Stock Symbol: AEM (NYSE and TSX)
(All amounts expressed in U.S. dollars unless otherwise noted)
TORONTO, Oct. 24 /PRNewswire-FirstCall/ - Agnico-Eagle Mines Limited ("Agnico-Eagle" or the "Company") today reported third quarter net income of $11.5 million, or $0.08 per share, which was net of a non-cash foreign currency translation loss of $25.2 million, or $0.19 per share. This accounting translation loss arises from the weakened US dollar and its effect on the US dollar conversion of our European and Canadian accounts. In the comparable 2006 quarter, the Company reported net income of $45.2 million, or $0.38 per share.
Earnings for the third quarter 2007 fell by approximately $10 million, net of the translation loss, period over period. This was largely due to the impact of a stronger Canadian dollar on operating costs and lower realized byproduct zinc prices, offset partly by a higher gold price. Earnings per share were also diluted by the issuance of approximately 13.8 million common shares upon the acquisition of Cumberland Resources Ltd. in 2007.
Third quarter cash provided by operating activities decreased to $49.9 million from $73.9 million in the comparable 2006 quarter, largely due to normal working capital movements.
"Another strong operating quarter at LaRonde, combined with steady construction progress at our development projects, keeps us on track to deliver on our plans for significant gold production growth", said Sean Boyd, Vice-Chairman and Chief Executive Officer. "Exploration success at many of our development projects also puts us in a strong position to add to our already large gold reserve base over the next year", added Mr. Boyd.
Third quarter 2007 highlights include:
- Strong Operating Results - steady metal output and excellent cost control led to solid operating earnings and strong cashflow
- Low Costs - Low total cash costs per ounce(1) at LaRonde of minus $307
- Gold Production Growth - first of five new mines, Goldex, ahead of schedule
- Safe Workplace - Record 33 consecutive months without a lost time accident underground at LaRonde
- Significant Exploration Upside - continued to receive ore-grade intersections over mineable widths outside of currently known reserve/resource envelope at Pinos Altos, Kittila, and Meadowbank
In the first nine months of 2007, the Company recorded net income of $74.2 million, or $0.57 per share. In the corresponding period in 2006, Agnico-Eagle recorded net income of $119.5 million, or $1.05 per share.
Year to date earnings were negatively affected by a non-cash foreign currency translation loss of $32.0 million or $0.25 per share. Net of the translation loss, earnings fell by approximately $23 million due to the impact of a stronger Canadian dollar on operating costs, offset partly by a higher gold price. Year to date earnings per share were also diluted by the shares issued to acquire Cumberland.
In the first nine months of 2007, the Company recorded cash provided by operating activities of $185.8 million. This compares favourably to the prior period when cash provided by operating activities was $141.8 million. The increase in cash provided by operating activities was due almost entirely to working capital movements.
The Company's financial position remains strong with cash and cash equivalents of $427.6 million at September 30, 2007. The Company's cash position decreased $67.7 million in the third quarter as $141.7 million was invested in the Company's gold growth projects. However, Agnico-Eagle's cash position is expected to increase in the fourth quarter as the expiry of warrants in November should result in further proceeds of approximately $122 million.
Payable gold production(2) in the third quarter of 2007 was 55,830 ounces at total cash costs per ounce of minus $307. This compares with payable gold production of 59,603 ounces, at total cash costs per ounce of minus $709, in the third quarter of 2006. The increase in total cash costs per ounce in the third quarter of 2007 versus the prior period is mainly due to a stronger Canadian dollar, increased minesite costs and lower byproduct zinc revenues.
Forecast and Dividend Announcement
On December 10, 2007, the 2008 production and cost forecast is expected to be announced. At this time, the Company expects to provide an update on the six development projects including updated capital expenditure estimates incorporating more recent exchange rates. The Board of Directors is expected to make a decision regarding the 2007 dividend at that time. Exploration updates are also expected for several of the development projects prior to the February reserve and resource update.
Conference Call Tomorrow
The Company will host its quarterly conference call tomorrow, Thursday October 25 at 11:00am E.D.T. Management will review the Company's operating and financial results for the third quarter of 2007 and provide an update of its exploration and development activities.
Via Telephone:
To listen on the telephone, please dial (416) 644-3415 or 1 (800) 732-9307 toll free, at least five minutes before the scheduled start of the presentation.
Via Webcast:
Additionally, a live audio webcast of the presentation will be available on the Company's website homepage at www.agnico-eagle.com. The webcast along with presentation slides will be archived for 180 days on the website.
