Agnico-Eagle Reports Fourth Quarter and Full Year 2010 Results; New Mines Contribute to Record Financial Results; Full Year Earnings Up 284% Record gold reserves up 16%
16.02.2011 | CNW
(All amounts expressed in U.S. dollars unless otherwise noted)TORONTO, Feb. 16 /CNW/ - Agnico-Eagle Mines Limited ("Agnico-Eagle" or the "Company") today reported quarterly net income of $88.0 million, or $0.53 per share for the fourth quarter of 2010. This result includes a non-cash foreign currency translation loss of $10.4 million, or $0.06 per share, stock option expense of $7.2 million, or $0.04 per share, and a gain on sale of investments of $11.3 million, or $0.06 per share. In the fourth quarter of 2009, the Company reported net income of $47.9 million, or $0.31 per share.
Fourth quarter 2010 cash provided by operating activities was $90.6 million (a record $179.4 million before changes in non-cash components of working capital) up from cash provided by operating activities of $53.7 million in the fourth quarter of 2009 ($99.1 million before changes in non-cash components of working capital), primarily due to 57% higher gold production and significantly higher metal prices.
"The growth plan that transformed the Company over the past several years has resulted in record gold reserves and record annual financial and operating results", said Sean Boyd, Vice-Chairman and Chief Executive Officer. "As Agnico-Eagle begins the next five-year growth phase from our expanded production platform, our strategy remains unchanged. The focus continues to be to increase our gold reserves, gold production, earnings and cash flows, each on a per-share basis", added Mr. Boyd.
Fourth quarter and full year 2010 highlights include:
- Record earnings and cash flows - annual earnings up 284%, cash provided by operating activities up 320%, year over year
- Record annual gold production - quarterly production of 256,469 ounces contributed to record annual gold production of 987,609 ounces; up 100% year over year
- Good cost control - Full year total cash costs per ounce of $4511. Minesite costs per tonne2 targets achieved at the steady state mines of LaRonde, Goldex, Lapa and Pinos Altos
- Record Quarter at Pinos Altos - record quarterly gold production of 39,289 ounces at total cash costs of $365 per ounce. First gold pour from Creston Mascota satellite project occurred in December
- Record gold reserves - gold reserves rise 2.9 million ounces net of production, or 16%, to a record 21.3 million ounces3. Record exploration expenditure planned for 2011
For the full year 2010, the Company recorded net income of $332.1 million, or $2.05 per share. In 2009, Agnico-Eagle recorded net income of $86.5 million, or $0.55 per share. Compared with the prior year, 2010 earnings were positively affected by a greater than 100% increase in gold production as a result of a full year of production at Kittila, Pinos Altos and Lapa, the startup of production at the Meadowbank mine in March, combined with higher realized prices for gold, silver, copper and zinc.
For 2010, the Company recorded cash provided by operating activities of $483.5 million ($581.7 million before changes in non-cash components of working capital). This is significantly up from 2009, when cash provided by operating activities totaled $115.1 million ($232.5 million before changes in non-cash components of working capital). The increase was primarily due to the previously mentioned increase in 2010 gold production, as well as significant increases in realized prices for all produced metals in 2010.
Payable gold production4 in the fourth quarter of 2010 was 256,469 ounces compared to 163,276 ounces in the fourth quarter of 2009. A detailed description of the production and cost performance by mine may be found in the respective sections later in this document.
Total cash costs for the fourth quarter of 2010, based on the Company's historic policy of attributing all stripping costs into current period costs, were $485 per ounce (versus $297 per ounce for fourth quarter 2009). However, to be consistent with other gold producers, going forward the Company will report total cash costs using the more common industry practice of deferring certain stripping costs (which is in line with the practice recommended by the Gold Institute) that can be attributed to future production. Under this methodology, the Company's cash costs for the fourth quarter of 2010 were $462 per ounce. This compares with $295 per ounce in the fourth quarter of 2009, calculated on the same basis.
The increase in total cash costs per ounce in the fourth quarter of 2010 is mainly due to higher costs at Kittila in October and November and high costs at Meadowbank as the mine continues to ramp-up to full production rates.
The Company's payable gold production for the full year 2010 was a record 987,609 ounces at total cash costs per ounce of $451, excluding a portion of stripping costs as described above. The full year production is 1.2% below the bottom end of the range of guidance provided in December 2009. The lower than anticipated gold production in the year is largely due to the slower than anticipated ramp-up at the new Meadowbank mine. Additionally, the shortfall is partly a result of lower than expected grades at LaRonde and Lapa in the fourth quarter of 2010.
The 2010 production compares to the full year 2009 level of 492,972 ounces at total cash costs per ounce of $346. The higher production in 2010 was due to the opening and optimizing of the new mines. The higher total cash costs per ounce were primarily due to the impact of Meadowbank's higher cost start-up phase in 2010 (higher than expected at $693 for the year mainly due to reduced throughput related to crushing issues).
The linked graph below presents the increase in gold production per share over the past 10 years. The Company believes that increasing this metric, and thereby increasing shareholders exposure to gold on a per share basis over time, is one of the best ways to increase shareholder returns.
Gold Production Per 1000 Shares
Conference Call Tomorrow
The Company's senior management will host a conference call on Thursday, February 17, 2011 at 11:00 AM (E.S.T.) to discuss financial results and provide an update of the Company's exploration and development activities. A detailed mineral reserve and resource update will also be provided.
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 416-644-3415 or Toll-free 800-814-4861. To ensure your participation, please call approximately five minutes prior to the scheduled start of the call.
Replay archive:
Please dial 416-640-1917 or the Toll-free access number 877-289-8525, passcode 4403795#.
The conference call replay will expire on Thursday, February 24, 2011.
The webcast along with presentation slides will be archived for 180 days on the website.
Cash Position Remains Strong
Cash and cash equivalents decreased to $104.6 million at December 31, 2010 from the September 30, 2010 balance of $148.1 million, as the Company repaid $65 million of its long term debt during the quarter.
