Stock Symbol: AEM (NYSE and TSX)
(All
amounts expressed in U.S. dollars unless otherwise noted)
TORONTO, Oct. 26, 2016 /PRNewswire/ - Agnico Eagle
Mines Limited (NYSE:AEM, TSX:AEM) ("Agnico Eagle" or the
"Company") today reported quarterly net income of $49.4 million, or net income of $0.22 per share for the third quarter of
2016. This result includes non-cash stock option expense of
$3.2 million ($0.01 per share), non-cash foreign currency
translation losses of $2.5 million
($0.01 per share), a non-cash foreign
currency translation loss on deferred tax liabilities of
$1.3 million ($0.01 per share), various mark-to-market and
other adjustment gains of $1.1
million (nil per share), non-recurring losses of
$0.7 million (nil per share) and
losses on financial instruments of $0.6
million (nil per share). Excluding these items would
result in adjusted net income1 of $56.6 million, or adjusted net income of
$0.25 per share for the third quarter
of 2016. In the third quarter of 2015, the Company reported
net income of $1.3 million or
$0.01 per share.
For the first nine months of 2016, the Company reported net
income of $96.2 million, or
$0.43 per share. This compares
to the first nine months of 2015, when net income was $40.1 million, or $0.19 per share. Financial results in the
2016 period were positively affected by higher revenues as a result
of higher realized gold prices (approximately 8%), silver prices
(approximately 9%) and other higher by-product metals revenues.
Third quarter 2016 cash provided by operating activities was
$282.9 million ($233.7 million before changes in non-cash
components of working capital). This compares to
cash provided by operating activities of $143.7 million in the third quarter of 2015
($217.8 million before changes in
non-cash components of working capital). The increase in cash
provided by operating activities before changes in non-cash
components of working capital during the current period was mainly
due to higher realized gold and silver prices and higher by-product
metals revenues.
________________________
1
Adjusted net income is a Non-GAAP measure. For a discussion
regarding the Company's use of non-GAAP measures, please see "Note
Regarding Certain Measures of Performance".
For the first nine months of 2016, cash provided by operating
activities was $658.0 million
($593.9 million before changes in
non-cash components of working capital), as compared to the first
nine months of 2015 when cash provided by operating activities was
$475.5 million ($547.4 million before changes in non-cash
components of working capital). The increase in cash provided
by operating activities before changes in non-cash components of
working capital during the period was mainly due to the reasons
described above.
"In the third quarter of 2016, our operations continued to
deliver solid production and cost performance. As a result,
we now expect to exceed the upper end of our 2016 production
guidance of 1.6 million ounces," said Sean
Boyd, Agnico Eagle's Chief Executive
Officer. "Furthermore, our strong operating performance
resulted in increased operating cash flow and an increase in our
cash position which further supports our development plans to grow
production to approximately 2.0 million ounces in 2020," added Mr.
Boyd.
Third Quarter 2016 Highlights Include:
- Quarterly gold production – Payable gold
production2 in the third quarter of 2016 was 416,187
ounces of gold at total cash costs3 per ounce on a
by-product basis of $575 and all-in
sustaining costs4 on a by-product basis ("AISC") of
$821 per ounce
- Record gold production at La India and record silver
production in Mexico – In the
third quarter of 2016, payable gold production was a new quarterly
record of 30,779 ounces at the La India mine. Silver
production was a new quarterly record of 825,000 ounces at the
Company's Mexican mines
- Whale Tail drilling yields deepest intersection to date
– Hole AMQ16-1045 intersected the deepest mineralization in the
Whale Tail deposit to date: 5.4 grams per tonne ("g/t") gold over
3.3 metres at 658 metres depth and 5.5 g/t gold over 16.1 metres at
725 metres depth, including 13.1 g/t gold over 3.5 metres at 732
metres depth (capped gold grades over estimated true width)
- Infill drilling yields widest intercept to date in the Sisar
Central Zone - Hole ROD16-702D intersected 6.6 g/t gold over
12.7 metres at 1,303 metres depth (uncapped gold grade over
estimated true width)
- Lapa Mine Life Extended Through Year-End 2016 –
Production is now forecast to continue through year-end 2016 and
the Company is evaluating a number of opportunities that could
potentially see the mine life extend into 2017
- Increasing cash position reduces net
debt5 – In the third quarter of 2016,
net debt was reduced by approximately $154
million, to $587.9 million, at
September 30, 2016. Cash and
cash equivalents and short term investments totalled $627.4 million
- A quarterly dividend of $0.10
per share was declared
______________________
2 Payable production
of a mineral means the quantity of mineral produced during a period
contained in products that are sold by the Company, whether such
products are shipped during the period or held as inventory at the
end of the period.
3 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. See also "Note
Regarding Certain Measures of Performance".
4 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.
See also "Note Regarding Certain Measures of Performance".
5 Net debt is a Non-GAAP measure. For a reconciliation
of net debt to the nearest IFRS equivalent, please see
"Reconciliation of Non-GAAP Financial Performance Measures" below.
See also "Note Regarding Certain Measures of Performance".
Third Quarter Financial and Production Highlights
In the third quarter of 2016, strong operational performance
continued at the Company's mines.
Payable gold production in the third quarter of 2016 was 416,187
ounces, compared to 441,124 ounces in the third quarter of
2015. The lower level of production in the 2016 period was
primarily due to lower grades at Lapa and Meadowbank. A
detailed description of the production and cost performance at each
mine is set out below.
Total cash costs per ounce on a by-product basis for the third
quarter of 2016 were higher at $575,
compared to $536 per ounce for the
third quarter of 2015. The increase in total cash costs per
ounce on a by-product basis in the third quarter of 2016 was a
result of lower gold production at Lapa and Meadowbank compared to
the third quarter of 2015.
Payable gold production for the first nine months of 2016 was
1,236,455 ounces, compared to payable gold production of 1,249,012
ounces in the comparable 2015 period. Production in the 2016
period was lower due to the reasons outlined above.
For the first nine months of 2016, total cash costs per ounce on
a by-product basis were $580.
This compares to total cash costs per ounce on a by-product basis
of $574 in the first nine months of
2015. The slightly higher costs in the 2016 period are due to
the lower levels of production compared to the 2015 period.
AISC for the third quarter of 2016 were $821, compared to $759 per ounce for the third quarter of
2015. The higher AISC in the 2016 period are primarily due to
lower production, higher total cash costs per ounce on a by-product
basis and higher capital expenditures compared to the 2015
period.
For the first nine months of 2016, AISC were $821, compared to $808 per ounce for the 2015 period. The
higher AISC in the 2016 period are due to the same reasons set out
above.
Strong Cash Position; Net Debt Reduced
Cash and cash equivalents and short term investments increased
to $627.4 million at September 30, 2016, from the June 30, 2016 balance of $473.7 million. At September 30, 2016, net debt was $587.9 million, a decrease of $154 million from June 30,
2016.
The outstanding balance on the Company's $1.2 billion credit facility remained nil at
September 30, 2016. This
results in available credit lines of approximately $1.2 billion, not including the uncommitted
$300 million accordion feature.
On October 26, 2016, the Company
amended its $1.2 billion credit
facility to extend the maturity date from June 22, 2020 to June 22,
2021.
Total capital expenditures (including sustaining capital) made
by the Company in the third quarter of 2016 were $146.8 million, including $41.8 million at Meliadine, $22.2 million at Kittila, $22.1 million at Goldex, $15.7 million at LaRonde, $14.9 million at Canadian Malartic (50% basis),
$12.8 million at Meadowbank,
$10.4 million at Pinos Altos, $2.7
million at La India and $2.3
million at Creston Mascota.
Total capital expenditures (including sustaining capital) for
the first nine months of 2016 were $378.9
million, including $85.2
million at Meliadine, $58.0
million at Goldex, $55.1
million at Kittila, $44.8
million at Canadian Malartic (50% basis), $45.4 million at LaRonde, $38.7 million at Pinos
Altos, $35.0 million at
Meadowbank, $7.7 million at La India
and $5.8 million at Creston
Mascota.
Total sustaining capital expenditures made by the Company in the
third quarter of 2016 were $80.0
million, including $18.6
million at Kittila, $15.7
million at LaRonde, $14.6
million at Canadian Malartic (50% basis), $12.8 million at Meadowbank, $8.5 million at Pinos
Altos, $4.9 million at Goldex,
$2.6 million at La India and
$2.3 million at Creston Mascota.
Total sustaining capital expenditures for the first nine months
of 2016 were $225.1 million,
including $46.1 million at Kittila,
$45.4 million at LaRonde,
$42.9 million at Canadian Malartic
(50% basis), $35.0 million at
Meadowbank, $28.2 million at
Pinos Altos, $14.0 million at Goldex, $7.7 million at La India and $5.8 million at Creston Mascota.
Based on the exploration success in the first nine months of the
year, the 2016 expensed exploration and corporate development
budget has been increased by approximately $16 million to $154
million. Additional exploration spending is expected
to occur at Amaruq, Barsele, La India and Odyssey.
Quarterly Dividend Declared
Agnico Eagle's Board of Directors has declared a quarterly cash
dividend of $0.10 per common share,
payable on December 15, 2016 to
shareholders of record as of December
1, 2016. Agnico Eagle has declared a cash dividend
every year since 1983.
Dividend Reinvestment Plan
Please follow the link below for information on the Company's
dividend reinvestment program. Dividend Reinvestment Plan
Third Quarter 2016 Results Conference Call and Webcast
Tomorrow
The Company's senior management will host a conference call on
Thursday, October 27, 2016 at
11:00 AM (E.D.T.) to discuss the
Company's financial and operating results.
Via Webcast:
A live audio webcast of the conference call will be available on
the Company's website at www.agnicoeagle.com.
Via Telephone:
For those preferring to listen by telephone, please dial
1-647-427-7450 or toll-free 1-888-231-8191. To ensure your
participation, please call approximately 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 38842633. The conference call replay will expire on
November 24, 2016 11:59 AM (E.S.T).
The webcast, along with presentation slides, will be archived
for 180 days on the Company's website.
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 Grades Drive Strong Production in the
Third Quarter of 2016
The 100% owned LaRonde mine in northwestern Quebec achieved commercial production in
1988.
The LaRonde mill processed an average of 5,677 tonnes per day
("tpd") in the third quarter of 2016, compared to an average of
5,992 tpd in the corresponding period of 2015. Throughput in
the 2016 period was negatively affected by a planned shutdown
during the quarter. Minesite costs per tonne6 were
approximately C$115 in the third
quarter of 2016, higher than the C$101 per tonne experienced in the third quarter
of 2015. The increased costs in the 2016 period were
primarily due to lower throughput levels and higher underground and
mill maintenance costs compared to the prior-year period.
For the first nine months of 2016, the LaRonde mill processed an
average of 6,087 tpd, compared to 6,145 tpd in the first nine
months of 2015. Minesite costs per tonne were approximately
C$108, compared to C$101 per tonne in the first nine 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
$541 in the third quarter of 2016, on
payable production of 71,784 ounces of gold. This compares to
the third quarter of 2015, when total cash costs per ounce on a
by-product basis were $558, on
payable production of 71,860 ounces of gold. Costs in the
2016 period were positively affected by higher by-product
revenues.
In the first nine months of 2016, LaRonde produced 222,280
ounces of gold at total cash costs per ounce on a by-product basis
of $537. This compares to the
first nine months of 2015, when the mine produced 194,760 ounces of
gold at total cash costs per ounce on a by-product basis of
$620. Production in the 2016
period increased due to higher gold grades; costs were lower due to
higher gold production and favourable foreign exchange rates.
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 down 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 third 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, 412 metres of underground development was
completed and a temporary vent raise was developed which is planned
to be commissioned in the fourth quarter of 2016. Internal
technical studies are 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.
______________________
6 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".
Canadian Malartic Mine – BAPE Process Concludes; Extension
Project Acceptable for Development
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 Canadian Malartic General Partnership (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 third quarter of 2016, the Canadian Malartic mill
processed an average of 53,989 tpd (on a 100% basis), compared to
an average of 53,703 tpd in the corresponding period of 2015.
Minesite costs per tonne in the third quarter of 2016 were
approximately C$25, compared to the
C$22 per tonne experienced in the
third quarter of 2015. Costs were higher in the 2016 period
primarily due to unplanned maintenance on the leach tank, ball mill
and crusher components in the process plant and additional
stripping costs. In addition, extra contractors were employed
to maximize stripping activities in the north part of the pit to
access higher grades. The average stripping ratio in the
third quarter of 2016 was 2.10 to 1.0, compared to 2.04 to 1.0 in
the prior-year period.
For the first nine months of 2016, the Canadian Malartic mill
processed an average of 53,928 tpd (on a 100% basis), compared to
an average of 52,139 tpd in the corresponding period of 2015.
Minesite costs per tonne were approximately C$24, compared to the C$23 per tonne in the corresponding period of
2015. Costs were higher due to the reasons outlined
above.
For the third quarter of 2016, Agnico Eagle's share of
production at the Canadian Malartic mine was 76,428 ounces of gold
at total cash costs per ounce on a by-product basis of $613. This compares to the third quarter of
2015 when total cash costs per ounce on a by-product basis were
$544 on production of 76,603 ounces
of gold. Production was lower in the 2016 period due to
slightly lower grades. Costs in the 2016 period were higher
primarily due to contractor use at the mine, higher maintenance
costs at the mill for repairs to the leach tanks and ball mill #3
and additional stripping costs; these increases were partially
offset by higher throughput levels and favourable foreign exchange
rates.
In the first nine months of 2016, Agnico Eagle's share of
production at the Canadian Malartic mine was 222,543 ounces of gold
at total cash costs per ounce on a by-product basis of $597. This compares to production of
212,937 ounces of gold at total cash costs per ounce on a
by-product basis of $593 in the prior
year period. Production was higher in 2016 due to increased
throughput levels and slightly higher gold grades; costs were
similar to prior-year period, but affected by the factors set out
above.
On August 2, 2016, the Partnership
was served with a class action lawsuit with respect to allegations
involving the Canadian Malartic mine. Since the spring of
2015, Canadian Malartic GP has been
working collaboratively with the community of Malartic and its
citizens to develop a "Good Neighbour Guide" that addresses the
allegations contained in the lawsuit and is disappointed by this
development. Agnico Eagle and the Partnership will take all
reasonable steps necessary to defend themselves from this
lawsuit. At the current time, the Company and the Partnership
does not believe it is probable that any amounts will be paid with
respect to these lawsuits and the amount and timing cannot be
reasonably estimated.
