AEM Agnico Eagle Mines Ltd

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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FORM 40-F

o REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
ý ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2014
Commission file number: 1-13422

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AGNICO EAGLE MINES LIMITED
(Exact name of Registrant as specified in its charter)

145 King Street East, Suite 400
Toronto, Ontario, Canada M5C 2Y7
(416) 947-1212
(Address and telephone number of Registrant's principal executive offices)

Davies Ward Phillips & Vineberg LLP
900 Third Avenue, 24th Floor, New York, New York 10022
Attention: Gerald D. Shepherd
(212) 588-5500
(Name, address (including zip code) and telephone number (including area code) of agent for service in the United States)

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Securities registered or to be registered pursuant to Section 12(b) of the Act:

Securities registered or to be registered pursuant to Section 12(g) of the Act:
None
(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
None
(Title of Class)

For annual reports, indicate by check mark the information filed with this Form:

ý  Annual information form                                     ý Audited annual financial statements

Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report.

215,042,968 Common Shares as of December 31, 2014

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

Yes  ý        No  o

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files).

Yes  ý        No  o

   

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EXPLANATORY NOTE

        Agnico Eagle Mines Limited ("Agnico Eagle" or the "Company") is a Canadian issuer eligible to file its annual report pursuant to Section 13 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), on Form 40-F pursuant to the multi-jurisdictional disclosure system of the Exchange Act. The Company is a "foreign private issuer" as defined in Rule 3b-4 under the Exchange Act. Equity securities of the Company are accordingly exempt from Sections 14(a), 14(b), 14(c), 14(f) and 16 of the Exchange Act pursuant to Rule 3a12-3.

FORWARD-LOOKING INFORMATION

        This Annual Report on Form 40-F and the exhibits attached hereto (the "Form 40-F") contain "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995. These statements relate to, among other things, the Company's plans, objectives, expectations, estimates, beliefs, strategies and intentions and can generally be identified by the use of words such as "anticipate", "believe", "budget", "could", "estimate", "expect", "forecast", "intend", "likely", "may", "plan", "project", "schedule", "should", "target", "will", "would" or other variations of these terms or similar words. Forward-looking statements in this report include, but are not limited to, the following:

•

the Company's outlook for 2015 and future periods;



•

statements regarding future earnings, and the sensitivity of earnings to gold and other metal prices;



•

anticipated levels or trends for prices of gold and byproduct metals mined by the Company or for exchange rates between currencies in which capital is raised, revenue is generated or expenses are incurred by the Company;



•

estimates of future mineral production and sales;



•

estimates of future costs, including mining costs, total cash costs per ounce, all-in sustaining costs, minesite costs per tonne and other expenses;



•

estimates of future capital expenditure, exploration expenditure and other cash needs, and expectations as to the funding thereof;



•

statements regarding the projected exploration, development and exploitation 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 thereto;



•

estimates of mineral reserves, mineral resources, ore grades and mineral recoveries and statements regarding anticipated future exploration results;



•

estimates of cash flow;



•

estimates of mine life;



•

anticipated timing of events with respect to the Company's minesites, mine development projects and exploration projects;



•

estimates of future costs and other liabilities for environmental remediation;



•

statements regarding anticipated legislation and regulations, including with respect to climate change, and estimates of the impact on the Company; and



•

other anticipated trends with respect to the Company's capital resources and results of operations.

        Forward-looking statements are necessarily based upon a number of factors and assumptions that, while considered reasonable by the Company as of the date of such statements, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The factors and assumptions of the Company upon which the forward-looking statements in the Form 40-F are based, and which may prove to be incorrect, include, but are not limited to, the assumptions set out elsewhere in the Form 40-F as well as: that there are no significant disruptions affecting Agnico Eagle's operations, whether due to labour disruptions, supply disruptions, damage to equipment, natural or man-made occurrences, mining or milling issues, political changes, title issues or otherwise; that permitting, development and expansion at each of Agnico Eagle's mines and mine development projects proceed on a basis consistent with current expectations, and that Agnico Eagle does not change its exploration or development plans relating to such projects; that the exchange rates between

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the Canadian dollar, Euro, Mexican peso and the U.S. dollar will be approximately consistent with current levels or as set out in the Form 40-F; that prices for gold, silver, zinc, copper and lead will be consistent with Agnico Eagle's expectations; that prices for key mining and construction supplies, including labour costs, remain consistent with Agnico Eagle's current expectations; that production meets expectations; that Agnico Eagle's current estimates of mineral reserves, mineral resources, mineral grades and mineral recoveries are accurate; that there are no material delays in the timing for completion of development projects; and that there are no material variations in the current tax and regulatory environment that affect Agnico Eagle.

        The forward-looking statements in the Form 40-F reflect the Company's views as at the date hereof and involve known and unknown risks, uncertainties and other factors which could cause the actual results, performance or achievements of the Company or industry results to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the risk factors set out under "Risk Factors" on page 85 of the Company's annual information form for the year ended December 31, 2014, which is filed as Exhibit 99.1 to this Form 40-F and incorporated by reference herein (the "AIF"). Given these uncertainties, readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date made. Except as otherwise required by law, the Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statements to reflect any change in the Company's expectations or any change in events, conditions or circumstances on which any such statement is based. This Form 40-F contains information regarding estimated total cash costs per ounce, all-in sustaining costs and minesite costs per tonne in respect of the Company or at certain of the Company's mines and mine development projects. The Company believes that these generally accepted industry measures are realistic indicators of operating performance and are useful in allowing year over year comparisons. Investors are cautioned that this information may not be suitable for other purposes.

CURRENCY

        Agnico Eagle presents its consolidated financial statements in United States dollars. All dollar amounts in this Form 40-F are stated in United States dollars ("U.S. dollars", "$" or "US$"), except where otherwise indicated. On March 12, 2015, the noon exchange rate (as reported by the Bank of Canada) of United States dollars into Canadian dollars ("C$") was US$1.00 equals C$1.2691.

NOTE TO INVESTORS CONCERNING ESTIMATES OF
MINERAL RESERVES AND MINERAL RESOURCES

        The mineral reserve and mineral resource estimates contained in this Form 40-F have been prepared in accordance with the Canadian securities regulatory authorities' (the "CSA") National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101"). These standards are similar to those used by the United States Securities and Exchange Commission's (the "SEC") 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 or incorporated by reference 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. The SEC does not recognize measures of "mineral resource".

        The mineral reserve and mineral resource data presented herein are estimates, and no assurance can be given that the anticipated tonnages and grades will be achieved or that the indicated level of recovery will be realized. The Company does not include equivalent gold ounces for byproduct metals contained in mineral reserves in its calculation of contained ounces.

Cautionary Note to Investors Concerning Estimates of Measured and Indicated Mineral Resources

        The Form 40-F 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.

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Cautionary Note to Investors Concerning Estimates of Inferred Mineral Resources

        The Form 40-F 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 as to their economic and legal feasibility. It cannot be assumed that any part or all of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian regulations, 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.

NOTE TO INVESTORS CONCERNING CERTAIN MEASURES OF PERFORMANCE

        The Form 40-F presents certain measures, including "total cash costs per ounce", "all-in sustaining costs" and "minesite costs per tonne", that are not recognized measures under International Financial Reporting Standards ("IFRS"). This data may not be comparable to data presented by other gold producers. For a reconciliation of these measures to the most directly comparable financial information presented in the consolidated financial statements prepared in accordance with IFRS, see the management's discussion and analysis for the period ended December 31, 2014, which is filed as Exhibit 99.3 to this Form 40-F and incorporated by reference herein (the "Annual MD&A"). The Company believes that these generally accepted industry measures are realistic indicators of operating performance and are useful in allowing year over year comparisons. However, these non-GAAP measures should be considered together with other data prepared in accordance with IFRS, and these measures, taken by themselves, are not necessarily indicative of operating costs or cash flow measures prepared in accordance with IFRS. This Form 40-F also contains information as to estimated future total cash costs per ounce, all-in sustaining costs and minesite costs per tonne. The estimates of total cash costs per ounce, all-in sustaining costs and minesite costs per tonne are based upon the total cash costs per ounce, all-in sustaining costs 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.

DISCLOSURE CONTROLS AND PROCEDURES

        The Company's management, with the participation of the Company's Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company's disclosure controls and procedures as of December 31, 2014 pursuant to Rule 13a-15 under the Exchange Act. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

        Based on such evaluation, the Company's Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2014, the Company's disclosure controls and procedures were designed at a reasonable assurance level and were effective to provide reasonable assurance that information the Company is required to disclose in reports that the Company files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

MANAGEMENT'S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

        Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed by, or under the supervision of, the Company's Chief Executive Officer and Chief Financial Officer and effected by the Company's board of directors (the "Board"), management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future

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periods are subject to risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

        The Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of the Company's internal control over financial reporting as of December 31, 2014. In making this assessment, the Company's management used the criteria set out by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control — Integrated Framework issued in 2013. Based upon its assessment, management concluded that, as of December 31, 2014, the Company's internal control over financial reporting was effective.

        On June 16, 2014, Agnico Eagle and Yamana Gold Inc. ("Yamana") jointly acquired 100.0% of the issued and outstanding shares of Osisko Mining Corporation ("Osisko") by way of a court-approved plan of arrangement (the "Arrangement") under the Canada Business Corporations Act. Under the Arrangement, Agnico Eagle and Yamana each indirectly acquired 50.0% of Osisko's issued and outstanding shares. Management has not evaluated the internal controls of Canadian Malartic Corporation (the successor to Osisko) in accordance with Question 3 of the Securities and Exchange Commission's Management's Report on Internal Control Over Financial Reporting and Certification of Disclosure in Exchange Act Periodic Reports Frequently Asked Questions. As a result, management's evaluation of the Company's internal control over financial reporting did not include an evaluation of the internal controls of Canadian Malartic Corporation and management's conclusion regarding the effectiveness of the Company's internal control over financial reporting does not extend to the internal controls of Canadian Malartic Corporation.

        The effectiveness of the Company's internal control over financial reporting as of December 31, 2014 has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in its attestation report on page 2 of the Company's Annual Audited Consolidated Financial Statements, which are filed as Exhibit 99.2 to this Form 40-F and incorporated by reference herein (the "Annual Financial Statements").

        The Company will continue to periodically review its disclosure controls and procedures and internal control over financial reporting and may make modifications from time to time as considered necessary or desirable.

ATTESTATION REPORT OF THE REGISTERED PUBLIC ACCOUNTING FIRM

        Ernst & Young LLP's attestation report on management's assessment of the Company's internal control over financial reporting is found on page 2 of the Annual Financial Statements.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

        Management regularly reviews its system of internal control over financial reporting and makes changes to the Company's processes and systems to improve controls and increase efficiency, while ensuring that the Company maintains an effective internal control environment. Changes may include such activities as implementing new, more efficient systems, consolidating activities, and migrating processes.

        There was no change in the Company's internal control over financial reporting that occurred during the period covered by this Form 40-F that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

IDENTIFICATION OF THE AUDIT COMMITTEE

        The Board has a separately-designated standing Audit Committee established in accordance with section 3(a)(58)(A) of the Exchange Act. The Audit Committee is composed of Dr. Leanne Baker (Chair), Mr. Bernard Kraft, Mr. Mel Leiderman and Dr. Sean Riley, as described under "Audit Committee — Composition of the Audit Committee" on page 103 of the AIF.

AUDIT COMMITTEE FINANCIAL EXPERT

        The Board has determined that the Company shall have at least one "audit committee financial expert" (as defined in paragraph (8) of General Instruction B to Form 40-F) and that Messrs. Bernard Kraft and Mel Leiderman are the Company's "audit committee financial experts" serving on the Audit Committee of the Board. Each of the Audit Committee financial experts is "independent" under applicable listing standards.

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PRINCIPAL ACCOUNTANT FEES AND SERVICES

        Ernst & Young LLP served as the Company's independent public accountant for each of the fiscal years in the two-year period ended December 31, 2014. For a description of the total amount billed to the Company by Ernst & Young LLP for services performed in the last two fiscal years by category of service (audit fees, audit-related fees, tax fees and all other fees), see "Audit Committee — External Auditor Service Fees" on page 104 of the AIF.

AUDIT COMMITTEE PRE-APPROVAL POLICIES AND PROCEDURES

        For a description of the pre-approval policies and procedures of the Company's Audit Committee, see "Audit Committee — Pre-Approval Policies and Procedures" on page 104 of the AIF. No audit-related fees, tax fees or other non-audit fees were approved by the Audit Committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

CODE OF ETHICS

        The Company has a "code of ethics" (as defined in paragraph (9) of General Instruction B to Form 40-F) that applies to its Chief Executive Officer, Chief Financial Officer, principal accounting officer, controller and persons performing similar functions. The Company's code of ethics is available on the Company's website at www.agnicoeagle.com or, without charge, upon request from the Corporate Secretary, Agnico Eagle Mines Limited, Suite 400, 145 King Street East, Toronto, Ontario M5C 2Y7 (telephone 416-947-1212).

OFF-BALANCE SHEET ARRANGEMENTS

        Not applicable.

CONTRACTUAL OBLIGATIONS

        For tabular disclosure of the Company's contractual obligations, see page 19 of the Annual MD&A under the heading "Liquidity and Capital Resources".

MINE SAFETY DISCLOSURE

        Not applicable.

CORPORATE GOVERNANCE

        The Company is subject to a variety of corporate governance guidelines and requirements enacted by the Toronto Stock Exchange (the "TSX"), the Canadian securities regulatory authorities, the New York Stock Exchange (the "NYSE") and the SEC. The Company is listed on the NYSE and, although the Company is not required to comply with most of the NYSE corporate governance requirements to which the Company would be subject if it were a U.S. corporation, the Company's governance practices differ from those required of U.S. domestic issuers in only the following respects. The NYSE rules for U.S. domestic issuers require shareholder approval of all equity compensation plans (as defined in the NYSE rules) regardless of whether new issuances, treasury shares or shares that the Company has purchased in the open market are used. The TSX rules require shareholder approval of share compensation arrangements involving new issuances of shares, and of certain amendments to such arrangements, but do not require such approval if the compensation arrangements involve only shares purchased in the open market. The NYSE rules for U.S. domestic issuers also require shareholder approval of certain transactions or series of related transactions that result in the issuance of common shares, or securities convertible into or exercisable for common shares, that have, or will have upon issuance, voting power equal to or in excess of 20% of the voting power outstanding prior to the transaction or if the issuance of common shares, or securities convertible into or exercisable for common shares, are, or will be upon issuance, equal to or in excess of 20% of the number of common shares outstanding prior to the transaction. The TSX rules require shareholder approval of acquisition transactions resulting in dilution in excess of 25%. The TSX also has broad general discretion to require shareholder approval in connection with any issuances of listed securities. The Company complies with the TSX rules described in this paragraph.

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UNDERTAKING

        Agnico Eagle undertakes to make available, in person or by telephone, representatives to respond to inquiries made by the SEC staff, and to furnish promptly, when requested to do so by the SEC staff, information relating to: the securities in relation to which the obligation to file an annual report on Form 40-F arises; or transactions in said securities.

CONSENT TO SERVICE OF PROCESS

        Concurrently with the filing of this Form 40-F, the Company is filing a Form F-X with the SEC.

        Any change to the name or address of the Company's agent for service shall be communicated promptly to the SEC by amendment to the Form F-X referencing the file number of the Company.

INCORPORATION BY REFERENCE

        This Form 40-F, which includes the exhibits filed herewith (other than the section of the AIF entitled "Ratings"), is incorporated by reference into the Company's Registration Statements on Form F-3D (registration no. 333-190888) and Form S-8 (registration nos. 333-130339 and 333-152004). Each of the AIF (other than the section entitled "Ratings"), the Annual Financial Statements and the Annual MD&A is incorporated by reference as an exhibit to the Company's Registration Statement on Form F-10 (registration no. 333-189715).

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EXHIBIT INDEX

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SIGNATURES

        Pursuant to the requirements of the Exchange Act, the Company certifies that it meets all of the requirements for filing on Form 40-F and has duly caused this annual report to be signed on its behalf by the undersigned, thereto duly authorized.

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EXPLANATORY NOTE
FORWARD-LOOKING INFORMATION
CURRENCY
NOTE TO INVESTORS CONCERNING ESTIMATES OF MINERAL RESERVES AND MINERAL RESOURCES
NOTE TO INVESTORS CONCERNING CERTAIN MEASURES OF PERFORMANCE
DISCLOSURE CONTROLS AND PROCEDURES
MANAGEMENT'S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
ATTESTATION REPORT OF THE REGISTERED PUBLIC ACCOUNTING FIRM
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
IDENTIFICATION OF THE AUDIT COMMITTEE
AUDIT COMMITTEE FINANCIAL EXPERT
PRINCIPAL ACCOUNTANT FEES AND SERVICES
AUDIT COMMITTEE PRE-APPROVAL POLICIES AND PROCEDURES
CODE OF ETHICS
OFF-BALANCE SHEET ARRANGEMENTS
CONTRACTUAL OBLIGATIONS
MINE SAFETY DISCLOSURE
CORPORATE GOVERNANCE
UNDERTAKING
CONSENT TO SERVICE OF PROCESS
INCORPORATION BY REFERENCE
EXHIBIT INDEX
SIGNATURES



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Exhibit 99.1

Annual Information Form
for the year ended December 31, 2014

Dated as of March 12, 2015

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AGNICO EAGLE MINES LIMITED

ANNUAL INFORMATION FORM

Table of Contents

			Page
INTRODUCTORY NOTES			iii
	Currency And Exchange Rates		iii
	Forward-Looking Information		iii
	Presentation Of Financial Information		v
	Note to Investors Concerning Estimates of Mineral Reserves and Mineral Resources		v
	Note to Investors Concerning Certain Measures of Performance		v
SELECTED FINANCIAL DATA			1
GLOSSARY OF SELECTED MINING TERMS			2
CORPORATE STRUCTURE			9
DESCRIPTION OF THE BUSINESS			11
GENERAL DEVELOPMENT OF THE BUSINESS			12
OPERATIONS AND PRODUCTION			15
	Business Units and Foreign Operations		15
	Northern Business		16
	Southern Business		56
	Regional Exploration Activities		68
	Mineral Reserves and Mineral Resources		69
	Principal Products and Distribution		82
	Employees		82
	Competitive Conditions		82
	Sustainable Development		82
	Employee Health and Safety		83
	Community		83
	Environmental Protection		84
RISK FACTORS			85
DIVIDENDS			97
DESCRIPTION OF CAPITAL STRUCTURE			97
RATINGS			97
MARKET FOR SECURITIES			98

i

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DIRECTORS AND OFFICERS OF THE COMPANY			99
	Directors		99
	Committees		100
	Officers		101
	Shareholdings of Directors and Officers		102
	Cease Trade Orders, Bankruptcies, Penalties or Sanctions		102
	Conflicts of Interest		103
AUDIT COMMITTEE			103
	Composition of the Audit Committee		103
	Relevant Education and Experience		103
	Pre-Approval Policies and Procedures		104
	External Auditor Service Fees		104
LEGAL PROCEEDINGS AND REGULATORY ACTIONS			104
INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS			105
TRANSFER AGENT AND REGISTRAR			105
MATERIAL CONTRACTS			105
INTERESTS OF EXPERTS			107
ADDITIONAL INFORMATION			107
SCHEDULE "A" AUDIT COMMITTEE CHARTER OF THE COMPANY			A-1

ii

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INTRODUCTORY NOTES

Currency and Exchange Rates

Currencies:    Agnico Eagle Mines Limited ("Agnico Eagle" or the "Company") presents its consolidated financial statements in United States dollars. All dollar amounts in this Annual Information Form ("AIF") are stated in United States dollars ("U.S. dollars", "$" or "US$"), except where otherwise indicated. Certain information in this AIF is presented in Canadian dollars ("C$") or European Union euros ("Euro" or "€").

Exchange Rates:    The following tables set out, in Canadian dollars, the exchange rates for the U.S. dollar, based on the noon buying rate as reported by the Bank of Canada (the "Noon Buying Rate"). On March 12, 2015, the Noon Buying Rate was US$1.00 equals C$1.2691.

		Year Ended December 31,
		2014		2013		2012		2011		2010
High		1.1643		1.0697		1.0418		1.0604		1.0778
Low		1.0614		0.9839		0.9710		0.9449		0.9946
End of Period		1.1601		1.0636		0.9949		1.0170		0.9946
Average		1.1045		1.0299		0.9996		0.9891		1.0299

		2015						2014
		March (to March 12)		February		January		December		November		October		September
High		1.2764		1.2717		1.2717		1.1643		1.1427		1.1289		1.1208
Low		1.2440		1.2403		1.1728		1.1344		1.1236		1.1136		1.0863
End of Period		1.2691		1.2508		1.2717		1.1601		1.1427		1.1275		1.1208
Average		1.2579		1.2511		1.2115		1.1533		1.1326		1.1213		1.1012

On December 31, 2014 and March 12, 2015, US$1.00 equaled €0.8237 and €0.9422, respectively, as reported by the European Central Bank.

Forward-Looking Information

Forward-Looking Information:    Certain statements in this AIF, referred to herein as "forward-looking statements", constitute "forward-looking information" under the provisions of Canadian provincial securities laws and constitute "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995. These statements relate to, among other things, the Company's plans, objectives, expectations, estimates, beliefs, strategies and intentions and can generally be identified by the use of words such as "anticipate", "believe", "budget", "could", "estimate", "expect", "forecast", "intend", "likely", "may", "plan", "project", "schedule", "should", "target", "will", "would" or other variations of these terms or similar words. Forward-looking statements in this report include, but are not limited to, the following:

•

the Company's outlook for 2015 and future periods;



•

statements regarding future earnings, and the sensitivity of earnings to gold and other metal prices;



•

anticipated levels or trends for prices of gold and byproduct metals mined by the Company or for exchange rates between currencies in which capital is raised, revenue is generated or expenses are incurred by the Company;



•

estimates of future mineral production and sales;

iii

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•

estimates of future costs, including mining costs, total cash costs per ounce, all-in sustaining costs, minesite costs per tonne and other expenses;



•

estimates of future capital expenditure, exploration expenditure and other cash needs, and expectations as to the funding thereof;



•

statements regarding the projected exploration, development and exploitation 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 thereto;



•

estimates of mineral reserves, mineral resources, ore grades and mineral recoveries and statements regarding anticipated future exploration results;



•

estimates of cash flow;



•

estimates of mine life;



•

anticipated timing of events with respect to the Company's minesites, mine development projects and exploration projects;



•

estimates of future costs and other liabilities for environmental remediation;



•

statements regarding anticipated legislation and regulations, including with respect to climate change, and estimates of the impact on the Company; and



•

other anticipated trends with respect to the Company's capital resources and results of operations.

Forward-looking statements are necessarily based upon a number of factors and assumptions that, while considered reasonable by Agnico Eagle as of the date of such statements, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The factors and assumptions of Agnico Eagle upon which the forward-looking statements in this AIF are based, and which may prove to be incorrect, include, but are not limited to, the assumptions set out elsewhere in this AIF as well as: that there are no significant disruptions affecting Agnico Eagle's operations, whether due to labour disruptions, supply disruptions, damage to equipment, natural or man-made occurrences, mining or milling issues, political changes, title issues or otherwise; that permitting, development and expansion at each of Agnico Eagle's mines and mine development projects proceed on a basis consistent with current expectations, and that Agnico Eagle does not change its exploration or development plans relating to such projects; that the exchange rates between the Canadian dollar, Euro, Mexican peso and the U.S. dollar will be approximately consistent with current levels or as set out in this AIF; that prices for gold, silver, zinc and copper will be consistent with Agnico Eagle's expectations; that prices for key mining and construction supplies, including labour costs, remain consistent with Agnico Eagle's current expectations; that production meets expectations; that Agnico Eagle's current estimates of mineral reserves, mineral resources, mineral grades and mineral recoveries are accurate; that there are no material delays in the timing for completion of development projects; and that there are no material variations in the current tax and regulatory environment that affect Agnico Eagle.

The forward-looking statements in this AIF reflect the Company's views as at the date of this AIF and involve known and unknown risks, uncertainties and other factors which could cause the actual results, performance or achievements of the Company or industry results to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the risk factors set out in "Risk Factors" below. Given these uncertainties, readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date made. Except as otherwise required by law, the Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statements to reflect any change in the Company's expectations or any change in events, conditions or circumstances on which any such statement is based. This AIF contains information regarding estimated total cash costs per ounce, all-in sustaining costs and minesite costs per tonne in respect of the Company or at certain of the Company's mines and mine development projects. The Company believes that these generally accepted industry measures are realistic indicators of operating performance and are useful in allowing year over year comparisons. Investors are cautioned that this information may not be suitable for other purposes.

Meaning of "including" and "such as":    When used in this AIF, the terms "including" and "such as" mean including and such as, without limitation.

iv

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Presentation of Financial Information

International Financial Reporting Standards:    The Company reports its financial results using International Financial Reporting Standards ("IFRS"). The Company adopted IFRS as its basis of accounting, replacing United States generally accepted accounting principles ("US GAAP") effective July 1, 2014. As a result, Agnico Eagle's consolidated financial statements for 2014 are reported in accordance with IFRS, with comparative information restated under IFRS and a transition date of January 1, 2013. The Company's transition to IFRS reporting had no significant impact on the design or effectiveness of the Company's internal controls over financial reporting. The Company adopted IFRS as its basis of accounting to maintain comparability with other gold mining companies. Unless otherwise specified, all references to financial results herein are to those calculated under IFRS.

Note to Investors Concerning Estimates of Mineral Reserves and Mineral Resources

The mineral reserve and mineral resource estimates contained in this AIF have been prepared in accordance with the Canadian securities regulatory authorities' (the "CSA") National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101"). These standards are similar to those used by the United States Securities and Exchange Commission's (the "SEC") 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 or incorporated by reference 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. The SEC does not recognize measures of "mineral resource".

The mineral reserve and mineral resource data presented herein are estimates, and no assurance can be given that the anticipated tonnages and grades will be achieved or that the indicated level of recovery will be realized. The Company does not include equivalent gold ounces for byproduct metals contained in mineral reserves in its calculation of contained ounces.

Cautionary Note to Investors Concerning Estimates of Measured and Indicated Mineral Resources

This document 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 document 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 as to their economic and legal feasibility. It cannot be assumed that any part or all of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian regulations, 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.

Note to Investors Concerning Certain Measures of Performance

This AIF presents certain measures, including "total cash costs per ounce", "all-in sustaining costs" and "minesite costs per tonne" that are not recognized measures under IFRS. This data may not be comparable to data presented by other gold producers. For a reconciliation of these measures to the most directly comparable financial information presented in the consolidated financial statements prepared in accordance with IFRS, see the Company's management's discussion and analysis for the period ended December 31, 2014 (the "Annual MD&A"). The Company believes that these generally accepted industry measures are realistic indicators of operating performance and are useful in allowing year over year comparisons. However, these non-GAAP measures should be considered together with other data prepared in accordance with IFRS, and these measures, taken by themselves, are not necessarily indicative of operating costs or cash flow measures prepared in accordance with IFRS. This AIF also contains information as to estimated future total cash costs per ounce, all-in sustaining costs and minesite costs per tonne. The estimates of total cash costs per ounce, all-in sustaining costs and minesite costs per tonne are based upon the total cash costs per ounce, all-in sustaining costs 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.

v

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SELECTED FINANCIAL DATA

The following selected financial data for each of the years in the five-year period ended December 31, 2014 are derived from the consolidated financial statements of Agnico Eagle audited by Ernst & Young LLP. The selected financial data should be read in conjunction with the Company's operating and financial review and prospects set out in Agnico Eagle's annual audited consolidated financial statements as of and for the period ended December 31, 2014, including the notes thereto (the "Annual Financial Statements") and the Annual MD&A.

		Year Ended December 31,
		2014(1)		2013(1)		2012(2)		2011(2)		2010(2)
		(in thousands of U.S. dollars, other than share and per share information)
Income Statement Data
Revenues from mining operations		1,896,766		1,638,406		1,917,714		1,821,799		1,422,521
Production		1,004,559		866,082		897,712		876,078		677,472
Exploration and corporate development		56,002		44,236		109,500		75,721		54,958
Amortization of property, plant and mine development		433,628		313,890		271,861		261,781		192,486
General and administrative		118,771		113,809		119,085		107,926		94,327
Impairment loss on available-for-sale securities		15,763		32,476		12,732		8,569		–
Loss (gain) on derivative financial instruments		6,156		268		819		(3,683	)	(7,612	)
Provincial capital tax		–		–		4,001		9,223		(6,075	)
Finance costs		73,393		62,455		57,887		55,039		49,493
Other (income) expenses		(7,004	)	3,396		2,389		5,188		(10,254	)
Environmental remediation		8,214		3,698		–		–		–
Loss on Goldex mine		–		–		–		302,893		–
Impairment loss		–		1,014,688		–		907,681		–
Gain on acquisition of Comaplex Minerals Corp., net of transaction costs		–		–		–		–		(57,526	)
Gain on sale of available-for-sale securities		(5,635	)	(74	)	(9,733	)	(4,907	)	(19,487	)
Foreign currency translation (gain) loss		3,781		1,769		16,320		(1,082	)	19,536
Income (loss) before income and mining taxes		189,138		(818,287	)	435,141		(778,628	)	435,203
Income and mining taxes expense (recovery)		106,168		(131,582	)	124,225		(209,673	)	103,087
Net income (loss) for the year		82,970		(686,705	)	310,916		(568,955	)	332,116
Attributed to non-controlling interest		–		–		–		(60	)	–
Attributed to common shareholders		82,970		(686,705	)	310,916		(568,895	)	332,116
Net income (loss) per share – basic		0.43		(3.97	)	1.82		(3.36	)	2.05
Net income (loss) per share – diluted		0.39		(3.97	)	1.81		(3.36	)	2.00
Weighted average number of common shares outstanding – basic		195,222,905		172,892,654		171,250,179		169,352,896		162,342,686
Weighted average number of common shares outstanding – diluted		196,201,626		172,892,654		171,485,615		169,352,896		165,842,259
Cash dividends declared per common share		0.32		0.66		1.02		–		0.64
Balance Sheet Data (at end of period)
Property, plant and mine development		5,301,496		3,694,461		4,067,456		3,895,355		4,564,563
Total assets		6,840,538		4,580,081		5,256,119		5,034,262		5,500,351
Long-term debt		1,322,461		987,356		830,000		920,095		650,000
Reclamation provision		249,917		184,009		101,753		105,443		91,641
Net assets		4,068,490		2,717,406		3,410,212		3,215,163		3,665,450
Common shares		4,599,788		3,294,007		3,241,922		3,181,381		3,078,217
Shareholders' equity		4,068,490		2,717,406		3,410,212		3,215,163		3,665,450
Total common shares outstanding		214,236,234		173,953,975		172,102,870		170,813,736		168,720,355

(1)

Figures reported for 2014 and 2013 are presented in accordance with IFRS.