Capital expenditures in the fourth quarter were $115.0 million, including $28.2 million at Pinos Altos, $26.1 million at Meadowbank, $23.7 million at LaRonde, $18.7 million at Kittila, $8.8 million on Goldex and $7.3 million at Lapa. For the full year 2010, capital expenditures totaled $511.6 million.
With its cash balances, anticipated cash flows and available bank lines, management believes that Agnico-Eagle remains fully funded for the development and exploration of its current pipeline of gold projects in Canada, Finland, Mexico and the USA.
Available bank lines as of December 31, 2010 were approximately $1.1 billion.
Gold Reserves Rise to Record Level
At year-end 2010, the Company's proven and probable gold reserves totaled 21.3 million ounces, net of depletion, an increase of 2.9 million ounces (or 16%) over 2009 levels. The largest increase (2.6 million ounces) came from the conversion of resources to reserves at the new Meliadine project in Nunavut, Canada (acquired in July 2010).
Another large contribution to the total came from Kittila where approximately 0.9 million ounces of reserves were added in 2010, net of depletion. Kittila now has the highest level of gold reserves at any of the Company's properties.
This exploration success continues Agnico-Eagle's track record of increasing its shareholders exposure to gold. During the year, the number of shares outstanding increased by approximately 8%, while the gold reserves increased by approximately 16%. A graph showing the increase in reserves per share over the past 10 years is linked below.
Gold Reserves Per 1000 Shares
In 2011, it is expected that Agnico-Eagle's overall mineral reserves will continue to grow as the Company continues to convert its resources to reserves and continues the exploration of its properties outside of the currently known resource. Agnico-Eagle's goal is to increase gold reserves from its existing portfolio of mines and projects to more than 22 million ounces by year-end 2011. During 2011, the Company expects to invest approximately $145 million in exploration.
The Company's year-end 2010 gold reserves, net of 987,609 ounces of gold production, is set out below:
_____________________________________________________________
|Gold Reserves By Mine|Proven & Probable Reserve (000s ounces)|
|_____________________|_______________________________________|
| |2010 |2009 |
|_____________________|______|________________________________|
|LaRonde |4,818 |4,849 |
| | | |
|Goldex |1,566 |1,630 |
| | | |
|Lapa |677 |843 |
| | | |
|Kittila |4,880 |4,025 |
| | | |
|Pinos Altos |3,271 |3,396 |
| | | |
|Meadowbank |3,486 |3,655 |
| | | |
|Meliadine |2,600 |- |
|_____________________|______|________________________________|
|Total |21,298|18,398 |
|_____________________|______|________________________________|
Amounts presented in the table and in this press release have been rounded to the nearest thousand. See attached table "Detailed Mineral Reserve and Resource Data (as at December 31, 2010)" for detailed breakdown of the Company's reserves and resources.
Agnico-Eagle's byproduct proven and probable reserves include approximately 124 million ounces of silver, 404,000 tonnes of zinc and 95,000 tonnes of copper.
The metals prices and exchange rates used in the reserve and resource calculation are the trailing three-year averages for such prices or rates, as mandated by the U.S. Securities and Exchange Commission (the "SEC"). The assumptions used in calculating the 2010 reserves and resources were $1024 per ounce gold, $16.62 per ounce silver, $0.86 per pound zinc, $2.97 per pound copper, $0.90 per pound lead, a C$/US$ exchange rate of 1.08, a US$/Euro exchange rate of 1.40, and a Mexican Peso/US$ exchange rate of 12.43. For a 10% change in the gold price (leaving all other assumptions unchanged), there would be an estimated 3% change in proven and probable reserves.
The byproduct reserves and resources for silver, zinc, copper and lead contained in the LaRonde orebody, and the silver reserves contained at Pinos Altos, are presented in the "Detailed Mineral Reserve and Resource Data" section set out near the end of this news release. These byproduct reserves are not included in Agnico-Eagle's gold reserve and resource totals.
Large Conversion of Gold Resources to Reserves in 2010
Exploration drilling during 2010 resulted in 2.9 million ounces of gold being converted from the resource category into the reserve category. In spite of this conversion, the resources continued to grow at several of the mines and projects.
In 2010, the Company's indicated mineral resources increased marginally over 2009 levels, largely due to the addition of indicated mineral resource at the Meliadine property. The Company's inferred resources as at the end of 2010 increased significantly over the 2009 level, with the largest contribution to this increase coming from the Meliadine and Bousquet properties.
However, these increases take into account a restatement of the 2009 resource at Meadowbank. Approximately 2.0 million ounces of indicated resource (19,763,101 tonnes grading 3.19 g/t) and 0.2 million ounces of inferred resource (2,431,310 tonnes grading 2.66 g/t) were overstated due to an arithmetic error. These resources were not within planned pit limits and were not part of the life of mine plan.
LaRonde Mine - Steady 2010 Performance As Expected
The 100% owned LaRonde mine in northwestern Quebec, Canada, began operation in 1988. Overall, proven and probable gold reserves at LaRonde contain approximately 4.8 million ounces from 34.7 million tonnes grading 4.3 grams per tonne ("g/t").
The LaRonde mill processed an average of 6,918 tonnes per day ("tpd") in the fourth quarter of 2010, compared with an average of 6,983 tpd in the corresponding period of 2009. Milling performance for the full year 2010 was approximately 7,102 tpd versus 6,975 tpd in 2009. LaRonde has been operating at a steady state of approximately 7,000 tonnes per day for more than seven years, since its final expansion in 2003.
Minesite costs per tonne were approximately C$79 in the fourth quarter of 2010. These costs are higher than the C$69 per tonne experienced in the fourth quarter of 2009. The increase is largely due to higher costs for labour, chemical reagents and fuel. Additionally, a higher proportion of ore from the lower levels was mined in 2010 leading to higher haulage costs.
Minesite costs per tonne for the full year 2010 were on budget at approximately C$75, approximately 4% higher than in 2009 (C$72) mainly due to cost pressures as discussed above.
