Agnico-Eagle to cut spending at Meliadine gold project

Agnico-Eagle plans to cut spending on its Meliadine project near Rankin Inlet, Nunavut, by about two-thirds next year.

The company posted its second quarter results yesterday reporting a loss of $24 million, compared to a profit of $43 million a year ago.

The company now plans to cut its expenses by about $200 million.

Agnico-Eagle had budgeted more than $120 million for work at Meliadine next year, but that’s now been reduced to about $45 million.

Sean Boyd, the company's chief executive officer, told investors this morning that exploration drilling will be scaled back but work will continue to build a ramp to the gold deposit.

"What's just as important as the decline in what we're spending there is how we're spending it," he said.

"We are going to continue with our ramp at Meliadine, which allows us to keep that project on the projected timeline for late 2018, assuming we get board approval a year from now."

The company blames its losses this quarter on the lower gold prices and a temporary shutdown at one of its mines in Finland.

Agnico-Eagle also owns and operates the Meadowbank gold mine near Baker Lake.