Agnico-Eagle Mines Limited Reports First Quarter 2011 Results
(All amounts expressed in U.S. dollars unless otherwise noted)TORONTO, April 28 /CNW/ - Agnico-Eagle Mines Limited ('Agnico-Eagle' or the 'Company') today reported quarterly net income of $45.3 million, or $0.27 per share for the first quarter of 2011. This result includes a non-cash foreign currency translation loss of $14.1 million, or $0.08 per share, stock option expense of $18.5 million, or $0.11 per share, an expense of $3.1 million, or $0.02 per share related to the March 10, 2011 Meadowbank fire, and a gain on sale of investments of $4.4 million, or $0.03 per share. Excluding these items would result in adjusted net income of $76.5 million, or $0.45 per share. In the first quarter of 2010, the Company reported net income of $22.3 million, or $0.14 per share.
First quarter 2011 cash provided by operating activities was $171.0 million ($146.9 million before changes in non-cash components of working capital), up from cash provided by operating activities of $74.5 million in the first quarter of 2010 ($92.5 million before changes in non-cash components of working capital).
The higher net income and cash provided by operating activities in 2011 was primarily due to 34% higher gold production and significantly higher metal prices when compared to the first quarter of 2010.
'Thanks to a quick response by the team at Meadowbank, the damage caused by the recent fire was limited and we are already back running at full capacity at the mine,' said Sean Boyd, Vice-Chairman and Chief Executive Officer. 'On the back of record production quarters at our Pinos Altos and Kittila mines, and with the expected commissioning of the permanent secondary crusher at Meadowbank in the third quarter, we expect to have all six of our mines operating at a steady state as we head into the second half of the year. It is expected that gold production in the second half of this year should be approximately 20 percent higher than in the first half of 2011,' added Mr. Boyd.
First quarter highlights include:
- Record Quarterly Gold Output at Kittila - record quarterly recovery of 86.4%, and gold production of 40,317 ounces
- Record Operating Quarter at Pinos Altos - record quarterly gold production of 48,001 ounces at total cash costs of $312 per ounce(1). Commercial production declared at Creston Mascota at March 1, 2011
- Strong Cash Generation - record quarterly cash provided by operating activities of $171 million, or $1.01 per share
- Gold Mineralization Extended at Kittila, Goldex, Lapa and Meliadine - details in today's separate exploration news release
Payable gold production(2) in the first quarter of 2011 was 252,362 ounces compared to 188,232 ounces in the first quarter of 2010. A description of the production and cost performance for each mine is set out further below.
The higher level of production in the 2011 period was largely due to production at the Meadowbank mine, which achieved commercial production in March 2010 and therefore only contributed one month to the first quarter total last year. The increase in gold production in 2011 was in spite of the fire which destroyed the Meadowbank kitchen complex and also in spite of unusually severe winter conditions. These factors negatively impacted production and costs, as disclosed in the Company's news releases of March 10 and March 28, 2011.
Total cash costs for the first quarter of 2011 were $531 per ounce. This compares with $441 per ounce in the first quarter of 2010. The higher cost in 2011 was largely attributable to the issues at Meadowbank which more than offset the positive impact of higher byproduct metals prices.
First Quarter 2011 Results Conference Call and Webcast Tomorrow
The Company's senior management will host a conference call on Friday, April 29, 2011 at 8:30 AM (E.D.T.) to discuss financial results and provide an update of the Company's 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 416-644-3416 or Toll-free 800-814-4859. 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 Toll-free 877-289-8525, access code 4428706#.
The conference call replay will expire on May 29, 2011.
The webcast along with presentation slides will be archived for 180 days on the website.
Cash Position Remains Strong
Cash and cash equivalents increased to $114.8 million at March 31, 2011, up slightly from the December 31, 2010 balance of $104.6 million, as higher cash flows in 2011 allowed the full repayment of the Company's bank facilities.
Capital expenditures in the first quarter of 2011 were $96.8 million, including $22.9 million at Kittila, $20.3 million at Meadowbank, $19.7 million at LaRonde, $15.9 million at Pinos Altos, $11.9 million on Goldex and $5.0 million at Lapa.
With its current 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 March 31, 2011 were approximately $1.2 billion.
LaRonde Mine - Strong Cash Flow Generation Continues
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 6,498 tonnes per day ('tpd') in the first quarter of 2011, compared with an average of 7,372 tpd in the corresponding period of 2010. The lower throughput was largely due to the scheduling of a number of small stopes in the upper levels of the mine which cannot be mined as efficiently as larger mining blocks. LaRonde's throughput is expected to be back to normal levels (approximately 7,000 tpd) in the second quarter of 2011.
Minesite costs per tonne(3) were approximately C$86 in the first quarter of 2011. These costs are higher than the C$71 per tonne experienced in the first quarter of 2010. The increase is largely due to the 12% lower throughput in 2011, as discussed above.
On a per ounce basis, net of byproduct credits, LaRonde's total cash costs per ounce were minus $12 in the first quarter of 2011 on production of 36,893 ounces of gold. This compares with the first quarter of 2010 when total cash costs per ounce were $167 on production of 45,036 ounces of gold. The decrease in total cash costs is largely due to significantly higher byproduct metal prices which more than offset lower byproduct metal production. The lower gold production in the 2011 period is largely related to planned mining of lower grade areas for much of the year and also due to lower first quarter throughput, as discussed above.
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 increases late in the year, when the deeper, higher grade, gold ore is planned to be accessed via the new internal shaft of the LaRonde Extension. However, considering currently high byproduct metals prices, the mine may be able to continue to extract some lower grade zinc and silver ores which were previously uneconomic. This could extend the mine's life and benefit the total cash cost per ounce.
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.
The exploration focus at LaRonde continues to be on defining potential open pit material at Bousquet Zone 5 and underground resources at Ellison (on the boundary of Iamgold Corporation's Westwood deposit). Updates on these areas are expected later in the year.