(2)

Figures reported for 2012, 2011 and 2010 have not been restated to conform to IFRS and are presented in accordance with US GAAP.

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GLOSSARY OF SELECTED MINING TERMS

"alteration"		Any physical or chemical change in the mineral composition of a rock subsequent to its formation, generally produced by weathering or hydrothermal solutions. Milder and more localized than metamorphism.
"anastomosing"		A network of branching and rejoining fault or vein surfaces or surface traces.
"andesite"		A dark-coloured, fine-grained calc-alkaline volcanic rock of intermediate composition.
"assay"		To analyze the proportions of metals in an ore; to test an ore or mineral for composition, purity, weight or other properties of commercial interest.
"banded iron formation"		An iron formation that shows marked banding, generally of iron-rich minerals and chert or fine-grained quartz.
"bedrock"		Solid rock exposed at the surface of the Earth or overlain by unconsolidated material, weathered rock or soil.
"bench"		A ledge in an open-pit mine that forms a single level of operation above which minerals or waste rock are excavated. The ore or waste is removed in successive layers (benches), several of which may be in operation simultaneously.
"breccia"		A rock in which angular rock fragments are surrounded by a mass of fine-grained minerals.
"brittle"		Of minerals, proneness to fracture under low stress. A quality affecting behaviour during comminution of ore, whereby one species fractures more readily than others in the material being crushed.
"bulk emulsion"		Water resistant explosive material pumped into a drilled blast hole and ignited remotely in order to fracture rock in the mining cycle. Emulsion products are particularly well suited to wet conditions.
"byproduct"		A secondary metal or mineral product recovered from the processing of rock.
"carbon-in-leach (CIL)"		A precious metals recovery step in the mill. Gold and silver are leached from the ground ore and at the same time adsorbed onto granules of activated carbon, which is then separated by screening and processed to remove the precious metals.
"carbon-in-pulp (CIP)"		A precious metals recovery step in the mill. After gold and silver have been leached from ground ore, they are adsorbed onto granules of activated carbon, which is then separated by screening and processed to remove the precious metals. A CIP circuit comprises a series of tanks through which leached slurry flows. Gold is captured onto captive activated carbon that will periodically be moved counter- currently from tank to tank. Head tank carbon is extracted periodically to further recover adsorbed gold before being returned to the circuit tails tank.
"chalcopyrite"		A sulphide mineral of copper and iron.
"concentrate"		The clean product recovered by froth flotation in the plant.
"conglomerate"		A coarse-grained sedimentary rock composed of rounded fragments set in a fine-grained cemented matrix.
"contact"		A plane or irregular surface between two types or ages of rock.
"counter-current decantation"		The clarification of washery water and the concentration of tailings by the use of several thickeners in series. The water flows in the opposite direction from the solids. The final products are slurry that is removed and clear water that is reused in the circuit.

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"crosscut"		An underground passage driven from a shaft towards the ore, at (or near) right angles to the strike of a vein or other orebody.
"cut-off grade"		The minimum metal grade in an ore that can be mined economically.
"cyanidation"		A method of extracting exposed gold or silver grains from crushed or ground ore by dissolving (leaching) it in a weak cyanide solution. May be carried out in tanks inside a mill or in heaps of ore out of doors (heap leach).
"deposit"		A natural occurrence of mineral or mineral aggregate, in such quantity and quality to invite exploitation.
"development"		The preparation of a mining property or area so that an orebody can be analyzed and its tonnage and quality estimated. Development is an intermediate stage between exploration and mining.
"diamond drill"		A drilling machine with a rotating, hollow, diamond-studded bit that cuts a circular channel around a core, which can be recovered to provide a more-or-less continuous and complete columnar sample of the rock penetrated.
"dilution"		The contamination of ore with barren wall rock in stoping, increasing tonnage mined and lowering the overall ore grade.
"dip"		The angle at which a vein, structure or rock bed is inclined from the horizontal as measured at right angles to the strike.
"disseminated"		Said of a mineral deposit (especially of metals) in which the desired minerals occur as scattered particles in the rock, but in sufficient quantity to make the deposit an ore. Some disseminated deposits are very large.
"dore"		Unrefined gold and silver bullion bars, which will be further refined to almost pure metal.
"drift"		A horizontal opening in or near an orebody and parallel to the long dimension of the orebody, as opposed to a crosscut that crosses the orebody.
"ductile"		Of rock, able to sustain, under a given set of conditions, 5% to 10% deformation before fracturing or faulting.
"dyke"		An earthen embankment, as around a drill sump or tank, or to impound a body of water or mill tailings. Also, a tabular body of igneous rock that cuts across the structure of adjacent rocks.
"electrowinning"		An electrochemical process in which a metal dissolved within an electrolyte is plated onto an electrode. Used to recover metals such as copper and gold from solution in the leaching of concentrates, etc.
"envelope"		1. The outer or covering part of a fold, especially of a folded structure that includes some sort of structural break.
		2. A metamorphic rock surrounding an igneous intrusion.
		3. In a mineral, an outer part different in origin from an inner part.
"epigenetic"		Orebodies formed by hydrothermal fluids and gases that were introduced into the host rocks from elsewhere, filling cavities in the host rock.
"epithermal"		Referring to a mineral deposit that formed later than the enclosing rocks consisting of veins and replacement bodies, containing precious metals or, more rarely, base metals.
"extensional-shear vein"		A vein put in place in an extension fracture caused by the deformation of a rock.
"fault"		A fracture or a fracture zone in crustal rocks along which there has been displacement of the two sides relative to one another parallel to the fracture. The displacement may be a few inches or many kilometres long.

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"feasibility study"		A comprehensive technical and economic study of the selected development option for a mineral project that includes appropriately detailed assessments of realistically assumed mining, processing, metallurgical, economic, marketing, legal, environmental, social and governmental considerations, together with any other relevant operational factors and a 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.
"felsic"		A term used to describe light-coloured rocks containing feldspar, feldspathoids and silica.
"flotation"		The method of mineral separation in which a froth created by a variety of reagents floats some finely crushed minerals, whereas other minerals sink. The metal-rich flotation concentrate is then skimmed off the surface.
"flowsheet"		A diagram showing the progress of material through a treatment plant.
"foliation"		A general term for a planar arrangement of features in any type of rock, especially the planar structure that results in a metamorphic rock.
"footwall"		The rock beneath an inclined vein or ore deposit (opposite of a hanging wall).
"fracture"		Any break in a rock, whether or not it causes displacement, due to mechanical failure by stress; includes cracks, joints and faults.
"free gold"		Gold not combined with other substances.
"glacial till"		Dominantly unsorted and unstratified, unconsolidated rock debris, deposited directly by and underneath a glacier.
"grade"		The relative quantity or the percentage of metal content of an orebody, e.g., grams of gold per tonne of rock, or percent copper.
"greenstone belt"		An area underlain by metamorphosed volcanic and sedimentary rocks, usually in a continental shield.
"grouting"		The process of sealing off a water flow in rocks by forcing a thin slurry of cement or other chemicals into the crevices; usually done through a diamond drill hole.
"hanging wall"		The rock on the upper side of a vein or ore deposit.
"head grade"		The average grade of ore fed into a mill.
"hectare"		A metric measurement of area. 1 hectare = 10,000 square metres = 2.47 acres.
"horst"		An up-faulted block of rock.
"hydrothermal alteration"		Alteration of rocks or minerals by reaction with hydrothermal (magmatic) fluids.
"igneous rock"		Rock formed by the solidification of molten material that originated within the Earth.
"in the hole (ITH) drill"		A type of rock drill in which a hammer is mounted in the hole, applying percussive force directly to the drill bit. Another type of rock drill is a top hammer where the hammer is mounted on the mast of the drill, applying percussive force on the drills rods/tubes, which is transmitted to the drill bit.

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"indicated mineral resource"		That part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed.
		While this term is recognized and required by Canadian regulations, the SEC does not recognize it. Investors are cautioned not to assume that any part or all of the mineral deposits in this category will ever be converted into mineral reserves.
"inferred mineral resource"		That part of a mineral resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes.
		While this term is recognized and required by Canadian regulations, the SEC does not recognize it. Investors are cautioned not to assume that any part or all of the mineral deposits in this category will ever be converted into mineral reserves. Investors are cautioned not to assume that part of or all of an inferred mineral resource exists, or is economically or legally mineable.
"infill drilling"		Drilling within a defined mineralized area to improve the definition of known mineralization.
"intrusive"		A body of igneous rock formed by the consolidation of magma intruded below surface into other rocks, in contrast to lavas, which are extruded upon the Earth's surface.
"iron formation"		A chemical sedimentary rock, typically thin-bedded or finely laminated, containing at least 15% iron of sedimentary origin and commonly containing layers of chert.
"kilometre"		A metric measurement of distance. 1.0 kilometre = 1,000 metres = 0.62 miles.
"leaching"		A chemical process for the extraction of valuable minerals from ore; also, a natural process by which ground waters dissolve minerals.
"lens"		A geological deposit that is thick in the middle and tapers towards the ends, resembling a convex lens.
"lithologic groups"		Groups of rock formations.
"lode"		A mineral deposit consisting of a zone of veins, veinlets or disseminations.
"longitudinal retreat"		An underground mining method where the ore is excavated in horizontal slices along the orebody and the stoping starts below and advances upwards. The ore is recovered underneath in the stope.
"mafic"		Igneous rocks composed mostly of dark, iron- and magnesium-rich silicate minerals.
"massive"		Said of a mineral deposit, especially of sulphides, characterized by a great concentration of ore in one place, as opposed to a disseminated or vein-like deposit. Said of any rock that has a homogeneous texture or fabric over a large area, with an absence of layering or any similar directional structure.
"matrix"		The fine-grained rock material in which a larger mineral is embedded.

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"measured mineral resource"		That part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters to support production planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough to confirm both geological and grade continuity.
		While this term is recognized and required by Canadian regulations, the SEC does not recognize it. Investors are cautioned not to assume that any part or all of the mineral deposits in this category will ever be converted into mineral reserves.
"Merrill-Crowe process"		A separation technique for removing gold from a cyanide solution. The solution is separated from the ore by methods such as filtration and counter-current decantation, and then the gold is precipitated onto zinc dust. Silver and copper may also precipitate. The precipitate is filtered to capture the gold slimes, which are further refined, e.g., by smelting, to remove the zinc and by treating with nitric acid to dissolve the silver.
"metamorphism"		The process by which the form or structure of sedimentary or igneous rocks is changed by heat and pressure.
"mill"		A mineral treatment plant in which crushing, wet grinding and further treatment of ore is conducted; also a revolving drum used for the grinding of ores in preparation for treatment.
"mineral resource"		A concentration or occurrence of diamonds, natural solid inorganic material or natural solid fossilized organic material including base and precious metals, coal and industrial minerals in or on the Earth's crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction. The location, quantity, grade, geological characteristics and continuity of a mineral resource are known, estimated or interpreted from specific geological evidence and knowledge. Investors are cautioned not to assume that any part or all of the mineral deposits in any category of resources will ever be converted into mineral reserves.
"mineral reserve"		The economically mineable part of a measured or indicated mineral resource demonstrated by at least a preliminary feasibility study. This study must include adequate information on mining, processing, metallurgical, economic and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified. A mineral reserve includes diluting materials and allowances for losses that may occur when the material is mined.
"muck"		Finely blasted rock (ore or waste) underground.
"net smelter return royalty"		A royalty payment made by a producer of metals based on the proceeds from the sale of mineral products after deducting off-site processing and distribution costs including smelting, refining, transportation and insurance costs.
"ounce"		A measurement of weight, especially used for gold, silver and platinum group metals. 1 troy ounce = 31.1035 grams.
"outcrop"		The part of a rock formation that appears at the surface of the Earth.
"oxidation"		A chemical reaction caused by exposure to oxygen, which results in a change in the chemical composition of a mineral.
"phenocryst"		Large crystals or mineral grains floating in the matrix or groundmass of a porphyry.
"pillar"		A block of ore or other rock entirely surrounded by stoping, left intentionally for purposes of ground control or on account of low value.

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"plunge"		The inclination of a fold axis or other linear structure from a horizontal plane, measured in the vertical plane.
"polydeformed"		A rock that has been subjected to more than one instance of folding, faulting, shearing, compression or extension as a result of various tectonic forces.
"porphyritic"		Rock texture in which one or more minerals has a larger grain size than the accompanying minerals.
"porphyry"		Any igneous rock in which relatively large crystals, called phenocrysts, are set in a fine- grained groundmass.
"preliminary feasibility study" or "pre-feasibility study"		A comprehensive study of a range of options for the technical and economic viability of a mineral project that has advanced to a stage where a preferred mining method (in the case of underground mining) or the pit configuration (in the case of an open pit) is established, and an effective method of mineral processing is determined. It includes a financial analysis based on reasonable assumptions on mining, processing, metallurgical, economic, marketing, legal, environmental, social and governmental considerations and the evaluation of any other relevant factors which are sufficient for a qualified person, acting reasonably, to determine if all or part of the mineral resource may be classified as a mineral reserve.
"pressure oxidation"		A process by which sulphide minerals are oxidized in order to expose gold that is encapsulated in the mineral lattice. The main component of a pressure oxidation circuit consists of a pressurized vessel (autoclave) where the oxygen level, process temperature and acidity are the primary control parameters.
"probable mineral reserve"		The economically mineable part of an indicated and, in some circumstances, a measured mineral resource demonstrated by at least a preliminary feasibility study.
"proven mineral reserve"		The economically mineable part of a measured mineral resource demonstrated by at least a preliminary feasibility study.
"pyrite"		A yellow iron sulphide mineral, FeS2, normally of little value. It is sometimes referred to as "fool's gold".
"pyroclastic"		Rocks produced by explosive or aerial ejection of ash, fragments and glassy material from a volcanic vent.
"recovery"		The percentage of valuable metal in the ore that is recovered by metallurgical treatment.
"rock burst"		A sudden and often violent breaking of a mass of rock from the walls of a mine, caused by failure of highly stressed rock and the rapid release of accumulated strain energy.
"run-of-mine ore"		The raw, mined material as it is delivered, prior to sorting, stockpiling or treatment.
"sandstone"		A sedimentary rock consisting of grains of sand cemented together.
"schist"		A strongly foliated crystalline rock that can be readily split into thin flakes or slabs due to the well-developed parallelism of more than 50% of the minerals present in it, such as mica or hornblende.
"sedimentary rocks"		Rocks resulting from the consolidation of loose sediment that has accumulated in layers. Examples are limestone, shale and sandstone.
"semi-autogenous grinding (SAG)"		A method of grinding rock whereby larger chunks of the rock itself and steel balls form the grinding media.
"shear" or "shearing"		The deformation of rocks by lateral movement along innumerable parallel planes, generally resulting from pressure and producing metamorphic structures such as cleavage and schistosity.

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"shear zone"		A tabular zone of rock that has been crushed and brecciated by many parallel fractures due to shear stress. Such an area is often mineralized by ore-forming solutions.
"sill"		An intrusive sheet of igneous rock of roughly uniform thickness that has been forced between the bedding planes of existing rock.
"slurry"		Fine rock particles in circulating water in a treatment plant.
"stope"		1. Any excavation in a mine, other than development workings, made for the purpose of extracting ore.
		2. To excavate ore in an underground mine.
"strike"		The direction, or bearing from true north, of a horizontal line on a vein or rock formation at right angles to the dip.
"stringers"		Mineral veinlets or filaments occurring in a discontinuous subparallel pattern in a host rock.
"sulphide"		A mineral characterized by the linkage of sulphur with a metal, such as pyrite, FeS2.
"tabular"		Said of a feature having two dimensions that are much larger or longer than the third, such as a dyke.
"tailings"		Material rejected from a mill after the economically and technically recoverable valuable minerals have been extracted.
"tailings dam" or "tailings impoundment" or "tailings pond"		Area closed at the lower end by a constraining wall or dam to which mill effluents are sent, the prime function of which is to allow enough time for metals to settle out or for cyanide to be naturally destroyed before the water is returned to the mill or discharged into the local watershed.
"tenement"		The right to enter, develop and work a mineral deposit. Includes a mining claim or a mining lease. A synonym of mineral title.
"thickener"		A vessel for reducing the proportion of water in a pulp by means of sedimentation.
"thickness"		The distance at right angles between the hanging wall and the footwall of a lode or lens.
"tonne"		A metric measurement of mass. 1 tonne = 1,000 kilograms = 2,204.6 pounds = 1.1 tons.
"transfer fault"		A structure that can accommodate lateral variations of deformation and strain.
"transverse open stoping"		An underground mining method in which the ore is excavated in horizontal slices perpendicular to the orebody length and the stoping starts below and advances upwards. The ore is recovered underneath the stope through a drawpoint system.
"trench"		A narrow excavation dug through overburden, or blasted out of rock, to expose a vein or ore structure for sampling or observation.
"vein"		A mineral filling of a fault or other fracture in a host rock.
"wacke"		A "dirty" sandstone that consists of a mixture of poorly sorted mineral and rock fragments in an abundant matrix of clay and fine silt.
"winze"		An internal mine shaft.
"Zadra elution circuit"		The process in this part of a gold mill strips gold and silver from carbon granules and puts them into solution.
"zone"		An area of distinct mineralization, i.e., a deposit.

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CORPORATE STRUCTURE

Agnico Eagle Mines Limited is a corporation governed by the Business Corporations Act (Ontario). The Company was formed by articles of amalgamation under the laws of the Province of Ontario on June 1, 1972, as a result of the amalgamation of Agnico Mines Limited ("Agnico Mines") and Eagle Gold Mines Limited ("Eagle"). Agnico Mines was incorporated under the laws of the Province of Ontario on January 21, 1953 under the name "Cobalt Consolidated Mining Corporation Limited". Eagle was incorporated under the laws of the Province of Ontario on August 14, 1945.

Since 1972, several corporate alterations have taken place. On August 22, 1972, the Company's articles were amended to permit the Company to: (i) borrow money on the credit of the Company, (ii) issue, sell or pledge debt obligations and (iii) charge, mortgage or pledge the Company's property. On June 27, 1980, Articles of Amendment were filed to allow the Company to use the name "Mines Agnico-Eagle Limitée". On July 5, 1984, the Company's articles were amended to delete all of the objects of the Company listed and specify that no restrictions apply to the business or powers that the Company may exercise. On July 3, 1986, Articles of Amendment were filed to set the minimum number of directors of the Company at five and the maximum at nine. On July 29, 1988, the Company's articles were amended to provide that the Company is authorized to issue an unlimited number of shares

On December 31, 1992, the Company amalgamated with Lucky Eagle Mines Limited. On June 30, 1993, the maximum number of directors of the Company was increased from nine to 12. On January 1, 1996, the Company amalgamated with Goldex Mines Limited and 1159885 Ontario Limited. On October 17, 2001, the Company filed Articles of Arrangement which provided for the amalgamation of the Company and Mentor Exploration and Development Co. On July 12, 2002, the name of the Company was changed to "Agnico-Eagle Mines Limited/Mines Agnico-Eagle Limitee". On August 1, 2007, the Company amalgamated with Cumberland Resources Ltd., Agnico-Eagle Acquisition Corporation and Meadowbank Mining Corporation. On May 4, 2010, the maximum number of directors of the Company was increased from 12 to 15.

On January 1, 2011, the Company amalgamated with 1816276 Ontario Inc. (the ultimate successor corporation of Comaplex Minerals Corp.). On January 1, 2013, the Company amalgamated with 1886120 Ontario Inc. (the successor corporation to 9237- 4925 Québec Inc.). On April 26, 2013, Articles of Amendment were filed to eliminate the hyphen between "Agnico" and "Eagle" and the official name of the Company became "Agnico Eagle Mines Limited/Mines Agnico Eagle Limitée".

The Company's head and registered office is located at Suite 400, 145 King Street East, Toronto, Ontario, Canada M5C 2Y7; telephone number (416) 947-1212; website: www.agnicoeagle.com. The information contained on the website is not part of this AIF. The Company's principal place of business in the United States is located at 1675 E. Prater Way, Suite 102, Sparks, Nevada 89434.

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The following chart sets out the corporate structure of the Company, each of its significant subsidiaries and certain other subsidiaries, together with the jurisdiction of organization of the Company and each such subsidiary as at March 12, 2015 (all of which are directly or indirectly wholly-owned by the Company, unless otherwise indicated).

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DESCRIPTION OF THE BUSINESS

The Company is an established Canadian-based international gold producer with mining operations in northwestern Quebec, northern Mexico, northern Finland and Nunavut and exploration activities in Canada, Europe, Latin America and the United States. The Company's operating history includes over three decades of continuous gold production, primarily from underground operations. Since its formation on June 1, 1972, the Company has produced approximately 11.0 million ounces of gold.

The Company's strategy is to focus on the continued exploration, development and expansion of its properties, all of which are located in politically stable jurisdictions. The Company has spent approximately $3.2 billion on mine development over the last six years. Through this development program, the Company transformed itself from a regionally focused, single mine producer to a multi-mine international gold producer with seven operating, 100% owned mines, one operating 50% owned mine, and one advanced exploration project.

The following table sets out the date of acquisition, the date of commencement of construction and the date of achieving commercial production for the Company's mines.

		Date of Acquisition(1)		Date of Commencement of Construction		Date of achieving Commercial Production		Estimated Mine Life(2)
LaRonde mine		1992		1985		1988		2025
Lapa mine		June 2003		June 2006		May 2009		2016
Goldex mine(3)		December 1993		July 2012		October 2013		2017
Canadian Malartic mine		June 2014		n/a		May 2011		2028
Kittila mine		November 2005		June 2006		May 2009		2034
Meadowbank mine		April 2007		Pre-April 2007		March 2010		2017
Pinos Altos mine		March 2006		August 2007		November 2009		2027
La India mine		November 2011		September 2012		February 2014		2020

Notes:

(1)

Date when 100% ownership was acquired, other than the Canadian Malartic mine which is the date when 50% ownership was acquired.

(2)

Estimated end date for gold production based on the Company's current life of mine plans.

(3)

Construction of infrastructure for purposes of mining the Goldex Extension Zone (the "GEZ") commenced in July 2005 and the GEZ achieved commercial production in August 2008. Mining operations on the GEZ have been suspended since October 2011. In late 2013, mining and production began from the M and E Zones of the Goldex mine.

Since 1988, the LaRonde mine, in the Abitibi region of Quebec, has been the Company's flagship operation, producing approximately 4.9 million ounces of gold as well as valuable byproducts. The Lapa mine, one of the Company's highest grade metals mines, is 11 kilometres east of the LaRonde mine, and the Goldex mine, which achieved commercial production from the M and E Zones in October 2013, is 60 kilometres east of the LaRonde mine. The synergies between these sites contribute to the Company's efforts to reduce costs. The Company's 50% owned Canadian Malartic mine, in Quebec, was acquired in June, 2014. The Kittila mine in Finland, which achieved commercial production in May 2009, has a long reserve life and has significant production expansion potential. The Company's Meadowbank mine in Nunavut achieved commercial production in March 2010 and is expected to produce the most gold (approximately 400,000 ounces) of any of the Company's mines in 2015. The Pinos Altos mine, in Mexico, achieved commercial production in November 2009 and also has significant production expansion potential and the La India mine, also in Mexico, achieved commercial production in February 2014. In addition, the Company plans to pursue opportunities for growth in gold production and gold reserves through the prudent acquisition or development of exploration properties, development properties, producing properties and other mining businesses in the Americas and Europe.

In 2014, the Company produced 1,429,288 ounces of gold at total cash costs per ounce of $637 on a by-product basis and at all-in sustaining costs per ounce of $954 on a by-product basis. For 2015, the Company expects to produce approximately 1.6 million ounces of gold at a total cash costs per ounce of gold on a by-product basis between $610 and $630 and at all-in sustaining costs per ounce between $880 and $900 on a by-product basis. The expected decrease in total cash costs per ounce of gold produced on a by-product basis in 2015 compared with 2014 is due primarily to increased production. See "Introductory Notes – Note to Investors Concerning Certain Measures of Performance" for a discussion of the use of the non-GAAP measure total cash costs per ounce and all-in sustaining costs per ounce. The

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Company has traditionally sold all of its production at the spot price of gold due to its general policy not to sell forward its future gold production.

Based on the recommendations of the World Gold Council made in 2013, the Company has modified its calculation of all-in sustaining costs per ounce of gold produced for 2014. All-in sustaining costs per ounce of gold produced is presented on both a by-product basis (deducting by-product metal revenues from production costs) and co-product basis (before by-product metal revenues). All-in sustaining costs per ounce of gold produced on a by-product basis is calculated as the aggregate of total cash costs per ounce of gold produced on a by-product basis and sustaining capital expenditures (including capitalized exploration), general and administrative expenses (including stock options) and non-cash reclamation provision expense per ounce of gold produced. All-in sustaining costs per ounce of gold produced on a co-product basis is calculated in the same manner as all-in sustaining costs per ounce of gold produced on a by-product basis except that no adjustment for by-product metal revenues is made to total cash costs per ounce of gold produced. The calculation of all-in sustaining 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.

Prior to modifying its calculation of all-in sustaining costs per ounce of gold produced for 2014 based on the recommendations of the World Gold Council, the Company calculated all-in sustaining costs per ounce of gold produced on a by-product basis as the aggregate of total cash costs per ounce of gold produced on a by-product basis and sustaining capital expenditures, general and administrative expenses (net of stock options) and exploration and corporate development expenses (excluding greenfield exploration) per ounce of gold produced. All-in sustaining costs per ounce of gold produced on a co-product basis would have been calculated in the same manner as all-in sustaining costs per ounce of gold produced on a by-product basis except that no adjustment for by-product metal revenues, net of smelting, refining and marketing charges would have been made to total cash costs per ounce of gold produced.

All-in sustaining costs is a non-IFRS measure and is used to show the full cost of gold production from current operations. The Company's methodology for calculating all-in sustaining costs may not be similar to the methodology used by other producers that disclose all-in sustaining costs. The Company may change the methodology it uses to calculate all-in sustaining costs in the future, including in response to the adoption of formal industry guidance regarding this measure by the World Gold Council.

GENERAL DEVELOPMENT OF THE BUSINESS

Three-Year History

2012

In 2012, a 750 tonne per day expansion to the mill facilities at the Kittila mine was approved. The Kittila mine's mill expansion project was completed ahead of schedule in 2014 and production is expected to increase and unit costs are expected to decrease as throughput ramps up to design capacity of 4,000 tonnes per day. Total capital expenditures on the Kittila mine throughput expansion project were $103.0 million.

On June 26, 2012, the Company entered into a letter of credit facility with The Bank of Nova Scotia, as lender, providing for a C$150 million uncommitted letter of credit facility which was increased to C$175 million in 2013. In 2014, the Company and the lender under the letter of credit facility agreed that the Company would be permitted to draw up to C$185 million on the facility.

On July 24, 2012, the Company issued by way of private placement $200 million aggregate principal amount of guaranteed senior unsecured notes consisting of $100 million 4.87% Series A senior notes due 2022 and $100 million 5.02% Series B senior notes due 2024.

In 2012, exploration drilling was conducted on several mineralized zones on the Goldex mine property near the GEZ. A team of independent consultants and Company staff performed a review, including a preliminary economic assessment, to determine whether future mining operations on the property, including the M and E Zones, would be viable. In July 2012, after a review of the assessment, Agnico Eagle's board of directors (the "Board" or the "Board of Directors") approved the M and E Zones for development.

Capital expenditures by the Company in 2012 were $445.6 million. This included $75.2 million at the LaRonde mine, $18.5 million at the Lapa mine, $26.8 million at the Goldex mine, $60.0 million at the Kittila mine, $105.1 million at the Meadowbank mine, $30.0 million at the Pinos Altos mine (which included approximately $5.8 million related to the Creston Mascota deposit at Pinos Altos), $39.2 million at the La India project, $83.3 million at the Meliadine project and $7.5 million at other properties. In addition, the Company incurred $5.0 million of expenditures on mine site exploration

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and $104.5 million on exploration activities at the Company's exploration properties and on corporate development activities.

2013

On May 16, 2013, the Company completed its acquisition of all of the issued and outstanding common shares of Urastar Gold Corp. ("Urastar"), a Canadian based natural resource company listed on the TSX Venture Exchange, pursuant to a court-approved plan of arrangement under the Business Corporations Act (British Columbia). Urastar holds a 100% interest in certain mining properties in Sonora, Mexico. Under the terms of the arrangement, each shareholder of Urastar received C$0.25 per common share and holders of unexercised in-the-money warrants of Urastar received C$0.15 per warrant, for aggregate cash consideration of $10.1 million. Urastar is now a wholly-owned subsidiary of Agnico Eagle.

In September 2013, pre-production commissioning activities commenced at the La India mine.

On October 1, 2013, commercial production was achieved at the Goldex mine's M and E Zones.

Capital expenditures by the Company in 2013 were $620.5 million. This included $84.3 million at the LaRonde mine, $22.7 million at the Lapa mine, $65.1 million at the Goldex mine, $83.8 million at the Kittila mine, $109.3 million at the Meadowbank mine, $70.7 million at the Pinos Altos mine (which included approximately $17.8 million related to the Creston Mascota deposit at Pinos Altos), $116.8 million at the La India project, $61.4 million at the Meliadine project and $6.5 million at other properties. In addition, the Company incurred $4.9 million of expenditures on mine site exploration and $39.3 million on exploration activities at the Company's exploration properties and on corporate development activities.

2014

On February 1, 2014, commercial production was achieved at the La India mine.

On June 16, 2014, the Company and Yamana Gold Inc. ("Yamana") jointly acquired 100% of the outstanding shares of Osisko Mining Corporation ("Osisko") pursuant to a court-approved plan of arrangement under the Canada Business Corporations Act (the "Arrangement") for approximately C$3.9 billion consisting of approximately C$1.0 billion in cash and a combination of common shares of the Company, common shares of Yamana and shares of a new company that was spun-off under the Arrangement. Under the Arrangement, each Osisko share was exchanged for: (i) C$2.09 in cash (C$1.045 per share from each of the Company and Yamana); (ii) 0.07264 of a common share of the Company; (iii) 0.26471 of a common share of Yamana; and (iv) 0.1 of one common share of Osisko Gold Royalties Ltd ("New Osisko"), the newly formed spun-off company that commenced trading on the Toronto Stock Exchange (the "TSX") immediately following the Arrangement.

