Stock Symbol: AEM (NYSE and TSX)
(All amounts expressed in U.S. dollars unless otherwise noted)
TORONTO, May 8 /CNW/ - Agnico-Eagle Mines Limited ("Agnico-Eagle" or the
"Company") today reported quarterly net income of $28.9 million, or $0.20 per
share for the first quarter of 2008. This result includes a non-cash foreign
currency translation gain of $8.9 million, or $0.06 per share. Additionally,
the non-cash stock option expense totaled $12.8 million, or $0.09 per share in
the first quarter. In the first quarter of 2007, the Company reported net
income of $24.9 million, or $0.21 per share.
First quarter cash provided by operating activities decreased slightly to
$53.8 million from $56.1 million in the first quarter of 2007, as sharply
higher gold prices were offset by lower gold production and increased
exploration and tax expenditures.
"Strong financial results were achieved once again this quarter from our
LaRonde operation. With the new Goldex mine starting operations in April and
our new Kittila mine expected to open this September, we expect to see
improving cash flows over the next several quarters", said Sean Boyd,
Vice-Chairman and Chief Executive Officer. "In addition, we remain excited
about the potential to continue to increase our gold reserves and resources in
2008 and the possibilities this may bring for further production growth at our
existing projects", added Mr. Boyd.
First quarter 2008 highlights include:
- Strong Operating Results - good metal output and cost control
contributed to solid operating earnings and strong cash flow
- Low Costs - Low total cash costs per ounce(1) at LaRonde of minus
$399
- Progress On Gold Production Growth - new Goldex gold mine now
commissioning. Kittila gold mine project on track for 2008 production
- Significant Exploration Upside - continuing to receive encouraging
results outside of currently known reserve/resource envelopes at
Pinos Altos and Kittila
The Company's financial position remains strong with cash and cash
equivalents of $294.4 million at March 31, 2008 and a substantially undrawn
$300 million five-year unsecured revolving credit facility. The Company's cash
position decreased $101.6 million in the first quarter largely due to the
$158.0 million invested in the Company's gold growth projects during the
quarter.
Payable gold production(2) in the first quarter of 2008 was 50,892 ounces
at total cash costs per ounce of minus $399. This compares with payable gold
production of 58,588 ounces, at total cash costs per ounce of minus $332, in
the first quarter of 2007. The decrease in production was largely due to lower
gold grades mined as a result of the mining of currently economic, but lower
grade, parts of the orebody.
For the full year, gold production from LaRonde, Goldex and Kittila is
still forecast to total 358,000 ounces.
Shareholders' Meeting Tomorrow
The Company will host its Annual and Special Meeting of Shareholders on
Friday, May 9, 2008 at 11:00 a.m. (E.D.T.) at the King Edward Hotel, 37 King
St. E., in Toronto, Canada. Management will review the Company's financial
results for the first quarter 2008 and provide an update of its exploration
and development activities.
Via Webcast:
A live audio webcast of the meeting will be available on the Company's
website homepage at www.agnico-eagle.com.
Via Telephone:
For those preferring to listen by telephone, please dial 416-644-3417 or
Toll Free 1-800-732-9307. To ensure your participation, please call
approximately five minutes prior to the scheduled start of the call.
Replay archive:
Please dial the toll-free access number 1-877-289-8525, passcode 21259717
followed by the number sign.
The conference call will be replayed from Friday, May 9, 2008 at 1:30 PM
(E.D.T.) to Friday, May 16, 2008 11:59 PM (E.D.T.).
The webcast along with presentation slides will be archived for 180 days
on the website.
LaRonde Mine - Strong Production and Cost Control Performance Continues
The LaRonde mill processed an average of 7,431 tonnes of ore per day in
the first quarter of 2008, compared with an average of 7,461 tonnes per day in
the first quarter of 2007. LaRonde has now been operating at an average of
more than 7,300 tonnes per day for more than four years, continuing to
demonstrate the reliability of this world class mine.
Minesite costs per tonne(3) were approximately C$65 in the first quarter.
These costs are slightly higher than the C$64 per tonne experienced in the
first quarter of 2007, largely due to the general increase in costs in the
industry. The forecast for minesite costs per tonne at LaRonde continue to be
C$66 for the full year, again largely due to industry-wide cost pressures.
On a per ounce basis, net of byproduct credits, LaRonde's total cash
costs per ounce remained very low by industry standards, at minus $399 in the
first quarter. This compares with the results of the first quarter of 2007
when total cash costs per ounce were minus $332. The decrease in total cash
costs is due to higher byproduct revenues resulting from higher realized
prices for silver and copper and increased zinc production, offset slightly by
lower zinc prices.
