Agnico-Eagle expands gold zones at Pinos Altos; Signs option to acquire El Realito Property in Mexico
June 27 2007 - 7:45AM
PR Newswire (US)
Stock Symbols: AEM (NYSE and TSX) TORONTO, June 27
/PRNewswire-FirstCall/ -- Agnico-Eagle Mines Limited is pleased to
provide an update on its spring exploration and acquisition
activities in Mexico. Significant drilling results have been
returned at Pinos Altos including potentially ore-grade gold
intercepts near surface and also at depth. More than half of the
Company's exploration expenditures in 2007 (more than $40 million)
are expected to be in Mexico, with $26 million earmarked for the
Pinos Altos property. Additionally, Agnico-Eagle is investigating
other attractive land acquisitions and option agreements similar to
the 2006 Pinos Altos acquisition. The Company has made several
strategic investments in junior exploration companies in Mexico as
well. Highlights of the recent exploration activity in Mexico
include: - Significant gold mineralization continues to be
intersected near- surface and at shallow depths on the Creston
Colorado and Mascota zones located in the northwest quadrant of the
Pinos Altos property, approximately seven kilometres from the main
Santo Nino zone. These new zones have not yet been included in the
gold resource and are open in all directions - Also at Pinos Altos,
several drill holes continue to intersect potentially ore-grade
mineralization over significant thicknesses between the Santo Nino
and Cerro Colorado zones, suggesting that they are in fact one
zone. This new mineralization, and the entire Cerro Colorado
mineral resource, has not been included in the base case
feasibility study currently undergoing third party review -
Agnico-Eagle has signed an option agreement under which it may
purchase 100% of the El Realito property in Sinaloa, Mexico from a
privately held company. A recent trenching program identified a
gold- bearing structure with a strike length of over two kilometres
http://www.agnico-eagle.com/files/PinosLocationMap.pdf "The most
recent Pinos Altos exploration results give us further confidence
that we will be able to meet our previously stated gold reserve
target of 18 million to 20 million ounces by the end of 2008.
Agnico-Eagle's gold reserves already exceed the average of the rest
of the mid-tier gold producers by more than double" said Sean Boyd,
Vice-Chairman and Chief Executive Officer. "Further reserve growth
beyond our stated targets is possible as we continue to encounter
potentially ore-grade mineralization outside of our currently
defined reserve and resource envelope" added Mr. Boyd. Since
acquiring the Pinos Altos property through an option agreement in
2006, Agnico-Eagle has been focusing on in-fill drilling around the
main Santo Nino and Oberon de Weber zones, for the purpose of
producing a feasibility study. The study is now completed and is
undergoing third party engineering review. All the necessary land
agreements with the four local ejidos have been established.
Negotiations for additional surface rights with the underlying
royalty holder are ongoing. If these negotiations are not
successful, modifications to the proposed mine plan contained in
the base case feasibility study will be implemented. Pinos Altos
Resource Likely to Increase as Santo Nino and Cerro Colorado Zones
Appear to Converge Four drill rigs are operational on the Pinos
Altos property. Total drilling in 2007 to date exceeds 21,000
metres. The Company has also been drilling outside of the current
resource envelope primarily focusing at depth and along strike of
the Santo Nino and Cerro Colorado structures. Some of the most
significant results in 2007 at Pinos Altos were from the deep
resource expansion program at Santo Nino. This program was planned
to investigate whether the main Santo Nino zone and the higher
grade Cerro Colorado zone might join at depth. To this end, hole
PA-07-170 returned 5.47 grams per tonne gold and 179.3 grams per
tonne silver over a true thickness of 14.4 metres. Hole PA-07-175
returned 5.47 grams per tonne gold and 68.9 grams per tonne silver
over a true thickness of 7.1 metres. These holes are located
between the Santo Nino and Cerro Colorado zones and have increased
confidence that the two zones may be the same zone.