Replay archive:
The access phone number for the archived audio replay is 1 (877) 289-8525, passcode 21248116 followed by the number sign. It will be available from Thursday, October 25, 2007 at 1:30 pm until Thursday, November 1, 2007 11:59 pm.
LaRonde Mine - Strong Production and Cost Control Performance Continues
The LaRonde mill processed an average of 7,250 tonnes of ore per day in the third quarter of 2007, compared with an average of 7,270 tonnes per day in the corresponding period of 2006. LaRonde has now been operating at an average of approximately 7,300 tonnes per day for almost four years, continuing to demonstrate the reliability of this world class mine.
Minesite costs per tonne(3) were C$66 in the third quarter. These costs are higher than the C$63 per tonne experienced in the third quarter of 2006. The increase in costs was again partly due to accelerated lateral development and higher input costs for fuel, labour, chemical reagents, etc. as seen across the mining industry.
Minesite costs per tonne for the full year 2007 are expected to be on budget at approximately C$65, five percent higher than 2006. This increase is partly due to the accelerated development, but also due to industry cost escalation, offset somewhat by lower reagent consumption in the mill due to improvements in the copper-zinc circuit. Fourth quarter 2007 minesite costs per tonne are expected to decrease somewhat, compared to the third quarter of 2007, as the benefit of the accelerated development undertaken over the past several quarters is realized.
On a per ounce basis, net of byproduct credits, LaRonde's total cash costs per ounce remained very low by industry standards, at minus $307 in the third quarter. This compares with the results of the third quarter of 2006 when total cash costs per ounce were minus $709. The increase in total cash costs is due to a stronger Canadian dollar, increased minesite costs and lower byproduct revenues.
As a result of the historically high zinc prices, which have prevailed over the past several quarters, it is now expected that the mine life of LaRonde, mineable from the existing shaft and infrastructure, will be extended by a year or more. This is largely due to the mining of previously sub-economic ore adjacent to the hangingwall of the orebody. This lower grade zinc ore was not included in the original mining plan. The effect of mining this ore is to postpone the mining of gold-rich ore resulting in marginally lower gold and byproduct production annually, but maximizing the value of the orebody over its life.
Cash Position Remains Strong, Despite Large Investments in Gold Growth
Cash and cash equivalents decreased to $427.6 million at September 30, 2007 from the June 30, 2007 balance of $495.3 million. As expected, all of the Company's operating cash flow and a portion of its existing cash balance were reinvested in its gold growth projects. During the quarter, Agnico-Eagle added $49.9 million of cash provided by operating activities. Capital expenditures in the quarter totaled $141.7 million, including $56.0 million on the construction of Meadowbank, $28.6 million on Goldex, $16.8 million at Kittila, $15.5 million on the LaRonde Extension, $9.7 million at Pinos Altos and $6.5 million at Lapa. For the full year 2007, capital expenditures are expected to be approximately $450 million. Capital costs are higher than 2006 and higher than previous guidance due to the acquisition of the Meadowbank project in April 2007 and the approval of construction of the Pinos Altos project in August 2007.
The cash position is expected to increase in the fourth quarter as the expiry of warrants in November should result in further proceeds of approximately $122 million. With a large cash balance, strong cash flows, no long term debt, and substantially undrawn bank lines of $300 million, Agnico-Eagle is fully funded for the development and exploration of its pipeline of gold projects in Canada, Finland and Mexico.
Five New Gold Mines Under Construction
At the 100% owned Goldex mine project in northwestern Quebec, Agnico-Eagle commenced construction in July 2005. Proven and probable reserves of 1.7 million ounces of gold (22.9 million tonnes grading 2.3 grams per tonne are estimated to be sufficient for a ten year mine life with annual production averaging 170,000 ounces. With a large additional resource, the deposit remains open for expansion.
The Goldex production shaft is expected to be completed in November 2007. Approximately 35,000 tonnes of ore were extracted and stockpiled on surface during the third quarter. The total proven reserves in the surface stockpile now stand at approximately 222,000 tonnes, grading 2.0 grams per tonne from development ore. Overall, construction is ahead of schedule and the mine is expected to begin production during the second quarter of 2008.
Construction commenced at the 100% owned Kittila mine project in northern Finland in the second quarter of 2006. The project is expected to produce an average of 150,000 ounces of gold per year. The mine life is estimated to be 13 years. Kittila has probable gold reserves of 2.6 million ounces (16.0 million tonnes grading 5.1 grams per tonne). With a large additional resource, the deposit remains open for expansion.
Drilling from surface is ongoing to convert resources to reserves and to extend the overall envelope. Deeper exploration drilling is expected to begin from the new decline in the fourth quarter of 2007, opening up the entire area below the main Suuri zone for detailed exploration.