Goldex Mine - Low Cost Underground Mine
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 7,950 tpd in the first quarter of 2011. During the first quarter of 2010, the plant processed 7,410 tpd. The mill has now demonstrated that it can sustain approximately 8,000 tonnes per day following the installation of a permanent secondary crusher and additional tailings pump capacity in the first quarter of 2010.
Minesite costs per tonne at Goldex were approximately C$23 in the first quarter of 2011, essentially unchanged from C$24 in the first quarter of 2010.
Payable gold production in the first quarter of 2011 was 38,500 ounces at total cash costs per ounce of $431. This compares to first quarter 2010 gold production of 42,269 ounces at total cash costs per ounce of $375. The decrease in gold production is due to the mining of lower grade material during the 2011 period which also negatively impacted the mill recovery and total cash costs per ounce.
Gold production for 2011 is expected to be approximately 183,500 ounces.
Construction of a new exploration ramp has been approved to explore the deeper D Zone at Goldex (approximately 150 metres below the GEZ Zone which is currently being mined). Total expenditure for the ramp and associated drilling is expected to be approximately $2 million in 2011, over and above the previously approved $6 million exploration budget for the mine.
Recent drilling has continued to intersect the D Zone. These thick intersections suggest further expansion of this zone. The latest drill results are discussed in today's separate exploration press release.
Kittila Mine - Record Quarter
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.
The Kittila mill processed an average of 2,911 tpd in the first quarter of 2011, close to its 3,000 tpd design rate. In the first quarter of 2010, the Kittila mill processed 2,419 tpd.
Gold recoveries in the first quarter of 2011 were a quarterly record of 86.4%, sustainably exceeding the design rate of 83% for the first time. This compares with the first quarter of 2010 when the recoveries were approximately 71%. This improvement in mill recovery was largely due to a change in the process which resulted in the ability to lower the chloride levels in the concentrate feed to the autoclave.
Minesite costs per tonne at Kittila were approximately €75 in the first quarter of 2011, compared to €64 in the first quarter of 2010. The increase in minesite costs was largely due to ore re-handling (blending), high contractor costs associated with blast hole charging, higher than expected energy consumption due to unusually severe winter conditions and much higher fuel costs.
Now that the mine is operating at steady state, the focus going forward will be on reducing the unit costs. The Company expects to transition to self-mining on surface and underground during 2011 which is expected to contribute to reduced costs.
First quarter 2011 gold production at Kittila was a record 40,317 ounces with a total cash cost per ounce of $687. In the first quarter of 2010 the mine produced 24,547 ounces at total cash costs per ounce of $735. The higher production and lower costs were largely the result of improved throughput and higher grades in the first quarter of 2011.
Gold production in 2011 is expected to be approximately 147,100 ounces.
A study is underway examining the possibility of increasing the production rate at Kittila. The study is expected to be reviewed in the fourth quarter of 2011.
Exploration drilling at Kittila has continued to extend the Suuri and Roura zones at depth and to the north. As the Company gains better access to these areas late in the year via a ramp, it is expected that the rate of growth of these zones will increase. Further details on the most recent drill holes are included in today's separate news release.
Lapa - Record Quarterly Throughput
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 1,581 tpd, a quarterly record, in the first quarter of 2011. This compares with an average of 1,432 tonnes per day in the first quarter of 2010 as Lapa has successfully achieved its design rate of 1,500 tpd.
Minesite costs per tonne were C$117 in the first quarter of 2011, compared to C$123 in the first quarter of 2010. The lower cost is largely due to the increased throughput, as discussed above.
Payable production in the first quarter of 2011 was 26,914 ounces of gold at total cash costs per ounce of $630. This compares with the first quarter of 2010, when production was 31,553 ounces of gold at total cash cost per ounce of $489. The decrease in gold production and increase in costs is largely due to a 27% decrease in grade and also due to an unscheduled five day shutdown in the mill for maintenance of grinding and ore storage. The lower grade was largely due to stope sequencing and lower grades in the 2011 mine model. The lower grades in the model reflect a higher gold price and therefore a lower cut off grade for reserves (reserve grade dropped to 7.4 g/t for 2011 versus 8.2 g/t for 2010).
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. The most recent drill results are presented in today's separate exploration news release.
Pinos Altos - Record Gold Production at Low Costs
The 100% owned Pinos Altos mine in northern Mexico achieved commercial production in November 2009. Proven and probable reserves, including the stand-alone, heap leach, Creston Mascota mine, total 3.3 million ounces of gold and 92.0 million ounces of silver from 44.2 million tonnes grading 2.3 g/t gold and 64.8 g/t silver.
The Pinos Altos mill processed an average of 4,475 tpd in the first quarter of 2011. This compares favourably with 2,584 tonnes per day in the first quarter of 2010, its first full quarter of commercial production. The mill is now routinely performing at process rates above the initial design capacity of 4,000 tpd.
Minesite costs per tonne were $28 in the first quarter of 2011, compared to $32 in the first quarter of 2010. The lower costs in 2011 are a result of the inclusion of the new Creston Mascota heap leach mine where minesite costs per tonne are much lower. The drop in costs was partly offset by the higher proportion of ore from the relatively higher cost underground mine (about 60% of the mill feed during the first quarter of 2011 compared to 100% from open pit during the first quarter of 2010).
Payable production in the first quarter of 2011 was a record 48,001 ounces of gold at total cash costs per ounce of $312, including the satellite Creston Mascota operation. This compares with production of 26,228 ounces at a total cash cost of $405 in the first quarter of 2010.
The first gold production from Creston Mascota occurred during the fourth quarter of 2010. In the first quarter of 2011, payable gold production from this heap leach operation was 4,561 ounces (included in the Pinos Altos total above). Commercial production at Creston Mascota was achieved on March 1, 2011.
Payable production in 2011 (including Creston Mascota) is expected to be 199,000 ounces of gold and approximately 2.2 million ounces of silver.
