Agnico-Eagle Mines Ltd. (NYSE:AEM,TSX:AEM) announced that the development and construction of its Mexico-based La India mine have been approved by its board of directors and commented that the mine will be an open-pit, heap leach operation. Commercial production is expected in the second half of 2014.

As quoted in the press release:

Construction costs for the project are expected to total approximately $158 million, which will be funded from the Company’s operating cash flows. Sustaining capital costs are forecast to total approximately $25 million over the eight year life of the mine. New capital of approximately $40 million is expected to be added to the Company’s total in 2012.
The feasibility study estimates that the La India project will generate an internal rate of return of approximately 31% assuming a gold price of $1,379 per ounce. Metallurgical recoveries are estimated to average approximately 80%, resulting in average gold production of 90,000 ounces per year. The waste to ore stripping ratio in the open pit mine is estimated at approximately 1:1. Life of mine total cash costs at La India are expected to average $500 per ounce.

Click here to read the full Agnico-Eagle Mines Ltd. (NYSE:AEM,TSX:AEM) press release.