On a per ounce basis, net of byproduct credits, LaRonde's total cash costs per ounce were minus $250 in the fourth quarter on production of 38,405 ounces of gold. This compares with the fourth quarter of 2009 when total cash costs per ounce were minus $84 on production of 46,397 ounces of gold. The decrease in total cash costs is largely due to significantly higher byproduct metal prices. The lower gold production in the 2010 period is largely related to lower grades as the mine extracted some lower grade tonnage which had become economic due to higher zinc and gold prices.
For the full year 2010, LaRonde's total cash costs per ounce were minus $7 on gold production of 162,806 ounces, placing it among the lowest cash cost gold mines in the industry. This compares to total cash costs per ounce of $103 on gold production of 203,494 in 2009, as lower gold production in 2010 (lower grades extracted as mentioned above) was more than offset by stronger byproduct metals prices.
The total cash cost per ounce performance of Agnico-Eagle's three Quebec mines is particularly noteworthy in light of the relative strength of the Canadian dollar in 2010 (up 6% versus the US dollar).
Gold production in 2011 at LaRonde is expected to be approximately 157,000 ounces as the gold grade of the stopes scheduled to be mined does not increase until late in the year, when the deeper, gold rich, ore is accessed via the new internal shaft of the LaRonde Extension. Post-2011, LaRonde is expected to ramp up to an average life of mine production of 338,000 ounces of gold per year, reflecting the higher gold grades at depth. This project remains on time and on budget.
Goldex Mine - Achieves Record Annual Gold Production
The 100% owned Goldex mine in northwestern Quebec began operation in 2008. Proven and probable gold reserves total 1.6 million ounces from 27.8 million tonnes grading 1.8 g/t.
The Goldex mill processed an average of 7,844 tpd in the fourth quarter of 2010. During the fourth quarter of 2009, the plant processed 7,655 tpd. Milling performance for the full year 2010 was 7,621 tpd compared to 7,164 tpd in 2009. This strong tonnage performance was largely due to the full year operation of the permanent secondary crushing unit, which has resulted in an increase to the capacity of the mill.
Minesite costs per tonne at Goldex were approximately C$21 in the fourth quarter of 2010, down from C$23 in the fourth quarter of 2009. For the full year 2010, minesite costs per tonne were approximately C$22, slightly below the C$23 per tonne in 2009, largely due to the strong tonnage performance which more than offset industry wide cost pressures. Agnico-Eagle believes this is one of the lowest cost hard rock underground mines in the world on a minesite cost per tonne basis.
Payable gold production in the fourth quarter of 2010 was 43,110 ounces at total cash costs per ounce of $370. This compares to fourth quarter 2009 gold production of 46,075 ounces at total cash costs per ounce of $338. The decrease in gold production is due to the scheduled mining of lower grade during the 2010 period which also negatively impacted the cost per ounce.
For the full year 2010, Goldex's payable gold production was a record 184,386 ounces at total cash costs per ounce of $335. This compares favourably to full year 2009 production of 148,849 ounces at total cash costs per ounce of $366. The improved performance at Goldex is reflective of the ongoing optimization efforts at the mine and improved throughput.
Gold production for 2011 is expected to be approximately 183,500 ounces.
Due to exploration success in 2010, it is expected that the mine life of Goldex may be extended as the deeper D Zone is explored and quantified. Beginning in 2011, it is expected that a ramp will be driven below the current workings to facilitate additional drilling which would be incorporated in a feasibility study considering the extraction of this zone. The study is expected to be completed in mid-2013.
Goldex Longitudinal Section
Kittila Mine - Growing Reserves and Record Mill Recoveries
The 100% owned Kittila mine in northern Finland achieved commercial production in May 2009. Proven and probable gold reserves total approximately 4.9 million ounces from 32.7 million tonnes grading 4.6 g/t. This is up approximately 21%, or 0.9 million ounces, from the 2009 level largely as a result of successful resource to reserve conversion drilling below the Suuri and Roura orebodies.
The following link shows a Kittila longitudinal section and the area of new reserves.
Kittila Longitudinal Section
The Kittila mill processed an average of 2,619 tonnes per day in the fourth quarter of 2010, compared with its 3,000 tonne per day design rate. A two week maintenance shutdown in early October was largely responsible for the lower-than-design throughput. In the fourth quarter of 2009, the Kittila mill processed 2,728 tonnes per day.
Gold recoveries in the fourth quarter of 2010 were a quarterly record of 81.8%, nearing the design rate of 83%. This compares with the fourth quarter of 2009 when the recoveries were 76.2%. This improvement in mill recovery was largely due to a mid-year 2010 breakthrough in the process which resulted in the ability to lower the chloride levels in the feed to the autoclave. Recoveries in excess of 85% have been recently achieved.
Minesite costs per tonne at Kittila were approximately €79 in the fourth quarter 2010, compared to €46 in the fourth quarter of 2009. The increase in minesite costs was largely due to ore re-handling (blending) as the mine dealt with high sulphur ore for the first time. Higher costs associated with the start-up phase and commercial production in the underground mine also negatively impacted the 2010 costs. Additionally, costs were affected by high maintenance costs (and reduced equipment availability) and unbudgeted contractor costs.
In December, operations and costs at Kittila stabilized significantly as the mill gained experience with the high sulphur ore and the underground mine nears its design throughput. For the month, throughput in the mill averaged approximately 3,200 tpd, mill recoveries were 82.5%, minesite costs per tonne were €72 and total cash costs per ounce were $685.
This improved performance has extended into January and February, as Kittila has continued to exceed its design throughput, while minesite costs per tonne and total cash costs per ounce continue to decrease from the December level.
For the full year 2010, the minesite costs per tonne were €66, compared to €54 in 2009. This increase is largely attributable to the above-mentioned cost pressures.