In connection with the Arrangement, substantially all of the assets and obligations relating to the Canadian Malartic mine in Quebec were transferred to Canadian Malartic GP, a newly formed general partnership in which the Company and Yamana each own an indirect 50% interest (the "Partnership"). The Company and Yamana formed a joint management committee to operate the Canadian Malartic mine. On June 17, 2014, Osisko and the acquisition corporation formed by the Company and Yamana to acquire Osisko amalgamated to form "Canadian Malartic Corporation" in which Agnico and Yamana each hold an indirect 50% interest. Canadian Malartic Corporation continues to hold, among other things, Osisko's Kirkland Lake, Hammond Reef, Pandora and Wood-Pandora (50% interest) assets and properties. The Company and Yamana will jointly explore and potentially develop the Kirkland Lake assets, and continue exploration at the Hammond Reef project and the Pandora and Wood-Pandora properties through Canadian Malartic Corporation.

Pursuant to the Arrangement, the following assets of Osisko were transferred to New Osisko: (i) a 5.0% net smelter royalty on the Canadian Malartic mine; (ii) C$157.0 million in cash; (iii) a 2.0% net smelter royalty on the Kirkland Lake assets, the Hammond Reef project, and certain other exploration properties retained by Canadian Malartic Corporation; (iv) all assets and liabilities of Osisko relating to the Guerrero camp in Mexico; and (v) certain other investments and assets.

The Company's and Yamana's relationship with respect to the Canadian Malartic mine is governed by a unanimous shareholders agreement with respect to Canadian Malartic Corporation and a general partnership agreement with respect to the Partnership.

Direct transaction costs totaling C$16.7 million were included in the cost of the investment in Osisko. The Company's share of Osisko's June 16, 2014 purchase price was comprised of 33,923,212 of the Company's common shares issued to former holders of Osisko shares, C$502,059,784.01 in cash and 871,680 of the Company's common shares issued and held by the depositary in respect of unsecured convertible debentures previously issued by Osisko that remained outstanding following the Arrangement. On conversion, holders of the outstanding unsecured convertible debentures are

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entitled, per Osisko share otherwise issuable, to the same per share consideration as received by former Osisko shareholders under the Arrangement.

A business acquisition report in respect of the Arrangement was filed by the Company on SEDAR on August 22, 2014.

On November 28, 2014, the Company completed its acquisition of all of the issued and outstanding common shares of Cayden Resources Inc. ("Cayden"), a Canadian based natural resource company listed on the TSX Venture Exchange, pursuant to a court-approved plan of arrangement under the Business Corporations Act (British Columbia). Cayden indirectly holds a 100% interest, or an option to earn a 100% interest, in certain mining properties in Jalisco and Guerrero, Mexico, including the El Barqueno property. Under the terms of the arrangement, each shareholder of Cayden received 0.09 of a common share of the Company and C$0.01 in cash. Cayden is now a wholly-owned subsidiary of Agnico Eagle.

Capital expenditures by the Company in 2014 were $475.4 million. This included $76.6 million at the LaRonde mine, $20.2 million at the Lapa mine, $34.3 million at the Goldex mine, $36.1 million at the Canadian Malartic mine, $106.2 million at the Kittila mine, $48.4 million at the Pinos Altos mine, $10.9 million related at the Creston Mascota deposit at Pinos Altos, $22.7 million at the La India mine, $65.9 million at the Meadowbank mine, $48.3 million at the Meliadine project and $5.9 million at other properties. In addition, the Company incurred $25.9 million of expenditures on mine site exploration and $56.0 million on exploration activities at the Company's exploration properties and on corporate development activities.

2015

On February 23, 2015, Agnico Eagle entered into a binding letter of intent (the "LOI") with Canadian Malartic GP, Yamana and Abitibi Royalties Inc. ("Abitibi Royalties") regarding the Malartic CHL prospect which abuts the Canadian Malartic mine and in which Canadian Malartic Corporation held a 70% interest, with the remaining 30% interest held by Abitibi Royalties. On March 19, 2015, Abitibi Royalties sold its 30% interest in the Malartic CHL prospect to the purchasers (the "CHL Transaction") in exchange for 459,197 common shares of the Company and 3,549,685 Yamana common shares, for total consideration of C$35 million (based on the respective closing prices of such shares on the TSX on February 20, 2015, the date immediately prior to the public announcement by Abitibi Royalties of entering into the LOI), and 3% net smelter return royalties to Abitibi Royalties and New Osisko on the prospect. In addition, as part of the CHL Transaction all prior agreements, claims and proceedings relating to the Malartic CHL prospect, including those previously instituted by Abitibi Royalties against Osisko prior to the Company and Yamana completing the Arrangement were terminated, settled and released.

Prior to completion of the Arrangement of Osisko, on June 6, 2014, Clifton Star Resources Inc. ("Clifton") instituted proceedings against Osisko (now Canadian Malartic Corporation) seeking, among other things, an order that Osisko pay Clifton C$22.5 million in damages. In the proceedings, Clifton alleged, among other things, that Osisko was obligated to lend Clifton C$22.5 million on or around December 1, 2012 pursuant to a December 10, 2009 commitment letter and a December 10, 2009 Duparquet Mining Camp Option and Joint Venture Agreement, each between Clifton and Osisko, and that Osisko's failure to advance such loan resulted in damages to Clifton. Clifton further alleged that such loan was intended to be used to make payments under certain option agreements between Clifton and third parties which entitled Clifton to acquire shares of such third parties that owned interests in the concessions comprising the "Duparquet Project". Following the joint acquisition of Osisko by the Company and Yamana on June 16, 2014, the Company and Yamana engaged in discussions with Clifton to advance the settlement of such claims. Effective March 2, 2015, Canadian Malartic Corporation (as the successor to Osisko) entered into a settlement agreement with Clifton, pursuant to which Canadian Malartic Corporation paid Clifton approximately C$5.27 million in consideration for a full and final release of all claims arising from the facts described in the Clifton proceedings, the whole without any admission of liability. Concurrently, under two separate non-brokered private placements, each of the Company and Yamana subscribed for 4,772,786 common shares of Clifton at a price of C$0.60 per share, for total proceeds to Clifton of approximately C$5.73 million. As a result of the closing of the private placement, the Company now holds 4,772,786 common shares of Clifton representing, as of March 2, 2015, approximately 9.9% of the issued and outstanding Clifton shares.

Pre-2012

In the second quarter of 2004, the Company acquired an approximate 14% ownership interest in Riddarhyttan Resources AB ("Riddarhyttan"), a Swedish precious and base metals exploration and development company that was at the time listed on the Stockholm Stock Exchange. In November 2005, the Company completed a tender offer (the "Riddarhyttan Offer") for all of the issued and outstanding shares of Riddarhyttan that it did not own. The Company issued 10,023,882 of its common shares and paid and committed an aggregate of $5.1 million cash as consideration to Riddarhyttan shareholders in connection with the Riddarhyttan Offer. On March 28, 2011, Riddarhyttan was merged with Agnico Eagle

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AB and Agnico Eagle Sweden AB, with Agnico Eagle Sweden AB as the continuing entity. The Kittila mine is currently 100% owned by Agnico Eagle Finland Oy, which is wholly-owned by Agnico Eagle Sweden AB.

In the first quarter of 2005, the Company entered into an exploration and option agreement with Industrias Penoles S.A. de C.V. ("Penoles") to acquire the Pinos Altos property in northern Mexico. The Pinos Altos property is comprised of approximately 11,000 hectares in the Sierra Madre gold belt, approximately 225 kilometres west of the city of Chihuahua in the state of Chihuahua in northern Mexico. In February 2006, the Company exercised its option and acquired the Pinos Altos property on March 15, 2006. Under the terms of the exploration and option agreement, the purchase price of $66.8 million was comprised of $32.5 million in cash and 2,063,635 common shares of the Company.

In February 2007, the Company made an exchange offer for all of the outstanding shares of Cumberland Resources Ltd. ("Cumberland") not already owned by the Company. At the time, Cumberland was a pre-production development stage company listed on the TSX and American Stock Exchange whose primary asset was the Meadowbank property. In May 2007, the Company acquired approximately 92% of the issued and outstanding shares of Cumberland that it did not previously own and, in July 2007, the Company completed the acquisition of all Cumberland shares by way of a compulsory acquisition. The Company issued 13,768,510 of its common shares and paid $9.6 million in cash as consideration to Cumberland shareholders in connection with its acquisition of Cumberland.

In April 2010, the Company entered into an agreement in principle with Comaplex Minerals Corp. ("Comaplex") to acquire all of the outstanding shares of Comaplex that it did not already own. At the time, Comaplex owned a 100% interest in the advanced stage Meliadine gold property, which is located approximately 300 kilometres southeast of the Company's Meadowbank mine. In May 2010, the Company executed the definitive agreements with Comaplex and, in July 2010 by plan of arrangement, the Company acquired 100% of the Meliadine gold property through the acquisition of Comaplex, which was renamed Meliadine Holdings Inc. Pursuant to the arrangement, Comaplex transferred to Geomark Exploration Ltd. all assets and related liabilities other than those relating to the Meliadine project. In connection with the arrangement, the Company issued 10,210,848 of its common shares as consideration to Comaplex shareholders.

In September 2011, the Company entered into an acquisition agreement with Grayd Resource Corporation ("Grayd"), a Canadian-based natural resource company listed on the TSX Venture Exchange, pursuant to which the Company agreed to make an offer to acquire all of the issued and outstanding common shares of Grayd. At the time, Grayd held a 100% interest in the La India property located in the Mulatos Gold Belt of Sonora, Mexico and had recently discovered the Tarachi gold porphyry prospect located approximately ten kilometres north of the La India property. In October 2011, the Company made the offer by way of a take-over bid circular, as amended and supplemented, and, in November 2011, acquired approximately 95% of the outstanding common shares of Grayd. In January 2012, the Company completed a compulsory acquisition of the remaining outstanding common shares of Grayd and Grayd became a wholly-owned subsidiary of the Company. In aggregate, the Company issued 1,319,418 of its common shares and paid C$179.7 million in cash as consideration to Grayd shareholders in connection with the transaction.

OPERATIONS AND PRODUCTION

Business Units and Foreign Operations

The Company operates through three business units: Northern Business, Southern Business and Exploration.

The Company's Northern Business is comprised of the Company's operations in Canada and Finland. The Company's Canadian properties include the LaRonde mine, the Lapa mine, the Goldex mine, the Meadowbank mine and the Meliadine project, each of which is held directly by the Company, and the 50% interest in the Canadian Malartic Mine, which is held indirectly through a wholly owned subsidiary of the Company and Canadian Malartic Corporation. The Company's operations in Finland are conducted through its indirect subsidiary, Agnico Eagle Finland Oy, which owns the Kittila mine. In 2014, the Northern Business accounted for approximately 79% of the Company's gold production. In 2015, the Company anticipates that the Northern Business will account for approximately 80% of the Company's gold production.

The Company's Southern Business is comprised of the Company's operations in Mexico. The Company's mining at Pinos Altos is conducted through its subsidiary, Agnico Eagle Mexico S.A. de C.V., which owns the Pinos Altos mine, including the Creston Mascota deposit. The La India mine is owned by the Company's indirect subsidiary, Agnico Sonora, S.A. de C.V. In 2014, the Southern Business accounted for approximately 21% of the Company's gold production. In 2015, the Company anticipates that the Southern Business will account for approximately 20% of the Company's gold production.

The Company's Exploration group focuses primarily on the identification of new mineral reserves and resources and new development opportunities in politically stable and proven gold producing regions. Current exploration activities are concentrated in Canada, Europe, Latin America and the United States. Several projects were evaluated during 2014 in other countries where the Company believes the potential for gold occurrences is excellent and which the Company believes to be politically stable and supportive of the mining industry. The Company currently manages 72 properties in Canada, five properties in the United States, three groups of properties in Finland, one property in Sweden and 12 properties in Mexico. Exploration activities are managed from offices in Val d'Or, Quebec; Reno, Nevada; Chihuahua and Hermosillo, Mexico; Kittila, Finland; and Vancouver, British Columbia.

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Northern Business

LaRonde Mine

The LaRonde mine is situated approximately halfway between the City of Rouyn-Noranda and the City of Val d'Or in northwestern Quebec (approximately 470 kilometres northwest of Montreal, Quebec) in the municipalities of Preissac and Cadillac. At December 31, 2014, the LaRonde mine was estimated to have proven and probable mineral reserves containing approximately 3.43 million ounces of gold comprised of 20.5 million tonnes of ore grading 5.20 grams per tonne. The Company's LaRonde mine consists of the LaRonde property and the adjacent El Coco and Terrex properties, each of which is 100% owned and operated by the Company. The LaRonde mine can be accessed either from Val d'Or in the east or from Rouyn-Noranda in the west, each of which are located approximately 60 kilometres from the LaRonde mine via Quebec provincial highway No. 117. The LaRonde mine is situated approximately two kilometres north of highway No. 117 on Quebec regional highway No. 395. The Company has access to the Canadian National Railway at Cadillac, Quebec, approximately six kilometres from the LaRonde mine.

The Company first acquired an interest in the LaRonde property in 1974 through an indirect investment in Dumagami Mines Limited ("Dumagami"). The Company acquired 100% of the outstanding shares of Dumagami on December 19, 1989, and on December 29, 1992, Dumagami transferred all of its property and assets, including the LaRonde mine, to the Company and subsequently dissolved.

The LaRonde mine operates under mining leases obtained from the Ministry of Natural Resources (Quebec) and under certificates of approval granted by the Ministry of Sustainable Development, Environment and the Fight Against Climate Change (Quebec). The LaRonde property consists of 36 contiguous mining claims and one provincial mining lease and covers in total 1,047.4 hectares. The El Coco property consists of 22 contiguous mining claims and one provincial mining lease and covers in total 356.7 hectares. The Terrex property consists of 21 mining claims and one provincial mining lease that was acquired in July 2014. The Terrex property covers in total 424.4 hectares. The mining leases on the LaRonde and El Coco properties expire in 2018 and 2021, respectively, and are automatically renewable for three further ten-year terms upon payment of a small fee. The Company also has three surface rights leases that cover in total approximately 303.6 hectares that relate to the water pipeline right of way from Lake Preissac and the eastern extension of the LaRonde tailings pond #7 on the El Coco property. The surface rights leases are renewable annually.

Location Map of the LaRonde Mine (as at December 31, 2014)

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The LaRonde mine includes underground operations at the LaRonde and El Coco properties that can both be accessed from the Penna Shaft, a mill, a treatment plant, a secondary crusher building and related facilities. In 2003, exploration work started to extend outside of the LaRonde property onto the Terrex property where a down-plunge extension of Zone 20 North was discovered. The Terrex property is subject to a 5% net profits royalty in favour of Delfer Gold Mines Inc. The Company does not expect to pay royalties in respect of this part of the property in 2015. In addition, the Company owns 100% of the Sphinx property immediately to the east of the El Coco property. In 2014, 71% of the ore processed from the LaRonde mine was extracted from the deeper portion of the LaRonde mine (that is, below Level 245) or the "LaRonde mine extension". In 2015, the Company anticipates that approximately 79% of the ore processed will be from this deeper part of the mine.

The Company expects future byproduct metal recoveries at the LaRonde mine to decline as production continues to shift towards deeper sections of the mine where gold grades are higher and byproduct metals are less prevalent. The decreased byproduct revenues will result in higher total cash costs per ounce attributable to ore extracted from these parts of the mine.

The Abitibi region has a continental climate with average annual rainfall of 64 centimetres and average annual snowfall of 318 centimetres. The average monthly temperatures range from a minimum of minus 23 degrees Celsius in January to a maximum of 23 degrees Celsius in July. Under normal circumstances, mining operations are conducted year-round without interruption due to weather conditions. The Company believes that the Abitibi region of northwestern Quebec has sufficient experienced mining personnel to staff its operations in the Abitibi region. The elevation is 337 metres above sea level. The LaRonde property is relatively flat with a maximum relief of approximately 40 metres. The topography gently slopes down from north to south and is characterized by boreal-type forest at LaRonde and the nearby properties. All of the LaRonde mine's power requirements are supplied by Hydro-Quebec through connections to its main power transmission grid. Water used in the LaRonde mine's operations is sourced from Lake Preissac and is transported approximately four kilometres to the minesite through a surface pipeline.

Map of the Abitibi region showing the location of the LaRonde, Lapa, Goldex and Canadian Malartic Mines

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Mining and Milling Facilities

Surface Plan of the LaRonde Mine (as at December 31, 2014)

The LaRonde mine was originally developed utilizing a 1,207-metre shaft (Shaft #1) and an underground ramp access system. The ramp access system is available down to Level 25 of Shaft #1 and continues down to Level 293 at the Penna Shaft. The mineral reserve accessible from Shaft #1 was depleted in September 2000 and Shaft #1 is no longer in use. A second production shaft (Shaft #2), located approximately 1.2 kilometres to the east of Shaft #1, was completed in 1994 to a depth of 525 metres and was used to mine Zones 6 and 7. Both ore zones were depleted in March 2000 and the workings were allowed to flood up to Level 6 (approximately 280 metres). A third shaft (the Penna Shaft), located approximately 800 metres to the east of Shaft #1, was completed down to a depth of 2,250 metres in March 2000. The Penna Shaft is used to mine Zones 20 North, 20 South, 6 and 7.

In 2006, the Company initiated construction of the LaRonde mine extension. Hoisting from this deeper part of the LaRonde mine began in the fourth quarter of 2011 and commercial production was achieved in November 2011. Access to the deeper part of the LaRonde mine is provided through a 823 metre internal shaft (completed in November 2009) starting from Level 203, for a total depth of 2,858 metres below the surface. A ramp is used to access the lower part of the orebody down to 3,110 metres below the surface. An internal winze system is used to hoist ore from depth to facilities on Level 215, approximately 2,150 metres below the surface, where it is transferred to the Penna Shaft hoist.

Production from the LaRonde mine extension continues to move towards anticipated steady-state levels. As a result, logistical problems, such as congestion in the underground workings, occur from time to time. The Company anticipates that these issues, and any other issues that may prevent or delay extraction and transportation of ore from a particular stope, will be less prevalent when the stope development work at depth is more advanced.

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The new cooling plant on Level 262 began operating in December 2013, and other components of the ventilation system were commissioned in 2014. The new system reduces the frequency of heat related delays experienced in prior years in the deepest part of the mine. The ventilation network is expected to continue to expand over the next few years to increase the air flow in the deeper areas of the mine.

In 2014, the Company began the installation of a coarse ore conveyor system that will extend from Level 293 to the crusher on Level 280. The new conveyor system, which is expected to be operational in the second half of 2015, is expected to reduce congestion in the deeper portions of the mine and increase the capacity to move material.

Mining Methods

The primary source of ore at the LaRonde mine continues to be from underground mining methods. During 2014, two mining methods were used: longitudinal retreat with cemented rock backfill or paste backfill and transverse open stoping with cemented rock backfill, paste or unconsolidated backfill. In addition, to address concerns regarding the frequency and intensity of seismic events encountered at the lower levels of the LaRonde mine, a hybrid of these two methods has been developed and used. In the underground mine, sublevels are driven at between 30-metre and 40-metre vertical intervals, depending on the depth. Stopes are undercut in 15-metre wide panels. In the longitudinal method, panels are mined in 15-metre sections and backfilled with 100% cemented rock backfill or paste backfill. The paste backfill plant was completed in 2000 and is located on the surface at the processing facility. In the transverse open stoping method, approximately 50% of the ore is mined in the first pass and filled with cemented rock backfill or paste backfill. On the second pass, the remainder of the ore is mined and filled with unconsolidated waste rock backfill or cemented paste backfill.

The throughput at LaRonde in 2014 averaged 6,244 tonnes per day (based on 334 working days due to the planned shutdown for the hoist drive (21 days) and ten days of unplanned shutdown also related to the hoist drives) compared with 6,354 tonnes per day in 2013. The reduced throughput in 2014 was due to the lower specific gravity of the material and the continuing transition to the lower mine, where factors such as heat, congestion, seismicity and lack of operational flexibility underground had a negative impact on the mine's ability to provide the planned tonnage to the mill. In 2014, approximately 78% of the ore was extracted (mucked) from the LaRonde mine extension. In 2015, this proportion is estimated to be 80%.

The Company's operations at the LaRonde mine reach more than three kilometres below the surface. There are very few resources available to model the geomechanical conditions at this depth, where operations are subject to high stress levels. The Company conducts periodic technical reviews of its operations at these levels using consultants with experience in deep mining. The Company uses the results of these technical reviews to adapt best mining practices for its operations at these levels.

Surface Facilities

Surface facilities at the LaRonde mine include a processing plant with a daily capacity of 7,200 tonnes of ore, which has been expanded four times since 1987 from the original rate of 1,630 tonnes per day. Beginning in 1999, transition to the LaRonde mine's polymetallic massive sulphide orebody required several modifications to the processing plant. In 2008, the installation of a limited copper/lead separation flotation circuit, following the copper flotation circuit, was completed. Also in 2008, a cyanidation plant began operation for the treatment of sulphide concentrate from the Goldex mine. A CIL circuit was completed and began operation in April 2013 to replace the existing LaRonde precious metal Merrill-Crowe circuit. The LaRonde mine is also the site for the Lapa mine ore processing plant (1,500 tonnes per day) that was commissioned in the second quarter of 2009.

The ore requires a series of grinding, copper/lead flotation and separation, zinc flotation and zinc tails precious metals leaching circuits, now followed by CIL recovery. Paste backfill and cyanide destruction plants operate intermittently. The tailings area has a dedicated cyanide destruction and metals precipitation plant that water passes through prior to recirculating to the mill. During the summer of 2014, the installation of a new series of processing tanks began in order to increase the processing time. This installation is expected to be finished in March 2015 with the replacement of the old series of tanks that have been in operation since 1993. A biological water treatment plant was commissioned in 2005 to address the build-up of thiocyanate in the tailings ponds at the LaRonde mine. This build-up was the result of the high sulphide content of the LaRonde mine ore and high rate of recirculation of the process water. The plant uses bacteria to oxidize and destroy thiocyanate in the water and removes phosphate prior to its release to the environment.

The Goldex concentrate circuit consists of pulp received from the Goldex mill via truck and subsequent leaching of the pulp with cyanide. The leached material is sent to the Lapa CIL circuit for gold recovery along with Lapa residual pulp. The

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Goldex concentrate circuit ceased to operate in November 2011 following the suspension of mining operations at Goldex. In the fourth quarter of 2013, mining operation resumed in the M and E Zones of the Goldex mine and the Goldex concentrate circuit resumed operation. Since May 2014, the Goldex concentrate has been processed in the Lapa CIL circuit.

The Lapa mine ore processing plant consists of a two-stage grinding circuit to reduce the granularity of the ore. A gravity recovery circuit that is incorporated into the grinding circuit recovers up to 45% of the available gold, depending on feed grades. The residual pulp is leached in a conventional CIL circuit to dissolve the balance of the precious metal. A carbon strip circuit recovers the gold from the carbon which is recycled to the leach circuit.

Production and Mineral Recoveries

During 2014, the LaRonde mine had payable production of 204,652 ounces of gold, 1,274,339 ounces of silver, 10,514 tonnes of zinc and 4,996 tonnes of copper from 2,085,346 tonnes of ore grading 3.24 grams of gold per tonne and 24.79 grams of silver per tonne, 0.73% zinc and 0.30% copper. The total cash costs per ounce of gold produced on a by-product basis at LaRonde in 2014 was US$668 and on a co-product basis was US$1,055. The LaRonde processing facility averaged 5,713 tonnes of ore per day and operated 86.38% of available time. The minesite cost per tonne at LaRonde was C$99.63. Gold and silver recovery averaged 94.31% and 76.66%, respectively. Zinc recovery averaged 69.07% with a concentrate quality of 53.45% zinc. Copper recovery averaged 79.00% with a concentrate quality of 19.93% copper.

The following table sets out the metal recoveries and concentrate grades at the LaRonde mine in 2014.

				Copper Concentrate (26,394 tonnes produced)				Zinc Concentrate (23,154 tonnes produced)
		Head Grades		Grade		Recovery		Grade		Recovery		Overall Metal Recoveries		Payable Production
Gold		3.24 g/t		173.10 g/t		67.70%		11.60 g/t		3.85%		94.36%		204,652 oz
Silver		24.79 g/t		925.86 g/t		47.27%		237.26 g/t		11.2%		87.22%		1,274,339 oz
Copper		0.30%		19.93%		83.17%		0.91%		3.37%		82.78%		4,996 t
Zinc		0.73%		2.32%		4.02%		53.45%		81.29%		81.29%		10,514 t

Annual production at the LaRonde mine in 2015 is expected to be approximately 245,000 ounces of gold, 1,396,679 ounces of silver, 5,322 tonnes of copper and 7,612 tonnes of zinc from 2,245,000 tonnes of ore grading 3.65 grams per tonne gold, 25.2 grams per tonne silver, 0.30% copper and 0.51% zinc. The total cash costs per ounce of gold produced in 2015 on a by-product basis are expected to be $576, with gold recovery estimated at 93.9%, silver recovery of 76.9%, copper recovery of 79.7% and zinc recovery of 66.8%. Gold recovery at the LaRonde mine is distributed approximately as follows: 67.7% in the copper concentrate, 3.85% in the zinc concentrate and 22.79% via leaching. Minesite costs per tonne of C$102 are expected in 2015.

Environmental Matters

Currently, water is treated at various facilities at the LaRonde mine. Water contained in the tailings that is to be used as underground backfill is treated to degrade cyanide using a sulphur dioxide and air process. The tailings entering the tailings pond are first decanted and the clear water subjected to natural cyanide degradation. This water is then transferred to polishing pond #1 to undergo a secondary treatment at a plant located between polishing ponds #1 and #2 that uses a peroxy silicate process to destroy cyanide, lime and coagulant (ferric sulfate) to precipitate metals. The tailings pond occupies an area of about 175 hectares. Waste rock that is not used underground for backfill is brought up to the surface and stored in close proximity to the tailings pond to be used to build cofferdams inside the pond to increase storage capacity. A waste rock pile containing approximately 300,000 tonnes of waste and occupying about nine hectares is located north of the mill.

Due to the high sulphur content of the LaRonde mine ore, the Company has had to address toxicity issues in the tailings ponds since the 1990s. The treatment process has been stable since introducing and optimizing a biological treatment

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plant in 2004, and the effluent has remained non-toxic since 2006. In 2006, the Company commenced an ammonia stripping operation involving an effluent partially treated by the biological treatment plant which allowed an increase in treatment flow rate, while keeping the final effluent toxicity-free. Since 2010, the Company has operated ammonia stripping towers to further increase the treatment flow rate of the biological plant. In September 2014, the ammonia stripping plant was shut down for maintenance and will not be operated again due to the increase in treatment capacity of the biological plant. In addition, water from acid rock drainage around the mills and the waste stockpile are treated to remove metals prior to discharge at a high density sludge lime treatment plant located at the LaRonde mill.

In 2014, the first phase of the construction of a major cofferdam was completed to an elevation of 354 metres. The second phase will be completed in 2015 to increase the elevation to 356 metres.

The LaRonde mine received an infraction notice in 2014 for a tailings line puncture that occurred in December 2013. The affected area was immediately cleaned up and no further action is required.

Capital Expenditures

Capital expenditures at the LaRonde mine during 2014 were approximately $76.7 million, which included sustaining capital expenditures and deferred expense, but excluded capitalized drilling. Budgeted 2015 capital expenditures at the LaRonde mine are C$80.1 million, excluding capitalized drilling.

Development

In 2014, a total of 12,614 metres of lateral development was completed. Development was focused on stope preparation of mining blocks for production in 2014 and 2015, especially the preparation of the lower mine production horizon. A total of 7,766 metres of development work was completed for the LaRonde mine extension infrastructure and the ramp to access the LaRonde mine extension.

A total of 11,500 metres of lateral development is planned for 2015. The main focus of development work continues to be stope preparation and the LaRonde mine extension access toward the orebody.

Geology, Mineralization and Exploration

Geology

The LaRonde property is located near the southern boundary of the Archean-age (2.7 billion years old) Abitibi Subprovince and the Pontiac Subprovince within the Superior Geological Province of the Canadian Shield. The most important regional structure is the Cadillac-Larder Lake ("CLL") fault zone, marking the contact between the Abitibi and Pontiac Subprovinces, located approximately two kilometres to the south of the LaRonde property.

The geology that underlies the LaRonde mine consists of three east-west-trending, steeply south-dipping and generally south-facing regional groups of rock formations. From north to south, they are: (i) 400 metres (approximate true thickness) of the Kewagama Group, which is made up of a thick band of interbedded wacke; (ii) 1,500 metres of the Blake River Group, a volcanic assemblage that hosts all the known economic mineralization on the property; and (iii) 500 metres of the Cadillac Group, made up of a thick band of wacke interbedded with pelitic schist and minor iron formation.

Zones of strong sericite and chlorite alteration that enclose massive to disseminated sulphide mineralization (including the ore that is mined for gold, silver, zinc and copper at the LaRonde mine) follow steeply dipping, east-west-trending, anastomosing shear zone structures within the Blake River Group volcanic units across the property. These shear zones are part of the larger Doyon-Dumagami Structural Zone that hosts several important gold occurrences (including the Doyon gold mine, the Westwood project and the former Bousquet mines) and has been traced for over ten kilometres within the Blake River Group, from the LaRonde mine westward to the Mouska gold mine.

Mineralization

The gold-bearing zones at the LaRonde mine are lenses of disseminated stringers through to massive aggregates of coarse pyrite with zinc, copper and silver content. Ten zones that vary in size from 50,000 to 40,000,000 tonnes have been identified, of which four are (or are believed to be) economic. Gold content is not proportional to the total sulphide content but does increase with copper content. Gold values are also higher in areas where the pyrite lenses are crosscut by tightly spaced north-south fractures.

These historical relationships, which were noted at LaRonde Shaft #1's Main Zone, are maintained at the Penna Shaft zones. The zinc-silver (i.e. Zone 20 North) mineralization with lower gold values, common in the upper mine, grades into

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gold-copper mineralization within the lower mine. The predominant base metal sulphides within the LaRonde mine are chalcopyrite (copper) and sphalerite (zinc).

