Stock Symbol: AEM (NYSE and TSX)
(All amounts expressed in U.S. dollars unless otherwise
noted)
TORONTO, July 27, 2016 /CNW/ - Agnico Eagle Mines
Limited (NYSE:AEM, TSX:AEM) ("Agnico Eagle" or the "Company")
today reported quarterly net income of $19.0 million, or net income of $0.09 per share for the second quarter of 2016
(on an undiluted basis). This result includes a non-cash
foreign currency translation loss on deferred tax liabilities of
$7.0 million ($0.03 per share), various mark-to-market and
other adjustment losses of $5.8
million ($0.03 per share),
non-cash foreign currency translation losses of $5.5 million ($0.02
per share), non-cash stock option expense of $3.1 million ($0.01
per share), non-recurring gains of $4.4
million ($0.02 per share), and
unrealized gains on financial instruments of $1.0 million (nil per share). Excluding
these items would result in adjusted net income1 of
$35.0 million or $0.16 per share for the second quarter of
2016. In the second quarter of 2015, the Company reported net
income of $10.1 million or net
income of $0.05 per share.
For the first six months of 2016, the Company reported net
income of $46.8 million, or
$0.21 per share. This compares
with the first six months of 2015 when net income was $38.8 million, or $0.18 per share. Financial results in the
2016 period were positively affected by higher gold production
and realized prices (approximately 2% and 3% higher, respectively)
and higher by-product metals revenues.
Second quarter 2016 cash provided by operating activities was
$229.5 million ($192.7 million before changes in non-cash
components of working capital). This compares to
cash provided by operating activities of $188.3 million in the second quarter of 2015
($152.8 million before changes in
non-cash components of working capital).
For the first six months of 2016, cash provided by operating
activities was $375.2 million
($360.2 million before changes in
non-cash components of working capital), as compared with the first
half of 2015 when cash provided by operating activities was
$331.8 million ($329.6 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 second quarter 2016 and first
six months of 2016 was mainly due to a combination of higher gold
and by-product metals production, as described above.
"The second quarter saw continued strong operating results from
all of our mines coupled with record safety performance", said
Sean Boyd, Agnico Eagle's Chief
Executive Officer. "Given these strong results and a more
robust gold price environment, we have significantly improved our
financial position, while continuing to make important investments
in several of our growth projects. In addition, we have
raised our dividend signaling our confidence in our business and
growth plan", added Mr. Boyd.
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1
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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".
|
Second Quarter 2016 highlights include:
- Quarterly gold production – Payable gold
production2 in the second quarter of 2016 was 408,932
ounces of gold at total cash costs3 per ounce on a
by-product basis of $592 and all-in
sustaining costs4 ("AISC") on a by-product basis of
$848 per ounce
- 2016 production guidance increased and cost forecasts
reduced – Expected gold production for 2016 is now forecast to
be approximately 1.58 to 1.6 million ounces (previously 1.565
million ounces) with total cash costs per ounce on a by-product
basis of $580 to $620 (previously
$590 to $630) and AISC of
approximately $840 to $880 per ounce
(previously $850 to $890)
- Investment grade balance sheet further enhanced – In the
second quarter of 2016, the outstanding balance of $210 million was repaid under the Company's
credit facility, and C$20 million
(reflecting the Company's 50% interest) was repaid under the
Canadian Malartic General Partnership's (the "Partnership") secured
loan facility. Net debt was reduced by approximately
$181 million, to $742 million, at June
30, 2016. For the seventh consecutive quarter, the
Company has reduced net debt. The Company's investment grade
credit was re-confirmed by Dominion Bond Rating Service Ltd.
("DBRS") with a stable trend
- Quarterly dividend increased by 25% - The Company
has declared a $0.10 quarterly
dividend. The previous quarterly dividend was $0.08
- Final permit received at the Meliadine Gold project
- In May 2016, the Company
received the Type A Water License, which is the final
license necessary to commence construction activities
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2
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Payable production of a
mineral means the quantity of mineral produced during a period
contained in products that are sold by the Company whether such
products are shipped during the period or held as inventory at the
end of the period.
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3
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Total cash costs per ounce
is a Non-GAAP measure. For a reconciliation to production costs,
see "Reconciliation of Non-GAAP Financial Performance Measures"
below. 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 (before 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 consolidated statements of income (loss) 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. 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. See also "Note Regarding Certain
Measures of Performance". For information about the Company's total
cash costs per ounce on a co-product basis please see
"Reconciliation of Non-GAAP Performance
Measures".
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4
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All-in-sustaining costs per
ounce is a Non-GAAP measure and is used to show the full cost of
gold production from current operations. For a reconciliation to
production costs, see "Reconciliation of Non-GAAP Financial
Performance Measures" below. The Company calculates all-in
sustaining costs per ounce of gold produced 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 option expense) and
reclamation expenses divided by the number of ounces of
gold produced. All-in sustaining costs per ounce of gold produced
on a co-product basis is calculated in the same manner as all-in
sustaining costs per ounce of gold produced on a by-product basis
except that no adjustment for by-product metal revenues is made.
For information about the Company's AISC on a co-product basis
please see "Reconciliation of Non-GAAP Performance Measures". The
Company's methodology for calculating all-in sustaining costs per
ounce may not be similar to the methodology used by other producers
that disclose all-in sustaining costs per ounce. See also "Note
Regarding Certain Measures of Performance". The Company may change
the methodology it uses to calculate all-in sustaining costs per
ounce in the future, including in response to the adoption of
formal industry guidance regarding this measure by the World Gold
Council.
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Second Quarter Financial and Production Highlights – Higher
Gold Production, Lower Unit Costs
In the second quarter of 2016, strong operational performance
continued at the Company's mines.
Payable gold production in the second quarter of 2016 was
408,932 ounces compared to 403,678 ounces in the second quarter of
2015. The higher level of production in the 2016 period was
primarily due to higher grades at LaRonde, increased throughput
levels and higher grades at Goldex and increased throughput levels
at Canadian Malartic. A detailed description of the
production and cost performance of each mine is set out below.
Total cash costs per ounce on a by-product basis for the second
quarter of 2016 were lower at $592,
as compared to $601 for the second
quarter 2015. The reduction in total cash costs per ounce on
a by-product basis in the second quarter of 2016 was a result of
higher silver production, higher gold production at most of the
Company's mines and weaker local currencies in Canada and Mexico against the U.S. dollar compared to the
second quarter of 2015.
Payable gold production for the first half of 2016 was 820,268
ounces, compared to payable gold production of 807,888 ounces in
the comparable 2015 period.
For the first half of 2016, total cash costs per ounce on a
by-product basis were $582, as
compared to $595 for the first half
of 2015. The lower costs in the 2016 period are due to the
same reasons set out above.
AISC on a by-product basis for the second quarter of 2016 were
lower at $848 as compared to
$864 per ounce for the second quarter
2015. The lower AISC on a by-product basis is primarily
due to higher production, lower total cash costs per ounce on a
by-product basis and timing of capital expenditures.
For the first half of 2016, AISC on a by-product basis were
$822 as compared to $835 per ounce for the 2015 period. The
lower AISC on a by-product basis in the 2016 period are due to
lower total cash costs per ounce on a by-product basis.
Cash Position Remains Strong; Net Debt Reduced for Seventh
Consecutive Quarter
Cash and cash equivalents and short term investments increased
to $473.7 million at June 30, 2016, from the March 31, 2016 balance of $168.0 million.
The outstanding balance on the Company's $1.2 billion credit facility was reduced from
$210 million at March 31, 2016 to nil at June 30, 2016. This results in available
credit lines of approximately $1.2
billion, not including the uncommitted $300 million accordion feature.
In order to take advantage of historically low interest rates
and improve term and liquidity, on June 30,
2016, the Company issued on a private placement basis an
aggregate of $350 million of
guaranteed senior unsecured notes due 2023, 2026 and 2028 (the
"Notes") with a weighted average maturity of 9.43 years and
weighted average yield of 4.77%. Net proceeds from the sale
of the Notes were used to reduce amounts outstanding under the
Company's credit facility and for general corporate purposes.
During the quarter the Company's investment grade credit was
re-confirmed by DBRS with a stable trend.
Total capital expenditures (including sustaining capital) made
by the Company in the second quarter of 2016 were $131.6 million, including $28.2 million at Meliadine, $20.7 million at Goldex, $19.3 million at Canadian Malartic (50% basis),
$18.8 million at Kittila,
$15.4 million at LaRonde,
$12.2 million at Pinos Altos, $10.6
million at Meadowbank, $3.3
million at La India and $2.2
million at Creston Mascota.
Total capital expenditures (including sustaining capital) for
the first six months of 2016 were $232.1
million, including $43.4
million at Meliadine, $35.9
million at Goldex, $33.0
million at Kittila, $29.8
million at Canadian Malartic (50% basis), $29.7 million at LaRonde, $28.2 million at Pinos
Altos, $22.1 million at
Meadowbank, $5.0 million at La India
and $3.5 million at Creston
Mascota.
Total sustaining capital expenditures made by the Company in the
second quarter of 2016 were $78.7
million, including $18.3
million at Canadian Malartic (50% basis), $15.8 million at Kittila, $15.4 million at LaRonde, $10.6 million at Meadowbank, $9.0 million at Pinos
Altos, $4.1 million at Goldex,
$3.3 million at La India and
$2.2 million at Creston Mascota.
Total sustaining capital expenditures for the first six months
of 2016 were $145.1 million,
including $29.7 million at LaRonde,
$28.3 million at Canadian Malartic
(50% basis), $27.5 million at
Kittila, $22.1 million at Meadowbank,
$19.8 million at Pinos Altos, $9.1
million at Goldex, $5.0
million at La India and $3.6
million at Creston Mascota.
Total capital expenditures (including sustaining capital) in
2016 remain forecast at $491
million.
Revised 2016 Guidance – Production Increased, Costs Lowered,
Depreciation Decreased
Production for 2016 is now forecast to be approximately 1.58 to
1.6 million ounces of gold (previously 1.565 million ounces) with
total cash costs per ounce on a by-product basis of $580 to $620 (previously $590 to $630) and AISC of approximately
$840 to $880 per ounce (previously
$850 to $890).
The Company expects depreciation and amortization expense to be
in the range of $610 to $630
million. Previous guidance was $630 to $660 million.
Second Quarter 2016 Results Conference Call and Webcast
Tomorrow
The Company's senior management will host a conference call on
Thursday, July 28, 2016 at
10:00 AM (E.D.T.) to discuss
financial results and provide an update of the Company's operating
activities.
Via Webcast:
A live audio webcast of the conference call will be available on
the Company's website 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 ten 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 38813014. The conference call replay will expire on
August 25, 2016.
The webcast, along with presentation slides, will be archived
for 180 days on www.agnicoeagle.com.
NORTHERN BUSINESS OPERATING 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 Tonnage, Grades and Better Recoveries
Drive Strong Production in the Second Quarter of 2016
The 100% owned LaRonde mine in northwestern Quebec achieved commercial production in
1988.
The LaRonde mill processed an average of 6,241 tonnes per day
("tpd") in the second quarter of 2016, compared with an average of
6,242 tpd in the corresponding period of 2015. Minesite costs
per tonne5 were approximately C$106 in the second quarter of 2016, higher than
the C$99 per tonne experienced in the
second quarter of 2015. The increased costs in the 2016
period were primarily due to higher underground and mill
maintenance costs compared to the prior-year period. In
addition, costs in the 2015 period were lower than
expected.
For the first six months of 2016, the LaRonde mill processed an
average of 6,295 tpd, compared to 6,223 tpd in the first six months
of 2015. Minesite costs per tonne were approximately
C$104, compared to C$101 per tonne in the first six months of
2015. Costs were higher in the 2016 period due to the reasons
described above.
LaRonde's total cash costs per ounce on a by-product basis were
$543 in the second quarter of 2016 on
payable production of 75,159 ounces of gold. This compares
with the second quarter of 2015 when total cash costs per ounce on
a by-product basis were $613 on
payable production of 64,007 ounces of gold. Costs in the
2016 period were positively impacted by higher production driven by
higher ore grades and favourable foreign exchange rates.
In the first six months of 2016, LaRonde produced 150,496 ounces
of gold at total cash costs per ounce on a by-product basis of
$536. This is in contrast with
the first six months of 2015 when the mine produced 122,900 ounces
of gold at total cash costs per ounce on a by-product basis of
$656. Costs were lower in the
2016 period due to the reasons outlined above.
Studies are continuing to assess the potential to extend the
mineral reserve base and carry out mining activities between the
311 and 371 levels at LaRonde. At present, the mineral
reserve base extends to the 311 level, which is 3.1 kilometres
below the surface. An infill drill program is continuing from
the 311 to the 371 levels with a focus on the western portion of
the deposit. Infill drilling will also be carried out on the
eastern portion of the deposit as underground development extends
into that area.