Surface overburden stripping for the main open pit is advanced with approximately 99,000 cubic metres moved in the quarter. Construction of the underground decline is on schedule and had advanced approximately 1,800 metres by the end of September 2007, including some other associated lateral development. The mining fleet has been ordered and foundation work in the processing plant is underway. Key components such as the SAG mill and autoclave are on schedule for delivery. Production is expected to begin in the third quarter of 2008.
At the 100% owned Lapa mine project in northwestern Quebec, the final phase of construction commenced in the second quarter of 2006. Probable gold reserves of 1.2 million ounces (3.9 million tonnes grading 9.1 grams per tonne) are expected to support estimated annual production of 125,000 ounces per year.
The shaft at Lapa has reached its final depth of 1,370 metres. The project is in changeover from shaft sinking to the permanent shaft facilities with lateral mine development scheduled to start within a month. Construction of the surface service facilities is underway.
At the 100% owned LaRonde mine in northwestern Quebec, construction commenced in the second quarter of 2006 on the infrastructure extension at depth. Proven and probable reserves of 5.2 million ounces (35.6 million tonnes grading 4.5 grams per tonne) are expected to support a mine life through 2021. Annual gold production post-2011, when the deeper ore is mined, is anticipated to average 320,000 ounces.
Mechanical installation for the internal hoist is well underway with the service hoist completed and the production hoist approximately 40% complete. The focus during the fourth quarter continues to be on underground infrastructure construction and detailed engineering. Shaft sinking for the new internal shaft is expected to begin this quarter. The same shaft sinking crews that successfully developed Lapa and Goldex are currently transitioning to LaRonde for this project.
At the 100% owned Pinos Altos mine project in northern Mexico, the property has probable gold reserves of 2.2 million ounces (20.0 million tonnes grading 3.5 grams per tonne). Additionally, the property contains a large silver reserve of over 65 million ounces (the same 20.0 million tonnes grading 102 grams per tonne). The project was approved for construction in August 2007. Average annual production is expected to be approximately 150,000 ounces of gold and over 2.0 million ounces of silver over an 11 year mine life.
Construction of the permanent camp is progressing as expected. The construction of a 2,800 metre underground exploration ramp commenced in March 2007 and has advanced 630 metres, while construction of a 900 metre light aircraft airstrip is complete.
Deeper exploration drilling is expected to begin from the decline in the fourth quarter of 2007, targeting the area below the main Santo Nino zone. With a large gold and silver resource outside of the reserve envelope, the deposit remains open for expansion.
Exploration drilling continues on the Mascota zone. This region, to the northwest of Santo Nino, is now being studied on the merits of being a separate mining operation, based on the assumption of a rapid accumulation of near surface gold reserves. The ore would possibly be processed via heap leach.
All the necessary land agreements with the four local ejidos have been established. Negotiations for additional surface rights with the underlying royalty holder are ongoing. If these negotiations are not successful, modifications to the proposed mine plan contained in the base case feasibility study will be implemented.
With the completion of the acquisition of Cumberland, Agnico-Eagle owns 100% of the Meadowbank project in Nunavut. Meadowbank has proven and probable gold reserves of 2.9 million ounces (21.3 million tonnes grading 4.2 grams per tonne). With a large additional gold resource, the deposit remains open for expansion. Initial gold production is anticipated by 2010. Annual gold production is estimated to average 400,000 ounces for the first four years and average 350,000 ounces per year over the life of the mine.
The exploration focus on Meadowbank during 2007 has been resource to reserve conversion in the vicinity of the open pit reserves, and resource exploration around the Goose South, Goose Island, Portage, Cannu and Vault zones. Further grassroots exploration, prospecting and diamond drilling has been performed on the large property position, largely to the north of the existing resource. An update on the most recent results will be disclosed before the end of the year.
The all-weather road construction is scheduled for completion before the end of this year. Approximately 80 kilometres of the 110 kilometre total have been completed to date. Detailed engineering and sourcing and acquisition of the major capital equipment are ongoing. The first pieces of the major capital equipment have already been delivered to the site.
---------------------------------------
(1) Total cash costs per ounce is a non-GAAP measure. For reconciliation
of total cash costs per ounce to production costs, as reported in the
financial statements, see Note 1 to the financial statements at the
end of this news release.
(2) Payable gold production means the quantity of a mineral produced
during a period contained in products that are sold by the Company,
whether such products are sold during the period or held as inventory
at the end of the period.
(3) Minesite costs per tonne is a non-GAAP measure. For reconciliation of
this measure to production costs, as reported in the financial
statements, see Note 1 to the financial statements at the end of this
news release.
