LaRonde output cut after mine death

Agnico-Eagle Mines (AGE-T) has scaled back underground mine production at its LaRonde gold-copper mine in northwestern Quebec to 5,000 tons per day after an explosion that killed an underground drilling and cabling contractor.

The explosion occurred while explosives were being loaded into a work area. Reuters reports that the death is the third at LaRonde in 16 years.

Agnico says full underground mining operations should resume shortly, pending an inspection by local authorities. Milling operations at LaRonde remain unaffected.

The Company wishes to extend its sincere condolences to the family and colleagues of the deceased.

Agnico’s fourth-quarter gold production slipped by 6.5% to 70,299 oz. Byproduct credits totalled 1.2 million oz. silver (compared with 1.1 million oz. in the final quarter of 2002); 24.7 million lbs. zinc (26.6 million lbs.); and 5.7 million lbs. copper (4 million lbs.).

The company’s revised production goal for 2004 is 300,000 oz. gold, 4.7 million oz. silver, 120 million lbs. zinc, and 24 million lbs. copper, all at a total cash operating cost of US$155-165 per oz., based on by-product credits that are well below current spot prices. The downward revision reflects struggles to ramp up LaRonde to full capacity after a major underground rockfall in March 2003, followed by a host of problems ranging from too much downtime at the mill to delays in mining higher-grade ore blocks.

Shares in Agnico were off 65, or 3.7%, at $16.90 in late afternoon trading in Toronto following the news on Feb. 4.


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