In the second quarter of 2016, site preparation activities
continued at Bousquet Zone 5 on the Company's adjoining Bousquet
property. Previous property owners had partly exploited
Bousquet Zone 5 using open pit and underground operations.
The Company is evaluating the potential to mine Bousquet Zone 5
using underground ramp access. The mining method is likely to
be similar to that employed at Goldex and processing could utilize
excess capacity from the Lapa circuit at LaRonde.
During the quarter, dewatering of the old pit was completed
along with rehabilitation of the ramp portal and 92 metres of
underground development was completed. A certificate of
authorization was issued by the Quebec government to permit collection of a
bulk sample. An internal technical study is expected to be
completed by the end of 2016. Following the completion of
technical studies and permitting, Bousquet Zone 5 could potentially
be in production in the second half of 2018.
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5
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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".
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Canadian Malartic Mine – Record Processing Rate Achieved in
Second Quarter of 2016
In June 2014, Agnico Eagle and
Yamana Gold Inc. ("Yamana") acquired all of the issued and
outstanding common shares of Osisko Mining Corporation ("Osisko")
and created the Partnership that 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.
During the second quarter of 2016, the Canadian Malartic mill
(on a 100% basis) processed an average of 55,481 tpd, compared with
an average of 50,705 tpd in the corresponding period of 2015.
The record daily throughput in the 2016 period was primarily due to
higher crusher availability, better crushing performance from the
secondary crusher and better plant availability.
Minesite costs per tonne in the second quarter of
2016 were approximately C$24
(C$20.50 excluding royalties)
compared to the C$23 (C$19.71 excluding royalties) per tonne
experienced in the second quarter of 2015. In the 2016 period
costs were slightly higher primarily due to increased contractor
use at both the mine and the mill and additional stripping costs
which were not capitalized. The average stripping ratio in
the second quarter of 2016 was 2.17 to 1.0 as compared to 2.64 to
1.0 in the prior period.
For the first six months of 2016, the Canadian Malartic mill
processed an average of 53,897 tpd, compared with an average of
51,343 tpd in the corresponding period of 2015. Minesite
costs per tonne were approximately C$24 (C$20.87
excluding royalties) compared to the C$23 (C$19.94
excluding royalties) per tonne in the first six months of
2016. Costs were higher due to the reasons outlined
above.
For the second quarter of 2016, Agnico Eagle's 50% share of
production at the Canadian Malartic mine was 72,502 ounces of gold
at total cash costs per ounce on a by-product basis of $621. This compares with the second quarter
of 2015 when total cash costs per ounce on a by-product basis were
$609 on production of 68,441 ounces
of gold. Costs in the 2016 period were higher due to a lower
amount of stripping costs being capitalized compared to the 2015
period.
In the first six months of 2016, Agnico Eagle's 50% share of
production at the Canadian Malartic mine was 146,115 ounces of gold
at total cash costs per ounce on a by-product basis of $589. This compares with the first six
months of 2015 when the mine produced 136,334 ounces of gold at
total cash costs per ounce on a by-product basis of $621. Costs were lower in first six months
of 2016 due to stronger cash cost performance in the first quarter
2016.
Permitting activities for the Canadian Malartic pit extension
and deviation of Highway 117 are continuing. As part of the
Quebec environmental impact
evaluation process, public hearings on the Canadian Malartic pit
extension project took place on June 14 to
16 and July 12 and 13, 2016 in
Malartic, Quebec.
The Quebec Bureau des Audiences Publiques sur
l'Environnement (BAPE) will now be reviewing the studies and
documents submitted by the Partnership, information that
was presented at the hearings and the written submissions
received from intervenors. The BAPE is expected to issue its
conclusions and recommendations on the acceptability of the project
to the Quebec Minister of the
Environment, Sustainable Development and Climate Change in
October 2016. A decision from
the Minister will then follow within the next several months.
The Odyssey prospect lies on the east side of the Canadian
Malartic property, approximately 1.5 kilometres east of the current
limit of the Canadian Malartic open pit. In the second
quarter of 2016, drilling was ongoing at Odyssey and a total of 57
holes (53,417 metres) were completed through June 30, 2016 by the Partnership.
The Odyssey prospect is composed of multiple mineralized bodies
spatially associated with a porphyritic intrusion close to the
contact of the Pontiac Group sediments and the Piché Group of
volcanic rocks. They are grouped into two elongated zones —
the Odyssey North and Odyssey South zones — that strike
east-southeast and dip steeply south. Odyssey North has been
traced from a depth of 600 to 1,300 metres below surface along a
strike length of approximately 1.5 kilometres. Odyssey South
currently has a strike length of 0.5 kilometres, and has been
located between approximately 200 and 550 metres below surface.
Recent drilling has yielded significant intercepts such as 2.63
grams per tonne ("g/t") gold (capped) over 33.5 metres estimated
true width at 1,171 metres depth in drill hole ODY16-5039, showing
similarities to the Goldex mine deposit. Additional details
on the 2016 Odyssey drill program are reported in the Company's
exploration news release of July 27,
2016.
Lapa – Potential for Increased Production through Year End
2016
The 100% owned Lapa mine in northwestern Quebec achieved commercial production in
May 2009.
The Lapa circuit, located at the LaRonde mill, processed an
average of 1,771 tpd in the second quarter of 2016. This
compares with an average of 1,387 tpd in the second quarter of
2015. Throughput in the 2015 period was lower because of
downtime related to the discovery of fatigue cracks in the feed
head of the Lapa ball mill.
Minesite costs per tonne were C$116 in the second quarter of 2016, compared to
C$126 in the second quarter of
2015. Costs in the 2016 period were lower due to higher
throughput compared to the same period in 2015.
For the first six months of 2016, the Lapa mill processed an
average of 1,767 tpd, compared to 1,538 tpd in the first six months
of 2015. Minesite costs per tonne were approximately
C$118, below the C$122 per tonne in the first six months of 2015
due to reasons explained above.
Payable production in the second quarter of 2016 was 21,914
ounces of gold at total cash costs per ounce on a by-product basis
of $658. This compares with the
second quarter of 2015, when payable production was 19,450 ounces
of gold at total cash costs per ounce on a by-product basis of
$678. In the 2016 period,
production was higher and costs were lower due to higher throughput
levels and favourable foreign exchange rates.
In the first six months of 2016, Lapa produced 43,623 ounces of
gold at total cash costs per ounce on a by-product basis of
$663. This compares to the
first six months of 2015 when the mine produced 45,370 ounces of
gold at total cash costs per ounce on a by-product basis of
$615. The six month period in
2015 was positively affected by higher production and lower
cash costs in the first quarter of 2015.
At Lapa, 2016 is the last full year of production based on the
current life of mine plan. Production was expected to show a
gradual decline moving into the fourth quarter of this year with
the full year expected to total 60,000 ounces of gold, as per
February 2016 guidance. The
Company is now evaluating a number of opportunities that could see
production potentially extend through year end and exceed previous
guidance.
Goldex – Strong Underground Performance and Higher Grades
Drive Increased Production and Lower Costs
The 100% owned Goldex mine in northwestern Quebec began operation in 2008 but mining
operations in the original orebody, the Goldex Extension Zone
("GEZ") were suspended in October
2011 (see October 19, 2011
news release). In July 2012,
the M and E satellite zones were approved for development.
Mining operations resumed on the M and E satellite zones in
September 2013. Mining operations at GEZ remain
suspended.
The Goldex mill processed an average of 7,233 tpd in the second
quarter of 2016. This compares with an average of 6,640 tpd
in the second quarter of 2015. The higher throughput in the
2016 period was due to better underground hoisting performance and
acceleration of the mining sequence compared to the 2015
period.
Minesite costs per tonne were approximately C$32 in the second quarter of 2016, which was
lower than the C$34 per tonne
experienced in the second quarter of 2015. Costs in the 2016
period were lower primarily due to higher mill throughput levels
and a higher proportion of rockfill to paste backfill during the
period.
For the first six months of 2016, the Goldex mill processed an
average of 7,112 tpd, compared to 6,468 tpd in the first six months
of 2015. Minesite costs per tonne were approximately
C$33, slightly lower than the
C$34 per tonne in the first six
months of 2015. The lower costs in the 2016 period are due to
the reasons set out above.
Payable gold production in the second quarter of 2016 was 31,452
ounces of gold at total cash costs per ounce on a by-product basis
of $513. This compares with the
second quarter of 2015, when payable production was 26,462 ounces
of gold at total cash costs per ounce on a by-product basis of
$633. The decrease in total
cash costs in the 2016 period was largely a result of increased
production due to higher throughput, higher gold grades and
favourable foreign exchange rates compared to the 2015 period.
In the first six months of 2016, Goldex produced 63,792 ounces
of gold at total cash costs per ounce on a by-product basis of
$509. This compares to the
first six months of 2015 when the mine produced 55,712 ounces of
gold at total cash costs per ounce on a by-product basis of
$585. The higher production and
lower costs in the 2016 period are due to the same reasons as
outlined above.
Development of the Deep 1 Zone remains on time and on budget for
startup in the first quarter of 2018. In the second quarter
of 2016, the excavation of the second leg of the Rail-Veyor
(conveyor system) ramp was completed and the initial components of
the Rail-Veyor are now being installed.
In January 2014, Agnico Eagle
acquired the Akasaba West gold-copper deposit from Alexandria
Minerals Corporation. Located less than 30 kilometres from
Goldex, the Akasaba West deposit could potentially create
flexibility and synergies for the Company's operations in the
Abitibi region by using extra milling capacity at both Goldex and
LaRonde, while reducing overall costs. The Akasaba West
deposit currently hosts a mineral reserve of approximately 141,000
ounces of gold (4.8 million tonnes of ore grading 0.92 g/t gold and
0.52% copper).
Permitting of the Akasaba project is progressing at both the
provincial and federal levels. At the provincial level,
following submission of the Environmental Impact Assessment (EIA)
in August 2015, the Company responded
to two series of questions from the Quebec government agencies and
ministries. Public consultation will also be scheduled.
At the federal level, following submission of the EIA in
September 2015, the Company
received two sets of questions from federal agencies and
ministries. Responses to the most recent set of
questions will be submitted in August 2016. The federal
environmental assessment agency will then proceed with a series of
consultations with the public and the First Nations and is expected
to potentially present its recommendations on the acceptability of
the project to the Federal Minister of the Environment in the first
half of 2017.
In June 2016 the company purchased
a property package of mining claims (approximately 840 hectares)
adjacent to the Goldex mine from Wesdome Gold Mines Ltd for
C$7.0 million. The acquisition
was for exploration purposes.
These claims, which are collectively referred to as Joubi,
consist of three properties including the Joubi and Dubuisson Ouest
properties and a portion of the Mine Ecole property. These
properties cover the lateral and downdip extensions of the Goldex
orebody. There are no mineral resources outlined on those
properties.
The transaction includes surface rights, infrastructure and
certain equipment from the historical Joubi Mine. As part of
the transaction, Agnico Eagle has granted to Wesdome a 2% net
smelter royalty on the Mine Ecole property and a 3% net smelter
royalty on the Joubi property.
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 reserve base. Exploration activities continue
to expand the mineral resource base and studies are underway to
evaluate the potential to cost-effectively increase production.
Kittila – Strong Mine and Mill Performance Continues;
Optimization Studies Ongoing
The 100% owned Kittila mine in northern Finland achieved commercial production in
2009.
The Kittila mill processed an average of 4,274 tpd in the second
quarter of 2016 compared to 4,170 tpd in the second quarter of
2015. The higher throughput in the 2016 period is a result of
increased development leading to improved ore access and strong
mining productivity.
Minesite costs per tonne at Kittila were approximately €81 in
the second quarter of 2016, compared to €75 in the second quarter
of 2015. Costs increased in the second quarter of 2016 due to
higher than expected maintenance costs associated with the
scheduled mill shutdown and increased contractor costs compared
with the 2015 period. These costs more than offset the benefit of
the increased throughput.
For the first six months of 2016, the Kittila mill processed an
average of 4,512 tpd, compared to 4,004 tpd in the first six months
of 2015. Minesite costs per tonne were approximately €76 in
the first six months of 2016, the same as in the comparable 2015
period as higher throughput was offset by higher operating costs,
as described above.
Second quarter 2016 payable gold production at Kittila was
46,209 ounces with total cash costs per ounce on a by-product basis
of $756. In the second quarter
of 2015, the mine produced 41,986 ounces at total cash costs per
ounce on a by-product basis of $776. The higher production in the 2016
period is a result of higher throughput levels, gold grades and
recoveries. Total cash costs per ounce decreased in the
second quarter of 2016 primarily due to increased production.
