Agnico-Eagle Mines Ltd. CEO Discusses its Finnish Gold Mining Acquisition (AEM)

Apr. 8.06 | About: Agnico Eagle (AEM)

Excerpt from The Wall Street Transcript's 12/26/05 interview with Agnico-Eagle Mines Ltd. (NYSE:AEM) CEO Sean Boyd:

TWST: You mentioned an acquisition in Finland. It doesn't seem like a place that rings a lot of bells when you talk about gold.

Mr. Boyd: There's a mining culture in Finland. The mining industry was generally controlled by one large company for many years. Finland was really opened up for exploration to other groups in the late 1990s. So part of the recent success in Finland was by a company called Riddarhyttan Resources, which got involved in a gold discovery in northern Finland called the Suurikuusikko deposit. That deposit currently has a geologic resource of approximately 3.7 ounces of gold. It's got a large property position that has not been extensively explored. So there's certainly a lot of upside there. We got involved in this project about a year ago when we took a 14% share position in the public company.

Over the last year or so, we have been instrumental in guiding the exploration program. That program resulted in a significant growth in the gold resource to 3.7 million ounces. We decided it made sense to take over the entire company, so we made an attractive bid for the company and have recently locked up about 97% of the company shares. We will eventually own 100% of the company. We like the deposit because we believe a mine can be built there and the deposit is likely to grow above its current geological resource of 3.7 million ounces.

TWST: What are the environmental difficulties in Finland?

Mr. Boyd: This project has an environmental permit. We need to modify that permit because we're choosing a different processing approach than what was originally contemplated in the initial permit. But the processing approach we're going to use is much more environmentally friendly than what was previously proposed. So we don't see a major issue there. The standards in Finland are just like they are in Canada. Everything that we plan there will exceed all environmental standards.

TWST: What kind of timeline are you thinking about?

Mr. Boyd: We are in the midst of completing a feasibility study there. Now that we own the company and are running it, we're looking to have a feasibility study done by the second quarter of 2006. We hope to be making a production decision at that time. This property could be in production in the first half of 2008.

TWST: Do you have any feel for the cost situation at this point?

Mr. Boyd: Not at this point because we're still working on our feasibility studies right now. We're in the final stage of metallurgical testing, which includes pilot plant testing that would be followed by detailed design and engineering. We're also working on open pit design concepts and upgrading the gold reserve and resource estimate to North American standards. So that's a process that will take the next few months. In the meantime, we continue to aggressively drill the project. We've got five drills working now and we're about to add another two drills so that those drills can do more real exploration along the full geological extent of the trend.

TWST: But it looks good so far?

Mr. Boyd: It's wide open, and there's certainly no geological reason why it cannot continue to grow.