Stock Symbol: AEM (NYSE and TSX)
(All
amounts expressed in U.S. dollars unless otherwise noted)
TORONTO, April 27, 2017 /PRNewswire/ - Agnico Eagle
Mines Limited (NYSE:AEM, TSX:AEM) ("Agnico Eagle" or the
"Company") today reported quarterly net income of $76.0 million, or $0.33 per share, for the first quarter of
2017. This result includes non-cash foreign currency
translation gains on deferred tax liabilities of $7.9 million ($0.03
per share), non-recurring gains of $3.5
million ($0.02 per share),
unrealized gains on financial instruments of $2.8 million ($0.01
per share), various mark-to-market and other adjustment losses of
$1.4 million ($0.01 per share) and non-cash foreign currency
translation losses of $0.9 million
(nil per share). Excluding these items would result in
adjusted net income1 of $64.1
million or $0.28 per share for
the first quarter of 2017. In the first quarter of 2016, the
Company reported net income of $27.8
million or $0.13 per
share.
Not included in the first quarter of 2017 adjusted net income
above is non-cash stock option expense of $7.6 million ($0.03
per share).
In the first quarter of 2017, cash provided by operating
activities increased by greater than 50% to $222.6 million ($224.7
million before changes in non-cash components of working
capital) compared with cash provided by operating activities
of $145.7 million in the first
quarter of 2016 ($167.5 million
before changes in non-cash components of working capital).
The increase in cash provided by operating activities before
changes in working capital during the current period was mainly due
to a combination of higher gold sales volumes and realized prices
(approximately 7% and 3%, respectively).
_________________________________
1 Adjusted
net income is a Non-GAAP measure. For a discussion regarding the
Company's use of non-GAAP measures, please see "Note Regarding
Certain Measures of Performance".
|
"Operationally, 2017 has started strongly with solid performance
on both the production and cost fronts. Higher gold
production at lower costs has resulted in stronger cash flow
generation and has allowed us to increase our production guidance
for the year", said Sean Boyd,
Agnico Eagle's Chief Executive Officer. "In the first quarter
we also made very good progress at several of our growth projects
with Meliadine progressing as expected, the Canadian Malartic
extension receiving government approval and the Goldex Deep project
ahead of schedule and under budget", added Mr. Boyd.
First Quarter 2017 highlights include:
- Strong production and cost performance continue
– Payable gold production2 in the first quarter of
2017 was 418,216 ounces of gold at production costs per ounce of
$578, total cash costs3
per ounce of $539 and all-in
sustaining costs per ounce4 ("AISC") of $741
- Full year production guidance increased – Production is
now expected to exceed 1.57 million ounces compared to previous
guidance of 1.55 million ounces. The increase reflects the
extension of the mine life at Lapa to the end of the second quarter
of 2017
- Canadian Malartic Extension
project receives Government of Quebec approval – Production activities at
the project are currently forecast to begin in late 2019, subject
to obtaining ancillary certificates of authorization and the
progress of the road diversion
- Goldex Deep 1 production expected to come in ahead of
schedule and under budget – At the end of the first quarter of
2017 construction was 75% complete, while mine infrastructure
development was 100% complete. Deep 1 is now expected to start
ramping up production in the third quarter of 2017, approximately
one quarter ahead of schedule. Production guidance at Goldex is
unchanged at this time but will be reviewed next quarter
- Exploration drilling at Amaruq extends and infills Whale
Tail Deposit to the west and infills V Zone – Recent
drilling indicates the potential to increase the depth of the
western part of the Whale Tail pit, and expand the Whale Tail pit
farther to the west. An infill drill program in the near-surface
portion of the V Zone has confirmed high gold grades in multiple
lenses
- Meliadine project on schedule and budget – Underground
development is 5% above plan and engineering was 67% complete at
the end of March 2017. Construction
activities are progressing well with the concrete batch plant being
commissioned and pile installation restarted in March. Full camp
facilities are expected to be completed in May ahead of the barge
season
- A quarterly dividend of $0.10
per share was declared
_________________________________
2Payable
production of a mineral means the quantity of mineral produced
during a period contained in products that have been or will
be sold by the Company whether such products are shipped
during the period or held as inventory at the end of the
period.
|
3Total
cash costs per ounce is a Non-GAAP measure and unless otherwise
specified is reported on a by-product basis. For a reconciliation
to production costs and for total cash costs on a co-product basis,
see "Reconciliation of Non-GAAP Financial Performance Measures"
below. See also "Note Regarding Certain Measures of
Performance".
|
4All-in-sustaining costs per ounce is a
Non-GAAP measure and unless otherwise specified is reported on a
by-product basis. For a reconciliation to production costs and for
all-in sustaining costs on a co-product basis, see "Reconciliation
of Non-GAAP Financial Performance Measures" below. See also "Note
Regarding Certain Measures of Performance".
|
First Quarter Financial and Production Highlights – Higher
Gold Production, Lower Production Costs
In the first quarter of 2017, strong operational performance
continued at the Company's mines, which led to payable gold
production of 418,216 ounces compared to 411,336 ounces in the
first quarter of 2016. The higher level of production in the
2017 period was primarily due to higher grades at LaRonde and
Meadowbank. A detailed description of the production of each
mine is set out below.
Production costs per ounce for the first quarter of 2017 were
$578, which was lower than the
$593 in the 2016 period.
Production costs per ounce were positively affected by higher gold
production levels at LaRonde and Meadowbank. Total cash costs
per ounce for the first quarter of 2017 were 6% lower at
$539 compared to $573 per ounce for the first quarter 2016.
Total cash costs per ounce in the first quarter of 2017 were
positively affected by a combination of higher production of gold
and by-product metals at LaRonde and higher production levels at
Meadowbank compared to the first quarter of 2016. A detailed
description of the cost performance of each mine is set out
below.
AISC for the first quarter of 2017 were 7% lower at $741 per ounce compared to $797 in the first quarter of 2016. The
lower AISC is primarily due to lower total cash costs per ounce and
lower sustaining capital expenditures compared to the first quarter
of 2016. AISC in 2017 remain forecast to be between
$850 and $900 per ounce, but will be
reviewed on an ongoing basis through 2017.
Cash Position Remains Strong
Cash and cash equivalents and short term investments increased
to $804.3 million at March 31, 2017, from the December 31, 2016 balance of $548.4 million. The increase in cash and
cash equivalents was largely as a result of the issuance of common
shares announced in the Company's news release of March 27, 2017, but also due to strong cash
generation at the mines.
The outstanding balance on the Company's credit facility
remained nil at March 31, 2017.
This results in available credit lines of approximately
$1.2 billion, not including the
uncommitted $300 million accordion
feature.
Capital Expenditures
Total capital expenditures (including sustaining capital) in
2017 remain forecast to be approximately $850
million. The following table sets out capital expenditures
(including sustaining capital) in the first quarter of 2017.
Capital
Expenditures
|
|
(In thousands of
US dollars)
|
|
|
Three Months
Ended
|
|
March 31,
2017
|
Sustaining
Capital
|
|
LaRonde
mine
|
$
|
13,805
|
Canadian Malartic
mine
|
12,442
|
Goldex
mine
|
3,179
|
Meadowbank
mine
|
2,431
|
Kittila
mine
|
9,681
|
Pinos
Altos
|
8,239
|
Creston Mascota
deposit Pinos Altos
|
582
|
La India
mine
|
1,634
|
|
|
Development
Capital
|
|
Canadian Malartic
mine
|
$
|
718
|
Goldex
mine
|
12,555
|
Meadowbank
mine
|
12,320
|
Meliadine
project
|
48,565
|
Kittila
mine
|
6,480
|
Pinos
Altos
|
889
|
Other
|
3,150
|
|
|
Total Capital
Expenditures
|
$
|
136,670
|
Revised 2017 Guidance – Production Increased
Production for 2017 is now forecast to exceed 1.57 million
ounces of gold as a result of the Lapa mine life extension to the
end of the second quarter of 2017 (previously 1.555 million
ounces). Total cash costs per ounce in 2017 remain forecast to
be between $595 and $625 per
ounce. Production and total cash costs will be reviewed on an
ongoing basis through 2017.
Dividend Record and Payment Dates for the Second Quarter of
2017
Agnico Eagle's Board of Directors has declared a quarterly cash
dividend of $0.10 per common share,
payable on June 15, 2017 to
shareholders of record as of June 1,
2017. Agnico Eagle has declared a cash dividend every year
since 1983.
Other Expected Dividend and Record Dates for 2017
Record
Date
|
Payment
Date
|
September
1
|
September
15
|
December 1
|
December
15
|
Dividend Reinvestment Plan
Please see the following link for information on the Company's
dividend reinvestment plan: Dividend Reinvestment Plan
First Quarter 2017 Results Conference Call and Webcast
Tomorrow
Agnico Eagle's senior management will host a conference call on
Friday, April 28, 2017 at
8:30 AM (E.D.T.) to discuss the
Company's financial and operating results.
Via Webcast:
A live audio webcast of the conference
call will be available on the Company's website at
www.agnicoeagle.com.
Via Telephone:
For those preferring to listen by
telephone, please dial 1-647-427-7450 or toll-free
1-888-231-8191. To ensure your participation, please call
approximately five minutes prior to the scheduled start of the
call.
Replay archive:
Please dial 1-416-849-0833 or
toll-free 1-855-859-2056, access code 50920688. The
conference call replay will expire on May
28, 2017.
The webcast, along with presentation slides, will be archived
for 180 days on the Company's website.
Annual Meeting
The Company's Annual Meeting of Shareholders (the "AGM") will
begin on Friday, April 28, 2017 at
11:00 am (E.D.T). The AGM
will be held at the Sheraton Centre Toronto Hotel (Grand
Ballroom) - 123 Queen Street West, Toronto, ON.
During the AGM management will provide an overview of the
Company's activities. For those unable to attend in person,
the alternatives to participate are listed below.
Via Webcast:
A live audio webcast of the AGM will be
available on the Company's website at www.agnicoeagle.com.
Via Telephone:
For those preferring to listen by
telephone, please dial 1-647-427-7450 or toll-free
1-888-231-8191. To ensure your participation, please call
approximately five minutes prior to the scheduled start of the
AGM.
Replay archive:
Please dial 1-416-849-0833 or
toll-free 1-855-859-2056, access code 50915952. The
conference call replay will expire on May
28, 2017.
The webcast, along with presentation slides, will be archived
for 180 days on the Company's website.
NORTHERN BUSINESS REVIEW
ABITIBI REGION, QUEBEC
Agnico Eagle is currently Quebec's largest gold producer with a 100%
interest in three mines (LaRonde, Goldex and Lapa) and a 50%
interest in the Canadian Malartic mine. These mines are
located within 50 kilometres of each other, which provides
operating synergies and allows for the sharing of technical
expertise.
LaRonde Mine – Higher Grades From Lower Mine Drive Strong
First Quarter Performance
The 100% owned LaRonde mine in northwestern Quebec achieved commercial production in
1988. The LaRonde mine produced its five millionth ounce in
2016.
LaRonde Mine -
Operating Statistics
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
|
March 31,
2017
|
|
March 31,
2016
|
Tonnes of ore milled
(thousands of tonnes)
|
|
559
|
|
577
|
Tonnes of ore milled
per day
|
|
6,215
|
|
6,341
|
Gold grade
(g/t)
|
|
4.61
|
|
4.24
|
Gold production
(ounces)
|
|
78,912
|
|
75,337
|
Production costs per
tonne (C$)
|
|
$
|
106
|
|
$
|
105
|
Minesite costs per
tonne (C$)
|
|
$
|
109
|
|
$
|
103
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
562
|
|
$
|
609
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
464
|
|
$
|
529
|
Production costs per tonne in the first quarter of 2017 were
essentially the same when compared to the prior-year period.
Production costs per ounce in the first quarter of 2017 decreased
when compared to the prior-year period due to higher
production.
Minesite costs per tonne5 in the first quarter of
2017 increased when compared to the prior-year period due to lower
throughput levels and higher costs in the mill. Total cash
costs per ounce in the first quarter of 2017 decreased when
compared to the prior-year period due to higher gold production
from the lower mine and higher by-product metal revenues.
At the LaRonde 3 project, studies are continuing to assess the
potential to extend the mineral reserve base and carry out phased
mining activities between a depth of 3.1 kilometres and 3.7
kilometres.
In 2016, the first mineral reserves were declared in the eastern
portion of LaRonde 3 and additional inferred mineral resources were
declared in the western portion of LaRonde 3. Further
drilling is being carried out to assess the vertical extent of the
mineralization.
_____________________________
5 Minesite
costs per tonne is a Non-GAAP measure. For a reconciliation of this
measure to production costs as reported in the financial
statements, see "Reconciliation of Non-GAAP Financial Performance
Measures" below. See also "Note Regarding Certain Measures of
Performance".
|
|
LaRonde Zone 5 – Permit Received for Surface
Construction
In 2003, the Company acquired the LaRonde Zone 5 project from
Barrick Gold Corporation. The property lies adjacent to and
west of the LaRonde mining complex and previous operators exploited
the deposit by open pit. In February
2017 LaRonde Zone 5 was approved by Agnico Eagle's Board of
Directors for development (subject to permitting approval).
Permits are expected to be received by mid-2018 with
underground mining expected to commence shortly thereafter.
In the first quarter of 2017, the certificate of authorization
for surface construction was received and mobilization is currently
underway. For additional details on the project see the
Company's news release dated February 15,
2017.
Canadian Malartic Mine – Canadian Malartic Extension
Project Receives Government of Quebec Approval
In June 2014, Agnico Eagle and
Yamana Gold Inc. ("Yamana") acquired all of the issued and
outstanding common shares of Osisko Mining Corporation and created
the Canadian Malartic General Partnership (the
"Partnership"). The Partnership owns and operates the
Canadian Malartic mine in northwestern Quebec through a joint management
committee. Each of Agnico Eagle and Yamana has an indirect
50% ownership interest in the Partnership. All volume numbers
in this section reflect the Company's 50% interest in the Canadian
Malartic mine except as noted.
Canadian Malartic
Mine - Operating Statistics
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
|
March 31,
2017
|
|
March 31,
2016
|
Tonnes of ore milled
(thousands of tonnes)
|
|
2,433
|
|
2,380
|
Tonnes of ore milled
per day
|
|
27,029
|
|
26,157
|
Gold grade
(g/t)
|
|
1.03
|
|
1.07
|
Gold production
(ounces)
|
|
71,382
|
|
73,613
|
Production costs per
tonne (C$)
|
|
$
|
18
|
|
$
|
21
|
Minesite costs per
tonne (C$)
|
|
$
|
22
|
|
$
|
24
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
455
|
|
$
|
554
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
556
|
|
$
|
557
|
Production costs per tonne in the first quarter of 2017
decreased when compared to the prior-year period due to a higher
amount of stripping costs being capitalized and timing of unsold
inventory. The average stripping ratio in the first quarter
of 2017 was 1.95 to 1.0. Production costs per ounce in the
first quarter of 2017 decreased when compared to the prior-year
period due to the reasons described above.