In the first six months of 2016, Kittila produced 94,336 ounces
of gold at total cash costs per ounce on a by-product basis of
$741. This compares with the
first six months of 2015, when the mine produced 86,640 ounces of
gold at total cash costs per ounce on a by-product basis of
$727. Production was higher in
the 2016 period primarily due to increased throughput. Costs
were higher in the 2016 period primarily due to higher contractor
costs compared to the 2015 period.
The Kittila mine and mill have shown the ability to operate in
excess of 4,000 tpd and efforts are ongoing to assess the optimal
throughput rate. Studies are also underway to optimize
underground mining rates and fully integrate the upper and lower
Rimpi zones and the newly discovered Sisar Zone in a new Kittila
mine plan. Unit costs are expected to improve once steady
state operations are achieved.
Drilling is ongoing to infill and extend the mineralization in
the Sisar Zone. In addition, underground ramp construction
began in March to access the upper portion of the Sisar Zone, which
is located approximately 150 to 200 metres from existing
underground infrastructure. During the second quarter of
2016, assay results were received from a number of drill
holes. Significant results include: drill hole ROD16-700D
that intersected 7.4 g/t gold (uncapped) over 9.6 metres estimated
true width at 1,161 metres depth, and hole ROD16-700B that
intersected 6.4 g/t gold (uncapped) over 6.5 metres estimated true
width at 1,261 metres depth. Additional details on these
holes are set out in the Company's exploration news
release of July 27, 2016.
Barsele Project – Drilling Extends the Skirasen Zone
In June 2015, Agnico Eagle
acquired a 55% interest in the Barsele project in Vasterbotten
County, northern Sweden, from Orex
Minerals (Orex Minerals subsequently transferred its interest in
the project to Barsele Minerals Corp.). The Company can earn
an additional 15% interest in the project through the completion of
a pre-feasibility study.
Recent drilling at the Skiråsen Zone has extended the
mineralization at depth and to the southeast. Highlights
include hole SKI16-006 grading 1.31 g/t gold (capped) over an
estimated true width of 69.8 metres at 445 metres depth. This
drill intercept is located roughly 850 metres southeast of the core
of the Central Zone indicating that the current known
mineralization could be part of a larger mineralized system.
Additional details on these holes are set out in the
Company's exploration news release of July
27, 2016.
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), two significant
development assets (Meliadine and Amaruq) 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 – Good Cost Performance Despite Lower Production
Volumes in the Second Quarter of 2016
The 100% owned Meadowbank mine in Nunavut, northern Canada, achieved commercial production in
March 2010.
The Meadowbank mill processed an average of 10,918 tpd in the
second quarter of 2016, compared to the 11,199 tpd achieved in the
second quarter of 2015. Year-over-year, mill throughput
levels were lower primarily due to harder ore being processed from
the Vault pit.
Minesite costs per tonne were approximately C$73 in the second quarter of 2016. These
costs were lower than the C$74 per
tonne in the second quarter of 2015. The lower costs per
tonne in the 2016 period were primarily due to lower production
costs (for drilling, blasting and fuel consumption) and an increase
in deferred stripping compared to the 2015 period.
For the first six months of 2016, the Meadowbank mill processed
an average of 10,654 tpd, compared to 11,103 tpd in the first six
months of 2015. Minesite costs per tonne were approximately
C$75 in the first six months of 2016,
which were higher than the C$73 per
tonne in the comparable 2015 period. The higher costs per
tonne were primarily due to lower throughput compared to the
respective 2015 period.
Payable production in the second quarter of 2016 was 72,402
ounces of gold at total cash costs per ounce on a by-product basis
of $789. This compares with the
second quarter of 2015 when 91,276 ounces were produced at total
cash costs per ounce on a by-product basis of $688. The lower production and higher costs
in the 2016 period compared to the 2015 period are primarily due to
processing less tonnage at lower grades (down 18%) and lower
recoveries.
In the first six months of 2016, Meadowbank produced 144,713
ounces of gold at total cash costs per ounce on a by-product basis
of $789. In the first six
months of 2015 the mine produced 179,799 ounces of gold at total
cash costs per ounce on a by-product basis of $672. The lower production and higher costs
in the 2016 period compared to the previous period are due to the
reasons outlined above.
Studies are ongoing to investigate additional opportunities to
extend production at Meadowbank through year-end 2018.
Potential opportunities include the development of the Phaser pit,
which is located to the southwest of the Vault pit, and an
additional pushback to access additional ore in the E3 pit at the
Portage deposit.
Amaruq Project – Exploration and Permitting Activities
Progressing as Planned
Agnico Eagle has a 100% interest in the Amaruq project in
Nunavut, northern Canada.
The large property consists of 116,717 hectares of Inuit-owned and
federal Crown land, located approximately 50 kilometres northwest
of the Meadowbank mine. The Company is actively exploring the
Amaruq deposit with the goal of potentially developing the deposit
as a satellite operation to Meadowbank.
During the quarter, exploration drilling continued at Amaruq.
The goals of the 2016 exploration program were to infill and
expand the known mineral resource areas and to test other
favourable targets with a focus on identifying a second source of
open pit ore.
Drilling began at the end of January and continued through May
based mainly on lake ice; the drilling since June has been
land-based supported by helicopters. Exploration and
conversion drilling to the end of June has totalled 77,517 metres
(338 holes), using up to nine rigs, completing the initial
75,000-metre drill program. Almost half of this drilling was
in the IVR deposit (36,545 metres, 152 holes), with 30% at Whale
Tail (24,820 metres, 103 holes) and the rest at Mammoth (16,153
metres, 83 holes). In addition, there was 2,186 metres (nine
holes) related to engineering studies (rock mechanics /
geotechnical drilling and metallurgical testing) in this
period.
Exploration drilling has encountered a new vein structure in the
V Zones, with results up to 15.5 g/t gold (capped) over 9.4 metres
estimated true width at 18 metres depth in drill hole AMQ16-706.
The V Zones have been shown to include multiple parallel
structures. A recent lower intercept was 15.5 g/t gold
(capped) over 5.4 metres estimated true width at 349 metres depth
in drill hole AMQ16-833. The V Zones are being evaluated as a
potential second source of open pit ore for Amaruq.
Additional details from the 2016 Amaruq program are set
out in the Company's exploration news release of July 27, 2016.
Construction of the Amaruq Exploration Access Road commenced in
the first quarter of 2016. At the end of the second quarter
of 2016, approximately 13.3 km of road had been completed.
Construction is expected to resume this August with a focus on
bridge installation. Completion of the 62 kilometre long road
is expected by the end of 2017.
An application for an amendment to the Amaruq Exploration Type B
Water License was submitted on March 31,
2016 to allow for the development of an exploration ramp and
the potential collection of a bulk sample. The permit
approval process for the exploration ramp is expected to take
approximately nine months.
In order to mine the Whale Tail deposit, a Project Certificate
for this satellite pit must be obtained from the Nunavut Impact
Review Board (the "NIRB") along with an amendment of the existing
Meadowbank Type A water license. A positive land use
conformity determination was received from the Nunavut Planning
Commission on June 17, 2016 for the
Amaruq Whale Tail pit project confirming that the planned activity
meets conformity with the existing land use plan. On
June 30, 2016 the Company submitted
an application and environmental impact statement for the Whale
Tail satellite pit with both the NIRB and Nunavut Water
Board. This application is currently undergoing screening by
the NIRB which initiates the permitting process, a process that is
expected to take place over a period of approximately two
years.
Meliadine Project – Final Permit Received May 2016; Optimization Studies Continuing
The Meliadine gold project was acquired in July 2010 and is the Company's largest
development project based on mineral reserves and mineral
resources. The Company has a 100% interest in the 111,757
hectare property, which is linked to the town of Rankin Inlet in Nunavut by a 25 kilometre all-weather access
road.
In March 2015, the Company
completed an updated technical report on the Meliadine gold
project. The updated technical report was based on extracting
only the 3.3 million ounces of gold in proven and probable mineral
reserves (13.9 million tonnes of ore at 7.44 g/t gold), which is
all contained in the Tiriganiaq and Wesmeg deposits.
The Meliadine property also hosts 3.3 million ounces of measured
and indicated mineral resources (20.2 million tonnes at 5.06 g/t
gold), and 3.5 million ounces of inferred mineral resources (14.1
million tonnes at 7.65 g/t gold). In addition, there
are many other known gold occurrences in the 80 km long
greenstone belt that require further evaluation.
Internal studies are continuing to evaluate the potential to
extract additional gold from the Tiriganiaq and Wesmeg/Normeg
deposits, which could extend the potential mine life, increase
annual production and improve project economics and the after-tax
internal rate of return. These studies are expected to be
completed by the end of 2016.
In the second quarter of 2016, approximately 1,098 metres of
underground development were completed. A total of
approximately 4,302 metres of underground development is
planned in 2016.
On May 19, 2016, the Company
received the Type A Water Licence, which is the final permit needed
to commence construction activities. The timing of future
capital expenditures at the Meliadine project beyond 2016 and the
determination of whether to build a mine at Meliadine are subject
to approval by Agnico Eagle's Board of Directors, which will be
based on, among other things, prevailing market conditions and
outcomes of the various plans being evaluated.
SOUTHERN BUSINESS OPERATING REVIEW
Agnico Eagle's Southern Business operations are focused in
Mexico. These operations have been the source of growing
precious metals production (gold and silver), stable operating
costs and strong free cash flow since 2009. In the second
quarter of 2016, the Mexican operations had new record quarterly
silver production of approximately 788,000 ounces.
Pinos Altos – Shaft
Commissioning Continues, Ramp Up to Design Capacity Expected in Q3
2016
The 100% owned Pinos Altos mine
in northern Mexico achieved
commercial production in November
2009.
The Pinos Altos mill processed
5,660 tpd in the second quarter of 2016, compared to 5,854 tpd in
the second quarter of 2015. During the second quarter of
2016, approximately 90,000 tonnes of ore were stacked on the leach
pad at Pinos Altos, compared to
114,800 tonnes in the comparable 2015 period. Minesite costs
per tonne at Pinos Altos were
$47 in the second quarter of 2016,
which were higher than the $43 in the
second quarter of 2015. The difference in minesite costs per
tonne was largely attributable to variations in the proportion of
heap leach ore to milled ore and open pit ore to underground ore,
currency variations and routine fluctuations in the waste to ore
stripping ratio in the open pit mines.
For the first six months of 2016, the Pinos Altos mill processed an average of 5,297
tpd, compared to 5,758 tpd in the first six months of 2015.
Approximately 143,200 tonnes of ore were stacked on the
Pinos Altos leach pad during the
first six months of 2016, compared to 189,200 tonnes in the prior
year period. Minesite costs per tonne were approximately
$48 compared to $45 per tonne in the first six months of 2015,
with variance due to the proportion of heap leach to milled ore and
the proportion of underground ore to open pit, variations in the
proportion of waste to ore mined and variations in the currency
exchange rate.
Payable production in the second quarter of 2016 was 49,458
ounces of gold at total cash costs per ounce on a by-product basis
of $348. This compares with
payable production of 50,647 ounces at total cash costs per ounce
on a by-product basis of $384 in the
second quarter of 2015. Lower production in 2016 is largely
due to lower throughput compared to the prior year period.
The decrease in the year over year total cash costs per ounce is
largely due to higher silver production and favourable foreign
exchange rates compared to the prior year period.
In the first six months of 2016, Pinos
Altos produced 97,575 ounces of gold at total cash costs per
ounce on a by-product basis of $346. This compares with the first six
months of 2015 when the mine produced 100,753 ounces of gold at
total cash costs per ounce on a by-product basis of $371. The decrease in cash costs for
the first six months of 2016 is due to the reasons outlined
above.
The Pinos Altos shaft project
was completed and commissioned for hoisting in mid-June.
Adjustments to ore-waste hoisting parameters and settings
progressed through the second half of June. Ramp up to the
design capacity will continue in July. The shaft completion
will allow better matching of the mill capacity with the future
mining capacity at Pinos Altos
once the open pit mining operation begins to wind down as planned
over the next several years.
The Company continues to evaluate a number of regional
opportunities. During the quarter, exploration drilling
commenced at the Madrono prospect. Additional details from
the Madrono drilling program are set out in the Company's news
release of July 27, 2016.
Creston Mascota Deposit at Pinos
Altos – Initial Madrono drilling Yields Positive
Results
The Creston Mascota deposit at Pinos
Altos has been operating as a satellite operation to the
Pinos Altos mine since late
2010.