The Company believes that Zone 20 North is one of the largest gold-bearing massive sulphide mineralized zones in the world and one of the largest known mineralized zones in the Abitibi region of Ontario and Quebec. Zone 20 North contains the majority of the mineral reserves and resources at the LaRonde mine, including 20.0 million tonnes of proven and probable mineral reserves grading 5.27 grams of gold per tonne, representing 97% of the total proven and probable mineral reserves at the LaRonde mine, 6.1 million tonnes of indicated mineral resources grading 3.32 grams of gold per tonne, representing 90% of the total measured and indicated mineral resources at the LaRonde mine, and 7.4 million tonnes of inferred mineral resources grading 4.47 grams of gold per tonne, representing 84% of the total inferred mineral resources at LaRonde.

Zone 20 North extends between 700 metres below the surface and at least 3,500 metres below the surface, and remains open at depth. With increased access on the lower levels of the mine (i.e., below Level 215 and from the internal shaft on levels 257 and 278), the transformation from a zinc/silver orebody to a gold/copper deposit is expected to continue during 2015.

Zone 20 North can be divided into an upper zinc/silver enriched gold poor zone and a lower gold/copper enriched zone. The zinc/silver zone has been traced over a vertical distance of 1,700 metres and a horizontal distance of 570 metres, with thicknesses approaching 40 metres. The gold/copper zone has been traced over a vertical distance of over 2,200 metres and a horizontal distance of 900 metres, with thicknesses varying from three to 40 metres. The zinc/silver zone consists of massive zinc/silver mineralization containing 50% to 90% massive pyrite and 10% to 50% massive light brown sphalerite. The gold/copper zone mineralization consists of 30% to 70% finely disseminated to massive pyrite containing 1% to 10% chalcopyrite veinlets, minor disseminated sphalerite and rare specks of visible gold. Gold grades are generally related to the chalcopyrite or copper content. At depth, the massive sulphide lens becomes richer in gold and copper. During 2014, 1.76 million tonnes of ore grading 3.32 grams of gold per tonne, 25.08 grams of silver per tonne, 0.67% zinc and 0.31% copper were mined from Zone 20 North.

Exploration

The combined amount of gold in proven and probable mineral reserves at the LaRonde mine at the end of 2014 is 3.43 million ounces, which represents a decrease of 11.6% as compared to the end of 2013. The reduction in reserves is principally associated with ore mined during 2014, changes in reserves parameters (mainly mining recovery factors used for the remaining reserves) and 2014 delineation drilling done at the edges of the orebody. Underground indicated mineral resources at the LaRonde mine increased by 2.5 million tonnes grading 5.14 grams of gold per tonne mainly because of positive diamond drilling results in the conversion drilling below the deeper level of mineral reserves (Level 311). That conversion of inferred resources to indicated resources in Zone 20 North at depth led to a net loss of 1.7 million tonnes grading 6.50 grams of gold per tonne of inferred mineral resources.

Diamond drilling is used for exploration on the LaRonde property. In 2014, 16 holes (7,976 metres) were drilled for definition (conversion) drilling and eight holes (2,612 metres) were for exploration. Expenditures on diamond drilling at the LaRonde mine during 2014 were approximately C$1.4 million, including C$1.2 million in drilling expenses charged to capital costs at the LaRonde mine, and C$0.2 million expensed as exploration drilling.

The main focus of the 2014 exploration program was continuing the investigation and conversion of Zone 20 North at depth and exploration of the Zone 6 and 7 horizons at depth from the new accesses developed in 2012 and 2013 on Levels 290, 292 and 293. The 2014 conversion program on Zone 20 North was focused on conversion from inferred to indicated resources at depth in the eastern portion of the deposit (below the actual limit of mineral reserves). The positive results obtained in this program confirmed the extension of the orebody to 3.3 kilometres below the surface, or 200 metres below the current maximum depth of mineral reserves. The conversion program will continue in 2015 through 2017, and will investigate the orebody to 3.7 kilometres below the surface and to the west. The second portion of the 2014 exploration program consisted of a follow up campaign on the Zone 6 and 7 horizons from the newly developed accesses on Level 293. In 2012, a deep hole from Level 215 intersected the Zone 6 horizon at a depth of 3,551 metres below the surface. The 22.8 metre thick massive sulphide zone had the same characteristics as other deposits on the property. In 2013, a first follow up campaign was planned from Level 278 to determine the extent of the deposit but the campaign was stopped due to excessive deviation during the drilling of the first hole. The Company decided to delay the program until new accesses were developed from the lower levels of the mine (Level 293) and the access on Level 293 was developed in 2014. The drilling campaign started in October 2014 and will continue into 2015 to test the continuity of Zone 6 from 2.9 to 3.2 kilometres below the surface. Another drilling access is planned to be developed from 2015 through 2018 to provide better positioning for an extensive diamond drilling program on Zone 6 to a depth of 3.7 kilometres.

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In 2015, the Company expects to spend C$1.6 million on 14,400 metres of definition (conversion) drilling and C$1.9 million on 6,300 metres of exploration drilling, for a total of C$3.5 million at the LaRonde mine.

Lapa Mine

The Lapa mine, which achieved commercial production in May 2009, is located approximately 11 kilometres east of the LaRonde mine near Cadillac, Quebec. At December 31, 2014, the Lapa mine was estimated to contain proven and probable mineral reserves of 0.2 million ounces of gold comprised of 0.9 million tonnes of ore grading 5.9 grams per tonne. The Lapa property is made up of the Tonawanda property, which consists of 44 contiguous mining claims and one provincial mining lease covering an aggregate of 702.4 hectares, and the Zulapa property, which consists of one mining concession covering 93.5 hectares. The mining lease at Lapa expires in 2029.

Location Map of the Lapa Mine (as at December 31, 2014)

The Company's initial interest in the Lapa property was acquired in 2002 through an option agreement with Breakwater Resources Ltd. ("Breakwater"). The Company undertook an aggressive exploration program and discovered a new gold deposit almost 300 metres below the surface. In 2003, the Company purchased the Lapa property from Breakwater for a payment of $8.9 million, a 1% net smelter return royalty on the Tonawanda property and a 0.5% net smelter return royalty on the Zulapa property. In 2008, the Company purchased all royalties from Breakwater for C$6.35 million. In addition, both the Zulapa and Tonawanda properties are subject to a 5% net profit royalty payable to Alfer Inc. and René Amyot. In 2004, an additional mining claim of 9.4 hectares was added to the Company's holdings at the Lapa mine. In January 2009, a mining lease covering 66.8 hectares was entered into with the Ministry of Natural Resources (Quebec).

The Lapa mine is accessible by Quebec provincial highway No. 117. The elevation varies between approximately 320 and 390 metres above sea level. All of the Lapa mine's power requirements are supplied by Hydro-Quebec through connections to its main power transmission grid. All of the water required at the Lapa mine is sourced from the Heva River and is transported approximately 3.5 kilometres to the minesite through a surface pipeline. The water is pumped into an existing open pit near the property that has been allowed to flood and from which the mine is supplied. The topography slopes relatively gently from north to south. The property is generally covered by a boreal-type forest consisting mainly of black spruce and white pine.

For additional information regarding the Abitibi region in which the Lapa mine is located, including information with respect to climate, topography, vegetation and mining personnel, see "– LaRonde Mine" above.

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Mining and Milling Facilities

Surface Plan of the Lapa Mine (as at December 31, 2014)

The Lapa property hosts an underground mining operation and the ore is trucked to a processing facility at the LaRonde mine, which has been modified to treat the ore, recover the gold and store the residues. Tailings from the Lapa mine are deposited in the tailings pond at the LaRonde mine.

In July 2004, the Company initiated the sinking of an 825-metre deep shaft at the Lapa property. In April 2006, 2,800 tonnes of development ore was extracted at Lapa and was estimated to contain, on average, 10.65 grams of gold per tonne. These results and results from other sampling methods were incorporated into a feasibility study, and in June 2006, the Company accelerated construction of the Lapa mine. This construction included extending the shaft to a depth of 1,369 metres, which was completed in October 2007. Significant additional construction was required in order for the Lapa mine to achieve commercial production in May 2009, including the construction of the Lapa mine ore processing facility at the LaRonde mine.

Mining Methods

Two underground mining methods are used at the Lapa mine: longitudinal retreat with cemented backfill and locally transverse open stoping with cemented backfill. Sublevels are driven at 30-metre vertical intervals. Stopes are mined in 12-metre sections and backfilled with 100% cemented rock backfill. The underground infrastructure at the Lapa mine is predominantly located in areas with stable rock conditions. However, in certain areas, the underground infrastructure is located in a talc chlorite schist (mainly ore zones), which may have a higher potential of instability. This risk of instability is managed at the Lapa mine through a ground control program. Excavated ore from the Lapa mine is trucked via provincial highway to the processing facility at the LaRonde mine.

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Surface Facilities

The infrastructure on the Lapa property includes the refurbished former LaRonde Shaft #1 headframe and shafthouse, service buildings, offices, a settling pond for waste water, dry facilities, an ore bin, a diesel reservoir and a water treatment plant. A backfill plant was commissioned in December 2008 and the sedimentation pond was extended in 2007 to control suspended solids from underground dewatering discharge.

Ore from the Lapa mine is processed in dedicated milling facilities integrated into the mill at the LaRonde mine. With an average production of 1,750 tonnes per day in 2014, the mine operated consistently above its design rate of 1,500 tonnes per day. Dilution, mainly associated with talc chlorite schist from the south wall, averaged 72% in 2014, consistent with prior years.

Production and Mineral Recoveries

During 2014, the Lapa mine had payable production of 92,622 ounces of gold from 638,844 tonnes of ore grading 5.59 grams of gold per tonne. The total cash costs at Lapa in 2014 per ounce of gold produced was $667 on a by-product basis and was $667 on a co-product basis and the Lapa processing facility averaged 1,750 tonnes per day and operated approximately 97% of available time. Gold recovery averaged 80.9% and the minesite costs per tonne at Lapa were C$107 in 2014.

The following table sets out the metal recoveries at the Lapa mine in 2014.

		Head Grade		Overall Metal Recovery		Payable Production
Gold		5.59 g/t		80.9%		92,622 oz

Gold production during 2015 at the Lapa mine is expected to be approximately 75,000 ounces from 584,000 tonnes of ore grading 5.17 grams of gold per tonne at an estimated total cash costs per ounce of approximately $769 on a by-product basis, and estimated gold recovery of 77.5%. Minesite costs per tonne of approximately C$118 are expected in 2015.

Environmental Matters

Water used underground at the Lapa mine was initially re-circulated from mine dewatering after settling in the sedimentation pond. The re-circulation led to ammonia concentration in the water, and the Company experienced occasional toxicity problems in the water pond in 2008 and 2009. To address the ammonia content in the water, the Company built a 3.5-kilometre surface pipeline to obtain fresh water from the Heva River. The pipeline was commissioned in November 2009. The Company also commissioned a water treatment plant on site in the fourth quarter of 2010 to reduce the ammonia from mine dewatering. Output is currently within the target range at approximately ten parts per million of ammonia and average efficiency is at approximately 70%.

During the first year of operation of the water treatment plant, the removal of suspended solids in the water coming from the underground operations was through a sedimentation process. The limited capacity of the sedimentation pond limited the effectiveness of the system when there was a high variation in concentrations of suspended solids. In the second quarter of 2012, an Oberlin filtration unit was installed inside the treatment plant to improve the removal of suspended solids from water coming from underground operations. Despite the additional filtration, the process remains sensitive to variations in the concentrations of suspended solids and managing it requires particular attention. The waste rock pile naturally drains towards the sedimentation pond. A waste rock sampling program implemented during the shaft sinking phase verified the non-acid generating nature of the waste rock. Water effluent from the sedimentation pond is sampled as required under the Quebec mining effluent guidelines. The ore from the Lapa mine is transported and processed at the Lapa mill, which is located adjacent to the LaRonde mill. The Lapa tailings are sent to the LaRonde mine tailings area.

The Certificates of Authorization to proceed with mine production and with mill construction were issued by the Ministry of Sustainable Development, Environment and the Fight Against Climate Change (Quebec) in October and December 2007, respectively. The Certificate of Authorization for mill and tailings production was received in 2008.

A revision to the closure plan for the Lapa mine was submitted to the Ministry of Natural Resources (Quebec) in 2009 and was approved in 2012. Financial assurance has been provided based on the closure plan.

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Capital Expenditures

In 2014, the Company incurred approximately $20.2 million in capital expenditures at the Lapa mine, which included deferred development and sustaining capital expenditures (including underground construction and mining equipment), but excluded capitalized drilling. Budgeted 2015 capital expenditures at the Lapa mine are C$6.3 million, which includes deferred development and sustaining capital, but excludes capitalized drilling.

Development

In 2014, a total of 8,092 metres of lateral development was completed. Development focused on permanent drifts (ramps and haulage way), stope preparation of mining blocks set for production from 2014 to 2016 and access to the satellite zones and the lower portions of the Contact Zone.

A total of 3,715 metres of lateral development is planned for 2015. The main focus of development work continues to be stope preparation and access to the orebody.

Geology, Mineralization and Exploration

Geology

The Lapa property is located near the southern boundary of the Archean-age (2.7 billion years old) Abitibi Subprovince and the Pontiac Subprovince within the Superior Province of the Canadian Shield. The most important regional structure is the CLL fault zone marking the contact between the Abitibi and Pontiac Subprovinces. The fault zone passes through the property from west to east, and is marked by schists and mafic to ultramafic volcanic flows that comprise the Piché group (up to approximately 300 metres thick in the mine area). On the Lapa property, the fault zone displays a "Z" shaped fold to which all of the lithologic groups in the region conform. Feldspathic dykes cut the Piché group, especially near the fold. North of the Piché group lies the Cadillac sedimentary group, which consists of 500 metres or more of well-banded wacke, conglomerate and siltstone with intercalations of iron formation. The Pontiac group sedimentary rocks (up to approximately 300 metres thick) that occur to the south of the Piché group are similar to the Cadillac group but do not contain conglomerate nor iron formation.

Mineralization

All of the known gold mineralization along the CLL fault zone is epigenetic (late) vein type, controlled by the structure. The mineralization is associated with the fault zone and occurs within or immediately adjacent to the Piché group rocks.

The Lapa deposit is comprised of the Contact Zone and five satellite zones. The Contact Zone accounts for approximately 60% of the mineral reserves.

The ore zones are made up of multiple quartz veins and veinlets, often smoky and anastomosing, within a sheared and altered envelope containing minor sulphides and visible gold. The Contact Zone is generally located at the contact between the Piché group and the Cadillac group. The satellite zones are located within the Piché group at a distance varying from ten to 50 metres from the contact with the Cadillac group, except for the satellite zones 7 and 8 at 150 metres from this same contact, and the Contact North Zone, which is located approximately ten metres north of the Contact Zone within the Cadillac group. The sheared envelope consists of millimetre-thick foliation bands of biotite or sericite with silica and, in places, cuts across rock units. Quartz veins and millimetre-sized veinlets parallel to the foliation account for 5% to 25% of the mineralization. Visible gold is common in the veins and veinlets but can also be found in the altered host rock. Sulphides account for 1% to 3% of the mineralization; the most common sulphides, in order of decreasing importance, are arsenopyrite, pyrite, pyrrhotite and stibnite. Graphite is also rarely observed as inclusions in smoky quartz veins.

The Contact and satellite zones are tabular mineralized envelopes oriented east-west and dipping very steeply to the north, turning south at depth. The economic portion of the zone has been traced from depths of approximately 450 metres to more than 1,500 metres below the surface. The Contact Zone has an average strike length of 300 metres, varies in thickness from 2.8 to 5.0 metres and is open at depth. Locally, some thicker intervals have been intersected but their continuity has not been demonstrated. The satellite zones have thicknesses similar to the Contact Zone.

Exploration

Overall, there was a reduction of approximately 112,000 ounces of gold in reserves at the Lapa mine in 2014 after mining 115,000 ounces of gold. The net reduction was a result of gold production and delineation diamond drilling, offset by additional ounces from Zone 8. Underground indicated resources at the Lapa mine decreased by 0.3 million tonnes

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grading 4.25 grams of gold per tonne mainly due to reclassification of several stopes in the top area of the mine. Approximately 0.1 million tonnes of inferred resources grading 11.96 grams of gold per tonne were added following underground drilling in 2014. Drilling and evaluation will continue in 2015.

In 2014, a total of 212 holes were drilled on the Lapa property for a total length of 39,004 metres. Of the drilling in 2014, 205 holes (34,923 metres) were for definition (conversion) and seven holes (4,081 metres) were for exploration. Expenditure on diamond drilling at the Lapa mine during 2014 was approximately C$3.4 million, including C$3.0 million in definition drilling expenses charged to capital costs and C$0.4 million expensed on exploration drilling.

Four exploration diamond drilling programs were completed at the Lapa mine during 2014. The first program was to convert mineral resources into mineral reserves in Zulapa Zone 8. The second program was executed from the exploration track drift on Level 101 (one kilometer below the surface) testing the eastern and western extension of the Contact Zone and the southern portion of the Piché group volcanic rock. The third program was executed from the surface toward the east area of the Contact Zone and the Zulapa corridor. The fourth program concentrated on expanding the Zulapa Zone 7 and the Contact East Zone at depth. Further drilling will be needed in 2015 to evaluate the economics of these areas. The 2015 program will also test previous gold intersection, unexplored areas and the deep extension of the Contact Zone.

In 2015, the Company expects to spend approximately C$0.9 million on 9,500 metres of definition (conversion) drilling and approximately C$0.95 million on 10,000 metres of exploration drilling, for a total of approximately C$1.85 million at the Lapa mine. A total of 3,715 metres of lateral development is planned for 2015. The main focus of development work continues to be stope preparation and access to the orebody.

Goldex Mine

The Goldex mine is located in the City of Val d'Or, Quebec, approximately 60 kilometres east of the LaRonde mine. The proven and probable mineral reserves at Goldex as at December 31, 2014 were approximately 0.3 million ounces of gold comprised of 7.1 million tonnes of ore grading 1.49 grams per tonne, all in the M and E Zones.

The Goldex mine operates under a mining lease obtained from the Ministry of Natural Resources (Quebec) and under certificates of approval granted by the Ministry of Sustainable Development, Environment and the Fight Against Climate Change (Quebec). The Goldex property consists of 22 contiguous mining claims and, since April 2006, one provincial mining lease (98.6 hectares), covering an aggregate of 331.2 hectares. The property is made up of three blocks: the Probe block (130.7 hectares); the Dalton block (10.4 hectares); and the Goldex Extension block (190.1 hectares). The claims are renewable every second year upon payment of a small fee. The mining lease expires in 2028 and is automatically renewable for three further ten-year terms upon payment of a small fee. The Company also has one surface lease covering 418.5 hectares that is used for the auxiliary tailings pond. This lease is renewable annually upon payment of a fee.

The GEZ, which was the gold deposit on which the Company was focusing its production efforts before production was suspended indefinitely on October 19, 2011, was discovered in 1989 on the Goldex Extension block (although the Company believes a small portion of the GEZ occurs on the Probe block). On November 29, 2012, the Company purchased the 5% net smelter return royalty interest on the Probe block from Probe Mines Limited ("Probe") for cash consideration of C$14 million. An additional C$4 million (in cash or common shares of the Company, at the election of Probe) is payable by the Company to Probe in 2015 as certain production thresholds were achieved on the Probe block in 2014.

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Location Map of the Goldex Mine (as at December 31, 2014)

Agnico Eagle has held a 100% interest in the Goldex property since December 1993, when the Company acquired the remaining 46.3% interest in Goldex Mines Limited that it did not already own. In late 1997, the Company completed a mining study that indicated that the GEZ deposit was not economically viable to mine at the then-prevailing gold price (approximately $323 per ounce of gold) using the mining approach chosen and the drill-hole-indicated grade. The property was placed on care and maintenance and the workings were allowed to flood. In February 2005, a new mineral reserve and resource estimate was completed for the GEZ which, coupled with a feasibility study, led to a probable mineral reserve estimate of 1.6 million ounces of gold contained in 20.1 million tonnes of ore grading 2.54 grams of gold per tonne. The GEZ resource model was revised and, in March 2005, the Company approved a feasibility study and the construction of the Goldex mine. The mine achieved commercial production on August 1, 2008.

Based on the results of a scoping study completed in July 2009, the Company decided to expand the mine and mill operations at Goldex to 8,000 tonnes per day. This project was completed in 2010. Capital costs in connection with the expansion totaled $10 million. The crusher for the expansion was commissioned at the end of the first quarter of 2010 at a rate of 7,811 tonnes per day.

On October 19, 2011, the Company suspended mining operations and gold production from the GEZ, following the receipt of recommendations from independent consultants to halt underground mining operations during the investigation into geotechnical concerns with the rock above the mining horizon. As a result, the Company wrote off substantially all of its investment in the Goldex mine (approximately $254 million), recorded a closure provision of approximately $44 million and reclassified all of the remaining 1.6 million ounces of proven and probable gold reserves, other than the ore stockpiled on the surface, as mineral resources in the third quarter of 2011. The surface stockpile was processed in the Goldex mill by October 30, 2011. Surface remediation, in the form of cement injection and other corrective work to the mine's surface infrastructure (including to Shaft #2) was carried out in 2012 and 2013.

The Company does not expect to produce more gold from the GEZ until the geotechnical concerns with the rock above the mining horizon are resolved, which may never occur.

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In July 2012, the Company approved the development of the M and E Zones of the Goldex mine. Production from these zones began in the fourth quarter of 2013 and commercial production was achieved in October 2013. Development work is continuing underground on the M and E Zones. The Company anticipates that approximately 5,780 tonnes of ore per day grading 1.58 grams per tonne (diluted) will be extracted and processed from the M and E Zones over the next three years.

In 2013, a feasibility study was carried out on the M2 and M5 Zones and the east part of the E Zone. This feasibility study indicated that mining these zones concurrently with the M and E Zones appeared economical. Therefore, the mineral resources of these new satellite zones were added to the mineral reserves as of December 31, 2014. The Company anticipates that the commencement of operations on these new satellite zones will result in increased daily throughput of the mine and mine life being extended further into 2017.

The Goldex property is accessible by Quebec provincial highway No. 117. The elevation is approximately 302 metres above sea level. All of the Goldex mine's power requirements are supplied by Hydro-Quebec through connections to its main power transmission grid. The potable water at the Goldex mine is sourced directly by aqueduct from the City of Val d'Or. Mine operations have three main sources of water: underground dewatering water, the polishing pond of the auxiliary tailings pond and from the Thompson River, if needed. For additional information regarding the Abitibi region in which the Goldex mine is located, including information with respect to climate, topography, vegetation and mining personnel, see "– LaRonde Mine" above.

Mining and Milling Facilities

Surface Plan of the Goldex Mine (as at December 31, 2014)

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The surface facilities at Goldex include a head frame, a hoist room, an ore storage facility, a processing plant, a paste backfill plant and a surface building containing a mechanical shop, a warehouse and an office. In addition, the Goldex property has a 790-metre deep shaft (Shaft #1), which historically was used to provide access to underground workings. Shaft #1 is now predominantly used for getting material into the mine and serves as an emergency exit from the mine.

The sinking of a new production shaft was completed in 2007. This shaft (Shaft #2) is a 5.5-metre diameter shaft with a 50-centimetre thick concrete lining and is used for ventilation as well as hoisting purposes. Shaft #2 is 865 metres deep and includes five stations. A refurbished friction hoist was installed for production and service duties, and an auxiliary hoist was installed for emergency and personnel service. The production hoist is equipped with one cage skip. Each skip has a 21.5-tonne capacity and the shaft can hoist an average of 7,000 to 8,000 tonnes of ore per day.

Mining Method

The Company mines the M and E Zones using primary and secondary stope methods. Drilling is carried out with ITH drills. Production holes are either 4.5 or 6.5 inches in diameter. Bulk emulsion is used as the primary explosive for stope blasting. For both zones, stopes are approximately 55 metres high. The width and length of individual stopes vary based on local rock mass quality, but an average stope is expected to range between 60,000 and 100,000 tonnes. Ore handling in the M Zone is done with 15 yard load-haul-dump machines. This equipment unloads into an ore pass accessible from each level. In the E Zone, located below the bottom of Shaft #2, ore handling is done with 15 yard load-haul-dump machines and 45 tonne trucks.

All stopes are supported with 15 metre cable bolts. In addition, the stability of each stope is remotely monitored in real time. The Company also uses paste backfill to allow for a high extraction ratio and to increase long term stability.

Surface Facilities

Plant construction at Goldex commenced in the second quarter of 2006 and was completed in the first quarter of 2008. The plant reached design capacity in the second quarter of 2009. Grinding at the Goldex mill was initially done through a two-stage circuit comprised of a SAG mill and a ball mill. In 2009, a surface crusher was added to reduce the size of ore transferred to the surface from 150 millimetres to 50 millimetres. A lamellar decanter was also added to recover small particles present in the water overflow of the concentrate thickener. The underflow pump for this thickener was upgraded following flotation circuit modification to increase the pull rate of the small particles. Approximately two-thirds of the gold is recovered through a gravity circuit, passed over shaking tables and smelted on site. The remainder of the gold and pyrite is recovered through a flotation process. The concentrate is then thickened and trucked to the mill at the LaRonde mine where it is further treated by cyanidation. Gold recovered is consolidated with precious metals from the LaRonde and Lapa mines.

In 2013, a new backfill plant was built on the site. The plant provides fill for the M and E Zone stopes. The tailing thickener underflow feeds the backfill plant, two disk filters increase the density before the continuous mixer where cement is added at a ratio of approximately 5% and then sent to the underground mine with a positive displacement pump. The capacity of the backfill plant is approximately 6,200 tonnes per day.

In 2013, metallurgical testing on ore from the M and E Zones showed that the cement in the backfill would have a negative impact on the efficiency of the flotation circuit. As a result, a pH control (using carbon dioxide), a reservoir and control valves were added to the mill.

The ore production rate at Goldex in 2014 averaged 5,799 tonnes per day compared with 5,343 tonnes per day in 2013. The increased throughput in 2014 was largely due to better than expected underground mining rates.

Production and Mineral Recoveries

During 2014, the Goldex mine had payable production of 100,433 ounces of gold from 2.1 million tonnes of ore grading 1.60 grams of gold per tonne. The total cash costs at Goldex in 2014 per ounce of gold produced was $638 on a by-product basis and $638 on a co-product basis. The Goldex processing facility averaged 5,799 tonnes of ore per day. Gold recovery averaged 92.1%. The minesite costs per tonne at Goldex in 2014 were C$33.

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The following table sets out the metal recoveries at the Goldex mine in 2014.

		Head Grade		Overall Metal Recovery		Payable Production
Gold		1.60 g/t		92.08%		100,433 oz

Gold production during 2015 at the Goldex mine is expected to be approximately 100,000 ounces from 2,190,000 tonnes of ore grading 1.55 grams of gold per tonne at an estimated total cash costs per ounce of approximately $618 on a by-product basis, with estimated gold recovery of 92.5%. Minesite costs per tonne of approximately C$34 are expected in 2015.

Environmental Matters

Environmental permits for the construction and operation of an ore extracting infrastructure at the Goldex mine were received from the Ministry of Sustainable Development, Environment and the Fight Against Climate Change (Quebec) in October 2005. The permits also covered the construction and operation of a sedimentation pond for mine water treatment and sewage facilities. In June 2011, the permits were revised to allow for the expansion of the mine and mill operations to 9,500 tonnes per day. In June 2012, environmental permits were received for the construction and operation of a paste backfill plant in connection with the development of the M and E Zones.

In November 2006, the Company and the Quebec government signed an agreement permitting the Company to dispose Goldex tailings at the Manitou site, a tailings site formerly used by an unrelated third party and abandoned to the Quebec government. The Manitou tailings site has issues relating to acid drainage, and the construction of tailings facilities by the Company and the deposit of tailings from Goldex on the Manitou tailings site was accepted by the Ministry of Sustainable Development, Environment and the Fight Against Climate Change (Quebec) as a valid rehabilitation plan to address the acid generation problem at Manitou. Under the agreement, the Company managed the construction and operation of the tailings facilities and the Quebec government paid all additional costs above the Company's budget for tailings facilities set out in the Goldex feasibility study. The Quebec government retains responsibility for all environmental contamination at the Manitou tailings site and for final closure of the facilities. The Company has also built a separate tailings deposit area (auxiliary tailings pond) near the Goldex mine. Environmental permits for the construction and operation of the auxiliary tailings pond were received in March 2007. The rehabilitation of the Manitou tailings site is expected to continue during the mining of the M and E Zones.

Internal dykes were built in 2013 at the Manitou tailings site to make better use of the reduced quantity of available tailings for rehabilitation of the Manitou site. An infraction notice was received from the Québec Ministry of Environment in February 2014 for an exceedance of the C10-C50 parameters in the effluent of the auxiliary pond, however, the effluent was resampled and the effluent was compliant.

As at December 31, 2014, the estimated remaining reclamation costs relating to the Goldex mine are approximately $11.6 million.

Capital Expenditures

Capital expenditures at the Goldex mine during 2014 were approximately $34.3 million, which included sustaining capital expenditures and deferred expenses, but excluded capitalized drilling. Total estimated capital expenditures for 2015 are $30.0 million excluding capitalized drilling.

Development

During 2014, approximately 7,300 metres of lateral development were completed at the Goldex Mine. A total of 500 metres of vertical development was also completed in order to establish both the ore pass system servicing the M Zone and the ventilation network servicing both the M and E Zones. A total of 2,990 metres of lateral development is planned for both zones in 2015, while 515 metres of vertical development will be necessary to extend the ore pass system and to ensure proper ventilation of the M2 and M5 Zones. Development is expected to continue, at a slower rate, through 2016.

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Geology, Mineralization and Exploration

Geology

The Goldex property is located near the southern boundary of the Archean-age (2.7 billion years old) Abitibi Subprovince, a typical granite-greenstone terrane located within the Superior Province of the Canadian Shield. The southern contact of the Abitibi Subprovince with the Pontiac Subprovince is marked by the east-southeast trending CLL fault zone, the most important regional structural feature. The Goldex deposit is hosted within a quartz diorite sill, the "Goldex Granodiorite", located in a succession of mafic to ultramafic volcanic rocks that are all generally oriented west-northwest.

The GEZ extends from 500 to 800 metres below the surface and is entirely hosted by the Goldex Granodiorite. The limits of the zone are defined by the intensity of the quartz vein stockwork envelope and by gold assays. The zone is almost egg-shaped; it is over 300 metres tall by 450 metres long (in a west-northwest direction) and its thickness increases rapidly from 25 metres along the east-west edges to almost 150 metres in the centre.