Minesite costs per tonne in the first quarter of 2017 were lower
when compared to the prior-year period due to a higher amount of
stripping costs being capitalized. Total cash costs per ounce
in the first quarter of 2017 were essentially the same when
compared to the prior-year period.
On April 10, 2017, the Quebec
Superior Court dismissed the application for an interlocutory
injunction. No dates have been set for the hearing of the
application for a permanent injunction to restrict the Canadian
Malartic mine's mining operations to sound levels and mining
volumes below the limits to which it is subject. For
additional information see the Company's Annual Information Form
for the year ended December 31,
2016.
On April 19, 2017, the Government
of Quebec announced the issuance
of two decrees authorizing the Partnership to carry out the
proposed expansion of the Canadian Malartic mine and the diversion
of Highway 117 in Malartic (the
"Project"). The preparatory work for the Project will begin
after obtaining the certificates of authorization to be issued by
the Ministry of Sustainable Development, Environment and Climate
Change.
Diversion plans will include a temporary bridge over Highway 117
to minimize the impact of the construction work on local traffic.
The road construction is expected to occur over a two-year
period. The Company's most recent production guidance assumes
a modest contribution from the Project in late 2019.
The approval of the Project provides greater operating
flexibility and allows for mill throughput of 55,000 tonnes per day
("tpd"). The decree sets the maximum extraction rate at 241,000 tpd
(ore and waste) as long as noise and dust thresholds are not
exceeded.
Drilling at Odyssey Focused on Internal Zones and Infilling the
South Zone
At the Canadian Malartic mine, exploration programs are ongoing
to evaluate several targets that are underground or close to
current pit limits. In addition, the Partnership continues to
explore the Odyssey project, which is located approximately 1.5
kilometres east of the current limit of the Canadian Malartic open
pit. Both of these opportunities have the potential to provide new
sources of ore for the Canadian Malartic mill.
During the first quarter of 2017, 34 holes (totaling 22,676
metres) were drilled at Odyssey with a primary focus on further
defining the internal mineralized zones between the Odyssey North
and South Zones and expanding the mineral resources in Odyssey
South.
Drilling carried out to date suggests that these internal zones
could increase the mineral resources and enhance the economics of
the project by adding higher grade mineral resources that would
require minimal additional infrastructure to access.
Lapa – Mine Life Extended into Second Quarter
2017
The 100% owned Lapa mine in northwestern Quebec achieved commercial production in
May 2009.
Lapa Mine -
Operating Statistics
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
|
March 31,
2017
|
|
March 31,
2016
|
Tonnes of ore milled
(thousands of tonnes)
|
|
130
|
|
161
|
Tonnes of ore milled
per day
|
|
1,439
|
|
1,769
|
Gold grade
(g/t)
|
|
4.25
|
|
5.00
|
Gold production
(ounces)
|
|
15,360
|
|
21,709
|
Production costs per
tonne (C$)
|
|
$
|
133
|
|
$
|
109
|
Minesite costs per
tonne (C$)
|
|
$
|
134
|
|
$
|
121
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
839
|
|
$
|
589
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
854
|
|
$
|
668
|
Production costs per tonne in the first quarter of 2017
increased when compared to the prior-year period due lower
throughput levels and the timing of unsold inventory.
Production costs per ounce in the first quarter of 2017 increased
when compared to the prior-year period due to lower production.
Minesite costs per tonne in the first quarter of 2017 increased
when compared to the prior-year period due to lower throughput
levels and timing of unsold inventory. Total cash costs per
ounce in the first quarter of 2017 increased when compared to the
prior-year period due to lower production.
During the quarter, additional target zones at depth were
approved for mining from the Zone Deep East and Zone 7 Deep areas.
Under the current mine plan, Lapa is expected to operate until the
end of the second quarter of 2017. Total gold production for 2017
is now forecast to be 30,000 ounces, up from the previous forecast
of 15,000 ounces.
Goldex – Production from Goldex Deep 1 Now Expected to
Begin in the Third Quarter of 2017
The 100% owned Goldex mine in northwestern Quebec began production from the M and E
satellite zones in September
2013.
Goldex Mine -
Operating Statistics
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
|
March 31,
2017
|
|
March 31,
2016
|
Tonnes of ore milled
(thousands of tonnes)
|
|
642
|
|
636
|
Tonnes of ore milled
per day
|
|
7,135
|
|
6,991
|
Gold grade
(g/t)
|
|
1.68
|
|
1.71
|
Gold production
(ounces)
|
|
32,671
|
|
32,340
|
Production costs per
tonne (C$)
|
|
$
|
35
|
|
$
|
34
|
Minesite costs per
tonne (C$)
|
|
$
|
37
|
|
$
|
34
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
516
|
|
$
|
486
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
532
|
|
$
|
506
|
During the first quarter of 2017, approximately 58,000 tonnes of
development ore from the Deep 1 project was milled and yielded
2,395 ounces of pre-commercial gold production. The revenue
from the pre-commercial gold production was deducted from the
capital expenditures of the project. The Company expects
approximately 7,000 ounces of pre-commercial gold production from
the Deep 1 project in 2017 (the table above includes pre-commercial
production).
Production costs per tonne in the first quarter of 2017
increased when compared to the prior-year period due to lower
throughput levels (after deducting development ore tonnage) and
lower productivity from smaller stopes. Production costs per
ounce in the first quarter of 2017 increased when compared to the
prior-year period due to lower production (after deducting
development ore ounces).
Minesite costs per tonne in the first quarter of 2017 increased
when compared to the prior-year period due to lower throughput
levels (after deducting development ore tonnage) and lower
productivity from smaller stopes. Total cash costs per ounce in the
first quarter of 2017 increased when compared to the prior-year
period due to lower production (after deducting development ore
ounces).
Construction of the Deep 1 project is now 75% complete with
remaining activities focused on the rock hammer room and the dump
loop for the Rail-Veyor ore transport system. Mine
infrastructure development is 100% complete and production from the
Deep 1 Zone is expected to start ramping up in the third quarter of
2017, which is approximately one quarter ahead of schedule.
The Deep 1 project initial capital costs are expected to be below
the July 2015 budget of $135 to $140 million, largely due to
the positive foreign exchange rate movements.
Production guidance at Goldex is unchanged at this time.
An internal technical study is underway to evaluate the
potential to mine a portion of the Deep 2 Zone, which starts below
the Deep 1 Zone at 1200 metres below surface.
Drilling is underway on the South Zone, which is accessible from
the Deep 1 Zone infrastructure. The South Zone consists of
quartz veins that have higher grades than those in the primary
mineralized zones at Goldex. The Company is evaluating the
potential for the South Zone to provide incremental ore feed to the
Goldex mill.
At the adjoining Joubi property, exploration activities by
previous operators focused on the evaluation of quartz vein
mineralization within a quartz diorite body. A six-hole drill
program is planned to evaluate the potential for bulk mining within
the Joubi intrusive body.
Agnico Eagle acquired the Akasaba West gold-copper
deposit in January 2014. Located less than 30
kilometres from Goldex, the Akasaba West deposit could create
flexibility and synergies for the Company's operations in the
Abitibi region by utilizing extra milling capacity at both Goldex
and LaRonde, while reducing overall costs. The public hearing
process has been completed at Akasaba and permitting activities are
expected to continue through 2017. The Company expects to begin
sourcing open pit ore from Akasaba West in 2019 after the necessary
permits are received.
NUNAVUT REGION
Agnico Eagle has identified Nunavut as a politically attractive and stable
jurisdiction with enormous geological potential. With the
Company's largest producing mine (Meadowbank) and two significant
development assets (the Meliadine project and the Amaruq satellite
deposit at Meadowbank) and other exploration projects, Nunavut has the potential to be a strategic
operating platform with the ability to generate strong production
and cash flows over several decades.
Meadowbank – Near-term Options to Extend Production Remain
Under Review
The 100% owned Meadowbank mine in Nunavut, northern Canada, achieved commercial production in
March 2010. The mine produced its two millionth ounce of gold
in 2015.
Meadowbank Mine -
Operating Statistics
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
|
March 31,
2017
|
|
March 31,
2016
|
Tonnes of ore milled
(thousands of tonnes)
|
|
926
|
|
946
|
Tonnes of ore milled
per day
|
|
10,287
|
|
10,390
|
Gold grade
(g/t)
|
|
3.11
|
|
2.58
|
Gold production
(ounces)
|
|
85,370
|
|
72,311
|
Production costs per
tonne (C$)
|
|
$
|
77
|
|
$
|
73
|
Minesite costs per
tonne (C$)
|
|
$
|
74
|
|
$
|
77
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
632
|
|
$
|
722
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
590
|
|
$
|
788
|
Production costs per tonne in the first quarter of 2017
increased when compared to the prior-year period due to lower
amount of stripping costs being capitalized and timing of unsold
inventory. Production costs per ounce in the first quarter of
2017 decreased when compared to the prior-year period due to higher
production.
Minesite costs per tonne in the first quarter of 2017 decreased
when compared to the prior-year period due lower total tonnage
mined. Total cash costs per ounce in the first quarter of
2017 decreased when compared to the prior-year period due to higher
production and the reason described above.
Studies are ongoing to reduce the potential production gap
between the end of the mine life at Meadowbank and the start of
operations at Amaruq in 2019.
Amaruq Satellite Deposit – Exploration Drilling
Extends and Infills Whale Tail Deposit to the West and Infills V
Zone
Agnico Eagle has a 100% interest in the Amaruq satellite deposit
which is located approximately 50 kilometres northwest of the
Meadowbank mine. Amaruq is situated on a 116,717-hectare
property near the 77,411-hectare Meadowbank property. A
significant gold discovery was made on the Amaruq property in 2013,
and activities since that time have focused on the development of
satellite mineralization to feed the existing 11,000 tpd Meadowbank
mill.
At December 31, 2016, the Amaruq
deposit contained an open pit indicated mineral resource of 2.1
million ounces gold (16.9 million tonnes grading 3.88 grams per
tonne ("g/t") gold); an open pit inferred mineral resource of
763,000 ounces gold (4.9 million tonnes grading 4.81 g/t gold); and
an underground inferred mineral resource of 1.4 million ounces gold
(6.8 million tonnes grading 6.22 g/t gold).
In 2016, the Company completed an internal technical study on
Amaruq. Based on this study, the Company has approved the project
for development pending the receipt of the required permits.
Agnico Eagle is working closely with the Nunavut Impact Review
Board ("NIRB") and the Nunavut Water Board ("NWB") on the Amaruq
Phase I (Whale Tail pit) joint permitting process. NIRB/NWB has
coordinated the technical review of Amaruq Phase I, which is
underway; technical meetings and a prehearing conference will be
held in Baker Lake, Nunavut, from
April 28, 2017 to May 2, 2017. The final public hearing is
expected to take place in September 2017. The Whale Tail pit
permitting is on schedule and permits are expected to be
received by the third quarter of 2018.
In the internal technical study, a conventional open pit mining
operation is contemplated to begin on the Whale Tail satellite
deposit (Phase I) in the third quarter of 2019 followed by the V
Zone pit (Phase II) in 2020. The Whale Tail and V Zone
planned pits extend to depths of approximately 250 metres and 150
metres, respectively, and both pits are open for expansion.
The plan set out in the study contemplates the production of
approximately 2.0 million ounces of gold between 2019 and 2024,
with pre-mining activities starting in 2018 at the Whale Tail
deposit. This represents less than 50 percent of the currently
known mineral resource base. Initial capital costs are estimated to
be approximately $330 million.
For additional details on the project see the Company's news
release dated February 15, 2017.
Approximately $78 million will be
spent on capital costs at Amaruq in 2017, primarily on completion
of the all-weather exploration road, additional technical studies
and the procurement of materials and equipment for the 2018
construction season. By the end of the first quarter of 2017,
39 kilometres of the exploration road from Meadowbank to Amaruq had
been completed; the 64-kilometre road is expected to be completed
as an exploration road by the fourth quarter of 2017.
Development of the Amaruq exploration ramp has been permitted and
planning is underway, construction of the ramp will begin when the
road is completed, allowing for the planned bulk sample
collection.
With the development of the Amaruq satellite deposit, the
Meadowbank life of mine is expected to extend through 2024.
This will allow the exploration team to evaluate the full
potential of the Amaruq property.
First Quarter 2017 Amaruq Work Program – Primary Focus on Infill
and Step-Out Drilling
The first phase of a planned $22-million, 75,000-metre drill program commenced
in early February 2017. In the first quarter of 2017, 119
holes (17,900 metres) were drilled. The first quarter 2017
drill program was focused primarily on the conversion of inferred
mineral resources at the IVR zone and Whale Tail deposit and a
possible expansion of the Whale Tail open-pit limit towards the
west.
Recent intercepts from the project are set out in the table
below and the drill hole collars are located on the Amaruq project
local geology map. The pierce points are shown on the Amaruq
project composite longitudinal section. All intercepts
reported for the Amaruq project show uncapped and capped grades
over estimated true widths, based on a preliminary geological
interpretation that is being updated as new information becomes
available with further drilling.
Recent exploration drill results from the Whale Tail (WT)
deposit and V Zone (V), Amaruq project
Drill hole
|
Location
|
From
(metres)
|
To
(metres)
|
Depth of
midpoint
below
surface
(metres)
|
Estimated
true width
(metres)
|
Gold grade
(g/t)
(uncapped)
|
Gold
grade (g/t)
(capped)*
|
AMQ17-1075
|
V-WT
|
35.4
|
38.4
|
30
|
2.9
|
47.8
|
14.7
|
and
|
V-WT
|
71.0
|
77.4
|
61
|
6.4
|
5.4
|
5.4
|
AMQ17-1095
|
V-WT
|
13.5
|
17.5
|
12
|
3.8
|
9.0
|
9.0
|
AMQ17-1099
|
V
|
179.1
|
190.0
|
153
|
10.2
|
4.8
|
4.8
|
AMQ17-1108
|
V
|
37.5
|
48.0
|
34
|
9.5
|
6.7
|
6.7
|
AMQ17-1109
|
WT
|
175.5
|
180.0
|
139
|
4.2
|
10.9
|
10.9
|
AMQ17-1111
|
V
|
46.3
|
49.9
|
43
|
3.1
|
12.6
|
12.6
|
AMQ17-1129
|
V
|
93.0
|
106.0
|
87
|
11.8
|
4.3
|
4.3
|
AMQ17-1143
|
V
|
86.0
|
93.9
|
75
|
7.4
|
17.1
|
10.7
|
AMQ17-1160
|
WT
|
256.9
|
271.0
|
218
|
13.6
|
6.1
|
6.1
|
including
|
|
266.0
|
271.0
|
222
|
4.8
|
10.3
|
10.3
|
AMQ17-1161
|
V
|
21.8
|
25.9
|
20
|
3.7
|
26.9
|
14.7
|
and
|
V
|
36.1
|
39.1
|
31
|
2.8
|
74.1
|
12.7
|
and
|
V
|
48.9
|
57.0
|
43
|
7.3
|
2.6
|
2.6
|
* Holes at the
Whale Tail deposit use a capping factor of 80 g/t gold. Holes
at the IVR deposit (including the V Zone) use a capping factor of
60 g/t gold.
|
[Amaruq local geology map]
[Amaruq Composite Longitudinal Section]
Recent exploration drilling in the Whale Tail deposit has probed
the area around the western, shallower part of the planned Whale
Tail pit. The highlight of the exploration work at Amaruq in
the first quarter of 2017 is hole AMQ17-1109 intersecting 10.9 g/t
gold over 4.2 metres at 139 metres depth, just below the shallower
part of the pit, suggesting a potential to increase the depth of
the western part of the Whale Tail pit. To date, the Whale
Tail deposit has been defined over at least 2.3 kilometres of
strike length and extends from surface to 732 metres depth; it
remains open at depth and along strike.