Approximately 573,000 tonnes of ore were stacked on the Creston
Mascota leach pad during the second quarter of 2016, compared to
approximately 608,500 tonnes stacked in the second quarter of
2015. In the 2016 period lower grades were stacked compared
to the 2015 period. Minesite costs per tonne at Creston
Mascota were $12 in the second
quarter of 2016, compared to $11 in
the second quarter of 2015. Costs in the 2016 period were
slightly higher due to an increased stripping ratio and wet weather
conditions related to the rainy season compared to the 2015
period.
For the first six months of 2016, approximately 1,089,200 tonnes
of ore were stacked on the Creston Mascota leach pad, compared to
1,135,500 tonnes in the prior year period.
For the first six months of 2016, mine site costs per tonne at
Creston Mascota were $12, compared to
$11 per tonne in the first six months
of 2015. Costs were higher in the 2016 period due to the
reasons outlined above.
Payable gold production at Creston Mascota in the second quarter
of 2016 was 12,398 ounces at total cash costs per ounce on a
by-product basis of $469. This
compares to 15,606 ounces at total cash costs per ounce on a
by-product basis of $402 during the
second quarter of 2015. Production in the 2016 period was
lower due to fewer tonnes stacked and lower grades compared to
the 2015 period. Cash costs were higher in the 2016 period
primarily due to higher minesite costs per tonne, and lower
production partially offset by a favourable foreign exchange rate
compared to the 2015 period.
Payable gold production for the first six months of 2016 was
23,949 ounces at total cash costs per ounce on a by-product basis
of $465. This compares to
28,054 ounces at total cash costs per ounce on a by-product basis
of $421 in the first six months of
2015. The lower production and higher costs in the 2016
period are due to the reasons outlined above.
Infill drilling continues at Creston Mascota with several high
grade intercepts encountered during the period suggesting potential
for modest extension of the current mine life.
During the first quarter of 2016, an agreement was signed that
allows access to the 51-hectare Madrono property for exploration
and mining. The Madrono property is located in an area with
good access and infrastructure between the Company's Pinos Altos and Creston Mascota operations and
includes at least three gold-silver veins: Madrono, Santa Martha and La Curva. Previous
mining in this area included small-scale bonanza production from
underground mine development on three levels in the 1930s.
In the second quarter of 2016, 12 drill holes totaling 2,978
metres were completed on preliminary target areas. Three of
the first six holes drilled at Madrono encountered gold and silver
mineralization with encouraging grades and widths. Highlights
include: 4.1 g/t gold and 64.5 g/t silver (both grades uncapped)
over 6.2 metres estimated true width at 45 metres depth in hole
MAD16-005. Additional details are presented in the Company's
exploration news release of July 27,
2016.
Permits were obtained in June 2016
to allow for the construction of an additional 75 exploration drill
pads on the Madrono property. Further drilling is planned for
Madrono through the balance of 2016.
La India – Increased Gold
and Silver Production Drive Lower costs
The La India mine in Sonora,
Mexico, located approximately 70 kilometres from the
Company's Pinos Altos mine, was
acquired in November 2011 through the
purchase of Grayd Resources, which held a 56,000 hectare land
position in the Mulatos Gold belt. Commissioning of the mine
commenced ahead of schedule in the third quarter of 2013 and
commercial production was declared as of February 1, 2014.
Approximately 1,534,500 tonnes of ore were stacked on the La
India leach pad during the second quarter of 2016, compared to
approximately 1,359,500 tonnes stacked in the second quarter of
2015. Minesite costs per tonne at La India were $8 in the second quarter of 2016, compared to the
$9 in the second quarter of
2015. The higher tonnage stacked in the 2016 period is a
reflection of additional low-grade ore being encountered in areas
previously thought to contain waste. The lower minesite costs
reflect normal variations in the waste/ore stripping ratio.
In the first six months of 2016, approximately 2,930,800 tonnes
of ore were stacked on the La India leach pad, compared to
approximately 2,738,000 stacked in the first six months of
2015. Minesite costs per tonne at La India were $8 in the first six months of 2016, compared to
the $9 in the first six months of
2015. The increased tonnage stacked and lower costs in the
2016 period are due to the reasons outlined above.
Payable gold production at La India in the second quarter of
2016 was 27,438 ounces at total cash costs per ounce on a
by-product basis of $381.
Payable production in the second quarter of 2015 was 25,803 ounces
at total cash costs per ounce on a by-product basis of $410. Production was higher in the 2016
period due to higher tonnage stacked and faster percolation rates
from the new lifts on the phase 2 heap leach pad. Total cash
costs in the 2016 period were positively impacted by slightly lower
minesite costs per tonne, higher gold and silver production and
favourable foreign exchange rates.
For the first six months of 2016, La India produced 55,669
ounces of gold at total cash costs per ounce on a by-product basis
of $371. This compares to
52,326 ounces at total cash costs per ounce on a by-product basis
of $414 in the first six months of
2015. The increased production and lower costs are due to the
reasons outlined above.
Construction of the haul road to the Main Zone was completed
during the second quarter of 2016. Mining activities on the
Main Zone began in May 2016.
During the quarter, several areas on the La India property
were drill tested including the infill drilling at the Main Zone
and exploration drilling at India East and El Cochi.
Encouraging results were obtained from the Main Zone, which could
have a positive impact on the year end mineral reserves and mineral
resources at La India. At El Cochi, drilling on an
outcropping area identified shallow oxidized mineralization and
drilling will continue once the change of land use permit is
obtained, which is expected in the second half of 2016. In
late June 2016, the environmental
permit for exploration at the El
Realito area was obtained (permission for 40 drill pads),
and drilling will be carried out later this year.
On July 19, 2016, La India
experienced an armed robbery. Employees at La India are safe
and normal operations resumed later that same day. The
Company is cooperating with federal, state and local authorities
who are actively investigating the incident. The Company
understands that all losses and damages will be covered by
insurance.
El Barqueno – Drilling Expands Known Deposits and Outlines
New Mineralized Zones
Agnico Eagle acquired its 100% interest in the El Barqueno
project in November 2014 with the
acquisition of Cayden Resources Inc. The 32,840-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. As of December 31,
2015, the El Barqueno project had an inferred mineral
resource of 19.7 million tonnes grading 0.96 g/t gold and 5.78 g/t
silver (containing 608,000 ounces of gold and 3.7 million ounces of
silver) at the Azteca-Zapoteca, Angostura and Peña de Oro zones.
Year-to-date, 44,985 metres of drilling has been completed
at El Barqueno in 2016. Drilling focused on expanding the
known areas of mineralization (Angostura and Azteca-Zapoteca) and testing new
target areas (Olmeca and Pena
Blanca). Significant high-grade intercepts are
reported at the new Olmeca prospect, which has been traced over 700
metres of strike length. Results from Olmeca include up to
4.5 g/t gold (capped) and 4.7 g/t silver (uncapped) over 11.0
metres estimated true width at 85 metres depth in drill hole
OLM16-010, and 9.4 g/t gold (capped) and 14.1 g/t silver (uncapped)
over 5.1 metres estimated true width at 67 metres depth in drill
hole in OLM16-003.
Additional details on the El Barqueno drilling are set
out in the Company's exploration news release of July 27, 2016.
In addition to the drilling activities, studies are underway to
evaluate possible development scenarios for the project. It
is currently envisioned that the project's gold-silver deposits
could potentially be developed into a series of open pits utilizing
heap leach processing, similar to the Creston Mascota deposit at
Pinos Altos and the La India
mines.
Dividend Record and Payment Dates for the Third Quarter of
2016
Agnico Eagle's Board of Directors has declared a quarterly cash
dividend of $0.10 per common share,
payable on September 15, 2016 to
shareholders of record as of September
1, 2016. Agnico Eagle has declared a cash dividend
every year since 1983.
Other Expected Dividend and Record Dates for 2016
Record
Date
|
Payment
Date
|
December
1
|
December
15
|
Dividend Reinvestment Plan
Please follow the link below for information on the Company's
dividend reinvestment program. Dividend Reinvestment Plan
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.
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 (before 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. All-in sustaining costs per ounce is
used to show the full cost of gold production from current
operations. 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 divided 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 is used, meaning no adjustment is made for
by-product metal revenues. The Company's methodology for
calculating all-in sustaining costs per ounce may differ from to
the methodology used by other producers that disclose all-in
sustaining costs per ounce. The Company may change the
methodology it uses to calculate all-in sustaining costs per ounce
in the future, including in response to the adoption of formal
industry guidance regarding this measure by the World Gold
Council. 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 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.
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, stock
option expense 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 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
July 27, 2016. 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",
"plan", "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,
production, 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 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,
and 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, 2015
filed with Canadian securities regulators and that are included in
its Annual Report on Form 40-F for the year ended December 31, 2015 ("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,
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; exchange rate
fluctuations; financing of additional capital requirements; cost of
exploration and development programs; mining risks; community
protests; risks associated with foreign operations; 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 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 Tim Haldane, P.Eng., Senior Vice-President,
Operations – USA and Latin America; 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").
The scientific and technical information relating to Agnico
Eagle's mineral reserves and mineral resources contained herein
(other than the Canadian Malartic mine) has been approved by Daniel
Doucet, Eng., Senior Corporate Director, Reserve Development; and
relating to mineral reserves and mineral resources at the Canadian
Malartic mine contained herein has been approved by Donald Gervais, P.Geo., Director of Technical
Services at Canadian Malartic
Corporation ("CMC") a corporation 50% owned indirectly by
each of Agnico and Yamana. Each of them is a "Qualified
Person" for the purposes of 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 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 and mineral resources 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 lower commodity price environment, Agnico Eagle has
decided to use price assumptions that are below the three-year
averages. The assumptions used for the mineral reserve and
mineral resource estimates at all mines and advanced projects as of
December 31, 2015 (other than the
Canadian Malartic mine), reported by the Company on February 10, 2016, were $1,100 per ounce gold, $16.00 per ounce silver, $0.90 per pound zinc, $2.50 per pound copper, and US$/C$, Euro/US$ and
US$/MXP exchange rates for all mines and projects other than the
Lapa, Meadowbank and Creston Mascota mines and Santo Niño open pit
at Pinos Altos of 1.16, 1.20 and
14.00, respectively. Due to shorter mine life, the
assumptions used for the mineral reserve and mineral resource
estimates at the shorter-life mines (the Lapa, Meadowbank and
Creston Mascota mines and Santo Niño open pit) as of December 31, 2015, reported by the Company on
February 10, 2016, included the same
metal price assumptions, and US$/C$ and US$/MXP exchange rates of
1.30 and 16.00, respectively.
The assumptions used for the mineral reserve and mineral
resource estimates at the Canadian Malartic mine as of December 31, 2015, reported by the Company on
February 10, 2016, were $1,150 per ounce gold, a cut-off grade between
0.30 g/t and 0.33 g/t gold (depending on the deposit) and a US$/C$
exchange rate of 1.24.
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.