Due to the improved mill capacity and the increased underground ore reserve tonnage at Pinos Altos, 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.
Exploration at Pinos Altos in 2011 is focusing on the Cerro Colorado zone (adjacent to the main Santo Nino zone, to the west), the satellite Creston Mascota, Cubiro and Bravo zones, and the Reyna de la Plata zone (parallel zone, north of Santo Nino). Further details of the exploration program at Pinos Altos will be available later this year.
Meadowbank - Back at Full Production Rates Following Fire
The 100% owned Meadowbank mine is located in Nunavut, northern Canada. Proven and probable gold reserves total 3.5 million ounces from 34.1 million tonnes grading 3.2 g/t. An additional 9.1 million tonnes grading 1.0 g/t (or 0.3 million ounces) of indicated gold resources are within the currently contemplated pit limits.
The Meadowbank mill processed an average of 6,985 tpd in the first quarter of 2011. No comparable period exists as the mine achieved commercial production in March 2010.
Minesite costs per tonne were C$93 in the first quarter. With commercial production achieved in March 2010, there is no complete comparable period in 2010. These costs were higher than the C$82 per tonne which is expected in 2011. The higher costs so far in 2011 are largely due to lower than planned throughput in the mill (approximately 14% lower than budget in the first quarter) largely due to the disruption caused by the fire of March 10, 2011 and unusually severe winter conditions.
The March 10 fire resulted in an expense of $3.1 million in the first quarter of 2011. The Company maintains various insurance policies that are expected to largely offset the associated costs going forward as claims are settled.
Payable production in the first quarter of 2011 was 61,737 ounces of gold at total cash costs per ounce of gold of $943. These costs are expected to decline dramatically in 2011 as throughput improves with the return of the full workforce in April 2011, and the commissioning of the permanent secondary crushing facility in the third quarter of 2011. The design rate of 8,500 tpd is expected to be achieved on a steady state basis at that time.
Payable production in 2011 is expected to be approximately 310,000 ounces of gold at total cash costs of approximately $700 per ounce as updated in the Company's March 28, 2011 news release. Previous guidance was for production of 360,000 ounces of gold at total cash costs per ounce of $600.
Meliadine - Initial Gold Reserve Established, Gold Zones Expanding
In July 2010, Agnico-Eagle completed the acquisition of the Meliadine project near Rankin Inlet, Nunavut.
The Company's initial reserve estimate is 2.6 million ounces of gold in probable reserves from 9.5 million tonnes grading 8.5 g/t. It is expected that this reserve will continue to grow significantly as the large gold resource is drilled extensively. Approximately $65 million is expected to be spent on Meliadine exploration and related infrastructure in 2011.
In addition to the initial gold reserve, the Meliadine project contains indicated gold resource of 8.8 million tonnes grading 5.2 g/t (or 1.5 million ounces). It also includes inferred gold resources of 11.8 million tonnes grading 6.9 g/t (or 2.6 million ounces).
Based on the exploration success and the growth in the deposit since it was acquired, the Company is evaluating the possibility of accelerating underground ramp development at Meliadine to facilitate further exploration and the eventual 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 Board will consider a production decision in 2013, contingent on receiving all required permits.
Recent drilling has extended the Wesmeg zone (approximately 400 metres south of the main Tiriganiaq zone) at Meliadine. Drilling through March has confirmed the continuity of Wesmeg and extended it to the west. The deposit consists of a North Trend and a South Trend, each more than a kilometre long. Wesmeg is open at depth and in all directions and would likely be mined via open pit methods. Further detail is available in today's separate exploration news release.
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 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.
Pinos Altos Tour
Agnico-Eagle will be hosting a trip for equity analysts and buy-side investors on May 19, 2011 to Pinos Altos in northern Mexico. A charter plane will depart Toronto in the afternoon of May 18. After overnight in Chihuahua, small planes will take participants to site and back on May 19, with return to Toronto that evening. Interested parties should contact Adriana Trlin at atrlin@agnico-eagle.com, or 416-947-1212 x3747. Space is extremely limited. All presentation materials will also be posted on the Company's website.
Meadowbank and Meliadine Tour
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 Adriana Trlin at atrlin@agnico-eagle.com, or 416-947-1212 x3747. 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
__________________________
|Record Date |Payment Date|
|_____________|____________|
|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. The Company has full exposure to higher gold prices consistent with its policy of no forward gold sales and maintains a corporate strategy based on increasing shareholders exposure to gold, on a per share basis. It has paid a cash dividend for 29 consecutive years. www.agnico-eagle.com
AGNICO-EAGLE MINES LIMITED
SUMMARY OF OPERATIONS KEY PERFORMANCE INDICATORS
(thousands of United States dollars, except where noted, US GAAP basis,
Unaudited)
Three months ended
March 31,
2011 2010
Gross mine profit (exclusive of amortization
shown below) (Note 1)
LaRonde $48,983 $45,387
Goldex 40,333 26,423
Lapa 19,178 21,273
Kittila 27,831 11,470
Pinos Altos (Note 2) 47,259 12,631
Meadowbank 29,917 2,171
Total gross mine profit 213,501 119,355
Amortization 61,929 30,503
Corporate 74,210 47,578
Income before tax 77,362 41,274
Tax provision 32,098 18,942
Net earnings $45,264 $22,332
Net earnings per share $0.27 $0.14
Operating cash flow $171,043 $74,491
Realized price per sales volume (US$):
- Gold (per ounce) $1,400 $1,111
- Silver (per ounce) $36.10 $17.87
- Zinc (per tonne) $2,509 $2,235
- Copper (per tonne) $10,027 $7,288
Payable production:
Gold (ounces)
LaRonde 36,893 45,036
Goldex 38,500 42,269
Lapa 26,914 31,553
Kittila 40,317 24,547
Pinos Altos (Note 2) 48,001 26,228
Meadowbank 61,737 18,599
Total gold (ounces) 252,362 188,232
Silver (000s ounces)
LaRonde 680 875
Pinos Altos 406 222
Meadowbank 13 2
Total silver (000s ounces) 1,099 1,099
Zinc (tonnes) 11,941 14,224
Copper (tonnes) 817 1,052
Payable metal sold:
Gold (ounces - LaRonde) 37,459 45,240
Gold (ounces - Goldex) 41,895 37,863
Gold (ounces - Lapa) 25,776 34,193
Gold (ounces - Kittila) 40,698 30,674
Gold (ounces - Pinos Altos) (Note 2) 45,484 20,965
Gold (ounces - Meadowbank) 61,928 7,103
Total gold (ounces) 253,240 176,038
Silver (000s ounces - LaRonde) 679 775
Silver (000s ounces - Pinos Altos) 409 221
Silver (000s ounces - Meadowbank) 21 —
Total silver (ounces) 1,109 996
Zinc (tonnes) 8,302 14,529
Copper (tonnes) 820 1,047
Total cash costs per ounce of gold (Note 3,4):
LaRonde $(12) $167
Goldex $431 $375
Lapa $630 $489
Kittila $687 $735
Pinos Altos (Note 2) $312 $405
Meadowbank $943 840
Weighted average total cash costs per ounce $531 $441
Note 1: Gross mine profit is calculated as total revenues from all metals, by mine, minus total production costs, by mine.
