Gold Mining Company Protects its Interests with Construction Contract Review
Agnico-Eagle Mines’ operating history includes more than 30 years of continuous gold production, primarily from underground perations. Its growth strategy is focused on finding more gold and developing new mines at the lowest possible cost.
Agnico-Eagle Mines Limited is a publicly traded international gold producer headquartered in Ontario, Canada, with $510 million in 2007 revenues. Its flagship LaRonde Mine in the Abitibi region of Quebec produces about 270,000 ounces of gold and holds around 5 million ounces of gold in proved and probable reserves, making it one of the largest gold deposits ever found. The mine also produces copper, zinc and silver as by-products. Overall, Agnico-Eagle controls more than 12 million ounces of reserves, with operations located in Quebec and Finland and exploration and development activities in Canada, Finland, Mexico and the United States.
Agnico-Eagle is constructing a new mine in Mexico and had become uncomfortable with the way things seemed to be headed in terms of
time and budget. Control Solutions was engaged for its expertise in construction audit and review of contracts prior to signing.
Summary of Results
Control Solutions worked with Agnico-Eagle over the course of two weeks and developed a robust risk matrix and audit plan that incorporated everything from initial project planning and funding all the way through the final move-in of patients. Risk areas were
broken into the following categories:
- Change Management
- Financial Management
- Regulatory Reporting
- Transition Management
Additionally, audit steps were broken down into various phases based on the project deadlines and stages of construction. The audit will be conducted in five phases over six years. The last and final phase will be a follow-up review six months after
construction is completed to identify any hidden defects.