Rock failure halts production at Goldex mine; Agnico-Eagle shares plummet
Agnico-Eagle Mines (TSE:AEM) had suspended mining and gold production at its Goldex mine in Val d'Or, Quebec, due to unstable ground and water inflow.
"A weak volcanic rock unit in the hanging wall of the Goldex deposit has failed. This rock failure is thought to extend between the top of the deposit and surface. As a result, this structure has allowed ground water to flow into the mine. This water flow has likely contributed to further weakening and movement of the rock mass," Agnico-Eagle said in a statement.
As a result of the problem, Agnico said it will write off its investment in Goldex, resulting in a $260 million charge in the third quarter results.
The news caused the Toronto-based company's shares to plummet around 19% near the close of trading on Wednesday.