In addition, on August 15, 2016,
the Partnership received notice of an application for injunction
relating to the Canadian Malartic mine, which has been filed under
the Environment Quality Act (Quebec). The next hearing related to the
injunction is expected to be heard in March 2017. The request
for injunction aims to restrict the Canadian Malartic mine's mining
operations to sound levels and mining volumes below the limits to
which it is subject. Agnico Eagle and the Partnership have
reviewed the injunction request, consider the request without merit
and will take all reasonable steps to defend against this
injunction.
The Partnership is currently analyzing the potential impacts of
the injunction in the event that it were to be granted. While
at this time the potential impacts cannot be definitively
determined, the Company expects that if the injunction were to be
granted there would be a negative impact on the operations of the
Canadian Malartic mine, which could include a reduction in
production and shift reductions resulting in the loss of jobs.
Following the Quebec Bureau
des Audiences Publiques sur l'Environnement ("BAPE") public
hearings in June and July 2016,
permitting of the Canadian Malartic extension project and Highway
117 deviation reached an important milestone with the issue of the
BAPE report on October 5, 2016.
The report concluded that the project is acceptable and provides
several recommendations intended to enhance social
acceptability. The next step is for the Ministre du
Développement durable, de l'Environnement et de la Lutte contre les
changements climatiques to review the report and present his
decision to Cabinet for approval. No date for the approval
has been set, but the Partnership anticipates that this may occur
in the first half of 2017.
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.
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.
During the third quarter of 2016, a total of 56 drill holes
(40,019 metres) were completed at Odyssey, bringing the
year-to-date total to 113 holes (89,774 metres). Drilling
will continue through year-end, at which time an inferred mineral
resource is expected be estimated for the prospect.
Canadian Malartic Corporation
In addition to the Partnership, each of Agnico Eagle and Yamana
have an indirect 50% interest in Canadian Malartic Corporation ("CMC"), which holds a
portfolio of exploration properties that includes properties
in the Kirkland Lake area of
Ontario and the Pandora property
in the Abitibi region of Quebec.
At the Pandora property, seven diamond drill holes (4,442
metres) were completed in the third quarter of 2016. A
supplemental program consisting of five holes (4,800 metres) is
underway. Additional exploration work at Pandora will depend
on the results from the 2016 supplemental program.
At Kirkland Lake, field work on
the Upper Beaver project has outlined numerous near surface
targets. The 2017 budget proposal will consider funding
to drill-test these and other targets on the Kirkland Lake property holdings. The
updated Amalgated Kirkland geologic and mineral models have
identified opportunities for growth both along strike and down dip
of the currently identified mineral bodies. Testing of these
new targets is also included in the 2017 budget proposal.
Goldex – Continued Strong Operating Performance; Deep Zone
Remains on Schedule for 2018 Startup
The 100% owned Goldex mine in northwestern Quebec began operation in 2008.
The Goldex mill processed an average of 7,292 tpd in the third
quarter of 2016. This compares to an average of 6,199 tpd in
the third quarter of 2015. The higher throughput in the 2016
period was primarily due to better underground mining and milling
performance and higher productivity compared to the 2015
period.
Minesite costs per tonne were approximately C$31 in the third quarter of 2016, which was
lower than the C$34 per tonne in the
third quarter of 2015. Costs in the 2016 period were lower
primarily due to higher throughput and a reduction in production
drilling and backfill costs.
For the first nine months of 2016, the Goldex mill processed an
average of 7,173 tpd, compared to 6,377 tpd in the first nine
months of 2015. Minesite costs per tonne were approximately
C$32 in the first nine months of
2016, compared to C$34 in first nine
months of 2015. The costs in the 2016 period were lower due
to the reasons outlined above.
Payable gold production in the third quarter of 2016 was 32,742
ounces of gold at total cash costs per ounce on a by-product basis
of $483. This compares to the
third quarter of 2015, when production was 32,068 ounces of gold at
total cash costs per ounce on a by-product basis of $479. The slight increase in total cash
costs per ounce in the 2016 period was largely a result of lower
gold grades partially offset by higher throughput levels.
In the first nine months of 2016, Goldex produced 96,534 ounces
of gold at total cash costs per ounce on a by-product basis of
$501. This compares to the
first nine months of 2015, when the mine produced 87,780 ounces of
gold at total cash costs per ounce on a by-product basis of
$546. The higher production and
lower costs in the 2016 period are primarily due to increased
throughput levels and favourable foreign exchange rates compared to
the 2015 period.
Development of the Deep 1 Zone remains on time and on budget for
startup in the first quarter of 2018. In the third quarter of
2016, the first segment of the Rail-Veyor (conveyor system) ramp
was completed and construction of the 120 level loading station and
excavation of the 115 level rock hammer room are now in
progress.
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, and thereby reduce 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 and responding to
questions from the Quebec
government agencies and ministries, the EIA was deemed "receivable"
and the project was referred to the BAPE. The current phase
of the BAPE process is a public review period that is expected to
end on November 18, 2016. If
the BAPE decides that a full public hearing process is warranted it
is expected to take place in first quarter of 2017.
At the federal level, following submission of the EIA, the
Company provided responses to questions received. The federal
environmental assessment agency is expected to present its
recommendations on the acceptability of the project to the Federal
Minister of the Environment in the first half of 2017.
Lapa – Production to Continue Through Year-End 2016 and
Opportunities Being Evaluated to Extend Mine Life into 2017
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 1,536 tpd in the third quarter of 2016. This
compares to an average of 1,583 tpd in the third quarter of
2015. Minesite costs per tonne were C$113 in the third quarter of 2016, compared to
C$114 in the third quarter of
2015. Costs in the 2016 period were lower primarily due to a
reduction in labour costs, energy consumption and consumables
compared to the same period in 2015.
For the first nine months of 2016, the Lapa mill processed an
average of 1,689 tpd, compared to 1,553 tpd in the first nine
months of 2015. Throughput in the 2015 period was negatively
affected by to repairs being carried out on the Lapa ball
mill. Minesite costs per tonne were approximately
C$117, which was less than the
C$119 per tonne in the first nine
months of 2015 due to the reasons explained above.
Payable production in the third quarter of 2016 was 16,242
ounces of gold at total cash costs per ounce on a by-product basis
of $743. This compares to the
third quarter of 2015, when production was 25,668 ounces of gold at
total cash costs per ounce on a by-product basis of $522. In the 2016 period, production was
lower and costs were higher primarily due to lower grades and mill
recoveries compared to the 2015 period.
In the first nine months of 2016, Lapa produced 59,865 ounces of
gold at total cash costs per ounce on a by-product basis of
$684. This compares to the
first nine months of 2015, when the mine produced 71,038 ounces of
gold at total cash costs per ounce on a by-product basis of
$581. The lower production and
higher costs in the 2016 period are due to the reasons outlined
above.
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 production expected to total approximately 60,000
ounces of gold as per the February
2016 guidance. Production is now forecast to continue
through year-end 2016. The Company is also evaluating
additional target zones at depth and a number of lower grade zones
that had previously been excluded from the mine plan. Should
this work yield favourable results, production could potentially be
extended further into 2017.
FINLAND AND SWEDEN
Agnico Eagle's Kittila mine in Finland is the largest primary gold producer
in Europe and hosts the Company's
largest mineral reserves. Exploration activities continue to
expand the mineral resources and studies are underway to evaluate
the potential to cost-effectively increase production.
Kittila – Drilling Continues to Extend Sisar Zone
Northward towards the Rimpi Deposit
The 100% owned Kittila mine in northern Finland achieved commercial production in
2009.
The Kittila mill processed an average of 4,837 tpd in the third
quarter of 2016, compared to 3,937 tpd in the third 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 €73 in
the third quarter of 2016, compared to €72 in the third quarter of
2015. Costs increased in the third quarter of 2016 due to
higher contractor costs and mill maintenance costs, compared to the
2015 period. These increased costs offset the benefit of the
increased throughput.
For the first nine months of 2016, the Kittila mill processed an
average of 4,621 tpd, compared to 3,981 tpd in the first nine
months of 2015. Minesite costs per tonne were approximately
€75 in the first nine months of 2016, the same as in the comparable
2015 period. The higher throughput in the 2016 period was
primarily due to the reasons outlined above.
Third quarter 2016 payable gold production at Kittila was 54,835
ounces at total cash costs per ounce on a by-product basis of
$663. In the third quarter of
2015, the mine produced 46,455 ounces at total cash costs per ounce
on a by-product basis of $639.
The higher production in the 2016 period is a result of the
increased throughput levels compared to the 2015 period and the
planned 2015 shutdown. Costs increased in the third quarter
of 2016 primarily due to increased contractor, mill maintenance and
re-handling costs.
In the first nine months of 2016, Kittila produced 149,171
ounces of gold at total cash costs per ounce on a by-product basis
of $712. This compares to the
first nine months of 2015, when the mine produced 133,095 ounces of
gold at total cash costs per ounce on a by-product basis of
$696. The higher production and
cash costs in 2016 are mainly due to the reasons described
above.
The Kittila mine and mill have shown the ability to consistently
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 an updated
Kittila mine plan. Unit costs are expected to improve once
steady state operations at this higher throughput 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. In the third quarter of 2016, 18
holes (6,815 metres) were drilled in the Sisar Top and Central
zones. The total drilling in Sisar for the first nine months
of 2016 was 46 holes (19,588 metres). Assays are pending for
many holes.
Selected recent drill results are set out in the table below;
drill hole collar coordinates are set out in a table in the
Appendix of this news release. Pierce points for all these
holes are shown on the Kittila Composite Longitudinal
Section. All intercepts reported for the Kittila mine show
uncapped grades over estimated true widths, based on a current
geological interpretation that is being updated as new information
becomes available with further drilling.
Recent exploration drill results from the Sisar Zone at the
Kittila mine
Drill hole
|
Zone
|
From
(metres)
|
To
(metres)
|
Depth of
midpoint
below
surface
(metres)
|
Estimated
true width
(metres)
|
Gold grade
(g/t)
(uncapped)
|
RIE16-602
|
Sisar Top
|
218.0
|
224.0
|
897
|
5.0
|
6.2
|
RIE16-608
|
Sisar Top
|
353.4
|
363.5
|
1,033
|
7.8
|
10.7
|
including
|
|
353.9
|
358.8
|
1,032
|
3.8
|
19.0
|
RIE16-609
|
Sisar Top
|
250.1
|
256.0
|
914
|
5.8
|
7.0
|
RIE16-612
|
Sisar Top
|
353.0
|
364.0
|
1,021
|
7.5
|
3.8
|
ROD16-702B
|
Main
|
406.8
|
414.0
|
1,067
|
4.9
|
3.7
|
ROD16-702D
|
Sisar
Central
|
693.4
|
721.0
|
1,303
|
12.7
|
6.6
|
[Kittila - Composite Longitudinal Section]
Recent holes drilled from the exploration ramp continue to
extend the Sisar Top Zone to the north and infill the Central
Zone. For the purposes of description, the zone has been
divided into two depths, referred to as "Sisar Top" (approximately
775 to 1,000 metres below surface), and "Sisar Central" (between
1,000 and 1,400 metres below the surface). Some of the Sisar
mineralized lenses extend from one depth to another.
Underground exploration drilling is continuing to the north as
the exploration ramp is extended, allowing the small gap between
the Sisar Top Zone and the Rimpi Zones to be investigated to 1,000
metres depth. The program has returned several good
intercepts in this area at 900 to 1,000 metres depth, demonstrating
that the Top Zone now extends northward almost as far as the
Rimpi Zone, parallel to, and approximately 100 metres east of the
Rimpi Zone. The pattern and quality of intercepts in this
area reported in an earlier news release (Company news release
dated July 27, 2016) and set out
above suggest that the Top Zone could potentially become a new
production source in the near term. The best recent result in
this part of the Sisar Top Zone was hole RIE16-608, that
intersected 10.7 g/t gold over 7.8 metres at 1,033 metres depth,
including 19.0 g/t gold over 3.8 metres. Nearby, hole
RIE16-612 intersected 3.8 g/t gold over 7.5 metres at 1,021 metres
depth; this intercept extends the Sisar Zone another 120 metres to
the north, approximately 90 metres to the south of the Rimpi
Zone mineral reserves at this depth. The Top Zone is also
being extended northward at shallower depths. Hole RIE16-609
intersected 7.0 g/t gold over 5.8 metres at 914 metres depth,
extending the Sisar Zone 40 metres to the north at this depth
compared to previous intercepts. Assays are pending on
several other recent holes farther north in this area.
Infill drilling has yielded the widest intercept to date in the
Sisar Central Zone. Hole ROD16-702D intersected 6.6 g/t gold
over 12.7 metres at 1,303 metres depth. Assays are pending on
several holes surrounding this intercept. The Sisar Central
Zone is approximately 150 metres east of the Main Zone.
The continued extension of the Sisar Zone could prove to be
significant for the future of the Kittila mine, given its close
proximity to the existing mine infrastructure. The results of
the Sisar Zone infill drilling campaign will be reflected in the
year-end 2016 mineral resources estimate for Kittila.
Barsele Project – Drilling Extends Central and Avan
Zones
In June 2015, Agnico Eagle
acquired a 55% interest in the Barsele project in Västerbotten
County, northern Sweden. The
Company can earn an additional 15% interest in the project through
the completion of a pre-feasibility study.
The most recent results from the 28,600-hectare property were
released in a Company news release dated July 27, 2016. The Barsele property is
known to contain intrusive-hosted gold mineralization (the Central,
Avan and Skirasen zones), which appears to be similar to the Goldex
deposit. The property also hosts gold-rich polymetallic
volcanogenic massive sulphide mineralization (the Norra Zone).
The Avan, Central and Skirasen zones extend over a strike length
of 2.6 kilometres, within a granodiorite that ranges in width from
200 to 500 metres over a strike length of more than eight
kilometres. Gold is generally associated with arsenopyrite
and low base metal content, but also occurs as native metal
locally.
A second phase of drilling commenced at the end of April with
one drill rig, increasing to four rigs by the end of September.
During the third quarter of 2016, exploration drilling was
carried out on the Central and Avan zones. In addition,
infill drilling was conducted on the Central, Avan and Skirasen
zones. The exploration drilling was testing geophysical
anomalies (induced polarization and magnetotelluric anomalies
similar to ones in the Central Zone) that were identified in a
geophysical survey conducted in the second quarter of 2016.
