Agnico Eagle Halts Barnat Pit After Wall Failure, Cuts Gold Output Forecast

Agnico Eagle Mines (TSX:AEM,NYSE:AEM) has temporarily suspended extraction at the Barnat open pit within its Canadian Malartic complex in Quebec following a rock mass movement along the site’s north wall.

The wall failure occurred in a sector previously identified by engineers as possessing weaker geological structures. The zone was already subject to enhanced geotechnical monitoring and was isolated by safety exclusion zones prior to the rock movement.

Company technical teams are currently conducting detailed geotechnical assessments to map out the stability of the north wall. Planning activities are actively underway to facilitate the safe and orderly resumption of operations in the Barnat pit.

In the interim, the Canadian Malartic processing plant is relying on low-grade surface stockpiles to replace the planned Barnat ore feed, a contingency designed to buffer the immediate production shock.

While the incident leaves the company’s immediate financial quarter unscathed, the suspension will generate persistent headwinds into the medium term. Production in the second quarter of 2026 was unaffected by the failure, with Agnico Eagle expecting to report quarterly output of approximately 845,000 ounces of gold, slightly ahead of internal plans.

However, the downstream impacts of the pit closure will affect second-half metrics.

The company projects a production reduction of 60,000 to 80,000 ounces of gold at Canadian Malartic for the latter half of 2026. As a result, full-year corporate production is now expected to land near the lower end of the company’s previously disclosed range of 3.3 million to 3.5 million ounces.

The constraints will extend beyond the current calendar year. The Barnat open pit was originally scheduled to be mined out by early 2029. Pending the results of the ongoing geotechnical review, Agnico Eagle anticipates the rock mass movement will curb production by up to 150,000 ounces annually in both 2027 and 2028.

Management is currently evaluating strategies to mitigate this multi-year deficit.

Despite the setback at the open-pit level, Agnico Eagle confirmed the incident will not disrupt the development timeline or production outlook for the adjacent Odyssey mine. The objective to achieve 1 million ounces of annualized gold production from Canadian Malartic by the early 2030s remains completely intact.

Further updates regarding a safe restart timeline, as well as revised production and cost guidance, will be detailed in the company’s second-quarter earnings report on July 29.

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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.