Wall fall at Barnat gold pit dents Agnico outlook

Agnico Eagle Mines (TSX, NYSE: AEM) has stopped mining at the Barnat open pit after a rock fall at its Canadian Malartic complex, which caused no injuries but threatens output through 2028 at the Quebec mine.

The company still expects second-quarter production of about 845,000 oz. gold, slightly ahead of plan. But the Wednesday instability along Barnat’s north wall could cut second-half output at Canadian Malartic by 60,000 to 80,000 oz. and push Agnico toward the low end of its 3.3-million-to-3.5-million-oz. guidance this year. The mine, located in Malartic is about 530 km northwest of Quebec City,

Canaccord Genuity analyst Carey MacRury put the expected second-half hit at 2.1% of his independent production estimate and up to about 4.5% (about 150,000 oz. gold) in each of 2027 and 2028.

“The rock mass movement will not affect the development or production outlook for the Odyssey mine and does not change the pathway to achieving annual production of 1 million oz. of gold from the Canadian Malartic complex in the early 2030s,” Agnico said in a Thursday statement.

Barnat was already nearing the end of its mine life, with Odyssey up next in the mine plan, shifting Canadian Malartic operations to a long-life underground mine from operating Canada’s largest open-pit gold mine since 2011.

Agnico shares listed in Toronto fell 4% to $216.37 apiece in early Thursday afternoon trading, giving it a market capitalization of $108.2 billion. Shares have tested $157.68 to $348.94 over the past 12 months.

Pit instability

Agnico reported no injuries, equipment damage or environmental impacts. It said the movement occurred in an area it had already identified as having weaker rock in Barnat’s north wall and placed under tighter ground monitoring, including safety exclusion zones.

The company’s technical teams are assessing the pit wall before deciding when mining can restart. In the meantime, the Canadian Malartic mill will process low-grade stockpiles instead of planned Barnat ore to soften the near-term production hit.

Mining at Barnat was expected to run until early 2029.

Odyssey path

Canadian Malartic remains Agnico’s key Quebec growth asset. Agnico considers the complex as its path to 1 million oz. a year, backed by Odyssey, a potential second shaft and future feed from satellite deposits at Marban and Wasamac.

Odyssey’s first shaft and ramp are expected to lift annual production to about 550,000 oz. by 2029. A second shaft could add 200,000 to 250,000 oz. a year from 2033, while Marban and Wasamac could add another 200,000 to 250,000 oz. combined.

Agnico said it will update production and cost guidance with second-quarter results, due after market close on July 29.