Cash Position Remains Strong, Despite Large Investments in Gold Growth
Cash and cash equivalents decreased to $294.4 million at March 31, 2008
from the December 31, 2007 balance of $396.0 million. As expected, all of the
Company's operating cash flow and a portion of its existing cash balances were
reinvested in its gold growth projects. During the quarter, Agnico-Eagle added
$53.8 million of cash provided by operating activities. Capital expenditures
in the quarter totaled $158.0 million, including $40.3 million on the
construction of Meadowbank, $25.4 million on Goldex, $38.1 million at Kittila,
$9.4 million on the LaRonde Extension, $22.4 million at Pinos Altos and
$14.4 million at Lapa.
The Company's cash position is anticipated to decrease further in 2008 as
the Company expects to spend more than $550 million on capital expenditures
related to its development projects, as previously disclosed in Agnico-Eagle's
press release of December 10, 2007. This capital expenditure estimate was
based upon foreign currency exchange rates of $1.146 C$/US$ and
1.288 US$/Euro. At current exchange rates, and considering industry-wide cost
escalation, this capital expenditure estimate is likely to increase.
However, with large cash balances, 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 existing pipeline of gold
projects in Canada, Finland and Mexico.
New Goldex Mine Commissioning; Four More New Gold Mines Under
Construction
At the 100% owned Goldex mine in northwestern Quebec, proven and probable
reserves are 1.6 million ounces of gold (23.1 million tonnes grading 2.2 grams
per tonne). Current reserves are estimated to be sufficient for a nine year
mine life with expected annual production averaging 175,000 ounces. With a
large additional resource, the mine remains open for expansion. Please see the
table titled "Detailed Mineral Reserve and Resource Data - December 31, 2007"
later in this press release for further detail.
The initial ore was fed into the Goldex mill in the third week of April
and commissioning is underway. The mill is currently operating at
approximately 4,400 tonnes per day and the initial gold pour was performed on
May 7, 2008. Commercial production (70% capacity for 30 consecutive days) is
expected to be declared in mid-2008. The full production rate of 6,900 tonnes
per day is expected by September 2008. Current production is sourced from the
surface stockpile of approximately 254,000 tonnes (grading 2.02 grams per
tonne).
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 over its estimated mine life of
13 years. Kittila has probable gold reserves of 3.0 million ounces
(18.2 million tonnes grading 5.1 grams per tonne).
Most of the major components of the semi-autogenous, or SAG, mill have
been delivered to site and mechanical installation has begun. The interior
brick work on the autoclave is nearing completion and piping has started. The
plant is on schedule for an August 2008 start up of the grinding and flotation
circuits, while the pressure oxidation circuit is expected to begin operation
this September. Overall, pit stripping, infrastructure construction and
equipment delivery at Kittila are on schedule for the September 2008 mine
start up.
Drilling from surface is ongoing to convert resources to reserves and to
extend the overall envelope. Currently four surface drills and one underground
drill are in operation. A fifth surface drill will be added later this month.
Three drills have been working on the resource to reserve conversion program
while two have been focusing on the deep exploration program.
Some results from the deep exploration program have been previously
released but these results have not been included in the current reserves or
resources (see press releases on February 15, 2008 and May 9, 2007). It is
expected that the assays of more recent drill holes will be received by
mid-year 2008, when a further exploration and resource update is planned.
Considering the growth in reserves and resources to date, the Company has
begun to contemplate future increases to the production rate and also methods
to access the deeper mineralization at Kittila.
At the 100% owned Lapa mine project in northwestern Quebec, the final
phase of construction commenced in the second quarter of 2006. Proven and
probable gold reserves of 1.1 million ounces (3.8 million tonnes grading
8.9 grams per tonne) are expected to support estimated annual production of
125,000 ounces per year over an anticipated mine life of seven years.
Lateral and vertical raise development is well underway with a lateral
advance of more than 1,600 metres completed by the end of the first quarter.
Construction of the surface service facilities is proceeding well. Initial
production from Lapa is expected to begin in mid-2009.
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 5.0 million ounces (34.9 million tonnes
grading 4.4 grams per tonne) are expected to support a mine life through 2021.
Annual gold production is anticipated to average 340,000 ounces over the
remaining 14 year mine life.
During the first quarter, the winze excavation reached the Level 215
station (2150 metres below surface) where ground support and concrete work was
completed at the brow. The first bench in the shaft was blasted in March 2008.
The blasting of the waste silo collar and the installation of the steel,
including liners of the silo, were completed in March 2008. The construction
of the cooling facility and electrical substation on Level 170 are ongoing.