Basal till drilling was commissioned during August. This
program is testing for gold mineralization indicators along a
corridor adjacent to, and southwest of, the entire
Skirasen-Central-Avan mineralized corridor.
Drilling at Barsele during the third quarter totaled 10,686
metres (34 holes). The total drilling during 2016 is 19,493
metres, while a cumulative total of 27,945 metres has been drilled
since the start of the Company's program in October 2015.
Recent intercepts from this program are set out in the table
below; drill hole collar coordinates are set out in a table in the
Appendix of this news release and the collars are located on the
Barsele Project Regional Geology Map. All intercepts reported
for the Barsele project show capped gold grades over estimated true
widths, based on a preliminary geological interpretation that is
being updated as new information becomes available with further
drilling.
Recent exploration and confirmation drill results from the
Barsele project
Drill hole
|
Location
|
From
(metres)
|
To
(metres)
|
Depth of
midpoint
below
surface
(metres)
|
Estimated
true width
(metres)
|
Gold grade
(g/t)
(uncapped)
|
Gold
grade
(g/t)
(capped)*
|
AVA16-005
|
Avan
|
221.0
|
227.0
|
145
|
4.5
|
16.20
|
7.28
|
and
|
Avan
|
367.0
|
393.0
|
250
|
19.5
|
2.22
|
2.22
|
AVA16-007
|
Avan
|
477.6
|
511.0
|
420
|
25.1
|
1.68
|
1.68
|
and
|
Avan
|
636.0
|
644.0
|
545
|
6.0
|
3.23
|
3.23
|
CNT16-001
|
Central
|
403.0
|
430.0
|
300
|
20.3
|
1.80
|
1.80
|
CNT16-002
|
Central
|
433.0
|
567.0
|
440
|
100.5
|
1.11
|
1.11
|
including
|
|
433.0
|
472.0
|
400
|
29.3
|
2.41
|
2.41
|
CNT16-006
|
Central
|
45.0
|
171.0
|
100
|
94.5
|
1.66
|
1.59
|
CNT16-012
|
Central
|
2.7
|
151.3
|
70
|
111.5
|
1.38
|
1.19
|
including
|
|
121.0
|
141.0
|
120
|
15.0
|
4.72
|
3.34
|
*Holes at Barsele use a capping factor of 20 g/t
gold.
[Barsele Project - Regional Geology Map]
Recent exploration drilling in the Avan Zone has identified a
new gold trend at depth, some 200 to 485 metres below previous Avan
Zone intercepts, about 1,250 metres northwest of the core of the
Central Zone. Highlights include hole AVA16-005 that
intersected 7.28 g/t gold over 4.5 metres at 145 metres depth, as
well as 2.22 g/t gold over 19.5 metres at 250 metres depth.
Hole AVA16-007 intersected 1.68 g/t gold over 25.1 metres at 420
metres depth, and 3.23 g/t gold over 6.0 metres at 545 metres
depth. These are the first drill results released by the
Company from the Avan Zone.
Recent exploration drilling has extended the Central Zone
approximately 175 metres to the northwest, closer to the new gold
prospective trend intercepted at depth at the Avan Zone.
Results include hole CNT16-001 which intersected 1.80 g/t gold over
20.3 metres at 300 metres depth. Hole CNT16-002 returned one
of the longest intercepts reported to date from the Barsele
project: 1.11 g/t gold over 100.5 metres at 440 metres depth,
including 2.41 g/t gold over 29.3 metres.
To date, 19 infill holes have been completed to confirm previous
drill results at shallower depths in the Central and Avan
zones. Highlights include: hole CNT16-006 which yielded 1.59
g/t gold over 94.5 metres at 100 metres depth and hole CNT16-012
which returned 1.19 g/t gold over 111.5 metres at 70 metres depth,
including 3.34 g/t gold over 15.0 metres.
In 2016, the Company plans to spend approximately $7.5 million on exploration to further evaluate
the mineral potential of the property. This includes 36,000
metres of diamond drilling, an induced polarization geophysical
survey, till sampling and hyperspectral core scanning. A
basic environmental assessment will be done, as well as ongoing
community relations programs to engage the various stakeholders in
the region.
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, the Company believes Nunavut has the potential to be a strategic
operating platform with the ability to generate strong production
and cash flows over several decades.
Meadowbank – Studies are Ongoing to Evaluate Extension of
Production Through Year-End 2018
The 100% owned Meadowbank mine in Nunavut, northern Canada, achieved commercial production in
March 2010.
The Meadowbank mill processed an average of 10,450 tpd in the
third quarter of 2016, compared to 10,824 tpd in the third quarter
of 2015. Mill throughput levels were lower in the 2016 period
due to a longer than planned shutdown for mill maintenance.
Minesite costs per tonne were approximately C$75 in the third quarter of 2016, compared to
C$72 per tonne in the third quarter
of 2015. The higher costs in the 2016 period were primarily
due to lower throughput levels and a decrease in capitalized versus
expensed waste stripping compared to the 2015 period.
For the first nine months of 2016, the Meadowbank mill processed
an average of 10,585 tpd, compared to 11,009 tpd in the first nine
months of 2015. Minesite costs per tonne were approximately
C$75 in the first nine months of
2016, which was higher than the C$72
per tonne in the 2015 period. The lower mill throughput
levels and higher costs in the 2016 period were primarily due to
the reasons outlined above.
Payable production in the third quarter of 2016 was 72,731
ounces of gold at total cash costs per ounce on a by-product basis
of $746. This compares to the
third quarter of 2015 when 99,425 ounces were produced at total
cash costs per ounce on a by-product basis of $598. The lower production in the 2016
period compared to the 2015 period was primarily due to lower
throughput levels, lower grade ore (a decrease of approximately
23%) and lower recoveries. Costs in the 2016 period were
higher due to decreased production levels.
In the first nine months of 2016, Meadowbank produced 217,444
ounces of gold at total cash costs per ounce on a by-product basis
of $774. In the first nine
months of 2015, the mine produced 279,224 ounces of gold at total
cash costs per ounce on a by-product basis of $646. The lower production and higher costs
in the 2016 period compared to the previous period were primarily
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 would be 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 – Whale Tail Drilling Extends Mineralization
at Depth
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.
Inferred mineral resources in the Whale Tail and IVR deposits at
the Amaruq project are estimated to be 3.71 million ounces of gold
(19.4 million tonnes grading 5.97 g/t gold) as of June 30, 2016. The last update on the
exploration work on the project was the Company news release dated
September 15, 2016.
Drilling at Amaruq during the third quarter totaled 190 holes
(49,298 metres). The total 2016 drilling to the end of
September was 514 holes (124,299 metres).
Recent intercepts from the project are set out in the table
below and the drill hole collars are located on the Amaruq project
local geology map. The pierce points are shown on the Amaruq
project composite longitudinal section. Drill collar
coordinators are set out in the Appendix of this news
release. All intercepts reported for the Amaruq project show
capped grades over estimated true widths, based on a preliminary
geological interpretation that is being updated as new information
becomes available with further drilling.
Recent exploration drill results from the Whale Tail (WT)
deposit and V Zone (V), Amaruq project
Drill hole
|
Location
|
From
(metres)
|
To
(metres)
|
Depth of
midpoint
below
surface
(metres)
|
Estimated
true width
(metres)
|
Gold grade
(g/t)
(uncapped)
|
Gold
grade
(g/t)
(capped)*
|
AMQ16-823
|
V
|
166.0
|
177.3
|
163
|
6.5
|
4.1
|
4.1
|
AMQ16-966
|
WT
|
608.0
|
613.9
|
535
|
5.9
|
11.7
|
11.7
|
and
|
WT
|
688.0
|
697.9
|
607
|
7.6
|
8.2
|
8.2
|
AMQ16-976
|
V
|
63.5
|
71.1
|
60
|
6.9
|
5.5
|
5.5
|
AMQ16-994
|
V
|
17.2
|
21.2
|
17
|
3.9
|
30.2
|
14.6
|
AMQ16-1007
|
V
|
252.0
|
258.1
|
213
|
5.7
|
24.0
|
14.9
|
AMQ16-1028
|
V
|
49.5
|
54.0
|
43
|
3.9
|
190.8
|
22.5
|
and
|
V
|
85.5
|
93.0
|
74
|
7.4
|
6.1
|
6.1
|
AMQ16-1031
|
WT
|
601.6
|
607.5
|
536
|
5.1
|
11.2
|
11.2
|
and
|
WT
|
636.1
|
653.3
|
571
|
8.6
|
3.8
|
3.8
|
AMQ16-1035
|
V
|
122.0
|
127.0
|
104
|
3.2
|
209.4
|
10.4
|
AMQ16-1045
|
WT
|
774.6
|
781.3
|
658
|
3.3
|
5.4
|
5.4
|
and
|
WT
|
845.0
|
870.0
|
725
|
16.1
|
5.5
|
5.5
|
including
|
WT
|
866.0
|
870.0
|
732
|
3.5
|
13.1
|
13.1
|
* Holes at the Whale Tail deposit use a capping factor of 80
g/t gold. Holes at the IVR deposit (including the V Zone) use
a capping factor of 60 g/t gold.
[Amaruq Project - Local Geology Map]
[Amaruq Project - Composite Longitudinal Section]
Recent exploration drilling in the Whale Tail deposit has probed
below the central part of the deposit and its east-plunging ore
shoot (which is interpreted as a sudden inflection in the dip of
the lenses of mineralization). The highlight of the
exploration work at Amaruq in the third quarter of 2016 is the
discovery of a second, deeper inflection in the Whale Tail
mineralization and the intersection of significant gold grades and
widths up to 190 metres below previous reported
intersections. To date, the Whale Tail deposit has been
defined over at least 2.2 kilometres of strike length and extends
from surface to 732 metres depth; it remains open at depth and
along strike.
Several holes have intersected strong gold mineralization below
the current Whale Tail mineral resources. Hole AMQ16-966
intersected 11.7 g/t gold over 5.9 metres at 535 metres depth and
8.2 g/t gold over 7.6 metres at 607 metres depth. Nearby,
hole AMQ16-1031 intersected 11.2 g/t gold over 5.1 metres at 536
metres depth and 3.8 g/t gold over 8.6 metres at 571 metres
depth. The intercepts from these two holes lie above and
below a possible second inflection, approximately 300 metres
below the first inflection. Approximately 280 metres to the
west, hole AMQ16-1045 intersected the deepest mineralization in the
Whale Tail deposit to date: 5.4 g/t gold over 3.3 metres at 658
metres depth and 5.5 g/t gold over 16.1 metres at 725 metres depth,
including 13.1 g/t gold over 3.5 metres at 732 metres depth.
The lower intercept extends the deposit by approximately 190 metres
below previous Whale Tail intercepts, and is approximately 350
metres below the current Whale Tail inferred mineral resources
outline. This deep exploration program is expanding the
underground potential of the Whale Tail deposit, opening up new
depths for future targets.
The V Zone could potentially represent a second source of open
pit ore at the Amaruq project (see the Company's news release dated
September 15, 2016). An infill
drill program in the near-surface portion of the V Zone has
confirmed high gold grades over multiple lenses. Hole
AMQ16-994 yielded 14.6 g/t gold over 3.9 metres at 17 metres depth
in the main V Zone lens. Approximately 770 metres to the
northeast, hole AMQ16-1028 had two intersections in the upper lens
of V Zone, yielding 22.5 g/t gold over 3.9 metres at 43 metres
depth and 6.1 g/t gold over 7.4 metres at 74 metres depth.
Other high-grade intervals encountered in holes AMQ16-1007 and
AMQ16-1035 also confirm the extension of the zone toward the
northeast, which is expected to result in an expansion of V Zone
inferred mineral resources in the year-end mineral resource
estimation.
Future Activities – 2017 Drill Program Expected to Begin in
Early February
The 2016 drilling and exploration program was completed in
mid-October, and the exploration camp is now being put on care and
maintenance until early 2017.
The Company anticipates that an updated mineral resource
estimate incorporating the balance of the 2016 drill results will
be released with the Company's year-end results in February
2017. The updated mineral resource estimate is expected to
include an initial estimate of indicated mineral resources for the
Amaruq project.
Activities should resume at the Amaruq project in mid-January
with the opening of the winter road for material hauling.
Drilling is expected to resume in early February and, in the first
half of 2017, will be focused on infilling the in-pit portion of
the IVR deposit. Construction of the 64-kilometre-long Amaruq
Exploration Access Road continues. To date, 15.7 kilometres
have been completed. Road construction is expected to be
completed in the fourth quarter of 2017.
The application to amend the Amaruq Type B exploration license
for the construction of an underground ramp/portal and the
excavation of a bulk sample submitted on March 31, 2016 is progressing well.
Approval is expected in early 2017.
Regulatory review of the Environmental Impact Statement
submitted at the end of June 2016, to
the Nunavut Impact Review Board (NIRB) and the Nunavut Water Board
(NWB) in support of the Whale Tail satellite pit project, is
ongoing. The project certificate and Type A water license are
expected at the beginning of the third quarter of 2018.
The timing of future capital expenditures on the Amaruq project
beyond 2016 and the determination of whether to build a satellite
mining operation at Amaruq are subject to approval by Agnico
Eagle's Board of Directors.
Meliadine Project – 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.
At December 31, 2015, the
Meliadine property hosted 3.4 million ounces of proven and probable
mineral reserves (14.5 million tonnes of ore grading 7.32 g/t
gold), 3.3 million ounces of measured and indicated mineral
resources (20.8 million tonnes of ore grading 4.95 g/t gold), and
3.6 million ounces of inferred mineral resources (14.7 million
tonnes of ore grading 7.51 g/t gold). In addition, there are
numerous other known gold occurrences in the 80-kilometre-long
greenstone belt that require further evaluation.
In the third quarter of 2016, approximately 937 metres of
underground development were completed. Year-to-date
development has reached 3,124 metres. A total of
approximately 4,300 metres of underground development is planned in
2016.
Internal technical studies are continuing with the goal of
optimizing the project for potential production start-up in
2020. These studies are expected to be completed by the end
of 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 third
quarter of 2016, the Mexican operations had new record quarterly
silver production of approximately 825,000 ounces.
Pinos Altos – New Shaft
Successfully Reaches Design Capacity in Q3 2016
The 100% owned Pinos Altos mine
in northern Mexico achieved
commercial production in November
2009.
