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Agnico-Eagle initiates construction activity at Kittilä Gold Mine

19/06/2006

In the first week of June, Agnico-Eagle Mines Limited (Agnico-Eagle), a long-established Canadian gold producer, announced that construction activities at the Kittila Mine on the Suurikuusikko deposit in northern Finland are to begin immediately. According to a statement, initial extraction will be open pit and will be followed by underground mining via ramp access. The mining operation will feed a surface processing plant capable of handling 3,000 tonnes per day. According to Agnico-Eagle, the Kittilä gold project is expected to produce an average of 150,000 ounces of gold annually at average total cash costs of approximately USD 250 per ounce, with production expected to begin by the middle of 2008 and extending over 13 years.

Commenting on the announcement, Agnico-Eagle said that eight drills are currently operating at the Kittilä mine project, with activity focused on converting the large gold resource to reserve and drilling the extensive land position along strike of the known gold reserve. Figures supplied by Agnico-Eagle indicate that the Kittilä mine project contains a measured resource of 0.1 million tonnes containing 4.07 grams of gold per tonne, an indicated mineral resource of 1.5 million tonnes containing 4.39 grams of gold per tonne and an inferred mineral resource of 6.7 million tonnes containing 4.35 grams of gold per tonne.

Decision expected to accelerate other mining projects

According to an article in the Helsingin Sanomat newspaper, the Kittilä Gold Mine is expected to create 200 new jobs. Quoted in this article, Heino Alaniska, who joined Agnico-Eagle 12 months ago and will manage the Kittilä project, said “Preparations for opening this mine have been going on for a long time.”

Taneli Saari, Investment Director and Leader of the Mining Team at Invest in Finland, said ”We believe this investment will accelerate the implementation of other mining projects in Finland. Investors will discover more about current projects and their knowledge of the skills and know-how that is on offer will increase significantly. There are several ventures which can be expected to get under way in the next few years.”

Agnico-Eagle has operations located in Quebec and exploration and development activities in Canada, Finland, Mexico and the United States. Agnico-Eagle's LaRonde Mine is Canada's largest gold deposit.

Further information:

http://www.agnico-eagle.com/

Recent articles published on this website concerning mining activities in Finland:

“Finland now one of Europe’s top locations for ore prospectors” (3rd March 2006)http://www.investinfinland.fi/news/2006/en_GB/1141398083729/

“Vulcan Resources acquires ‘world-class vanadium opportunity’ in Finland” (3rd March 2006) http://www.investinfinland.fi/news/2006/en_GB/1141398373122/

For additional information on mining activities in Finland, use the term “mining” in this website’s search function.