The V Zone represents a second source of open pit ore at the
Amaruq project. An infill drill program in the near-surface
portion of the V Zone has confirmed high gold grades over multiple
lenses that generally strike northeast and dip shallowly to the
southeast. The V Zone has been traced to 542 metres below surface
and remains open at depth.
At the northwest margin of the planned V Zone pit, which is
considered to be the base of the V Zone lenses, there was a
significant intersection confirming grades in the area: hole
AMQ17-1108 intersected 6.7 g/t gold over 9.5 metres at 34 metres
depth. Approximately 300 metres to the southeast, at the southern
margin of the planned V Zone pit, hole AMQ17-1099 intersected 4.8
g/t gold over 10.2 metres at 153 metres depth, which is below the
planned pit bottom at this location. This confirms and extends the
V Zone underground mineral resources. Approximately 100 metres
south of hole 1099, in an area between the V Zone and Whale Tail
deposit, hole AMQ17-1075 intersected 14.7 g/t gold over 2.9 metres
at 30 metres depth, and 5.4 g/t gold over 6.4 metres at 61 metres
depth, while hole AMQ17-1095 intersected 9.0 g/t gold over 3.8
metres at 12 metres depth in this area. These three
intercepts suggest a potential amalgamation of the two pits, which
will need to be investigated further.
Some of the highest gold grades encountered recently in the V
Zone were from conversion drilling in the southeast portion of the
planned pit, which is considered to be the upper parts of the V
Zone lenses. Hole AMQ17-1161 had three shallow intercepts: 14.7 g/t
gold over 3.7 metres at 20 metres depth, 12.7 g/t gold over 2.8
metres at 31 metres depth, and 2.6 g/t gold over 7.3 metres at 43
metres depth. Approximately 70 metres to the south, close to
the margin of the planned pit, hole AMQ17-1143 intersected 10.7 g/t
gold over 7.4 metres at 75 metres depth.
Drilling to test regional exploration targets is expected to
begin in the second quarter of 2017.
Meliadine Project – Construction Activities Progressing on
Schedule and on Budget
Located near Rankin Inlet, Nunavut,
Canada, the Meliadine project was acquired in July 2010, and is one of Agnico Eagle's largest
gold projects in terms of mineral resources. The Company owns 100%
of the 111,757 hectare property.
In February 2017, the Company's
Board of Directors approved the construction of the Meliadine
project. The mine is expected to begin operation in the third
quarter of 2019, and the current mine plan will be focused on the
Tiriganiaq and nearby Wesmeg-Normeg mineralized zones that will be
accessed from the Tiriganiaq underground infrastructure.
Over an estimated 14-year mine life, approximately 5.3 million
ounces of gold are expected to be produced at Meliadine. This
represents approximately half of the currently known mineral
reserve and mineral resource base.
At December 31, 2016, the
Meliadine property was estimated to hold proven and probable
mineral reserves of 3.4 million ounces (14.5 million tonnes grading
7.32 g/t gold), indicated mineral resources of 3.3 million ounces
(20.8 million tonnes grading 4.95 g/t gold) and inferred mineral
resources of 3.6 million ounces (14.7 million tonnes grading 7.51
g/t gold). In addition, there are numerous other known gold
occurrences along the 80-kilometre-long greenstone belt that
require further evaluation.
For additional details on the project see the Company's news
release dated February 15, 2017.
In the first quarter of 2017, approximately 1,200 metres of
underground development was completed, which was 5% above
plan. Construction activities are progressing well with the
commissioning of the concrete batch plant underway and the
resumption of pile installation at the end of March. Full
camp facilities are expected to be completed in May ahead of
critical barge season. At the end of the first quarter,
approximately 67% of the engineering work was completed. The
Company expects to complete approximately 80% of the engineering
work by the end of August 2017.
2017 Meliadine Work Program and Additional Opportunities to
Create Value
The estimated capital budget for 2017 is unchanged at
$360 million. Key elements of
this program include:
- 5,600 metres of underground development (including the start of
a second ramp system from underground)
- Approximately 12,500 metres of conversion drilling and 14,000
metres of underground delineation drilling (drilling is expected to
begin in the second quarter of 2017)
- Completion of the camp complex in May 2017
- All piling installation is expected to be completed by the end
of the second quarter of 2017, with subsequent concrete work
expected to be carried out in the second and third quarter of
2017
- Steel and building erection is expected to begin in
August 2017
- Closing in of the process plant, power plant, and multi service
building by the end of 2017
- Installation of underground mine ventilation and heating by the
fourth quarter of 2017
- Completion of the fuel farm in Rankin
Inlet and onsite in the fourth quarter of 2017
- Construction of second ramp portal between the second and
fourth quarters 2017
The Company believes that there are numerous opportunities to
create additional value both at the mine and on the large land
package. Opportunities currently being reviewed include:
- Optimization of the current mine plan (advance Phase 2 pit
development)
- Potential to optimize labour costs once the mine is in
operation (reduction of headcount at site via improved
telecommunications)
- Minesite exploration upside through mineral resource conversion
and expansion of known ore zones (most zones are open below a depth
of 450 metres)
- Potential for the discovery of new deposits along the 80
kilometre-long greenstone belt. Regional exploration programs
are expected to recommence in 2017
FINLAND AND SWEDEN
Agnico Eagle's Kittila mine in Finland is the largest primary gold producer
in Europe and hosts the Company's
largest mineral reserves. Exploration activities continue to
expand the mineral resources, and studies are underway to evaluate
the potential to cost-effectively increase production.
Kittila – Improved Continuity and Understanding of
Sisar Top Zone
The 100% owned Kittila mine in northern Finland achieved commercial production in
2009. The Kittila mine produced its one millionth ounce in
2016.
Kittila Mine -
Operating Statistics
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
|
March 31,
2017
|
|
March 31,
2016
|
Tonnes of ore milled
(thousands of tonnes)
|
|
423
|
|
432
|
Tonnes of ore milled
per day
|
|
4,697
|
|
4,749
|
Gold grade
(g/t)
|
|
4.29
|
|
4.12
|
Gold production
(ounces)
|
|
51,621
|
|
48,127
|
Production costs per
tonne (EUR)
|
|
€
|
78
|
|
€
|
75
|
Minesite costs per
tonne (EUR)
|
|
€
|
75
|
|
€
|
72
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
696
|
|
$
|
749
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
668
|
|
$
|
726
|
Production costs per tonne in the first quarter of 2017
increased when compared to the prior-year period due to lower
throughput levels as a result of accelerating a portion of a
planned shutdown from the second quarter to the first quarter and
higher re-handling and contractor costs. Production costs per
ounce in the first quarter of 2017 decreased when compared to the
prior-year period due to higher production.
Minesite costs per tonne in the first quarter of 2017 increased
when compared to the prior-year period due to lower throughput
levels as a result of accelerating a portion of a planned shutdown
from the second quarter to the first quarter and higher re-handling
and contractor costs. Total cash costs per ounce in the first
quarter of 2017 decreased when compared to the prior-year period
due to higher production.
The main target of exploration at Kittila continues to be the
Sisar Zone, which is subparallel to and slightly east of the main
Kittila mineralization. Sisar has been located between
approximately 800 metres and 1,910 metres below surface, forming a
roughly triangular shape that remains open at depth and along
strike to the north and south. The initial mineral reserves
in the Sisar Zone were estimated as of December 31, 2016, and were the result of
conversion drilling in 2016. Sisar and to a smaller extent Rimpi
added 338,000 ounces of gold in mineral reserves at Kittila at
year-end 2016, before deducting the gold in ore mined.
Drilling from the exploration ramp is ongoing to infill and
extend the Sisar Zone mineralization. In addition,
underground ramp construction that began a year ago is extending
farther into the upper portion of the Sisar Zone, which is located
approximately 150 to 200 metres from existing underground
infrastructure. The ramp extension will allow for more deep
drilling platforms to investigate the Sisar Zone.
In the first quarter of 2017, 16 holes (5,201 metres) were
drilled in the Sisar Top and Central Zones. Assays are
pending for many of the holes.
Selected recent drill results are set out in the table below;
drill hole collar coordinates are set out in a table in the
Appendix of this news release. Pierce points for all these
holes are shown on the Kittila Composite Longitudinal
Section. All intercepts reported for the Kittila mine show
uncapped grades over estimated true widths, based on a current
geological interpretation that is being updated as new information
becomes available with further drilling.
Recent exploration drill results from the Sisar Zone at the
Kittila mine
Drill hole
|
Zone
|
From
(metres)
|
To
(metres)
|
Depth of
midpoint
below
surface
(metres)
|
Estimated
true width
(metres)
|
Gold grade
(g/t)
(uncapped)
|
RIE16-501
|
Sisar Top
|
218.0
|
223.0
|
815
|
4.6
|
5.1
|
RIE16-623
|
Sisar Top
|
233.0
|
239.8
|
1,003
|
4.7
|
6.9
|
and
|
Sisar Top
|
251.0
|
261.0
|
1,012
|
7.1
|
7.1
|
RIE16-624
|
Sisar Top
|
214.0
|
228.5
|
980
|
10.5
|
6.0
|
and
|
Sisar Top
|
244.4
|
249.5
|
991
|
3.7
|
6.9
|
ROD14-005F
|
Sisar
Central
|
687.3
|
702.0
|
1,329
|
5.4
|
3.7
|
[Kittila - Composite Longitudinal Section]
For the purposes of description, the zone has been divided into
two depths, referred to as "Sisar Top" (approximately 800 to 1,000
metres below surface) and "Sisar Central" (approximately 1,000 to
1,400 metres below surface). Some of the Sisar mineralized
lenses extend between the Sisar Top and Sisar Central.
Recent intercepts from the Sisar Zone at approximately 1,000
metres below surface fill in a gap in the Sisar mineral reserves,
and show that the Sisar Zone in this area comprises up to five
subparallel lenses in close proximity, approximately 200 metres
east of the main Kittila ore zone. There is a dominant Sisar lens,
with additional lenses to its east and west sides. The best
recent result in this area at the base of the Sisar Top Zone was
hole RIE16-623 that intersected 6.9 g/t gold over 4.7 metres at
1,003 metres depth, and 7.1 g/t gold over 7.1 metres at 1,012
metres depth. Approximately 50 metres to the south, hole
RIE16-624 intersected 6.0 g/t gold over 10.5 metres at 980 metres
depth and 6.9 g/t gold over 3.7 metres at 991 metres depth.
These four intercepts are from three different lenses that are
approximately 10 metres apart at the 1,000-metre depth.
Together, they fill in a gap in the Sisar mineral reserves in this
area. Approximately 120 metres to the south of hole
RIE16-624, conversion hole RIE16-501 intersected 5.1 g/t gold over
4.6 metres at 815 metres depth confirming and extending the Sisar
mineral reserves in the area.
Infill drilling has yielded another intercept in Sisar
Central. Hole ROD14-005F intersected 3.7 g/t gold over 5.4
metres at 1,329 metres depth, confirming the continuity of the
Sisar Zone in this area. The Sisar Central Zone is
approximately 150 metres east of the Main Zone at this depth.
In 2017, approximately $7.9
million will be spent on further deep drilling at Kittla
(which includes the Sisar Zone). The goal of this program is to
expand the mineral resources in the northern part of the property
and demonstrate the economic potential of the Sisar Zone as a new
mining horizon at Kittila.
Studies are ongoing to evaluate the economics of increasing
throughput rates at Kittila to 2.0 million tonnes per annum. The
Company expects that this increased mining rate scenario could be
supported by the development of the Rimpi and Sisar Zones.
SOUTHERN BUSINESS REVIEW
Agnico Eagle's Southern Business operations are focused in
Northern Mexico, with two
operations (Pinos Altos and
Creston Mascota) in Chihuahua State and the La India mine in Sonora
State. These operations have been the source of growing
precious metals production (gold and silver), stable operating
costs and strong free cash flow since 2009.
Pinos Altos – Record Mill
Performance in March
The 100% owned Pinos Altos mine
in northern Mexico achieved
commercial production in November
2009.
Pinos Altos Mine -
Operating Statistics
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
|
March 31,
2017
|
|
March 31,
2016
|
Tonnes of ore
processed (thousands of tonnes)
|
|
553
|
|
502
|
Tonnes of ore
processed per day
|
|
6,149
|
|
5,516
|
Gold grade
(g/t)
|
|
2.71
|
|
3.07
|
Gold production
(ounces)
|
|
45,360
|
|
48,117
|
Production costs per
tonne
|
|
$
|
43
|
|
$
|
48
|
Minesite costs per
tonne
|
|
$
|
48
|
|
$
|
50
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
523
|
|
$
|
496
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
358
|
|
$
|
343
|
Production costs per tonne in the first quarter of 2017
decreased when compared to the prior-year period due to higher
throughput and variations in the proportion of heap leach ore to
milled ore and open pit ore to underground ore, routine
fluctuations in the waste to ore stripping ratio in the open pit
mine and favourable foreign exchange rates. Production costs
per ounce in the first quarter of 2017 increased when compared to
the prior-year period due to lower gold production, a lower amount
of stripping costs being capitalized and timing of unsold
inventory.
Minesite costs per tonne in the first quarter of 2017 decreased
when compared to the prior-year period due to higher throughput and
variations in the proportion of heap leach ore to milled ore and
open pit ore to underground ore and routine fluctuations in the
waste to ore stripping ratio in the open pit mine and favourable
foreign exchange rates. Total cash costs per ounce in the
first quarter of 2017 increased when compared to the prior-year
period due to lower gold production, a lower amount of stripping
costs being capitalized and timing of unsold inventory.
During the first quarter of 2017 the first cell of the Phase III
heap leach pad was completed and ore stacking commenced at the end
of March 2017. Work on the second cell is expected to be
completed during the second quarter of 2017.
Construction of a silver flotation circuit is progressing on
schedule for start-up in the third quarter of 2017. The
circuit will be used to recover additional silver before the
tailings are sent for impoundment.