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 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
|
Swanson, Quebec,
Canada
|
|
Meadowbank,
Nunavut,
Canada
|
February 15,
2012
|
Goldex, Quebec,
Canada
|
October 14,
2012
|
Lapa, Quebec,
Canada
|
June 8,
2006
|
Meliadine,
Nunavut,
Canada
|
February 11,
2015
|
Akasaba, Quebec,
Canada
|
|
Amaruq, Nunavut,
Canada
|
|
Hammond Reef, Ontario,
Canada
|
July 2,
2013
|
Upper Beaver (Kirkland Lake
project), Ontario, Canada
|
November 5,
2012
|
Pinos Altos and Creston
Mascota, Mexico
|
March 25,
2009
|
La India,
Mexico
|
August 31,
2012
|
AGNICO EAGLE MINES
LIMITED
SUMMARY OF OPERATIONS KEY PERFORMANCE
INDICATORS
(thousands of United States dollars,
except where noted)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
June
30,
|
|
June
30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Operating
margin(i)by mine:
|
|
|
|
|
|
|
|
Northern
Business
|
|
|
|
|
|
|
|
|
LaRonde
mine
|
$
|
54,985
|
|
$
|
32,799
|
|
$
|
103,039
|
|
$
|
62,813
|
|
Lapa
mine
|
14,437
|
|
11,351
|
|
25,243
|
|
26,038
|
|
Goldex
mine
|
22,896
|
|
15,525
|
|
45,080
|
|
34,778
|
|
Meadowbank
mine
|
34,733
|
|
49,600
|
|
68,062
|
|
96,177
|
|
Canadian Malartic
mine(ii)
|
50,133
|
|
44,737
|
|
91,874
|
|
79,456
|
|
Kittila
mine
|
22,079
|
|
16,145
|
|
46,165
|
|
43,560
|
Southern
Business
|
|
|
|
|
|
|
|
|
Pinos Altos
mine
|
48,392
|
|
44,538
|
|
84,212
|
|
79,190
|
|
Creston Mascota deposit at
Pinos Altos
|
9,719
|
|
12,968
|
|
18,708
|
|
21,377
|
|
La India
mine
|
24,818
|
|
18,834
|
|
46,367
|
|
39,424
|
Total operating
margin(i)
|
282,192
|
|
246,497
|
|
528,750
|
|
482,813
|
Amortization of property,
plant and mine development
|
154,658
|
|
157,615
|
|
300,289
|
|
293,512
|
Exploration, corporate and
other
|
89,624
|
|
67,973
|
|
163,354
|
|
111,679
|
Income before income and
mining taxes
|
37,910
|
|
20,909
|
|
65,107
|
|
77,622
|
Income and mining taxes
expense
|
18,920
|
|
10,826
|
|
18,329
|
|
38,796
|
Net income for the
period
|
$
|
18,990
|
|
$
|
10,083
|
|
$
|
46,778
|
|
$
|
38,826
|
Net income per share —
basic (US$)
|
$
|
0.09
|
|
$
|
0.05
|
|
$
|
0.21
|
|
$
|
0.18
|
Net income per share —
diluted (US$)
|
$
|
0.08
|
|
$
|
0.05
|
|
$
|
0.21
|
|
$
|
0.18
|
Cash
flows:
|
|
|
|
|
|
|
|
Cash provided by operating
activities
|
$
|
229,456
|
|
$
|
188,349
|
|
$
|
375,160
|
|
$
|
331,804
|
Cash used in investing
activities
|
$
|
(122,651)
|
|
$
|
(104,476)
|
|
$
|
(230,246)
|
|
$
|
(158,368)
|
Cash provided by (used in)
financing activities
|
$
|
199,494
|
|
$
|
(64,514)
|
|
$
|
197,906
|
|
$
|
(187,696)
|
Realized prices
(US$):
|
|
|
|
|
|
|
|
Gold
(per ounce)
|
$
|
1,268
|
|
$
|
1,196
|
|
$
|
1,230
|
|
$
|
1,199
|
Silver
(per ounce)
|
$
|
17.21
|
|
$
|
16.41
|
|
$
|
16.25
|
|
$
|
16.68
|
Zinc
(per tonne)
|
$
|
1,852
|
|
$
|
2,231
|
|
$
|
1,704
|
|
$
|
2,130
|
Copper
(per tonne)
|
$
|
4,714
|
|
$
|
6,274
|
|
$
|
4,506
|
|
$
|
5,656
|
Payable
production(iii):
|
|
|
|
|
|
|
|
Gold
(ounces):
|
|
|
|
|
|
|
|
|
Northern
Business
|
|
|
|
|
|
|
|
|
|
LaRonde
mine
|
75,159
|
|
64,007
|
|
150,496
|
|
122,900
|
|
|
Lapa
mine
|
21,914
|
|
19,450
|
|
43,623
|
|
45,370
|
|
|
Goldex
mine
|
31,452
|
|
26,462
|
|
63,792
|
|
55,712
|
|
|
Meadowbank
mine
|
72,402
|
|
91,276
|
|
144,713
|
|
179,799
|
|
|
Canadian Malartic
mine(ii)
|
72,502
|
|
68,441
|
|
146,115
|
|
136,334
|
|
|
Kittila
mine
|
46,209
|
|
41,986
|
|
94,336
|
|
86,640
|
|
Southern
Business
|
|
|
|
|
|
|
|
|
|
Pinos Altos
mine
|
49,458
|
|
50,647
|
|
97,575
|
|
100,753
|
|
|
Creston Mascota deposit at
Pinos Altos
|
12,398
|
|
15,606
|
|
23,949
|
|
28,054
|
|
|
La India
mine
|
27,438
|
|
25,803
|
|
55,669
|
|
52,326
|
Total gold
(ounces)
|
408,932
|
|
403,678
|
|
820,268
|
|
807,888
|
Silver (thousands of
ounces):
|
|
|
|
|
|
|
|
|
Northern
Business
|
|
|
|
|
|
|
|
|
|
LaRonde
mine
|
266
|
|
201
|
|
512
|
|
398
|
|
|
Lapa
mine
|
1
|
|
1
|
|
4
|
|
1
|
|
|
Goldex
mine
|
1
|
|
-
|
|
1
|
|
-
|
|
|
Meadowbank
mine
|
66
|
|
57
|
|
109
|
|
153
|
|
|
Canadian Malartic
mine(ii)
|
86
|
|
69
|
|
164
|
|
141
|
|
|
Kittila
mine
|
2
|
|
2
|
|
5
|
|
5
|
|
Southern
Business
|
|
|
|
|
|
|
|
|
|
Pinos Altos
mine
|
633
|
|
576
|
|
1,220
|
|
1,139
|
|
|
Creston Mascota deposit at
Pinos Altos
|
50
|
|
37
|
|
98
|
|
69
|
|
|
La India
mine
|
105
|
|
72
|
|
222
|
|
141
|
Total silver (thousands of
ounces)
|
1,210
|
|
1,015
|
|
2,335
|
|
2,047
|
Zinc
(tonnes)
|
1,318
|
|
827
|
|
1,932
|
|
1,763
|
Copper
(tonnes)
|
1,141
|
|
1,133
|
|
2,295
|
|
2,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payable metal
sold:
|
|
|
|
|
|
|
|
Gold
(ounces):
|
|
|
|
|
|
|
|
|
Northern
Business
|
|
|
|
|
|
|
|
|
|
LaRonde
mine
|
72,005
|
|
59,376
|
|
147,262
|
|
120,319
|
|
|
Lapa
mine
|
22,911
|
|
20,771
|
|
42,747
|
|
44,268
|
|
|
Goldex
mine
|
30,605
|
|
27,306
|
|
62,560
|
|
55,213
|
|
|
Meadowbank
mine
|
70,021
|
|
96,870
|
|
141,610
|
|
181,649
|
|
|
Canadian Malartic
mine(ii)(iv)
|
72,259
|
|
67,522
|
|
137,344
|
|
126,783
|
|
|
Kittila
mine
|
44,580
|
|
39,385
|
|
95,305
|
|
88,386
|
|
Southern
Business
|
|
|
|
|
|
|
|
|
|
Pinos Altos
mine
|
52,287
|
|
54,402
|
|
95,511
|
|
95,835
|
|
|
Creston Mascota deposit at
Pinos Altos
|
12,117
|
|
16,537
|
|
23,962
|
|
27,936
|
|
|
La India
mine
|
27,748
|
|
23,803
|
|
53,913
|
|
50,701
|
Total gold
(ounces)
|
404,533
|
|
405,972
|
|
800,214
|
|
791,090
|
Silver (thousands of
ounces):
|
|
|
|
|
|
|
|
|
Northern
Business
|
|
|
|
|
|
|
|
|
|
LaRonde
mine
|
267
|
|
225
|
|
499
|
|
429
|
|
|
Lapa
mine
|
-
|
|
-
|
|
1
|
|
-
|
|
|
Goldex
mine
|
1
|
|
-
|
|
1
|
|
-
|
|
|
Meadowbank
mine
|
66
|
|
59
|
|
109
|
|
157
|
|
|
Canadian Malartic
mine(ii)(iv)
|
76
|
|
80
|
|
149
|
|
134
|
|
|
Kittila
mine
|
2
|
|
2
|
|
5
|
|
5
|
|
Southern
Business
|
|
|
|
|
|
|
|
|
|
Pinos Altos
mine
|
647
|
|
616
|
|
1,177
|
|
1,062
|
|
|
Creston Mascota deposit at
Pinos Altos
|
49
|
|
48
|
|
96
|
|
68
|
|
|
La India
mine
|
123
|
|
76
|
|
210
|
|
139
|
Total silver (thousands of
ounces):
|
1,231
|
|
1,106
|
|
2,247
|
|
1,994
|
Zinc
(tonnes)
|
673
|
|
733
|
|
1,278
|
|
1,997
|
Copper
(tonnes)
|
1,164
|
|
1,131
|
|
2,320
|
|
2,291
|
|
|
|
|
|
|
|
|
Total cash costs per
ounce of gold produced - co-product basis
(US$)(v):
|
|
|
|
|
|
|
|
Northern
Business
|
|
|
|
|
|
|
|
|
LaRonde
mine
|
$
|
707
|
|
$
|
811
|
|
$
|
689
|
|
$
|
850
|
|
Lapa
mine
|
658
|
|
679
|
|
663
|
|
616
|
|
Goldex
mine
|
513
|
|
633
|
|
510
|
|
585
|
|
Meadowbank
mine
|
804
|
|
699
|
|
801
|
|
686
|
|
Canadian Malartic
mine(ii)
|
641
|
|
626
|
|
606
|
|
638
|
|
Kittila
mine
|
757
|
|
777
|
|
742
|
|
728
|
Southern
Business
|
|
|
|
|
|
|
|
|
Pinos Altos
mine
|
583
|
|
570
|
|
557
|
|
559
|
|
Creston Mascota deposit at
Pinos Altos
|
542
|
|
441
|
|
535
|
|
462
|
|
La India
mine
|
451
|
|
456
|
|
437
|
|
458
|
Weighted average total cash
costs per ounce of gold produced
|
$
|
663
|
|
$
|
666
|
|
$
|
647
|
|
$
|
658
|
|
|
|
|
|
|
|
|
Total cash costs per
ounce of gold produced - by-product basis
(US$)(v):
|
|
|
|
|
|
|
|
Northern
Business
|
|
|
|
|
|
|
|
|
LaRonde
mine
|
$
|
543
|
|
$
|
613
|
|
$
|
536
|
|
$
|
656
|
|
Lapa
mine
|
658
|
|
678
|
|
663
|
|
615
|
|
Goldex
mine
|
513
|
|
633
|
|
509
|
|
585
|
|
Meadowbank
mine
|
789
|
|
688
|
|
789
|
|
672
|
|
Canadian Malartic
mine(ii)
|
621
|
|
609
|
|
589
|
|
621
|
|
Kittila
mine
|
756
|
|
776
|
|
741
|
|
727
|
Southern
Business
|
|
|
|
|
|
|
|
|
Pinos Altos
mine
|
348
|
|
384
|
|
346
|
|
371
|
|
Creston Mascota deposit at
Pinos Altos
|
469
|
|
402
|
|
465
|
|
421
|
|
La India
mine
|
381
|
|
410
|
|
371
|
|
414
|
Weighted average total cash
costs per ounce of gold produced
|
$
|
592
|
|
$
|
601
|
|
$
|
582
|
|
$
|
595
|
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 100.0% of Osisko by way of
a statutory plan of arrangement (the "Arrangement"). As a result of
the Arrangement, Agnico Eagle and Yamana each indirectly own 50.0%
of CMC and the Partnership, which now holds the Canadian Malartic
mine. The information set out in this table reflects the Company's
50.0% interest in the Canadian
Malartic mine.
|
(iii)
|
Payable production
(a non‑GAAP non-financial performance measure) is the quantity
of mineral produced during a period contained in products that are
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
transferred to Osisko Gold Royalties Ltd., pursuant to
the Arrangement.
|
(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 (before 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 interim condensed 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. 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.
