Agnico-Eagle options advanced stage exploration project in Northern Mexico
March 16 2005 - 7:00AM
PR Newswire (US)
Agnico-Eagle options advanced stage exploration project in Northern
Mexico (All amounts expressed in U.S. dollars unless otherwise
noted) TORONTO, March 16 /PRNewswire-FirstCall/ -- Agnico-Eagle
Mines Limited ("Agnico-Eagle") announced today that is has entered
into an option agreement with Industrias Penoles S.A. de C.V.
("Penoles") to acquire the Pinos Altos project. Located in the
Sierra Madre gold belt, 170 miles west of the capital of Mexico's
Chihuahua state, the greater than 27,000-acre Pinos Altos property
is directly accessible by paved highway. The property is also
approximately 60 miles from a major electric power terminus and
within 6 miles of a proposed extension of the grid. Penoles
acquired the property in 1995 and drilling to date has outlined an
indicated mineral resource of 4.4 million tons with a grade of 0.18
ounces of gold per ton and 3.82 ounces per ton of silver,
containing 0.8 million ounces of gold and 16.9 million ounces of
silver. In addition, the property has an inferred mineral resource
of 2.5 million tons grading 0.18 ounces of gold per ton and 3.41
ounces of silver per ton, containing 0.4 million ounces of gold and
8.4 million ounces of silver. Penoles' work to date has also
included metallurgical testing and initial work on the permitting
for a potential mining operation. "Pinos Altos represents
Agnico-Eagle's first entry into the highly prospective gold camps
of Northern Mexico, an area we have actively scouted for three
years," said Sean Boyd, President and Chief Executive Officer.
"With its vast land package and open pit potential, Pinos Altos
could provide a near-term step towards our objective of multi-mine
production," added Mr. Boyd. Over 90% of the Pinos Altos mineral
resource is located in the Santo Nino vein, along a regional fault
zone that holds a number of other known deposits in the area. This
Santo Nino vein zone has thicknesses of up to 150 feet over a
length of 1.2 miles and a vertical extent of at least 1,800 feet.
It remains open to the west and at depth. Under the terms of its
option agreement with Penoles, Agnico-Eagle is required to invest
$2.8 million, over the next five months (subject to extension and
certain events), on a 55,000-foot diamond drilling program. The
components of the program are expected to include open pit
exploration and resource to reserve conversion, underground
resource to reserve conversion and deep exploration drilling. After
the five-month exploration program is completed, Agnico-Eagle will
have a two-month period to exercise its option to purchase Penoles'
100% interest in the project. If Agnico-Eagle exercises its option,
the purchase price will be approximately $65 million, to be
satisfied with $39 million in cash and 1,809,350 shares of
Agnico-Eagle, issued from treasury. Where to Find Maps
Illustrations and maps related to this project can be viewed by
using the following links:
http://www.agnico-eagle.com/url/050223_PinosAltos_Location.pdf
http://www.agnico-eagle.com/url/050223_PinosAltos_Geology.pdf
Scientific Data The mineral resource estimate by Penoles was
completed in June 2003 and was reviewed Marc H. Legault, P.Eng.,
Agnico-Eagle's Manager Project Evaluations and qualified person as
defined by National Instrument 43-101. The data disclosed,
including the sampling, analytical and test data underlying the
mineral resource estimate, has been verified. The key assumptions
and parameters used in the estimate are a gold price of $300 per
ounce, a silver price of $4.75 per ounce, a 0.10 ounce per ton gold
grade cut-off, and metallurgical recoveries of 92.39% for gold and
47.83% for silver. Gold assays were cut to 0.89 ounces per ton
while silver assays were cut to 19.25 ounces per ton. Although more
recent exploration information has been collected in the area where
the mineral resource estimate was completed, it is the opinion of
the qualified person that including this information would not
materially change the estimate. We believe the estimate of mineral
resources at Pinos Altos is not likely to be materially affected by
any known environmental, permitting, legal, title, taxation,
socio-political, marketing or other relevant issues. Mineral
resources which are not mineral reserves do not have demonstrated
economic viability. Because Pinos Altos is not considered to be a
material property for Agnico-Eagle, a technical report describing
the resource estimate will not be filed with the securities
regulatory authorities. About Agnico-Eagle Agnico-Eagle is a long
established Canadian gold producer with operations located in
northwestern Quebec and exploration and development activities in
eastern Canada and the southern United States. Agnico-Eagle's
LaRonde Mine in Quebec is Canada's largest gold deposit. The
Company has full exposure to higher gold prices consistent with its
policy of no forward gold sales. It has paid a cash dividend for 25
consecutive years. DATASOURCE: Agnico-Eagle Mines Limited CONTACT:
David Smith, Director, Investor Relations, (416) 947-1212
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