Creston Mascota – Drilling Extends High Grade Zone at
Bravo
The 100% owned Creston Mascota open pit heap leach, located less
than 7 kilometres from Pinos
Altos, has been operating since late 2010.
Creston Mascota
deposit at Pinos Altos - Operating Statistics
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
|
March 31,
2017
|
|
March 31,
2016
|
Tonnes of ore
processed (thousands of tonnes)
|
|
524
|
|
516
|
Tonnes of ore
processed per day
|
|
5,817
|
|
5,672
|
Gold grade
(g/t)
|
|
1.16
|
|
1.18
|
Gold production
(ounces)
|
|
11,244
|
|
11,551
|
Production costs per
tonne
|
|
$
|
13
|
|
$
|
11
|
Minesite costs per
tonne
|
|
$
|
13
|
|
$
|
12
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
621
|
|
$
|
500
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
525
|
|
$
|
460
|
Production costs per tonne in the first quarter of 2017
increased when compared to the prior-year period due to higher
costs associated with longer haulage distances for ore and waste
(ore is now being trucked to the Phase IV leach pad), a lower
amount of stripping costs being capitalized and timing of unsold
inventory. Waste haulage costs are expected to decline as
permits have now been received to store material in an unused
portion of the pit. Production costs per ounce in the first quarter
of 2017 increased when compared to the prior-year period due to
lower production and the reasons described above.
Minesite costs per tonne in the first quarter of 2017 increased
when compared to the prior-year period due to higher costs
associated with the longer haulage distances for ore and waste and
a lower amount of stripping costs being capitalized. Total
cash costs per ounce in the first quarter of 2017 increased when
compared to the prior-year period due to reasons described
above.
Exploration drilling in the first quarter of 2017 was mainly at
the Bravo Zone, immediately adjacent to the Creston Mascota pit,
including 3,383 metres of conversion and step-out exploration
drilling in 30 holes. Bravo is a
shallowly north west-dipping, almost stratiform zone of quartz
breccia, vein and stockwork with significant gold and silver grades
over thicknesses up to 20 metres.
The collars of these four holes were within 50 metres of each
other, approximately 600 metres from the margin of the
currently-planned Creston Mascota pit.
Selected recent drill results from the Bravo Zone are set out in
the table below, and the collar coordinates are in a separate table
in the appendix of this news release. Hole locations are also
shown on the Creston Mascota area local geology map. All
intercepts reported for the Bravo Zone show uncapped and capped
grades over estimated true widths.
Recent exploration drill results from Bravo Zone at Creston
Mascota
Drill hole
|
From
(metres)
|
To
(metres)
|
Depth of
midpoint below
surface metres)
|
Estimated
true width
(metres)
|
Gold grade
(g/t)
(uncapped)
|
Gold grade
(g/t)
(capped)
|
Silver grade
(g/t)
(uncapped)
|
Silver
grade (g/t)
(capped)
|
BRV17-135
|
72.4
|
84.9
|
86
|
12.5
|
3.9
|
2.1
|
49
|
40
|
BRV17-140
|
63.2
|
82.5
|
88
|
19.2
|
3.1
|
2.4
|
101
|
61
|
including
|
79.1
|
82.5
|
95
|
3.4
|
7.6
|
7.6
|
231
|
217
|
BRV17-146
|
87.0
|
93.9
|
105
|
6.6
|
5.1
|
4.3
|
94
|
94
|
BRV17-149
|
85.6
|
90.2
|
96
|
4.6
|
9.8
|
7.0
|
366
|
152
|
Cut-off value 0.30
g/t gold, maximum 3.0-m internal dilution
|
Holes at the Bravo
Zone use a capping factor of 10 g/t gold and 250 g/t
silver
|
Highlights from recent drilling at the Bravo Zone include hole
BRV17-149 that yielded 9.8 g/t gold and 366 g/t silver over 4.6
metres at 85.5 metres core length. Another high-grade
intercept was in hole BRV17-140 that intersected 3.1 g/t gold and
101 g/t silver over 19.2 metres at 63.2 metres core length,
including 7.6 g/t gold and 231 g/t silver over 3.4 metres.
Holes BRV17-135 and BRV17-146 also had high-grade
intersections.
The results of the current drill program have the potential to
increase the gold and silver grades of the Bravo Zone mineral
resources at Creston Mascota and extend its high-grade structure to
the west and northwest.
The Company believes that the Bravo Zone could potentially
extend the life of the Creston Mascota heap leach facility.
In addition, the Company believes that the Madrono and Cubiro Zones
may have higher grade areas that could potentially provide
additional feed to the Pinos Altos
mill. A total of 36,000 metres of exploration drilling is
planned at the Pinos Altos –
Creston Mascota complex in 2017.
[Creston Mascota – Local Geology Map]
La India – Exploration
Focused on Extending Near-Pit Mineralization and Delineation of
Additional Mineral Reserves and Resources
The 100% owned La India mine in Sonora, Mexico, located approximately 70
kilometres from the Company's Pinos
Altos mine, achieved commercial production in February 2014.
La India Mine -
Operating Statistics
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
|
March 31,
2017
|
|
March 31,
2016
|
Tonnes of ore
processed (thousands of tonnes)
|
|
1,402
|
|
1,396
|
Tonnes of ore
processed per day
|
|
15,575
|
|
15,344
|
Gold grade
(g/t)
|
|
0.74
|
|
0.84
|
Gold production
(ounces)
|
|
26,296
|
|
28,231
|
Production costs per
tonne
|
|
$
|
9
|
|
$
|
8
|
Minesite costs per
tonne
|
|
$
|
10
|
|
$
|
8
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
499
|
|
$
|
387
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
438
|
|
$
|
360
|
Production costs per tonne in the first quarter of 2017
increased when compared to the prior-year period due to higher
costs associated with slightly more waste stripping, longer haulage
distances for both ore and waste from the Main Zone pit and timing
of unsold inventory. Waste rock haulage costs are expected to
decline with the recent permitting approval of a new waste rock
disposal area closer to the Main Zone pit. Production costs per
ounce in the first quarter of 2017 increased when compared to the
prior-year period due to lower production and the reasons described
above.
Minesite costs per tonne in the first quarter of 2017 increased
when compared to the prior-year period due to higher costs
associated with slightly more waste stripping, longer haulage
distances for both ore and waste from the Main Zone pit and timing
of unsold inventory. Total cash costs per ounce in the first
quarter of 2017 increased when compared to the prior-year period
due to lower gold production and the reasons described above.
During the quarter, infill drilling was carried out on the Main
Zone to evaluate the potential to extend mineral reserves and
mineral resources below the current pit design. Additional
holes are planned for the second half of 2017.
Drilling was also carried at the nearby El Realito project during the quarter, with
encouraging results. Additional exploration work is planned
at El Realito and drilling
commenced on the Cerro de Oro, and
El Cochi areas late in the first
quarter of 2017. All three areas are being drilled to
evaluate the potential to increase mineral reserves and mineral
resources in close proximity to the existing mining areas.
Given the increases in mineral reserves and mineral resources in
2016 and ongoing exploration that appears to show the potential for
further increases, the Company is evaluating location options to
construct additional pad capacity. Basic engineering work is
underway to fully evaluate these areas.
El Barqueno – 2017 Exploration Focused on Infill Drilling and
Testing New Targets
Agnico Eagle acquired its 100% interest in the El Barqueno
project in November 2014. The
63,997-hectare property is in the Guachinango gold-silver mining district of
Jalisco State in west-central, Mexico, approximately 150 kilometres west of
the state capital of Guadalajara.
The El Barqueno project contains a number of known mineralized
zones and several prospects. The project contains 301,100
ounces of gold in indicated mineral resources (8.4 million tonnes
grading 1.11 g/t gold) and 362,000 ounces of gold in inferred
mineral resources (7.2 million tonnes grading 1.56 g/t
gold).
Approximately 45,000 metres of additional drilling is expected
to be completed by the end of 2017 at El Barqueno, principally at
the Olmeca, Azteca-Zapoteca and Peña de Oro sectors in the central El Barqueno
property, and the El Rayo
prospects and the Tecolote-Tortuga areas in the south area of the
El Barqueno project. Exploration expenditures in 2017 are
expected to total approximately $16.8
million.
At the end of the first quarter of 2017, approximately 5,619
metres of drilling had been completed with a focus on the Olmeca
and Azteca-Zapoteca zones. Negotiations continue to finalize
long-term land agreements for key areas for future exploration
around the project.
While it is too early to estimate the full extent of the mineral
resources and the number of deposits with economic potential at El
Barqueno, the Company has the experience of developing
cost-efficient mining operations in Mexico and increasing their size through
successful exploration as well as metallurgical innovation.
Agnico Eagle believes that El Barqueno ultimately has the
potential to be developed into a series of open pits utilizing heap
leach and/or mill processing, similar to the Pinos Altos mine. Conceptual mine design
studies and additional metallurgical testing are ongoing at El
Barqueno.
About Agnico Eagle
Agnico Eagle is a senior Canadian gold mining company that has
produced precious metals since 1957. Its eight mines are
located in Canada, Finland and Mexico, with exploration and development
activities in each of these countries as well as in the United States and Sweden. The Company and its shareholders
have full exposure to gold prices due to its long-standing policy
of no forward gold sales. Agnico Eagle has declared a cash
dividend every year since 1983.
Further Information
For further information regarding Agnico Eagle, contact Investor
Relations at info@agnicoeagle.com or call (416) 947-1212.
Note Regarding Certain Measures of Performance
This news release discloses certain measures, including "total
cash costs per ounce", "all-in sustaining costs per ounce",
"minesite costs per tonne" and "adjusted net income" that are not
standardized measures under IFRS. These data may not be
comparable to data reported by other issuers. For a
reconciliation of these measures to the most directly comparable
financial information reported in the consolidated financial
statements prepared in accordance with IFRS, other than adjusted
net income, see "Reconciliation of Non-GAAP Financial Performance
Measures" below. The total cash costs per ounce of gold
produced is reported on both a by-product basis (deducting
by-product metal revenues from production costs) and co-product
basis (without deducting by-product metal revenues). The
total cash costs per ounce of gold produced on a by-product basis
is calculated by adjusting production costs as recorded in the
consolidated statements of income for by-product revenues, unsold
concentrate inventory production costs, smelting, refining and
marketing charges and other adjustments, and then dividing by the
number of ounces of gold produced. The total cash costs per
ounce of gold produced on a co-product basis is calculated in the
same manner as the total cash costs per ounce of gold produced on a
by-product basis except that no adjustment is made for by-product
metal revenues. Accordingly, the calculation of total cash
costs per ounce of gold produced on a co-product basis does not
reflect a reduction in production costs or smelting, refining and
marketing charges associated with the production and sale of
by-product metals. The total cash costs per ounce of gold
produced is intended to provide information about the
cash-generating capabilities of the Company's mining
operations. Management also uses these measures to monitor
the performance of the Company's mining operations. As market
prices for gold are quoted on a per ounce basis, using the total
cash costs per ounce of gold produced on a by-product basis measure
allows management to assess a mine's cash-generating capabilities
at various gold prices.
The Company calculates all-in sustaining costs per ounce of gold
produced on a by-product basis as the aggregate of total cash costs
per ounce on a by-product basis, sustaining capital expenditures
(including capitalized exploration), general and administrative
expenses (including stock options) and reclamation expenses, and
then dividing by the number of ounces of gold produced. The
all-in sustaining costs per ounce of gold produced on a co-product
basis is calculated in the same manner as the all-in sustaining
costs per ounce of gold produced on a by-product basis, except that
the total cash costs per ounce on a co-product basis are used,
meaning no adjustment is made for by-product metal revenues.
All-in sustaining costs per ounce is used to show the full cost of
gold production from current operations. Management is aware
that these per ounce measures of performance can be affected by
fluctuations in foreign exchange rates and, in the case of total
cash costs per ounce of gold produced on a by-product basis,
by-product metal prices. Management compensates for these
inherent limitations by using these measures in conjunction with
minesite costs per tonne (discussed below) as well as other data
prepared in accordance with IFRS.
Minesite costs per tonne are calculated by adjusting production
costs as recorded in the consolidated statements of income for
unsold concentrate inventory production costs, and then dividing by
tonnes of ore processed. As the total cash costs per ounce of
gold produced can be affected by fluctuations in by‑product metal
prices and foreign exchange rates, management believes that
minesite costs per tonne provides additional information regarding
the performance of mining operations, eliminating the impact of
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 of performance can be impacted by fluctuations in
processing levels and compensates for this inherent limitation by
using this measure in conjunction with production costs prepared in
accordance with IFRS.
Adjusted net income is calculated by adjusting the basic net
income per share as recorded in the consolidated statements of
income for foreign currency translation gains and losses,
mark-to-market adjustments, non-recurring gains and losses and
unrealized gains and losses on financial instruments.
Management uses adjusted net income to evaluate the underlying
operating performance of the Company and to assist with the
planning and forecasting of future operating results.
Management believes that adjusted net income is a useful
measure of performance because foreign currency translation gains
and losses, mark-to-market adjustments, non-recurring gains and
losses and unrealized gains and losses on financial instruments do
not reflect the underlying operating performance of the Company and
may not be indicative of future operating results.
Management also performs sensitivity analyses in order to
quantify the effects of fluctuating foreign exchange rates and
metal prices. This news release also contains information as
to estimated future total cash costs per ounce, all-in sustaining
costs per ounce and minesite costs per tonne. The estimates
are based upon the total cash costs per ounce, all-in sustaining
costs per ounce and minesite costs per tonne that the Company
expects to incur to mine gold at its mines and projects and,
consistent with the reconciliation of these actual costs referred
to above, do not include production costs attributable to accretion
expense and other asset retirement costs, which will vary over time
as each project is developed and mined. It is therefore not
practicable to reconcile these forward-looking non-GAAP financial
measures to the most comparable IFRS measure.