About Agnico-Eagle
Agnico-Eagle is a long established Canadian gold producer with operations located in Quebec and exploration and development activities in Canada, Finland, Mexico and the United States. Agnico-Eagle's LaRonde Mine is Canada's largest gold deposit in terms of reserves. The Company has full exposure to higher gold prices consistent with its policy of no forward gold sales. It has paid a cash dividend for 25 consecutive years.
Forward-Looking Statements
The information in this press release has been prepared as at October 24, 2007. Certain statements contained in this press release constitute "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and forward looking information under the provisions of Canadian provincial securities laws. When used in this document, the words "anticipate", "expect", "estimate", "forecast", "planned", "projected" and similar expressions are intended to identify forward-looking statements or information.
Such statements and information include without limitation: statements regarding timing and amounts of capital expenditures and other assumptions; estimates of future reserves, resources, mineral production and sales; estimates of mine life; estimates of future mining costs, total cash costs per ounce, minesite costs and other expenses; estimates of future capital expenditures and other cash needs, and expectations as to the funding thereof; statements and information as to the projected development of certain ore deposits, including estimates of exploration, development and production and other capital costs, and estimates of the timing of such exploration, development and production or decisions with respect to such exploration, development and production; estimates of reserves and resources, and statements and information regarding anticipated future exploration and feasibility study results; the anticipated timing of events with respect to the Company's minesites; statements and information regarding the sufficiency of the Company's cash resources; and other statements and information regarding anticipated trends with respect to the Company's capital resources and results of operations. Such statements and information reflect the Company's views as at the date of this press release and are subject to certain risks, uncertainties and assumptions, and undue reliance should not be placed on such statements and information. Without limiting the foregoing, certain of the foregoing statements, primarily related to projects, are based on preliminary views of the Company with respect to, among other things, grade, tonnage, processing, mining methods, capital costs, and location of surface infrastructure and actual results and final decisions may be materially different from those currently anticipated. Many factors, known and unknown, could cause the actual results to be materially different from those expressed or implied by such statements and information. Such risks include, but are not limited to: the Company's dependence on the LaRonde mine, the volatility of prices of gold and other metals; uncertainty of mineral reserves, mineral resources, mineral grades and mineral recovery estimates; uncertainty of future production, capital expenditures, and other costs; currency fluctuations; financing of additional capital requirements; cost of exploration and development programs; mining risks; risks associated with foreign operations; the completion of successful negotiations with the royalty holder on certain surface rights and other interests relating to the Pinos Altos property; governmental and environmental regulation; the volatility of the Company's stock price; and risks associated with the Company's byproduct metal derivative strategies. For a more detailed discussion of such risks and other factors that may affect the Company's ability to achieve the expectations set forth in the forward-looking statements contained in this document, see Company's Annual Report on Form 20-F for the year ended December 31, 2006, as well as the Company's other filings with the Canadian Securities Administrators and the U.S. Securities and Exchange Commission. The Company does not intend, and does not assume any obligation, to update these forward-looking statements and information.
Note to Investors Regarding the Use of Non-GAAP Financial Measures
This press release presents certain measures, including "total cash cost per ounce" and "minesite cost per tonne", that are not recognized measures under United States generally accepted accounting principals ("US GAAP"). This data may not be comparable to data presented by other gold producers. For a reconciliation of these measures to the figures presented in the consolidated financial statements prepared in accordance with US GAAP see Note 1 to the financial statements attached to this press release and "Item 5. Operating and Financial Review and Prospects - Results of Operations - Production Costs" in the Company's Annual Report on Form 20-F filed with securities regulators in Canada and the United States. The Company believes that these generally accepted industry measures are realistic indicators of operating performance and useful in allowing year over year comparisons. However, both of these non-GAAP measures should be considered together with other data prepared in accordance with US GAAP, and these measures, taken by themselves, are not necessarily indicative of operating costs or cash flow measures prepared in accordance with US GAAP.
Detailed Mineral Reserve and Resource Data
Agnico-Eagle Mines Limited is reporting mineral resource and reserve estimates in accordance with the CIM guidelines for the estimation, classification and reporting of resources and reserves. Further information regarding the Company's mineral reserve and mineral resource estimates (other than in respect of the Meadowbank mine project and Pinos Altos mine project) can be found in the Company's Annual Report on Form 20-F for the year ended December 31, 2006 filed with Canadian securities regulators and with the United States Securities and Exchange Commission on March 30, 2007. Further information regarding the Pinos Altos mine project can be found in the Pinos Altos Gold-Silver Project, Chihuahua State, Mexico 2007 Technical Report on the Mineral Resources and Reserves filed with the Canadian securities regulators on September 24, 2007. Further information regarding the Meadowbank mine project can be found in the Meadowbank Gold Project Nunavut Technical Report filed with the Canadian securities regulators on March 31, 2005 (see www.sedar.com under "Cumberland Resources Limited").