|
AGNICO EAGLE MINES
LIMITED
CONSOLIDATED BALANCE
SHEETS
(thousands of United States dollars,
except share amounts, IFRS basis)
(Unaudited)
|
|
|
|
|
|
|
|
As at
June 30,
|
|
As at
December
31,
|
|
|
2016
|
|
2015
|
|
|
|
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
467,902
|
|
$
|
124,150
|
|
Short-term
investments
|
|
5,749
|
|
7,444
|
|
Restricted
cash
|
|
676
|
|
685
|
|
Trade
receivables
|
|
5,443
|
|
7,714
|
|
Inventories
|
|
438,726
|
|
461,976
|
|
Income taxes
recoverable
|
|
8,887
|
|
817
|
|
Available-for-sale
securities
|
|
85,581
|
|
31,863
|
|
Fair value of derivative
financial instruments
|
|
2,454
|
|
87
|
|
Other current
assets
|
|
181,342
|
|
194,689
|
Total current
assets
|
|
1,196,760
|
|
829,425
|
Non-current
assets:
|
|
|
|
|
|
Restricted
cash
|
|
789
|
|
741
|
|
Goodwill
|
|
696,809
|
|
696,809
|
|
Property, plant and mine
development
|
|
5,063,100
|
|
5,088,967
|
|
Other
assets
|
|
66,737
|
|
67,238
|
Total
assets
|
|
$
|
7,024,195
|
|
$
|
6,683,180
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
|
$
|
239,778
|
|
$
|
243,786
|
|
Reclamation
provision
|
|
10,347
|
|
6,245
|
|
Interest
payable
|
|
13,898
|
|
14,526
|
|
Income taxes
payable
|
|
13,113
|
|
14,852
|
|
Finance lease
obligations
|
|
7,174
|
|
9,589
|
|
Current portion of
long-term debt
|
|
130,374
|
|
14,451
|
|
Fair value of derivative
financial instruments
|
|
719
|
|
8,073
|
Total current
liabilities
|
|
415,403
|
|
311,522
|
Non-current
liabilities:
|
|
|
|
|
|
Long-term
debt
|
|
1,072,754
|
|
1,118,187
|
|
Reclamation
provision
|
|
326,628
|
|
276,299
|
|
Deferred income and mining
tax liabilities
|
|
797,319
|
|
802,114
|
|
Other
liabilities
|
|
32,844
|
|
34,038
|
Total
liabilities
|
|
2,644,948
|
|
2,542,160
|
EQUITY
|
|
|
|
|
|
Common
shares:
|
|
|
|
|
|
|
Outstanding - 224,188,926
common shares issued, less
713,429 shares held in
trust
|
|
4,926,048
|
|
4,707,940
|
|
Stock
options
|
|
181,766
|
|
216,232
|
|
Contributed
surplus
|
|
37,254
|
|
37,254
|
|
Deficit
|
|
(812,421)
|
|
(823,734)
|
|
Accumulated other
comprehensive income
|
|
46,600
|
|
3,328
|
Total
equity
|
|
4,379,247
|
|
4,141,020
|
Total liabilities and
equity
|
|
$
|
7,024,195
|
|
$
|
6,683,180
|
AGNICO EAGLE MINES
LIMITED
CONSOLIDATED STATEMENTS OF
INCOME
(thousands of United States dollars,
except per share amounts, IFRS basis)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES
|
|
|
|
|
|
|
|
|
|
|
Revenues from mining
operations
|
|
|
|
$
|
537,628
|
|
$
|
510,109
|
|
$
|
1,028,159
|
|
$
|
993,705
|
|
|
|
|
|
|
|
|
|
|
|
COSTS, EXPENSES AND
OTHER INCOME
|
|
|
|
|
|
|
|
|
|
|
Production
(i)
|
|
|
|
255,436
|
|
263,612
|
|
499,409
|
|
510,892
|
Exploration and corporate
development
|
|
|
|
38,100
|
|
30,616
|
|
66,485
|
|
47,267
|
Amortization of property,
plant and mine development
|
|
|
|
154,658
|
|
157,615
|
|
300,289
|
|
293,512
|
General and
administrative
|
|
|
|
24,337
|
|
23,572
|
|
49,160
|
|
48,793
|
Impairment loss on
available-for-sale securities
|
|
|
|
-
|
|
345
|
|
-
|
|
1,030
|
Finance
costs
|
|
|
|
17,391
|
|
17,955
|
|
35,192
|
|
37,667
|
Gain on derivative
financial instruments
|
|
|
|
(670)
|
|
(8,836)
|
|
(10,291)
|
|
(260)
|
Gain on sale of
available-for-sale securities
|
|
|
|
(1,799)
|
|
(2,675)
|
|
(1,918)
|
|
(23,724)
|
Environmental
remediation
|
|
|
|
840
|
|
(141)
|
|
5,933
|
|
288
|
Foreign currency
translation loss (gain)
|
|
|
|
5,517
|
|
4,779
|
|
12,287
|
|
(6,911)
|
Other
expenses
|
|
|
|
5,908
|
|
2,358
|
|
6,506
|
|
7,529
|
Income before income and
mining taxes
|
|
|
|
37,910
|
|
20,909
|
|
65,107
|
|
77,622
|
Income and mining taxes
expense
|
|
|
|
18,920
|
|
10,826
|
|
18,329
|
|
38,796
|
Net income for the
period
|
|
|
|
$
|
18,990
|
|
$
|
10,083
|
|
$
|
46,778
|
|
$
|
38,826
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share -
basic
|
|
|
|
$
|
0.09
|
|
$
|
0.05
|
|
$
|
0.21
|
|
$
|
0.18
|
Net income per share -
diluted
|
|
|
|
$
|
0.08
|
|
$
|
0.05
|
|
$
|
0.21
|
|
$
|
0.18
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of
common shares outstanding
(in thousands):
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
222,165
|
|
215,426
|
|
220,925
|
|
214,996
|
Diluted
|
|
|
|
225,169
|
|
216,722
|
|
223,568
|
|
216,186
|
|
|
|
|
|
|
|
|
|
|
|
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
June 30,
|
|
Six Months
Ended
June 30,
|
|
|
|
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
Net income for the
period
|
|
|
|
|
|
$
|
18,990
|
|
$
|
10,083
|
|
$
|
46,778
|
|
$
|
38,826
|
Add (deduct) items not
affecting cash:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of property,
plant and mine development
|
|
154,658
|
|
157,615
|
|
300,289
|
|
293,512
|
|
Deferred income and mining
taxes
|
|
|
|
3,665
|
|
(13,680)
|
|
(13,321)
|
|
5,620
|
|
Gain on sale of
available-for-sale securities
|
(1,799)
|
|
(2,675)
|
|
(1,918)
|
|
(23,724)
|
|
Stock-based
compensation
|
|
|
|
|
7,860
|
|
8,131
|
|
17,646
|
|
19,849
|
|
Impairment loss on
available-for-sale securities
|
|
|
-
|
|
345
|
|
-
|
|
1,030
|
|
Foreign currency
translation loss (gain)
|
|
|
|
5,517
|
|
4,779
|
|
12,287
|
|
(6,911)
|
|
Other
|
|
|
|
|
|
4,227
|
|
(11,403)
|
|
68
|
|
2,133
|
Adjustment for settlement
of reclamation provision
|
|
|
|
(402)
|
|
(407)
|
|
(1,634)
|
|
(709)
|
Changes in non-cash working
capital balances:
|
|
|
|
|
|
|
|
|
|
|
|
Trade
receivables
|
|
|
|
|
|
198
|
|
22
|
|
2,271
|
|
(1,462)
|
|
Income
taxes
|
|
|
|
|
|
3,915
|
|
13,043
|
|
(9,809)
|
|
(11,020)
|
|
Inventories
|
|
|
|
|
|
6,894
|
|
11,623
|
|
31,505
|
|
22,035
|
|
Other current
assets
|
|
|
|
|
6,124
|
|
(18,186)
|
|
10,144
|
|
(23,023)
|
|
Accounts payable and
accrued liabilities
|
|
|
|
28,539
|
|
36,435
|
|
(17,797)
|
|
15,853
|
|
Interest
payable
|
|
|
|
|
|
(8,930)
|
|
(7,376)
|
|
(1,349)
|
|
(205)
|
Cash provided by operating
activities
|
|
|
|
|
229,456
|
|
188,349
|
|
375,160
|
|
331,804
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INVESTING
ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions to property,
plant and mine development
|
|
|
|
(123,263)
|
|
(111,511)
|
|
(223,957)
|
|
(194,398)
|
Acquisitions, net of cash
and cash equivalents acquired
|
|
|
(5,499)
|
|
(5,983)
|
|
(5,499)
|
|
(12,983)
|
Net (purchases) sales of
short-term investments
|
|
|
|
(540)
|
|
(947)
|
|
1,695
|
|
(1,048)
|
Net proceeds from sale of
available-for-sale securities and other
investments
|
6,979
|
|
18,643
|
|
7,278
|
|
56,311
|
Purchase of
available-for-sale securities and other
investments
|
|
|
(327)
|
|
(14,158)
|
|
(9,772)
|
|
(19,433)
|
(Increase) decrease in
restricted cash
|
|
|
|
|
(1)
|
|
9,480
|
|
9
|
|
13,183
|
Cash used in investing
activities
|
|
|
|
|
(122,651)
|
|
(104,476)
|
|
(230,246)
|
|
(158,368)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCING
ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends
paid
|
|
|
|
|
|
(15,352)
|
|
(14,423)
|
|
(30,198)
|
|
(29,198)
|
Repayment of finance lease
obligations
|
|
|
|
|
(2,570)
|
|
(5,039)
|
|
(5,084)
|
|
(13,444)
|
Proceeds from long-term
debt
|
|
|
|
|
|
50,000
|
|
75,000
|
|
125,000
|
|
75,000
|
Repayment of long-term
debt
|
|
|
|
|
|
(275,374)
|
|
(126,086)
|
|
(405,374)
|
|
(226,086)
|
Notes
issuance
|
|
|
|
|
|
350,000
|
|
-
|
|
350,000
|
|
-
|
Long-term debt
financing
|
|
|
|
|
|
(2,169)
|
|
-
|
|
(2,169)
|
|
-
|
Repurchase of common shares
for stock-based compensation plans
|
|
(632)
|
|
(1,257)
|
|
(15,527)
|
|
(11,899)
|
Proceeds on exercise of
stock options
|
|
|
|
|
93,003
|
|
4,735
|
|
157,427
|
|
12,958
|
Common shares
issued
|
|
|
|
|
|
2,588
|
|
2,556
|
|
23,831
|
|
4,973
|
Cash provided by (used in)
financing activities
|
|
|
|
199,494
|
|
(64,514)
|
|
197,906
|
|
(187,696)
|
Effect of exchange rate
changes on cash and cash equivalents
|
|
(1,143)
|
|
966
|
|
932
|
|
(4,946)
|
Net increase (decrease)
in cash and cash equivalents during the
period
|
305,156
|
|
20,325
|
|
343,752
|
|
(19,206)
|
Cash and cash
equivalents, beginning of period
|
|
|
|
162,746
|
|
138,006
|
|
124,150
|
|
177,537
|
Cash and cash
equivalents, end of period
|
|
|
|
$
|
467,902
|
|
$
|
158,331
|
|
$
|
467,902
|
|
$
|
158,331
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL CASH FLOW
INFORMATION
|
|
|
|
|
|
|
|
|
|
Interest
paid
|
|
|
|
|
|
$
|
24,540
|
|
$
|
24,817
|
|
$
|
33,420
|
|
$
|
35,898
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income and mining taxes
paid
|
|
|
|
|
|
$
|
13,448
|
|
$
|
151
|
|
$
|
66,765
|
|
$
|
38,098
|
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
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
Six Months
Ended
|
|
|
June 30,
2016
|
|
June 30,
2015
|
|
June 30,
2016
|
|
June 30,
2015
|
(thousands of United
States dollars)
|
|
|
|
|
|
|
|
|
LaRonde
mine
|
|
$
|
40,500
|
|
$
|
45,133
|
|
$
|
86,354
|
|
$
|
90,999
|
Lapa
mine
|
|
14,791
|
|
13,656
|
|
27,575
|
|
27,641
|
Goldex
mine
|
|
15,937
|
|
16,913
|
|
31,669
|
|
31,780
|
Meadowbank
mine
|
|
54,761
|
|
66,888
|
|
106,971
|
|
123,983
|
Canadian Malartic
mine(i)
|
|
47,974
|
|
42,185
|
|
88,788
|
|
83,371
|
Kittila
mine
|
|
34,055
|
|
30,777
|
|
70,082
|
|
62,776
|
Pinos Altos
mine
|
|
28,794
|
|
29,768
|
|
52,650
|
|
53,979
|
Creston Mascota deposit at
Pinos Altos
|
|
6,623
|
|
7,501
|
|
12,404
|
|
13,107
|
La India
mine
|
|
12,001
|
|
10,791
|
|
22,916
|
|
23,256
|
Production costs per the
interim condensed
consolidated statements of
income
|
|
$
|
255,436
|
|
$
|
263,612
|
|
$
|
499,409
|
|
$
|
510,892
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LaRonde Mine - Total
Cash Costs per Ounce of Gold
Produced(ii)
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
Six Months
Ended
|
(thousands of United