The Pinos Altos mill processed
5,415 tpd in the third quarter of 2016, compared to 5,403 tpd
processed in the third quarter of 2015. During the third
quarter of 2016, approximately 98,000 tonnes of ore was
stacked on the leach pad at Pinos
Altos, compared to 49,300 tonnes in the comparable 2015
period.
Minesite costs per tonne at Pinos
Altos were $49 in the third
quarter of 2016, which is in line with the $48 in the third quarter of 2015. Although
minesite costs per tonne are similar on a year-over-year basis,
these costs are subject to variations in the proportion of heap
leach ore to milled ore and open pit ore to underground ore,
currency exchange rates and routine movements in the waste to ore
stripping ratio in the open pit mines.
For the first nine months of 2016, the Pinos Altos mill processed an average of 5,336
tpd, compared to 5,638 tpd processed in the first nine months of
2015. Mill throughput in the 2016 period was negatively
affected by clay encountered in the Cerro
Colorado underground ore and freezing weather conditions in
the first quarter of 2016. Approximately 241,400 tonnes of
ore was stacked on the Pinos Altos
leach pad during the first nine months of 2016, compared to 238,500
tonnes in the prior year period.
Minesite costs per tonne in the first nine months of 2016 were
approximately $49, compared to
$46 per tonne in the 2015
period. The difference in minesite costs per tonne was
largely attributable to lower thoughput levels and variations in
the proportion of heap leach ore to milled ore and open pit ore to
underground ore, fluctuations in the currency exchange rate and
variations in the proportion of waste to ore mined.
Payable production in the third quarter of 2016 was 48,512
ounces of gold at total cash costs per ounce on a by-product basis
of $343. This compares to
production of 47,725 ounces of gold at total cash costs per ounce
on a by-product basis of $392 in the
third quarter of 2015. Higher production in 2016 is due to
slightly higher mill throughput, grades processed and recoveries
over the prior year period. The decrease in the year over
year total cash costs per ounce is largely due to increased gold
production and silver production, higher realized silver prices and
favourable foreign exchange rates compared to the prior year
period.
In the first nine months of 2016, Pinos Altos produced 146,087 ounces of gold at
total cash costs per ounce on a by-product basis of $345. This compares to the first nine
months of 2015, when the mine produced 148,478 ounces of gold at
total cash costs per ounce on a by-product basis of $378. The lower production in the 2016
period is primarily due to slightly lower tonnes milled compared to
the 2015 period. The lower cash costs in the first nine
months of 2016 are primarily due to favourable foreign exchange
rates, increased silver production, and higher realized silver
prices compared to the prior year period.
The Pinos Altos shaft project
was completed and commissioned for hoisting in mid-June.
Adjustments to ore-waste hoisting parameters progressed through the
second half of June. Ramp up to the design capacity of 6,000
tpd was successfully completed in July, as planned. This
achievement will provide more flexibility to the underground
operations and 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.
Creston Mascota Deposit at Pinos
Altos – Exploration Continuing on Several Near-Mine
Targets
The Creston Mascota deposit at Pinos
Altos has been operating as a satellite operation to the
Pinos Altos mine since late
2010.
Approximately 506,200 tonnes of ore was stacked on the Creston
Mascota leach pad during the third quarter of 2016, compared to
approximately 434,300 tonnes stacked in the third quarter of
2015. In the 2016 period, more tonnes were stacked mainly due
to the current mining sequence compared to the same period in
2015. Minesite costs per tonne at Creston Mascota were
$14 in the third quarter of 2016, the
same as in the third quarter of 2015.
For the first nine months of 2016, approximately 1,595,400
tonnes of ore was stacked on the Creston Mascota leach pad,
compared to 1,569,800 tonnes in the prior year period. Fewer
tonnes were stacked in the 2015 period primarily due to the reasons
outlined above. For the first nine months of 2016, minesite
costs per tonne at Creston Mascota were $12, which was the same as the first nine months
of 2015.
Payable production at Creston Mascota in the third quarter of
2016 was 12,134 ounces of gold at total cash costs per ounce on a
by-product basis of $493. This
compares to 12,716 ounces of gold at total cash costs per ounce on
a by-product basis of $436 during the
third quarter of 2015. Production was lower in the 2016
period due to lower gold grades, partially offset by more tonnes
stacked compared to the 2015 period. Total cash costs per
ounce on a by-product basis were higher in the 2016 period due to
lower production, which was partially offset by favourable foreign
exchange rates compared to the 2015 period.
Payable production for the first nine months of 2016 was 36,083
ounces of gold at total cash costs per ounce on a by-product basis
of $474. This compares to
40,770 ounces of gold at total cash costs per ounce on a by-product
basis of $425 in the first nine
months of 2015. The lower production in the 2016 period was
due to lower gold grades compared to the 2015 period. The
higher costs in the 2016 period are due to lower gold production,
which was partially offset by increased silver production, higher
realized silver prices and favourable foreign exchange rates
compared to the 2015 period.
Rough earthworks for the Phase 4 heap leach pad are nearing
completion, and liner installation has commenced. Electrical
power line construction for the substation and pumping system is
also in process.
The Company continues to evaluate a number of regional
exploration opportunities in the Pinos
Altos area. 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.
During the third quarter of 2016, approximately 4,000 metres of
drilling was carried out at Madrono and approximately 1,600 metres
of drilling was completed on the Bravo zone. Results from both of these
properties are currently being compiled and evaluated.
Several new targets were also generated near Creston Mascota
(Molino, Confianza and Santa
Ana). Drill-testing of these new targets is expected
to commence in the coming months once permits are received.
La India – Record Quarterly
Gold Production
The 100% owned La India mine property in Sonora, Mexico, located approximately 70
kilometres from the Company's Pinos
Altos mine, is comprised of 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 1,366,100 tonnes of ore was stacked on the La
India leach pad during the third quarter of 2016, compared to
approximately 1,193,900 tonnes stacked in the third quarter of
2015. The mining sequence at La India in the 2016 period was
positively affected by additional ore in the North Zone areas where
waste was expected, as well as mining through un-modeled low grade
ore at the Main Zone, reducing the overall strip ratio. A
contractor supplied supplemental crushing capacity to help clear
low grade ore inventory. Minesite costs per tonne at La India
were $11 in the third quarter of
2016, the same as in the third quarter of 2015.
In the first nine months of 2016, approximately 4,296,900 tonnes
of ore was stacked on the La India leach pad, compared to
approximately 3,931,900 stacked in the first nine months of 2015.
Tonnes stacked were higher in the 2016 period due to the same
reasons outlined above. Minesite costs per tonne at La India
were $9 in the first nine months of
2016, the same as in the first nine months of 2015.
Payable production at La India in the third quarter of 2016 was
a new quarterly record of 30,779 ounces of gold at total cash costs
per ounce on a by-product basis of $400. Production in the third quarter of
2015 was 28,604 ounces of gold at total cash costs per ounce on a
by-product basis of $436.
Production in the 2016 period was positively affected by increased
tonnage stacked, partially offset by lower grades. Total cash
costs per ounce on a by-product basis in the 2016 period were
favourably affected by higher production volumes and favourable
foreign exchange rates.
For the first nine months of 2016, La India produced 86,448
ounces of gold at total cash costs per ounce on a by-product basis
of $381. This compares to
80,930 ounces of gold at total cash costs per ounce on a by-product
basis of $422 in the first nine
months of 2015. The higher production and lower costs in the
2016 period are primarily due to the reasons outlined above.
During the third quarter of 2016, mine site exploration drilling
continued. Favourable results continue to be obtained from
the Main Zone, which could have a positive impact on the year-end
mineral reserves and mineral resources at La India. Step out
drilling also commenced during the quarter at the El Realito
prospect with initial encouraging results.
El Barqueno Project - Drilling Outlines New Zones and Extends
an Existing Deposit
Agnico Eagle has a 100% interest in the El Barqueno
project. The 32,840-hectare property is in the Guachinango gold-silver mining district,
Jalisco State, Mexico,
approximately 150 kilometres west of the state capital of
Guadalajara. As of
December 31, 2015, the El Barqueno
project has 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
Pena de Oro zones. The Company last reported on
this project in a news release dated July
27, 2016. This news release summarizes the results of
exploration programs completed on the project to the end of
September 2016.
From July through September 2016,
64 holes (17,443 metres) were drilled using six drill rigs in order
to test several mineralized structures and prospects (Olmeca,
Pena Blanca, Pena de Oro,
San Diego and Angostura areas). This brings the
year-to-date total drilling to 278 holes (62,428 metres) on this
project.
Gold and silver grades of recent intercepts from the
Pena de Oro Zone and the recently
discovered Olmeca and Pena Blanca
prospects are set out in the tables below; drill hole collar
coordinates are set out in a table in the Appendix of this news
release. The drill hole collars are located on the El
Barqueno Project Local Geology Map. All intercepts reported
for the El Barqueno project show uncapped gold and silver grades
(except for capped gold grades for the Olmeca prospect) over
estimated true widths, based on a preliminary geological
interpretation that will be updated as new information becomes
available with further drilling.
Selected recent exploration drill results from the El
Barqueno project
Drill Hole
|
Zone
|
From
(metres)
|
To
(metres)
|
Depth of
midpoint
below
surface
(metres)
|
Estimated
true width
(metres)
|
Gold grade
(g/t)
(uncapped)*
|
Gold grade
(g/t)
(capped)**
|
Silver grade
(g/t)
(uncapped)
***
|
OLM16-013
|
Olmeca -Socorro
Vein
|
167.5
|
179.5
|
145
|
9.2
|
7.3
|
5.3
|
13.2
|
including
|
|
167.5
|
173.0
|
144
|
4.2
|
15.3
|
10.9
|
16.9
|
OLM16-019
|
Olmeca -Mortero
Vein
|
55.0
|
64.0
|
45
|
8.0
|
0.0
|
|
49.3
|
and
|
Olmeca Mortero
Vein
|
76.0
|
88.0
|
55
|
10.0
|
0.0
|
|
40.1
|
OLM16-022
|
Olmeca - Mortero
Vein
|
87.3
|
133.0
|
78
|
37.9
|
0.0
|
|
50.8
|
OLM16-023
|
Olmeca -Socorro
Vein
|
44.1
|
48.6
|
25
|
3.4
|
4.1
|
4.1
|
49.3
|
OLM16-026
|
Olmeca - Mortero
Vein
|
16.0
|
66.0
|
41
|
40.0
|
0.0
|
|
73.2
|
PDO16-117
|
Pena
Blanca
|
137.0
|
148.0
|
101
|
10.5
|
0.8
|
|
2.0
|
PDO16-122
|
Pena
Blanca
|
75.0
|
87.0
|
60
|
10.0
|
1.7
|
|
8.6
|
PDO16-124****
|
Pena de
Oro
|
80.0
|
82.0
|
56
|
3.6
|
5.3
|
|
25.0
|
PDO16-129
|
Pena de
Oro
|
25.0
|
39.6
|
30
|
13.7
|
5.8
|
|
5.1
|
PDO16-130
|
Pena de
Oro
|
26.7
|
30.8
|
20
|
3.7
|
2.4
|
|
2.3
|
* Cut-off grade of 0.4 g/t gold; only intervals longer than
2.8 metres estimated true width were included
** Holes at
the Olmeca – Socorro Vein prospect use a capping factor of 20 g/t
gold
*** Holes at the Olmeca – Mortero Vein prospect do not use a
capping factor for silver
****Check Assays
Pending
[El Barqueno Project - Local Geology Map]
Olmeca Prospect Structure
A total of 47 drill holes (14,008 metres) have been completed in
the Olmeca prospect area using four diamond drill rigs on three
separate veins. There are currently six drill rigs on the
prospect.
The most intensely drilled vein, the Socorro Vein, has been
defined as a 1,000-metre long, east-northeast-striking, and steeply
north-dipping, gold-bearing structure that includes high-grade gold
values. The mineralization is found in a high-strain zone
including hematite and specularite-rich gouge material at the
contact of a diorite intrusive with an andesitic tuff unit.
Initial intercepts from the Socorro Vein were reported in a Company
news release dated July 27,
2016. Recent results from this vein include hole OLM16-013
that yielded 5.3 g/t gold and 13.2 g/t silver over 9.2 metres at
145 metres depth (including 10.9 g/t gold and 16.9 g/t silver over
4.2 metres), and hole OLM16-023 that yielded 4.1 g/t gold and 49.3
g/t silver over 3.4 metres at 25 metres depth. The Socorro
Vein remains open to the east, to the west and at depth.
The Mortero Vein, located some 2.0 kilometres west of Socorro,
has been delineated over a 300-metre strike length and to a depth
of approximately 300 metres. Encouraging silver values have
been reported in hole OLM16-022, which yielded 50.8 g/t silver over
37.9 metres at 78 metres depth, and in hole OLM16-026, which
reported 73.2 g/t silver over 40.0 metres at 41 metres depth.
Gold values have generally been low in this part of the
system. The Mortero Vein is open in all directions with
drilling continuing at depth and along strike.
It is unclear whether or not the Socorro and Mortero veins form part of the same
mineralized structure. It is possible that the high silver
values found at shallow depths in the Mortero Vein represent the
upper part of a mineralized system with gold values potentially
increasing with depth.
Five additional subparallel auriferous structures have been
denoted within the Olmeca prospect area through prospecting,
geological mapping as well as soil and rock geochemical surveys.
Drilling has just commenced on one of them - Tierra Blanca.
Pena de Oro and Pena Blanca Zones
Additional drilling totaling 3,584 metres in 20 holes has been
completed to test the northeastern extension of the Pena de Oro -
Pena Blanca area. This
drilling has extended the mineralized Pena de Oro
structure an additional 250 metres to the northeast and the zone
remains open in this direction as well as at depth. The
recent drilling has also defined the new Pena Blanca structures comprising a
500-metre-long east-trending structure and a separate
north-northwest-trending structure that appears to link the
Pena Blanca and Pena de Oro
structures into one mineralized system.
Notable recent intercepts in the Pena de Oro Zone include hole PDO16-124 that
intersected 5.3 g/t gold and 25.0 g/t silver over 3.6 metres at 56
metres depth, and hole PDO16-129 that yielded 5.8 g/t gold and 5.1
g/t silver over 13.7 metres at 30 metres depth. In the Pena
Blanca Zone, hole PDO16-122 yielded 1.7 g/t gold and 8.6 g/t silver
over 10.0 metres at a depth of 60 metres, and hole PDO16-117
reported 0.8 g/t gold and 2.0 g/t silver over 10.5 metres at a
depth of 101 metres. Additional drilling is required to
better define the geometry of these mineralized structures and the
potential for other parallel and intersecting structures in the
area.