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True Drill Width From To Gold Silver Hole Zone (metres) (metres)
(metres) (g/t) (g/t)
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PA-07-170(x) Cerro Colorado 14.4 491.0 507.5 5.47 179.3
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PA-07-174 Cerro Colorado 13.5 545.5 562.0 1.58 41.1
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PA-07-175 Cerro Colorado 48.2 531.3 598.0 1.73 40.9
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including 7.1 534.0 544.0 2.11 49.8
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and 7.1 570.0 580.0 5.47 68.9
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PA-07-178 Cerro Colorado 8.1 630.0 639.5 3.66 64.2
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PA-07-180(xx) Cerro Colorado 6.0 488.5 495.0 5.51 126.3
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(x) Additional results received from previously disclosed hole;
(xx)Some results pending in hole PA-07-180.
http://www.agnico-eagle.com/files/PinosLongitudinalMap.pdf As the
gold resource at Cerro Colorado has not yet been included in the
base case feasibility study, these results are potentially
significant to future production. Further definition of the Cerro
Colorado resource and its inclusion in the mine plan would likely
enhance the economics of the Pinos Altos project as it is higher
grade than the current reserves (Cerro Colorado has an inferred
resource of 1.5 million tonnes grading 3.7 grams per tonne gold, or
180,000 ounces of gold, and 76.6 ounces per tonne silver, or 3.8
million ounces of silver as at February 2007). Recent New
Discoveries Continue to Grow in Northwest Quadrant of Property In
the northwest quadrant of the Pinos Altos property, approximately
seven kilometres from the main deposit at Santo Nino, the Mascota
and Creston Colorado zones continue to provide more evidence of the
potential to expand overall gold and silver resources on the
property. In the fall of 2006, surface mapping, sampling and
trenching identified gold associated with at least two apparently
flat lying zones of quartz vein and stockwork mineralization near
surface, each covering an area several thousand square metres in
size. The mineralization is similar to Santo Nino (except in its
orientation), with brecciated quartz veins and an associated quartz
stockwork system and some green-coloured quartz and traces of
visible gold. http://www.agnico-eagle.com/files/PinosGeologyMap.pdf
A drilling program has been underway at Creston Colorado and the
adjacent Mascota zone since December 2006 using a portable drill.
Over 4,000 metres have been completed so far with several
significant results. Significant Thicknesses Intersected at Creston
Colorado At Creston Colorado, diamond drilling has systematically
traced a near surface zone of almost continuous gold mineralization
that trends roughly north/south and dips very shallowly to the
west. This zone of quartz stockwork and quartz vein breccia
mineralization generally reaches a thickness of up to 65 metres and
has been traced for over 800 metres along strike (open to the
north) and for up to 200 metres down plunge (open down plunge).
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True Drill Width(x) From To Gold Silver Hole Zone (metres) (metres)
(metres) (g/t) (g/t)
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CM-07-29 Creston Colorado 3.0 88.4 91.4 1.73 2.5
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and 28.5 105.1 133.8 1.35 27.6
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including 5.5 105.1 110.6 2.02 29.6
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CM-07-30 Creston Colorado 17.1 108.8 126.0 0.51 14.9
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including 5.6 108.8 114.4 1.16 16.5
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CM-07-31 Creston Colorado 66.7 61.5 128.5 1.92 25.4
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CM-07-32 Creston Colorado 18.7 44.0 62.8 1.35 12.0
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CM-07-32A Creston Colorado 6.4 43.3 49.7 6.07 43.4
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CM-07-33 Creston Colorado 48.6 70.0 119.0 3.48 17.6
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including 19.2 86.7 106.0 6.86 25.0
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CM-07-34 Creston Colorado 13.1 93.8 107.0 1.59 7.5
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and 28.5 162.7 191.3 1.67 12.0
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(x) True thickness estimates are preliminary Recent drilling on
Creston Colorado has identified what appears to be two significant
zones of stockwork mineralization in hole CM-07-034. In two
separate intercepts, assays returned gold grades of 1.59 grams per
tonne gold and 7.5 grams per tonne silver over a true thickness of
13.1 metres, and 1.67 grams per tonne gold and 12.0 grams per tonne
silver over an apparent true thickness of 28.5 metres.
