excitement of being at the forefront of development. “The project is in a relatively new mining area within Brazil with very few industrial mines in the region,” Gignac said. “There are other smaller exploration companies in the area, but we will be the first large-scale producer here. We hope this opens many more doors into the Brazilian market for us.”
Whether in South America of Africa, Québec-based companies operating abroad can reap the benefits of Canadian mining expertise and proximity to money markets while tapping into global resource bases.
Image courtesy of Agnico Eagle
“Every jurisdiction is different when it comes to mining legislation. Tailings management is an important aspect of a project, particularly when obtaining permits. The past failures of tailings management in Brazil have given rise to a change in the legislative framework in the country, leading to some of the strictest tailings management regulations globally.”
Louis-Pierre Gignac, CEO, G Mining Ventures Corp.