Future Activities – Updated Mineral Resource Estimate Expected
with 2016 Year-end Results
Another 10,000 metres of drilling is expected to be completed by
the end of 2016 at the El Barqueno project, primarily in the Olmeca
area as well as the Tecolote and Tortuga areas. Exploration
expenditures in 2016 are expected to total approximately
$16 million. Results of the
drilling will be used to update the mineral resource estimate for
the El Barqueno project as of year-end 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
mine.
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", "net debt" 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. Minesite
costs per tonne are 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 processed. As the total cash costs
per ounce of gold produced can be affected by fluctuations in
by‑product metal prices and exchange rates, management believes
that the minesite costs per tonne provides additional information
regarding the performance of mining operations, eliminating the
impact of varying production levels. Management also uses
this measure to determine the economic viability of mining
blocks. As each mining block is evaluated based on the net
realizable value of each tonne mined, in order to be economically
viable the estimated revenue on a per tonne basis must be in excess
of the minesite costs per tonne. Management is aware that
this per tonne measure of performance can be impacted by
fluctuations in processing levels and compensates for this inherent
limitation by using this measure in conjunction with production
costs prepared in accordance with IFRS. Net debt is
calculated by adjusting the total of the current portion of
long-term debt and non-current long-term debt as recorded on the
consolidated balance sheet for deferred financing costs, cash and
cash equivalents and short-term investments. Management uses
net debt to determine the overall debt position and to evaluate
future debt capacity of the Company. Adjusted net income is
calculated by adjusting the basic net income per share for 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. 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
October 26, 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",
"future", "plan", "possible", "potential", "will" and similar
expressions are intended to identify forward-looking
statements. Such statements include, without limitation: the
Company's forward-looking production guidance, including estimated
ore grades, project timelines, drilling results, metal production,
life of mine estimates, 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; statements regarding the
Company's ability to obtain the necessary permits and
authorizations in connection with its exploration, development and
mining operations and the anticipated timing thereof; and
statements regarding anticipated future exploration; statements
concerning litigation involving the Partnership; 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, MD&A and Form 40-F.
Property/Project
name
and location
|
Date of most
recent
Technical Report (NI
43-101) filed on
SEDAR
|
LaRonde, Bousquet
&
Ellison, Quebec, Canada
|
March 23,
2005
|
Canadian Malartic,
Quebec, Canada
|
June 16,
2014
|
Kittila, Kuotko
and
Kylmakangas, Finland
|
March 4,
2010
|
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
|
Appendix: Selected drill collar coordinates
Sisar Zone exploration drill collar coordinates of selected
holes
|
Drill collar
coordinates*
|
Drill hole
ID
|
UTM North
|
UTM East
|
Elevation
(metres
above sea
level)
|
Azimuth
|
Dip
(degrees)
|
Length
(metres)
|
RIE16-602
|
7538900
|
2558637
|
-614
|
090
|
-17
|
351
|
RIE16-608
|
7539000
|
2558636
|
-629
|
090
|
-35
|
417
|
RIE16-609
|
7539000
|
2558636
|
-628
|
094
|
-17
|
348
|
RIE16-612
|
7539000
|
2558636
|
-629
|
079
|
-31
|
386
|
ROD16-702B
|
7538098
|
2558628
|
-499
|
089
|
-66
|
671
|
ROD16-702D
|
7538098
|
2558628
|
-499
|
089
|
-66
|
797
|
* Finnish Coordinate System KKJ Zone 2
Barsele project exploration drill collar coordinates of
selected holes
|
Drill collar
coordinates*
|
Drill hole
ID
|
UTM North
|
UTM East
|
Elevation
(metres
above sea
level)
|
Azimuth
|
Dip
(degrees)
|
Length
(metres)
|
AVA16-005
|
7215584
|
617494
|
313
|
222
|
-47
|
602
|
AVA16-007
|
7215585
|
617494
|
313
|
223
|
-62
|
756
|
CNT16-001
|
7214874
|
618126
|
336
|
040
|
-50
|
523
|
CNT16-002
|
7214874
|
618126
|
336
|
040
|
-63
|
676
|
CNT16-006
|
7214988
|
618600
|
314
|
039
|
-66
|
276
|
CNT16-012
|
7214999
|
618639
|
305
|
211
|
-61
|
151
|
* Coordinate System Sweref 99
Amaruq project exploration drill collar coordinates of
selected holes
|
Drill collar
coordinates*
|
Drill hole
ID
|
UTM North
|
UTM East
|
Elevation
(metres
above sea
level)
|
Azimuth
|
Dip
(degrees)
|
Length
(metres)
|
AMQ16-823
|
7256217
|
606892
|
159
|
143
|
-70
|
198
|
AMQ16-966
|
7255106
|
606755
|
158
|
343
|
-62
|
963
|
AMQ16-976
|
7256269
|
606828
|
162
|
323
|
-63
|
96
|
AMQ16-994
|
7256226
|
606605
|
160
|
325
|
-59
|
54
|
AMQ16-1007
|
7256385
|
607454
|
161
|
325
|
-55
|
326
|
AMQ16-1028
|
7256375
|
607273
|
156
|
324
|
-56
|
183
|
AMQ16-1031
|
7255144
|
606757
|
157
|
332
|
-62
|
873
|
AMQ16-1035
|
7256459
|
607345
|
157
|
325
|
-56
|
240
|
AMQ16-1045
|
7255024
|
606693
|
161
|
327
|
-61
|
974
|
* Coordinate System UTM Nad 83 zone 14
El Barqueno project exploration drill hole collar
coordinates
|
Drill Hole Collar
Coordinates*
|
Drill Hole
ID
|
UTM North
|
UTM East
|
Elevation
(metres
above sea
level)
|
Azimuth
|
Dip
(degrees)
|
Length
(metres)
|
(degrees)
|
OLM16-013
|
560672
|
2280469
|
1,383
|
155
|
-75
|
397
|
OLM16-019
|
558309
|
2279756
|
1,617
|
000
|
-50
|
172
|
OLM16-022
|
558359
|
2279716
|
1,585
|
000
|
-50
|
146
|
OLM16-023
|
561325
|
2280560
|
1,372
|
155
|
-50
|
165
|
OLM16-026
|
558407
|
2279757
|
1,549
|
000
|
-55
|
454
|
PDO16-117
|
560401
|
2282610
|
1,405
|
165
|
-45
|
384
|
PDO16-122
|
560342
|
2282483
|
1,386
|
165
|
-45
|
156
|
PDO16-124
|
560526
|
2282320
|
1,360
|
335
|
-50
|
128
|
PDO16-129
|
560425
|
2282343
|
1,346
|
345
|
-55
|
116
|
PDO16-130
|
560506
|
2282362
|
1,355
|
345
|
-55
|
201
|
* Coordinate System UTM WGS84 13N Zone
AGNICO EAGLE MINES
LIMITED
|
SUMMARY OF
OPERATIONS KEY PERFORMANCE INDICATORS
|
(thousands of
United States dollars, except where noted)
|
(Unaudited)
|
|
|
|
|
|
Three Months
Ended September
30,
|
|
Nine Months
Ended September
30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Operating
margin(i)by mine:
|
|
|
|
|
|
|
|
Northern
Business
|
|
|
|
|
|
|
|
|
LaRonde
mine
|
$
|
61,587
|
|
$
|
32,443
|
|
$
|
164,626
|
|
$
|
95,256
|
|
Lapa mine
|
10,181
|
|
13,813
|
|
35,424
|
|
39,852
|
|
Goldex
mine
|
27,834
|
|
20,681
|
|
72,914
|
|
55,459
|
|
Meadowbank
mine
|
46,190
|
|
55,493
|
|
114,253
|
|
151,670
|
|
Canadian Malartic
mine(ii)
|
55,981
|
|
44,293
|
|
147,855
|
|
123,748
|
|
Kittila
mine
|
36,714
|
|
21,528
|
|
82,879
|
|
65,088
|
Southern
Business
|
|
|
|
|
|
|
|
|
Pinos Altos
mine
|
60,699
|
|
37,217
|
|
144,911
|
|
116,407
|
|
Creston Mascota
deposit at Pinos Altos
|
10,448
|
|
8,898
|
|
29,156
|
|
30,275
|
|
La India
mine
|
23,858
|
|
19,845
|
|
70,224
|
|
59,269
|
Total operating
margin(i)
|
333,492
|
|
254,211
|
|
862,242
|
|
737,024
|
Amortization of
property, plant and mine development
|
161,472
|
|
157,968
|
|
461,761
|
|
451,480
|
Exploration,
corporate and other
|
84,079
|
|
110,258
|
|
247,433
|
|
221,937
|
Income (loss) before
income and mining taxes
|
87,941
|
|
(14,015)
|
|
153,048
|
|
63,607
|
Income and mining
taxes expense (recovery)
|
38,549
|
|
(15,309)
|
|
56,878
|
|
23,487
|
Net income for the
period
|
$
|
49,392
|
|
$
|
1,294
|
|
$
|
96,170
|
|
$
|
40,120
|
Net income per
share — basic (US$)
|
$
|
0.22
|
|
$
|
0.01
|
|
$
|
0.43
|
|
$
|
0.19
|
Net income per
share — diluted (US$)
|
$
|
0.22
|
|
$
|
0.01
|
|
$
|
0.43
|
|
$
|
0.19
|
Cash
flows:
|
|
|
|
|
|
|
|
Cash provided by
operating activities
|
$
|
282,856
|
|
$
|
143,687
|
|
$
|
658,016
|
|
$
|
475,491
|
Cash used in
investing activities
|
$
|
(142,701)
|
|
$
|
(100,365)
|
|
$
|
(372,947)
|
|
$
|
(258,733)
|
Cash provided by
(used in) financing activities
|
$
|
11,840
|
|
$
|
7,396
|
|
$
|
209,746
|
|
$
|
(180,300)
|
Realized prices
(US$):
|
|
|
|
|
|
|
|
Gold
(per ounce)
|
$
|
1,332
|
|
$
|
1,119
|
|
$
|
1,266
|
|
$
|
1,173
|
Silver
(per ounce)
|
$
|
19.52
|
|
$
|
14.93
|
|
$
|
17.45
|
|
$
|
16.04
|
Zinc
(per tonne)
|
$
|
2,170
|
|
$
|
1,909
|
|
$
|
1,945
|
|
$
|
1,973
|
Copper
(per tonne)
|
$
|
4,819
|
|
$
|
4,538
|
|
$
|
4,613
|
|
$
|
5,193
|
Payable
production(iii):
|
|
|
|
|
|
|
|
Gold
(ounces):
|
|
|
|
|
|
|
|
|
Northern
Business
|
|
|
|
|
|
|
|
|
|
LaRonde
mine
|
71,784
|
|
71,860
|
|
222,280
|
|
194,760
|
|
|
Lapa mine
|
16,242
|
|
25,668
|
|
59,865
|
|
71,038
|
|
|
Goldex
mine
|
32,742
|
|
32,068
|
|
96,534
|
|
87,780
|
|
|
Meadowbank
mine
|
72,731
|
|
99,425
|
|
217,444
|
|
279,224
|
|
|
Canadian Malartic
mine(ii)
|
76,428
|
|
76,603
|
|
222,543
|
|
212,937
|
|
|
Kittila
mine
|
54,835
|
|
46,455
|
|
149,171
|
|
133,095
|
|
Southern
Business
|
|
|
|
|
|
|
|
|
|
Pinos Altos
mine
|
48,512
|
|
47,725
|
|
146,087
|
|
148,478
|
|
|
Creston Mascota
deposit at Pinos
Altos
|
12,134
|
|
12,716
|
|
36,083
|
|
40,770
|
|
|
La India
mine
|
30,779
|
|
28,604
|
|
86,448
|
|
80,930
|
Total gold
(ounces)
|
416,187
|
|
441,124
|
|
1,236,455
|
|
1,249,012
|
Silver (thousands of
ounces):
|
|
|
|
|
|
|
|
|
Northern
Business
|
|
|
|
|
|
|
|
|
|
LaRonde
mine
|
203
|
|
221
|
|
716
|
|
619
|
|
|
Lapa mine
|
1
|
|
1
|
|
5
|
|
3
|
|
|
Goldex
mine
|
—
|
|
—
|
|
1
|
|
—
|
|
|
Meadowbank
mine
|
59
|
|
39
|
|
168
|
|
191
|
|
|
Canadian Malartic
mine(ii)
|
96
|
|
76
|
|
260
|
|
217
|
|
|
Kittila
mine
|
3
|
|
3
|
|
8
|
|
8
|
|
Southern
Business
|
|
|
|
|
|
|
|
|
|
Pinos Altos
mine
|
644
|
|
606
|
|
1,863
|
|
1,744
|
|
|
Creston Mascota
deposit at Pinos Altos
|
55
|
|
40
|
|
153
|
|
109
|
|
|
La India
mine
|
126
|
|
67
|
|
348
|
|
208
|
Total silver
(thousands of ounces)
|
1,187
|
|
1,053
|
|
3,522
|
|
3,099
|
Zinc
(tonnes)
|
1,010
|
|
739
|
|
2,942
|
|
2,502
|
Copper
(tonnes)
|
1,177
|
|
1,306
|
|
3,472
|
|
3,606
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payable metal
sold:
|
|
|
|
|
|
|
|
Gold
(ounces):
|
|
|
|
|
|