Refer to the Company's press release dated February 21, 2007 for other information applicable to written disclosure of mineral reserves and resources.
Marc Legault, Agnico-Eagle's Vice President, Project Development, a qualified person for the purposes of the Canadian Securities Administrators' National Instrument 43-101, is the qualified person that supervised the preparation of the material that forms the basis for the disclosure of scientific and technical information set out in this press release.
Detailed Mineral Reserve and Resource Data
-------------------------------------------------------------------------
Au
Category (000's Tonnes
and Zone Au(g/t) Ag(g/t) Cu(%) Zn(%) oz.) (000's)
-------------------------------------------------------------------------
Proven Mineral
Reserve
-------------------------------------------------------------------------
LaRonde 2.76 80.96 0.36 4.06 513 5,779
-------------------------------------------------------------------------
Goldex 2.25 7 97
-------------------------------------------------------------------------
Meadowbank 4.8 470 3,020
-------------------------------------------------------------------------
Bousquet 6.30 17 86
-------------------------------------------------------------------------
Subtotal Proven
Mineral Reserve 3.49 1,007 8,982
-------------------------------------------------------------------------
Probable Mineral
Reserve
-------------------------------------------------------------------------
LaRonde 2.53 63.53 0.29 3.38 814 10,003
-------------------------------------------------------------------------
LaRonde
Extension 5.99 21.73 0.31 0.79 3,824 19,860
-------------------------------------------------------------------------
Kittila 5.08 2,616 16,022
-------------------------------------------------------------------------
Pinos Altos 3.47 102.33 2,224 19,957
-------------------------------------------------------------------------
Lapa 9.08 1,152 3,944
-------------------------------------------------------------------------
Goldex 2.29 1,682 22,813
-------------------------------------------------------------------------
Meadowbank 4.11 2,420 18,300
-------------------------------------------------------------------------
Subtotal
Probable
Mineral Reserve 4.13 14,732 99,962
-------------------------------------------------------------------------
Total Proven and
Probable
Mineral
Reserves 4.08 15,739 115,004
-------------------------------------------------------------------------
Tonnage amounts and contained metal amounts presented in the tables in
this news release have been rounded to the nearest thousand. Reserves are
not a sub-set of resources. The effective dates (with the exception of
Pinos Altos and Meadowbank) is February 21, 2007. The effective date of
the Pinos Altos's reserve is August 9, 2007. The effective date of the
Meadowbank reserve is December, 2005.
AGNICO-EAGLE MINES LIMITED
SUMMARIZED QUARTERLY DATA
(thousands of United States dollars, except where noted, unaudited)
Three months ended Nine months ended
September 30, September 30,
2007 2006 2007 2006
----------- ----------- ----------- -----------
Income and cash flows
LaRonde Mine
Revenues from
mining operations....... $104,812 $108,798 $323,477 $326,251
Production costs......... 44,936 36,456 123,924 105,210
----------- ----------- ----------- -----------
Gross profit (exclusive
of amortization
shown below)............ $59,876 $72,342 $199,553 $221,041
Amortization............. 7,578 6,119 21,600 18,224
----------- ----------- ----------- -----------
Gross profit............. $52,298 $66,223 $177,953 $202,817
----------- ----------- ----------- -----------
Net income for the
period.................. $11,452 $45,203 $74,183 $119,485
Net income per share
(basic)................. $0.08 $0.38 $0.57 $1.05
Net income per share
(diluted)............... $0.08 $0.37 $0.55 $1.02
Cash provided by
operating activities.... $49,946 $73,945 $185,844 $141,751
Cash provided by
(used in) investing
activities.............. $(144,428) $(61,531) $(248,964) $(125,907)
Cash provided by
(used in) financing
activities.............. $15,361 $2,268 $6,551 $294,173
Weighted average number
of common shares
outstanding - basic
(in thousands).......... 135,509 120,386 130,151 113,649
Tonnes of ore milled..... 667,238 669,026 2,018,487 1,987,456
Head grades:
Gold (grams per
tonne)................ 2.85 3.01 2.89 3.07
Silver (grams per
tonne)................ 75.00 75.90 76.00 77.00
Zinc................... 3.80% 4.43% 3.65% 4.16%
Copper................. 0.32% 0.39% 0.34% 0.37%
Recovery rates:
Gold................... 91.58% 92.34% 91.25% 91.88%
Silver................. 88.10% 88.30% 87.65% 87.50%
Zinc................... 86.20% 87.70% 86.30% 87.30%
Copper................. 84.90% 81.70% 85.30% 82.30%
Payable production:
Gold (ounces).......... 55,830 59,603 170,810 179,804
Silver (ounces