At the 100% owned Pinos Altos mine project in northern Mexico, the
property has probable gold reserves of 2.5 million ounces (24.7 million tonnes
grading 3.2 grams per tonne). Additionally, the property contains a large
silver reserve of over 73.1 million ounces (from the same 24.7 million tonnes
grading 92.2 grams per tonne). The project was approved for construction in
August 2007. Average annual production is expected to be approximately 190,000
ounces of gold over an estimated 12 year mine life with start-up expected in
mid-2009.
All the necessary land agreements with the four local ejidos have been
established and in April 2008 the Company received official recognition as a
"socially responsible company" from the State of Chihuahua for its community
efforts.
The construction of a 2,800 metre underground exploration ramp commenced
in March 2007 and has advanced approximately 1,200 metres. Additionally, the
development of the production decline has advanced approximately 450 metres
and site preparation for the start of surface construction is underway. The
first pieces of the surface mining fleet have been delivered and
pre-production stripping of the Santo Nino pit has commenced.
Surface and underground drilling on the main Pinos Altos property also
continued during the first quarter with early results continuing to support
the effort to convert resources to reserves and to extend the known
mineralized boundaries, particularly at Cerro Colorado.
Exploration drilling also continues on the Creston/Mascota area. This
region, approximately 10 kilometres northwest of Santo Nino, currently has an
inferred gold resource of 7.7 million tonnes grading 1.4 grams per tonne gold
and 16.2 grams per tonne silver. The resource could possibly be processed via
heap leach although a milling option is also being contemplated. An initial
scoping study, on what could be a stand-alone mining operation, is expected to
be completed by the end of 2008.
Negotiations for additional surface rights with the underlying royalty
holder are ongoing. If these negotiations are not successful, modifications to
the proposed mining sequence in the base case feasibility study may be
implemented and the construction schedule may be delayed as a result.
Agnico-Eagle's 100% owned Meadowbank project in Nunavut has probable gold
reserves of 3.5 million ounces (29.3 million tonnes grading 3.7 grams per
tonne). With a large additional gold resource, the project remains open for
expansion. Initial gold production is anticipated by January 2010. Annual gold
production is currently estimated to average 360,000 ounces over the estimated
nine year life of the mine.
The all-weather road from the deep-water port at Baker Lake to the
Meadowbank project site was substantially completed in the first quarter of
2008. Construction of the permanent camp facilities is underway with
approximately 64 beds available at the end of the first quarter 2008. Detailed
engineering, 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.
Surface diamond drilling has resumed with four rigs in operation. The
immediate focus is to confirm the gold mineralization between the Goose Island
and Portage Zones. Additionally, targets include resource conversion at Goose
Island and Goose South. Total exploration drilling in 2008 is expected to
total approximately 25,000 metres. Surface prospecting is also planned for the
large 49,000 hectare property position to follow up on approximately 40 other
known gold occurrences recorded by the previous owner of the property, as well
as anomalous base metal showings discovered late last year. To this end, a new
exploration camp with 82 beds is expected to be constructed this May,
approximately 10 kilometres south of the mine site.
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 26 consecutive years.
<<
AGNICO-EAGLE MINES LIMITED
SUMMARIZED QUARTERLY DATA
(thousands of United States dollars, except where noted,
US GAAP basis)
(Unaudited)
Three months ended
------------------
March 31,
---------
2008 2007
---- ----
Income and cash flows
Revenues from mining operations............. $119,134 $100,730
Production costs............................ 43,651 36,178
----------- -----------
Gross profit (exclusive of
amortization shown below).................. $75,483 $64,552
Amortization................................ 7,030 6,928
----------- -----------
Gross profit................................ $68,453 $57,624
----------- -----------
----------- -----------
Net income for the period................... $28,908 $24,922
Net income per share (basic)................ $0.20 $0.21
Net income per share (diluted).............. $0.20 $0.20
Cash provided by operating activities....... $53,824 $56,066
Cash used in investing activities........... $(160,771) $(79,294)
Cash provided by (used in) financing
activities................................. $6,484 $(10,663)
Weighted average number of common
shares outstanding
- basic (in thousands)..................... 143,372 121,159
Tonnes of ore milled........................ 676,182 671,484
Head grades:
Gold (grams per tonne).................... 2.60 3.00
Silver (grams per tonne).................. 64.62 84.40
Zinc...................................... 3.83% 3.71%
Copper.................................... 0.28% 0.39%
Recovery rates:
Gold...................................... 90.04% 90.66%
Silver.................................... 85.97% 87.40%
Zinc...................................... 88.80% 85.30%
Copper.................................... 85.18% 84.80%
Payable production:
Gold (ounces)............................. 50,892 58,588
Silver (ounces in thousands).............. 1,026 1,397
Zinc (tonnes)............................. 19,467 17,944
Copper (tonnes)........................... 1,453 1,990
Payable metal sold:
Gold (ounces)............................. 51,596 56,758
Silver (ounces in thousands).............. 1,018 1,624
Zinc (tonnes)............................. 18,710 17,767
Copper (tonnes)........................... 1,421 1,978
Realized prices (US$):
Gold (per ounce).......................... $1,089 $669
Silver (per ounce)........................ $19.91 $13.82
Zinc (per tonne).......................... $2,530 $2,798
Copper (per tonne)........................ $10,559 $6,090
Total cash costs (per ounce) (US$):
Production costs............................ $858 $617
Less: Net byproduct revenues................ (1,237) (1,071)
Inventory adjustments..................... (14) 126
Accretion expense and other............... (6) (4)
----------- -----------
Total cash costs
(per ounce)(1)............................. $(399) $(332)
----------- -----------
----------- -----------
Minesite costs per tonne milled (C$)(1)..... $65 $64
----------- -----------
----------- -----------
(1) Total cash costs (per ounce) and minesite costs per tonne milled are
non-GAAP measures. For a reconciliation of these measures to
production costs in the financial statements, see note 1 to these
financial statements.