Note 2: Creston Mascota achieved commercial production as of March 1, 2011 and is considered a satellite pit to the Pinos Altos mine.
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 reconciliation to production costs, see Note 1 to the financial statements included herein. 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 changes are immaterial in nature.
TORONTO, April 28 /CNW/ --
AGNICO-EAGLE MINES LIMITED
CONSOLIDATED BALANCE SHEETS
(thousands of United States dollars, US GAAP basis)
(Unaudited)
As at As at
March 31, December 31,
2011 2010
ASSETS
Current
Cash and cash equivalents $114,825 $104,645
Trade receivables 71,566 112,949
Inventories:
Ore stockpiles 63,297 67,764
Concentrates 60,193 50,332
Supplies 160,107 149,647
Other current assets 194,557 188,885
Fair value of derivative 2,036 -
assets
Total current assets 666,581 674,222
Other assets 58,396 61,502
Future income and mining tax 2,615 -
assets
Goodwill 200,064 200,064
Property, plant and mine 4,595,545 4,564,563
development
$5,523,201 $5,500,351
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current
Accounts payable and accrued $168,504 $170,967
liabilities
Dividends payable 81,002 108,009
Interest payable 20,513 9,743
Income taxes payable 1,393 14,450
Total current liabilities 271,412 303,169
Long term debt 600,000 650,000
Fair value of derivative - 142
financial instruments
Reclamation provision and other 151,303 145,536
liabilities
Future income and mining tax 759,023 736,054
liabilities
Shareholders' equity
Common shares
Authorized — unlimited
Issued — 169,017,306 3,090,202 3,078,217
(December 31, 2010 —
168,763,496)
Stock options 95,115 78,554
Warrants 24,858 24,858
Contributed surplus 15,166 15,166
Retained earnings 485,529 440,265
Accumulated other comprehensive 30,593 28,390
income
Total shareholders' equity 3,741,463 3,665,450
$5,523,201 $5,500,351
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
March 31,
2011 2010
REVENUES
Revenues from mining operations $412,068 $237,583
Interest and sundry income 1,599 827
Gain on sale of available-for-sale 4,394 346
securities
418,061 238,756
COSTS AND EXPENSES
Production 198,567 118,227
Exploration and corporate 16,978 7,504
development
Amortization 61,929 30,503
General and administrative 35,152 28,430
Provincial capital tax - (587)
Interest 14,008 4,504
Foreign currency loss 14,065 8,901
Income before income, mining and 77,362 41,274
federal capital taxes
Income and mining tax expense 32,098 18,942
Net income for the period 9 $45,264 $22,332
Net income per share — basic $0.27 $0.14
Net income per share — diluted $0.26 $0.14
Weighted average number of shares
outstanding (in thousands)
Basic 168,853 156,692
Diluted 172,863 159,093
TORONTO, April 28 /CNW/ --
AGNICO-EAGLE MINES LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(thousands of United States dollars, US GAAP basis)
(Unaudited)
Three months ended
March 31,
2011 2010
Operating activities
Net income for the period 45,264 $22,332
Add (deduct) items not affecting cash:
Amortization 61,929 30,503
Future income and mining taxes 8,879 13,095
Gain on sale of available-for-sale (4,394) (459)
securities
Amortization of deferred costs and 35,269 27,060
other
Changes in non-cash working capital
balances
Trade receivables 41,383 20,390
Income taxes payable (13,057) 3,924
Inventories (16,595) (25,542)
Other current assets 4,466 (2,686)
Interest payable 10,770 (339)
Accounts payable and accrued (2,871) (13,787)
liabilities
Cash provided by operating activities 171,043 74,491
Investing activities
Additions to property, plant and mine (96,849) (112,563)
development
Acquisition, investments and other 4,199 (5,642)
Cash used in investing activities (92,650) (118,205)
Financing activities
Dividends paid (25,820) (26,830)
Repayment of capital lease and other (3,053) (1,539)
Repayment of long term debt (50,000) 20,000
Sales-leaseback financing — 3,005
Proceeds from common shares issued 10,031 3,718
Cash provided by (used in) financing (68,842) (1,646)
activities
Effect of exchange rate changes on cash 629 (181)
and cash equivalents
Net increase (decrease) in cash and 10,180 (45,541)
cash equivalents during the period
Cash and cash equivalents, beginning of 104,645 163,593
period
Cash and cash equivalents, end of $114,825 $118,052
period
Other operating cash flow information:
Interest paid during the period $3,229 $8,722
Income, mining and capital taxes paid $35,219 $1,497
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. The total cash cost per ounce for the Company is
calculated as the weighted average of the total cash cost per ounce at
each of the Company's mines based on the proportion of the Company's
payable ounces produced at a mine.
