Agnico Eagle Mines Limited (NYSE: AEM) announced approval of its Hope Bay project investment in Nunavut, Canada, following completion of a preliminary economic assessment. The underground mining operation will feature a 6,000 tonnes per day processing facility with estimated annual gold production between 400,000 and 435,000 ounces over an initial 11-year mine life.

The 2026 study indicates initial development capital expenditures of approximately $2.4 billion, including processing facility reconstruction, a 37 megawatt diesel generator power plant, mobile equipment and underground development. The project expects average total cash costs of $958 per ounce and all-in sustaining costs of $1,214 per ounce based on current gold prices of $4,500 per ounce and a Canadian/US dollar exchange rate of 1.36.

The project shows an after-tax internal rate of return of 26% and net present value of approximately $4.3 billion at a 5% discount rate under current assumptions. Production could begin as early as 2030, with the operation reaching design capacity of 6,000 tonnes per day by 2032.

Hope Bay contains 5.79 million ounces of gold in measured and indicated mineral resources and 3.33 million ounces in inferred resources. The mine plan incorporates approximately 55% of measured and indicated resources and 48% of inferred resources, indicating potential for mine life extension.

The mining strategy involves concurrent development of three mining fronts at Doris, Madrid and Patch 7 deposits using conventional underground mining methods. The operation will employ conventional milling with expected overall gold recovery of 94%.

Agnico Eagle plans to spend approximately $43.4 million for 110,000 metres of drilling at Hope Bay in 2026, including conversion and expansion drilling. The company acquired the Hope Bay project in February 2021 and placed previous mining operations on care and maintenance in September 2021 to focus on exploration.