In 2014, exploration efforts at Goldex were focused on the M, E and Deep Zones. These zones are defined by quartz tourmaline veins and gold assays similar to the GEZ. The mineralization in the M2 and M5 Zones is similar to the GEZ, although their continuity is more limited and there appears to be stacking of dislocated zones containing gold-bearing quartz tourmaline pyrite veins and veinlets. The M Zone has been defined as having a length of 160 metres, a height of 120 metres and a thickness of 115 metres. The E Zone, adjacent to the eastern end of the GEZ, has a length of 150 metres, a height of 150 metres and a thickness of 100 metres. The Deep Zone is approximately 150 metres below the GEZ and close to 1,500 metres below the surface. It appears to have an approximate length of 500 metres.

Mineralization

Gold mineralization at Goldex corresponds to a quartz-tourmaline vein deposit type. The Goldex gold-bearing quartz-tourmaline-pyrite veins and veinlets have strong structural control. The most significant structure directly related to mineralization is a discrete shear zone, the Goldex Mylonite, that is up to five metres wide and occurs within the Goldex Granodiorite, just south of the GEZ and north of the M Zone.

A couple of vein sets exist within the GEZ, M, E, P and Deep Zones, of which the main set consists of extensional-shear veins dipping approximately 30 degrees south. The vein sets and associated alteration halos combine to form stacked envelopes up to 30 metres thick.

Moderate to strong albite-carbonate alteration of the host-rock quartz diorite surrounds the quartz-tourmaline-pyrite veins and covers almost 80% of the mineralized zone; outside of the envelopes, prior chlorite alteration affects the quartz diorite and gives it a darker grey-green colour. Occasionally, enclaves of relatively unaltered medium grey-green-coloured quartz diorite (with no veining or gold) are found within the GEZ and the M and E Zones; they are removed with the rest of the stope's ore to allow for a smooth stope shape, required for mining purposes.

Most of the gold occurs as microscopic particles that are almost always associated with pyrite, generally adjacent to grains and crystals but also 20% included within the pyrite. The gold-bearing pyrite occurs in the quartz-tourmaline veins and in narrow fractures in the albite-carbonate-altered quartz diorite (generally immediately adjacent to the veins).

Exploration

The combined amount of gold in proven and probable mineral reserves at the Goldex mine at the end of 2014 is 0.34 million ounces (7.1 million tonnes of ore grading 1.49 grams of gold per tonne), which represents a decrease of approximately 32,000 ounces of gold in reserves after mining 100,433 ounces of gold. Underground measured and indicated mineral resources at the Goldex mine increased by 3.7 million tonnes of ore to 33.8 million tonnes of ore grading 1.93 grams of gold per tonne, primarily due to conversion of inferred to indicated mineral resources, reduction of the cut-off grade and positive drilling results in the Dx and Deep Zones. In 2014, there was an increase in inferred mineral resources of approximately 3.2 million tonnes of ore to 29.2 million tonnes of ore grading 1.64 grams of gold per tonne. This increase in the inferred mineral resources was primarily due to a reduction of the cut-off grade and positive drilling results in the Dx and Deep Zones.

Diamond drilling at Goldex in 2014 totaled 178 holes for a total length of 33,556 metres. Of this total, 12 holes (1,661 metres) were for exploration of the Mx Zone at a cost of $6.6 million, 73 holes (20,498 metres) were definition (conversion) drilling principally in the Dx, Deep and Mx Zones, 88 holes (10,841 metres) were delineation drilling in the Mx, M and E Zones and five holes (556 metres) were holes drilled to provide geotechnical information. Other exploration-related expenses in 2014 included ramp development and a study of the Deep Zone.

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Satellite zones at the Goldex mine, including the Mx, Dx, Deep and South Zones, are being evaluated by the Company and, if found to be economically mineable, are expected to provide the Company additional flexibility in its mining operations at the Goldex mine and may extend the mine life.

In 2015, the Company expects to spend $1.9 million on 17,500 metres of definition (conversion) drilling, $0.35 million on 5,600 metres of exploration drilling and $11.7 million on 4,810 metres of development work on the exploration ramp into the Deep Zone, for a total of $13.95 million at the Goldex mine. The objective is to outline initial reserves from the Deep Zone in late 2015 or early 2016.

Canadian Malartic Mine

The Canadian Malartic mine is located approximately 25 kilometres west of the City of Val-d'Or and 80 kilometres east of City of Rouyn-Noranda. The mine lies within the town of Malartic. It straddles the townships of Fournière, Malartic and Surimau. At December 31, 2014, the Canadian Malartic mine was estimated to have proven and probable mineral reserves containing approximately 8.7 million ounces of gold comprised of 254 million tonnes of ore grading 1.06 grams per tonne.

The Company acquired its 50% interest in the Canadian Malartic mine on June 16, 2014 through its joint acquisition of Osisko with Yamana. See "General Development of the Business – Three-Year History – 2014" for further details of the Company's acquisition of its 50% interest in the Canadian Malartic mine.

The Canadian Malartic mine operates under mining leases obtained from the Ministry of Natural Resources (Quebec) and under certificates of approval granted by the Ministry of Sustainable Development, Environment and the Fight Against Climate Change (Quebec). The Canadian Malartic mine is comprised of the East Amphi property, the CHL Malartic prospect and the Canadian Malartic property. The Canadian Malartic mine consists of a contiguous block comprising one mining concession, five mining leases and 208 mining claims covering an aggregate area of 8,735.9 hectares. The Canadian Malartic mine is owned by Canadian Malartic GP. The Canadian Malartic mining claims give Canadian Malartic GP the right to explore for mineral substances on the subject land; the mining leases give Canadian Malartic GP the right to mine mineral substances on the subject land; and the mining concession gives Canadian Malartic GP the right to mine mineral substances and with surface rights limited to those necessary for mining activities on the subject land.

Expiration dates for the mining leases on the Canadian Malartic property vary between December 3, 2015 and February 17, 2034, and are automatically renewable for three further ten-year terms upon payment of a small fee.

The Canadian Malartic mine can be accessed either from Val d'Or in the east or from Rouyn-Noranda in the west via Quebec provincial highway No. 117. A paved road running north-south from the town of Malartic towards Mourier Lake cuts through the central area of the Canadian Malartic mine. The Canadian Malartic property is further accessible by a series of logging roads and trails. The Canadian Malartic mine is also serviced by a rail-line which cuts through the middle of the town of Malartic. The nearest large airport is located in Val-d'Or, about 25 km east of the Canadian Malartic mine.

A buffer zone 135 metres wide has been developed along the northern limit of the open pit to mitigate the impacts of mining activities on the citizens of Malartic. Inside this buffer zone, a landscaped ridge was built mainly using rock and topsoil produced during pre-stripping work. The height of this landscaped ridge is 15 metres where the concentration of residents is higher and five to six metres in less populated areas.

The electrical power for the Canadian Malartic mine is supplied from the existing Hydro-Quebec 120kV Cadillac main substation. A 120 kV electrical transmission line, approximately 19 kilometres long was built. The plant water systems consist of the process water system which is supplied principally from the plant thickener overflows, the fresh water system which is supplied from an old underground mine dewatering system, the reagent preparation water system, the gland water distribution system and the reclaim water from form the Southeast Pond area. The Canadian Malartic mine is also connected to the Malartic municipal sewage and potable water systems. Fuel storage facilities have 250,000 litres of storage capacity.

For additional information regarding the Abitibi region in which the Canadian Malartic mine is located, including information with respect to climate, topography, vegetation and mining personnel, see "– LaRonde Mine" above.

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Location Map of the Canadian Malartic Mine (as at December 31, 2014)

The Canadian Malartic mine includes open-pit operations, an administration/warehouse building, a mine office/truck shop building, a process plant and the crushing plant.

Following the joint acquisition of the Canadian Malartic mine by the Company and Yamana, most of the mining claims are subject to a 5% net smelter return royalty payable to New Osisko. The mining claims comprising the CHL Malartic prospect are subject to 3% net smelter return royalties payable to each of New Osisko and Abitibi Royalties Inc. In addition, of the 208 mining claims constituting the Canadian Malartic property, 101 are also subject to other net smelter return royalties that vary between 1% and 2%, payable under varying circumstances. In 2014 Canadian Malartic GP, the operator of the Canadian Malartic mine, paid C$28.6 million in the aggregate with respect to these net smelter return royalties, and expects to pay approximately C$41 million in 2015.

Gold was first discovered in the Malartic area in 1923. Gold production on the Canadian Malartic property began in 1935 and continued uninterrupted until 1965. Following various ownership changes over the ensuing years, Osisko acquired ownership of the Canadian Malartic property in 2004. Based on a feasibility study completed in December 2008, Osisko completed construction of a 55,000 tonne per day mill complex, tailings impoundment area, 5 million cubic metre polishing pond and road network by February 2011 and the mill was commissioned in March 2011. The Canadian Malartic mine achieved commercial production on May 19, 2011. From 2011 until March 31, 2014, the Canadian Malartic mine produced 1,203,922 ounces of gold and 902,537 ounces of silver from 43,936,334 tonnes of ore grading 0.94 grams of gold per tonne and 0.91 grams of silver per tonne.

As of December 31, 2010, the Canadian Malartic mine had received all formal government permits required for its construction and related activities, with the exception of the authorization for the mill and mine operations. The official certificate of authorization for the mill and operations was granted on March 31, 2011, at which point the Canadian Malartic mine was fully permitted.

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On February 26, 2014 the Government of Québec adopted a decree authorizing the mining of the Gouldie deposit, which allowed pre-stripping work to proceed. Since then the pre-stripping activity has been initiated for the Gouldie deposit. On February 18, 2014, the Ministry of Natural Resources (Quebec) granted Osisko a mining lease having an approximate total area 66 hectares. The mining lease stipulates that Canadian Malartic GP has 30 months to mine the Gouldie deposit and may not exceed a daily production rate of 6,990 tonnes of ore and a daily extraction rate of 30,000 tonnes of ore, waste and overburden.

Mining and Milling Facilities

Surface Plan of the Canadian Malartic Mine (as at December 31, 2014)

The Canadian Malartic mine is a large open-pit operation comprising the Canadian Malartic, Barnat and Gouldie pits. Canadian Malartic GP continues to work with the Quebec Ministry of Transport and the town of Malartic on the deviation of Quebec provincial highway No. 117 to gain access to the higher grade Barnat deposit. The final layout and the environmental impact study was completed by the end of January 2015.

Mining Methods

Mining at the Canadian Malartic mine is done by open pit method using excavators and trucks. In order to maximize productivity and limit the number of units operating in the pit, large scale equipment was selected for the mine operation. The primary loading tools are hydraulic excavators, with wheel loaders used as a secondary loading tool. The mine production schedule was developed to feed the mill at a nominal rate of 55,000 tonnes per day.

The throughput at the Canadian Malartic mine in 2014 averaged 51,248 tonnes per day compared with 49,338 tonnes per day in 2013. The increased throughput in 2014 was largely due to mill optimization, additional crushed ore from the portable crusher and a new pebble circuit.

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Surface Facilities

Surface facilities at the Canadian Malartic mine include the administration/warehouse building, the mine office/truck shop building, the process plant and the crushing plant. The processing plant has a daily capacity of 55,000 tonnes of ore.

Ore is processed via conventional cyanidation. Ore blasted from the pit is first crushed by a gyratory crusher followed by secondary crushing prior to grinding. Ground ore feeds successively into leach and CIP circuits.

A Zadra elution circuit is used to extract the gold from the loaded carbon. Pregnant solution is processing via electrowining and the resulting precipitate is smelted into gold/silver dore bars.

Mill tails are thickened and detoxified, reducing cyanide levels below 20 parts per million. A recent study supported the change-over of the existing Combinox (sulfur dioxide – hydrogen peroxide) cyanide detoxifying process into a Caro's (sulfuric acide – hydrogen peroxide) acid process. Detoxified slurry is subsequently pumped to a conventional tailings facility.

Production and Mineral Recoveries

Since the June 16, 2014 acquisition of Osisko, Agnico Eagle and Yamana have each held a 50% interest in the Canadian Malartic mine. From June 16 to December 31, 2014, Agnico Eagle's share of the Canadian Malartic mine's payable production was 143,008 ounces of gold and 149,551 ounces of silver, at a total cash costs per ounce of gold produced of $701 on a by-product basis and $721 on a co-product basis.

On a 100% basis over the full year of 2014, the Canadian Malartic mine had payable production of 535,470 ounces of gold and 533,315 ounces of silver from 18,705,550 tonnes of ore grading 1.00 gram of gold per tonne and 1.19 grams of silver per tonne. The Canadian Malartic processing facility averaged 51,248 tonnes of ore per day and operated 94.2% of available time. Gold and silver recovery averaged 88.8% and 74.8%, respectively. The minesite costs per tonne at Canadian Malartic were C$19.76.

The following table sets out the metal recoveries at the Canadian Malartic mine on a 100% basis for the full year of 2014.

		Head Grade		Overall Metal Recovery		Payable Production
Gold		1.00 g/t		88.8%		535,470 oz
Silver		1.19 g/t		74.8%		533,315 oz

The Company's 50% share of annual production at the Canadian Malartic mine in 2015 is expected to consist of approximately 280,000 ounces of gold and 272,500 ounces of silver from 9.75 millions of tonnes of ore grading 1.04 grams per tonne gold and 1.17 grams per tonne silver. The total cash costs to produce gold in 2015 is expected to be approximately $609 per ounce on a by-product basis, with estimated gold recovery of 89% and silver recovery of 74%. Minesite costs per tonne of approximately C$20.00 are expected in 2015.

Environmental Matters

Since 2009, there have been 59 non-conformance blast notices, 53 non-conformance noise notices, 17 non-conformance notices for dust and air quality, 4 non-conformance notices for water quality (surface and final effluent) and 16 other non-conformance notices. In 2011, a detailed plan was developed by Osisko to manage hazardous materials, assess infrastructure safety, and monitor noise, vibrations, air quality, dust, atmospheric emissions, effluent quality, groundwater and surface water. Mitigation measures were put in place to improve the process and avoid any non-conformance. The mine's team of on-site environmental experts continuously monitor regulatory compliance in terms of approvals, permits, and observance of directives and requirements.

The original design of the waste rock pile was developed to accommodate approximately 326 millions of tonnes of mechanically placed waste rock requiring a total storage volume of approximately 161 million cubic metres. The Gouldie deposit is located in the center of the initially planned footprint of the waste rock pile, making it necessary to revise the waste rock piling sequence in order to keep the Gouldie deposit available for mining.

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The existing polishing pond, is contained within the current authorized footprint of the tailings management facility. This pond will be later used as a cell to store tailings. Before using this pond, Canadian Malartic GP plans to build a new polishing pond east of dyke A. The existing polishing pond, converted into a tailings cell, will be the 8th cell of the tailings management facility with an estimated capacity of 48 millions of tonnes adding 2.5 years of operation to the tailings management facility capacity for a total of 148 million tonnes and 7.5 years of operation. The total capacity of the current tailings management facility is estimated at 198 million tonnes. The expansion of the open-pit, with the production from the Barnat pit, will increase to 342 million tonnes the total amount of tailings to manage, requiring an additional 144 millions of tonnes in tailings storage capacity. Canadian Malartic GP plans to store tailings in an extended tailings facility and in the Canadian Malartic pit at the end of its operations. According to the mining plan, at the end of mine life, 50 to 100 million tonnes of tailings will be deposited in the pit. The rest of the tailings, a minimum of 59 and a maximum of 109 million tonnes, will be deposited in the extended tailings facility.

Regulatory approval for the proposed tailings deposition in the Canadian Malartic pit and the expansion of the currently authorized tailings area are part of the approval process for the Canadian Malartic pit extension (Barnat deposit) subject to the environmental impact assessment process of the Quebec Environmental Protection Act. The environmental impact assessment has been completed and is under review by the Ministry of Sustainable Development, Environment and the Fight Against Climate Change (Quebec). Golder Associates Ltd. is designing the tailings extension component and is preparing a hydrogeological study to demonstrate that the Canadian Malartic pit would provide a hydraulic trap and contain the tailings with minimum environmental risk.

An annual hydrological site balance is maintained to provide a yearly estimate of water volumes that must be managed in the different structures of the water management system of the Canadian Malartic mine during an average climatic year (in terms of precipitation). Results of this hydrological balance indicate that excess water from the Southeast Pond will eventually need to be released into the environment. A water treatment plant is currently under construction to ensure that in the short and medium term the water to be released to the environment will meet water quality requirements. Adding a treatment plant is expected to reduce the risks associated with surface water management and add flexibility to the system.

Reclamation and closure costs have been estimated for rehabilitating the tailings facility and waste dump, vegetating the surrounding area, dismantling the plant and associated infrastructure, and performing environmental inspection and monitoring for a period of ten years. The reclamation and closure cost is estimated at C$51.5 million. Financial assurance has been provided based on the closure plan.

Capital Expenditures

Capital expenditures at the Canadian Malartic mine during 2014 were approximately $36.1 million, which included sustaining capital expenditures and deferred expense, but excluded capitalized drilling. Budgeted 2015 capital expenditures at the Canadian Malartic mine are $59.0 million, excluding capitalized drilling.

Development

Development activities at the Canadian Malartic mine in 2014 primarily consisted of stripping activities. Development activities in 2015 are expected to include additional stripping activities, preparations for the pit extension and work related to the proposed deviation of Quebec provincial highway No. 117.

Geology, Mineralization and Exploration

Geology

The Canadian Malartic property straddles the southern margin of the eastern portion of the Abitibi Subprovince, an Archean greenstone belt situated in the southeastern part of the Superior Province of the Canadian Shield. The Abitibi Subprovince is limited to the north by gneisses and plutons of the Opatica Subprovince, and to the south by metasediments and intrusive rocks of the Pontiac Subprovince. The contact between the Pontiac Subprovince and the rocks of the Abitibi greenstone belt is characterized by a major fault corridor, the east-west trending Larder Lake–Cadillac Fault Zone ("LLCFZ"). This structure runs from Larder Lake, Ontario through Rouyn-Noranda, Cadillac, Malartic, Val-d'Or and Louvicourt, Québec, at which point it is truncated by the Grenville Front.

The regional stratigraphy of the southeastern Abitibi area is divided into groups of alternating volcanic and sedimentary rocks, generally oriented at N280° – N330° and separated by fault zones. The main lithostratigraphic divisions in this region are, from south to north, the Pontiac Group of the Pontiac Subprovince and the Piché, Cadillac, Blake River,

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Kewagama and Malartic groups of the Abitibi Subprovince. The various lithological groups within the Abitibi Subprovince are metamorphosed to greenschist facies. Metamorphic grade increases toward the southern limit of the Abitibi belt, where rocks of the Piché Group and the northern part of the Pontiac Group have been metamorphosed to upper greenschist facies.

The majority of the Canadian Malartic property is underlain by metasedimentary units of the Pontiac Group, lying immediately south of the LLCFZ. The north-central portion of the property covers an approximately 9.5 kilometre section of the LLCFZ corridor and is underlain by mafic-ultramafic metavolcanic rocks of the Piché Group cut by porphyritic and dioritic intrusions. The Cadillac Group covers the northern part of the property (north of the LLCFZ). It consists of greywacke containing lenses of conglomerate.

Mineralization

Surface drilling by Lac Minerals Ltd. in the 1980s defined several near-surface mineralized zones now included in the Canadian Malartic deposit (the F, P, A, Wolfe and Gilbert zones), all expressions of a larger, continuous mineralized system located at depth around the historical underground workings of the Canadian Malartic and Sladen mines. In addition to these, the Western Porphyry Zone occurs 1 km northeast of the main Canadian Malartic deposit and the Gouldie mineralized zone occurs approximately 1.2 km southeast of the main Canadian Malartic deposit, although the relationship between these zones and the main deposit is presently unknown.

Mineralization in the Canadian Malartic deposit occurs as a continuous shell of 1 to 5% disseminated pyrite associated with fine native gold and traces of chalcopyrite, sphalerite and tellurides. The gold resource is mostly hosted by altered clastic sediments of the Pontiac Group (70%) overlying an epizonal dioritic porphyry intrusion. A portion of the deposit also occurs in the upper portions of the porphyry body (30%).

The South Barnat deposit is located to the north and south of the old South Barnat and East Malartic mine workings, largely along the southern edge of the LLCFZ. The disseminated/stockwork gold mineralization at South Barnat is hosted both in potassic-altered, silicified greywackes of the Pontiac Group (south of the fault contact) and in potassic-altered porphyry dykes and schistose, carbonatized and biotitic ultramafic rocks (north of the fault contact).

Several mineralized zones have been documented within the LLCFZ (South Barnat, Buckshot, East Malartic, Jeffrey, Odyssey, East Amphi, Fourax), all of which are generally spatially associated with stockworks and disseminations within dioritic or felsic porphyritic intrusions.

Exploration

The combined amount of gold in proven and probable mineral reserves at the Canadian Malartic mine at the end of 2014 is 8.7 million ounces, which represents a decrease of 3% as compared to June 16, 2014. This mineral reserve includes replacement of the 285,378 ounces of gold mined from June 16, 2014 to December 31, 2014. The reduction in mineral reserves is principally associated with ore mined during the second half of 2014.

Diamond drilling is used for exploration on the Canadian Malartic property. In 2014, 0 holes (0 metres) were drilled for definition (conversion) drilling and 32 holes (20,139 metres) were for exploration. Expenditures on diamond drilling at the Canadian Malartic mine during 2014 were approximately C$25 million.

The main focus of the 2014 exploration program was the Odyssey North and Odyssey South targets.

In 2015, Canadian Malartic GP expects to spend C$1.2 million on 7,000 metres of exploration drilling at the Canadian Malartic mine.

Kittila Mine

The Kittila mine, which commenced commercial production in May 2009, is located in northern Finland approximately 900 kilometres north of Helsinki and 50 kilometres northeast of the town of Kittila. At December 31, 2014, the Kittila mine was estimated to contain proven and probable mineral reserves of 4.5 million ounces of gold comprised of 28.5 million tonnes of ore grading 4.93 grams of gold per tonne. The Kittila mine is accessible by paved road from the village of Kiistala, which is located on the southern portion of the main claim block. The gold deposit is located near the small village of Rouravaara, approximately ten kilometres north of the village of Kiistala. The property is close to infrastructure, including hydro power, an airport and the town of Kittila. The Kittila mine also has access to a qualified labour force, including mining and construction contractors.

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The total landholdings surrounding and including the Kittila mine comprise one mining licence (licence area of 847 hectares and licence extension area of 285 hectares) and 187 tenements covering approximately 22,897 hectares. The tenements form a continuous block around the Kittila mining licence. The block has been divided into the Suurikuusikko area (which includes the Rouravaara area), the Suurikuusikko West area, the Suurikuusikko East area and the Kittila mining licence.

The boundary of the mining licence is determined by ground-surveyed points, whereas the boundaries of the tenements are not required to be surveyed. All of the tenements at the Kittila mine are registered in the name of Agnico Eagle Finland Oy, an indirect, wholly-owned subsidiary of the Company. The expiry dates of the tenements vary, with the earliest expiry date being August 2017. Tenements are initially valid for four years, provided exploration work in the area is reported annually and a small annual fee is paid to maintain title; extensions of titles can be granted for 11 additional years upon payment of a slightly higher fee and active exploration in the area. Agnico Eagle Finland Oy also holds the mining licence in respect of the Kittila mine. The mine is subject to a 2.0% net smelter return royalty payable to the Republic of Finland.

The Kittila mine area is sparsely populated and is situated between 200 and 245 metres above sea level. The topography is characterized by low rolling forested hills separated by marshes, lakes and interconnected rivers. The gold deposit is situated on an area of land that has no special use at present and there is sufficient land available for tailings facilities. Water requirements for the Kittila mine are sourced from the nearby Seurujoki River, recirculation of water from pit dewatering and tailings pond water. The Kittila region is located within the South-West Lapland zone of the northern boreal vegetation zone characterized by spruce forests, marshes and bogs.

The mine is located within the Arctic Circle, but the climate is moderated by the Gulf Stream off the coast of Norway, such that northern Finland's climate is comparable to that of eastern Canada. Winter temperatures range from minus ten to minus 30 degrees Celsius, whereas summer temperatures range from ten degrees Celsius to the mid-20s. Exploration and mining work can be carried out year-round. Because of its northern latitude, winter days are extremely short with a brief period of 24-hour darkness around the winter solstice. Conversely, summer days are very long with a brief period of 24-hour daylight in early summer around the summer solstice. Annual precipitation varies between five and 50 centimetres, one-third of which falls as snow. Snow accumulation usually begins in November and remains until March or April.

Location Map of the Kittila Mine (as at December 31, 2014)

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The Company acquired its 100%, indirect interest in the Kittila mine through the acquisition of the Swedish company Riddarhyttan Resources AB in November 2005. In June 2006, on the basis of an independently reviewed feasibility study, the Company approved construction of the Kittila mine. Mining at Kittila started initially as open pit mining. This open pit mining was completed in November 2012 and all mining is currently carried out from the underground via ramp access. The initial underground stope was mined in early 2010. Ore is processed in a 3,000-tonne per day surface processing plant that was commissioned in late 2008. Limited gold concentrate production started in September 2008 and gold dore bar production commenced in January 2009. A decision to increase the mine production was made in February 2013 and construction started immediately. The production increase consists of expanding the processing capacity from 3,000 tonnes per day to 3,750 tonnes per day. The expansion project was completed ahead of schedule in 2014, and final expansion tie-ins were completed during a scheduled maintenance shut-down in September. The ramping-up of processing capacity continued to year-end, occasionally reaching over 4,000 tonnes per day.

Mining and Milling Facilities

Surface Plan of the Kittila Mine (as at December 31, 2014)

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The orebodies at Kittila were initially mined from two open pits, followed by underground operations to mine the deposits further beneath the surface. Smaller additional open pits will be used to mine any remaining mineral reserves close to the surface in the future. Open pit mining started in May 2008 and the extracted ore was stockpiled. As of December 2014, a total of 6.2 million tonnes of ore have been processed, including ore from the open pits and underground, 0.52 million tonnes of ore are currently stockpiled and 37.3 million tonnes of waste rock have been excavated, including both open pit and underground excavation. Work on the ramp and other work to access the mineral reserves underground continued throughout 2014. Total underground (lateral and vertical) development at the end of 2014 is approximately 48,900 metres. Underground mining commenced in the fourth quarter of 2010 and, at the end of 2014, a total of 3.35 million tonnes of ore has been mined from the underground portion of the mine.

Mining Methods

At the Kittila mine, the Suurikuusikko and the Rouravaara orebodies are currently mined by underground mining methods and access to the underground mine is via ramp. Approximately 4,500 tonnes of ore per day are fed to the concentrator. The underground mining method is open stoping with delayed backfill. Stopes are between 25 and 40 metres high and yield between 10,000 and 40,000 tonnes of ore per stope. To ensure sufficient ore production is available in the future to supply the mill, over 11,000 metres of tunnels will be developed each year. After extraction, stopes are filled with paste backfill or cemented backfill to enable the safe extraction of ore in adjacent stopes. Ore is trucked to the surface crusher via the ramp access system.

Surface mining at the Kittila mine ended in 2012. Surface mining was completed at the Rouravaara pit in April 2012 and surface mining at the Suurikuusikko pit was completed in early November 2012.

Surface Facilities

Construction of the processing plant and associated equipment was completed in 2008 and facilities at the Kittila mine include an office building, a maintenance facility for mining equipment, a warehouse, a second maintenance shop, an oxygen plant, a processing plant, a paste backfill plant, a tank farm, a crusher, conveyor housings and an ore bin. Due to limited space in the original office building, in 2014 a second office building was constructed close to the underground ramp. In addition, there are some temporary structures for contractor offices and work areas.

The ore at the Kittila mine is treated by grinding, flotation, pressure oxidation and CIL circuits. After grinding, ore processing consists of two stages. In the first stage, ore is enriched by flotation and in the second stage the gold is extracted by pressure oxidation and CIL processes. At the end of the second stage, gold is recovered from the carbon in a Zadra elution circuit and recovered from the solution using electrowinning and finally poured into dore bars using an electric induction furnace.

During 2014, flotation recoveries averaged 93.0%. Recoveries in the second stage of the process in 2014 averaged 90.1%.

Production and Mineral Recoveries

In 2014, the Kittila mine had payable production of 141,742 ounces of gold from 1,156,368 tonnes of ore grading 4.55 grams of gold per tonne. The total cash costs at Kittila in 2014 per ounce of gold produced was $845 on a by-product basis and $846 on a co-product basis. In 2014, the Kittila processing facility averaged 3,772 tonnes of ore per day and operated approximately 84% of available time. Gold recovery averaged 84.21%. The minesite costs per tonne at Kittila were €78.58 in 2014.

The following table sets out the metal recoveries at the Kittila mine in 2014.

		Head Grade		Overall Metal Recovery		Payable Production
Gold		4.55 g/t		84.21%		141,742 oz

In 2015, the Kittila mine is expected to produce approximately 185,000 ounces of gold from 1,487,000 tonnes of ore grading 4.5 grams of gold per tonne at an estimated total cash costs per ounce of approximately $711 on a by-product basis, with estimated gold recovery of 86.0%. Minesite costs per tonne of approximately €72 are expected in 2015.

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Environmental Matters

Agnico Eagle Finland Oy currently holds a mining licence, an environmental permit and operational permits in respect of the Kittila mine. All permits necessary to begin production were received during 2008.

The construction of the first phase of the tailings dam and waterproof bottom layer was completed in the fall of 2008. Work on the second phase was completed in 2010 and included the expansion of the tailings area. Work on the third phase began in 2013 and includes work to heighten the dam. Work on the third phase is expected to continue for several years.

Water from dewatering the mine and water used in the mine and mill is collected and treated by sedimentation. Emissions and environmental impact are monitored in accordance with the comprehensive monitoring program that has been approved by the Finnish environmental authorities. Work on enhancing the scrubbing of mill gases initiated in 2012 was postponed to 2014 due to reviews by authorities of the permit levels. Financial assurance is provided to the environmental authorities on an annual basis in the amount prescribed by the environmental permit.

The environmental permit renewal was received in July 2013. This renewal contains additional effluent criteria and the Company has appealed the timing of compliance with such criteria to allow for studies and design to take place for new water treatment as required. A decision by the Administrative Court reviewing the appeal is expected in in the first quarter of 2015. The Company is currently investigating different water treatment techniques to ensure compliance with the new criteria.

Capital Expenditures

Capital expenditures at the Kittila mine during 2014 totaled approximately $106.2 million, which included mill expansion construction, mill modification, underground development and sustaining capital costs, but excludes capitalized drilling.

The Company expects capital expenditures during 2015 at the Kittila mine to be approximately $63.0 million, excluding capitalized drilling.