States dollars, except as noted)
|
|
June 30,
2016
|
|
June 30,
2015
|
|
June 30,
2016
|
|
June 30,
2015
|
Production
costs
|
|
$
|
40,500
|
|
$
|
45,133
|
|
$
|
86,354
|
|
$
|
90,999
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
Inventory and other
adjustments(iv)
|
|
12,658
|
|
6,786
|
|
17,277
|
|
13,464
|
Cash operating costs
(co-product basis)
|
|
$
|
53,158
|
|
$
|
51,919
|
|
$
|
103,631
|
|
$
|
104,463
|
|
|
By-product metal
revenues
|
|
(12,369)
|
|
(12,701)
|
|
(23,015)
|
|
(23,835)
|
Cash operating costs
(by-product basis)
|
|
$
|
40,789
|
|
$
|
39,218
|
|
$
|
80,616
|
|
$
|
80,628
|
Gold production
(ounces)
|
|
75,159
|
|
64,007
|
|
150,496
|
|
122,900
|
Total cash costs per ounce
of gold produced ($
per ounce)(ii):
|
|
|
|
|
|
|
|
|
|
Co-product
basis
|
|
$
|
707
|
|
$
|
811
|
|
$
|
689
|
|
$
|
850
|
|
By-product
basis
|
|
$
|
543
|
|
$
|
613
|
|
$
|
536
|
|
$
|
656
|
|
|
|
|
|
|
|
|
|
LaRonde Mine - Minesite
Costs per Tonne(iii)
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
Six Months
Ended
|
(thousands of United
States dollars, except as noted)
|
|
June 30,
2016
|
|
June 30,
2015
|
|
June 30,
2016
|
|
June 30,
2015
|
Production
costs
|
|
$
|
40,500
|
|
$
|
45,133
|
|
$
|
86,354
|
|
$
|
90,999
|
Inventory and other
adjustments(v)
|
|
6,136
|
|
854
|
|
3,779
|
|
1,719
|
Minesite operating
costs
|
|
$
|
46,636
|
|
$
|
45,987
|
|
$
|
90,133
|
|
$
|
92,718
|
Minesite operating costs
(thousands of C$)
|
|
C$
|
60,288
|
|
C$
|
56,474
|
|
C$
|
119,516
|
|
C$
|
114,263
|
Tonnes of ore milled
(thousands of tonnes)
|
|
569
|
|
568
|
|
1,146
|
|
1,126
|
Minesite costs per tonne
(C$)(iii)
|
|
C$
|
106
|
|
C$
|
99
|
|
C$
|
104
|
|
C$
|
101
|
|
|
|
|
|
|
|
|
|
Lapa Mine - Total Cash
Costs per Ounce of Gold
Produced(ii)
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
Six Months
Ended
|
(thousands of United
States dollars, except as noted)
|
|
June 30,
2016
|
|
June 30,
2015
|
|
June 30,
2016
|
|
June 30,
2015
|
Production
costs
|
|
$
|
14,791
|
|
$
|
13,656
|
|
$
|
27,575
|
|
$
|
27,641
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
Inventory and other
adjustments(iv)
|
|
(375)
|
|
(459)
|
|
1,352
|
|
290
|
Cash operating costs
(co-product basis)
|
|
$
|
14,416
|
|
$
|
13,197
|
|
$
|
28,927
|
|
$
|
27,931
|
|
|
By-product metal
revenues
|
|
(4)
|
|
(1)
|
|
(17)
|
|
(18)
|
Cash operating costs
(by-product basis)
|
|
$
|
14,412
|
|
$
|
13,196
|
|
$
|
28,910
|
|
$
|
27,913
|
Gold production
(ounces)
|
|
21,914
|
|
19,450
|
|
43,623
|
|
45,370
|
Total cash costs per ounce
of gold produced ($
per ounce)(ii):
|
|
|
|
|
|
|
|
|
|
Co-product
basis
|
|
$
|
658
|
|
$
|
679
|
|
$
|
663
|
|
$
|
616
|
|
By-product
basis
|
|
$
|
658
|
|
$
|
678
|
|
$
|
663
|
|
$
|
615
|
|
|
|
|
|
|
|
|
|
Lapa Mine - Minesite
Costs per Tonne(iii)
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
Six Months
Ended
|
(thousands of United
States dollars, except as noted)
|
|
June 30,
2016
|
|
June 30,
2015
|
|
June 30,
2016
|
|
June 30,
2015
|
Production
costs
|
|
$
|
14,791
|
|
$
|
13,656
|
|
$
|
27,575
|
|
$
|
27,641
|
Inventory and other
adjustments(v)
|
|
(385)
|
|
(658)
|
|
1,174
|
|
(109)
|
Minesite operating
costs
|
|
$
|
14,406
|
|
$
|
12,998
|
|
$
|
28,749
|
|
$
|
27,532
|
Minesite operating costs
(thousands of C$)
|
|
C$
|
18,627
|
|
C$
|
15,919
|
|
C$
|
38,108
|
|
C$
|
33,996
|
Tonnes of ore milled
(thousands of tonnes)
|
|
161
|
|
126
|
|
322
|
|
278
|
Minesite costs per tonne
(C$)(iii)
|
|
C$
|
116
|
|
C$
|
126
|
|
C$
|
118
|
|
C$
|
122
|
|
|
|
|
|
|
|
|
|
Goldex Mine - Total Cash
Costs per Ounce of Gold
Produced(ii)
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
Six Months
Ended
|
(thousands of United
States dollars, except as noted)
|
|
June 30,
2016
|
|
June 30,
2015
|
|
June 30,
2016
|
|
June 30,
2015
|
Production
costs
|
|
$
|
15,937
|
|
$
|
16,913
|
|
$
|
31,669
|
|
$
|
31,780
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
Inventory and other
adjustments(iv)
|
|
211
|
|
(163)
|
|
835
|
|
810
|
Cash operating costs
(co-product basis)
|
|
$
|
16,148
|
|
$
|
16,750
|
|
$
|
32,504
|
|
$
|
32,590
|
|
|
By-product metal
revenues
|
|
(2)
|
|
(5)
|
|
(8)
|
|
(13)
|
Cash operating costs
(by-product basis)
|
|
$
|
16,146
|
|
$
|
16,745
|
|
$
|
32,496
|
|
$
|
32,577
|
Gold production
(ounces)
|
|
31,452
|
|
26,462
|
|
63,792
|
|
55,712
|
Total cash costs per ounce
of gold produced ($
per ounce)(ii):
|
|
|
|
|
|
|
|
|
|
Co-product
basis
|
|
$
|
513
|
|
$
|
633
|
|
$
|
510
|
|
$
|
585
|
|
By-product
basis
|
|
$
|
513
|
|
$
|
633
|
|
$
|
509
|
|
$
|
585
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goldex Mine - Minesite
Costs per Tonne(iii)
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
Six Months
Ended
|
(thousands of United
States dollars, except as noted)
|
|
June 30,
2016
|
|
June 30,
2015
|
|
June 30,
2016
|
|
June 30,
2015
|
Production
costs
|
|
$
|
15,937
|
|
$
|
16,913
|
|
$
|
31,669
|
|
$
|
31,780
|
Inventory and other
adjustments(v)
|
|
281
|
|
(328)
|
|
632
|
|
432
|
Minesite operating
costs
|
|
$
|
16,218
|
|
$
|
16,585
|
|
$
|
32,301
|
|
$
|
32,212
|
Minesite operating costs
(thousands of C$)
|
|
C$
|
21,108
|
|
C$
|
20,318
|
|
C$
|
42,814
|
|
C$
|
39,635
|
Tonnes of ore milled
(thousands of tonnes)
|
|
658
|
|
604
|
|
1,294
|
|
1,171
|
Minesite costs per tonne
(C$)(iii)
|
|
C$
|
32
|
|
C$
|
34
|
|
C$
|
33
|
|
C$
|
34
|
|
|
|
|
|
|
|
|
|
Meadowbank Mine - Total
Cash Costs per Ounce of Gold
Produced(ii)
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
Six Months
Ended
|
(thousands of United
States dollars, except as noted)
|
|
June 30,
2016
|
|
June 30,
2015
|
|
June 30,
2016
|
|
June 30,
2015
|
Production
costs
|
|
$
|
54,761
|
|
$
|
66,888
|
|
$
|
106,971
|
|
$
|
123,983
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
Inventory and other
adjustments(iv)
|
|
3,474
|
|
(3,094)
|
|
8,920
|
|
(554)
|
Cash operating costs
(co-product basis)
|
|
$
|
58,235
|
|
$
|
63,794
|
|
$
|
115,891
|
|
$
|
123,429
|
|
|
By-product metal
revenues
|
|
(1,115)
|
|
(978)
|
|
(1,774)
|
|
(2,667)
|
Cash operating costs
(by-product basis)
|
|
$
|
57,120
|
|
$
|
62,816
|
|
$
|
114,117
|
|
$
|
120,762
|
Gold production
(ounces)
|
|
72,402
|
|
91,276
|
|
144,713
|
|
179,799
|
Total cash costs per ounce
of gold produced ($
per ounce)(ii):
|
|
|
|
|
|
|
|
|
|
Co-product
basis
|
|
$
|
804
|
|
$
|
699
|
|
$
|
801
|
|
$
|
686
|
|
By-product
basis
|
|
$
|
789
|
|
$
|
688
|
|
$
|
789
|
|
$
|
672
|
|
|
|
|
|
|
|
|
|
Meadowbank Mine -
Minesite Costs per
Tonne(iii)
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
Six Months
Ended
|
(thousands of United
States dollars, except as noted)
|
|
June 30,
2016
|
|
June 30,
2015
|
|
June 30,
2016
|
|
June 30,
2015
|
Production
costs
|
|
$
|
54,761
|
|
$
|
66,888
|
|
$
|
106,971
|
|
$
|
123,983
|
Inventory and other
adjustments(v)
|
|
1,837
|
|
(3,768)
|
|
4,595
|
|
(2,074)
|
Minesite operating
costs
|
|
$
|
56,598
|
|
$
|
63,120
|
|
$
|
111,566
|
|
$
|
121,909
|
Minesite operating costs
(thousands of C$)
|
|
C$
|
72,454
|
|
C$
|
75,290
|
|
C$
|
145,512
|
|
C$
|
145,917
|
Tonnes of ore milled
(thousands of tonnes)
|
|
993
|
|
1,019
|
|
1,939
|
|
2,010
|
Minesite costs per tonne
(C$)(iii)
|
|
C$
|
73
|
|
C$
|
74
|
|
C$
|
75
|
|
C$
|
73
|
|
|
|
|
|
|
|
|
|
Canadian Malartic Mine -
Total Cash Costs per Ounce of Gold
Produced(i)(ii)
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
Six Months
Ended
|
(thousands of United
States dollars, except as noted)
|
|
June 30,
2016
|
|
June 30,
2015
|
|
June 30,
2016
|
|
June 30,
2015
|
Production
costs
|
|
$
|
47,974
|
|
$
|
42,185
|
|
$
|
88,788
|
|
$
|
83,371
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
Inventory and other
adjustments(iv)
|
|
(1,502)
|
|
688
|
|
(193)
|
|
3,554
|
Cash operating costs
(co-product basis)
|
|
$
|
46,472
|
|
$
|
42,873
|
|
$
|
88,595
|
|
$
|
86,925
|
|
|
By-product metal
revenues
|
|
(1,442)
|
|
(1,177)
|
|
(2,537)
|
|
(2,319)
|
Cash operating costs
(by-product basis)
|
|
$
|
45,030
|
|
$
|
41,696
|
|
$
|
86,058
|
|
$
|
84,606
|
Gold production
(ounces)
|
|
72,502
|
|
68,441
|
|
146,115
|
|
136,334
|
Total cash costs per ounce
of gold produced ($
per ounce)(ii):
|
|
|
|
|
|
|
|
|
|
Co-product
basis
|
|
$
|
641
|
|
$
|
626
|
|
$
|
606
|
|
$
|
638
|
|
By-product
basis
|
|
$
|
621
|
|
$
|
609
|
|
$
|
589
|
|
$
|
621
|
|
|
|
|
|
|
|
|
|
Canadian Malartic Mine -
Minesite Costs per
Tonne(i)(iii)
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
Six Months
Ended
|
(thousands of United
States dollars, except as noted)
|
|
June 30,
2016
|
|
June 30,
2015
|
|
June 30,
2016
|
|
June 30,
2015
|
Production
costs
|
|
$
|
47,974
|
|
$
|
42,185
|
|
$
|
88,788
|
|
$
|
83,371
|
Inventory and other
adjustments(v)
|
|
(1,763)
|
|
48
|
|
(687)
|
|
1,733
|
Minesite operating
costs
|
|
$
|
46,211
|
|
$
|
42,233
|
|
$
|
88,101
|
|
$
|
85,104
|
Minesite operating costs
(thousands of C$)
|
|
C$
|
59,541
|
|
C$
|
51,937
|
|
C$
|
117,086
|
|
C$
|
105,126
|
Tonnes of ore milled
(thousands of tonnes)
|
|
2,525
|
|
2,307
|
|
4,905
|
|
4,647
|
Minesite costs per tonne
(C$)(iii)
|
|
C$
|
24
|
|
C$
|
23
|
|
C$
|
24
|
|
C$
|
23
|
|
|
|
|
|
|
|
|
|
Kittila Mine - Total
Cash Costs per Ounce of Gold
Produced(ii)
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
Six Months
Ended
|
(thousands of United
States dollars, except as noted)
|
|
June 30,
2016
|
|
June 30,
2015
|
|
June 30,
2016
|
|
June 30,
2015
|
Production
costs
|
|
$
|
34,055
|
|
$
|
30,777
|
|
$
|
70,082
|
|
$
|
62,776
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
Inventory and other
adjustments(iv)
|
|
922
|
|
1,855
|
|
(102)
|
|
312
|
Cash operating costs
(co-product basis)
|
|
$
|
34,977
|
|
$
|
32,632
|
|
$
|
69,980
|
|
