A surge of infections from the omicron variant of COVID-19 has pushed one Canadian gold miner to largely shutter its Arctic operations and is threatening to delay deal-making amid tighter restrictions.

Record high infection rates in Canada have so far not triggered the widespread shutdowns the industry saw in the first half of 2020, but closures have begun. Agnico Eagle Mines Ltd. announced Dec. 22 that it was sending home Nunavut-based employees who work at the Meliadine, Meadowbank and Hope Bay gold mines for at least three weeks after an outbreak of cases. Agnico said it expected "minimal production" over the period.

Provincial governments have reintroduced more stringent rules on travel and large gatherings, while the federal government has advised Canadians to avoid nonessential travel, creating new hurdles for site inspections and attendance at conferences or meetings.

Exploration drilling in Quebec. Source: Sayona Mining Ltd.

"Entry into Canada is getting tougher so I think fewer will come to Vancouver or Toronto for conferences," said John-Mark Staude, CEO of Riverside Resources Inc., an exploration company that often partners with major miners on its projects. "This could negatively impact M&A, optioning of properties and deal flows."

Omicron's impacts on operations in Canada have otherwise been fairly light with some companies returning to more stringent health and safety protocols that were established during past waves of the pandemic. Osisko Mining Inc., which ran one of the largest exploration programs in 2021 at the Windfall Lake gold project in Quebec, has started to do more COVID-19 testing but has not seen a slow down in its exploration and development work, Executive Chairman and CEO John Burzynski said in an email.

"Testing frequency was relaxed late in the summer, but we have gone back to full testing," Burzynski said. Employees are screened before they come on-site and are tested during two-week work rotations and again before they go back to sensitive communities.

"So far we have had no new positives," Burzynski said.

Agnico may be taking an unusually protective stance because of its workforce. In Canada, First Nations are widely considered more vulnerable to COVID-19, especially where they live in remote communities away from major hospitals, among other issues.

"They have to be extra cautious with First Nations," Haywood Securities analyst Kerry Smith said in an email.