AGNICO-EAGLE MINES LIMITED
CONSOLIDATED BALANCE SHEETS
(thousands of United States dollars, US GAAP basis)
(Unaudited)
As at As at
March 31, December 31,
--------- ------------
2008 2007
---- ----
ASSETS
Current
Cash and cash equivalents................. $294,419 $396,019
Metals awaiting settlement................ 93,525 79,419
Inventories:
Ore stockpiles........................... 4,702 5,647
Concentrates............................. 2,635 1,913
Supplies................................. 15,342 15,637
Other current assets...................... 110,495 107,459
----------- -----------
Total current assets........................ 521,118 606,094
Other assets................................ 16,127 16,436
Future income and mining tax assets......... 24,181 5,905
Property, plant and mine development........ 2,258,058 2,107,063
----------- -----------
$2,819,484 $2,735,498
----------- -----------
----------- -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued
liabilities.............................. $125,516 $108,227
Dividends payable......................... 438 26,280
Income taxes payable...................... 4,648 -
----------- -----------
Total current liabilities................... 130,602 134,507
----------- -----------
Reclamation provision and other
liabilities................................ 57,990 57,941
----------- -----------
Future income and mining
tax liabilities............................ 505,283 484,116
----------- -----------
Shareholders' equity
Common shares
Authorized - unlimited
Issued - 143,690,233
(December 31, 2007 - 142,403,379)......... 1,972,399 1,931,667
Stock options............................... 29,708 23,573
Contributed surplus......................... 15,166 15,166
Retained earnings........................... 141,148 112,240
Accumulated other comprehensive loss........ (32,812) (23,712)
----------- -----------
Total shareholders' equity.................. 2,125,609 2,058,934
----------- -----------
$2,819,484 $2,735,498
----------- -----------
----------- -----------
AGNICO-EAGLE MINES LIMITED
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(thousands of United States dollars except share
and per share amounts, US GAAP basis)
(Unaudited)
Three months ended
------------------
March 31,
---------
2008 2007
---- ----
REVENUES
Revenues from mining operations............. $119,134 $100,730
Interest and sundry income.................. 4,115 5,274
Gain on sale of available-for-sale
securities................................. 406 1,865
----------- -----------
123,655 107,869
COSTS AND EXPENSES
Production.................................. 43,651 36,178
Loss on derivative financial instruments.... - 6,128
Exploration and corporate development....... 8,898 5,829
Amortization................................ 7,030 6,928
General and administrative.................. 19,868 9,053
Provincial capital tax...................... 869 1,062
Interest.................................... 1,054 751
Foreign currency loss (gain)................ (8,889) (1,267)
----------- -----------
Income before income, mining and
federal capital taxes...................... 51,174 43,207
Income and mining tax expense............... 22,266 18,285
----------- -----------
Net income for the period................... $28,908 $24,922
----------- -----------
----------- -----------
Net income per share - basic................ $0.20 $0.21
----------- -----------
----------- -----------
Net income per share - diluted.............. $0.20 $0.20
----------- -----------
----------- -----------
Weighted average number of shares
outstanding (in thousands)
Basic..................................... 143,372 121,159
Diluted................................... 144,375 125,649
AGNICO-EAGLE MINES LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(thousands of United States dollars, US GAAP basis)
(Unaudited)
Three months ended
------------------
March 31,
---------