Fourth quarter 2010 gold production at Kittila was below expectations at 29,721 ounces with a total cash cost per ounce of $832. In the fourth quarter of 2009 the mine produced 35,270 ounces at total cash costs per ounce of $464. The lower production and higher cost were the result of the previously discussed factors.
For the full year 2010, payable gold production from Kittila was 126,205 ounces at total cash costs of $657 per ounce. In 2009, the mine produced 71,838 ounces of gold at total cash costs of $668 per ounce. The higher production and lower cost in 2010 was largely due to a combination of 28% higher throughput and 27% higher mill recovery in 2010 as optimization efforts in the mill succeeded. These factors were partly offset by much higher minesite costs as discussed above.
The Company believes that it has now achieved steady state production at Kittila, with recoveries consistently above the design rate of 83%. As a result, minesite costs and total cash costs per ounce are expected to decline significantly in 2011. Gold production in 2011 is expected to be 147,100 ounces.
A study is underway examining the possibility of increasing the production rate at Kittila. Results of the study are expected to be completed in the third quarter of 2011. A third quarter reserve and resource update is expected as well.
Lapa - Steady Performance During 2010
The 100% owned Lapa mine in northwestern Quebec achieved commercial production in May 2009. Proven and probable gold reserves total approximately 0.7 million ounces from 2.8 million tonnes grading 7.4 g/t.
The Lapa circuit, at the LaRonde mill, processed an average of 1,517 tpd in the fourth quarter of 2010. This compares with an average of 1,191 tonnes per day in the fourth quarter of 2009 as Lapa successfully achieved its design rate of 1,500 tpd. For the full year 2010, Lapa averaged 1,512 tpd compared with 1,090 tpd in 2009, the mine's first year of operation.
Minesite costs per tonne were C$115 in the fourth quarter of 2010, 22% below the C$148 in the fourth quarter of 2009. The lower cost is largely due to good cost control and the increased throughput, as mentioned above.
Full-year minesite costs in 2010 were C$114 per tonne, significantly below C$140 achieved in 2009. The improved operating performance is attributable to realized efficiencies as the Company gained valuable experience with the orebody.
Payable production in the fourth quarter of 2010 was 29,288 ounces of gold at total cash costs per ounce of $564. This compares favourably with the fourth quarter of 2009, when production was 22,590 ounces of gold at total cash cost per ounce of $608. The improvements were largely due to improved throughput, but also higher grade as dilution was reduced in 2010 through optimization of drilling, blasting and support patterns.
For the full year 2010, payable production was 117,456 ounces of gold at total cash costs of $529 per ounce. As Lapa came into commercial production partway through 2009, prior year production was 52,602 ounces of gold at total cash costs of $751 per ounce.
Payable production in 2011 is expected to be approximately 125,000 ounces of gold.
During 2011, an exploration drift will facilitate drilling along the trend to the east and at depth. These areas have not previously been explored. The drilling is intended to investigate the possibility of extending the mine life.
Pinos Altos - Record Gold Production at Low Costs
The 100% owned Pinos Altos mine in northern Mexico achieved commercial production in November 2009. For 2010, proven and probable reserves, including the stand-alone Creston Mascota deposit, total 3.3 million ounces of gold and 92.0 million ounces of silver from 44.2 million tonnes grading 2.3 g/t of gold and 64.8 g/t silver.
The Pinos Altos mill processed an average of 4,501 tpd in the fourth quarter of 2010. This compares favourably with 1,863 tonnes per day in the fourth quarter of 2009 (its first quarter of operation). Previous issues with tailings filter capacity were eliminated in the second half of 2010 with the installation of two additional filter banks. The mill is now routinely performing at process rates above the initial design capacity of 4,000 tpd including a one week period during November 2010 when it operated at a rate of 5,300 tpd. Higher throughput has been observed in each consecutive quarter at Pinos Altos since startup in the last quarter of 2009.
Minesite costs per tonne were $35 in the fourth quarter of 2010, compared to $27 in the partial fourth quarter of 2009. In the fourth quarter of 2009, a greater proportion of lower cost heap leach tonnes were processed. For the full year 2010, minesite costs per tonne were $35. With commercial production achieved at November 1, 2009, there is no comparable period in that year. The minesite costs at Pinos Altos for Q4 and full year 2010 were lower than forecast.
Payable production in the fourth quarter of 2010 was a record 39,289 ounces of gold at total cash costs per ounce of $365. This compares with production of 12,944 ounces at a total cash cost of $570 in the partial quarter of 2009.
The first gold production occurred at the satellite Creston Mascota project during the fourth quarter of 2010 with 666 ounces of payable gold production being reported from this heap leach operation (included in the Pinos Altos total). Commercial production at Creston Mascota is expected to be achieved in the second quarter of 2011.
Full year 2010 production was 131,097 ounces at total cash cost per ounce of gold of $425. There is no comparable period in 2009.
Payable production in 2011 (including Creston Mascota) is expected to be 199,000 ounces of gold and approximately 2.2 million ounces of silver.
The Company is evaluating alternatives with respect to increasing the underground mine capacity either through an additional production ramp or a production shaft. The study is expected to be completed near the end of 2011.
Meadowbank - Optimization Ongoing
The 100% owned Meadowbank mine project in Nunavut, northern Canada, achieved commercial production in March 2010. Proven and probable gold reserves total 3.5 million ounces from 34.1 million tonnes grading 3.2 g/t. An additional 0.3 million ounces of indicated gold (9.1 million tonnes grading 1.0 g/t) resources are within the currently contemplated pit limits.
The Meadowbank mill processed an average of 6,659 tpd in the fourth quarter of 2010, essentially unchanged from the third quarter of 2010 as the new mine continues with a temporary secondary crushing arrangement. The permanent secondary crushing facility is anticipated to be operational in the third quarter of 2011. The design rate of 8,500 tpd is expected to be achieved at this time.
Minesite costs per tonne were C$91 in the fourth quarter and C$95 for the full year of 2010. With commercial production achieved in March 2010, there is no comparable period in 2009. These costs were higher than the C$82 per tonne which is expected in 2011.