Total Cash Costs per Ounce of
Gold By Mine
Three months Three months
(thousands of dollars, except ended ended
where noted) March 31, 2011 March 31, 2010
Total Production costs per $198,567 $118,227
Consolidated Statements of
Income
Attributable to LaRonde 47,885 45,482
Attributable to Goldex 17,874 13,800
Attributable to Lapa 16,751 16,379
Attributable to Kittila 28,500 23,018
Attributable to Pinos Altos 30,907 13,849
Attributable to Meadowbank 56,650 5,699
Total $198,567 $118,227
LaRonde
Three months Three months
(thousands of dollars, except ended ended
where noted) March 31, 2011 March 31, 2010
Production costs $47,885 $45,482
Adjustments:
Byproduct revenues (52,979) (38,391)
Inventory and other adjustment(
(i)) 5,352 763
Non-cash reclamation provision (700) (335)
Cash operating costs (442) $7,519
Gold production (ounces) 36,893 45,036
Total cash costs (per ounce)((ii)
(i)) $(12) $167
Goldex
Three months Three months
(thousands of dollars, except ended ended
where noted) March 31, 2011 March 31, 2010
Production costs $17,874 $13,800
Adjustments:
Byproduct revenues 87 -
Inventory and other adjustment(
(i)) (1,309) 2,102
Non-cash reclamation provision (55) (54)
Cash operating costs $16,597 $15,848
Gold production (ounces) 38,500 42,269
Total cash costs (per ounce)(
(iii)) $431 $375
Lapa
Three months Three months
(thousands of dollars, except ended ended
where noted) March 31, 2011 March 31, 2010
Production costs $16,751 $16,379
Adjustments:
Byproduct revenues 66 -
Inventory and other adjustment(
(i)) 158 (926)
Non-cash reclamation provision (15) (14)
Cash operating costs $16,960 $15,439
Gold production (ounces) 26,914 31,553
Total cash costs (per ounce)(
(iii)) $630 $489
Kittila
Three months Three months
(thousands of dollars, except ended ended
where noted) March 31, 2011 March 31, 2010
Production costs $28,500 $23,018
Adjustments:
Byproduct revenues 77 (25)
Inventory and other adjustment(
(i)) (843) (4,849)
Non-cash reclamation provision (50) (99)
Cash operating costs $27,684 $18,045
Gold production (ounces) 40,317 24,547
Total cash costs (per ounce)(
(iii)) $687 $735
Pinos Altos (includes Creston
Mascota)
Three months Three months
(thousands of dollars, except ended ended
where noted) March 31, 2011 March 31, 2010
Production costs $30,907 $13,849
Adjustments:
Byproduct revenues (15,003) (3,687)
Inventory and other adjustment(
(i)) 5,697 1,493
Non-cash reclamation provision (282) (214)
Stripping costs (capitalized vs
expensed)((ii)) (6,325) (810)
Cash operating costs $14,994 $10,631
Gold production (ounces) 48,001 26,228
Total cash costs (per ounce)(
(iii)) $312 $405
Meadowbank
Three months Three months
(thousands of dollars, except ended ended
where noted) March 31, 2011 March 31, 2010
Production costs $56,650 $5,699
Adjustments:
Byproduct revenues (449) (26)
Inventory and other adjustment(
(i)) 2,426 9,161
Non-cash reclamation provision (412) (127)
Cash operating costs $58,215 $14,707
Gold production (ounces) 61,737 17,515
Total cash costs (per ounce)(
(iv)) $943 $840
TORONTO, April 28 /CNW/ --
Minesite Cost per Tonne
LaRonde
Three months Three months
(thousands of dollars, ended ended
except where noted) March 31, 2011 March 31, 2010
Production costs $47,885 $45,482
Adjustments:
Inventory and other 4,517 763
adjustments (iv)
Non-cash reclamation (700) (335)
provision
Minesite operating costs $51,702 $45,910
(US$)
Minesite operating costs $50,357 $47,078
(C$)
Tonnes of ore milled (000s) 585 664
Minesite cost per tonne $86 $71
(C$) (v)
Goldex
Three months Three months
(thousands of dollars, ended ended
except where noted) March 31, 2011 March 31, 2010
Production costs $17,874 $13,800
Adjustments:
Inventory and other (1,161) 2,102
adjustments (iv)
Non-cash reclamation (55) (54)
provision
Minesite operating costs $16,658 $15,848
(US$)
Minesite operating costs $16,327 $16,313
(C$)
Tonnes of ore milled (000s) 715 667
Minesite cost per tonne $23 $24
(C$) (v)
Lapa
Three months Three months
(thousands of dollars, ended ended
except where noted) March 31, 2011 March 31, 2010
Production costs $16,751 $16,379
Adjustments:
Inventory and other 306 (926)
adjustments (iv)
Non-cash reclamation (15) (14)
provision
Minesite operating costs $17,042 $15,439
(US$)
Minesite operating costs $16,640 $15,832
(C$)
Tonnes of ore milled (000s) 142 129
Minesite cost per tonne $117 $123
(C$) (v)
Kittila
Three months Three months
(thousands of dollars, ended ended
except where noted) March 31, 2011 March 31, 2010
Production costs $28,500 $23,018
Adjustments:
Inventory and other (843) (4,849)
adjustments (iv)
Non-cash reclamation (50) (99)
provision
Minesite operating costs $27,607 $18,070
(US$)
Minesite operating costs €19,710 €13,915
(EUR)
Tonnes of ore milled (000s) 262 218
Minesite cost per tonne €75 €64
(EUR) (v)
Pinos Altos (includes
Creston Mascota)
Three months Three months
(thousands of dollars, ended ended
except where noted) March 31, 2011 March 31, 2010
Production costs $30,907 $13,849
Adjustments:
Inventory and other 5,064 1,493
adjustments (iv)
Non-cash reclamation (282) (214)
provision
Stripping costs
(capitalized vs expensed) (
(ii)) (6,325) (810)
Minesite operating costs $29,364 $14,318
(US$)
Tonnes of ore processed 1,033 450
(000s)
Minesite cost per tonne $28 $32
(US$) (v)
Meadowbank
Three months Three months
(thousands of dollars, ended ended
except where noted) March 31, 2011 March 31, 2010
Production costs $56,650 $5,699
Adjustments:
Inventory and other 2,772 9,161
adjustments (iv)
Non-cash reclamation (412) (127)
provision
Minesite operating costs $59,010 $14,733
(US$)
Minesite operating costs $58,242 $15,117
(C$)
Tonnes of ore milled (000s) 629 163
Minesite cost per tonne $93 $93
(C$) (v)
(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) The Company has decided to report total cash costs using the more
common industry practice of deferring certain stripping costs that can
be attributed to future production. The 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 total cash costs per ounce have been recalculated on
this basis.