Forward-Looking Statements
The information in this news release has been prepared as at
April 27, 2017. Certain
statements contained in this news 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 news release,
the words "anticipate", "could", "estimate", "expect", "forecast",
"future", "plan", "possible", "potential", "will" and similar
expressions are intended to identify forward-looking
statements. Such statements include, without limitation: the
Company's forward-looking production guidance, including estimated
ore grades, project timelines, drilling results, metal production,
life of mine estimates, total cash costs per ounce, all-in
sustaining costs per ounce, minesite costs per tonne, other
expenses and cash flows; the estimated timing and conclusions of
technical reports and other studies; the methods by which ore will
be extracted or processed; statements concerning the Company's
plans to build operations at Meliadine, Amaruq and LaRonde Zone 5,
including the timing and funding thereof; statements concerning
other expansion projects, recovery rates, mill throughput,
optimization and projected exploration expenditures, including
costs and other estimates upon which such projections are based;
statements regarding timing and amounts of capital expenditures and
other assumptions; estimates of future mineral reserves, mineral
resources, mineral production, optimization efforts and sales;
estimates of mine life; estimates of future capital expenditures
and other cash needs, and expectations as to the funding thereof;
statements as to the projected development of certain ore deposits,
including estimates of exploration, development and production and
other capital costs and estimates of the timing of such
exploration, development and production or decisions with respect
to such exploration, development and production; estimates of
mineral reserves and mineral resources; statements regarding the
Company's ability to obtain the necessary permits and
authorizations in connection with its exploration, development and
mining operations and the anticipated timing thereof; statements
regarding anticipated future exploration; the anticipated timing of
events with respect to the Company's mine sites and statements
regarding the sufficiency of the Company's cash resources and other
statements 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
news release and are subject to certain risks, uncertainties and
assumptions, and undue reliance should not be placed on such
statements. 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 material
factors and assumptions used in the preparation of the forward
looking statements contained herein, which may prove to be
incorrect, include, but are not limited to, the assumptions set
forth herein and in management's discussion and analysis
("MD&A") and the Company's Annual Information Form ("AIF") for
the year ended December 31, 2016
filed with Canadian securities regulators and that are included in
its Annual Report on Form 40-F for the year ended December 31, 2016 ("Form 40-F") filed with the
U.S. Securities and Exchange Commission (the "SEC") as well as:
that there are no significant disruptions affecting operations;
that production, permitting, development and expansion at each of
Agnico Eagle's properties proceeds on a basis consistent with
current expectations and plans; that the relevant metal prices,
foreign exchange rates and prices for key mining and construction
supplies will be consistent with Agnico Eagle's 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 mineral recovery estimates; uncertainty of future production,
project development, capital expenditures and other costs; foreign
exchange rate fluctuations; financing of additional capital
requirements; cost of exploration and development programs; mining
risks; community protests; risks associated with foreign
operations; the unfavorable outcome of litigation involving the
Partnership; governmental and environmental regulation; the
volatility of the Company's stock price; and risks associated with
the Company's currency, fuel and by-product metal derivative
strategies. For a more detailed discussion of such risks and
other factors that may affect the Company's ability to achieve the
expectations set forth in the forward-looking statements contained
in this news release, see the AIF and MD&A filed on SEDAR at
www.sedar.com and included in the Form 40-F filed on EDGAR at
www.sec.gov, as well as the Company's other filings with the
Canadian securities regulators and the SEC. Other than as
required by law, the Company does not intend, and does not assume
any obligation, to update these forward-looking statements.
Notes to Investors Regarding the Use of Mineral
Resources
Cautionary Note to Investors Concerning Estimates of Measured
and Indicated Mineral Resources
This news release uses the terms "measured mineral resources"
and "indicated mineral resources". Investors are advised that
while those terms are recognized and required by Canadian
regulations, the U.S. Securities and Exchange Commission (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 mineral
reserves.
Cautionary Note to Investors Concerning Estimates of
Inferred Mineral Resources
This news release also uses the term "inferred mineral
resources". Investors are advised that while this term is
recognized and required by Canadian regulations, the SEC does not
recognize it. "Inferred mineral 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 any
part or all of an inferred mineral resource
exists, or is economically or legally mineable.
Scientific and Technical Data
The scientific and technical information contained in this news
release relating to Quebec
operations has been approved by Christian Provencher, Eng.,
Vice-President, Canada; relating
to Nunavut operations has been
approved by Dominique Girard, Eng., Vice-President, Nunavut
Operations; relating to the Finland operations has been approved by
Francis Brunet, Eng., Corporate Director Mining; relating to
Southern Business operations has been approved by Carol Plummer,
Eng., Vice-President, Project Development, Southern Business; and
relating to exploration has been approved by Alain Blackburn, Eng., Senior Vice-President,
Exploration and Guy Gosselin, Eng. and P.Geo., Vice-President,
Exploration. Each of them is a "Qualified Person" for the
purposes of National Instrument 43-101 Standards of Disclosure
for Mineral Projects ("NI 43-101").
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 reports mineral reserve and
mineral resource estimates in accordance with the Canadian
Institute of Mining, Metallurgy and Petroleum Best Practice
Guidelines for Exploration and Best Practice Guidelines
for Estimation of Mineral Resources and Mineral
Reserves, in accordance with NI 43-101. These standards
are similar to those used by the SEC's Industry Guide No. 7, as
interpreted by Staff at the SEC ("Guide 7"). However, the
definitions in NI 43-101 differ in certain respects from those
under Guide 7. Accordingly, mineral reserve information
contained herein may not be comparable to similar information
disclosed by U.S. companies. Under the requirements of the
SEC, mineralization may not be classified as a "reserve" unless the
determination has been made that the mineralization could be
economically and legally produced or extracted at the time the
reserve determination is made. A "final" or "bankable"
feasibility study is required to meet the requirements to designate
mineral reserves under Industry Guide 7. Agnico Eagle uses
certain terms in this news release, such as "measured",
"indicated", "inferred" and "resources" that the SEC guidelines
strictly prohibit U.S. registered companies from including in their
filings with the SEC.
In prior periods, mineral reserves for all properties were
typically estimated using historic three-year average metals prices
and foreign exchange rates in accordance with the SEC
guidelines. These guidelines require the use of prices that
reflect current economic conditions at the time of mineral reserve
determination, which the Staff of the SEC has interpreted to mean
historic three-year average prices. Given the current
commodity price environment, Agnico Eagle has decided to use price
assumptions that are below the three-year averages.
The assumptions used for the December
2016 mineral reserves estimate at all longer life mines and
advanced projects reported by the Company (other than the Meliadine
project, the Canadian Malartic mine and the Upper Beaver project)
were $1,150 per ounce gold,
$16.50 per ounce silver, $0.95 per pound zinc, $2.15 per pound copper and foreign exchange rates
of C$1.20 per $1.00, 16.00 Mexican pesos per $1.00 and $1.15 per
€1.00 for all mines and projects other than the Lapa and Meadowbank
mines in Canada, and the Creston
Mascota mine and Santo Niño pit at the Pinos Altos mine in Mexico; due to the shorter remaining mine life
for the Lapa and Meadowbank mines in Canada, and the Creston Mascota mine and Santo
Niño pit at the Pinos Altos mine
in Mexico, the foreign exchange
rates used were C$1.30 per
$1.00 and 16.00 Mexican pesos
per $1.00 (other assumptions
unchanged). At the Meliadine project, the same assumptions at
December 2015 were used to estimate
the December 2016 mineral reserves,
which were $1,100 per ounce gold and
an foreign exchange rate of C$1.16
per $1.00.
The Partnership, owned by Agnico Eagle (50%) and Yamana Gold
Inc. ("Yamana") (50%), which owns and operates the Canadian
Malartic mine, and Canadian Malartic
Corporation ("CMC"), owned by Agnico Eagle (50%) and Yamana
(50%), which owns and manages the Upper Beaver project in
Kirkland Lake, have estimated the
December 2016 mineral reserves of the
Canadian Malartic mine and the Upper Beaver project using the
following assumptions: $1,200 per
ounce gold; a cut-off grade at the Canadian Malartic mine between
0.33 g/t and 0.37 g/t gold (depending on the deposit); a
C$125/tonne net smelter return (NSR)
for the Upper Beaver project; and an foreign exchange rate of
C$1.25 per $1.00.
NI 43-101 requires mining companies to disclose mineral reserves
and mineral resources using the subcategories of "proven mineral
reserves", "probable mineral reserves", "measured mineral
resources", "indicated mineral resources" and "inferred mineral
resources". Mineral resources that are not mineral reserves
do not have demonstrated economic viability.
A mineral reserve is the economically mineable part of a
measured and/or indicated mineral resource. It includes
diluting materials and allowances for losses, which may occur when
the material is mined or extracted and is defined by studies at
pre-feasibility or feasibility level as appropriate that include
application of modifying factors. Such studies demonstrate
that, at the time of reporting, extraction could reasonably be
justified. The mineral reserves presented in this news
release are separate from and not a portion of the mineral
resources.
Modifying factors are considerations used to convert mineral
resources to mineral reserves. These include, but are not
restricted to, mining, processing, metallurgical, infrastructure,
economic, marketing, legal, environmental, social and governmental
factors.
A proven mineral reserve is the economically mineable part of a
measured mineral resource. A proven mineral reserve implies a
high degree of confidence in the modifying factors. A
probable mineral reserve is the economically mineable part of an
indicated and, in some circumstances, a measured mineral
resource. The confidence in the modifying factors applying to
a probable mineral reserve is lower than that applying to a proven
mineral reserve.
A mineral resource is a concentration or occurrence of solid
material of economic interest in or on the Earth's crust in such
form, grade or quality and quantity that there are reasonable
prospects for eventual economic extraction. The location,
quantity, grade or quality, continuity and other geological
characteristics of a mineral resource are known, estimated or
interpreted from specific geological evidence and knowledge,
including sampling.
A measured mineral resource is that part of a mineral resource
for which quantity, grade or quality, densities, shape and physical
characteristics are estimated with confidence sufficient to allow
the application of modifying factors to support detailed mine
planning and final evaluation of the economic viability of the
deposit. Geological evidence is derived from detailed and
reliable exploration, sampling and testing and is sufficient to
confirm geological and grade or quality continuity between points
of observation. An indicated mineral resource is that part of
a mineral resource for which quantity, grade or quality, densities,
shape and physical characteristics are estimated with sufficient
confidence to allow the application of modifying factors in
sufficient detail to support mine planning and evaluation of the
economic viability of the deposit. Geological evidence is
derived from adequately detailed and reliable exploration, sampling
and testing and is sufficient to assume geological and grade or
quality continuity between points of observation. An inferred
mineral resource is that part of a mineral resource for which
quantity and grade or quality are estimated on the basis of limited
geological evidence and sampling. Geological evidence is
sufficient to imply but not verify geological and grade or quality
continuity.
Investors are cautioned not to assume that part or all of an
inferred mineral resource exists, or is economically
or legally mineable.
A feasibility study is a comprehensive technical and economic
study of the selected development option for a mineral project that
includes appropriately detailed assessments of applicable modifying
factors, together with any other relevant operational factors and
detailed financial analysis that are necessary to demonstrate, at
the time of reporting, that extraction is reasonably justified
(economically mineable). The results of the study may
reasonably serve as the basis for a final decision by a proponent
or financial institution to proceed with, or finance, the
development of the project. The confidence level of the study
will be higher than that of a pre-feasibility study.
Additional Information
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 Technical Reports, which may be
found at www.sedar.com. Other important operating information
can be found in the Company's AIF, MD&A and Form 40-F.