The higher costs in 2010 are largely due to lower than planned throughput in the mill (approximately 19% lower than budget in the fourth quarter) largely due to the temporary crushing issues.
Payable production in the fourth quarter of 2010 was 75,990 ounces of gold at total cash cost per ounce of gold of $745. Full year 2010 production was 265,659 ounces of gold at total cash costs per ounce of gold of $693. These costs are expected to decline dramatically in 2011 as throughput improves.
Payable production in 2011 is expected to be 362,000 ounces of gold.
During the 2011 drilling season, conversion and expansion of the 0.3 million ounces (2.3 million tonnes grading 4.4 g/t) off indicated resource and 0.2 million ounces (0.8 million tonnes grading 5.6 g/t) off inferred resource around the southern end of the deposit will remain a priority. A study considering an underground exploration ramp to examine this resource is expected to be presented to the Board in the second quarter of 2011.
Meliadine - Initial Gold Reserve Established, Gold Resource Expands
In July 2010, Agnico-Eagle completed the acquisition of the Meliadine project near Rankin Inlet, Nunavut.
The initial reserve estimate is 2.6 million ounces of gold from 9.5 million tonnes grading 8.5 g/t. It is expected that this reserve will continue to grow rapidly as the large gold resource is drilled extensively over the next 12 months. Approximately $65 million is expected to be spent on Meliadine exploration in 2011.
In addition to the initial gold reserve, the Meliadine project contains 1.5 million ounces of indicated gold resource from 8.8 million tonnes grading 5.2 g/t. It also includes approximately 2.6 million ounces of inferred gold resource from 11.8 million tonnes grading 6.9 g/t.
The following link shows the reserve and resource outlines for the main Tiriganiaq deposit.
Tiriganiaq Longitudinal Section
The Company is evaluating the possibility of accelerating underground ramp development at Meliadine to facilitate exploration and development of the growing deposit. The ramp study, and a reserve and resource update, are expected to be completed in the third quarter of 2011.
It is anticipated that the final feasibility will be presented to the Board for a production decision in 2013. Earliest gold production is expected to be late 2015.
Depreciation Guidance
Agnico-Eagle expects 2011 amortization on its income statement to amount to $200 to $250 per reserve ounce. This amount was approximately $195 in 2010 and $151 in 2009.
Please see the supplemental financial data section of the Financial and Operating Database on the Company's website for the adjusted plant, property and mine development totals by mine at December 31, 2010.
Mine Tour Meadowbank and Meliadine
Agnico-Eagle will be hosting a trip for equity analysts and buy-side investors on June 28, 2011 to Meadowbank. The tour will include a project review of Meliadine while at the Meadowbank site. The tour will be a day trip via chartered airplane from Toronto. Interested parties should contact Hazel Winchester at hwinchester@agnico-eagle.com, or 416-847-3717. All presentation materials will also be posted on the Company's website.
Annual General Meeting
Friday April 29, 2011 at 11:00am
Vanity Fair Ballroom
Le Méridien King Edward Hotel
37 King Street East
Toronto, ON M5C 1E9
Dividend Record and Payment Dates for the Remainder of 2011
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|Record Date|Payment Date|
|___________|____________|
|March 1 |March 15 |
|___________|____________|
|June 1 |June 15 |
|___________|____________|
|September 1|September 15|
|___________|____________|
|December 1 |December 15 |
|___________|____________|
Dividend Reinvestment Program
Please follow the link below for information on the Company's dividend reinvestment program.
DividendReinvestmentPlan
About Agnico-Eagle
Agnico-Eagle is a long established, Canadian headquartered, gold producer with operations located in Canada, Finland and Mexico, and exploration and development activities in Canada, Finland, Mexico and the United States. Agnico-Eagle's LaRonde mine is Canada's largest operating gold mine 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 29 consecutive years. www.agnico-eagle.com
Three months ended Year ended
December 31, December 31,
2010 2009 2010 2009
Gross mine profit (exclusive of
amortization shown below) (Note 1)
LaRonde $65,517 $59,425 $203,240 $188,000
Goldex 50,121 33,891 163,529 88,151
Lapa 25,477 8,019 84,718 9,937
Kittila 17,467 14,964 72,400 18,993
Pinos Altos 34,998 2,363 85,344 2,363
Creston Mascota — — — —
Meadowbank (Note 2) 49,426 — 135,818 —
Total gross mine profit 243,006 118,662 745,049 307,444
Amortization 69,835 21,661 192,486 72,461
Corporate 51,268 30,275 117,360 126,945
Income before tax 121,903 66,726 435,203 108,038
Tax provision 33,940 18,790 103,087 21,500
Net earnings $87,963 $47,936 $332,116 $86,538
Net earning per share $0.53 $0.31 $2.05 $0.55
Operating cash flow $90,575 $53,701 $483,470 $115,106
Realized price per sales volume
(US$):
Gold (per ounce) $1,387 $1,153 $1,250 $1,024
Silver (per ounce) $31.96 $19.17 $22.56 $15.54
Zinc (per tonne) $2,391 $2,506 $2,165 $1,808
Copper (per tonne) $10,311 $7,469 $8,182 $6,140
Payable production:
Gold (ounces)
LaRonde 38,405 46,397 162,806 203,494
Goldex 43,110 46,075 184,386 148,849
Lapa 29,288 22,590 117,456 52,602
Kittila 29,721 35,270 126,205 71,838
Pinos Altos 39,289 12,944 130,431 16,189
Creston Mascota 666 — 666 —
Meadowbank (Note 2) 75,990 — 265,659 —
Total gold (ounces) 256,469 163,276 987,609 492,972
Silver (000s ounces)
LaRonde 766 860 3,581 3,919
Pinos Altos 427 100 1,185 116
Creston Mascota 493 — 493 —
Meadowbank (Note 2) 14 — 46 —
Total silver (000s ounces) 1,700 960 5,305 4,035
Zinc (tonnes) 14,939 15,450 62,544 56,186
Copper (tonnes) 935 1,523 4,224 6,671
Payable metal sold:
Gold (ounces - LaRonde) 39,896 44,453 163,781 206,536
Gold (ounces - Goldex) 48,067 47,208 183,357 144,182
Gold (ounces - Lapa) 31,177 23,885 123,136 41,721
Gold (ounces - Kittila) 28,722 30,659 129,639 59,385
Gold (ounces - Pinos Altos) 39,157 12,529 122,514 12,529
Gold (ounces - Creston Mascota) — — — —
Gold (ounces - Meadowbank) (Note 79,849 — 250,629 —
2)
Total gold (ounces) 266,868 158,734 973,056 464,353
Silver (000s ounces - LaRonde) 828 801 3,539 3,833
Silver (000s ounces - Pinos 406 38 1,137 38
Altos)
Silver (000s ounces -Creston — — — —
Mascota)
Silver (000s ounces - Meadowbank) 14 — 46 —
Total silver (ounces) 1,248 839 4,722 3,871
Zinc (tonnes) 15,212 13,951 59,566 58,391
Copper (tonnes) 941 1,532 4,223 6,689
Total cash costs per ounce of gold
(Note 3,4):
LaRonde $(250) $(84) $(7) $103
Goldex $370 $338 $335 $366
Lapa $564 $608 $529 $751
Kittila $832 $464 $657 $668
Pinos Altos $365 $570 $425 $570
Creston Mascota — — — —
Meadowbank (Note 2) $745 — $693 —
Weighted average total cash costs $462 $295 $451 $346
per ounce
Note 1
Gross mine profit is calculated as total revenues from all metals produced by a mine minus total production costs related to that mine.