Development

In 2014, underground development continued in both the Suurikuusikko and Rouravaara mining areas. The driving of a ramp from surface towards the new Rimpi zone was also initiated in 2014. A total of 8,884 metres of ramp and sublevel access development was completed during the year. A total of 11,751 tonnes of ore from development and 1,057,242 tonnes of stope ore were mined in 2014. The Company expects to complete approximately 13,340 metres of lateral development and 325 metres of vertical development during 2015.

Geology, Mineralization and Exploration

Geology

The Kittila mine is situated within the Kittila Greenstone belt, part of the Lapland Greenstone belt in the Proterozoic-age Svecofennian geologic province. The appearance and geology of the area is similar to that of the Abitibi region of the Canadian Shield. In northern Finland, the bedrock is typically covered by a thin but uniform blanket of unconsolidated glacial till. Bedrock exposures are scarce and irregularly distributed.

The mine area is underlain by mafic volcanic and sedimentary rocks metamorphosed to greenschist assemblages and assigned to the Kittila group. The major rock units trend north to north-northeast and are near-vertical. The volcanics are further sub-divided into iron-rich tholeiitic basalts ("Kautoselka Formation") located to the west and magnesium-rich tholeiitic basalt, coarse volcaniclastic units, graphitic schist and minor chemical sedimentary rocks ("Vesmajarvi Formation") located to the east. The contact between these two rock units consists of a transitional zone (the "Porkonen Formation") varying between 50 and 200 metres in thickness. This zone is strongly sheared, brecciated and characterized by intense hydrothermal alteration and gold mineralization, features consistent with major brittle-ductile deformation zones. The zone is part of a major north-northeast-oriented shear zone (the "Suurikuusikko Trend").

Mineralization

The Porkonen Formation hosts the Kittila gold deposit, which contains multiple mineralized zones stretching over a strike length of more than 25 kilometres. Most of the work at the Kittila mine has been focused on the 4.5-kilometre stretch that hosts the known gold reserves and resources. From north to south, the zones are Rimminvuoma ("Rimpi-S"), the deep extension of Rimminvuoma ("Rimpi Deep"), North Rouravaara ("Roura-N"), Central Rouravaara ("Roura-C"), depth extension of Rouravaara and Suurikuusikko ("Suuri/Roura Deep"), Suurikuusikko ("Suuri"), Etela and Ketola. The Suuri

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and Suuri/Roura Deep zones include several parallel sub-zones that have previously been referred to as Main East, Main Central and Main West. The Suuri zone hosts approximately 23% of the current probable gold reserve estimate on a contained-gold basis, while Suuri Deep has approximately 19%, Roura-C approximately 7%, Roura Deep approximately 21%, Roura-N approximately 1%, Rimpi Deep approximately 22%, Rimpi-S approximately 5%, Ketola approximately 1% and Etela approximately 0.1%.

Gold mineralization in these zones is associated with intense hydrothermal alteration (carbonate-albite-sulphide), and is almost exclusively refractory, locked inside fine-grained sulphide minerals: arsenopyrite (approximately 73%) or pyrite (approximately 23%). The rest is "free gold", which is manifested as extremely small grains of gold in pyrite.

Exploration

In 2014, proven and probable gold reserves decreased by approximately 190,000 ounces to 4.52 million ounces of gold (28.5 million tonnes of ore grading 4.93 grams per tonne). This decrease was primarily due to an increased cut-off grade resulting from the lower gold price which caused a 0.2 million ounce reduction in proven and probable mineral reserves. The decrease was off-set, in part, by increased mineral reserves from exploration and conversion drilling in the Roura Deep Zone. Measured mineral resources at December 31, 2014 were 0.8 million tonnes of ore grading 2.78 grams of gold per tonne. Indicated mineral resources increased by 2.8 million tonnes to 13.4 million tonnes grading 2.98 grams of gold per tonne. Inferred mineral resources increased by 1.4 million tonnes to 8.9 million tonnes of ore grading 4.30 grams of gold per tonne.

Diamond drilling is used for exploration on the Kittila property. In 2014, most of the work on the mining licence area focused on the Roura and Rimpi areas. From 1987 through the end of 2014, a total of 3,430 drill holes, totaling 775,849 metres, have been completed on the property. In 2014, between four and five drills were used on the Kittila property. A total of 381 drill holes were completed in 2014 for a length of 41,121 metres. Of these drill holes, 334 holes (21,226 metres) were for delineation drilling, seven holes (1,797 metres) were for conversion drilling and 34 holes (16,313 metres) were related to mine exploration. Total expenditures for diamond drilling in 2014 were $6.71 million, including $0.31 million for definition (conversion) drilling and $4.40 million for exploration.

Outside of the Kittila mining licence area, systematic diamond drilling and target focused ground geophysics continued along the Suurikuusikko Trend, and a number of new targets were tested by diamond drilling in 2014. Encouraging results have been obtained from four gold zones in the Kuotko West area located approximately ten kilometres north of the Kittila mine site. A total of 30 diamond drill holes totaling 7,483 metres were drilled on exploration targets outside of the mining licence area in 2014, at a cost of $3.5 million.

The 2015 exploration budget for the Kittila mine is approximately $4.38 million ($3.84 million for 14,450 metres of minesite exploration drilling and $0.54 million for 4,000 metres of resource conversion drilling), using up to three drills throughout the year to help further identify the gold reserve and resource potential of the Kittila property.

In addition, $4.4 million of exploration expenditures, including an estimated 6,300 metres of diamond drilling, is planned in 2015 for exploration along the Suurikuusikko and Kapsa Trends, and $0.6 million is planned for geophysical surveys and geochemical sampling along the nearby Hanhimaa Shear Zone.

Meadowbank Mine

The Meadowbank mine, which achieved commercial production in March 2010, is located in the Third Portage Lake area in the Kivalliq District of Nunavut in northern Canada, approximately 70 kilometres north of Baker Lake. At December 31, 2014, the Meadowbank mine was estimated to contain proven and probable mineral reserves of 1.2 million ounces of gold comprised of 11.8 million tonnes of ore grading an average of 3.08 grams of gold per tonne. The Company acquired its 100% interest in the Meadowbank mine in 2007 as the result of the acquisition of Cumberland Resources Ltd.

The fresh water required for domestic camp use, mining and milling is obtained from the intake barge at Third Portage Lake. Power is supplied by a 29-megawatt diesel electric power generation plant.

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Location Map of the Meadowbank Mine (as at December 31, 2014)

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The Meadowbank mine is held under ten Crown mining leases, four exploration concessions and 40 Crown mineral claims. The Crown mining leases, which cover the Portage, Goose and Goose South deposits, are administered under federal legislation. The Crown mining leases, which have renewable ten-year terms, have no annual work commitments but are subject to annual rent fees that vary according to their renewal date. The Crown mining leases cover 7,395 hectares and expire in either 2016 or 2019. The production lease with the Kivalliq Inuit Association ("KIA") is a surface lease covering 1,513 hectares and requires the payment of C$158,865 annually. Production from subsurface lease areas is subject to a royalty of up to 14% of the adjusted net profits, as defined in the Northwest Territories and Nunavut Mining Regulations. In order to conduct exploration on the Inuit-owned lands at Meadowbank, the Company must receive approval for an annual work proposal from the KIA, the body that holds the surface rights in the Kivalliq District and administers land use in the region through various boards. The Nunavut Water Board (the "NWB"), one such board, provided the recommendation to Aboriginal Affairs and Northern Development Canada to grant the Meadowbank mine's construction and operating licences in July 2008. The Company has obtained all of the approvals and licences required to build and operate the Meadowbank mine.

The four Meadowbank exploration concessions comprise approximately 33,490 hectares and are granted by Nunavut Tunngavik Inc. ("NTI"), the corporation responsible for administering subsurface mineral rights on Inuit-owned lands in Nunavut. In 2015, exploration concessions covering the Vault deposit at Meadowbank will require annual rental fees of approximately C$57,000. During the exploration phase, the concessions can be held for up to 20 years and the concessions can be converted into production leases with annual fees of C$1 per hectare, with no annual work commitments. Production from the concessions is subject to a 12% net profits interest royalty from which annual deductions are limited to 85% of the gross revenue.

In 2012, the Company signed a production lease with NTI covering the extraction and processing of gold from the Vault deposit. This lease authorizes the Company to mine and process gold from the Vault deposit and sets in place royalty payments that are equivalent to those being paid by the Company at the Portage and Goose pits.

The 40 Crown mineral claims cover approximately 36,889 hectares at Meadowbank and are subject to land fees and work commitments. Land fees are payable only when work is filed. The most recent filing was in 2012, when approximately $7,254 in land fees were paid and $4,426,941 in assessment work was submitted.

The Meadowbank area consists of low, rolling hills with numerous lakes. The topography in the immediate vicinity of the mine is generally flat, with relief in the order of ten to 12 metres near the main deposit areas, and as high as 60 metres locally. Elevations are about 133 metres above sea level along the lake shorelines. This location is considered to have an arid arctic climate with temperatures ranging from 5 to minus 40 degrees Celsius in the winter (from October to May) and from minus 5 to 25 degrees Celsius throughout the summer (from June to September). The area is characterized by a continuous vegetation cover interspersed with bedrock outcroppings and continuously aggrading surfaces. Vegetation is typical of upland tundra, as the site is well north of the tree-line. The animal population includes mammals such as caribou, birds such as the snowy owl and fish including lake trout. Surface geological work can be carried out from mid-May to mid-October, while mining, milling and exploration drilling can take place throughout the year, though outdoor work can be hampered in December and January by the cold and darkness.

The Meadowbank mine is accessible from Baker Lake, located 70 kilometres to the south, over a 110-kilometre all-weather road completed in March 2008. Baker Lake provides 2.5 months of summer shipping access via Hudson Bay and year-round airport facilities. The Meadowbank mine also has a 1,752-metre long gravel airstrip, permitting access by air. Fuel, equipment, bulk materials and supplies are shipped by barge and ship from Montreal, Quebec (or Hudson Bay port facilities) into Baker Lake during the summer port access period that starts at the end of July in each year. Fuel and supplies are transported year-round to the site from Baker Lake by conventional tractor trailer units. Scheduled and chartered flights provide transportation for personnel and air cargo.

The Meadowbank mine is designed as a "fly-in/fly-out" operation. The permanent bases for employees from which to service the mine are Val d'Or and Montreal in Quebec and communities in the Kivalliq District of Nunavut. To the greatest extent possible the Company tries to source its Meadowbank mine workforce from the local area.

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Mining and Milling Facilities

Surface Plan of the Meadowbank Mine (as at December 31, 2014)

Surface Plan of the Vault Deposit (as at December 31, 2014)

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Meadowbank has three major deposits that have sufficient drilling definition to sustain mineral reserves: Portage, Goose and Vault. All required aggregates used in the mining process are produced from waste material taken from the north end of the Portage pit. In 2008, a dewatering dyke was constructed in order to access the north half of the Portage pit in preparation for production in 2010. Construction of the Bay-Goose dyke, a major dewatering dyke required to access the southern portion of the Portage and the Goose pits, commenced in 2009 and was completed in 2011. Three tailings impoundment dykes: Saddle Dam 1, Saddle Dam 2 and Stormwater Dyke, were built in 2009 and 2010. The final elevation of Stormwater dyke was completed in 2014. Construction of the main tailings impoundment dyke, Central Dyke, began in 2012. Additional phases of construction on the Central Dyke are expected to continue throughout the mine life. Construction of the eight-kilometre long access road to the Vault pit began in 2011 and was completed in 2012.

Mining Methods

Mining at the Meadowbank mine is done by open pit method using excavators and trucks. The ore is extracted conventionally using drilling and blasting, then hauled by trucks to a primary gyratory crusher adjacent to the mill. The marginal-grade material (material grading under the cut-off grade at a gold price of $1,150 per ounce, but which has the potential to increase the mineral reserves at the end of the mine life if the metal prices makes its processing economical) is stockpiled separately. Also, stockpiles of low-grade material currently lower than the mill feed grade have been created. The majority of this low-grade material was processed in 2014. The remainder will be processed at the end of the mine life. Waste rock is hauled to one of three waste storages areas on the property, used for dyke construction material or backfilled into the mined out area.

Mining first commenced in the Portage pit in 2010 and in the Goose pit in March 2012, and commercial production at the Vault pit was achieved in April 2014.

Surface Facilities

Plant site facilities include a mill building, a mechanical shop, a generator building, an assay lab and a heavy vehicle maintenance shop. A structure comprised of two separate crushers flank the main process complex. Power is supplied by a 29-megawatt diesel electric power generation plant with heat recovery and an onsite fuel storage (5.6 million litres) and distribution system. The mill-service-power complex is connected to the accommodations complex by enclosed corridors. In addition, the Company is building peripheral infrastructure including tailings and waste impoundment areas. In January 2012, the Company identified naturally occurring asbestos fibres in dust samples taken from the secondary crusher building at the Meadowbank mine and subsequently found small concentrations of fibres in the ore coming from certain areas of the open pit mines. The Company has instituted additional monitoring and an asbestos management program at the site.

The accommodations complex at the Meadowbank mine consists of a permanent camp and a temporary camp to accommodate additional workers. The camp is supported by a sewage treatment, solid waste disposal and potable water plant. In 2008, the exploration group was relocated eight kilometres south of the minesite location to a separate camp with an 80-person capacity.

Facilities constructed at Baker Lake include a barge landing site located three kilometres east of the community and a storage compound. A fuel storage and distribution complex with capacity for 60-million litres of diesel fuel and 2-million litres of jet fuel is located next to the barge landing facility.

In 2013, new facilities were built near the Vault deposit, which is located approximately eight kilometres from the mine complex. These facilities include a heated shelter for employees, a storage area, a fuel farm, an electrical power generation plant and a water treatment plant.

The process design is based on a conventional gold plant flowsheet consisting of two-stage crushing, grinding, gravity concentration, cyanide leaching and gold recovery in a CIP circuit. The mill is designed for year-round operation, with a design capacity of 9,800 tonnes per day. Based on projections from metallurgical test work, the overall gold recovery is projected to be approximately 92.8%, with approximately 25% typically recovered in the gravity circuit.

The different ore zones have slightly different grind sensitivities to gold recovery and, as such, different particle size distributions are recommended as target grinds in the processing. The use of a slightly coarser grind for ore from the Vault deposit will allow all three of the ore zones to be processed at a consistent process throughput.

The run-of-mine ore is transported to the crusher using off-road trucks. The ore is dumped into the gyratory crusher or into stockpiles designated by ore-type. The feed from the primary crusher is conveyed to the cone crusher in closed circuit with a vibrating screen. The crushed ore is delivered to the coarse ore stockpile and ore from the stockpile is conveyed to the

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mill. The grinding circuit is comprised of a primary SAG mill operated in open circuit and a secondary ball mill operated in closed circuit with cyclones. A portion of the cyclone underflow stream is sent to the concentrator, which separates the heavy minerals from the ore. The grinding circuit incorporates a gravity process to recover free gold and the free gold concentrate is leached in an intensive cyanide leach-direct electrowinning recovery process.

The cyclone overflow is sent to the grinding thickener. The clarified overflow is recycled to the grinding circuit and thickened underflow is pumped to a pre-aeration and leach circuit. The cyanide circuit consists of seven tanks, providing approximately 42 hours of retention time. The leached slurry flows to a train of six CIP tanks. Gold in the solution flowing from the leaching circuit is adsorbed into the activated carbon. Gold is recovered from the carbon in a Zadra elution circuit and is recovered from the solution using an electrowinning recovery process. The gold sludge is then poured into dore bars using an electric induction furnace.

The CIP tailings are treated for the destruction of cyanide using the standard sulphur-dioxide-air process. The detoxified tailings are then pumped to the permanent tailings facility. The tailings storage is designed for zero discharge, with all process water being reclaimed for re-use in the mill to minimize water requirements.

Production and Mineral Recoveries

During 2014, the Meadowbank mine had payable production of 452,877 ounces of gold from 4,129,143 tonnes of ore grading 3.61 grams of gold per tonne. The total cash costs at Meadowbank in 2014 per ounce of gold produced was $599 on a by-product basis and $604 on a co-product basis. In 2014, the Meadowbank processing facility averaged 11,312 tonnes of ore per day and operated 95% of available time and gold recovery averaged 94.6%. The minesite costs per tonne at Meadowbank were C$72.39 in 2014.

The following table sets out the metal recoveries at the Meadowbank mine in 2014. Mill processing exceeded extraction from the mine in 2014; 5,146 tonnes came from the marginal stockpile and 220,013 tonnes from the low-grade stockpile.

		Head Grade		Overall Metal Recovery		Payable Production
Gold		3.61 g/t		94.6%		452,877 oz

Gold production during 2015 at Meadowbank is expected to be approximately 400,000 ounces from 4,120,000 tonnes of ore grading 3.27 grams of gold per tonne at an estimated total cash costs per ounce of approximately $656 on a by-product basis, with estimated gold recovery of 92.5%. Minesite costs per tonne of approximately C$77 are expected in 2015.

Environmental Matters (including Inuit Impact and Benefit Agreement)

The development of the Meadowbank mine was subject to an extensive environmental review process under the Nunavut Land Claims Agreement (the "NLCA") administered by the Nunavut Impact Review Board (the "NIRB"). On December 30, 2006, a predecessor to the Company received the Project Certificate from the NIRB, which included the terms and conditions to ensure the environmental integrity of the development process. In July 2008, the Company received a water licence from the NWB for construction and operation of the mine subject to additional terms and conditions. Both authorizations were approved by the then Minister of Aboriginal Affairs and Northern Development Canada.

In February 2007, a predecessor to the Company and the Nunavut government signed a Development Partnership Agreement (the "DPA") with respect to the Meadowbank mine. The DPA provides a framework for stakeholders, including the federal and municipal governments and the KIA, to maximize the long-term socio-economic benefits of the Meadowbank mine to Nunavut.

An Inuit Impact and Benefit Agreement for the Meadowbank mine (the "Meadowbank IIBA") was signed with the KIA in March 2006. This agreement was renegotiated and an amended Meadowbank IIBA was signed on October 18, 2011. The Meadowbank IIBA ensures that local employment, training and business opportunities arising from all phases of the project are accessible to the Kivalliq Inuit. The Meadowbank IIBA also outlines the special considerations and compensation that must be provided to the Inuit regarding traditional, social and cultural matters.

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The Company currently holds a renewable exploration lease from the KIA that expires December 31, 2015. In July 2008, the Company signed a production lease for the construction and the operation of the mine, the mill and all related activities. This production lease was amended on May 2, 2013 to expand the surface area granted under the lease. In April 2008, the Company and the KIA signed a water compensation agreement for the Meadowbank mine addressing Inuit rights under the Land Claims Agreement respecting compensation for water use and water impacts associated with the mine.

A series of four dykes have been built to isolate the mining activities at the Portage and Goose deposits from neighbouring lakes. An additional dyke was built in 2013 to isolate the mining activities at the Vault deposit. Waste rock from the Portage, Goose and Vault pits is primarily stored in the Portage and Vault rock storage facilities, and a portion of the waste is placed in the Portage Pit. The control strategy for waste rock storage includes freeze control of the waste rock through permafrost encapsulation and capping with an insulating convective layer of neutralizing rock (ultramafic and non-acid generating volcanic rocks). The Vault rock storage facility does not require an insulating convective layer due to the non-acid generating nature of the rock in that area. Waste rock deposited in the Portage pit will be covered with water during the closure phase flooding of the pit which will prevent any acid generation. Because the site is underlain by greater than 400 metres of permafrost, the waste rock below the capping layer is expected to freeze, resulting in low (if any) rates of acid rock drainage generation in the long term.

Tailings are stored in the dewatered portion of the Second Portage Lake. The tailings are deposited on tailings beaches within a two cell tailings storage facility isolated by the central dyke. A reclamation pond is located within the tailings storage facility. Deposition of tailings began in the south cell in the fourth quarter of 2014. The control strategy to minimize water infiltration into the tailings storage facility and the migration of constituents out of the facility includes freeze control of the tailings through permafrost encapsulation and through comprehensive, engineered dyke liners. A four metre thick dry cover of acid neutralizing ultramafic rock backfill will be placed over the tailings as an insulating convective layer to confine the permafrost active layer within relatively inert tailings materials.

The water management objective for the project is to minimize the potential impact on the quality of surface water and groundwater resources at the site. Diversion ditches were constructed in 2012 to divert clean runoff water away from areas affected by the mine or mining activities. Following a field investigation in 2014, a contact water interception trench was constructed to collect seepage water downgradient from the mill prior to entering into the nearby lake. All contact water originating from the mine site or mill is intercepted, collected, conveyed to the tailings storage facility for reuse in process or decanted to treatment for removal of solids (if needed) prior to release to the Third Portage Lake.

An interim closure and reclamation plan was submitted in 2014 as a requirement of part of the NWB type A water licence and financial assurance was provided and updated. In 2013, the Company applied to the NWB for an increase in freshwater consumption and received the amendment to the Type A License on July 23, 2014. In 2014, the Meadowbank mine used 95% of the permitted limit and effectively managed water use according to the revised management plans and amended permit.

In November 2013, Meadowbank received a compliance direction and is currently under investigation by Environment Canada and Aboriginal Affairs and Northern Development Canada in relation to a seepage incident that was identified during their July 2013 on-site inspection. Monitoring data in 2014 indicated that the 2013 seepage event did not affect the water quality of the downstream ponds and Second Portage Lake. This investigation is ongoing.

Capital Expenditures/Development

In 2014, the Company incurred approximately $65.9 million in capital expenditures at the Meadowbank mine, including $22.8 million on Vault pit pre-production and deferred stripping and $34.9 million on capital and equipment, but excluding capitalized drilling.

In 2015, a total of $52.1 million has been budgeted to be spent at the Meadowbank mine, including $15.4 million on dyke construction, $21 million on deferred stripping and $15.7 million on capital and equipment, but excluding capitalized drilling. The remaining mine life is currently expected to be three years.

Geology, Mineralization and Exploration

Geology

The Meadowbank mine comprises a number of Archean-age gold deposits hosted within polydeformed volcanic and sedimentary rocks of the Woodburn Lake Group, part of the Western Churchill supergroup in northern Canada.

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Three minable gold deposits, Goose, Portage and Vault, have been discovered along the 25-kilometre long Meadowbank gold trend, and the PDF deposit (a fourth deposit) has been outlined on the northeast gold trend. These known gold resources are within 225 metres of the surface, making the deposits attractive for open pit mining.

Mineralization

The predominant gold mineralization found in the Portage and Goose deposits is associated with iron sulfides, mainly pyrite and pyrrhotite, which occur as a replacement of magnetite in the oxide facies iron formation host rock. To a lesser extent, pyrite and chalcopyrite may be found and, on rare occasions, arsenopyrite may be associated with the other sulphides. Gold is mainly observed in native form (electrum), occurring in isolated specs or as plating around sulfide grains. The ore zones are typically six to seven metres wide, following the contacts between the iron formation units and the surrounding host rock. Zones extend up to several hundred metres along strike and at depth. The sulphides primarily occur as replacement of the primary magnetite layers, as well as narrow stringers or bands of disseminated sulphides that almost always crosscut the main foliation and/or bedding which would imply an epigenetic mode of emplacement. The percentage of sulphides is quite variable and may range from trace to semi-massive amounts over several centimetres to several metres in length. The higher gold grades and the occasional occurrence of visible gold are almost always associated with greater than 20% sulphide content.

The main mineralized banded iron formation unit is bounded by an ultramafic unit to the west which locally occurs interlayered with the banded iron formation and to the east by an intermediate to felsic metavolcaniclastic unit.

In the Vault deposit, pyrite is the principal ore-bearing sulphide. The disseminated sulphides occur along sheared horizons that have been sericitized and silicified. These zones are several metres wide and may continue for hundreds of metres along strike and down dip.

Three of the four known gold deposits have been or are being mined. The Goose and Portage deposits are hosted within highly deformed, magnetite-rich iron formation rocks, while intermediate volcanic rock assemblages host the majority of the mineralization at the more northerly Vault deposit. The fourth deposit, PDF, shows the same characteristics as Vault, though it is not currently anticipated to be a mineable deposit.

Defined over a 1.85-kilometre strike length and across lateral extents ranging from 100 to 230 metres, the geometry of the Portage deposit consists of general north-northwest striking ore zones that are highly folded. The mineralization in the lower limb of the fold is typically six to eight metres in true thickness, reaching up to 20 metres in the hinge area.

The Goose deposit is located just south of the Portage deposit and is also associated with iron formation but exhibits different geometry, with a north-south trend and a steep westerly dip. Mineralized zones typically occur as a single unit near surface, splaying into several limbs at depth. The deposit is currently defined over a 750-metre strike length and down to 500 metres at depth (mainly in the southern end), with true thicknesses of three to 12 metres (reaching up to 20 metres locally). The Goose underground resource (100 to 500 metres at depth) extends 700 metres to the south of the Goose pit. The ore zones show the same characteristics as the Goose pit, which is two to five main zones sub-parallel and undulating. The average thickness rarely exceeds three to five metres.

The Vault deposit is located seven kilometres northeast of the Portage and Goose deposits. It is planar and shallow-dipping with a defined strike of 1,100 metres. The deposit has been disturbed by two sets of normal faults striking east-west and north-south and dipping moderately to the southeast and steeply to the east, respectively. The main lens has an average true thickness of eight to 12 metres, reaching as high as 18 metres locally. The hanging wall lenses are typically three to five metres, and up to seven metres, in true thickness.

Exploration

In 2014, proven and probable gold reserves decreased by approximately 583,000 ounces to 1.17 million ounces of gold (11.8 million tonnes of ore grading 3.08 grams per tonne) after mining 479,245 ounces of gold. The net decrease was primarily due to an increased cut-off grade resulting from the lower gold prices in 2014. Measured and indicated mineral resources at the Meadowbank mine increased by 0.25 million tonnes to 7.5 million tonnes grading 3.30 grams of gold per tonne. This increase was also primarily due to the decrease in gold price used to estimate the mineral reserves and mineral resources. Inferred mineral resources essentially remained the same.

No drilling was conducted at the Portage and Goose pits during 2014. In 2015, 1,450 metres of delineation drilling is planned at the Portage pit.

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At the Vault deposit, 3,069 metres of diamond drilling was done throughout the year to complete the delineation program within the starter pit. An additional 1,660 metres is planned in 2015 to complete the delineation drilling in the Vault pit and test the northwest extension of the Main Zone.

Meliadine Project

The Meliadine project is an advanced exploration property located near the western shore of Hudson Bay in the Kivalliq region of Nunavut, about 25 kilometres north of the hamlet of Rankin Inlet and 290 kilometres southeast of the Meadowbank mine. The closest major city is Winnipeg, Manitoba, about 1,500 kilometres to the south.

The Company acquired its 100% interest in the Meliadine project through its acquisition of Comaplex Minerals Corp. in July 2010.

The mineral reserves and resources of the Meliadine project are estimated at December 31, 2014 to contain proven and probable mineral reserves of 3.34 million ounces of gold in 13.94 million tonnes of ore grading 7.44 grams of gold per tonne. In addition, the project has 20.25 million tonnes of indicated mineral resources grading 5.06 grams of gold per tonne and 14.08 million tonnes of inferred mineral resources grading 7.65 grams of gold per tonne at December 31, 2014.

The Meliadine property is a large land package that is nearly 80 kilometres long. It consists of 111,757 hectares of mineral rights, of which 76,793 hectares are held under the Northwest Territories and Nunavut Mining Regulations and administered by Aboriginal Affairs and Northern Development Canada and referred to as Crown Land. The Crown Land is made up of mining claims covering 25,507 hectares and mineral leases covering 51,286 hectares. There are also 34,964 hectares of subsurface NTI concessions administered by a division of the Nunavut territorial government. In 2014, C$126,758 was paid to Aboriginal Affairs and Northern Development Canada for the mining lease; NTI requires annual rental fees of C$63,482 and exploration expenditures of C$268,636.

The Kivalliq region has an arid arctic climate. The Meliadine property is mainly covered by glacial overburden with the presence of deep-seated permafrost. The property is about 60 metres above sea level in low-lying topography with numerous lakes. Surface waters are usually frozen by early October and remain frozen until early June. Surface geological work can be carried out from mid-May to mid-October, while exploration drilling can take place throughout the year, though is reduced in December and January due to cold and darkness.

Equipment, fuel and dry goods are transported on the annual warm-weather sealift by barge to Rankin Inlet via Hudson Bay. Ocean-going barges from Churchill, Manitoba or eastern Canadian ports can access the community from late June to early October. Churchill, which is approximately 470 kilometres south of Rankin Inlet, has a deep-water port facility and a year-round rail link to locations to the south.

In October 2013 the Company completed construction of a 23.8-kilometre-long all-weather gravel road linking Rankin Inlet with the project site. This road was constructed to support ongoing exploration activities at the Meliadine project property and significantly reduces the transportation and logistical costs for exploration and development work. Personnel, perishables and lighter goods arrive at the Rankin Inlet regional airport by commercial or charter airline, from which they can be transported by road directly to the Meliadine project exploration camp. Exploration personnel for the Meliadine project are mainly sourced from other parts of Canada on a fly-in/fly-out rotation from Montreal and Val d'Or, Quebec and Winnipeg, Manitoba, although there is preferential employment of qualified people from the Kivalliq region. The hamlet of Rankin Inlet has developed a strong community of entrepreneurs who provide a wide variety of services, such as freight expediting, equipment supply and outfitting.

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Location Map of the Meliadine Project (as at December 31, 2014)

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Mining and Milling Facilities

Surface Plan of the Meliadine Project (as at December 31, 2014)

The latest planned surface infrastructures are indicated on the surface plan map above and consist of modular structures for the dormitories, kitchen, administration office and tailing dry stacks, as well as conventional structures for the warehouse, process plant, power plant, metallurgical test lab and mobile maintenance shop. On the surface plan are also indicated the planned mine portals, ventilation raises, open pits, waste dumps, ore pads, water management structures, attenuation pond and tailings dry stacks. The project is still pending approval; the planned infrastructures indicated could change during the project approval process.

Surface Facilities

Current facilities at the Meliadine project include the exploration camp located on the shore of Meliadine Lake, approximately 2.3 kilometres east of the Tiriganiaq deposit. The self-contained camp consists of four wings of trailers that can accommodate up to 200 personnel and includes kitchen facilities, complete with diesel generators.

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Power for the exploration camp is currently provided by diesel generators. Potable water for the exploration camp is pumped from Meliadine Lake and water for the underground operations and surface drill programs is pumped from Pump Lake. The current water licences allow for a maximum daily water use of 589 cubic metres.