Property/Project
name
and location
|
Date of most
recent
Technical Report (NI
43-101) filed on
SEDAR
|
LaRonde, Bousquet
&
Ellison, Quebec, Canada
|
March 23,
2005
|
Canadian Malartic,
Quebec, Canada
|
June 16,
2014
|
Kittila, Kuotko
and
Kylmakangas, Finland
|
March 4,
2010
|
Meadowbank,
Nunavut,
Canada
|
February 15,
2012
|
Goldex, Quebec,
Canada
|
October 14,
2012
|
Lapa, Quebec,
Canada
|
June 8,
2006
|
Meliadine, Nunavut,
Canada
|
February 11,
2015
|
Hammond Reef,
Ontario, Canada
|
July 2,
2013
|
Upper Beaver
(Kirkland Lake property), Ontario, Canada
|
November 5,
2012
|
Pinos Altos and
Creston Mascota, Mexico
|
March 25,
2009
|
La India,
Mexico
|
August 31,
2012
|
Appendix: Selected drill collar coordinates
Sisar Zone exploration drill collar coordinates of selected
holes
|
Drill collar
coordinates*
|
Drill hole
ID
|
UTM
North
|
UTM
East
|
Elevation
(metres
above sea
level)
|
Azimuth
|
Dip
(degrees)
|
Length
(metres)
|
RIE16-501
|
7538699
|
2558639
|
585
|
104
|
-2
|
308
|
RIE16-623
|
7538805
|
2558701
|
655
|
088
|
-35
|
330
|
RIE16-624
|
7538805
|
2558701
|
655
|
103
|
-31
|
311
|
ROD14-005F
|
7538298
|
2558630
|
529
|
089
|
-60
|
879
|
* Finnish
Coordinate System KKJ Zone 2
|
Bravo Zone drill collar coordinates
|
Drill collar
coordinates*
|
Drill hole
ID
|
UTM North
|
UTM East
|
Elevation
(metres
above sea
level)
|
Azimuth
(degrees)
|
Dip
(degrees)
|
Length
(metres)
|
BRV17-135
|
3135129
|
760144
|
1,599
|
090
|
-45
|
123
|
BRV17-140
|
3135176
|
760147
|
1,605
|
090
|
-46
|
132
|
BRV17-146
|
3135221
|
760142
|
1,620
|
090
|
-55
|
126
|
BRV17-149
|
3135173
|
760106
|
1,588
|
089
|
-45
|
120
|
*Coordinate System
UTM Nad 27 Zone
|
AGNICO EAGLE MINES
LIMITED
|
SUMMARY OF
OPERATIONS KEY PERFORMANCE INDICATORS
|
(thousands of
United States dollars, except where noted)
|
(Unaudited)
|
|
|
|
|
|
Three Months
Ended
March 31,
|
|
2017
|
|
2016
|
|
|
|
|
Operating
margin(i)by mine:
|
|
|
|
Northern
Business
|
|
|
|
|
LaRonde
mine
|
$
|
70,702
|
|
$
|
48,055
|
|
Lapa mine
|
6,205
|
|
10,806
|
|
Goldex
mine
|
20,854
|
|
22,184
|
|
Meadowbank
mine
|
57,473
|
|
33,329
|
|
Canadian Malartic
mine(ii)
|
51,586
|
|
41,740
|
|
Kittila
mine
|
29,841
|
|
24,086
|
Southern
Business
|
|
|
|
|
Pinos Altos
mine
|
42,033
|
|
35,820
|
|
Creston Mascota
deposit at Pinos Altos
|
8,057
|
|
8,989
|
|
La India
mine
|
20,369
|
|
21,549
|
Total operating
margin(i)
|
307,120
|
|
246,558
|
Amortization of
property, plant and mine development
|
132,509
|
|
145,631
|
Exploration,
corporate and other
|
71,964
|
|
73,730
|
Income (loss) before
income and mining taxes
|
102,647
|
|
27,197
|
Income and mining
taxes expense (recovery)
|
26,697
|
|
(591)
|
Net income for the
period
|
$
|
75,950
|
|
$
|
27,788
|
Net income per share
— basic (US$)
|
$
|
0.33
|
|
$
|
0.13
|
Net income per share
— diluted (US$)
|
$
|
0.33
|
|
$
|
0.13
|
|
|
|
|
Cash
flows:
|
|
|
|
Cash provided by
operating activities
|
$
|
222,611
|
|
$
|
145,704
|
Cash used in
investing activities
|
$
|
(153,687)
|
|
$
|
(107,595)
|
Cash provided by
(used in) financing activities
|
$
|
181,571
|
|
$
|
(1,588)
|
|
|
|
|
Realized prices
(US$):
|
|
|
|
Gold (per
ounce)
|
$
|
1,223
|
|
$
|
1,192
|
Silver (per
ounce)
|
$
|
17.62
|
|
$
|
15.09
|
Zinc (per
tonne)
|
$
|
2,782
|
|
$
|
1,540
|
Copper (per
tonne)
|
$
|
6,277
|
|
$
|
4,297
|
|
|
|
|
Payable
production(iii):
|
|
|
|
Gold
(ounces):
|
|
|
|
|
Northern
Business
|
|
|
|
|
|
LaRonde
mine
|
78,912
|
|
75,337
|
|
|
Lapa mine
|
15,360
|
|
21,709
|
|
|
Goldex
mine
|
32,671
|
|
32,340
|
|
|
Meadowbank
mine
|
85,370
|
|
72,311
|
|
|
Canadian Malartic
mine(ii)
|
71,382
|
|
73,613
|
|
|
Kittila
mine
|
51,621
|
|
48,127
|
|
Southern
Business
|
|
|
|
|
|
Pinos Altos
mine
|
45,360
|
|
48,117
|
|
|
Creston Mascota
deposit at Pinos Altos
|
11,244
|
|
11,551
|
|
|
La India
mine
|
26,296
|
|
28,231
|
Total gold
(ounces)
|
418,216
|
|
411,336
|
|
|
|
|
Silver (thousands of
ounces):
|
|
|
|
|
Northern
Business
|
|
|
|
|
|
LaRonde
mine
|
272
|
|
247
|
|
|
Lapa mine
|
1
|
|
3
|
|
|
Goldex
mine
|
—
|
|
—
|
|
|
Meadowbank
mine
|
71
|
|
43
|
|
|
Canadian Malartic
mine(ii)
|
84
|
|
77
|
|
|
Kittila
mine
|
3
|
|
3
|
|
Southern
Business
|
|
|
|
|
|
Pinos Altos
mine
|
583
|
|
587
|
|
|
Creston Mascota
deposit at Pinos Altos
|
56
|
|
48
|
|
|
La India
mine
|
128
|
|
117
|
Total silver
(thousands of ounces)
|
1,198
|
|
1,125
|
|
|
|
|
Zinc
(tonnes)
|
1,005
|
|
614
|
Copper
(tonnes)
|
1,272
|
|
1,154
|
|
|
|
|
Payable metal
sold:
|
|
|
|
Gold
(ounces):
|
|
|
|
|
Northern
Business
|
|
|
|
|
|
LaRonde
mine
|
85,456
|
|
75,257
|
|
|
Lapa mine
|
15,407
|
|
19,836
|
|
|
Goldex
mine
|
33,212
|
|
31,955
|
|
|
Meadowbank
mine
|
90,555
|
|
71,589
|
|
|
Canadian Malartic
mine(ii)(iv)
|
63,860
|
|
65,085
|
|
|
Kittila
mine
|
53,900
|
|
50,725
|
|
Southern
Business
|
|
|
|
|
|
Pinos Altos
mine
|
45,133
|
|
43,224
|
|
|
Creston Mascota
deposit at Pinos Altos
|
11,626
|
|
11,845
|
|
|
La India
mine
|
25,680
|
|
26,165
|
Total gold
(ounces)
|
424,829
|
|
395,681
|
|
|
|
|
Silver (thousands of
ounces):
|
|
|
|
|
Northern
Business
|
|
|
|
|
|
LaRonde
mine
|
288
|
|
232
|
|
|
Lapa mine
|
—
|
|
1
|
|
|
Goldex
mine
|
—
|
|
—
|
|
|
Meadowbank
mine
|
63
|
|
43
|
|
|
Canadian Malartic
mine(ii)(iv)
|
79
|
|
73
|
|
|
Kittila
mine
|
2
|
|
3
|
|
Southern
Business
|
|
|
|
|
|
Pinos Altos
mine
|
606
|
|
530
|
|
|
Creston Mascota
deposit at Pinos
Altos
|
50
|
|
48
|
|
|
La India
mine
|
129
|
|
86
|
Total silver
(thousands of ounces):
|
1,217
|
|
1,016
|
|
|
|
|
Zinc
(tonnes)
|
2,136
|
|
605
|
Copper
(tonnes)
|
1,229
|
|
1,156
|
|
|
|
|
Total cash costs
per ounce of gold produced — co-product basis
(US$)(v):
|
|
|
|
Northern
Business
|
|
|
|
|
LaRonde
mine
|
$
|
662
|
|
$
|
670
|
|
Lapa mine
|
855
|
|
668
|
|
Goldex
mine(vi)
|
532
|
|
506
|
|
Meadowbank
mine
|
603
|
|
797
|
|
Canadian Malartic
mine(ii)
|
575
|
|
572
|
|
Kittila
mine
|
669
|
|
727
|
Southern
Business
|
|
|
|
|
Pinos Altos
mine
|
594
|
|
530
|
|
Creston Mascota
deposit at Pinos Altos
|
618
|
|
527
|
|
La India
mine
|
525
|
|
424
|
Weighted average
total cash costs per ounce of gold produced
|
$
|
616
|
|
$
|
631
|
|
|
|
|
Total cash costs
per ounce of gold produced — by-product basis
(US$)(v):
|
|
|
|
Northern
Business
|
|
|
|
|
LaRonde
mine
|
$
|
464
|
|
$
|
529
|
|
Lapa mine
|
854
|
|
668
|
|
Goldex
mine(vi)
|
532
|
|
506
|
|
Meadowbank
mine
|
590
|
|
788
|
|
Canadian Malartic
mine(ii)
|
556
|
|
557
|
|
Kittila
mine
|
668
|
|
726
|
Southern
Business
|
|
|
|
|
Pinos Altos
mine
|
358
|
|
343
|
|
Creston Mascota
deposit at Pinos Altos
|
525
|
|
460
|
|
La India
mine
|
438
|
|
360
|
Weighted average
total cash costs per ounce of gold produced
|
$
|
539
|
|
$
|
573
|
|
|
|
|
Notes:
|
(i) Operating margin
is calculated as revenues from mining operations less production
costs.
|
(ii) On June 16,
2014, Agnico Eagle and Yamana jointly acquired 100% of Osisko by
way of a plan of arrangement under the Canada Business
Corporation Act (the "Osisko Arrangement"). As a result of the
Osisko Arrangement, Agnico Eagle and Yamana each indirectly own 50%
of Osisko (now Canadian Malartic Corporation) and the Partnership,
which now holds the Canadian Malartic mine. The information set out
in this table reflects the Company's 50% interest in the Canadian
Malartic mine since the date of acquisition.
|
(iii) Payable
production (a non-GAAP non-financial performance measure) is
the quantity of mineral produced during a period contained in
products that have been or will be sold by the Company,
whether such products are sold during the period or held as
inventories at the end of the period.
|
(iv) The Canadian
Malartic mine's payable metal sold excludes the 5.0% net smelter
royalty in favour of Osisko Gold Royalties Ltd.
|
(v) Total cash costs
per ounce of gold produced is not a recognized measure under IFRS
and this data may not be comparable to data reported by other gold
producers. Total cash costs per ounce of gold produced is reported
on both a by-product basis (deducting by-product metal revenues
from production costs) and co-product basis (without deducting
by-product metal revenues). Total cash costs per ounce of gold
produced on a by-product basis is calculated by adjusting
production costs as recorded in the condensed interim consolidated
statements of income for by-product metal revenues, unsold
concentrate inventory production costs, smelting, refining and
marketing charges and other adjustments, and then dividing by the
number of ounces of gold produced. Total cash costs per ounce of
gold produced on a co-product basis is calculated in the same
manner as total cash costs per ounce of gold produced on a
by-product basis except that no adjustment for by-product metal
revenues is made. Accordingly, the calculation of total cash costs
per ounce of gold produced on a co-product basis does not reflect a
reduction in production costs or smelting, refining and marketing
charges associated with the production and sale of by-product
metals. The Company believes that these generally accepted industry
measures provide a realistic indication of operating performance
and provide useful comparison points between periods. Total cash
costs per ounce of gold produced is intended to provide information
about the cash generating capabilities of the Company's mining
operations. Management also uses these measures to monitor the
performance of the Company's mining operations. As market prices
for gold are quoted on a per ounce basis, using the total cash
costs per ounce of gold produced on a by-product basis measure
allows management to assess a mine's cash generating capabilities
at various gold prices. Management is aware that these per ounce
measures of performance can be affected by fluctuations in exchange
rates and, in the case of total cash costs of gold produced on a
by-product basis, by-product metal prices. Management compensates
for these inherent limitations by using these measures in
conjunction with minesite costs per tonne as well as other data
prepared in accordance with IFRS. Management also performs
sensitivity analyses in order to quantify the effects of
fluctuating metal prices and exchange rates.
|
(vi) The Goldex
mine's per ounce of gold produced calculations exclude 2,395 ounces
of payable gold production and the associated costs related to the
Deep 1 Zone which were produced prior to the achievement of
commercial production.
|
AGNICO EAGLE MINES
LIMITED
|
CONSOLIDATED
BALANCE SHEETS
|
(thousands of
United States dollars, except share amounts, IFRS
basis)
|
(Unaudited)
|
|
|
|
|
|
As at March
31,
2017
|
|
As at December
31,
2016
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
|
793,187
|
|
$
|
539,974
|
|
Short-term
investments
|
11,145
|
|
8,424
|
|
Restricted
cash
|
379
|
|
398
|
|
Trade
receivables
|
9,613
|
|
8,185
|
|
Inventories
|
420,066
|
|
443,714
|
|
Income taxes
recoverable
|
447
|
|
—
|
|
Available-for-sale
securities
|
126,000
|
|
92,310
|
|
Fair value of
derivative financial instruments
|
2,650
|
|
364
|
|
Other current
assets
|
130,087
|
|
136,810
|
Total current
assets
|
1,493,574
|
|
1,230,179
|
Non-current
assets:
|
|
|
|
|
Restricted
cash
|
770
|
|
764
|
|
Goodwill
|
696,809
|
|
696,809
|
|
Property, plant and
mine development
|
5,124,758
|
|
5,106,036
|
|
Other
assets
|
81,358
|
|
74,163
|
Total
assets
|
$
|
7,397,269
|
|
$
|
7,107,951
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts payable and
accrued liabilities
|
$
|
215,677
|
|
$
|
228,566
|
|
Reclamation
provision
|
11,251
|
|
9,193
|
|
Interest
payable
|
26,379
|
|
14,242
|
|
Income taxes
payable
|
31,714
|
|
35,070
|
|
Finance lease
obligations
|
5,089
|
|
5,535
|
|
Current portion of
long-term debt
|
130,013
|
|
129,896
|
|
Fair value of
derivative financial instruments
|
223
|
|
1,120
|
Total current
liabilities
|
420,346
|
|
423,622
|
Non-current
liabilities:
|
|
|
|
|
Long-term
debt
|
1,073,359
|
|
1,072,790
|
|
Reclamation
provision
|
269,629
|
|
265,308
|
|
Deferred income and
mining tax liabilities
|
822,265
|
|
819,562
|
|
Other
liabilities
|
33,168
|
|
34,195
|
Total
liabilities
|
2,618,767
|
|
2,615,477
|
EQUITY
|
|
|
|
Common
shares:
|
|
|
|
|
Outstanding —
231,081,041 common shares issued, less 868,101 shares held in
trust
|
5,205,803
|
|
4,987,694
|
|
Stock
options
|
184,409
|
|
179,852
|
|
Contributed
surplus
|
37,254
|
|
37,254
|
|
Deficit
|
(690,859)
|
|
(744,453)
|
|
Accumulated other
comprehensive income
|
41,895
|
|
32,127
|
Total
equity
|
4,778,502
|
|
4,492,474
|
Total liabilities and
equity
|
$
|
7,397,269
|
|
$
|
7,107,951
|
AGNICO EAGLE MINES
LIMITED
|
CONSOLIDATED
STATEMENTS OF INCOME
|
(thousands of
United States dollars, except per share amounts, IFRS
basis)
|
(Unaudited)
|
|
|
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
REVENUES
|
|
|
|
Revenues from mining
operations
|
$
|
547,459
|
|
$
|
490,531
|
|
|
|
|
COSTS, EXPENSES
AND OTHER INCOME
|
|
|
|
Production(i)
|
240,339
|
|
243,973
|
Exploration and
corporate development
|
25,313
|
|
28,385
|
Amortization of
property, plant and mine development
|
132,509
|
|
145,631
|
General and
administrative
|
30,754
|
|
24,823
|
Finance
costs
|
19,706
|
|
17,801
|
Gain on derivative
financial instruments
|
(3,800)
|
|
(9,621)
|
Gain on sale of
available-for-sale securities
|
(76)
|
|
(119)
|
Environmental
remediation
|
328
|
|
5,093
|
Foreign currency
translation loss
|
852
|
|
6,770
|
Other (income)
expenses
|
(1,113)
|
|
598
|
Income before income
and mining taxes
|
102,647
|
|
27,197
|
Income and mining
taxes expense (recovery)
|
26,697
|
|
(591)
|
Net income for the
period
|
$
|
75,950
|
|
$
|
27,788
|
|
|
|
|
Net income per share
- basic
|
$
|
0.33
|
|
$
|
0.13
|
Net income per share
- diluted
|
$
|
0.33
|
|
$
|
0.13
|
|
|
|
|
Weighted average
number of common shares outstanding (in thousands):
|
|
|
|
Basic
|
226,883
|
|
219,681
|
Diluted
|
229,345
|
|
221,906
|
|
|
|
|
Note:
|
|
|
|
(i)Exclusive of amortization, which is
shown separately.