Note 2
Meadowbank achieved commercial production as of March 1, 2010. Payable production includes commercial production of 264,575 ounces since March 1, 2010 and pre-March 1, 2010 production of 1,084 ounces.
Note 3
Total cash costs per ounce of gold is calculated net of silver, copper, zinc and other byproduct credits. The weighted average total cash cost per ounce is based on commercial production ounces. Total cash costs per ounce is a non-GAAP measure. For a reconciliation to production costs, see Note 1 to the financial statements. See also "Note Regarding Certain Measures of Performance".
Note 4
Certain measures have been reclassified in prior periods to conform to the current periods' presentation. The aggregate effect of the changes are immaterial in nature. As of February 16, 2011, the Company reports total cash costs per ounce and minesite costs per tonne using the more common industry practice of deferring certain stripping costs attributable to future production. This methodology is in line with the Gold Institute Production Cost Standard. The purpose of adjusting for these stripping costs is to enhance the comparability of cash costs to the majority of the Company's peers within the mining industry. The previous period's cash costs have been adjusted accordingly.
AGNICO-EAGLE MINES LIMITED
CONSOLIDATED BALANCE SHEETS
(thousands of United States dollars, US GAAP basis)
(Unaudited)
As at As at
December 31, December 31, 2009
2010
ASSETS
Current
Cash and cash equivalents $104,645 $163,593
Trade receivables 112,949 93,570
Inventories:
Ore stockpiles 67,764 41,286
Concentrates 50,332 31,579
Supplies 149,647 100,885
Other current assets 188,885 173,127
Total current assets 674,222 604,040
Other assets 61,502 33,641
Future income and mining tax assets 1,647 27,878
Goodwill 200,064 -
Property, plant and mine 4,564,563 3,581,798
development
$5,501,998 $4,247,357
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued $170,967 $155,432
liabilities
Dividends payable 108,009 28,198
Interest payable 9,743 1,666
Income taxes payable 14,450 4,501
Total current liabilities 303,169 189,797
Long term debt 650,000 715,000
Fair value of derivative financial 142 663
instruments
Reclamation provision and other 145,536 96,255
liabilities
Future income and mining tax 737,701 493,881
liabilities
Shareholders' equity
Common shares
Authorized — unlimited
Issued — 168,763,496 3,078,217 2,378,759
(December 31, 2009 —
156,655,056)
Stock options 78,554 65,771
Warrants 24,858 24,858
Contributed 15,166 15,166
surplus
Retained earnings 440,265 216,158
Accumulated other comprehensive 28,390 51,049
income
Total shareholders' equity 3,665,450 2,751,761
$5,501,998 $4,247,357
AGNICO-EAGLE MINES LIMITED
CONSOLIDATED STATEMENTS OF INCOME
(thousands of United States dollars except share and per share amounts,
US GAAP basis)
(Unaudited)
Three months ended Year ended
December 31, December 31,
2010 2009 2010 2009
REVENUES
Revenues from mining operations $439,004 $225,597 $1,422,521 $613,762
Interest and sundry income 1,209 2,713 75,392 16,172
Gain on sale of 11,302 3,667 19,487 10,142
available-for-sale securities
451,515 231,977 1,517,400 640,076
COSTS AND EXPENSES
Production 195,998 106,935 677,472 306,318
Exploration and corporate 15,008 7,561 54,958 36,279
development
Amortization 69,835 21,661 192,486 72,461
General and administrative 22,732 17,864 94,327 63,687
Provincial capital tax 704 849 (6,075) 5,014
Interest 14,958 2,596 49,493 8,448
Foreign currency loss 10,377 7,785 19,536 39,831
Income before income, mining and 121,903 66,726 435,203 108,038
federal capital taxes
Income and mining tax expense 33,940 18,790 103,087 21,500
Net income for the period $87,963 $47,936 $332,116 $86,538
Net income per share — $0.53 $0.31 $2.05 $0.55
basic
Net income per share — $0.51 $0.30 $2.00 $0.55
diluted
Weighted average number of
shares outstanding
(in thousands)
Basic 168,342 156,570 162,386 155,942
Diluted 172,856 159,939 165,842 158,621
AGNICO-EAGLE MINES LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(thousands of United States dollars, US GAAP basis)
(Unaudited)
Three months ended Year ended
December 31, December 31,
2010 2009 2010 2009
Operating activities
Net income for the period $87,963 $47,936 $332,116 $86,538
Add (deduct) items not
affecting cash:
Amortization 69,835 21,661 192,486 72,461
Future income and mining 20,226 18,422 66,928 20,309
taxes
Gain on sale of (11,302) (3,667) (19,487) (10,142)
available-for-sale
securities
Reversal of mark-to-market — — (64,508) —
gain - Comaplex
Amortization of deferred 12,688 14,699 74,186 63,370
costs and other
Changes in non-cash working
capital balances
Trade receivables (29,135) (21,923) (19,379) (47,930)