2008 2007
---- ----
Operating activities
Net income for the period................... $28,908 $24,922
Add (deduct) items not affecting cash:
Amortization.............................. 7,030 6,928
Future income and mining taxes............ 15,699 16,330
Unrealized loss on derivative contracts... - 5,723
Gain on sale of available-for-sale
securities............................... (406) (1,865)
Amortization of deferred costs and other.. 3,609 4,449
Changes in non-cash working capital balances
Metals awaiting settlement................ (14,106) 9,807
Income taxes payable...................... 4,648 3,191
Other taxes recoverable................... - 3,169
Inventories............................... 147 (2,591)
Other current assets...................... (8,994) (7,053)
Accounts payable and accrued liabilities.. 17,289 (6,944)
----------- -----------
Cash provided by operating activities....... 53,824 56,066
----------- -----------
Investing activities
Additions to property, plant and
mine development........................... (158,030) (62,974)
Acquisition, investments and other.......... (2,741) (16,320)
----------- -----------
Cash used in investing activities........... (160,771) (79,294)
----------- -----------
Financing activities
Dividends paid.............................. (23,779) (13,406)
Proceeds from common shares issued.......... 30,263 2,743
----------- -----------
Cash provided by (used in) financing
activities................................. 6,484 (10,663)
----------- -----------
Effect of exchange rate changes on
cash and cash equivalents.................. (1,137) 2,889
----------- -----------
Net increase in cash and cash
equivalents during the period.............. (101,600) (31,002)
Cash and cash equivalents,
beginning of period........................ 396,019 458,617
----------- -----------
Cash and cash equivalents, end of period.... $294,419 $427,615
----------- -----------
----------- -----------
Other operating cash flow information:
Interest paid during the period............. $683 $589
----------- -----------
----------- -----------
Income, mining and capital taxes
paid during the period..................... - $25
----------- -----------
----------- -----------
Note 1: Reconciliation of Total Cash Costs Per Ounce and Minesite Costs
-----------------------------------------------------------------------
Per Tonne
---------
(thousands of dollars, except where noted)
------------------------------------------
Three months Three months
------------ ------------
ended March 31, ended March 31,
--------------- ---------------
2008 2007
---- ----
Production costs per Consolidated
Statements of Income $43,651 $36,178
Adjustments:
Byproduct revenues (62,943) (62,744)
Inventory adjustment(i) (730) 7,400
Non-cash reclamation provision (306) (263)
--------------- ---------------
Cash operating costs $(20,328) $(19,429)
--------------- ---------------
Gold production (ounces) 50,892 58,588
--------------- ---------------
Total cash costs (per ounce)(ii) $(399) $(332)
--------------- ---------------
(thousands of dollars, except where noted)
------------------------------------------
Three months Three months
------------ ------------
ended March 31, ended March 31,
--------------- ---------------
2008 2007
---- ----
Production costs per Consolidated
Statements of Income $43,651 $36,178
Adjustments:
Inventory adjustments(iii) 999 1,001
Non-cash reclamation provision (306) (263)
--------------- ---------------
Minesite operating costs (US$) 44,344 $36,916
--------------- ---------------
Minesite operating costs (C$) 43,995 $42,682
--------------- ---------------
Tonnes of ore milled (000's tonnes) 676 672
--------------- ---------------
Minesite costs per tonne (C$)(iv) $65 $64
--------------- ---------------
----------------
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 indication 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.