(iii) Total cash cost per ounce 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.
(iv) This inventory adjustment reflects production costs associated with
unsold concentrates.
(v) 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 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.
Note Regarding Certain Measures of Performance
This press release presents measures including 'total cash costs per
ounce' and 'minesite costs 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, these measures, taken by
themselves, are not necessarily indicative of operating costs or cash
flow measures prepared in accordance with US GAAP. 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 of the
Company for the period ended December 31, 2010 contained herein.
The contents of this press release have been prepared under the
supervision of, and reviewed by, Marc Legault P.Eng., Vice-President
Project Development and a 'Qualified Person' for the purposes of NI
43-101.
Detailed Mineral Reserve and Resource Data (as at December 31, 2010)
__________________________________________________________________
| |Au |Ag |Cu |Zn |Pb |Au |Tonnes |
|Category and |(g/t) |(g/t) |(%) |(%) |(%) |(000s |(000s) |
|Operation | | | | | |oz.) | |
|_____________|_______|_______|______|______|______|______|________|
|Proven Mineral Reserve |
|__________________________________________________________________|
|Goldex |1.87 | | | | | 890| 14,804|
|(underground)| | | | | | | |
|_____________|_______|_______|______|______|______|______|________|
| Kittila |4.19 | | | | | 53| 395|
|(open pit) | | | | | | | |
|_____________|_______|_______|______|______|______|______|________|
| Kittila |6.00 | | | | | 2| 8|
|(underground)| | | | | | | |
|_____________|_______|_______|______|______|______|______|________|
|Kittila total|4.23 | | | | | 55| 403|
|proven | | | | | | | |
|_____________|_______|_______|______|______|______|______|________|
|Lapa |7.24 | | | | | 261| 1,122|
|(underground)| | | | | | | |
|_____________|_______|_______|______|______|______|______|________|
|LaRonde |2.36 |55.17 |0.26 |2.78 |0.32 | 366| 4,838|
|(underground)| | | | | | | |
|_____________|_______|_______|______|______|______|______|________|
|Meadowbank |3.13 | | | | | 85| 839|
|(open pit) | | | | | | | |
|_____________|_______|_______|______|______|______|______|________|
|Pinos Altos |0.89 |13.26 | | | | 31| 1,078|
|(open pit) | | | | | | | |
|_____________|_______|_______|______|______|______|______|________|
|Pinos Altos |2.52 |78.68 | | | | 144| 1,786|
|(underground)| | | | | | | |
|_____________|_______|_______|______|______|______|______|________|
|Pinos Altos |1.90 |54.06 | | | | 175| 2,864|
|total proven | | | | | | | |
|_____________|_______|_______|______|______|______|______|________|
|Subtotal |2.29 | | | | | 1,832| 24,869|
|Proven | | | | | | | |
|Mineral | | | | | | | |
|Reserve | | | | | | | |
|_____________|_______|_______|______|______|______|______|________|
TORONTO, April 28 /CNW/ --
_____________________________________________________________________
|Probable Mineral Reserve |
|_____________________________________________________________________|
|Goldex |1.62 | | | | | 676| 12,990|
|(underground) | | | | | | | |
|________________|______|_______|______|______|______|_______|________|
| Kittila (open |5.28 | | | | | 281| 1,657|
|pit) | | | | | | | |
|________________|______|_______|______|______|______|_______|________|
| Kittila |4.61 | | | | | 4,544| 30,672|
|(underground) | | | | | | | |
|________________|______|_______|______|______|______|_______|________|
|Kittila total |4.64 | | | | | 4,826| 32,329|
|probable | | | | | | | |
|________________|______|_______|______|______|______|_______|________|
|Lapa |7.56 | | | | | 416| 1,709|
|(underground) | | | | | | | |
|________________|______|_______|______|______|______|_______|________|
|LaRonde |4.63 |23.99 |0.28 |0.90 |0.07 | 4,452| 29,892|
|(underground) | | | | | | | |
|________________|______|_______|______|______|______|_______|________|
|Meadowbank (open|3.18 | | | | | 3,402| 33,259|
|pit) | | | | | | | |
|________________|______|_______|______|______|______|_______|________|
| Meliadine |6.91 | | | | | 953| 4,287|
|(open pit) | | | | | | | |
|________________|______|_______|______|______|______|_______|________|
| Meliadine |9.89 | | | | | 1,647| 5,180|
|(underground) | | | | | | | |
|________________|______|_______|______|______|______|_______|________|
|Meliadine total |8.54 | | | | | 2,600| 9,467|
|probable | | | | | | | |
|________________|______|_______|______|______|______|_______|________|
| Pinos Altos |1.98 |45.34 | | | | 1,083| 16,987|
|(open pit) | | | | | | | |
|________________|______|_______|______|______|______|_______|________|
| Pinos Altos |2.58 |79.64 | | | | 2,013| 24,311|
|(underground) | | | | | | | |
|________________|______|_______|______|______|______|_______|________|
|Pinos Altos |2.33 |65.53 | | | | 3,096| 41,298|
|total probable | | | | | | | |
|________________|______|_______|______|______|______|_______|________|
|Subtotal |3.76 | | | | | 19,467| 160,944|
|Probable Mineral| | | | | | | |
|Reserve | | | | | | | |
|________________|______|_______|______|______|______|_______|________|
|Total Proven and|3.57 | | | | | 21,299| 185,813|
|Probable Mineral| | | | | | | |
|Reserves | | | | | | | |
|________________|______|_______|______|______|______|_______|________|
TORONTO, April 28 /CNW/ --
_____________________________________________________________________
| |Au |Ag |Cu |Zn |Pb |Tonnes |
|Category and Operation |(g/t) |(g/t) |(%) |(%) |(%) |(000s) |
|________________________|_______|_______|______|______|______|_______|