Additionally, hole CM-07-031 returned an impressive true thickness
of 66.7 metres grading 1.92 grams per tonne gold and 25.4 grams per
tonne silver. One of the best results returned so far at Creston
Colorado was in hole CM-07-32A which returned 6.1 grams per tonne
gold and 43.4 grams per tonne silver over 6.4 metres true
thickness. The hole was stopped short of its targeted depth, in
mineralized rock, due to drilling and recovery problems. These
three holes are significant as they suggest potential ore-grade
mineralization at relatively shallow depths accessible by open-pit
mining. http://www.agnico-eagle.com/files/CrestonMascotaPlanMap.pdf
http://www.agnico-eagle.com/files/CrestonCrossSection.pdf Mascota
Mineralization May Be Associated With Creston Colorado At Mascota,
drilling has identified similar, but thinner, near surface gold
mineralization. So far the zone has ranged between four and six
metres true thickness. The drilling program is now concentrating on
extending the zone towards the adjacent Creston Colorado zone. Most
significantly, the results of the current exploration program
suggest that the Creston Colorado and Mascota zones may form part
of a larger more widespread zone, occurring at a similar geologic
interval, but separated by sub-vertical fault zones that displace
the same mineralized horizon. These zones are not included in the
current reserve and resource estimate at Pinos Altos. A new five
kilometre road has been completed to provide better access to this
sector. A second drill rig will be added shortly and an initial
resource calculation for this region is expected by the end of
2007. Detail of 2007 Exploration Focus Development on the
underground ramp began in March. Contract development of the
underground exploration ramp at Pinos Altos is currently
progressing at a rate of approximately 150 metres per month. Over
250 metres of ramp has been completed to date and over 1,350 metres
of ramp are expected to be completed by year end 2008. Diamond
drilling from the first underground drilling station is planned to
commence in October 2007. This drilling will target deep zones in
Santo Nino and Cerro Colorado. Over 12,000 metres of diamond
drilling is planned to be completed by the end of the year. The
main focus of the underground exploration program will be resource
to reserve conversion of the Cerro Colorado/Santo Nino zones and
the area between them. In anticipation of a positive Board
decision, Agnico-Eagle has signed a letter of intent for delivery
of the long-lead time ball and SAG mills for the Pinos Altos
project. Gold and Silver Reserves at Pinos Altos Pinos Altos
currently has probable gold and silver reserves of 1.8 million
ounces and 55.5 million ounces, respectively (18.6 million tonnes
containing 3.07 grams per tonne gold and 92.77 grams per tonne
silver). In the indicated resource category there are a further 1.6
million tonnes grading 1.48 grams per tonne gold and 61.84 grams
per tonne silver, or 78,000 ounces of gold and 3.3 million ounces
of silver. There are also inferred resources of 5.2 million tonnes
grading 3.03 grams per tonne gold and 80.54 grams per tonne silver
(0.5 million ounces of gold and 13.5 million ounces of silver).
Company-wide drilling programs continue to confirm that extensive
mineralization exists outside of the current gold reserve and
resource envelopes at the various properties. The budgeted
exploration expenditure in 2007 exceeds $40 million, the highest
level in the Company's history, including $26 million in Mexico.
Currently, 23 drill rigs are operating targeting 156,000 metres on
exploration and 85,000 metres on definition drilling. It is
anticipated that drilling at the current projects will enable
Agnico-Eagle to meet its year-end 2008 target of 18 million to 20
million ounces of gold reserves (current gold reserves are 15.4
million ounces, the highest level in the intermediate gold sector).
