Agnico encouraged by new Eagle West gold discovery

More encouraging results were released by Agnico-Eagle Mines (TSE) from surface exploration of the Eagle West discovery 2,600 ft. west of the company’s Eagle shaft in the Joutel area of northwestern Quebec. Drilling, the company says, has confirmed a strike length of 500 ft., with the zone open on strike and downdip. The company hopes to complete its 20,000-ft. drilling program in the area before Christmas. To date, results from seven holes have been released.

Agnico says the new zone’s character of mineralization and alteration in its structural and stratigraphic setting is similar to that of the nearby producing Eagle/Telbel mining operation. Among the newly reported results:

Width Grade Hole (ft.) (oz./t) AE-90-17 43.8 0.272 AE-90-18 34.9 0.597

incl. 19.9 0.829 AE-90-19 12.7 0.226

The TSE said it has opened an investigation into the jump in the Agnico share price preceding release of the announcement of the new find. Surveillance manager Neil Winchester said the exchange will be looking at events not just on the day before the announcement, but on a number of trading days.

Agnico reports a third-quarter net loss of $2.6 million (9 cents per share) on revenue of $17.5 million, compared with a loss of $114,000 (1 cents per share) on revenue of $8.8 million for the same period last year.

For the first nine months of 1990, a net loss of $4.7 million (18 cents per share) on revenue of $56.4 million was reported, compared to a gain of $3.8 million (25 cents per share) on revenue of $27.9 million for the same period last year.

Gold production during the third quarter totalled 39,603 oz., up from 18,438 oz. last year. For the nine months, Agnico’s output totalled 126,680 oz., up from 52,247 oz. for the same period last year.

The company attributed the loss in part to increased amortization charges related to the cost of acquiring the LaRonde mine (from Dumagami Mines, which was amalgamated with Agnico) west of Val d’Or, Que., and increased exploration costs.

The company reports an average cash operating cost of US$259 per oz. to Sept. 30, down from US$311 for the same period last year. Agnico-Eagle Mines (TSE) 3 months ended Sept. 30 1990 1989 Revenue $17,480 $8,749 Net loss 2,554 114

per share 0.09 0.01 9 months ended Sept. 30 Revenue $56,353 $27,896 Net earnings (loss) (4,651) 3,811

per share (0.18) 0.2504