|Indicated Mineral | | | | | | |
|Resource | | | | | | |
|________________________|_______|_______|______|______|______|_______|
|Bousquet (underground) |5.63 | | | | | 1,704|
|________________________|_______|_______|______|______|______|_______|
|Ellison (underground) |5.68 | | | | | 415|
|________________________|_______|_______|______|______|______|_______|
|Goldex (underground) |1.77 | | | | | 8,273|
|________________________|_______|_______|______|______|______|_______|
|Kittila (underground) |2.41 | | | | | 15,348|
|________________________|_______|_______|______|______|______|_______|
|Lapa (underground) |4.10 | | | | | 1,770|
|________________________|_______|_______|______|______|______|_______|
|LaRonde (underground) |1.89 |23.96 |0.12 |1.36 |0.13 | 6,933|
|________________________|_______|_______|______|______|______|_______|
| Meadowbank (open pit) |1.40 | | | | | 23,441|
|________________________|_______|_______|______|______|______|_______|
| Meadowbank |4.39 | | | | | 2,318|
|(underground) | | | | | | |
|________________________|_______|_______|______|______|______|_______|
|Meadowbank total |1.67 | | | | | 25,759|
|indicated | | | | | | |
|________________________|_______|_______|______|______|______|_______|
| Meliadine (open pit) |5.25 | | | | | 1,968|
|________________________|_______|_______|______|______|______|_______|
| Meliadine |5.20 | | | | | 6,839|
|(underground) | | | | | | |
|________________________|_______|_______|______|______|______|_______|
|Meliadine total |5.21 | | | | | 8,807|
|indicated | | | | | | |
|________________________|_______|_______|______|______|______|_______|
| Pinos Altos (open pit)|0.88 |12.42 | | | | 15,832|
|________________________|_______|_______|______|______|______|_______|
| Pinos Altos |1.25 |35.76 | | | | 9,789|
|(underground) | | | | | | |
|________________________|_______|_______|______|______|______|_______|
|Pinos Altos total |1.02 |21.34 | | | | 25,621|
|indicated | | | | | | |
|________________________|_______|_______|______|______|______|_______|
|Swanson (open pit) |1.93 | | | | | 504|
|________________________|_______|_______|______|______|______|_______|
|Total Indicated Resource|2.10 | | | | | 95,135|
|________________________|_______|_______|______|______|______|_______|
TORONTO, April 28 /CNW/ --
_____________________________________________________________________
| |Au |Ag |Cu |Zn |Pb |Tonnes |
|Category and Operation |(g/t) |(g/t) |(%) |(%) |(%) |(000s) |
|________________________|______|_______|______|______|______|________|
|Inferred Mineral | | | | | | |
|Resource | | | | | | |
|________________________|______|_______|______|______|______|________|
| Bousquet (open pit) |1.87 | | | | | 18,798|
|________________________|______|_______|______|______|______|________|
| Bousquet (underground)|7.45 | | | | | 1,667|
|________________________|______|_______|______|______|______|________|
|Bousquet total inferred |2.32 | | | | | 20,464|
|________________________|______|_______|______|______|______|________|
|Ellison (underground) |5.81 | | | | | 786|
|________________________|______|_______|______|______|______|________|
|Goldex (underground) |1.67 | | | | | 25,813|
|________________________|______|_______|______|______|______|________|
| Kittila (open pit) |3.71 | | | | | 362|
|________________________|______|_______|______|______|______|________|
| Kittila (underground) |2.44 | | | | | 7,958|
|________________________|______|_______|______|______|______|________|
|Kittila total inferred |2.50 | | | | | 8,320|
|________________________|______|_______|______|______|______|________|
|Kuotko, Finland (open |3.24 | | | | | 1,116|
|pit) | | | | | | |
|________________________|______|_______|______|______|______|________|
|Kylmäkangas, Finland |4.07 | | | | | 1,924|
|(underground) | | | | | | |
|________________________|______|_______|______|______|______|________|
|Lapa (underground) |8.27 | | | | | 454|
|________________________|______|_______|______|______|______|________|
|LaRonde (underground) |3.72 |12.24 |0.27 |0.48 |0.05 | 11,526|
|________________________|______|_______|______|______|______|________|
| Meadowbank (open pit) |1.85 | | | | | 9,393|
|________________________|______|_______|______|______|______|________|
| Meadowbank |5.62 | | | | | 824|
|(underground) | | | | | | |
|________________________|______|_______|______|______|______|________|
|Meadowbank total |2.15 | | | | | 10,218|
|inferred | | | | | | |
|________________________|______|_______|______|______|______|________|
| Meliadine (open pit) |4.86 | | | | | 2,388|
|________________________|______|_______|______|______|______|________|
| Meliadine |7.47 | | | | | 9,446|
|(underground) | | | | | | |
|________________________|______|_______|______|______|______|________|
|Meliadine total inferred|6.94 | | | | | 11,834|
|________________________|______|_______|______|______|______|________|
| Pinos Altos (open pit)|0.87 |17.34 | | | | 21,913|
|________________________|______|_______|______|______|______|________|
| Pinos Altos |2.38 |59.24 | | | | 3,744|
|(underground) | | | | | | |
|________________________|______|_______|______|______|______|________|
|Pinos Altos total |1.09 |23.46 | | | | 25,657|
|inferred | | | | | | |
|________________________|______|_______|______|______|______|________|
|Total Inferred Resource |2.59 | | | | | 118,111|
|________________________|______|_______|______|______|______|________|
Tonnage amounts and contained metal amounts presented in this table have
been rounded to the nearest thousand. Reserves are not a sub-set of
resources. No measured resources were estimated.