in thousands)......... 1,222 1,233 3,754 3,707
Zinc (tonnes).......... 18,609 22,068 54,015 61,318
Copper (tonnes)........ 1,647 1,884 5,327 5,527
Payable metal sold:
Gold (ounces).......... 55,797 57,326 170,400 187,969
Silver (ounces
in thousands)......... 1,192 1,137 3,957 3,512
Zinc (tonnes).......... 19,487 20,541 53,714 59,340
Copper (tonnes)........ 1,644 1,880 5,310 5,534
Realized prices:
Gold (per ounce)....... $748 $600 $697 $632
Silver (per ounce)..... $12.79 $12.39 $13.39 $12.09
Zinc (per tonne)....... $2,838 $3,525 $3,165 $3,345
Copper (per tonne)..... $7,910 $6,843 $7,342 $8,818
Total cash costs
(per ounce):
Production costs......... $804 $612 $726 $585
Less: Net byproduct
revenues................ (1,131) (1,340) (1,198) (1,224)
Inventory
adjustments........... 25 21 47 16
Accretion expense
and other............. (5) (2) (5) (2)
----------- ----------- ----------- -----------
Total cash costs
(per ounce)............. $(307) $(709) $(430) $(625)
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Minesite costs per
tonne milled (C$)....... $66 $63 $67 $61
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------Total cash costs (per ounce) and minesite costs per tonne milled are non-GAAP measures. For a reconciliation of these measures to the financial statements, see note 1 to these financial statements.
AGNICO-EAGLE MINES LIMITED
COMPARATIVE CONDENSED FINANCIAL INFORMATON
(thousands of United States dollars, unaudited)
As at As at
September December
30, 2007 31, 2006
----------- -----------
ASSETS
Current
Cash, cash equivalents and short
term investments.............................. $427,594 $458,617
Trade receivable............................... 74,619 84,987
Inventories:
Ore stockpiles............................... 5,023 2,330
Concentrates................................. 3,727 3,794
Supplies..................................... 15,010 11,152
Other current assets........................... 77,322 61,953
----------- -----------
Total current assets............................. 603,295 622,833
Other assets..................................... 15,494 7,737
Future income and mining tax assets.............. 19,131 31,059
Property, plant and mine development............. 1,893,634 859,859
----------- -----------
$2,531,554 $1,521,488
----------- -----------
----------- -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities....... $92,596 $42,538
Dividends payable.............................. 647 15,166
Income taxes payable........................... - 14,231
----------- -----------
Total current liabilities........................ 93,243 71,935
----------- -----------
Reclamation provision and other liabilities...... 36,727 27,457
----------- -----------
Future income and mining tax liabilities......... 507,660 169,691
----------- -----------
Shareholders' equity
Common shares
Authorized - unlimited
Issued - 135,893,339 (December 31, 2006
- 121,025,635)................................ 1,791,777 1,230,654
Stock options.................................... 22,374 5,884
Warrants......................................... 14,653 15,723
Contributed surplus.............................. 15,128 15,128
Retained earnings................................ 72,711 3,015
Accumulated other comprehensive loss............. (22,719) (17,999)
----------- -----------
Total shareholders' equity....................... 1,893,924 1,252,405
----------- -----------
$2,531,554 $1,521,488
----------- -----------
----------- -----------
AGNICO-EAGLE MINES LIMITED
COMPARATIVE CONDENSED FINANCIAL INFORMATON
(thousands of United States dollars,
except share and per share amounts, unaudited)
Three months ended Nine months ended
September 30, September 30,
2007 2006 2007 2006
----------- ----------- ----------- -----------
REVENUES
Revenues from mining
operations.............. $104,812 $108,798 $323,477 $326,251
Interest and sundry
income.................. 7,448 12,039 18,793 16,644
Gain on sale of
available-for-sale
securities.............. 886 1,062 4,088 22,975
----------- ----------- ----------- -----------
113,146 121,899 346,358 365,870
COSTS AND EXPENSES
Production............... 44,936 36,456 123,924 105,210
Loss on derivative
financial instruments... - 967 5,829 13,012
Exploration and
corporate development... 3,792 8,154 18,658 20,806
Amortization............. 7,578 6,119 21,600 18,224
General and
administrative.......... 7,744 5,853 24,420 16,672
Provincial capital tax... 2,008 729 4,508 1,626
Interest................. 941 349 2,662 1,923
Foreign currency
translation loss........ 25,243 1,037 32,021 9,555
----------- ----------- ----------- -----------
Income before income,
mining and federal
capital taxes........... 20,904 62,235 112,736 178,842
Income and mining
tax expense............. 9,452 17,032 38,553 59,357
----------- ----------- ----------- -----------
Net income for the
period.................. $11,452 $45,203 $74,183 $119,485