$
|
63,088
|
|
|
By-product metal
revenues
|
|
(32)
|
|
(38)
|
|
(79)
|
|
(73)
|
Cash operating costs
(by-product basis)
|
|
$
|
34,945
|
|
$
|
32,594
|
|
$
|
69,901
|
|
$
|
63,015
|
Gold production
(ounces)
|
|
46,209
|
|
41,986
|
|
94,336
|
|
86,640
|
Total cash costs per ounce
of gold produced ($
per ounce)(ii):
|
|
|
|
|
|
|
|
|
|
Co-product
basis
|
|
$
|
757
|
|
$
|
777
|
|
$
|
742
|
|
$
|
728
|
|
By-product
basis
|
|
$
|
756
|
|
$
|
776
|
|
$
|
741
|
|
$
|
727
|
|
|
|
|
|
|
|
|
|
Kittila Mine - Minesite
Costs per Tonne(iii)
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
Six Months
Ended
|
(thousands of United
States dollars, except as noted)
|
|
June 30,
2016
|
|
June 30,
2015
|
|
June 30,
2016
|
|
June 30,
2015
|
Production
costs
|
|
$
|
34,055
|
|
$
|
30,777
|
|
$
|
70,082
|
|
$
|
62,776
|
Inventory and other
adjustments(v)
|
|
816
|
|
1,858
|
|
(381)
|
|
199
|
Minesite operating
costs
|
|
$
|
34,871
|
|
$
|
32,635
|
|
$
|
69,701
|
|
$
|
62,975
|
Minesite operating costs
(thousands of €)
|
|
€
|
31,381
|
|
€
|
28,296
|
|
€
|
62,490
|
|
€
|
55,010
|
Tonnes of ore milled
(thousands of tonnes)
|
|
389
|
|
379
|
|
821
|
|
725
|
Minesite costs per tonne
(€)(iii)
|
|
€
|
81
|
|
€
|
75
|
|
€
|
76
|
|
€
|
76
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pinos Altos Mine - Total
Cash Costs per Ounce of Gold
Produced(ii)
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
Six Months
Ended
|
(thousands of United
States dollars, except as noted)
|
|
June 30,
2016
|
|
June 30,
2015
|
|
June 30,
2016
|
|
June 30,
2015
|
Production
costs
|
|
$
|
28,794
|
|
$
|
29,768
|
|
$
|
52,650
|
|
$
|
53,979
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
Inventory and other
adjustments(iv)
|
|
16
|
|
(892)
|
|
1,651
|
|
2,353
|
Cash operating costs
(co-product basis)
|
|
$
|
28,810
|
|
$
|
28,876
|
|
$
|
54,301
|
|
$
|
56,332
|
|
|
By-product metal
revenues
|
|
(11,577)
|
|
(9,404)
|
|
(20,549)
|
|
(18,978)
|
Cash operating costs
(by-product basis)
|
|
$
|
17,233
|
|
$
|
19,472
|
|
$
|
33,752
|
|
$
|
37,354
|
Gold production
(ounces)
|
|
49,458
|
|
50,647
|
|
97,575
|
|
100,753
|
Total cash costs per ounce
of gold produced ($
per ounce)(ii):
|
|
|
|
|
|
|
|
|
|
Co-product
basis
|
|
$
|
583
|
|
$
|
570
|
|
$
|
557
|
|
$
|
559
|
|
By-product
basis
|
|
$
|
348
|
|
$
|
384
|
|
$
|
346
|
|
$
|
371
|
|
|
|
|
|
|
|
|
|
Pinos Altos Mine -
Minesite Costs per
Tonne(iii)
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
Six Months
Ended
|
(thousands of United
States dollars, except as noted)
|
|
June 30,
2016
|
|
June 30,
2015
|
|
June 30,
2016
|
|
June 30,
2015
|
Production
costs
|
|
$
|
28,794
|
|
$
|
29,768
|
|
$
|
52,650
|
|
$
|
53,979
|
Inventory and other
adjustments(v)
|
|
(416)
|
|
(1,732)
|
|
880
|
|
948
|
Minesite operating
costs
|
|
$
|
28,378
|
|
$
|
28,036
|
|
$
|
53,530
|
|
$
|
54,927
|
Tonnes of ore processed
(thousands of tonnes)
|
|
605
|
|
648
|
|
1,107
|
|
1,231
|
Minesite costs per tonne
(US$)(iii)
|
|
$
|
47
|
|
$
|
43
|
|
$
|
48
|
|
$
|
45
|
|
|
|
|
|
|
|
|
|
Creston Mascota deposit
at Pinos Altos - Total Cash Costs per Ounce of Gold
Produced(ii)
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
Six Months
Ended
|
(thousands of United
States dollars, except as noted)
|
|
June 30,
2016
|
|
June 30,
2015
|
|
June 30,
2016
|
|
June 30,
2015
|
Production
costs
|
|
$
|
6,623
|
|
$
|
7,501
|
|
$
|
12,404
|
|
$
|
13,107
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
Inventory and other
adjustments(iv)
|
|
92
|
|
(611)
|
|
402
|
|
(143)
|
Cash operating costs
(co-product basis)
|
|
$
|
6,715
|
|
$
|
6,890
|
|
$
|
12,806
|
|
$
|
12,964
|
|
|
By-product metal
revenues
|
|
(898)
|
|
(611)
|
|
(1,680)
|
|
(1,158)
|
Cash operating costs
(by-product basis)
|
|
$
|
5,817
|
|
$
|
6,279
|
|
$
|
11,126
|
|
$
|
11,806
|
Gold production
(ounces)
|
|
12,398
|
|
15,606
|
|
23,949
|
|
28,054
|
Total cash costs per ounce
of gold produced ($
per ounce)(ii):
|
|
|
|
|
|
|
|
|
|
Co-product
basis
|
|
$
|
542
|
|
$
|
441
|
|
$
|
535
|
|
$
|
462
|
|
By-product
basis
|
|
$
|
469
|
|
$
|
402
|
|
$
|
465
|
|
$
|
421
|
|
|
|
|
|
|
|
|
|
Creston Mascota deposit
at Pinos Altos - Minesite Costs per
Tonne(iii)
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
Six Months
Ended
|
(thousands of United
States dollars, except as noted)
|
|
June 30,
2016
|
|
June 30,
2015
|
|
June 30,
2016
|
|
June 30,
2015
|
Production
costs
|
|
$
|
6,623
|
|
$
|
7,501
|
|
$
|
12,404
|
|
$
|
13,107
|
Inventory and other
adjustments(v)
|
|
31
|
|
(691)
|
|
226
|
|
(292)
|
Minesite operating
costs
|
|
$
|
6,654
|
|
$
|
6,810
|
|
$
|
12,630
|
|
$
|
12,815
|
Tonnes of ore processed
(thousands of tonnes)
|
|
573
|
|
609
|
|
1,089
|
|
1,135
|
Minesite costs per tonne
(US$)(iii)
|
|
$
|
12
|
|
$
|
11
|
|
$
|
12
|
|
$
|
11
|
|
|
|
|
|
|
|
|
|
La India Mine - Total
Cash Costs per Ounce of Gold
Produced(ii)
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
Six Months
Ended
|
(thousands of United
States dollars, except as noted)
|
|
June 30,
2016
|
|
June 30,
2015
|
|
June 30,
2016
|
|
June 30,
2015
|
Production
costs
|
|
$
|
12,001
|
|
$
|
10,791
|
|
$
|
22,916
|
|
$
|
23,256
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
Inventory and other
adjustments(iv)
|
|
361
|
|
963
|
|
1,415
|
|
718
|
Cash operating costs
(co-product basis)
|
|
$
|
12,362
|
|
$
|
11,754
|
|
$
|
24,331
|
|
$
|
23,974
|
|
|
By-product metal
revenues
|
|
(1,907)
|
|
(1,179)
|
|
(3,703)
|
|
(2,311)
|
Cash operating costs
(by-product basis)
|
|
$
|
10,455
|
|
$
|
10,575
|
|
$
|
20,628
|
|
$
|
21,663
|
Gold production
(ounces)
|
|
27,438
|
|
25,803
|
|
55,669
|
|
52,326
|
Total cash costs per ounce
of gold produced ($
per ounce)(ii):
|
|
|
|
|
|
|
|
|
|
Co-product
basis
|
|
$
|
451
|
|
$
|
456
|
|
$
|
437
|
|
$
|
458
|
|
By-product
basis
|
|
$
|
381
|
|
$
|
410
|
|
$
|
371
|
|
$
|
414
|
|
|
|
|
|
|
|
|
|
La India Mine - Minesite
Costs per Tonne(iii)
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
Six Months
Ended
|
(thousands of United
States dollars, except as noted)
|
|
June 30,
2016
|
|
June 30,
2015
|
|
June 30,
2016
|
|
June 30,
2015
|
Production
costs
|
|
$
|
12,001
|
|
$
|
10,791
|
|
$
|
22,916
|
|
$
|
23,256
|
Inventory and other
adjustments(v)
|
|
(1)
|
|
771
|
|
818
|
|
362
|
Minesite operating
costs
|
|
$
|
12,000
|
|
$
|
11,562
|
|
$
|
23,734
|
|
$
|
23,618
|
Tonnes of ore processed
(thousands of tonnes)
|
|
1,535
|
|
1,360
|
|
2,931
|
|
2,738
|
Minesite costs per tonne
(US$)(iii)
|
|
$
|
8
|
|
$
|
9
|
|
$
|
8
|
|
$
|
9
|
Notes:
|
(i)
|
On June 16, 2014,
Agnico Eagle and Yamana jointly acquired 100.0% of Osisko by way of
the Arrangement. As a result of the Arrangement, Agnico Eagle and
Yamana each indirectly own 50.0% of CMC and the Partnership, which
now holds the Canadian Malartic mine. The information set out in
this table reflects the Company's 50.0% interest in the Canadian
Malartic mine.
|
|
|
(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 (before 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 interim condensed 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. 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
(discussed below) 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 interim
condensed consolidated statements of income for unsold concentrate
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 on concentrates 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 sales margin on the portion of
concentrate 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 unsold
concentrates.
|
Reconciliation of
Production Costs to All-in Sustaining Costs per Ounce of Gold
Produced
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
Six Months
Ended
|
(United States dollars
per ounce of gold produced, except where
noted)
|
|
June 30,
2016
|
|
June 30,
2015
|
|
June 30,
2016
|
|
June 30,
2015
|
|
|
|
|
|
|
|
|
|
Production costs per the
interim condensed consolidated statements of income (thousands of
United States dollars)
|
|
$
|
255,436
|
|
$
|
263,612
|
|
$
|
499,409
|
|
$
|
510,892
|
Gold production
(ounces)
|
|
408,932
|
|
403,678
|
|
820,268
|
|
807,888
|
Production costs per ounce
of gold production
|
|
$
|
625
|
|
$
|
653
|
|
$
|
609
|
|
$
|
632
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Inventory and other
adjustments(i)
|
|
38
|
|
13
|
|
38
|
|
26
|
Total cash costs per ounce
of gold produced (co-product
basis)(ii)
|
|
$
|
663
|
|
$
|
666
|
|
$
|
647
|
|
$
|
658
|
|
By-product metal
revenues
|
|
(71)
|
|
(65)
|
|
(65)
|
|
(63)
|
Total cash costs per ounce
of gold produced (by-product
basis)(ii)
|
|
$
|
592
|
|
$
|
601
|
|
$
|
582
|
|
$
|
595
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Sustaining capital
expenditures (including capitalized
exploration)
|
|
193
|
|
203
|
|
177
|
|
177
|
|
General and administrative
expenses (including stock options)
|
|
60
|
|
58
|
|
60
|
|
60
|
|
Non-cash reclamation
provision and other
|
|
3
|
|
2
|
|
3
|
|
3
|
All-in sustaining costs per
ounce of gold produced (by-product basis)
|
|
$
|
848
|
|
$
|
864
|
|
$
|
822
|
|
$
|
835
|
|
By-product metal
revenues
|
|
71
|
|
65
|
|
65
|
|
63
|
All-in sustaining costs per
ounce of gold produced (co-product basis)
|
|
$
|
919
|
|
$
|
929
|
|
$
|
887
|
|
$
|
898
|
Notes:
|
|
|
|
(i)
|
Under the Company's revenue
recognition policy, revenue is recognized on concentrates 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
concentrate production not yet recognized as
revenue.
|
|
|
(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 (before 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 interim condensed 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.
|
SOURCE Agnico Eagle Mines Limited