|
|
|
|
AGNICO EAGLE MINES
LIMITED
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(thousands of
United States dollars, IFRS basis)
|
(Unaudited)
|
|
|
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2017
|
|
2016
|
|
|
|
|
OPERATING
ACTIVITIES
|
|
|
|
Net income for the
period
|
$
|
75,950
|
|
$
|
27,788
|
Add (deduct) items
not affecting cash:
|
|
|
|
|
Amortization of
property, plant and mine development
|
132,509
|
|
145,631
|
|
Deferred income and
mining taxes
|
531
|
|
(16,986)
|
|
Gain on sale of
available-for-sale securities
|
(76)
|
|
(119)
|
|
Stock-based
compensation
|
15,390
|
|
9,786
|
|
Foreign currency
translation loss
|
852
|
|
6,770
|
|
Other
|
(111)
|
|
(4,159)
|
Adjustment for
settlement of reclamation provision
|
(306)
|
|
(1,232)
|
Changes in non-cash
working capital balances:
|
|
|
|
|
Trade
receivables
|
(1,428)
|
|
2,073
|
|
Income
taxes
|
(3,803)
|
|
(13,724)
|
|
Inventories
|
7,936
|
|
24,611
|
|
Other current
assets
|
5,219
|
|
4,020
|
|
Accounts payable and
accrued liabilities
|
(21,159)
|
|
(46,336)
|
|
Interest
payable
|
11,107
|
|
7,581
|
Cash provided by
operating activities
|
222,611
|
|
145,704
|
|
|
|
|
INVESTING
ACTIVITIES
|
|
|
|
Additions to
property, plant and mine development
|
(128,639)
|
|
(100,694)
|
Net (purchases) sales
of short-term investments
|
(2,721)
|
|
2,235
|
Net proceeds from
sale of available-for-sale securities and other
investments
|
191
|
|
299
|
Purchases of
available-for-sale securities and other investments
|
(22,537)
|
|
(9,445)
|
Decrease in
restricted cash
|
19
|
|
10
|
Cash used in
investing activities
|
(153,687)
|
|
(107,595)
|
|
|
|
|
FINANCING
ACTIVITIES
|
|
|
|
Dividends
paid
|
(19,458)
|
|
(14,846)
|
Repayment of finance
lease obligations
|
(1,682)
|
|
(2,514)
|
Proceeds from
long-term debt
|
—
|
|
75,000
|
Repayment of
long-term debt
|
—
|
|
(130,000)
|
Repurchase of common
shares for stock-based compensation plans
|
(24,238)
|
|
(14,895)
|
Proceeds on exercise
of stock options
|
10,913
|
|
64,424
|
Common shares
issued
|
216,036
|
|
21,243
|
Cash provided by
(used in) financing activities
|
181,571
|
|
(1,588)
|
Effect of exchange
rate changes on cash and cash equivalents
|
2,718
|
|
2,075
|
Net increase in
cash and cash equivalents during the period
|
253,213
|
|
38,596
|
Cash and cash
equivalents, beginning of period
|
539,974
|
|
124,150
|
Cash and cash
equivalents, end of period
|
$
|
793,187
|
|
$
|
162,746
|
|
|
|
|
SUPPLEMENTAL CASH
FLOW INFORMATION
|
|
|
|
Interest
paid
|
$
|
6,867
|
|
$
|
8,880
|
Income and mining
taxes paid
|
$
|
30,363
|
|
$
|
53,317
|
AGNICO EAGLE MINES LIMITED
RECONCILIATION OF NON-GAAP FINANCIAL PERFORMANCE MEASURES
(thousands of United States
dollars, except where noted)
(Unaudited)
Total Production
Costs by Mine
|
Three Months
Ended
March 31, 2017
|
|
Three Months
Ended
March 31, 2016
|
(thousands of
United States dollars)
|
|
|
|
|
|
|
|
LaRonde
mine
|
$
|
|
|
44,365
|
|
$
|
|
|
45,854
|
Lapa mine
|
|
|
12,887
|
|
|
|
12,784
|
Goldex
mine
|
|
|
16,865
|
|
|
|
15,732
|
Meadowbank
mine
|
|
|
53,978
|
|
|
|
52,210
|
Canadian Malartic
mine(i)
|
|
|
32,501
|
|
|
|
40,814
|
Kittila
mine
|
|
|
35,919
|
|
|
|
36,027
|
Pinos Altos
mine
|
|
|
23,732
|
|
|
|
23,856
|
Creston Mascota
deposit at Pinos Altos
|
|
|
6,978
|
|
|
|
5,781
|
La India
mine
|
|
|
13,114
|
|
|
|
10,915
|
Production costs per
the condensed interim consolidated statements of income
|
$
|
|
|
240,339
|
|
$
|
|
|
243,973
|
|
|
|
|
|
|
|
|
Reconciliation
of Production Costs to Total Cash Costs per Ounce of Gold Produced
(ii) by Mine and Reconciliation of Production Costs to Minesite
Costs per Tonne(iii) by Mine
|
(thousands of
United States dollars, except as noted)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LaRonde Mine
Per Ounce of Gold Produced(ii)
|
Three Months
Ended
March 31, 2017
|
|
Three Months
Ended
March 31, 2016
|
|
(thousands)
|
|
($ per
ounce)
|
|
(thousands)
|
|
($ per
ounce)
|
Gold production
(ounces)
|
|
|
78,912
|
|
|
|
75,337
|
|
|
|
|
|
|
|
|
Production
costs
|
$
|
44,365
|
|
$
|
562
|
|
$
|
45,854
|
|
$
|
609
|
|
Inventory and other
adjustments(iv)
|
7,840
|
|
100
|
|
4,619
|
|
61
|
Cash operating costs
(co-product basis)
|
$
|
52,205
|
|
$
|
662
|
|
$
|
50,473
|
|
$
|
670
|
|
By-product metal
revenues
|
(15,585)
|
|
(198)
|
|
(10,646)
|
|
(141)
|
Cash operating costs
(by-product basis)
|
$
|
36,620
|
|
$
|
464
|
|
$
|
39,827
|
|
$
|
529
|
|
|
|
|
|
|
|
|
LaRonde Mine
Per Tonne(iii)
|
Three Months
Ended
March 31, 2017
|
|
Three Months
Ended
March 31, 2016
|
|
(thousands)
|
|
($ per
tonne)
|
|
(thousands)
|
|
($ per
tonne)
|
Tonnes of ore milled
(thousands of tonnes)
|
|
|
559
|
|
|
|
577
|
|
|
|
|
|
|
|
|
Production
costs
|
$
|
44,365
|
|
$
|
79
|
|
$
|
45,854
|
|
$
|
79
|
Production costs
(C$)
|
C$
|
59,224
|
|
C$
|
106
|
|
C$
|
60,732
|
|
C$
|
105
|
Inventory and other
adjustments (C$)(v)
|
1,496
|
|
3
|
|
(1,504)
|
|
(2)
|
Minesite operating
costs (C$)
|
C$
|
60,720
|
|
C$
|
109
|
|
C$
|
59,228
|
|
C$
|
103
|
|
|
|
|
|
|
|
|
Lapa Mine
Per Ounce of Gold Produced(ii)
|
Three Months
Ended
March 31, 2017
|
|
Three Months
Ended
March 31, 2016
|
|
(thousands)
|
|
($ per
ounce)
|
|
(thousands)
|
|
($ per
ounce)
|
Gold production
(ounces)
|
|
|
15,360
|
|
|
|
21,709
|
|
|
|
|
|
|
|
|
Production
costs
|
$
|
12,887
|
|
$
|
839
|
|
$
|
12,784
|
|
$
|
589
|
|
Inventory and other
adjustments(iv)
|
242
|
|
16
|
|
1,727
|
|
79
|
Cash operating costs
(co-product basis)
|
$
|
13,129
|
|
$
|
855
|
|
$
|
14,511
|
|
$
|
668
|
|
By-product metal
revenues
|
(14)
|
|
(1)
|
|
(13)
|
|
—
|
Cash operating costs
(by-product basis)
|
$
|
13,115
|
|
$
|
854
|
|
$
|
14,498
|
|
$
|
668
|
|
|
|
|
|
|
|
|
Lapa Mine
Per Tonne(iii)
|
Three Months
Ended
March 31, 2017
|
|
Three Months
Ended
March 31, 2016
|
|
(thousands)
|
|
($ per
tonne)
|
|
(thousands)
|
|
($ per
tonne)
|
Tonnes of ore milled
(thousands of tonnes)
|
|
|
130
|
|
|
|
161
|
|
|
|
|
|
|
|
|
Production
costs
|
$
|
12,887
|
|
$
|
99
|
|
$
|
12,784
|
|
$
|
79
|
Production costs
(C$)
|
C$
|
17,259
|
|
C$
|
133
|
|
C$
|
17,516
|
|
C$
|
109
|
Inventory and other
adjustments (C$)(v)
|
61
|
|
1
|
|
1,965
|
|
12
|
Minesite operating
costs (C$)
|
C$
|
17,320
|
|
C$
|
134
|
|
C$
|
19,481
|
|
C$
|
121
|
|
|
|
|
|
|
|
|
Goldex Mine
Per Ounce of Gold Produced(ii)(vi)
|
Three Months
Ended
March 31, 2017
|
|
Three Months
Ended
March 31, 2016
|
|
(thousands)
|
|
($ per
ounce)
|
|
(thousands)
|
|
($ per
ounce)
|
Adjusted gold
production (ounces)
|
|
|
30,276
|
|
|
|
32,340
|
|
|
|
|
|
|
|
|
Production
costs
|
$
|
16,865
|
|
$
|
557
|
|
$
|
15,732
|
|
$
|
486
|
|
Inventory and other
adjustments(iv)
|
(752)
|
|
(25)
|
|
624
|
|
20
|
Cash operating costs
(co-product basis)
|
$
|
16,113
|
|
$
|
532
|
|
$
|
16,356
|
|
$
|
506
|
|
By-product metal
revenues
|
(8)
|
|
—
|
|
(6)
|
|
—
|
Cash operating costs
(by-product basis)
|
$
|
16,105
|
|
$
|
532
|
|
$
|
16,350
|
|
$
|
506
|
|
|
|
|
|
|
|
|
Goldex Mine
Per Tonne(iii)(vii)
|
Three Months
Ended
March 31, 2017
|
|
Three Months
Ended
March 31, 2016
|
|
(thousands)
|
|
($ per
tonne)
|
|
(thousands)
|
|
($ per
tonne)
|
Adjusted tonnes of
ore milled (thousands of tonnes)
|
|
|
584
|
|
|
|
636
|
|
|
|
|
|
|
|
|
Production
costs
|
$
|
16,865
|
|
$
|
29
|
|
$
|
15,732
|
|
$
|
25
|
Production costs
(C$)
|
C$
|
22,303
|
|
C$
|
38
|
|
C$
|
21,364
|
|
C$
|
34
|
Inventory and other
adjustments (C$)(v)
|
(973)
|
|
(1)
|
|
342
|
|
—
|
Minesite operating
costs (C$)
|
C$
|
21,330
|
|
C$
|
37
|
|
C$
|
21,706
|
|
C$
|
34
|
|
|
|
|
|
|
|
|
Meadowbank
Mine
Per Ounce of Gold Produced(ii)
|
Three Months
Ended
March 31, 2017
|
|
Three Months
Ended
March 31, 2016
|
|
(thousands)
|
|
($ per
ounce)
|
|
(thousands)
|
|
($ per
ounce)
|
Gold production
(ounces)
|
|
|
85,370
|
|
|
|
72,311
|
|
|
|
|
|
|
|
|
Production
costs
|
$
|
53,978
|
|
$
|
632
|
|
$
|
52,210
|
|
$
|
722
|
|
Inventory and other
adjustments(iv)
|
(2,515)
|
|
(29)
|
|
5,446
|
|
75
|
Cash operating costs
(co-product basis)
|
$
|
51,463
|
|
$
|
603
|
|
$
|
57,656
|
|
$
|
797
|
|
By-product metal
revenues
|
(1,107)
|
|
(13)
|
|
(659)
|
|
(9)
|
Cash operating costs
(by-product basis)
|
$
|
50,356
|
|
$
|
590
|
|
$
|
56,997
|
|
$
|
788
|
|
|
|
|
|
|
|
|
Meadowbank
Mine
Per Tonne(iii)
|
Three Months
Ended
March 31, 2017
|
|
Three Months
Ended
March 31, 2016
|
|
(thousands)
|
|
($ per
tonne)
|
|
(thousands)
|
|
($ per
tonne)
|
Tonnes of ore milled
(thousands of tonnes)
|
|
|
926
|
|
|
|
946
|
|
|
|
|
|
|
|
|
Production
costs
|
$
|
53,978
|
|
$
|
58
|
|
$
|
52,210
|
|
$
|
55
|
Production costs
(C$)
|
C$
|
71,414
|
|
C$
|
77
|
|
C$
|
69,120
|
|
C$
|
73
|
Inventory and other
adjustments (C$)(v)
|
(3,141)
|
|
(3)
|
|
3,938
|
|
4
|
Minesite operating
costs (C$)
|
C$
|
68,273
|
|
C$
|
74
|
|
C$
|
73,058
|
|
C$
|
77
|
|
|
|
|
|
|
|
|
Canadian Malartic
Mine
Per Ounce of Gold Produced(i)(ii)
|
Three Months
Ended
March 31, 2017
|
|
Three Months
Ended
March 31, 2016
|
|
(thousands)
|
|
($ per
ounce)
|
|
(thousands)
|
|
($ per
ounce)
|
Gold production
(ounces)
|
|
|
71,382
|
|
|
|
73,613
|
|
|
|
|
|
|
|
|
Production
costs
|
$
|
32,501
|
|
$
|
455
|
|
$
|
40,814
|
|
$
|
554
|
|
Inventory and other
adjustments(iv)
|
8,564
|
|
120
|
|
1,309
|
|
18
|
Cash operating costs
(co-product basis)
|
$
|
41,065
|
|
$
|
575
|
|
$
|
42,123
|
|
$
|
572
|
|
By-product metal
revenues
|
(1,354)
|
|
(19)
|
|
(1,095)
|
|
(15)
|
Cash operating costs
(by-product basis)
|
$
|
39,711
|
|
$
|
556
|
|
$
|
41,028
|
|
$
|
557
|
|
|
|
|
|
|
|
|
Canadian Malartic
Mine
Per Tonne(i)(iii)
|
Three Months
Ended
March 31, 2017
|
|
Three Months
Ended
March 31, 2016
|
|
(thousands)
|
|
($ per
tonne)
|
|
(thousands)
|
|
($ per
tonne)
|
Tonnes of ore milled
(thousands of tonnes)
|
|
|
2,433
|
|
|
|
2,380
|
|
|
|
|
|
|
|
|
Production
costs
|
$
|
32,501
|
|
$
|
13
|
|
$
|
40,814
|
|
$
|
17
|
Production costs
(C$)
|
C$
|
42,996
|
|
C$
|
18
|
|
C$
|
50,594
|
|
C$
|
21
|
Inventory and other
adjustments (C$)(v)
|
|
11,133
|
|
4
|
|
6,951
|
|
3
|
Minesite operating
costs (C$)
|
C$
|
54,129
|
|
C$
|
22
|
|
C$
|
57,545
|
|
C$
|
24
|
|
|
|
|
|
|
|
|
Kittila Mine
Per Ounce of Gold Produced(ii)
|
Three Months
Ended
March 31, 2017
|
|
Three Months
Ended
March 31, 2016
|
|
(thousands)
|
|
($ per
ounce)
|
|
(thousands)
|
|
($ per
ounce)
|
Gold production
(ounces)
|
|
|
51,621
|
|
|
|
48,127
|
|
|
|
|
|
|
|
|
Production
costs
|
$
|
35,919
|
|
$
|
696
|
|
$
|
36,027
|
|
$
|
749
|
|
Inventory and other
adjustments(iv)
|
(1,392)
|
|
(27)
|
|
(1,024)
|
|
(22)
|
Cash operating costs
(co-product basis)
|
$
|
34,527
|
|
$
|
669
|
|
$
|
35,003
|
|
$
|
727
|
|
By-product metal
revenues
|
(46)
|
|
(1)
|
|
(47)
|
|
(1)
|
Cash operating costs
(by-product basis)
|
$
|
34,481
|
|
$
|
668
|
|
$
|
34,956
|
|
$
|
726
|
|
|
|
|
|
|
|
|
Kittila Mine
Per Tonne(iii)
|
Three Months
Ended
March 31, 2017
|
|
Three Months
Ended
March 31, 2016
|
|
(thousands)
|
|
($ per
tonne)
|
|
(thousands)
|
|
($ per
tonne)
|
Tonnes of ore milled
(thousands of tonnes)
|
|
|
423
|
|
|
|
432
|
|
|
|
|
|
|
|
|
Production
costs
|
$
|
35,919
|
|
$
|
85
|
|
$
|
36,027
|
|
$
|
83
|
Production costs
(€)
|
€
|
33,104
|
|
€
|
78
|
|
€
|
32,202
|
|
€
|
75
|
Inventory and other
adjustments (€)(v)
|
(1,340)
|
|
(3)
|
|
(1,093)
|
|
(3)
|
Minesite operating
costs (€)
|
€
|
31,764
|
|
€
|
75
|
|
€
|
31,109
|
|
€
|
72
|
|
|
|
|
|
|
|
|
Pinos Altos
Mine
Per Ounce of Gold Produced(ii)
|
Three Months
Ended
March 31, 2017
|
|
Three Months
Ended
March 31, 2016
|
|
(thousands)
|
|
($ per
ounce)
|
|
(thousands)
|
|
($ per
ounce)
|
Gold production
(ounces)
|
|
|
45,360
|
|
|
|
48,117
|
|
|
|
|
|
|
|
|
Production
costs
|
$
|
23,732
|
|
$
|
523
|
|
$
|
23,856
|
|
$
|
496
|
|
Inventory and other
adjustments(iv)
|
3,211
|
|
71
|
|
1,635
|
|
34
|
Cash operating costs
(co-product basis)
|
$
|
26,943
|
|
$
|
594
|
|
$
|
25,491
|
|
$
|
530
|
|
By-product metal
revenues
|
(10,695)
|
|
(236)
|
|
(8,972)
|
|
(187)
|
Cash operating costs
(by-product basis)
|
$
|
16,248
|
|
$
|
358