Forward-Looking Statements
The information in this news release has been prepared as at April 28,
2011. 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 and are referred to herein as 'forward-looking statements'. When
used in this document, words such as 'anticipate', 'expect',
'estimate', 'forecast', 'planned', 'will', 'likely', 'schedule' and
similar expressions are intended to identify forward-looking
statements.
Such statements include without limitation: the Company's
forward-looking production guidance, total cash costs per ounce
guidance and depreciation guidance, including estimated ore grades,
project timelines, drilling results, orebody configurations, metal
production, life of mine horizons, commencement of production
estimates, the estimated timing of scoping and other studies evaluating
potential projects or expansions, recovery rates, mill throughput, 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 and production; and
other statements and information regarding anticipated trends with
respect to the Company's operations, exploration and the funding
thereof. 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 and in management's
discussion and analysis and the Company's Annual Report on Form 20-F
for the year ended December 31, 2010 ('Form 20-F') as well as: 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, production and expansion at each of Agnico-Eagle's mines
and growth projects proceeds on a basis consistent with current
expectations, and that Agnico-Eagle does not change its 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 news
release; that prices for gold, silver, zinc, copper and lead 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 Agnico-Eagle's current
estimates of mineral reserves, mineral resources, mineral grades and
metal recovery are accurate; that there are no material delays in the
timing for completion of ongoing growth projects; that the Company's
current plans to optimize production are successful; 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 metal 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; 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 Form 20-F, 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, recoveries, mining methods, capital
costs, total cash costs, minesite costs, and location of surface
infrastructure. Actual results and final decisions may be materially
different from those currently anticipated.
Notes to Investors Regarding the Use of Resources
Cautionary Note to Investors Concerning Estimates of Measured and
Indicated Resources
This news release uses 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 also uses 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. Agnico-Eagle uses 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 for all properties 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 the Staff of the SEC has interpreted to mean
historic three-year average prices. The assumptions used for the
mineral reserves and resources estimates reported by the Company on
February 16, 2011 were based on three-year average prices for the
period ending December 31, 2010 of $1,024 per ounce gold, $16.62 per
ounce silver, $0.86 per pound zinc, $2.97 per pound copper, $0.90 per
pound lead and C$/US$, US$/Euro and MXP/US$ exchange rates of 1.08,
1.40 and 12.43, 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.
Under National Instrument 43-101, 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. All
reserves disclosed in this press release qualify as mineral reserves
under both National Instrument 43-101 and the SEC's Industry Guide 7.
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 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, 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 reasonably 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 separate from and
not a portion of the mineral resources.
_____________________________________________________________________
|Property/Project name |Qualified Person |Date of most recent |
|and location |responsible for the |Technical Report (NI|
| |current Mineral Resource|43-101) |
| |and Reserve |filed on SEDAR |
| |Estimate and | |
| |relationship to | |
| |Agnico-Eagle | |
|_______________________|________________________|____________________|
|LaRonde, Bousquet & |François Blanchet Ing., |March 23, 2005 |
|Ellison, |LaRonde Division | |
|Quebec, Canada |Superintendent of | |
| |geology | |
|_______________________|________________________|____________________|
|Kittila, Kuotko and |Daniel Doucet, Ing., |March 4, 2010 |
|Kylmakangas, |Corporate Director of | |
|Finland |Geology | |
|_______________________|________________________|____________________|
|Pinos Altos, Chihuahua,|Dyane Duquette, P.Geo., |March 25, 2009 |
|Mexico. |Superintendent of | |
|Swanson, Quebec, Canada|geology, | |
| |Technical Services Group| |
|_______________________|________________________|____________________|
|Meadowbank, Nunavut, |Bruno Perron Ing., |December 15, 2008 |
|Canada |Meadowbank | |
| |Superintendent | |
| |of geology | |
|_______________________|________________________|____________________|
|Goldex, Quebec, Canada |Richard Genest, Ing., |October 27, 2005 |
| |Goldex Division | |
| |Superintendent | |
| |of geology | |
|_______________________|________________________|____________________|
|Lapa, Quebec, Canada |Normand Bédard, P.Geo., |June 8, 2006 |
| |Lapa Division | |
| |Superintendent | |
| |of geology | |
|_______________________|________________________|____________________|
|Meliadine, Nunavut, |Dyane Duquette, P.Geo., |March 8, 2011 |
|Canada |Superintendent of | |
| |geology, | |
| |Technical Services Group| |
|_______________________|________________________|____________________|
The effective date for all of the Company's mineral resource and reserve
estimates in this press release is December 31, 2010. Additional
information about each of the mineral projects that is required by NI
43-101, sections 3.2 and 3.3 and paragraphs 3.4 (a), (c) and (d) can be
found in the Technical Reports referred to above, which may be found at
www.sedar.com. Other important operating information can be found in the Company's
Form 20-F and its news releases dated December 15, 2010 and February
16, 2011.
The contents of this press release have been prepared under the
supervision of, and reviewed by, Marc Legault P.Eng., Vice-President
Project Development and a 'Qualified Person' for the purposes of NI
43-101.
_________________________
(1) 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'.
2 Payable production of a mineral means the quantity of mineral produced
during a period contained in products that are sold by the Company
whether such products are shipped 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.
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Investor Relations
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