----------- ----------- ----------- -----------
Net income per share
- basic................. $0.08 $0.38 $0.57 $1.05
----------- ----------- ----------- -----------
Net income per share
- diluted............... $0.08 $0.37 $0.55 $1.02
----------- ----------- ----------- -----------
Weighted average number
of shares outstanding
(in thousands)
Basic.................. 135,509 120,386 130,151 113,649
Diluted................ 140,280 123,822 134,922 117,086
AGNICO-EAGLE MINES LIMITED
COMPARATIVE CONDENSED FINANCIAL INFORMATION
(thousands of United States dollars, unaudited)
Three months ended Nine months ended
September 30, September 30,
2007 2006 2007 2006
----------- ----------- ----------- -----------
Operating activities
Net income for the
period.................. $11,452 $45,203 $74,183 $119,485
Add (deduct) items
not affecting cash:
Amortization........... 7,578 6,119 21,600 18,224
Future income and
mining taxes.......... 7,960 13,275 30,221 45,109
Unrealized loss on
derivative
contracts............. - (3,545) 5,018 4,571
Gain on sale of
available-for-sale
securities............ (886) (1,062) (4,088) (22,975)
Gain on Contact
Diamond Corporation... - (7,361) - (7,361)
Amortization of
deferred costs and
other................. 25,888 5,150 49,410 24,706
Changes in non-cash
working capital
balances
Trade receivables...... 1,892 16,782 10,368 (23,778)
Income taxes
payable............... (17,121) 4,216 (14,231) 14,474
Other taxes
recoverable........... (5,524) 415 (8,731) 4,355
Inventories............ 3,959 (871) (2,049) (3,260)
Other current
assets................ (7,061) (6,344) (15,887) (22,335)
Accounts payable and
accrued liabilities... 21,809 1,968 40,030 (7,221)
Interest payable....... - - - (2,243)
----------- ----------- ----------- -----------
Cash provided by
operating activities.... 49,946 73,945 185,844 141,751
----------- ----------- ----------- -----------
Investing activities
Additions to property,
plant and mine
development............. (141,721) (41,395) (311,111) (95,903)
Acquisition of
Cumberland Resources
Ltd., net of cash
acquired of $96,043
(note 9)................ - - 84,207 -
Acquisitions,
investments and other... (2,707) (20,136) (22,060) (30,004)
----------- ----------- ----------- -----------
Cash provided by
(used) in investing
activities.............. (144,428) (61,531) (248,964) (125,907)
----------- ----------- ----------- -----------
Financing activities
Dividends paid........... - - (13,406) (3,166)
Short-term debt.......... - (7,232) -
Proceeds from common
shares issued........... 15,361 9,649 19,957 312,105
Share issue costs........ - (149) - (14,766)
----------- ----------- ----------- -----------
Cash provided by
(used in) financing
activities.............. 15,361 2,268 6,551 294,173
----------- ----------- ----------- -----------
Effect of exchange
rate changes on
cash and cash
equivalents............. 11,381 730 25,546 (116)
----------- ----------- ----------- -----------
Net increase in cash
and cash equivalents
during the period....... (67,740) 15,412 (31,023) 309,901
Cash and cash
equivalents,
beginning of period..... 495,334 415,471 458,617 120,982
----------- ----------- ----------- -----------
Cash and cash
equivalents,
end of period........... $427,594 $430,883 $427,594 $430,883
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Other operating
cash flow information:
Interest paid during
the period.............. $509 $117 $1,638 $3,436
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Income, mining and
capital taxes paid
during the period....... $20,407 $264 $23,544 $1,232
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Note 1: Reconciliation of Total Cash Costs Per Ounce and Minesite Costs
Per Tonne
Total Cash Costs Per Ounce
Three Three Nine Nine
months months months months
ended ended ended ended
(thousands of dollars, September September September September
except where noted) 30, 2007 30, 2006 30, 2007 30, 2006
------------------------- ----------- ----------- ----------- -----------
Production costs per
Consolidated
Statements of Income.... $44,936 $36,456 $123,924 $105,210
Adjustments:
Byproduct revenues..... (63,165) (74,192) (204,653) (207,419)
Inventory
adjustment(i)......... 1,396 (4,430) 8,078 (9,767)
Non-cash reclamation
provision............. (293) (116) (837) (333)
----------- ----------- ----------- -----------
Cash operating costs..... $(17,126) $(42,282) $(73,488) $(112,309)
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Gold production
(ounces)................ 55,830 59,603 170,810 179,804
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Total cash costs
(per ounce)(ii)......... $(307) $(709) $(430) $(625)
----------- ----------- ----------- -----------
Minesite Costs Per Tonne
Three Three Nine Nine
months months months months
ended ended ended ended
(thousands of dollars, September September September September
