Agnico Eagle Mines Limited Reports Second Quarter 2021 Results

Strong Operating Results With Record Safety Performance; Reintegration of Nunavummiut Workforce Underway at Meliadine and Meadowbank; Underground Development and Surface Construction Proceeding as Planned at Odyssey

TORONTO, July 28, 2021 - Agnico Eagle Mines Limited (NYSE: AEM) (TSX: AEM) ("Agnico Eagle" or the "Company") today reported quarterly net income of $189.6 million, or net income of $0.78 per share, for the second quarter of 2021. This result includes non-cash mark-to-market gains on warrants of $15.9 million ($0.07 per share), foreign currency translation gains on deferred tax liabilities of $9.3 million ($0.04 per share), derivative gains on financial instruments of $1.8 million ($0.01 per share), non-cash foreign currency translation losses of $2.4 million ($0.01 per share) and various other adjustment losses of $2.7 million ($0.02 per share). Excluding these items would result in adjusted net income1 of $167.7 million or $0.69 per share for the second quarter of 2021. For the second quarter of 2020, the Company reported net income of $105.3 million or net income of $0.44 per share.

Included in the second quarter of 2021 net income, and not adjusted above, are non-cash stock option expense of $3.9 million ($0.02 per share) and workforce costs of employees affected by the COVID-19 pandemic (primarily Nunavut-based) of $2.5 million ($0.01 per share).

In the first six months of 2021, the Company reported net income of $325.7 million, or net income of $1.34 per share. This compares with the first six months of 2020, when net income was $83.7 million, or net income of $0.35 per share.

The increase in net income in the second quarter of 2021, compared to the prior-year period, is primarily due to higher mine operating margins (from higher sales volumes and higher realized metal prices) and lower losses in non-cash items related to mark-to-market adjustments on financial instruments owned by the Company, partially offset by higher amortization of property, plant and mine development due to higher production volumes and the contribution of the Hope Bay mine, higher exploration expenses, and higher income and mining taxes driven by higher operating margins. In the second quarter of 2020, gold production and sales were negatively affected by COVID-19 related reductions in mining activities.
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1 Adjusted net income is a non-GAAP measure. For a discussion regarding the Company's use of non-GAAP measures, please see "Note Regarding Certain Measures of Performance".

The increase in net income in the first six months of 2021, compared to the prior-year period, is primarily due to the reasons described above partially offset by higher general and administration costs related to a health care donation of $8.0 million spread over several years that was expensed in the first quarter of 2021.

In the second quarter of 2021, cash provided by operating activities was $406.9 million ($432.2 million before changes in non-cash components of working capital), compared to the second quarter of 2020 when cash provided by operating activities was $162.6 million ($185.2 million before changes in non-cash components of working capital). The cash provided by operating activities in the second quarter of 2021 resulted in another strong quarter of free cash-flow2 generation.

In the first six months of 2021, cash provided by operating activities was $763.3 million ($847.4 million before changes in non-cash components of working capital), compared to the first six months of 2020 when cash provided by operating activities was $326.0 million ($389.9 million before changes in non-cash components of working capital).

The increase in cash provided by operating activities in the second quarter of 2021, compared to the prior-year period, is primarily due to an increase in mine operating margins, partially offset by higher cash taxes related to the higher mine operating margins. The higher mine operating margins were primarily a result of strong operating performance from the Company's key mines in the second quarter of 2021, and higher average realized metal prices. In the second quarter of 2020, gold production was negatively affected by COVID-19 related reductions in mining activities at seven of the Company's eight mines.

The increase in cash provided by operating activities in the first six months of 2021, compared to the prior-year period, is primarily due to an increase in mine operating margins due to the reasons described above, partially offset by higher cash taxes related to the higher mine operating margins and payments for deferred taxes related to the 2020 tax year in the first quarter of 2021.
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2 Free cash flow is a non-GAAP measure. For a discussion regarding the Company's use of non-GAAP measures, please see "Note Regarding Certain Measures of Performance".


"In the second quarter of 2021, the Company posted record safety performance with solid operational results which resulted in another strong quarter of cash flow generation. The Company remains on track to hit its production and cost guidance for 2021 and we expect to see growing gold output in the second half of the year, which should lead to continued strong cash flow generation in 2021," said Sean Boyd, Agnico Eagle's Chief Executive Officer. "Our sound operational platform and stable financial position has given us the flexibility to increase our exploration spending in 2021, and advance our pipeline of development projects, which is expected to provide additional shareholder value in the coming months and years," added Mr. Boyd.


Second quarter of 2021 highlights include:

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