Income taxes payable 9,697 (1,273) 9,949 (313)
Inventories (19,392) 1,227 (91,305) (90,772)
Other current assets (3,314) (14,469) (29,278) 4,834
Interest payable (9,838) 197 8,077 1,520
Accounts payable and accrued (36,853) (9,109) 23,685 15,231
liabilities
Cash provided by operating 90,575 53,701 483,470 115,106
activities
Investing activities
Additions to property, plant (114,985) (173,994) (511,641) (657,175)
and mine development
Acquisition, investments and (6,206) 7,181 (5,893) 41,878
other
Cash used in investing (121,191) (166,813) (517,534) (615,297)
activities
Financing activities
Dividends paid — — (26,830) (27,132)
Repayment of capital lease (3,243) (5,064) (16,019) (13,177)
and other
Proceeds from notes 40,000 — 1,311,000 —
Repayment of long term debt (105,000) 30,000 (1,376,000) 515,000
Sales-leaseback financing 7,156 7,861 14,017 21,389
Credit facility financing (97) (9) (12,772) (4,784)
cost
Proceeds from common shares 50,776 4,746 84,659 68,522
issued
Cash provided by (used in) (10,408) 37,534 (21,945) 559,818
financing activities
Effect of exchange rate (2,447) 139 (2,939) 4,585
changes on cash and cash
equivalents
Net increase (decrease) in (43,471) (75,439) (58,948) 64,212
cash and cash equivalents
during the period
Cash and cash equivalents, 148,116 239,032 163,593 99,381
beginning of period
Cash and cash equivalents, $104,645 $163,593 $104,645 $163,593
end of period
Other operating cash flow
information:
Interest paid during the $24,465 $8,810 $41,429 $18,535
period
Income, mining and capital $7,674 $1,049 $25,199 $8,792
taxes paid during the period
Note 1 The following tables provide a reconciliation, on an individual mine
basis, of the total cash costs per ounce of gold produced and minesite
costs per tonne to production costs as set out the interim consolidated
financial statements:
Total Cash
Costs per Ounce
of Gold By Mine
(thousands of Three months Three months
dollars, except ended ended Year ended Year ended
where noted) December 31, December 31, December 31, December 31,
2010 2009 2010 2009
Total
Production
costs per
Consolidated
Statements of
Income $195,998 $106,935 $677,472 $306,318
Attributable to
LaRonde 49,739 41,117 189,146 164,221
Attributable to
Goldex 16,774 16,462 61,561 54,342
Attributable to
Lapa 17,692 18,250 66,199 33,472
Attributable to
Kittila 22,235 19,287 87,740 42,464
Attributable to
Pinos Altos 29,206 11,819 90,293 11,819
Attributable to
Meadowbank 60,352 - 182,533 -
Total $195,998 $106,935 $677,472 $306,318
LaRonde
(thousands of Three months Three months Year ended Year ended
dollars, except ended December ended December December 31, December 31,
where noted) 31, 2010 31, 2009 2010 2009
Production
costs $49,739 $41,117 $189,146 $164,221
Adjustments:
Byproduct (192,155)
revenues (59,376) (41,878) (138,262)
Inventory and
other
adjustment(
(i)) 372 (2,837) 3,287 (3,809)
Non-cash
reclamation
provision (337) (320) (1,344) (1,198)
Cash operating
costs $(9,602) $(3,918) $(1,066) $20,952
Gold production
(ounces) 38,405 46,397 162,806 203,494
Total cash
costs
(per ounce)(
(iii)) $(250) $(84) $(7) $103
Goldex
(thousands of Three months Three months Year ended Year ended
dollars, except ended December ended December December 31, December 31,
where noted) 31, 2010 31, 2009 2010 2009
Production
costs $16,774 $16,462 $61,561 $54,342
Adjustments:
Byproduct 727
revenues 748 - -
Inventory and
other
adjustment(
(i)) (1,519) (831) (253) 383
Non-cash
reclamation
provision (54) (47) (216) (196)
Cash operating
costs $15,949 $15,584 $61,819 $54,529
Gold production
(ounces) 43,110 46,075 184,386 148,849
Total cash
costs
(per ounce)(()
(iii)()) $370 $338 $335 $366
Lapa
(thousands of Three months Three months Year ended Year ended
dollars, except ended December ended December December 31, December 31,
where noted) 31, 2010 31, 2009 2010 2009
Production
costs $17,692 $18,250 $66,199 $33,472
Adjustments:
Byproduct 644
revenues 682 - -
Inventory and
other
adjustment(
(i)) (1,830) (4,514) (4,683) 6,072
Non-cash
reclamation
provision (14) (12) (57) (25)
Cash operating
costs $16,530 $13,724 $62,103 $39,519
Gold production
(ounces) 29,288 22,590 117,456 52,602
Total cash
costs
(per ounce)(
(iii)) $564 $608 $529 $751
Kittila
(thousands of Three months Three months Year ended Year ended
dollars, except ended December ended December December 31, December 31,
where noted) 31, 2010 31, 2009 2010 2009
Production
costs $22,235 $19,287 $87,740 $42,464
Adjustments:
Byproduct 252
revenues 332 - -
Inventory and
other
adjustment(
(i)) 2,252 (2,813) (4,774) 1,565
Non-cash
reclamation
provision (78) (93) (334) (254)
Cash operating
costs $24,741 $16,381 $82,884 $43,775
Gold production
(ounces) 29,721 35,270 126,205 65,547
