No gold from Nunavut's Hope Bay this year, as Agnico Eagle shifts focus

It will be a bit longer before any Inuit employees return to the Hope Bay gold mine site in Nunavut, as Agnico Eagle Mining Ltd. shifts the focus of the project.

The company announced this month that it won't continue production at Hope Bay this year, turning instead toward exploration work at the site, which is about 125 kilometres southwest of Cambridge Bay. That means there won't be a return to pre-pandemic staffing levels anytime soon.

"We did a reassessment of the operation," said Eric Steinmetzer, Agnico Eagle's general manager of operations at Hope Bay, on Thursday. 

"And after all the consideration, we thought that it was making more sense to stop operating and just focusing and putting all our energy into exploration."

Before the start of the pandemic, there were 689 employees on site. About 75 of them were Inuit, mostly from the Kitikmeot region. 
 
After the pandemic hit, the mine's Inuit employees were sent home and then laid off soon after. By the end of 2020, there were 322 employees at the mine, none of them Inuit living in Nunavut.

Some COVID-19 outbreaks at the site last year also forced further reductions in the workforce and operations. Right now, Steinmetzer says, there are about 200 people working on site.

He says the mine was just not able to produce enough gold for the operations to be profitable through the pandemic.

Stanley Anablak, president of the Kitikmeot Inuit Association (KIA), had been hoping to see Inuit from the region back working at Hope Bay earlier this year. But he also understands that the pandemic changed things.

"It wasn't surprising. It was expected," Anablak said, of Agnico Eagle's decision to suspend production.

"We're hopeful that they'll still be employing our local Inuit from our region. The numbers won't be high, but I'm hopeful that they'll continue to employ Inuit from our region."

Agnico Eagle makes royalty payments to KIA but those will stop as long as there's no gold produced at Hope Bay.

"We weren't getting very much," said Anablak. 

"But we're hopeful things will work better in the next year or so, to get into full production again and get back on track."

Like buying a used car

Tom Hoefer, president of the N.W.T/Nunavut chamber of mines, is also not surprised by Agnico Eagle's new plan for Hope Bay.

The company just bought the project a year ago from TMAC Resources, he notes. He compares it to buying a used car, and then trying to figure out how to get it running in top shape.

"And so that's what they're doing now is to say, 'Well, let's take a timeout here and take a methodical approach and look at what we've got here," Hoefer said.

"They've got three deposits that the previous owners had identified in that area, but it's got significant potential for more. And I think that's what they want to do, is to get that bigger picture of just what they've got."

Hoefer sees it as good for the long-term future of the mine. Operating in the North is expensive, meaning "thin margins of error" as markets change. He argues the Agnico Eagle is aiming to make the project more "robust."

"It's really got a good geology," Hoefer said of the Hope Bay site

"It's very similar to the Abitibi of northern Ontario and Quebec, which is a very, very rich area. Same age rocks, same kind of style of geology. And so it's got huge potential."

Steinmetzer says that in the short term, the site will employ about 150 people. Most of them will be directly involved in exploration work.

He says the company is aiming to begin re-hiring Inuit from the region next month to make up some of the smaller workforce. Some southern employees now working at Hope Bay will be re-deployed to the company's other operations in including the Meadowbank and Meliadine mines in Nunavut.

Steinmetzer is not sure how long it will be before production might resume at Hope Bay. 

"There is no specific timelines, but that can be up to two to three years, we'll see. Obviously, we want to do that as fast as we can, but there is no firm timeline," he said.

He says the project is still a priority for Agnico Eagle.

"We are very optimistic. We really believe that Hope Bay will be the next flagship of Nunavut for Agnico Eagle," he said.