|
|
|
Northern
Business
|
|
|
|
|
|
|
|
|
|
LaRonde
mine
|
78,096
|
|
69,143
|
|
225,358
|
|
189,462
|
|
|
Lapa mine
|
16,851
|
|
23,331
|
|
59,598
|
|
67,599
|
|
|
Goldex
mine
|
33,275
|
|
33,004
|
|
95,835
|
|
88,217
|
|
|
Meadowbank
mine
|
78,710
|
|
100,440
|
|
220,320
|
|
282,090
|
|
|
Canadian Malartic
mine(ii)(iv)
|
72,950
|
|
72,651
|
|
210,294
|
|
199,433
|
|
|
Kittila
mine
|
55,710
|
|
47,070
|
|
151,015
|
|
135,436
|
|
Southern
Business
|
|
|
|
|
|
|
|
|
|
Pinos Altos
mine
|
60,541
|
|
49,327
|
|
156,052
|
|
145,162
|
|
|
Creston Mascota
deposit at Pinos
Altos
|
12,655
|
|
12,911
|
|
36,617
|
|
40,847
|
|
|
La India
mine
|
26,050
|
|
28,983
|
|
79,963
|
|
79,684
|
Total gold
(ounces)
|
434,838
|
|
436,860
|
|
1,235,052
|
|
1,227,930
|
Silver (thousands of
ounces):
|
|
|
|
|
|
|
|
|
Northern
Business
|
|
|
|
|
|
|
|
|
|
LaRonde
mine
|
225
|
|
220
|
|
724
|
|
649
|
|
|
Lapa mine
|
—
|
|
—
|
|
1
|
|
—
|
|
|
Goldex
mine
|
1
|
|
—
|
|
1
|
|
—
|
|
|
Meadowbank
mine
|
53
|
|
36
|
|
162
|
|
193
|
|
|
Canadian Malartic
mine(ii)(iv)
|
87
|
|
53
|
|
236
|
|
186
|
|
|
Kittila
mine
|
3
|
|
3
|
|
8
|
|
7
|
|
Southern
Business
|
|
|
|
|
|
|
|
|
|
Pinos Altos
mine
|
812
|
|
620
|
|
1,989
|
|
1,682
|
|
|
Creston Mascota
deposit at Pinos Altos
|
38
|
|
39
|
|
134
|
|
107
|
|
|
La India
mine
|
91
|
|
66
|
|
301
|
|
205
|
Total silver
(thousands of ounces):
|
1,310
|
|
1,037
|
|
3,556
|
|
3,029
|
Zinc
(tonnes)
|
1,374
|
|
650
|
|
2,652
|
|
2,650
|
Copper
(tonnes)
|
1,201
|
|
1,302
|
|
3,521
|
|
3,605
|
|
|
|
|
|
|
|
|
Total cash costs
per ounce of gold produced - co-product basis
(US$)(v):
|
|
|
|
|
|
|
|
Northern
Business
|
|
|
|
|
|
|
|
|
LaRonde
mine
|
$
|
718
|
|
$
|
701
|
|
$
|
698
|
|
$
|
795
|
|
Lapa mine
|
743
|
|
522
|
|
685
|
|
582
|
|
Goldex
mine
|
484
|
|
479
|
|
501
|
|
546
|
|
Meadowbank
mine
|
761
|
|
604
|
|
787
|
|
657
|
|
Canadian Malartic
mine(ii)
|
637
|
|
559
|
|
617
|
|
609
|
|
Kittila
mine
|
664
|
|
640
|
|
713
|
|
697
|
Southern
Business
|
|
|
|
|
|
|
|
|
Pinos Altos
mine
|
612
|
|
578
|
|
575
|
|
565
|
|
Creston Mascota
deposit at Pinos Altos
|
583
|
|
478
|
|
551
|
|
467
|
|
La India
mine
|
482
|
|
470
|
|
453
|
|
462
|
Weighted average
total cash costs per ounce of gold produced
|
$
|
652
|
|
$
|
587
|
|
$
|
649
|
|
$
|
633
|
|
|
|
|
|
|
|
|
Total cash costs
per ounce of gold produced - by-product basis
(US$)(v):
|
|
|
|
|
|
|
|
Northern
Business
|
|
|
|
|
|
|
|
|
LaRonde
mine
|
$
|
541
|
|
$
|
558
|
|
$
|
537
|
|
$
|
620
|
|
Lapa mine
|
743
|
|
522
|
|
684
|
|
581
|
|
Goldex
mine
|
483
|
|
479
|
|
501
|
|
546
|
|
Meadowbank
mine
|
746
|
|
598
|
|
774
|
|
646
|
|
Canadian Malartic
mine(ii)
|
613
|
|
544
|
|
597
|
|
593
|
|
Kittila
mine
|
663
|
|
639
|
|
712
|
|
696
|
Southern
Business
|
|
|
|
|
|
|
|
|
Pinos Altos
mine
|
343
|
|
392
|
|
345
|
|
378
|
|
Creston Mascota
deposit at Pinos Altos
|
493
|
|
436
|
|
474
|
|
425
|
|
La India
mine
|
400
|
|
436
|
|
381
|
|
422
|
Weighted average
total cash costs per ounce of gold produced
|
$
|
575
|
|
$
|
536
|
|
$
|
580
|
|
$
|
574
|
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
|
|
As
at
|
|
September
30,
|
|
December
31,
|
|
2016
|
|
2015
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
|
618,561
|
|
$
|
124,150
|
|
Short-term
investments
|
8,802
|
|
7,444
|
|
Restricted
cash
|
452
|
|
685
|
|
Trade
receivables
|
7,899
|
|
7,714
|
|
Inventories
|
441,487
|
|
461,976
|
|
Income taxes
recoverable
|
4,368
|
|
817
|
|
Available-for-sale
securities
|
103,421
|
|
31,863
|
|
Fair value of
derivative financial instruments
|
857
|
|
87
|
|
Other current
assets
|
168,500
|
|
194,689
|
Total current
assets
|
1,354,347
|
|
829,425
|
Non-current
assets:
|
|
|
|
|
Restricted
cash
|
782
|
|
741
|
|
Goodwill
|
696,809
|
|
696,809
|
|
Property, plant and
mine development
|
5,045,798
|
|
5,088,967
|
|
Other
assets
|
75,143
|
|
67,238
|
Total
assets
|
$
|
7,172,879
|
|
$
|
6,683,180
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts payable and
accrued liabilities
|
$
|
286,448
|
|
$
|
243,786
|
|
Reclamation
provision
|
12,143
|
|
6,245
|
|
Interest
payable
|
26,127
|
|
14,526
|
|
Income taxes
payable
|
20,052
|
|
14,852
|
|
Finance lease
obligations
|
6,415
|
|
9,589
|
|
Current portion of
long-term debt
|
130,248
|
|
14,451
|
|
Fair value of
derivative financial instruments
|
1,104
|
|
8,073
|
Total current
liabilities
|
482,537
|
|
311,522
|
Non-current
liabilities:
|
|
|
|
|
Long-term
debt
|
1,073,091
|
|
1,118,187
|
|
Reclamation
provision
|
314,842
|
|
276,299
|
|
Deferred income and
mining tax liabilities
|
811,004
|
|
802,114
|
|
Other
liabilities
|
32,941
|
|
34,038
|
Total
liabilities
|
2,714,415
|
|
2,542,160
|
EQUITY
|
|
|
|
Common
shares:
|
|
|
|
|
Outstanding —
225,251,715 common shares issued, less 610,257 shares
held in trust
|
4,976,257
|
|
4,707,940
|
Stock
options
|
176,035
|
|
216,232
|
Contributed
surplus
|
37,254
|
|
37,254
|
Deficit
|
(785,342)
|
|
(823,734)
|
Accumulated other
comprehensive income
|
54,260
|
|
3,328
|
Total
equity
|
4,458,464
|
|
4,141,020
|
Total liabilities and
equity
|
$
|
7,172,879
|
|
$
|
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
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
REVENUES
|
|
|
|
|
|
|
|
Revenues from mining
operations
|
$
|
610,863
|
|
$
|
508,795
|
|
$
|
1,639,022
|
|
$
|
1,502,500
|
|
|
|
|
|
|
|
|
COSTS, EXPENSES
AND OTHER INCOME
|
|
|
|
|
|
|
|
Production(i)
|
277,371
|
|
254,584
|
|
776,780
|
|
765,476
|
Exploration and
corporate development
|
44,647
|
|
37,085
|
|
111,132
|
|
84,352
|
Amortization of
property, plant and mine development
|
161,472
|
|
157,968
|
|
461,761
|
|
451,480
|
General and
administrative
|
21,474
|
|
25,675
|
|
70,634
|
|
74,468
|
Impairment loss on
available-for-sale securities
|
—
|
|
7,076
|
|
—
|
|
8,106
|
Finance
costs
|
19,654
|
|
19,674
|
|
54,846
|
|
57,341
|
Loss (gain) on
derivative financial instruments
|
832
|
|
16,550
|
|
(9,459)
|
|
16,290
|
Gain on sale of
available-for-sale securities
|
(1,582)
|
|
(875)
|
|
(3,500)
|
|
(24,599)
|
Environmental
remediation
|
(278)
|
|
49
|
|
5,655
|
|
337
|
Foreign currency
translation loss (gain)
|
2,531
|
|
902
|
|
14,818
|
|
(6,009)
|
Other (income)
expenses
|
(3,199)
|
|
4,122
|
|
3,307
|
|
11,651
|
Income (loss) before
income and mining taxes
|
87,941
|
|
(14,015)
|
|
153,048
|
|
63,607
|
Income and mining
taxes expense (recovery)
|
38,549
|
|
(15,309)
|
|
56,878
|
|
23,487
|
Net income for the
period
|
$
|
49,392
|
|
$
|
1,294
|
|
$
|
96,170
|
|
$
|
40,120
|
|
|
|
|
|
|
|
|
Net income per share
- basic
|
$
|
0.22
|
|
$
|
0.01
|
|
$
|
0.43
|
|
$
|
0.19
|
Net income per share
- diluted
|
$
|
0.22
|
|
$
|
0.01
|
|
$
|
0.43
|
|
$
|
0.19
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding
(in thousands):
|
|
|
|
|
|
|
|
Basic
|
224,306
|
|
217,182
|
|
222,053
|
|
215,728
|
Diluted
|
227,654
|
|
217,712
|
|
225,073
|
|
216,627
|
|
|
|
|
|
|
|
|
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
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
OPERATING
ACTIVITIES
|
|
|
|
|
|
|
|
Net income for the
period
|
$
|
49,392
|
|
$
|
1,294
|
|
$
|
96,170
|
|
$
|
40,120
|
Add (deduct) items
not affecting cash:
|
|
|
|
|
|
|
|
|
Amortization of
property, plant and mine
development
|
161,472
|
|
157,968
|
|
461,761
|
|
451,480
|
|
Deferred income and
mining taxes
|
11,252
|
|
37,783
|
|
(2,069)
|
|
43,403
|
|
Gain on sale of
available-for-sale securities
|
(1,582)
|
|
(875)
|
|
(3,500)
|
|
(24,599)
|
|
Stock-based
compensation
|
7,427
|
|
8,928
|
|
25,073
|
|
28,777
|
|
Impairment loss on
available-for-sale securities
|
-
|
|
7,076
|
|
-
|
|
8,106
|
|
Foreign currency
translation loss (gain)
|
2,531
|
|
902
|
|
14,818
|
|
(6,009)
|
|
Other
|
3,531
|
|
4,874
|
|
3,599
|
|
7,007
|
Adjustment for
settlement of reclamation provision
|
(297)
|
|
(143)
|
|
(1,931)
|
|
(852)
|
Changes in non-cash
working capital balances:
|
|
|
|
|
|
|
|
|
Trade
receivables
|
(2,456)
|
|
55,296
|
|
(185)
|
|
53,834
|
|
Income
taxes
|
11,458
|
|
(55,628)
|
|
1,649
|
|
(66,648)
|
|
Inventories
|
(11,138)
|
|
(71,510)
|
|
20,367
|
|
(49,475)
|
|
Other current
assets
|
10,282
|
|
(25,761)
|
|
20,426
|
|
(48,784)
|
|
Accounts payable and
accrued liabilities
|
29,339
|
|
15,959
|
|
11,542
|
|
31,812
|
|
Interest
payable
|
11,645
|
|
7,524
|
|
10,296
|
|
7,319
|
Cash provided by
operating activities
|
282,856
|
|
143,687
|
|
658,016
|
|
475,491
|
|
|
|
|
|
|
|
|
INVESTING
ACTIVITIES
|
|
|
|
|
|
|
|
Additions to
property, plant and mine development
|
(125,526)
|
|
(122,402)
|
|
(349,483)
|
|
(316,800)
|
Acquisitions, net of
cash and cash equivalents acquired
|
(6,935)
|
|
-
|
|
(12,434)
|
|
(12,983)
|
Net purchases of
short-term investments
|
(3,053)
|
|
(475)
|
|
(1,358)
|
|
(1,523)
|
Net proceeds from
sale of available-for-sale securities and other
investments
|
2,183
|
|
4,724
|
|
9,461
|
|
61,035
|
Purchase of
available-for-sale securities and other investments
|
(9,594)
|
|
-
|
|
(19,366)
|
|
(19,433)
|
Decrease in
restricted cash
|
224
|
|
17,788
|
|
233
|
|
30,971
|
Cash used in
investing activities
|
(142,701)
|
|
(100,365)
|
|
(372,947)
|
|
(258,733)
|
|
|
|
|
|
|
|
|
FINANCING
ACTIVITIES
|
|
|
|
|
|
|
|
Dividends
paid
|
(20,896)
|
|
(15,374)
|
|
(51,094)
|
|
(44,572)
|
Repayment of finance
lease obligations
|
(2,545)
|
|
(4,091)
|
|
(7,629)
|
|
(17,535)
|
Proceeds from
long-term debt
|
-
|
|
250,000
|
|
125,000
|
|
325,000
|
Repayment of
long-term debt
|
-
|
|
(275,000)
|
|
(405,374)
|
|
(501,086)
|
Notes
issuance
|
-
|
|
50,000
|
|
350,000
|
|
50,000
|
Long-term debt
financing
|
(326)
|
|
(1,493)
|
|
(2,495)
|
|
(1,493)
|
Repurchase of common
shares for stock-based compensation plans
|
(15)
|
|
-
|
|
(15,542)
|
|
(11,899)
|
Proceeds on exercise
of stock options
|
33,124
|
|
1,052
|
|
190,551
|
|
14,010
|
Common shares
issued
|
2,498
|
|
2,302
|
|
26,329
|
|
7,275
|
Cash provided by
(used in) financing activities
|
11,840
|
|
7,396
|
|
209,746
|
|
(180,300)
|
Effect of exchange
rate changes on cash and cash equivalents
|
(1,336)
|
|
(7,085)
|
|
(404)
|
|
(12,031)
|
Net increase in
cash and cash equivalents during the period
|
150,659
|
|
43,633
|
|
494,411
|
|
24,427
|
Cash and cash
equivalents, beginning of period
|
467,902
|
|
158,331
|
|
124,150
|
|