|
|
$
|
16,519
|
|
$
|
343
|
|
|
|
|
|
|
|
|
Pinos Altos
Mine
Per Tonne(iii)
|
Three Months
Ended
March 31, 2017
|
|
Three Months
Ended
March 31, 2016
|
|
(thousands)
|
|
($ per
tonne)
|
|
(thousands)
|
|
($ per
tonne)
|
Tonnes of ore
processed (thousands of tonnes)
|
|
|
553
|
|
|
|
502
|
|
|
|
|
|
|
|
|
Production
costs
|
$
|
23,732
|
|
$
|
43
|
|
$
|
23,856
|
|
$
|
48
|
Inventory and other
adjustments(v)
|
2,841
|
|
5
|
|
1,296
|
|
2
|
Minesite operating
costs
|
$
|
26,573
|
|
$
|
48
|
|
$
|
25,152
|
|
$
|
50
|
|
|
|
|
|
|
|
|
Creston Mascota
deposit at Pinos Altos
Per Ounce of Gold Produced(ii)
|
Three Months
Ended
March 31, 2017
|
|
Three Months
Ended
March 31, 2016
|
|
(thousands)
|
|
($ per
ounce)
|
|
(thousands)
|
|
($ per
ounce)
|
Gold production
(ounces)
|
|
|
11,244
|
|
|
|
11,551
|
|
|
|
|
|
|
|
|
Production
costs
|
$
|
6,978
|
|
$
|
621
|
|
$
|
5,781
|
|
$
|
500
|
|
Inventory and other
adjustments(iv)
|
(31)
|
|
(3)
|
|
310
|
|
27
|
Cash operating costs
(co-product basis)
|
$
|
6,947
|
|
$
|
618
|
|
$
|
6,091
|
|
$
|
527
|
|
By-product metal
revenues
|
(1,044)
|
|
(93)
|
|
(782)
|
|
(67)
|
Cash operating costs
(by-product basis)
|
$
|
5,903
|
|
$
|
525
|
|
$
|
5,309
|
|
$
|
460
|
|
|
|
|
|
|
|
|
Creston Mascota
deposit at Pinos Altos
Per Tonne(iii)
|
Three Months
Ended
March 31, 2017
|
|
Three Months
Ended
March 31, 2016
|
|
(thousands)
|
|
($ per
tonne)
|
|
(thousands)
|
|
($ per
tonne)
|
Tonnes of ore
processed (thousands of tonnes)
|
|
|
524
|
|
|
|
516
|
|
|
|
|
|
|
|
|
Production
costs
|
$
|
6,978
|
|
$
|
13
|
|
$
|
5,781
|
|
$
|
11
|
Inventory and other
adjustments(v)
|
(95)
|
|
—
|
|
195
|
|
1
|
Minesite operating
costs
|
$
|
6,883
|
|
$
|
13
|
|
$
|
5,976
|
|
$
|
12
|
|
|
|
|
|
|
|
|
La India Mine
Per Ounce of Gold Produced(ii)
|
Three Months
Ended
March 31, 2017
|
|
Three Months
Ended
March 31, 2016
|
|
(thousands)
|
|
($ per
ounce)
|
|
(thousands)
|
|
($ per
ounce)
|
Gold production
(ounces)(ii)
|
|
|
26,296
|
|
|
|
28,231
|
|
|
|
|
|
|
|
|
Production
costs
|
$
|
13,114
|
|
$
|
499
|
|
$
|
10,915
|
|
$
|
387
|
|
Inventory and other
adjustments(iv)
|
686
|
|
26
|
|
1,054
|
|
37
|
Cash operating costs
(co-product basis)
|
$
|
13,800
|
|
$
|
525
|
|
$
|
11,969
|
|
$
|
424
|
|
By-product metal
revenues
|
|
(2,280)
|
|
(87)
|
|
(1,796)
|
|
(64)
|
Cash operating costs
(by-product basis)
|
$
|
11,520
|
|
$
|
438
|
|
$
|
10,173
|
|
$
|
360
|
|
|
|
|
|
|
|
|
La India Mine
Per Tonne(iii)
|
Three Months
Ended
March 31, 2017
|
|
Three Months
Ended
March 31, 2016
|
|
(thousands)
|
|
($ per
tonne)
|
|
(thousands)
|
|
($ per
tonne)
|
Tonnes of ore
processed (thousands of tonnes)
|
|
|
1,402
|
|
|
|
1,396
|
|
|
|
|
|
|
|
|
Production
costs
|
$
|
13,114
|
|
$
|
9
|
|
$
|
10,915
|
|
$
|
8
|
Inventory and other
adjustments(v)
|
369
|
|
1
|
|
819
|
|
—
|
Minesite operating
costs
|
$
|
13,483
|
|
$
|
10
|
|
$
|
11,734
|
|
$
|
8
|
|
Notes:
|
(i) On June 16, 2014,
Agnico Eagle and Yamana jointly acquired 100% of Osisko by way of
the Osisko Arrangement. As a result of the Osisko
Arrangement, Agnico Eagle and Yamana each indirectly own 50% of
Osisko (now Canadian Malartic Corporation) and the Partnership,
which now holds the Canadian Malartic mine. The information
set out in this table reflects the Company's 50% interest in the
Canadian Malartic mine since the date of acquisition.
|
(ii) Total cash costs
per ounce of gold produced is not a recognized measure under IFRS
and this data may not be comparable to data reported by other gold
producers. Total cash costs per ounce of gold produced is reported
on both a by-product basis (deducting by-product metal revenues
from production costs) and co-product basis (without deducting
by-product metal revenues). Total cash costs per ounce of gold
produced on a by-product basis is calculated by adjusting
production costs as recorded in the condensed interim consolidated
statements of income for by-product metal revenues, inventory
production costs, smelting, refining and marketing charges and
other adjustments, and then dividing by the number of ounces of
gold produced. Total cash costs per ounce of gold produced on a
co-product basis is calculated in the same manner as total cash
costs per ounce of gold produced on a by-product basis except that
no adjustment for by-product metal revenues is made. Accordingly,
the calculation of total cash costs per ounce of gold produced on a
co-product basis does not reflect a reduction in production costs
or smelting, refining and marketing charges associated with the
production and sale of by-product metals. The Company believes that
these generally accepted industry measures provide a realistic
indication of operating performance and provide useful comparison
points between periods. Total cash costs per ounce of gold produced
is intended to provide information about the cash generating
capabilities of the Company's mining operations. Management also
uses these measures to monitor the performance of the Company's
mining operations. As market prices for gold are quoted on a per
ounce basis, using the total cash costs per ounce of gold produced
on a by-product basis measure allows management to assess a mine's
cash generating capabilities at various gold prices. Management is
aware that these per ounce measures of performance can be affected
by fluctuations in exchange rates and, in the case of total cash
costs of gold produced on a by-product basis, by-product metal
prices. Management compensates for these inherent limitations by
using these measures in conjunction with minesite costs per tonne
as well as other data prepared in accordance with IFRS. Management
also performs sensitivity analyses in order to quantify the effects
of fluctuating metal prices and exchange rates.
|
(iii) Minesite costs
per tonne is not a recognized measure under IFRS and this data may
not be comparable to data reported by other gold producers. This
measure is calculated by adjusting production costs as shown in the
condensed interim consolidated statements of income for inventory
production costs, and then dividing by tonnes of ore milled. As the
total cash costs per ounce of gold produced measure can be affected
by fluctuations in by-product metal prices and exchange rates,
management believes that the minesite costs per tonne measure
provides additional information regarding the performance of mining
operations, eliminating the impact of 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 of performance can be impacted by
fluctuations in processing levels and compensates for this inherent
limitation by using this measure in conjunction with production
costs prepared in accordance with IFRS.
|
(iv) Under the
Company's revenue recognition policy, revenue is recognized when
legal title and risk is transferred. As total cash costs per ounce
of gold produced are calculated on a production basis, an inventory
adjustment is made to reflect the portion of production not yet
recognized as revenue. Other adjustments include the addition of
smelting, refining and marketing charges to production
costs.
|
(v) This inventory
and other adjustment reflects production costs associated with the
portion of production still in inventory.
|
(vi) The Goldex
mine's per ounce of gold produced calculations exclude 2,395 ounces
of payable gold production and the associated costs related to the
Deep 1 Zone which were produced prior to the achievement of
commercial production.
|
(vii) The Goldex
mine's per tonne calculations exclude 57,730 tonnes and the
associated costs related to the Deep 1 Zone which were processed
prior to the achievement of commercial production.
|
Reconciliation of
Production Costs to All-in Sustaining Costs per Ounce of
Gold Produced
|
|
|
|
|
|
|
|
Three Months Ended
March 31, 2017
|
|
Three Months Ended
March 31, 2016
|
Production costs per
the condensed interim consolidated statements of income (thousands
of United States dollars)
|
|
$
|
240,339
|
|
$
|
243,973
|
Adjusted gold
production (ounces)(i)
|
|
415,821
|
|
411,336
|
Production costs per
ounce of adjusted gold production(i)
|
|
$
|
578
|
|
$
|
593
|
Adjustments:
|
|
|
|
|
|
Inventory and other
adjustments(ii)
|
|
38
|
|
38
|
Total cash costs per
ounce of gold produced (co-product
basis)(iii)
|
|
$
|
616
|
|
$
|
631
|
By-product metal
revenues
|
|
(77)
|
|
(58)
|
Total cash costs per
ounce of gold produced (by-product
basis)(iii)
|
|
$
|
539
|
|
$
|
573
|
Adjustments:
|
|
|
|
|
|
Sustaining capital
expenditures (including capitalized exploration)
|
|
125
|
|
161
|
|
General and
administrative expenses (including stock options)
|
|
74
|
|
60
|
|
Non-cash reclamation
provision and other
|
|
3
|
|
3
|
All-in sustaining
costs per ounce of gold produced (by-product basis)
|
|
$
|
741
|
|
$
|
797
|
|
By-product metal
revenues
|
|
77
|
|
58
|
All-in sustaining
costs per ounce of gold produced (co-product basis)
|
|
$
|
818
|
|
$
|
855
|
|
|
|
|
|
Notes:
|
|
|
|
|
(i) The Company's per
ounce of gold produced calculations exclude 2,395 ounces of payable
gold production and the associated costs related to the Goldex
mine's Deep 1 zone which were produced prior to the achievement of
commercial production.
|
(ii) Under the
Company's revenue recognition policy, revenue is recognized when
legal title and risk is transferred. As total cash costs per ounce
of gold produced are calculated on a production basis, this
inventory adjustment reflects the sales margin on the portion of
production not yet recognized as revenue.
|
(iii) Total cash
costs per ounce of gold produced is not a recognized measure under
IFRS and this data may not be comparable to data presented by other
gold producers. Total cash costs per ounce of gold produced is
presented on both a by-product basis (deducting by-product metal
revenues from production costs) and co-product basis (without
deducting by-product metal revenues). Total cash costs per ounce of
gold produced on a by-product basis is calculated by adjusting
production costs as recorded in the condensed interim consolidated
statements of income for by-product metal revenues, inventory
production costs, smelting, refining and marketing charges and
other adjustments, and then dividing by the number of ounces of
gold produced. Total cash costs per ounce of gold produced on a
co-product basis is calculated in the same manner as total cash
costs per ounce of gold produced on a by-product basis except that
no adjustment for by-product metal revenues is made. Accordingly,
the calculation of total cash costs per ounce of gold produced on a
co-product basis does not reflect a reduction in production costs
or smelting, refining and marketing charges associated with the
production and sale of by-product metals. The Company believes that
these generally accepted industry measures provide a realistic
indication of operating performance and provide useful comparison
points between periods. Total cash costs per ounce of gold produced
is intended to provide information about the cash generating
capabilities of the Company's mining operations. Management also
uses these measures to monitor the performance of the Company's
mining operations. As market prices for gold are quoted on a per
ounce basis, using the total cash costs per ounce of gold produced
on a by-product basis measure allows management to assess a mine's
cash generating capabilities at various gold prices. Management is
aware that these per ounce measures of performance can be affected
by fluctuations in exchange rates and, in the case of total cash
costs of gold produced on a by-product basis, by-product metal
prices. Management compensates for these inherent limitations by
using these measures in conjunction with minesite costs per tonne
as well as other data prepared in accordance with IFRS. Management
also performs sensitivity analyses in order to quantify the effects
of fluctuating metal prices and exchange rates.
|
SOURCE Agnico Eagle Mines Limited