The exploration camp has an incinerator on site to burn all flammable materials, such as camp and food wastes. Incinerator ashes, plastics and metal objects, along with all hazardous solid and liquid wastes are collected at the Meliadine project site and then transported to a waste management company in southern Canada.

Sewage has been treated through a Biodisk treatment system since the summer of 2010. Routine water sampling is conducted and reported on a monthly basis to the authorities.

The decommissioning of the Meliadine East camp on Atulik Lake began during the summer of 2010, and was completed by spring 2011. The core shack and storage building remain at the former camp site.

An underground portal allowing access to an exploration ramp was built at the Tiriganiaq deposit in 2007 and 2008 in order to extract a bulk sample for study purposes. A waste rock and ore storage pad was built during excavation of the ramp and a sampling tower was installed for processing the bulk sample. There is a two-kilometre-long road between the Meliadine project exploration camp and the portal site. Another underground bulk sample of 4,600 tonnes of ore was taken from the Tiriganiaq deposit via this portal in 2011.

Environmental Matters (including Inuit Impact and Benefit Agreement)

Land and environmental management in the region of the Meliadine project is governed by the provisions of the NLCA. The Meliadine project is located on Inuit-owned land, where Inuit own both the sub-surface mineral rights (managed by NTI) and the surface land rights (managed by the KIA on behalf of Inuit beneficiaries under the provisions of the NLCA). Consequently, to explore and develop the project, the Company must obtain land use leases from the KIA. The Company has been granted a commercial lease by KIA for exploration and underground development activity, a prospecting and land use lease for exploration and development activities, an exploration land use lease for exploration and drilling on the Inuit-owned lands of Meliadine East and a parcel drilling permit for drilling activity on Inuit-owned lands. A number of right-of-way leases covering road access to the Meliadine project property and esker quarrying on the Inuit-owned lands were also granted by the KIA.

Pursuant to the NLCA and the Nunavut Waters and Nunavut Surface Rights Tribunal Act requirements, the Company obtained several water use licenses from the NWB, covering ongoing water use for its Meliadine project exploration camp, the underground bulk sampling program and for ongoing exploration drilling activities.

In 2011, the Company, together with the KIA, initiated the environmental assessment process for the Meliadine project with the objective of obtaining a project certificate from the Government of Canada for the construction, operation and ultimate decommissioning of the full project. The project certificate is required before obtaining the permits required to construct, operate and decommission a gold mine at Meliadine. In May 2011, the KIA referred the Meliadine project to the NIRB for screening under the NLCA. On May 4, 2011, the NIRB received the Meliadine project proposal from the Company. On June 8, 2011, the NIRB received a positive conformity determination from the Nunavut Planning Commission for the Meliadine project in relation to the Keewatin Regional Land Use Plan.

In 2011, the NIRB issued a screening decision report to then-Minister of Indian and Northern Affairs Canada (now Minister of Aboriginal Affairs and Northern Development Canada or the "Minister"), recommending a review and, on September 14, 2011, the Minister referred the Meliadine project proposal to the NIRB for a review of the ecosystemic and socio-economic impacts of the project. The NIRB finalized terms of reference for this review and the required Environmental Impact Statement ("EIS") in early 2012.

In April 2013, the Company submitted the draft EIS for the Meliadine project to the NIRB. The Meliadine project underwent technical review by the NIRB and other intervening parties leading to a pre-hearing conference held by the NIRB in December 2013. In January 2014, the NIRB issued its pre-hearing conference report outlining the items that need to be addressed by the Company to finalize the final EIS. The Company submitted the final EIS on May 6, 2014 and it was accepted by the NIRB on May 21, 2014. The technical review was completed by July 21, 2014 and the final public hearings were held in Rankin Inlet from August 21-27, 2014. The NIRB approved the project on October 15, 2014 and recommended to the Minister to approve the project. On January 27, 2015, the Minister approved the environmental assessment findings and recommendations made by the NIRB. The Minister directed the NIRB to issue Agnico Eagle with a Project Certificate for the Meliadine project setting out the terms and conditions under which the Meliadine project can proceed. These conditions were set out in the NIRB report that was submitted to the Minister on October 10, 2014. The

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NIRB will now convene all of the regulatory agencies for a final workshop which is expected to lead to the issuance of the Project Certificate within the next two months.

The various licenses, permits and authorizations required to construct, operate and ultimately decommission the project can only be issued once a project certificate is received from the NIRB. These include the Type A water license from the NWB, a commercial production land use lease from the KIA, authorizations under the Fisheries Act from Fisheries and Oceans Canada and Navigable Waters Protection Act authorizations from Transport Canada.

In addition to these construction and operating licenses, permits and authorizations, the Company must negotiate an Inuit Impact and Benefit Agreement ("IIBA") for the Meliadine project and an Inuit water compensation agreement in accordance with the NLCA. The Company initiated negotiations with the KIA on the IIBA in January 2012 and negotiations have continued since then. The Company anticipates it can reach an agreement with the KIA if it decides to build a mine at Meliadine. The Company and the KIA have discussed the water compensation agreement and will formally initiate these negotiations once a project certificate has been issued.

Capital Expenditures

Total capital expenditures at the Meliadine project in 2014 were $48.3 million, including capitalized surface and underground drilling, ramp development, permitting, camp operation and technical studies.

Capital expenditures of $76.9 million have been budgeted for the Meliadine project in 2015, including $27.1 million for further ramp development, $19.7 million for early construction activities, $7.6 million for continued permitting and $4.8 million for the continuation of technical studies. No diamond drilling is planned in 2015.

Development

In 2013, ice was removed and ground support was upgraded at the existing exploration ramp at the Tiriganiaq deposit in preparation for resumed development. Some infrastructure was upgraded: dome No.1 (mechanical garage) was refurbished; dome No.3 (cold storage) was built; and a permanent steel portal was erected. The capital cost for the ramp development in 2013 was $9.4 million.

Underground development resumed in 2014 with 1,363 metres of tunnel excavated to a depth of 225 metres below the surface. The main objective of this development program is to extend the ramp to 300 metres below the surface in order to proceed with cost effective conversion drilling of deeper inferred mineral resources as mineral resources below 300 metres are difficult to convert from the surface. In order to provide ventilation to the ramp, three sections of ventilation raise were excavated from the surface to Level 200.

The development program will continue in 2015, with the objective of establishing a conversion drilling platform at Level 300.

Geology, Mineralization and Exploration

Geology and Mineralization

Archean volcanic and sedimentary rocks of the Meliadine greenstone belt underlie the property, which is mainly covered by glacial overburden with deep-seated permafrost and is part of the Western Churchill supergroup in northern Canada. The rock layers have been folded, sheared and metamorphosed, and have been truncated by the Pyke Fault, a regional structure that extends the entire 80-kilometre length of the large property.

The Pyke Fault appears to control gold mineralization on the Meliadine project property. At the southern edge of the fault is a series of oxide iron formations that host the seven Meliadine project deposits currently known. The deposits consist of multiple lodes of mesothermal quartz-vein stockworks, laminated veins and sulphidized iron formation mineralization with strike lengths of up to three kilometres. The Upper Oxide iron formation hosts the Tiriganiaq and Wolf North zones. The two Lower Lean iron formations contain the F Zone, Pump, Wolf Main and Wesmeg deposits. The Normeg zone was discovered in 2011 on the eastern end of the Wesmeg zone, near Tiriganiaq. The Wolf (North and Main), F Zone, Pump and Wesmeg/Normeg deposits are all within five kilometres of Tiriganiaq. The Discovery deposit is 17 kilometres east southeast of Tiriganiaq and is hosted by the Upper Oxide iron formation. Each of these deposits has mineralization within 120 metres of surface, making them potentially mineable by open pit methods. They also have deeper ore that could potentially be mined with underground methods, which are currently being considered in various studies.

Two bulk samples have been extracted from the exploration ramp. The results confirmed the resource estimation model that has been developed for the two principal zones (Zones 1000 and 1100) at Tiriganiaq, and indicated approximately

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6% more gold than had been predicted by the block model for these areas. The 2011 bulk sample program also confirmed the previous assessment of the Company's block model in terms of grade continuity, consistency and distribution, and the evaluation of related mining properties through geological mapping, underground chip, channel and muck sampling, and geotechnical observations.

Exploration

Proven and probable gold reserves at Meliadine increased in 2014 by approximately 494,000 ounces to 3.34 million ounces of gold (13.9 million tonnes of ore grading 7.44 grams per tonne). Indicated mineral resources at Meliadine increased by 1.3 million tonnes of ore to 20.2 million tonnes of ore grading 5.06 grams of gold per tonne. Inferred mineral resources increased by 2.4 million tonnes of ore to 14.1 million tonnes of ore grading 7.65 grams of gold per tonne. The increases in mineral reserves, indicated mineral resources and inferred mineral resources were primarily due to changes in modeling parameters implemented to better reconcile with the two previous bulk samples, as well as the use of lower costs established in recent studies.

In 2014, the Company spent C$9.4 million on 122 diamond drill holes (32,116 metres) at Meliadine. This included C$2.1 million on 37 holes (6,969 metres) of conversion drilling, C$5.9 million on 55 holes (19,798 metres) of exploration drilling around the known deposits (Tiriganiaq, Wesmeg/Normeg, Wolf, Pump and Discovery) and C$0.6 million on 15 holes (2,032 metres) of exploration drilling on regional targets. Also in 2014, C$0.9 million was spent on 15 holes (3,317 metres) of underground delineation drilling at the Tiriganiaq deposit.

An updated technical study completed in January 2015 has confirmed the economic viability of the Meliadine project with a nine-year mine life at an operating rate of 3,000 tonnes per day in years one to three, and 5,000 tonnes per day in years four to nine. Various potential scenarios are being evaluated before the Company can determine whether to build a mine at Meliadine.

The 2015 plan includes approximately $21 million on 2,500 metres of underground development of the exploration ramp. This development will allow for cost-effective exploration and conversion drilling of the deeper parts of the Tiriganiaq and Wesmeg/Normeg zones, and help to optimize potential mining plans.

Southern Business

Pinos Altos Mine

The Pinos Altos mine achieved commercial production in November 2009. It is located on an 11,000 hectare property in the Sierra Madre gold belt, 285 kilometres west of the City of Chihuahua in the State of Chihuahua in northern Mexico. At December 31, 2014, the Pinos Altos mine was estimated to contain proven and probable mineral reserves of 1.76 million ounces of gold and 46.7 million ounces of silver comprised of 18.2 million tonnes of ore grading 3.01 grams of gold per tonne and 80 grams of silver per tonne. The Creston Mascota deposit at Pinos Altos achieved commercial production in the first quarter of 2011. At December 31, 2014, the Creston Mascota deposit was estimated to contain additional proven and probable mineral reserves of 0.24 million ounces of gold and 2.5 million ounces of silver comprised of 5.8 million tonnes of ore grading 1.25 grams of gold per tonne and 13 grams of silver per tonne. The combined total of proven and probable mineral reserves at Pinos Altos and Creston Mascota as of December 31, 2014 was estimated to contain 2.00 million ounces of gold and 49.2 million ounces of silver comprised of 24.1 million tonnes of ore grading 2.58 grams of gold per tonne and 64 grams of silver per tonne. The Pinos Altos property is made up of two blocks: the Agnico Eagle Mexico Concessions (22 concessions, 26,810.2 hectares) and the Pinos Altos Concessions (18 concessions, 5,053.1 hectares).

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Location Map of the Pinos Altos Mine (as at December 31, 2014)

Approximately 54% of the current Pinos Altos mineral reserves and resources, including Creston Mascota, are subject to a net smelter return royalty of 3.5% payable to Pinos Altos Explotación y Exploración S.A. de C.V. ("PAEyE") and the remaining 46% of the current mineral reserves and resources at Pinos Altos are subject to a 2.5% net smelter return royalty payable to the Servicio Geológico Mexicano, a Mexican Federal Government agency. After 2029, this portion of the property will also be subject to a 3.5% net smelter return royalty payable to PAEyE.

The assets acquired by the Company from PAEyE and the Asociación de Pequeños Propietarios Forestales de Pinos Altos S de R.L. in 2006 included the right to use up to 400 hectares of land for mining installations for a period of 20 years after formal mining operations have been initiated. The Company also obtained sole ownership of the Agnico Eagle Mexico Concessions previously owned by Compania Minera La Parreña S.A. de C.V. During 2008, the Company and PAEyE entered into an agreement under which the Company acquired further surface rights for open pit mining operations and additional facilities. Infrastructure payments, surface rights payments and advance royalty payments totaling $35.5 million were made to PAEyE and the Asociación de Pequeños Propietarios Forestales de Pinos Altos S de R.L. in 2009 as a result of this agreement.

In 2006, the Company concluded negotiations with communal land owners (ejidos) and others for the purchase of 5,745 hectares of land contained within the Agnico Eagle Mexico and Pinos Altos Concessions. In addition, a temporary occupation agreement with a 30-year term expiring in 2036 was negotiated with ejido Jesus del Monte for 1,470 hectares of land covered by these same concession blocks. The acquisition of these surface rights for the geologically prospective lands within the district surrounding the Pinos Altos property will facilitate future exploration and mining development in these areas.

The Pinos Altos mine is directly accessible by a paved interstate highway that links the cities of Chihuahua and Hermosillo and is connected to a state power grid that is within ten kilometres of the Pinos Altos property. The Company anticipates existing and planned underground mine workings will intercept water resources sufficient to sustain the requirements for future operation. The land position is sufficient for construction of all planned surface, infrastructure and mining facilities at the Pinos Altos mine (including the Creston Mascota deposit), including its tailings impoundment area. The Company further believes that a sufficient local and trained workforce is available in northern Mexico to continue to support the operation of the mine.

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The Pinos Altos property is characterized by moderate to rough terrain with mixed forest (pine and oak) and altitudes that vary from 1,770 metres to 2,490 metres above sea level. The climate is sub-humid, with about one metre of annual precipitation. The average annual temperature is 18.3 degrees Celsius. Exploration and mining work can be carried out year-round.

In August 2007, on the basis of an independently reviewed feasibility study, the Company approved construction of a mine at Pinos Altos. The mine achieved commercial production in November 2009.

Based on a feasibility study prepared in 2009, the Company decided to build a stand-alone heap leach operation at the Creston Mascota deposit at Pinos Altos. The first gold pour from the Creston Mascota deposit occurred on December 28, 2010 and commercial production from the Creston Mascota deposit was achieved in the first quarter of 2011.

The Company continues to evaluate opportunities to develop other mineral resources that have been identified in the Pinos Altos area as satellite operations.

The Company has engaged the local communities in the area with hiring, local contracts, education support and medical support programs to ensure that the mine provides long-term benefits to the residents living and working in the region. Approximately 69% of the operating workforce at Pinos Altos are locally hired and 100% of the permanent workforce at the Company operations in Mexico are Mexican nationals.

Mining and Milling Facilities

Surface Plan of the Pinos Altos Mine (as at December 31, 2014)

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Surface Plan of the Creston Mascota Deposit at Pinos Altos (as at December 31, 2014)

Milling operations during 2014 at Pinos Altos processed an average of 5,350 tonnes of ore per day as compared to the original design rate of 4,000 tonnes per day. The underground mine at Pinos Altos produced an average 2,825 tonnes of ore per day as compared to its designed rate of 3,000 tonnes per day. The open pit mines at Pinos Altos and the Creston Mascota deposit produced 21.7 million tonnes of ore, overburden and waste in 2014, which was in accordance with the mine plan for the year.

Mining Methods

The surface operations at the Pinos Altos mine use traditional open pit mining techniques with bench heights of seven metres and double benches on the footwall and single benching on the hanging wall. Mining is accomplished with front end loaders, trucks, track drills and various support equipment. Based upon geotechnical evaluations, the final pit slopes vary between 45 degrees and 50 degrees. Performance at the open pit mining operation at Pinos Altos during 2014 continues to indicate that the equipment, mining methods and personnel selected for the project are satisfactory for future production phases. 12.2 million tonnes of ore, overburden and waste were mined during 2014, which was in accordance with the mine plan for the year.

The underground mine, which commenced operations in the second quarter of 2010, uses the long hole sublevel stoping method to extract the ore. The stope height is 30 metres and the stope width is 15 metres. Ore is hauled to the surface utilizing underground trucks via a ramp system. The paste backfill system and ventilation system were commissioned in the fourth quarter of 2010. During 2014, approximately 1.0 million tonnes of ore were produced from the underground portion of the mine, averaging 2,825 tonnes per day. Currently, the planned capacity of the underground mine is 3,000 tonnes of ore per day. Construction of a shaft hoisting facility to increase the mining capacity to 4,500 tonnes of ore per day was initiated in 2012, with commissioning expected to be completed in 2016. The shaft hoisting capacity should reduce the need for additional underground trucks required as the mine depth increases and is expected to continue to maintain mill feed rates at 4,500 tonnes of ore per day in future years as the open pit mines at Pinos Altos become depleted. Approximately 21 kilometres of total lateral development have been completed as of December 31, 2014.

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Surface Facilities

The principal mineral processing facilities at the Pinos Altos mine were designed to process 4,000 tonnes of ore per day in a conventional process plant circuit which includes single stage crushing, grinding in a SAG and ball mill in closed loop, gravity separation followed by agitated leaching, counter-current decantation and metals recovery in the Merrill-Crowe process. Tailings are detoxified and filtered and then used for paste backfill in the underground mine or deposited as dry tailings in an engineered tailings impoundment area. The Pinos Altos mill processed an average of 5,350 tonnes of ore per day during 2014. Low grade ore at Pinos Altos is processed in a heap leach system designed to accommodate approximately five million tonnes of mineralized material over the life of the project. The production from heap leach operations is expected to be relatively minor, contributing about 1% of total metal production planned for the remaining life of the mine (not including production from the Creston Mascota heap leach operation).

Other surface facilities at the Pinos Altos mine include: a headframe and hoist room, a heap leach pad, pond, liner and pumping system; administrative support offices; camp facilities; a laboratory; a process plant shop; a maintenance shop; a power generating station; surface power transmission lines and substations; the engineered tailings management system; and a warehouse.

As noted above, a separate heap leach operation and ancillary support facilities were built at the Creston Mascota deposit, which is designed to process approximately 4,000 tonnes of ore per day in a three stage crushing, agglomeration and heap leach circuit with carbon adsorption. This project was commissioned in the latter part of 2010, with commercial production achieved in the first quarter of 2011. During 2014, a total of 1.8 million tonnes of ore was mined from the Creston Mascota deposit, averaging 4,900 tonnes per day. Based on performance of the mine and process facilities at the Creston Mascota deposit to date, the equipment, mining methods and personnel are satisfactory for completion of the planned production phases. The Creston Mascota deposit is expected to produce approximately 47,500 ounces of gold per year in 2015.

Over the life of the mine, recoveries of gold and silver in the milling circuit at Pinos Altos (other than from the Creston Mascota deposit) are expected to average approximately 93% and 43%, respectively. The Company anticipates precious metals recovery from low grade ore processed in the Pinos Altos heap leach facility will average 68% for gold and 12% for silver. Heap leach recoveries for ore from the Creston Mascota deposit are expected to average 63% for gold and 8% for silver.

Production and Mineral Recoveries

During 2014, the Pinos Altos mine, including the Creston Mascota deposit, had total payable production of 218,878 ounces of gold and approximately 1.8 million ounces of silver from the Pinos Altos mill and the heap leach pads at the Pinos Altos mine and the Creston Mascota deposit. The total cash costs at Pinos Altos in 2014 per ounce of gold produced was $543 on a by-product basis. The average minesite costs per tonne for all ore at Pinos Altos were $45.

Of the total in 2014, the Pinos Altos mill had payable production of 157,033 ounces of gold and 1,659,000 ounces of silver from 1.95 million tonnes of ore grading 2.64 grams of gold per tonne and 68.9 grams of silver per tonne. In 2014, the total cash costs per ounce of gold produced from ore treated at Pinos Altos was $533 on a by-product basis and $718 on a co-product basis and the processing facility averaged 5,350 tonnes of ore per day and operated 83% of available time. In the mill, gold recovery averaged 94.6% and silver recovery averaged 38.3% and the minesite costs per tonne for ore treated at Pinos Altos were $48 in 2014.

The following table sets out the metal recoveries at the Pinos Altos mill in 2014.

		Head Grade		Overall Metal Recovery		Payable Production
Gold		2.64 g/t		94.6%		157,033 oz
Silver		68.9 g/t		38.3%		1,659,100 oz

Of the 2014 total, the Pinos Altos heap leach had payable production of 13,986 ounces of gold and 71,801 ounces of silver from 0.57 million tonnes of ore grading 0.78 grams of gold per tonne and 21 grams of silver per tonne.

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The cumulative recovery for gold and silver on the heap leach pad at Pinos Altos are approximately 70% and 14%, respectively. Heap leach recovery is following the expected cumulative recovery curve and it is anticipated that the ultimate recovery of 68% for gold and 12% for silver will be achieved when leaching is completed.

Of the 2014 total, the heap leach at the Creston Mascota deposit had payable production of 47,842 ounces of gold and 88,167 ounces of silver from 1.79 million tonnes of ore grading 1.30 grams of gold per tonne and 15 grams of silver per tonne. In 2014, the total cash costs per ounce of gold produced from this ore was $578 on a by-product basis and $611 on a co-product basis. The minesite costs per tonne for this ore were $16 in 2014.

The cumulative metals recovery for gold and silver on the heap leach pad at the Creston Mascota deposit are approximately 55% and 8%, respectively. Heap leach recovery is following the expected cumulative recovery curve and it is anticipated that the ultimate recovery of 63% for gold and 8% for silver will be achieved when leaching is completed.

Production during 2015 at the Pinos Altos mine, including the Creston Mascota deposit, is expected to be approximately 225,000 ounces of gold and 2,070,000 ounces of silver from 4.38 million tonnes of ore grading 1.93 grams of gold per tonne and 42 grams of silver per tonne, at an estimated total cash costs per ounce of gold of approximately $533 on a by-product basis, with estimated gold recovery of 82% and silver recovery of 35%. Minesite costs per tonne of approximately $35 for all ore are expected in 2015.

Of this total, in 2015 the Pinos Altos mill is expected to produce approximately 175,000 ounces of gold and 1,990,000 ounces of silver from 2.34 million tonnes of ore grading 2.48 grams of gold per tonne and 65 grams of silver per tonne, at an estimated total cash costs per ounce of gold of approximately $526 on a by-product basis, with estimated gold recovery of 94% and silver recovery of 41%. Minesite costs per tonne of approximately $54 for milled ore are expected in 2015. The heap leach at the Creston Mascota deposit is expected to produce approximately 50,000 ounces of gold and 80,000 ounces of silver from 2.05 million tonnes of ore grading 1.30 grams of gold per tonne and 16 grams of silver per tonne, at an estimated total cash costs per ounce of gold of approximately $559 on a by-product basis, with estimated gold recovery of 57% and silver recovery of 8%. Minesite costs per tonne of approximately $14 for Creston Mascota heap leach ore are expected in 2015.

Environmental Matters

The Pinos Altos mine has received the necessary permit authorizations for construction and operation of a mine, including a Change of Land Use permit and an Environmental Impact Study approval from the Mexican environmental agency. As of December 31, 2014, all permits necessary for the operation of the Pinos Altos mine, including the operations at the Creston Mascota deposit, had been received. Pinos Altos uses the dry stack tailings technology to minimize the geotechnical and environmental risk that can be associated with the rainfall intensities and topographic relief in the Sierra Madre region of Mexico.

Following an audit process by an independent third party, the operations at both the Pinos Altos mine and the Creston Mascota deposit have received the "Industria Limpia" certification from the Mexican environmental authorities. This certification is based on compliance with environmental requirements.

Capital Expenditures

Combined capital expenditures at the Pinos Altos and Creston Mascota deposit during 2014 were approximately $59.2 million, excluding capitalized drilling. Combined capital expenditures included sustaining capital for development underground, project capital expenses for the Pinos Altos shaft project and the expansion of the heap leach pad at the Creston Mascota deposit.

In 2015, the Company expects capital expenditures at Pinos Altos, including the Creston Mascota deposit, to be approximately $104.0 million, excluding capitalized drilling. Capital expenditures in 2015 are primarily being used for underground mine development, shaft construction, tailings expansion and the development of the Phase IV leach pad at the Creston Mascota deposit.

Development

As of December 31, 2014, for the mine life to date, more than 118 million tonnes of ore, overburden and waste had been removed from the open pit mine at Pinos Altos and approximately 23 kilometres of lateral development had been completed in the underground mine. At the Creston Mascota deposit, approximately 34.9 million tonnes of ore, overburden, and waste had been removed from the open pit mine as of December 31, 2014.

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Geology, Mineralization and Exploration

Geology

The Pinos Altos mine is in the northern part of the Sierra Madre geologic province, on the northeast margin of the Ocampo Caldera, which hosts many epithermal gold and silver occurrences, including the nearby Ocampo and Moris mines.

The property is underlain by Tertiary-age (less than 45 million years old) volcanic and intrusive rocks that have been disturbed by faulting. The volcanic rocks belong to the lower volcanic complex and the discordant overlying upper volcanic supergroup. The lower volcanic complex is represented on the property by the Navosaigame conglomerates (including thinly-bedded sandstone and siltstone) and the El Madrono volcanics (felsic tuffs and lavas intercalated with rhyolitic tuffs, sandy volcanoclastics and sediments). The upper volcanic group is made up of the Victoria ignimbrites (explosive felsic volcanics), the Frijolar andesites (massive to flow-banded, porphyritic flows) and the Buenavista ignimbrites (dacitic to rhyolitic pyroclastics).

Intermediate and felsic dykes as well as rhyolitic domes intrude all of these units. The Santo Nino andesite is a dyke that intrudes along the Santo Nino fault zone.

Structure on the property is dominated by a ten-kilometre by three-kilometre horst, a fault-uplifted block structure oriented west-northwest, that is bounded on the south by the south-dipping Santo Nino fault and on the north by the north-dipping Reyna de Plata fault. Quartz-gold vein deposits are emplaced along these faults and along transfer faults that splay outwards from the Santo Nino fault.

Mineralization

Gold and silver mineralization at the Pinos Altos mine consists of low sulphidation type epithermal-type hydrothermal veins, breccias and bodies. The Santo Nino structure outcrops over a distance of roughly six kilometres. It strikes at 60 degrees azimuth on its eastern portion and turns to strike roughly 90 degrees azimuth on its western fringe. The structure dips at 70 degrees towards the south. The four mineralized sectors hosted by the Santo Nino structure consist of discontinuous quartz rich lenses named from east to west: El Apache, Oberon de Weber, Santo Nino and Cerro Colorado.

The El Apache lens is the most weakly mineralized. The area hosts a weakly developed white quartz dominated breccia. Gold values are low and erratic over its roughly 750 metre strike length. Past drilling suggests that this zone is of limited extent at depth.

The Oberon de Weber lens has been followed on surface and by diamond drilling over an extent of roughly 500 metres. Shallow holes drilled by the Company show good continuity both in terms of grade and thickness over roughly 550 metres. From the previous drilling done by Penoles, continuity at depth appears to be erratic with a weakly defined western rake.

The Santo Nino lens is the most vertically extensive of these lenses. It has been traced to a depth of approximately 750 metres below the surface. The vein is followed continuously on surface over a distance of 550 metres and discontinuously up to 650 metres. Beyond its western and eastern extents, the Santo Nino andesite is massive and only weakly altered. Gold grades found are systematically associated with green quartz brecciated andesite.

The Cerro Colorado lens is structurally more complex than the three described above. Near the surface, it is marked by a complex superposition of brittle faults with mineralized zones which are difficult to correlate from hole to hole. Its relation to the Santo Nino fault zone is not clearly defined. Two deeper holes drilled by the Company suggest better grade continuity is possible at depth.

The San Eligio zone is located approximately 250 metres north of Santo Nino. The host rock is brecciated Victoria Ignimbrite, occasionally with a stockwork style of mineralization. There is no andesite in this sector. Unlike the other lenses, the San Eligio lens dips towards the north. The lateral extent of the zone seems to be continuous for 950 metres. Its average width is five metres and never exceeds 15 metres. Surface mapping and prospecting has suggested that there is good potential for additional mineralization on strike and at depths below 150 metres. Visible gold has been seen in the drill core.

The Creston Mascota deposit is seven kilometres northwest of the Santo Nino deposit, and is similar, but dips shallowly to the west. The Creston Mascota deposit is about 1,000 metres long and 4 to 40 metres wide, and extends from surface to more than 200 metres depth.

Several other promising zones are associated with the horst feature in the northwest part of the property. The Cubiro deposit is a near-surface deposit located two kilometres west of the Creston Mascota deposit. Cubiro is a surface deposit that strikes northwest, has a steep dip and has been followed along strike for approximately 850 metres. Drilling has

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intersected significant gold and silver mineralization up to 30 metres in width. The Cubiro deposit is split by a fault that resulted in 200 metres of displacement to the west, as defined by drilling to date. The zone is still open to the southeast and possibly at depth.

The Sinter zone is 1,500 metres north-northeast of the Santo Nino zone and is part of the Reyna de Plata gold structure. The steeply dipping mineralization ranges from four to 35 metres in width and almost 900 metres long, with over 350 metres of vertical depth. Sinter is being evaluated for its open pit mining and heap leach potential.

Other identified mineral resources in the Pinos Altos region include the Bravo and Carola zones adjacent to the Creston Mascota deposit and the Reyna de la Plata prospect further to the east. Exploration efforts will be allocated to these zones as development continues at Pinos Altos and the Creston Mascota deposit.

Exploration

In 2014, proven and probable mineral reserves at Pinos Altos (excluding Creston Mascota) decreased by approximately 211,000 ounces of gold and 9.56 million ounces of silver to 1.76 million ounces of gold and 46.68 million ounces of silver (18.2 million tonnes of ore grading 3.01 grams of gold per tonne and 79.65 grams of silver per tonne) after mining 179,977 ounces of gold and 4.67 million ounces of silver. The net decrease was a result of using a higher cut-off grade (necessitated by a lower gold price assumption) for the mineral reserves estimation. The reserve grade increased 6% from 2.84 grams of gold per tonne to 3.01 grams of gold per tonne. Indicated mineral resources at Pinos Altos increased by 0.4 million tonnes of ore to 11.9 million tonnes of ore grading 1.84 grams of gold per tonne and 44.14 grams of silver per tonne due to a more conservative approach at the Cerro Colorado, Oberon de Weber and Sinter deposits. Inferred mineral resources declined to 12.6 million tonnes of ore grading 1.22 grams of gold per tonne and 26.82 grams of silver per tonne.

