08:54 AM EDT, 06/19/2024 (MT Newswires) -- Agnico Eagle Mines ( AEM ) on Wednesday said it will spend US$100 million over the next three years to build an underground ramp at its Detour Lake open-pit mine in Ontario after releasing a preliminary economic analysis for the project that shows it could become one of the world's most prolific gold mines.

The company said new mineral reserve and mineral resource estimates, accompanied by a revised life of mine plan and a planned expansion of the mine's mill, will push output from the mine to one-million ounces per year by 2030.

"With the development of an underground mine to complement the existing open pit mine, we see the opportunity to transform the asset into one of the top five gold mines in the world by output. We believe the Underground Project has relatively low execution risk, and has the potential to generate a strong risk-adjusted return on capital while maintaining exploration and production upside for decades in one of the best mining jurisdictions in the world," President and Chief executive Ammar Al-Joundi said in a release.

The company plans to expand its exploration drilling at the mine in support of the three-year development of the underground ramp, as the updated mineral resource estimate sees the project tapping 0.7-million ounces of indicated gold resources and 3.9-million ounces of inferred resources.

Agnico Eagle expects production to rise by 300,000 ounces annually beginning in 2030 from its expected output in 2024 to 2029 as it expands milling capacity to 79,450 tonnes per day starting in 2028. Development capital expenditures for the Underground Project and mill optimization to 29 Mtpa are forecast to be approximately $731 million. The average total cash costs for the Underground Project, combined with the mill optimization to 29 Mtpa, are expected to be $690 per ounce.

The revised life of mine plan sees the site operating until 2024, two years later than a 2022 estimate.

Agnico Eagle shares closed up $0.44 to $88.68 Tuesday on the Toronto Stock Exchange.