177,537
|
Cash and cash
equivalents, end of period
|
$
|
618,561
|
|
$
|
201,964
|
|
$
|
618,561
|
|
$
|
201,964
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL CASH
FLOW INFORMATION
|
|
|
|
|
|
|
|
Interest
paid
|
$
|
6,628
|
|
$
|
10,358
|
|
$
|
40,048
|
|
$
|
46,256
|
Income and mining
taxes paid
|
$
|
17,738
|
|
$
|
9,258
|
|
$
|
84,503
|
|
$
|
47,356
|
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
|
|
Nine Months
Ended
|
|
Nine Months
Ended
|
|
|
September 30,
2016
|
|
September 30,
2015
|
|
September 30,
2016
|
|
September 30,
2015
|
(thousands of
United States dollars)
|
|
|
|
|
|
|
|
|
LaRonde
mine
|
|
$
|
49,086
|
|
$
|
49,243
|
|
$
|
135,440
|
|
$
|
140,242
|
Lapa mine
|
|
12,166
|
|
12,279
|
|
39,741
|
|
39,919
|
Goldex
mine
|
|
16,357
|
|
16,120
|
|
48,026
|
|
47,900
|
Meadowbank
mine
|
|
59,746
|
|
57,404
|
|
166,717
|
|
181,387
|
Canadian Malartic
mine(i)
|
|
47,917
|
|
42,008
|
|
136,705
|
|
125,380
|
Kittila
mine
|
|
37,437
|
|
31,116
|
|
107,519
|
|
93,892
|
Pinos Altos
mine
|
|
35,457
|
|
26,845
|
|
88,107
|
|
80,824
|
Creston Mascota
deposit at Pinos Altos
|
|
7,014
|
|
6,101
|
|
19,418
|
|
19,208
|
La India
mine
|
|
12,191
|
|
13,468
|
|
35,107
|
|
36,724
|
Production costs per
the interim condensed consolidated statements
of income
|
|
$
|
277,371
|
|
$
|
254,584
|
|
$
|
776,780
|
|
$
|
765,476
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
Nine Months
Ended
|
|
Nine Months
Ended
|
(thousands of
United States dollars, except as noted)
|
|
September 30,
2016
|
|
September 30,
2015
|
|
September 30,
2016
|
|
September 30,
2015
|
Production
costs
|
|
$
|
49,086
|
|
$
|
49,243
|
|
$
|
135,440
|
|
$
|
140,242
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Inventory and other
adjustments(iv)
|
|
2,466
|
|
1,106
|
|
19,743
|
|
14,570
|
Cash operating costs
(co-product basis)
|
|
$
|
51,552
|
|
$
|
50,349
|
|
$
|
155,183
|
|
$
|
154,812
|
|
By-product metal
revenues
|
|
(12,718)
|
|
(10,291)
|
|
(35,733)
|
|
(34,125)
|
Cash operating costs
(by-product basis)
|
|
$
|
38,834
|
|
$
|
40,058
|
|
$
|
119,450
|
|
$
|
120,687
|
Gold production
(ounces)
|
|
71,784
|
|
71,860
|
|
222,280
|
|
194,760
|
Total cash costs per
ounce of gold produced ($
per ounce)(ii):
|
|
|
|
|
|
|
|
|
|
Co-product
basis
|
|
$
|
718
|
|
$
|
701
|
|
$
|
698
|
|
$
|
795
|
|
By-product
basis
|
|
$
|
541
|
|
$
|
558
|
|
$
|
537
|
|
$
|
620
|
|
|
|
|
|
|
|
|
|
LaRonde Mine -
Minesite Costs per Tonne(iii)
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
Nine Months
Ended
|
(thousands of
United States dollars, except as noted)
|
|
September 30,
2016
|
|
September 30,
2015
|
|
September 30,
2016
|
|
September 30,
2015
|
Production
costs
|
|
$
|
49,086
|
|
$
|
49,243
|
|
$
|
135,440
|
|
$
|
140,242
|
Inventory and other
adjustments(v)
|
|
(2,987)
|
|
(1,454)
|
|
792
|
|
266
|
Minesite operating
costs
|
|
$
|
46,099
|
|
$
|
47,789
|
|
$
|
136,232
|
|
$
|
140,508
|
Minesite operating
costs (thousands of C$)
|
|
C$
|
60,186
|
|
C$
|
55,417
|
|
C$
|
179,702
|
|
C$
|
169,680
|
Tonnes of ore milled
(thousands of tonnes)
|
|
522
|
|
551
|
|
1,668
|
|
1,678
|
Minesite costs per
tonne (C$)(iii)
|
|
C$
|
115
|
|
C$
|
101
|
|
C$
|
108
|
|
C$
|
101
|
|
|
|
|
|
|
|
|
|
Lapa Mine - Total
Cash Costs per Ounce of Gold Produced(ii)
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
Nine Months
Ended
|
(thousands of
United States dollars, except as noted)
|
|
September 30,
2016
|
|
September 30,
2015
|
|
September 30,
2016
|
|
September 30,
2015
|
Production
costs
|
|
$
|
12,166
|
|
$
|
12,279
|
|
$
|
39,741
|
|
$
|
39,919
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Inventory and other
adjustments(iv)
|
|
(97)
|
|
1,117
|
|
1,255
|
|
1,407
|
Cash operating costs
(co-product basis)
|
|
$
|
12,069
|
|
$
|
13,396
|
|
$
|
40,996
|
|
$
|
41,326
|
|
By-product metal
revenues
|
|
(5)
|
|
(2)
|
|
(22)
|
|
(20)
|
Cash operating costs
(by-product basis)
|
|
$
|
12,064
|
|
$
|
13,394
|
|
$
|
40,974
|
|
$
|
41,306
|
Gold production
(ounces)
|
|
16,242
|
|
25,668
|
|
59,865
|
|
71,038
|
Total cash costs per
ounce of gold produced ($
per ounce)(ii):
|
|
|
|
|
|
|
|
|
|
Co-product
basis
|
|
$
|
743
|
|
$
|
522
|
|
$
|
685
|
|
$
|
582
|
|
By-product
basis
|
|
$
|
743
|
|
$
|
522
|
|
$
|
684
|
|
$
|
581
|
|
|
|
|
|
|
|
|
|
Lapa Mine -
Minesite Costs per Tonne(iii)
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
Nine Months
Ended
|
(thousands of
United States dollars, except as noted)
|
|
September 30,
2016
|
|
September 30,
2015
|
|
September 30,
2016
|
|
September 30,
2015
|
Production
costs
|
|
$
|
12,166
|
|
$
|
12,279
|
|
$
|
39,741
|
|
$
|
39,919
|
Inventory and other
adjustments(v)
|
|
(15)
|
|
406
|
|
1,159
|
|
297
|
Minesite operating
costs
|
|
$
|
12,151
|
|
$
|
12,685
|
|
$
|
40,900
|
|
$
|
40,216
|
Minesite operating
costs (thousands of C$)
|
|
C$
|
15,880
|
|
C$
|
16,614
|
|
C$
|
53,988
|
|
C$
|
50,610
|
Tonnes of ore milled
(thousands of tonnes)
|
|
141
|
|
146
|
|
463
|
|
424
|
Minesite costs per
tonne (C$)(iii)
|
|
C$
|
113
|
|
C$
|
114
|
|
C$
|
117
|
|
C$
|
119
|
|
|
|
|
|
|
|
|
|
Goldex Mine -
Total Cash Costs per Ounce of Gold
Produced(ii)
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
Nine Months
Ended
|
(thousands of
United States dollars, except as noted)
|
|
September 30,
2016
|
|
September 30,
2015
|
|
September 30,
2016
|
|
September 30,
2015
|
Production
costs
|
|
$
|
16,357
|
|
$
|
16,120
|
|
$
|
48,026
|
|
$
|
47,900
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Inventory and other
adjustments(iv)
|
|
(521)
|
|
(744)
|
|
314
|
|
66
|
Cash operating costs
(co-product basis)
|
|
$
|
15,836
|
|
$
|
15,376
|
|
$
|
48,340
|
|
$
|
47,966
|
|
By-product metal
revenues
|
|
(13)
|
|
(2)
|
|
(21)
|
|
(15)
|
Cash operating costs
(by-product basis)
|
|
$
|
15,823
|
|
$
|
15,374
|
|
$
|
48,319
|
|
$
|
47,951
|
Gold production
(ounces)
|
|
32,742
|
|
32,068
|
|
96,534
|
|
87,780
|
Total cash costs per
ounce of gold produced ($
per ounce)(ii):
|
|
|
|
|
|
|
|
|
|
Co-product
basis
|
|
$
|
484
|
|
$
|
479
|
|
$
|
501
|
|
$
|
546
|
|
By-product
basis
|
|
$
|
483
|
|
$
|
479
|
|
$
|
501
|
|
$
|
546
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goldex Mine -
Minesite Costs per Tonne(iii)
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
Nine Months
Ended
|
(thousands of
United States dollars, except as noted)
|
|
September 30,
2016
|
|
September 30,
2015
|
|
September 30,
2016
|
|
September 30,
2015
|
Production
costs
|
|
$
|
16,357
|
|
$
|
16,120
|
|
$
|
48,026
|
|
$
|
47,900
|
Inventory and other
adjustments(v)
|
|
(314)
|
|
(1,497)
|
|
318
|
|
(1,064)
|
Minesite operating
costs
|
|
$
|
16,043
|
|
$
|
14,623
|
|
$
|
48,344
|
|
$
|
46,836
|
Minesite operating
costs (thousands of C$)
|
|
C$
|
20,977
|
|
C$
|
19,168
|
|
C$
|
63,791
|
|
C$
|
58,803
|
Tonnes of ore milled
(thousands of tonnes)
|
|
671
|
|
570
|
|
1,965
|
|
1,741
|
Minesite costs per
tonne (C$)(iii)
|
|
C$
|
31
|
|
C$
|
34
|
|
C$
|
32
|
|
C$
|
34
|
|
|
|
|
|
|
|
|
|
Meadowbank Mine -
Total Cash Costs per Ounce of Gold
Produced(ii)
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
Nine Months
Ended
|
(thousands of
United States dollars, except as noted)
|
|
September 30,
2016
|
|
September 30,
2015
|
|
September 30,
2016
|
|
September 30,
2015
|
Production
costs
|
|
$
|
59,746
|
|
$
|
57,404
|
|
$
|
166,717
|
|
$
|
181,387
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Inventory and other
adjustments(iv)
|
|
(4,423)
|
|
2,642
|
|
4,497
|
|
2,088
|
Cash operating costs
(co-product basis)
|
|
$
|
55,323
|
|
$
|
60,046
|
|
$
|
171,214
|
|
$
|
183,475
|
|
By-product metal
revenues
|
|
(1,042)
|
|
(543)
|
|
(2,816)
|
|
(3,210)
|
Cash operating costs
(by-product basis)
|
|
$
|
54,281
|
|
$
|
59,503
|
|
$
|
168,398
|
|
$
|
180,265
|
Gold production
(ounces)
|
|
72,731
|
|
99,425
|
|
217,444
|
|
279,224
|
Total cash costs per
ounce of gold produced ($
per ounce)(ii):
|
|
|
|
|
|
|
|
|
|
Co-product
basis
|
|
$
|
761
|
|
$
|
604
|
|
$
|
787
|
|
$
|
657
|
|
By-product
basis
|
|
$
|
746
|
|
$
|
598
|
|
$
|
774
|
|
$
|
646
|
|
|
|
|
|
|
|
|
|
Meadowbank Mine -
Minesite Costs per Tonne(iii)
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
Nine Months
Ended
|
(thousands of
United States dollars, except as noted)
|
|
September 30,
2016
|
|
September 30,
2015
|
|
September 30,
2016
|
|
September 30,
2015
|
Production
costs
|
|
$
|
59,746
|
|
$
|
57,404
|
|
$
|
166,717
|
|
$
|
181,387
|
Inventory and other
adjustments(v)
|
|
(4,315)
|
|
(1,643)
|
|
280
|
|
(3,717)
|
Minesite operating
costs
|
|
$
|
55,431
|
|
$
|
55,761
|
|
$
|
166,997
|
|
$
|
177,670
|
Minesite operating
costs (thousands of C$)
|
|
C$
|
72,237
|
|
C$
|
71,519
|
|
C$
|
217,749
|
|
C$
|
217,436
|
Tonnes of ore milled
(thousands of tonnes)
|
|
961
|
|
996
|
|
2,900
|
|
3,005
|
Minesite costs per
tonne (C$)(iii)
|
|
C$
|
75
|
|
C$
|
72
|
|
C$
|
75
|
|
C$
|
72
|
|
|
|
|
|
|
|
|
|
Canadian Malartic
Mine - Total Cash Costs per Ounce of Gold
Produced(i)(ii)
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
Nine Months
Ended
|
(thousands of
United States dollars, except as noted)
|
|
September 30,
2016
|
|
September 30,
2015
|
|
September 30,
2016
|
|
September 30,
2015
|
Production
costs
|
|
$
|
47,917
|
|
$
|
42,008
|
|
$
|
136,705
|
|
$
|
125,380
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Inventory and other
adjustments(iv)
|
|
756
|
|
781
|
|
563
|
|
4,335
|
Cash operating costs
(co-product basis)
|
|
$
|
48,673
|
|
$
|
42,789
|
|
$
|
137,268
|
|
$
|
129,715
|
|
By-product metal
revenues
|
|
(1,816)
|
|
(1,134)
|
|
(4,353)
|
|
(3,453)
|
Cash operating costs
(by-product basis)
|
|
$
|
46,857
|
|
$
|
41,655
|
|
$
|
132,915
|
|
$
|
126,262
|
Gold production
(ounces)
|
|
76,428
|
|
76,603
|
|
222,543
|
|
212,937
|
Total cash costs per
ounce of gold produced ($
per ounce)(ii):
|
|
|
|
|
|
|
|
|
|
Co-product
basis
|
|
$
|
637
|
|
$
|
559
|
|
$
|
617
|
|
$
|
609
|
|
By-product
basis
|
|
$
|
613
|
|
$
|
544
|
|
$
|
597
|
|
$
|
593
|
|
|
|
|
|
|
|
|
|
Canadian Malartic
Mine - Minesite Costs per Tonne(i)(iii)
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
Nine Months
Ended
|
(thousands of
United States dollars, except as noted)
|
|
September 30,
2016
|
|
September 30,
2015
|
|
September 30,
2016
|