Detailed Mineral Reserve and Resource Data - December 31, 2007
-------------------------------------------------------------------------
Au
Category and Zone Au Ag Cu Zn (000's Tonnes
(g/t) (g/t) (%) (%) oz.) (000's)
-------------------------------------------------------------------------
Proven Mineral Reserve
-------------------------------------------------------------------------
Goldex 2.23 18 250
-------------------------------------------------------------------------
Lapa 10.65 1 2.8
-------------------------------------------------------------------------
LaRonde 2.77 73.80 0.33 3.81 416 4,672
-------------------------------------------------------------------------
Subtotal Proven Mineral
Reserve 2.75 435 4,924
-------------------------------------------------------------------------
Probable Mineral Reserve
-------------------------------------------------------------------------
Goldex 2.20 1,616 22,849
-------------------------------------------------------------------------
Kittila 5.12 2,996 18,205
-------------------------------------------------------------------------
Lapa 8.86 1,070 3,756
-------------------------------------------------------------------------
LaRonde 4.67 34.61 0.30 1.67 4,542 30,225
-------------------------------------------------------------------------
Meadowbank 3.67 3,453 29,261
-------------------------------------------------------------------------
Pinos Altos 3.21 92.21 2,547 24,657
-------------------------------------------------------------------------
Subtotal Probable Mineral
Reserve 3.91 16,224 128,952
-------------------------------------------------------------------------
Total Proven and Probable
Mineral Reserves 3.87 16,659 133,877
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Category and Zone Au Ag Cu Zn Tonnes
(g/t) (g/t) (%) (%) (000's)
-------------------------------------------------------------------------
Bousquet 5.63 1,704
-------------------------------------------------------------------------
Ellison 5.68 415
-------------------------------------------------------------------------
Goldex 2.75 304
-------------------------------------------------------------------------
Kittila 3.03 5,416
-------------------------------------------------------------------------
Lapa 4.48 865
-------------------------------------------------------------------------
LaRonde 2.14 25.33 0.14 1.70 5,643
-------------------------------------------------------------------------
Meadowbank 2.30 14,582
-------------------------------------------------------------------------
Pinos Altos 1.36 49.88 6,182
-------------------------------------------------------------------------
Total Indicated Resource 2.48 35,111
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Category and Zone Au Ag Cu Zn Tonnes
(g/t) (g/t) (%) (%) (000's)
-------------------------------------------------------------------------
Bousquet 7.45 1,667
-------------------------------------------------------------------------
Ellison 5.81 786
-------------------------------------------------------------------------
Goldex 2.35 11,889
-------------------------------------------------------------------------
Kittila 3.39 10,832
-------------------------------------------------------------------------
Lapa 8.96 759
-------------------------------------------------------------------------
LaRonde 6.26 22.65 0.47 1.07 4,723
-------------------------------------------------------------------------
Meadowbank 3.49 3,434
-------------------------------------------------------------------------
Pinos Altos 1.44 24.08 12,237
-------------------------------------------------------------------------
Total Inferred Resource 3.19 46,326
-------------------------------------------------------------------------
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.
>>
Forward-Looking Statements
The information in this press release has been prepared as at May 8,
2008. 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, words such as "anticipate", "expect", "estimate," "forecast,"
"planned", "will", "likely" and similar expressions are intended to identify
forward-looking statements or information. Such statements include without
limitation: the Company's estimates of production, including estimated ore
grades, metal production, life of mine horizons, forecast total cash costs and
minesite costs, actual production estimates and projected exploration and
capital expenditures, including costs and other estimates upon which such
projections are based; the Company's goal to increase its mineral reserves and
resources; the Company's cash position and other statements and information
regarding anticipated trends with respect to the Company's operations and
exploration. Such statements reflect the Company's views as at the date of
this press release and are subject to certain risks, uncertainties and
assumptions. Forward-looking statements are necessarily based upon a number of
factors and assumptions that, while considered reasonable by Agnico-Eagle as
of the date of such statements, are inherently subject to significant
business, economic and competitive uncertainties and contingencies. The
factors and assumptions of Agnico-Eagle contained in this news release, which
may prove to be incorrect, include, but are not limited to, the assumptions
set forth herein: that there are no significant disruptions affecting
operations, whether due to labour disruptions, supply disruptions, damage to
equipment, natural occurrences, political changes, title issues or otherwise;
that permitting, development and expansion at each of Agnico-Eagle's
development projects proceeds on a basis consistent with current expectations,
and that Agnico-Eagle does not change its development plans relating to such
projects; that the exchange rate between the Canadian dollar, European Union
Euro, Mexican peso and the United States dollar will be approximately
consistent with current levels or as set out in this press release or the
Company's Form 20-F referred to below; prices for gold, silver, zinc and
copper will be consistent with Agnico-Eagle's expectations; that prices for
key mining and construction supplies, including labour costs, remain
consistent with Agnico-Eagle's current expectations; that production meets
expectations; that Agnico-Eagle's current estimates of mineral reserves,
mineral resources, mineral grades and mineral recovery are accurate; that
there are no material delays in the timing for completion of ongoing
development projects; and that there are no material variations in the current
tax and regulatory environment. Many factors, known and unknown, could cause
the actual results to be materially different from those expressed or implied
by such forward looking statements. Such risks include, but are not limited
to: 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; risks related to title issues at the Pinos Altos project;
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, see the Company's Annual Information Form and Annual Report on Form
20-F for the year ended December 31, 2007, as well as the Company's other
filings with the Canadian Securities Administrators and the U.S. Securities
and Exchange Commission (the "SEC"). The Company does not intend, and does not
assume any obligation, to update these forward-looking statements and
information, except as required by law. Accordingly, readers are advised not
to place undue reliance on forward-looking statements. 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, total cash costs, minesite costs,
and location of surface infrastructure and actual results and final decisions
may be materially different from those current anticipated.
Notes To Investors Regarding The Use Of Resources
Cautionary Note To Investors Concerning Estimates Of Measured And
Indicated Resources.