Total cash
costs
(per ounce)(()
(iii)) $832 $464 $657 $668
Pinos Altos
(thousands of Three months Three months Year ended Year ended
dollars, except ended December ended December December 31, December 31,
where noted) 31, 2010 31, 2009 2010 2009
Production
costs 29,206 $11,819 90,293 $11,819
Adjustments:
Byproduct (25,052)
revenues (10,054) (625) (625)
Inventory and
other
adjustment(
(i)) 296 (5,356) 2,925 (5,356)
Non-cash
reclamation
provision (214) (100) (858) (100)
Stripping
costs (if
portion
capitalized
vs expensed)
((ii)) (4,921) (253) (11,857) (253)
Cash operating
costs $14,313 $5,485 $55,451 $5,485
Gold production
(ounces) 39,289 9,634 130,431 9,634
Total cash
costs
(per ounce)(
(iii)) $365 $570 $425 $570
Meadowbank
(thousands of Three months Three months Year ended Year ended
dollars, except ended December ended December December 31, December 31,
where noted) 31, 2010 31, 2009 2010 2009
Production
costs 60,352 $- 182,533 $-
Adjustments:
Byproduct (584)
revenues 8 - -
Inventory and
other
adjustment(
(i)) (2,432) - 6,911 -
Non-cash
reclamation
provision (437) - (1,315) -
Stripping
costs (if
portion
capitalized
vs expensed)
((ii)) (842) - (4,321) -
Cash operating
costs $56,649 $- $183,224 $-
Gold production
(ounces) 75,990 - 264,576 -
Total cash
costs
(per ounce)(
(iii)) $745 $- $693 $-
Minesite Cost
per Tonne
LaRonde
(thousands of
dollars, Three months Three months Year ended Year ended
except where ended December ended December December 31, December 31,
noted) 31, 2010 31, 2009 2010 2009
Production
costs $49,739 $41,117 $189,146 $164,221
Adjustments:
Inventory and
other
adjustments
(iv) 372 1,370 3,287 234
Non-cash
reclamation
provision (337) (320) (1,344) (1,198)
Minesite
operating
costs (US$) $49,774 $42,167 $191,089 $163,257
Minesite
operating
costs (C$) $50,416 $44,455 $194,993 $184,233
Tonnes of ore
milled (000s) 637 642 2,592 2,546
Minesite cost
per tonne
(C$) (v) $79 $69 $75 $72
Goldex
(thousands of
dollars, Three months Three months Year ended Year ended
except where ended December ended December December 31, December 31,
noted) 31, 2010 31, 2009 2010 2009
Production
costs $16,774 $16,462 $61,561 $54,342
Adjustments:
Inventory and
other
adjustments
(iv) (1,519) (831) (253) 383
Non-cash
reclamation
provision (54) (47) (216) (196)
Minesite
operating
costs (US$) $15,201 $15,584 $61,092 $54,529
Minesite
operating
costs (C$) $15,397 $16,304 $62,545 $60,986
Tonnes of ore
milled (000s) 722 704 2,782 2,615
Minesite cost
per tonne
(C$) (v) $21 $23 $22 $23
Lapa
(thousands of
dollars, Three months Three months Year ended Year ended
except where ended December ended December December 31, December 31,
noted) 31, 2010 31, 2009 2010 2009
Production
costs $17,692 $18,250 $66,199 $33,472
Adjustments:
Inventory and
other
adjustments
(iv) (1,830) (4,514) (4,683) 6,072
Non-cash
reclamation
provision (14) (12) (57) (26)
Minesite
operating
costs (US$) $15,848 $13,724 $61,459 $39,518
Minesite
operating
costs (C$) $16,053 $16,262 $62,771 $42,055
Tonnes of ore
milled (000s) 140 110 552 299
Minesite cost
per tonne
(C$) (v) $115 $148 $114 $140
Kittila
(thousands of
dollars, Three months Three months Year ended Year ended
except where ended December ended December December 31, December 31,
noted) 31, 2010 31, 2009 2010 2009
Production
costs $22,235 $19,287 $87,740 $42,464
Adjustments:
Inventory and
other
adjustments
(iv) 2,252 (2,813) (4,774) 1,565
Non-cash
reclamation
provision (78) (93) (334) (254)
Minesite
operating
costs (US$) $24,409 $16,381 $82,632 $43,775
Minesite
operating
costs (EUR) €19,035 €11,467 €63,464 €30,568
Tonnes of ore
milled (000s) 241 251 960 563
Minesite cost
per tonne
(EUR) (v) €79 €46 €66 €54
Pinos Altos
(thousands of
dollars, Three months Three months Year ended Year ended
except where ended December ended December December 31, December 31,
noted) 31, 2010 31, 2009 2010 2009
Production
costs $29,206 $11,819 $90,293 $11,819
Adjustments:
Inventory and
other
adjustments
(iv) 296 (5,356) 2,925 (5,356)
Non-cash
reclamation
provision (214) (100) (858) (100)
Stripping
costs (if
portion
capitalized
vs expensed)
((ii)) (4,921) (253) (11,857) (253)
Minesite
operating
costs (US$) $24,367 $6,110 $80,503 $6,110
Tonnes of ore
processed
(000s) 699 227 2,318 227
Minesite cost
per tonne
(US$) (v) $35 $27 $35 $27
Meadowbank
(thousands of
dollars, Three months Three months Year ended Year ended
except where ended December ended December December 31, December 31,
noted) 31, 2010 31, 2009 2010 2009
Production
costs $60,352 $- $182,533 $-
Adjustments:
Inventory and
other
adjustments
(iv) (2,432) - 6,911 -
Non-cash
reclamation
provision (437) - (1,315) -
Stripping
costs (if
portion
capitalized
vs expensed)
((ii)) (842) - (4,32