|
September 30,
2015
|
Production
costs
|
|
$
|
47,917
|
|
$
|
42,008
|
|
$
|
136,705
|
|
$
|
125,380
|
Inventory and other
adjustments(v)
|
|
263
|
|
52
|
|
(424)
|
|
1,784
|
Minesite operating
costs
|
|
$
|
48,180
|
|
$
|
42,060
|
|
$
|
136,281
|
|
$
|
127,164
|
Minesite operating
costs (thousands of C$)
|
|
C$
|
63,200
|
|
C$
|
55,010
|
|
C$
|
180,286
|
|
C$
|
160,136
|
Tonnes of ore milled
(thousands of tonnes)
|
|
2,483
|
|
2,470
|
|
7,388
|
|
7,117
|
Minesite costs per
tonne (C$)(iii)
|
|
C$
|
25
|
|
C$
|
22
|
|
C$
|
24
|
|
C$
|
23
|
|
|
|
|
|
|
|
|
|
Kittila Mine -
Total Cash Costs per Ounce of Gold
Produced(ii)
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
Nine Months
Ended
|
(thousands of
United States dollars, except as noted)
|
|
September 30,
2016
|
|
September 30,
2015
|
|
September 30,
2016
|
|
September 30,
2015
|
Production
costs
|
|
$
|
37,437
|
|
$
|
31,116
|
|
$
|
107,519
|
|
$
|
93,892
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Inventory and other
adjustments(iv)
|
|
(1,025)
|
|
(1,401)
|
|
(1,127)
|
|
(1,088)
|
Cash operating costs
(co-product basis)
|
|
$
|
36,412
|
|
$
|
29,715
|
|
$
|
106,392
|
|
$
|
92,804
|
|
By-product metal
revenues
|
|
(62)
|
|
(44)
|
|
(141)
|
|
(116)
|
Cash operating costs
(by-product basis)
|
|
$
|
36,350
|
|
$
|
29,671
|
|
$
|
106,251
|
|
$
|
92,688
|
Gold production
(ounces)
|
|
54,835
|
|
46,455
|
|
149,171
|
|
133,095
|
Total cash costs per
ounce of gold produced ($
per ounce)(ii):
|
|
|
|
|
|
|
|
|
|
Co-product
basis
|
|
$
|
664
|
|
$
|
640
|
|
$
|
713
|
|
$
|
697
|
|
By-product
basis
|
|
$
|
663
|
|
$
|
639
|
|
$
|
712
|
|
$
|
696
|
|
|
|
|
|
|
|
|
|
Kittila Mine -
Minesite Costs per Tonne(iii)
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
Nine Months
Ended
|
(thousands of
United States dollars, except as noted)
|
|
September 30,
2016
|
|
September 30,
2015
|
|
September 30,
2016
|
|
September 30,
2015
|
Production
costs
|
|
$
|
37,437
|
|
$
|
31,116
|
|
$
|
107,519
|
|
$
|
93,892
|
Inventory and other
adjustments(v)
|
|
(1,181)
|
|
(1,442)
|
|
(1,562)
|
|
(1,243)
|
Minesite operating
costs
|
|
$
|
36,256
|
|
$
|
29,674
|
|
$
|
105,957
|
|
$
|
92,649
|
Minesite operating
costs (thousands of €)
|
|
€
|
32,372
|
|
€
|
26,160
|
|
€
|
94,862
|
|
€
|
81,169
|
Tonnes of ore milled
(thousands of tonnes)
|
|
445
|
|
362
|
|
1,266
|
|
1,087
|
Minesite costs per
tonne (€)(iii)
|
|
€
|
73
|
|
€
|
72
|
|
€
|
75
|
|
€
|
75
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pinos Altos Mine -
Total Cash Costs per Ounce of Gold
Produced(ii)
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
Nine Months
Ended
|
(thousands of
United States dollars, except as noted)
|
|
September 30,
2016
|
|
September 30,
2015
|
|
September 30,
2016
|
|
September 30,
2015
|
Production
costs
|
|
$
|
35,457
|
|
$
|
26,845
|
|
$
|
88,107
|
|
$
|
80,824
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Inventory and other
adjustments(iv)
|
|
(5,776)
|
|
731
|
|
(4,125)
|
|
3,084
|
Cash operating costs
(co-product basis)
|
|
$
|
29,681
|
|
$
|
27,576
|
|
$
|
83,982
|
|
$
|
83,908
|
|
By-product metal
revenues
|
|
(13,037)
|
|
(8,865)
|
|
(33,586)
|
|
(27,842)
|
Cash operating costs
(by-product basis)
|
|
$
|
16,644
|
|
$
|
18,711
|
|
$
|
50,396
|
|
$
|
56,066
|
Gold production
(ounces)
|
|
48,512
|
|
47,725
|
|
146,087
|
|
148,478
|
Total cash costs per
ounce of gold produced ($
per ounce)(ii):
|
|
|
|
|
|
|
|
|
|
Co-product
basis
|
|
$
|
612
|
|
$
|
578
|
|
$
|
575
|
|
$
|
565
|
|
By-product
basis
|
|
$
|
343
|
|
$
|
392
|
|
$
|
345
|
|
$
|
378
|
|
|
|
|
|
|
|
|
|
Pinos Altos Mine -
Minesite Costs per Tonne(iii)
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
Nine Months
Ended
|
(thousands of
United States dollars, except as noted)
|
|
September 30,
2016
|
|
September 30,
2015
|
|
September 30,
2016
|
|
September 30,
2015
|
Production
costs
|
|
$
|
35,457
|
|
$
|
26,845
|
|
$
|
88,107
|
|
$
|
80,824
|
Inventory and other
adjustments(v)
|
|
(6,306)
|
|
(498)
|
|
(5,426)
|
|
450
|
Minesite operating
costs
|
|
$
|
29,151
|
|
$
|
26,347
|
|
$
|
82,681
|
|
$
|
81,274
|
Tonnes of ore
processed (thousands of tonnes)
|
|
597
|
|
546
|
|
1,704
|
|
1,778
|
Minesite costs per
tonne (US$)(iii)
|
|
$
|
49
|
|
$
|
48
|
|
$
|
49
|
|
$
|
46
|
|
|
|
|
|
|
|
|
|
Creston Mascota
deposit at Pinos Altos - Total Cash Costs per Ounce of Gold
Produced(ii)
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
Nine Months
Ended
|
(thousands of
United States dollars, except as noted)
|
|
September 30,
2016
|
|
September 30,
2015
|
|
September 30,
2016
|
|
September 30,
2015
|
Production
costs
|
|
$
|
7,014
|
|
$
|
6,101
|
|
$
|
19,418
|
|
$
|
19,208
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Inventory and other
adjustments(iv)
|
|
55
|
|
(27)
|
|
457
|
|
(171)
|
Cash operating costs
(co-product basis)
|
|
$
|
7,069
|
|
$
|
6,074
|
|
$
|
19,875
|
|
$
|
19,037
|
|
By-product metal
revenues
|
|
(1,089)
|
|
(534)
|
|
(2,769)
|
|
(1,692)
|
Cash operating costs
(by-product basis)
|
|
$
|
5,980
|
|
$
|
5,540
|
|
$
|
17,106
|
|
$
|
17,345
|
Gold production
(ounces)
|
|
12,134
|
|
12,716
|
|
36,083
|
|
40,770
|
Total cash costs per
ounce of gold produced ($
per ounce)(ii):
|
|
|
|
|
|
|
|
|
|
Co-product
basis
|
|
$
|
583
|
|
$
|
478
|
|
$
|
551
|
|
$
|
467
|
|
By-product
basis
|
|
$
|
493
|
|
$
|
436
|
|
$
|
474
|
|
$
|
425
|
|
|
|
|
|
|
|
|
|
Creston Mascota
deposit at Pinos Altos - Minesite Costs per
Tonne(iii)
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
Nine Months
Ended
|
(thousands of
United States dollars, except as noted)
|
|
September 30,
2016
|
|
September 30,
2015
|
|
September 30,
2016
|
|
September 30,
2015
|
Production
costs
|
|
$
|
7,014
|
|
$
|
6,101
|
|
$
|
19,418
|
|
$
|
19,208
|
Inventory and other
adjustments(v)
|
|
(112)
|
|
(137)
|
|
114
|
|
(429)
|
Minesite operating
costs
|
|
$
|
6,902
|
|
$
|
5,964
|
|
$
|
19,532
|
|
$
|
18,779
|
Tonnes of ore
processed (thousands of tonnes)
|
|
506
|
|
434
|
|
1,595
|
|
1,570
|
Minesite costs per
tonne (US$)(iii)
|
|
$
|
14
|
|
$
|
14
|
|
$
|
12
|
|
$
|
12
|
|
|
|
|
|
|
|
|
|
La India Mine -
Total Cash Costs per Ounce of Gold
Produced(ii)
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
Nine Months
Ended
|
(thousands of
United States dollars, except as noted)
|
|
September 30,
2016
|
|
September 30,
2015
|
|
September 30,
2016
|
|
September 30,
2015
|
Production
costs
|
|
$
|
12,191
|
|
$
|
13,468
|
|
$
|
35,107
|
|
$
|
36,724
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Inventory and other
adjustments(iv)
|
|
2,632
|
|
(21)
|
|
4,047
|
|
697
|
Cash operating costs
(co-product basis)
|
|
$
|
14,823
|
|
$
|
13,447
|
|
$
|
39,154
|
|
$
|
37,421
|
|
By-product metal
revenues
|
|
(2,526)
|
|
(975)
|
|
(6,229)
|
|
(3,286)
|
Cash operating costs
(by-product basis)
|
|
$
|
12,297
|
|
$
|
12,472
|
|
$
|
32,925
|
|
$
|
34,135
|
Gold production
(ounces)
|
|
30,779
|
|
28,604
|
|
86,448
|
|
80,930
|
Total cash costs per
ounce of gold produced ($
per ounce)(ii):
|
|
|
|
|
|
|
|
|
|
Co-product
basis
|
|
$
|
482
|
|
$
|
470
|
|
$
|
453
|
|
$
|
462
|
|
By-product
basis
|
|
$
|
400
|
|
$
|
436
|
|
$
|
381
|
|
$
|
422
|
|
|
|
|
|
|
|
|
|
La India Mine -
Minesite Costs per Tonne(iii)
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
Nine Months
Ended
|
(thousands of
United States dollars, except as noted)
|
|
September 30,
2016
|
|
September 30,
2015
|
|
September 30,
2016
|
|
September 30,
2015
|
Production
costs
|
|
$
|
12,191
|
|
$
|
13,468
|
|
$
|
35,107
|
|
$
|
36,724
|
Inventory and other
adjustments(v)
|
|
2,322
|
|
(161)
|
|
3,140
|
|
202
|
Minesite operating
costs
|
|
$
|
14,513
|
|
$
|
13,307
|
|
$
|
38,247
|
|
$
|
36,926
|
Tonnes of ore
processed (thousands of tonnes)
|
|
1,366
|
|
1,194
|
|
4,297
|
|
3,932
|
Minesite costs per
tonne (US$)(iii)
|
|
$
|
11
|
|
$
|
11
|
|
$
|
9
|
|
$
|
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 processed. 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
|
|
Nine Months
Ended
|
|
Nine Months
Ended
|
(United States
dollars per ounce of gold produced, except where
noted)
|
September 30,
2016
|
|
September 30,
2015
|
|
September 30,
2016
|
|
September 30,
2015
|
|
|
|
|
|
|
|
|
Production costs per
the interim condensed consolidated statements of income
|
|
|
|
|
|
|
|
|
|
|
|
(thousands of United
States dollars)
|
$
|
277,371
|
|
$
|
254,584
|
|
$
|
776,780
|
|
$
|
765,476
|
Gold production
(ounces)
|
416,187
|
|
441,124
|
|
1,236,455
|
|
1,249,012
|
Production costs per
ounce of gold production
|
$
|
666
|
|
$
|
577
|
|
$
|
628
|
|
$
|
613
|
Adjustments:
|
|
|
|
|
|
|
|
|
Inventory and other
adjustments(i)
|
(14)
|
|
10
|
|
21
|
|
20
|
Total cash costs per
ounce of gold produced (co-product basis)(ii)
|
$
|
652
|
|
$
|
587
|
|
$
|
649
|
|
$
|
633
|
|
By-product metal
revenues
|
(77)
|
|
(51)
|
|
(69)
|
|
(59)
|
Total cash costs per
ounce of gold produced (by-product basis)(ii)
|
$
|
575
|
|
$
|
536
|
|
$
|
580
|
|
$
|
574
|
Adjustments:
|
|
|
|
|
|
|
|
|
Sustaining capital
expenditures (including capitalized
exploration)
|
192
|
|
163
|
|
182
|
|
172
|
|
General and
administrative expenses (including stock options)
|
52
|
|
58
|
|
57
|
|
60
|
|
Non-cash reclamation
provision and other
|
2
|
|
2
|
|
2
|
|
2
|
All-in sustaining
costs per ounce of gold produced (by-product basis)
|
$
|
821
|
|
$
|
759
|
|
$
|
821
|
|
$
|
808
|
|
By-product metal
revenues
|
77
|
|
51
|
|
69
|
|
59
|
All-in sustaining
costs per ounce of gold produced (co-product basis)
|
$
|
898
|
|
$
|
810
|
|
$
|
890
|
|
$
|
867
|
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.
|
|
|
Reconciliation of
Long-term Debt to Net Debt
|
|
|
|
|
|
|
|
|
|
|
As
at
|
|
As at
|
(thousands of
United States dollars)
|
September 30,
2016
|
|
June 30, 2016
|
|
|
|
|
Current portion of
long-term debt per the interim consolidated balance
sheets
|
$
|
130,248
|
|
$
|
130,374
|
Non-Current portion
of long-term debt
|
1,073,091
|
|
1,072,754
|
Long-term
debt
|
$
|
1,203,339
|
|
$
|
1,203,128
|
Adjustments:
|
|
|
|
|
Deferred financing
costs
|
$
|
11,908
|
|
$
|
12,246
|
|
Cash and cash
equivalents
|
(618,561)
|
|
(467,902)
|
|
Short-term
investments
|
(8,802)
|
|
(5,749)
|
Net Debt
|
$
|
587,884
|
|
$
|
741,723
|
SOURCE Agnico Eagle Mines Limited