This press release may use the terms "measured resources" and "indicated
resources". We advise investors that while those terms are recognized and
required by Canadian regulations, the SEC does not recognize them. Investors
are cautioned not to assume that any part or all of mineral deposits in these
categories will ever be converted into reserves.
Cautionary Note To Investors Concerning Estimates Of Inferred Resources.
This press release may also use the term "inferred resources". We advise
investors that while this term is recognized and required by Canadian
regulations, the SEC does not recognize it. "Inferred resources" have a great
amount of uncertainty as to their existence, and great uncertainty as to their
economic and legal feasibility. It cannot be assumed that all or any part of
an inferred mineral resource will ever be upgraded to a higher category. Under
Canadian rules, estimates of inferred mineral resources may not form the basis
of feasibility or pre-feasibility studies, except in rare cases. Investors are
cautioned not to assume that part or all of an inferred resource exists, or is
economically or legally mineable.
Scientific And Technical 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.
Cautionary Note To U.S. Investors - The SEC permits U.S. mining
companies, in their filings with the SEC, to disclose only those mineral
deposits that a company can economically and legally extract or produce. We
use certain terms in this press release, such as "measured", "indicated", and
"inferred", and "resources" that the SEC guidelines strictly prohibit U.S.
registered companies from including in their filings with the SEC. U.S.
Investors are urged to consider closely the disclosure in our Form 20-F, which
may be obtained from us, or from the SEC's website at:
http://sec.gov/edgar.shtml. A "final" or "bankable" feasibility study is
required to meet the requirements to designate reserves under Industry
Guide 7. Estimates were calculated using historic three-year average metals
prices and foreign exchange rates in accordance with the SEC Industry Guide 7.
Industry Guide 7 requires the use of prices that reflect current economic
conditions at the time of reserve determination which Staff of the SEC has
interpreted to mean historic three-year average prices. The assumptions used
for the mineral reserves and resources estimate reported by the Company on
February 15, 2008 were based on three-year average prices for the period
ending December 31, 2007 of $583 per ounce gold, $10.77 per ounce silver,
$1.19 per pound zinc, $2.65 per pound copper and C$/US$, US$/Euro, and
Mexican Peso/US$ exchange rates of 1.14, 1.29 and 10.91, respectively.
The Canadian Securities Administrators' National Instrument 43-101 ("NI
43-101") requires mining companies to disclose reserves and resources using
the subcategories of "proven" reserves, "probable" reserves, "measured"
resources, "indicated" resources and "inferred" resources. Mineral resources
that are not mineral reserves do not have demonstrated economic viability.
A mineral reserve is the economically mineable part of a measured or
indicated resource demonstrated by at least a preliminary feasibility study.
This study must include adequate information on mining, processing,
metallurgical, economic and other relevant factors that demonstrate, at the
time of reporting, that economic extraction can be justified. A mineral
reserve includes diluting materials and allows for losses that may occur when
the material is mined. A proven mineral reserve is the economically mineable
part of a measured resource for which quantity, grade or quality, densities,
shape and physical characteristics are so well established that they can be
estimated with confidence sufficient to allow the appropriate application of
technical and economic parameters, to support production planning and
evaluation of the economic viability of the deposit. A probable mineral
reserve is the economically mineable part of an indicated mineral resource for
which quantity, grade or quality, densities, shape and physical
characteristics can be estimated with a level of confidence sufficient to
allow the appropriate application of technical and economic parameters, to
support mine planning and evaluation of the economic viability of the deposit.
A mineral resource is a concentration or occurrence of natural, solid,
inorganic or fossilized organic material in or on the earth's crust in such
form and quantity and of such a grade or quality that it has reasonable
prospects for economic extraction. The location, quantity, grade, geological
characteristics and continuity of a mineral resource are known, estimated or
interpreted from specific geological evidence and knowledge. A measured
mineral resource is that part of a mineral resource for which quantity, grade
or quality, densities, shape, physical characteristics, can be estimated with
a level of confidence sufficient to allow the appropriate application of
technical and economic parameters, to support mine planning and evaluation of
the economic viability of the deposit. The estimate is based on detailed and
reliable exploration, sampling and testing information gathered through
appropriate techniques from locations such as outcrops, trenches, pits,
workings and drill holes that are spaced closely enough to confirm both
geological and grade continuity. An indicated mineral resource is that part of
a mineral resource for which quantity, grade or quality, densities, shape and
physical characteristics can be estimated with a level of confidence
sufficient to allow the appropriate application of technical and economic
parameters, to support mine planning and evaluation of the economic viability
of the deposit. The estimate is based on detailed and reliable exploration and
testing information gathered through appropriate techniques from locations
such as outcrops, trenches, pits, workings and drill holes that are spaced
closely enough for geological and grade continuity to be reasonable assumed.