Agnico-Eagle's gold reserves are all located in mining-friendly
regions with low political risk. Pinos Altos Analyst Tour
Agnico-Eagle is planning to host a tour of its Pinos Altos property
on August 20 and August 21, 2007. The trip is open to equity
analysts. A charter will be departing from Toronto early in the
morning on August 20, returning late on August 21. Interested
parties should contact Hazel Winchester at (416) 847-3717 or as
soon as possible as spaces are limited. Agnico-Eagle Options El
Realito Project Agnico-Eagle has recently entered into an
exploration and purchase option agreement with a private Mexican
company regarding the El Realito Property in Sinaloa, Mexico. This
property is on the southern extension of the same trend of the
Sierra Madre Occidental Range that hosts Agnico-Eagle's Pinos Altos
property. The El Realito Property comprises approximately 1,800
hectares of mining concessions located approximately 40 kilometres
northeast of the town of Culiacan. The agreement contemplates
making a series of payments to the vendor of up to $3.5 million
over the 24 month exploration work period. Agnico-Eagle may
exercise an option to purchase the property for a fixed price at
any time during the term of the agreement. The exploration program
which includes prospecting, mapping, trenching and drilling has
commenced and is anticipated to total up to $2.9 million for 2007.
This property has numerous gold showings and a history of small
scale mining. The gold structure can be followed over a strike
length of approximately two kilometres and represents an epithermal
system similar to Pinos Altos. To date, Agnico-Eagle has completed
surface trenching, sampling and geological mapping. Minor visible
gold was observed in several locations. Historically, the deposit
was worked by a limited number of artesianal miners, but remains
largely untested. A drilling program of 20,000 metres has been
outlined and the geologists are on the site to prepare the summer
program. Scientific and Technical Data Roger Doucet, P.Geo., the
Company's Exploration Manager for Mexico, who is a Qualified
Person, has prepared and reviewed the exploration results for Pinos
Altos that are disclosed in this press release. At Pinos Altos, the
diamond drilling equipment recovers either NQ (48 mm diameter) or
HQ (64 mm diameter) core samples. The drill core selected for
analysis was sawed in half with one half sent to a commercial
analytical laboratory and the other half retained for future
reference or use. Agnico-Eagle has established an Analytical
Quality Assurance Program for sampling at Pinos Altos. This program
includes the systematic addition of blank samples, duplicate
samples and certified standards to each batch of samples sent for
analysis to commercial accredited laboratories. Blank samples are
used to check for possible contamination in the laboratories;
duplicate samples quantify overall precision while certified
standards determine the analytical accuracy. In addition
approximately 10% of the assayed samples are sent to a second
certified laboratory for check analysis. ALS Chemex, an accredited
exploration sample analysis laboratory either collects the split
samples directly from the project site or they are delivered by the
Company using a secure chain of custody procedure. The samples are
prepared by ALS Chemex either in Chihuahua, Chihuahua or
Hermosillo, Sonora and the analysis is done in Vancouver, British
Columbia. BSI Inspectorate an accredited laboratory in Reno,
Nevada, re-analyses all of the samples selected for check assaying.
The gold assaying method, using a 30 gram charge, is by Fire Assay
with either an atomic adsorption finish or, if the result is
greater than 3 parts per million of gold, a gravimetric finish as
requested by the project geologist. Silver analysis, from a 30 gram
charge, is either by three acid digestion followed by atomic
absorption or, if the atomic absorption results is greater than 200
parts per million of silver by Fire Assay with a gravimetric finish
as requested. Creston Colorado/Mascota Drill Hole Locations and
Orientations
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HOLE-ID NORTH EAST ELEV. AZIMUTH DIP LENGTH
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CM-07-29 760736 3135879 1994 090 -45 219.0
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CM-07-30 760700 3135881 1985 090 -45 235.0
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CM-07-31 760781 3135929 2003 090 -45 170.0
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CM-07-32A 760812 3135985 2002 090 -55 50.7
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CM-07-33 760765 3135988 1995 090 -45 174.0
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CM-07-34 760715 3135934 1998 090 -45 253.0
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About Agnico-Eagle Agnico-Eagle is a long established Canadian gold
producer with operations located in Quebec and exploration and
development activities in Canada, Finland, Mexico and the United
States. Agnico-Eagle's LaRonde Mine is Canada's largest gold
deposit in terms of reserves. The Company has full exposure to
changes in 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,
Vice-President, Investor Relations, (416) 947-1212
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