except where noted) 30, 2007 30, 2006 30, 2007 30, 2006
------------------------- ----------- ----------- ----------- -----------
Production costs per
Consolidated
Statements of Income.... $44,936 $36,456 $123,924 $105,210
Adjustments:
Inventory
adjustments(iii)...... (2,576) 1,250 2,319 2,812
Non-cash reclamation
provision............. (293) (116) (837) (333)
----------- ----------- ----------- -----------
Minesite operating
costs (US$)............. 42,067 $37,590 125,406 $107,689
----------- ----------- ----------- -----------
Minesite operating
costs (C$).............. 44,138 $42,153 134,857 $121,591
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Tonnes of ore milled
(000's tonnes).......... 667 669 2,018 1,987
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Minesite costs per
tonne (C$)(iv).......... $66 $63 $67 $61
----------- ----------- ----------- -----------
---------
Notes:
(i) Under the Company's revenue recognition policy, revenue is
recognized on concentrates when legal title passes. Since total
cash costs are calculated on a production basis, this inventory
adjustment reflects the sales margin on the portion of concentrate
production for which revenue has not been recognized in the
period.
(ii) Total cash costs is not a recognized measure under US GAAP and
this data may not be comparable to data presented by other gold
producers. The Company believes that this generally accepted
industry measure is a realistic indicator of operating performance
and is useful in allowing year over year comparisons. As
illustrated in the table above, this measure is calculated by
adjusting Production Costs as shown in the Consolidated Statements
of Income and Comprehensive Income for net byproduct revenues,
royalties, inventory adjustments and asset retirement provisions.
This measure is intended to provide investors with information
about the cash generating capabilities of the Company's mining
operations. Management uses this measure to monitor the
performance of the Company's mining operations. Since market
prices for gold are quoted on a per ounce basis, using this per
ounce measure allows management to assess the mine's cash
generating capabilities at various gold prices. Management is
aware that this per ounce measure of performance can be impacted
by fluctuations in byproduct metal prices and exchange rates.
Management compensates for the limitation inherent with this
measure by using it in conjunction with the minesite costs per
tonne measure (discussed below) as well as other data prepared in
accordance with US GAAP. Management also performs sensitivity
analyses in order to quantify the effects of fluctuating metal
prices and exchange rates.
(iii) This inventory adjustment reflects production costs associated
with unsold concentrates.
(iv) Minesite costs per tonne is not a recognized measure under US GAAP
and this data may not be comparable to data presented by other
gold producers. As illustrated in the table above, this measure is
calculated by adjusting Production Costs as shown in the
Consolidated Statements of Income and Comprehensive Income for
inventory and hedging adjustments and asset retirement provisions
and then dividing by tonnes processed through the mill. Since
total cash costs data can be affected by fluctuations in byproduct
metal prices and exchange rates, management believes minesite
costs per tonne provides additional information regarding the
performance of mining operations and allows management to monitor
operating costs on a more consistent basis as the per tonne
measure eliminates the cost variability associated with varying
production levels. Management also uses this measure to determine
the economic viability of mining blocks. As each mining block is
evaluated based on the net realizable value of each tonne mined,
in order to be economically viable the estimated revenue on a per
tonne basis must be in excess of the minesite costs per tonne.
Management is aware that this per tonne measure is impacted by
fluctuations in production levels and thus uses this evaluation
tool in conjunction with production costs prepared in accordance
with US GAAP. This measure supplements production cost information
prepared in accordance with US GAAP and allows investors to
distinguish between changes in production costs resulting from
changes in production versus changes in operating performance.
(v) Payable gold production means the quantity of gold produced during
a period contained in products that are sold by the Company,
whether such products are sold during the period or held as
inventory at the end of the period.
SOURCE Agnico-Eagle Mines Limited
-0- 10/24/2007
/CONTACT: David Smith, VP, Investor Relations, (416) 947-1212/
(AEM. AEM)
CO: Agnico-Eagle Mines Limited
ST: Ontario
IN: MNG
SU: ERN CCA
SB
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5582 10/24/2007 17:00 EDT http://www.prnewswire.com