An inferred mineral resource is that part of a mineral resource for which
quantity and grade or quality can be estimated on the basis of geological
evidence and limited sampling and reasonably assumed, but not verified,
geological and grade continuity. The estimate is based on limited information
and sampling gathered through appropriate techniques from locations such as
outcrops, trenches, pits, workings and drill holes. Mineral resources which
are not mineral reserves do not have demonstrated economic viability.
Investors are cautioned not to assume that part or all of an inferred
resource exists, or is economically or legally mineable.
A feasibility study is a comprehensive study of a mineral deposit in
which all geological, engineering, legal, operating, economic, social,
environmental and other relevant factors are considered in sufficient detail
that it could reasonably serve as the basis for a final decision by a
financial institution to finance the development of the deposit for mineral
production.
The mineral reserves presented in this disclosure are not a subset of
mineral resources.
A Qualified Person, Dyane Duquette P.Geo., Assistant Superintendent of
Technical Services for the Goldex project, was responsible for the mineral
reserve and mineral resource estimate at the Goldex project. Additional
information regarding the Goldex mineral resource and mineral reserve estimate
required by Canadian securities laws is set out in the Company's Technical
Report for the Goldex Project that was filed on SEDAR on October 27, 2005 and
in the Company's press release dated February 15, 2008.
The Kittila mine project mineral resource and mineral reserve estimate
was prepared by Jyrki Korteniemi, the Superintendent of Geology for the
Kittila Project under the supervision of a Qualified Person, Marc Legault
P.Eng., the Company's Vice-President, Project Development. Additional
information regarding the Kittila mineral resource and mineral reserve
required by Canadian securities laws is set out in the Company's Technical
Report for the Kittila Project that was filed on SEDAR on March 14, 2006 and
in the Company's press release dated February 15, 2008.
The Qualified Person responsible for the Lapa mineral reserve and mineral
resource estimate is Normand Bédard P.Geo., the Superintendent of Geology for
the Lapa mine project. Additional information regarding the Lapa mineral
resource and mineral reserve required by Canadian securities laws is set out
in the Company's Technical Report for the Lapa Project that was filed on SEDAR
on June 8, 2006 and in the Company's press release dated February 15, 2008.
The Qualified Person responsible for the LaRonde mineral reserve and
resource estimate is François Blanchet Ing., Superintendent of Geology for the
LaRonde Division. The effective date of the estimate is December 31, 2007.
Additional information regarding the LaRonde mineral resource and mineral
reserve required by Canadian securities laws is set out in the Company's
Technical Report for the LaRonde Project that was filed on SEDAR on March 23,
2005 and in the Company's press release dated February 15, 2008.
The Qualified Person responsible for the Meadowbank mineral resource
estimate is Daniel Doucet Ing., Principal Engineer Geology for the Company's
Technical Services Group, Abitibi Regional Office. Additional information
regarding the Meadowbank mineral resource and mineral reserve required by
Canadian securities laws is set out in the Company's Technical Report for the
Meadowbank Project that was filed by Cumberland Resources Ltd. on SEDAR on
March 31, 2005 and in the Company's press release dated February 15, 2008.
The Qualified Person responsible for the Pinos Altos mineral resource and
reserve estimate is Daniel Doucet, Ing., Principal Engineer Geology for the
Company's Technical Services Group, Abitibi Regional Office. Additional
information regarding the Pinos Altos mineral resource and mineral reserve
required by Canadian securities laws is set out in the Company's Technical
Report for the Pinos Altos Project that was filed on SEDAR on September 24,
2007 and in the Company's press release dated February 15, 2008.
The contents of this press release have been prepared under the
supervision of, and reviewed by, Marc Legault, the Company's Vice President,
Project Development, a "Qualified Person" for the purposes of NI 43-101.
Note Regarding Certain Measures Of Performance
This press release presents measures including "total cash costs per
ounce" and "minesite cost per tonne" that are not recognized measures under US
GAAP. This data may not be comparable to data presented by other gold
producers. The Company believes that these generally accepted industry
measures are realistic indicators of operating performance and useful for 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. The
Company provides a reconciliation of realized total cash costs per ounce and
minesite costs per tonne to the most comparable US GAAP measures in its annual
and interim filings with securities regulators in Canada and the United
States. A reconciliation of the Company's total cash cost per ounce and
minesite cost per tonne to the most comparable financial measures calculated
and presented in accordance with US GAAP for the Company's historical results
of operations is set out in Note 1 to the financial statements included
herein.
(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.
For further information: David Smith, VP, Investor Relations, (416) 947-1212