Agnico Eagle Approves $2.4 Billion Investment in Gold Project, Reviving Mine in Canada's Arctic -- 2nd Update

By Robb M. Stewart

Agnico Eagle has given the go ahead to a big gold project in Canada's Arctic, tapping into elevated prices for the precious metal and the government's ambitions to develop a region with increasing strategic importance.

The investment decision by Agnico Eagle breathes new life into a mine that China had hoped to run but which ran up against natural security concerns.

The Toronto miner, the world's largest listed gold producer by market value after Newmont, said the Hope Bay project in Canada's Nunavut territory, is expected to cost about US$2.4 billion initially. That envisages a mine producing an estimated 400,000 and 435,000 troy ounces over an at least 11-year life span at a cash cost of below US$1,000 an ounce, well below the more than US$4,500 gold currently trades at.

The project sits almost 120 miles north of the Arctic Circle and near the Northwest Passage, a nautical sea route through Canada's polar region that connects the Atlantic and Pacific oceans. A mine would be the company's fourth to be built in the Arctic.

Agnico Eagle took control of the project in early 2021 with its roughly 287 million-Canadian-dollar (US$208.9 million) acquisition of the previous owner, TMAC Resources, then put work on hold. Ottawa late the previous year vetoed a deal that would have seen TMAC bought by Chinese state-owned Shandong Gold Mining, a proposal that had approval from TMAC's shareholders and Chinese regulators but which raised concerns about Beijing's expanding presence in the polar region.

Gold deposits were first discovered in the 1990s when Hope Bay was operated by BHP Group, and exploration continued first under Miramar Hope Bay and then Newmont, before TMAC bought it in 2013 and worked toward first commercial production in 2017.

"Canadians have been talking about the massive opportunity of the Hope Bay deposit since the 1990s. Well, in the Canada of today in 2026 we are doing more than talking. We are putting shovels in the ground," Tim Hodgson, Canada's minister of energy and natural resources, said.

Hodgson, who attended the groundbreaking ceremony for the redevelopment of Hope Bay, said construction of the mine is of strategic importance to Canada. The mine is projected to lift Canadian exports by C$2.6 billion a year and support close to 2,000 jobs, while also bringing economic benefits to indigenous communities in the sparsely populated region. "This is what building Canada strong for all is about," he said.

Agnico Eagle said its initial investment would cover the reconstruction of a processing facility, as well as spending on the addition of a diesel generator power plant, upgrades to the tailings facility for mine waste, and more than 20 miles in underground development.

Ottawa is stumping up C$25 million in federal funding for a wind project at the mining site, investing in an Inuit-owned development that aims to add 4.2 megawatts of power and 4 megawatts of battery storage to the mine's existing power system.

Agnico Eagle Chief Executive Ammar Al-Joundi said all mining permits have been secured and production could begin as early as 2030.

The company has completed a preliminary economic assessment and envisages substantial upside for a mine through continuing regional exploration, with the current mine plan based on only slightly more than half of the declared miner resources already drilled.

The work in Nunavut, where Agnico Eagle already has two mining operations, represents a milestone in the company's ambitions to grow production by 20% to 30% over the next decade, including up to 1 million ounces annually from the Arctic territory. The miner produced 3.45 million ounces last year and is aiming for between 3.3 million and 3.5 million ounces in 2026.

Prime Minister Mark Carney's government is pushing to bolster Canada's economic resilience in the wake of the shift in U.S. trade policy and tariffs. He has laid out plans to accelerate building and strengthen defense in the country's far north, a large slice of a region that continues to grow in strategic importance for its shipping lanes and resources.

Carney last month said the government was pushing ahead with a plan for the region that is backed by more than C$35 billion in federal investments and major projects that represent roughly C$10 billion in investment, including spending on armed forces bases, Arctic airports and an almost 500-mile highway.

--Connor Hart in New York contributed to this article.

Write to Robb M. Stewart at [e-mail]

(END) Dow Jones Newswires

05-19-26 1559ET