In 2014, proven and probable mineral reserves at the Creston Mascota deposit decreased by approximately 56,000 ounces of gold and 0.59 million ounces of silver to 0.24 million ounces of gold and 2.53 million ounces of silver (5.8 million tonnes of ore grading 1.25 grams of gold per tonne and 13.47 grams of silver per tonne) after mining 74,972 ounces of gold and 2.43 million ounces of silver. The net decrease was a result of using a lower gold price assumption for the mineral reserves estimation. Indicated mineral resources at the Creston Mascota deposit decreased by 0.2 million tonnes of ore to 2.2 million tonnes of ore grading 0.68 grams of gold per tonne and 4.69 grams of silver per tonne due to wireframe modifications and reclassification of some indicated mineral resources to probable mineral reserves. The inferred mineral resources at the Creston Mascota deposit declined to 4.5 million tonnes of ore grading 1.07 grams of gold per tonne and 13.98 grams of silver per tonne. Drilling and evaluation will continue in 2015.

In 2014, minesite exploration activities were primarily focused on conversion, infill and exploration of the mineral resources at the San Eligio, Creston Mascota, Sinter, Oberon de Weber, Cubiro and Cerro Colorado deposits. A total of 1,412 metres of minesite exploration drilling and 7,149 metres of definition (conversion) drilling were completed during the year.

In 2015, the Company expects to spend approximately $6 million on exploration at the Pinos Altos mine and the Creston Mascota deposit, including $3.3 million on 13,000 metres of conversion drilling and $2.7 million on 11,000 metres of exploration drilling.

La India Mine

Construction began at La India in September 2012 and commercial production was achieved on February 1, 2014. At December 31, 2014, the La India mine was estimated to contain proven and probable mineral reserves of 0.68 million ounces of gold comprised of 24.9 million tonnes of ore grading 0.85 grams of gold per tonne.

The La India property consists of 36 100% owned and 18 optioned mining concessions, totaling approximately 60,793 hectares in the Mulatos Gold Belt in Sonora, Mexico. The La India property includes the Tarachi deposit and several other prospective targets in the Mulatos Gold Belt. At the Tarachi deposit, indicated resources are 47.2 million tonnes grading 0.39 grams of gold per tonne and inferred resources are 81.7 million tonnes grading 0.36 grams of gold per tonne. A preliminary metallurgical testing program on Tarachi composite samples has been completed and negotiations for land access are ongoing.

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Location Map of the La India Mine (as at December 31, 2014)

The Mulatos Gold Belt is part of the Sierra Madre gold and silver belt that also hosts the operating Mulatos gold mine immediately southeast of the La India property and the Pinos Altos mine and the Creston Mascota deposit 70 kilometres to the southeast.

The La India mine is located in the municipality of Sahuaripa, southeastern Sonora State, between the small rural towns of Tarachi and Matarachi, which offer basic infrastructure in the form of roads, rural telephone service, small grocery stores and unpaved air strips. More services are available in the town of Sahuaripa located 60 kilometres by gravel road (approximately 2.5 hours) northwest of the La India mine. The population of the district is estimated to be a few thousand, with most of the inhabitants involved in cattle ranching, farming, forestry, mining and exploration. An adequate supply of labour for mining operations can be drawn from the region. Trained exploration personnel for the La India mine are mainly sourced from northern Mexico, including Hermosillo, Sonora.

The closest major city with an international airport is Hermosillo, the capital of Sonora, located 210 kilometres west-northwest of the La India mine. Road travel from Hermosillo to the site takes approximately seven hours. Alternatively, the mine can be accessed by small aircraft. The power supply at the La India mine is provided by diesel generators.

The Company acquired the La India property in November 2011 as part of its acquisition of Grayd. Grayd had explored the property since 2004 and had prepared a preliminary economic assessment of the project in December 2010 based on a June 2010 NI 43-101-compliant resource estimate.

The climate at La India is semi-arid with seasonal temperatures ranging from 35 degrees Celsius to minus two degrees Celsius, and heavy rainfall from July to September. Mining activities may be conducted year round.

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Infill drilling at La India from November 2011 to May 2012 allowed the Company to confirm and expand the mineral resources reported in the December 2010 preliminary economic assessment. In September 2012, following the completion of a feasibility study, the Company approved the construction of a mine at La India. The mine achieved commercial production in February 2014. The Company continues to evaluate opportunities to develop other mineral resources that have been identified in the La India area.

The Company has engaged the local communities in the area with hiring, local contracts, education support and medical support programs to ensure that the La India mine provides long term benefits to the residents living and working in the region. Approximately 22% of the operating workforce at La India is locally hired and 100% of the permanent workforce are Mexican nationals.

At the Tarachi deposit, the surface rights in the project area are owned by the Tarachi Ejido (agrarian community) and private parties. All measured, indicated and inferred project resources lie within privately owned or ejido possessed land. Surface access lease agreements have been executed with the property owners or possessors for approximately 50% of the identified target areas. The existing agreements permit exploration and drilling activities; if mining activity is contemplated in this exploration area the Company will be required to negotiate further to acquire the surface rights needed for project development.

Mining and Milling Facilities

Mining Methods

Operations at the La India mine use traditional open pit mining techniques with bench heights of six metres and utilize front end loaders, trucks, track drills and various support equipment. Based upon geotechnical evaluations, the final pit slopes vary between 45 degrees and 50 degrees.

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Surface Facilities

The following surface plan details the planned mine layout showing projected pits and waste rock dump locations, roads, the leach pad and other infrastructure.

Surface Plan of the La India Mine (as at December 31, 2014)

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Surface facilities at the La India mine include a three-stage ore crushing facility, a 50 million tonne capacity lined heap leach pad with process ponds and pumping system, a carbon adsorption plant, a laboratory, a process plant shop, a mining equipment maintenance shop, a generated power station, surface power transmission lines and substations, a warehouse, administrative support offices and camp facilities. The power for the facilities is supplied by diesel generators and water is supplied by a system of wells and catchment facilities. Septic discharges are managed in their respective leach fields. Non-organic waste from the camp is disposed in the Matarachi Ejido landfill.

Production and Mineral Recoveries

For the brief pre-production period at the beginning of 2014, the La India mine had payable production of 3,492 ounces of gold from approximately 275,000 tonnes of ore stacked on the heap leach pad grading 0.96 grams of gold per tonne. Following commercial production, 4,498,000 tonnes of ore was processed and placed on the heap leach pad at La India in 2014, with an average grade of 1.05 grams of gold per tonne. The total cash costs at La India in 2014 per ounce of gold produced was $487 on a by-product basis and $532 on a co-product basis. Stacking rates averaged 13,100 tonnes of ore per day. The minesite costs per tonne at La India were $8 in 2014.

The cumulative recovery for gold on the heap leach pad at La India is approximately 46.5%. Heap leach recovery is following the expected cumulative recovery curve and it is anticipated that the ultimate gold recovery of 77% will be achieved when leaching is completed.

The following table sets out the metal recoveries at La India in 2014.

		Head Grade		Overall Metal Recovery		Payable Production
Gold (including prior to commercial production)		1.05 g/t		46%		75,093 oz

Gold production during 2015 at the La India mine is expected to be approximately 90,000 ounces from 5.4 million tonnes of ore grading 0.86 grams of gold per tonne, at an estimated total cash costs per ounce of approximately $491 on a by-product basis, with estimated cumulative gold recovery of 61%. Minesite costs of per tonne approximately $9 are expected in 2015.

Environmental Matters

The La India mine is not located in an area with a special federal environmental protection designation. As of December 31, 2014, all permits necessary for the operation of the La India mine had been received.

Capital Expenditures

Capital expenditures at the La India mine during 2014 were approximately $22.7 million, excluding capitalized drilling, which was spent on crusher optimization and general sustaining activities. The Company expects capital expenditures to be approximately $25 million in 2015, excluding capitalized drilling. The capital expenditures in 2015 are to be used for extending the haul road and development of the Phase II leach pad.

Development

As of December 31, 2014, for the mine life to date, more than 11.7 million tonnes of ore, overburden and waste had been removed from the open pit mine at La India.

Agreements & Licences

The mining concessions for the La India mine and Tarachi deposit are controlled by an indirect, wholly-owned subsidiary of the Company by means of direct ownership and by five separate agreements whereby the Company can earn a 100% interest in certain concessions by making cash and share payments. Payment has been made in full for the claims that host all of the measured, indicated and inferred resources. Some concessions are subject to underlying net smelter return royalties varying between 1% and 3%, certain of which may be purchased by the Company which would result in net smelter return royalties of up to 2% remaining.

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For the Tarachi deposit, payments totaling $0.75 million and shares with value equivalent to $967,500 over a six year period are required for the Company to earn a 100% interest in the relevant concessions. To date, $0.3 million has been paid toward these concessions and no shares have been issued. Some concessions are subject to an underlying net smelter return royalty of 2%, some of which may be purchased by the Company, which would result in net smelter return royalties of up to 1% remaining.

The defined mineral reserve and resource and all lands required for infrastructure for the La India mine are wholly-contained within three privately-held properties which the Company has acquired in order to permit exploration, construction and mine development activities.

Geology, Mineralization and Exploration

Geology and Mineralization

The La India mine lies within the Sierra Madre Occidental ("SMO") province, an extensive Eocene to Miocene volcanic field extending from the United States-Mexico border to central Mexico. The La India mine lies within the western limits of the SMO in an area dominated by outcrops of andesite and dacitic tuffs, overlain by rhyolites and rhyolitic tuffs that were affected by large-scale north-northwest-striking normal faults and intruded by granodiorite and diorite stocks. Incised fluvial canyons cut the uppermost strata and expose the Lower Series volcanic strata.

The mine area is predominantly underlain by a volcanic sequence comprised of andesitic and felsic extrusive volcanic strata with interbedded epiclastic strata of similar composition. The mineral occurrences present in the mine area, and the deposit type being sought, are volcanic-hosted high-sulphidation epithermalhydrothermal gold silver and porphyry-related gold deposits. Such deposits may be present as veins and/or disseminated deposits and/or breccias. The La India mine deposit area is one of several high-sulphidation epithermal mineralization centres recognized in the region.

Epithermal high-sulphidation mineralization at the La India mine developed as a cluster of gold zones (Main and North) aligned north-south within a spatially related zone of hydrothermal alteration in excess of 20 square kilometres in area. Gold mineralization is confined to the Late Eocene rocks within zones of intermediate and advanced argillitic alteration originally containing sulphides, and subsequently oxidized by supergene processes. The North and Main zones are within two kilometres of each other.

Surface outcrop mapping and drill-hole data so far indicate that the gold system at the Tarachi deposit is likely best classified as a gold porphyry deposit.

Exploration

In 2014, proven and probable mineral reserves at La India decreased by approximately 86,000 ounces of gold to 0.68 million ounces of gold (24.9 million tonnes of ore grading 0.85 grams of gold per tonne) after mining 150,392 ounces of gold. The net reduction was a result of production, a higher cut-off grade and a lower gold price. Measured and indicated mineral resources at the La India mine decreased by 1.8 million tonnes of ore to 54.5 million tonnes of ore grading 0.39 grams of gold per tonne, largely due to a new ore wireframe interpretation and a higher cut-off grade. Inferred mineral resources increased in 2014 to 82.6 million tonnes of ore grading 0.37 grams of gold per tonne.

In 2014, the Company completed 26,546 metres of drilling through 365 diamond drill holes at the La India mine. This included 13,618 metres of minesite exploration drilling at a cost of $1.4 million at the Main zone and 12,928 metres of definition (conversion) drilling at a cost of $3.9 million at the North, Main and La India zones. In 2014, there was also exploration drilling of 11,032 metres through 71 diamond and reverse circulation drill holes at the Arroyo Hondo, Cordon de Viruela, Tarachi, Chivitas, San Javier, El Jabali, and La Julianna targets and mapping and sampling at the Arroyo Honda, Tarachi, La Jabali and La Julianna areas at a cost of $5.9 million.

The Company expects to spend approximately $3.0 million on 11,000 metres of conversion drilling and $3.8 million on 13,000 metres of exploration drilling at the La India mine in 2015. An additional $1.4 million is planned for 2,500 metres of exploration drilling in the Tarachi region in 2015 and focused in the La Jabali area.

Regional Exploration Activities

During 2014, the Company continued to actively explore in Quebec, Nunavut, Nevada, Finland, Sweden and Mexico. The Canadian exploration activities were focused on the Amaruq (formerly IVR) and Meliadine properties in Nunavut as well as on the Goldex, Akasaba West, Lapa and Perron properties in Quebec. In the United States, exploration activities during 2014 were concentrated on the West Pequop and Summit projects located in northeast Nevada. In Mexico, regional

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exploration was focused on the La India property. In Finland, regional exploration was focused to the north of the Kittila mine along the Kiistala fault, and on the Hanhimaa property immediately west of the Kittila mine property. In southern Sweden, the Company explored the Solvik project. Canadian Malartic Corporation focused exploration on the Upper Beaver project near Kirkland Lake, Ontario, as well as the Pandora property adjacent to the Lapa mine in Quebec. At the LaRonde, Goldex, Lapa, Meadowbank, Kittila, Pinos Altos (including the Creston Mascota deposit) and La India mines, and the Canadian Malartic mine, the Company continued exploration programs around the mines. Most of the exploration budget was spent on drilling programs near the mine infrastructure along previously recognized gold trends.

At the end of 2014, the Company's land holdings in Canada consisted of 72 projects comprised of 3,935 mineral titles covering an aggregate of 390,758 hectares (of this total in Canada, nine projects comprised of 1,831 mineral titles covering an aggregate of 73,258 hectares are held as a 50% interest with Yamana, including the Canadian Malartic mine). Land holdings in the United States consisted of five properties comprised of 2,902 mineral titles covering an aggregate of 38,437 hectares. Land holdings in Finland consisted of three groups of properties comprised of 231 mineral titles covering an aggregate of 26,672 hectares. Land holdings in Sweden consisted of one project comprised of ten mineral titles covering an aggregate of 10,369 hectares. Land holdings in Mexico consisted of 12 projects comprised of 137 mining concession titles covering an aggregate of 185,455 hectares.

The total amount of expenditures incurred on regional exploration activities at the Company's exploration properties plus head office overhead and corporate development activities in 2014 was $59 million. This included drilling 450 holes for an aggregate of approximately 98 kilometres on 100%-owned properties. It also included the Company's 50% portion of the cost of drilling 102 holes for an aggregate of approximately 30 kilometres on Canadian Malartic GP exploration properties from June 16, 2014 to the end of the year.

The budget for expenditures on regional exploration activities at the Company's exploration properties plus head office overhead and corporate development activities in 2015 is approximately $90 million, including approximately 104 kilometres of drilling on 100%-owned properties, and 50% of the cost of drilling 45 kilometres on Canadian Malartic GP exploration properties. For further details of the components of the 2015 exploration budget, see the Company's news release dated February 11, 2015.

The integrity and validity of the exploration information in this AIF has been verified by Qualified Persons as defined by NI 43-101. This includes the sampling methods, and analytical and testing data, with reviews of assay databases and assay certificates. The methods used by the Company follow the Canadian Institute of Mining, Metallurgy and Petroleum ("CIM") Best Practice Guidelines for Exploration and for Estimation of Mineral Resources and Mineral Reserves.

Mineral Reserves and Mineral Resources

Cautionary Note to U.S. Investors Concerning Estimates of Measured and Indicated Mineral Resources

This section uses the terms "measured mineral resources" and "indicated mineral resources". Investors are advised that while these 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 U.S. Investors Concerning Estimates of Inferred Mineral Resources

This section 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 any part or all 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.

Information on Mineral Reserves and Mineral Resources of the Company

The scientific and technical information set out in this AIF has been approved by the following "qualified persons" as defined by NI 43-101: mineral reserves and mineral resources (other than for the Canadian Malartic mine) – Daniel Doucet, ing., Senior Corporate Director, Reserve Development; mineral reserves and mineral resources (for the Canadian Malartic mine) – Donald Gervais, ing., Director of Technical Services at Canadian Malartic Corporation; environmental – Louise Grondin P.Eng., Senior Vice-President, Environment and Sustainable Development; mining operations, Southern Business – Tim Haldane P.Eng., Senior Vice-President, Operations – USA & Latin America; metallurgy – Paul Cousin, ing., Vice-President, Metallurgy; and mining operations, Northern Business – Christian Provencher, ing., Vice-President, Canada. The Company's mineral reserves estimate was derived from internally generated data or geology reports. Four of the Company's mineral reserve and mineral resource estimates (Kittila, Meliadine, Pinos Altos and La India) have been audited by independent consultants.

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Historically, 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 SEC guidelines. These guidelines require the use of prices that reflect current economic conditions at the time of reserve determination, which the Staff of the SEC has interpreted to mean historic three-year average prices. Given the current commodity price environment, the Company decided to use price assumptions that are below the three-year averages for its 2013 and 2014 mineral reserve and mineral resource estimates. The assumptions used for the 2014 mineral reserves and mineral resources estimate at all mines and advanced projects reported by the Company in this AIF (other than the Canadian Malartic mine) were $1,150 per ounce gold, $18 per ounce silver, $1.00 per pound zinc, $3.00 per pound copper and exchange rates of C$1.08 per $1.00, 13.00 Mexican pesos per $1.00 and $1.30 per €1.00. The assumptions used at the Canadian Malartic mine were $1,300 per ounce gold, a cut-off grade between 0.28 g/t and 0.35 g/t gold (depending on the deposit) and an exchange rate of C$1.10 per $1.00. The assumptions used for the 2013 mineral reserves and resources estimate at all mines and advanced projects reported by the Company were $1,200 per ounce gold, $18.00 per ounce silver, $0.82 per pound zinc, $3.00 per pound copper and exchange rates of C$1.03 per $1.00, 12.75 Mexican pesos per $1.00 and $1.32 per €1.00. The assumptions used for the 2012 mineral reserves and mineral resources estimates for the Lapa, Goldex, Meadowbank, Meliadine and Creston Mascota properties reported by the Company were based on three-year average prices for the period ending December 31, 2012 of $1,490 per ounce of gold, $29.00 per ounce of silver, $0.95 per pound of zinc, $3.67 per pound of copper, $1.00 per pound of lead and exchange rates of C$1.00 per $1.00, 12.75 Mexican pesos per $1.00 and $1.34 per €1.00. The assumptions used for the 2012 mineral reserves and resources estimates for the LaRonde, Kittila, Pinos Altos, La India and Tarachi properties reported by the Company used more conservative metal price assumptions of $1,345 per ounce of gold, $25.00 per ounce of silver, $0.95 per pound of zinc, $3.49 per pound of copper, $0.99 per pound of lead and exchange rates of C$1.00 per $1.00, 13.00 Mexican pesos per $1.00 and $1.30 per €1.00. Other assumptions used for estimating 2013 and 2012 mineral reserve and mineral resource information may be found in the Company's annual filings in respect of the years ended December 31, 2013 and December 31, 2012, respectively.

Set out below are the mineral reserve estimates as of December 31, 2014, as calculated in accordance with NI 43-101 (tonnages and contained gold quantities are rounded to the nearest thousand):

Property		Tonnes		Gold Grade (g/t)		Contained Gold (oz)
Proven Reserves
Northern Business
LaRonde mine (underground)		4,460,000		3.76		538,000
Canadian Malartic mine (open pit) (50%)		24,969,000		0.92		736,000
Lapa mine (underground)		832,000		5.87		157,000
Goldex mine (underground)		203,000		1.70		11,000
Kittila mine (open pit)		207,000		3.53		23,000
Kittila mine (underground)		714,000		4.67		107,000
Kittila mine total proven		921,000		4.41		131,000
Meadowbank mine (open pit)		1,090,000		1.50		53,000
Meliadine project (open pit)		34,000		7.31		8,000
Southern Business
Pinos Altos mine (open pit)		48,000		1.93		3,000
Pinos Altos mine (underground)		2,394,000		3.30		254,000
Pinos Altos mine total proven		2,441,000		3.27		257,000
Creston Mascota deposit at Pinos Altos (open pit)		187,000		0.76		5,000
La India mine (open pit)		99,000		0.53		2,000
Total Proven Reserves		35,236,000		1.67		1,897,000

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Probable Reserves
Northern Business
LaRonde mine (underground)		16,072,000		5.60		2,893,000
Canadian Malartic mine (open pit) (50%)		101,978,000		1.10		3,593,000
Lapa mine (underground)		74,000		5.50		13,000
Goldex mine (underground)		6,893,000		1.49		329,000
Kittila mine (open pit)		139,000		3.46		15,000
Kittila mine (underground)		27,475,000		4.96		4,378,000
Kittila mine total probable		27,614,000		4.95		4,393,000
Meadowbank mine (open pit)		10,705,000		3.24		1,116,000
Meliadine project (open pit)		3,862,000		5.13		638,000
Meliadine project (underground)		10,048,000		8.33		2,690,000
Meliadine project total probable		13,910,000		7.44		3,327,000
Southern Business
Pinos Altos mine (open pit)		3,840,000		3.02		373,000
Pinos Altos mine (underground)		11,948,000		2.95		1,132,000
Pinos Altos mine total probable		15,788,000		2.97		1,506,000
Creston Mascota deposit at Pinos Altos (open pit)		5,657,000		1.27		231,000
La India mine (open pit)		24,783,000		0.85		677,000
Total Probable Reserves		223,475,000		2.52		18,080,000
North total proven and probable reserves		209,756,000		2.57		17,299,000
South total proven and probable reserves		48,955,000		1.70		2,678,000
Total Proven and Probable Reserves		258,711,000		2.40		19,976,000

In the tables above and below setting out mineral reserve information about the Company's mineral projects the total contained gold ounces stated do not include equivalent gold ounces for byproduct metals contained in the mineral reserve. The Canadian Malartic mineral reserve and resource amounts represent Agnico Eagle's 50% interest in the property. For all mineral reserves and mineral resources other than inferred mineral resources, the reported metal grades in the estimates reflect dilution after mining recovery. The mineral reserve and mineral resource figures presented in this AIF are estimates, and no assurance can be given that the anticipated tonnages and grades will be achieved or that the indicated level of recovery will be realized.

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Mineral Reserves and Mineral Resources

Northern Business

LaRonde Mine Mineral Reserves and Mineral Resources

			As at December 31,
			2014		2013		2012
LaRonde Extension Orebody (below Level 245)
	Proven mineral reserves – tonnes		3,600,000		4,600,000		3,600,000
	Average grade – gold grams per tonne		4.03		3.79		3.49
	Probable mineral reserves – tonnes		16,000,000		17,800,000		21,300,000
	Average grade – gold grams per tonne		5.61		5.56		5.16
LaRonde Orebody (above Level 245)
	Proven mineral reserves – tonnes		900,000		1,400,000		2,700,000
	Average grade – gold grams per tonne		2.65		2.43		2.26
	Probable mineral reserves – tonnes		100,000		300,000		1,200,000
	Average grade – gold grams per tonne		1.84		2.75		2.04
Total proven and probable mineral reserves – tonnes			20,532,000		24,100,000		28,800,000
Average grade – gold grams per tonne			5.20		5.00		4.54
Total contained gold ounces			3,432,000		3,880,000		4,206,000

Notes:

(1)

The 2014 proven and probable mineral reserve estimates set out in the table above are based on a net smelter return cut off value of the ore that varies between C$98 per tonne and C$114 per tonne depending on the deposit. Gold cut off grades used for resource estimates were fixed at 75% of the applicable reserve cut off grade. The Company's historical metallurgical recovery rates at the LaRonde mine from January 1, 2010 to December 31, 2014 averaged 91.5% for gold, 87.5% for silver, 87.1% for zinc and 80.2% for copper. Since May 2013, when the precious metals circuit was upgraded to carbon in pulp technology, the metallurgical recovery rates to December 31, 2014 have averaged 94.2% for gold, 87.1% for silver, 82.3% for zinc, 82.8% for copper, and 0% for lead (lead has not been recovered since May 2013). The historical metallurgical recovery rate for lead from January 1, 2010 to December 31, 2014 was 21.8%. The Company estimates that a 13.0% change in the gold price would result in an approximate 2.5% change in mineral reserves.

(2)

In addition to the mineral reserves set out above, at December 31, 2014, the LaRonde mine contained indicated mineral resources of 6,791,000 tonnes grading 3.26 grams of gold per tonne and inferred mineral resources of 8,794,000 tonnes grading 4.23 grams of gold per tonne.

(3)

The following table sets out the reconciliation of mineral reserves (rounded to the nearest thousand tonnes) at the LaRonde mine by category at December 31, 2014 with those at December 31, 2013. Revision indicates additional mineral reserves converted from mineral resources or other categories of mineral reserves and mineral reserves added from exploration activities during 2014.

		Proven		Probable		Total
December 31, 2013		5,978		18,149		24,127
Processed in 2014		2,085		–		2,085
Revision		567		(2,077	)	(1,510	)
December 31, 2014		4,460		16,072		20,532

(4)

Complete information on the verification procedures, the quality assurance program, quality control procedures, expected payback period of capital, parameters and methods and other factors that may materially affect scientific and technical information presented in this AIF relating to the LaRonde mine may be found in the Technical Report on the 2005 LaRonde Mineral Resource & Mineral Reserve Estimate filed with Canadian securities regulatory authorities on the System for Electronic Document Analysis and Retrieval ("SEDAR") on March 23, 2005.

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Lapa Mine Mineral Reserves and Mineral Resources

			As at December 31,
			2014		2013		2012
Gold
	Proven mineral reserves – tonnes		832,000		1,011,000		1,129,000
	Average grade – gold grams per tonne		5.87		5.99		6.25
	Probable mineral reserves – tonnes		74,000		456,000		939,000
	Average grade – gold grams per tonne		5.50		5.92		5.58
Total proven and probable mineral reserves – tonnes			907,000		1,466,000		2,068,000
Average grade – gold grams per tonne			5.84		5.97		5.95
Total contained gold ounces			170,000		281,000		395,000

Notes:

(1)

The 2014 proven and probable mineral reserve estimates set out in the table above were calculated using an assumed metallurgical gold recovery of 75% and a cut off grade of 4.0 grams of gold per tonne, and the resource estimates were calculated using an assumed metallurgical gold recovery of 74% and a cut off grade of 3.1 grams of gold per tonne. Gold cut off grades used for resource estimates were fixed at 75% of the applicable reserve cut off grade. The operating cost per tonne estimate for the Lapa mine in 2014 was C$121.88. The Company estimates that a 13.0% change in the gold price would result in an approximate 6% change in mineral reserves.

(2)

In addition to the mineral reserves set out above, at December 31, 2014, the Lapa mine contained indicated mineral resources of 1,067,000 tonnes grading 4.29 grams of gold per tonne and inferred mineral resources of 1,114,000 tonnes grading 6.30 grams of gold per tonne.

(3)

The following table sets out the reconciliation of mineral reserves (rounded to the nearest thousand tonnes) at the Lapa mine by category at December 31, 2014 with those at December 31, 2013. Revision indicates additional mineral reserves converted from mineral resources or other categories of mineral reserves and mineral reserves added from exploration activities during 2014.

		Proven		Probable		Total
December 31, 2013		1,011		456		1,466
Processed in 2014		639		–		639
Revision		460		(382	)	80
December 31, 2014		832		74		907

(4)

Complete information on the verification procedures, the quality assurance program, quality control procedures, expected payback period of capital, parameters and methods and other factors that may materially affect scientific and technical information presented in this AIF relating to the Lapa mine may be found in the Technical Report on the Lapa Gold Project, Cadillac Township, Quebec, Canada filed with Canadian securities regulatory authorities on SEDAR on June 8, 2006.

AGNICO EAGLE     73
ANNUAL INFORMATION FORM            

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Goldex Mine Mineral Reserves and Mineral Resources

			As at December 31,
			2014		2013		2012
Gold
	Proven mineral reserves – tonnes		203,000		119,000		59,000
	Average grade – gold grams per tonne		1.70		1.52		1.70
	Probable mineral reserves – tonnes		6,893,000		7,485,000		6,936,000
	Average grade – gold grams per tonne		1.49		1.52		1.55
Total proven and probable mineral reserves – tonnes			7,096,000		7,605,000		6,995,000
Average grade – gold grams per tonne			1.49		1.52		1.55
Total contained gold ounces			340,000		372,000		349,000

Notes:

(1)

The 2014 proven and probable mineral reserve estimates set out in the table above were estimated using an assumed metallurgical gold recovery of 92.52%. In 2014, the minesite costs per tonne were estimated to be C$33.55 for the E and M Zones. The cut off grade used for mineral reserves was 1.0 grams of gold per tonne. Gold cut off grades used for resource estimates were fixed at 75% of the applicable reserve cut off grade. The Company estimates that a 13.0% change in the gold price would result in an approximate 6% change in mineral reserves.

(2)

In addition to the mineral reserves set out above, at December 31, 2014, the Goldex mine contained measured mineral resources of 12,360,000 tonnes grading 1.86 grams of gold per tonne, indicated mineral resources of 21,409,000 tonnes grading 1.97 grams of gold per tonne and inferred mineral resources of 29,241,000 tonnes grading 1.64 grams of gold per tonne.

(3)

The following table sets out the reconciliation of mineral reserves (rounded to the nearest thousand tonnes) at the Goldex mine by category at December 31, 2014 with those at December 31, 2013. Revision indicates additional mineral reserves converted from mineral resources or other categories of mineral reserves and mineral reserves added from exploration activities during 2014.

		Proven		Probable		Total
December 31, 2013		119		7,485		7,605
Processed in 2014		2,117		–		2,117
Revision		2,201		(592	)	1,608
December 31, 2014		203		6,893		7,096

(4)

Complete information on the verification procedures, the quality assurance program, quality control procedures, expected payback period of capital, parameters and methods and other factors that may materially affect scientific and technical information presented in this AIF relating to the Goldex mine may be found in the Technical Report on Production of the M and E Zones at Goldex Mine dated October 14, 2012 filed with the Canadian securities regulatory authorities on SEDAR on November 1, 2012.

74     AGNICO EAGLE
           ANNUAL INFORMATION FORM

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Canadian Malartic Mineral Reserves and Mineral Resources (Agnico Eagle's 50% Interest)

			As at December 31,
			2014
Gold
	Proven mineral reserves – tonnes		24,969,000
	Average grade – gold grams per tonne		0.92
	Probable mineral reserves – tonnes		101,978,000
	Average grade – gold grams per tonne		1.10
Total proven and probable mineral reserves – tonnes			126,947,000
Average grade – gold grams per tonne			1.06
Total contained gold ounces			4,329,000

Notes:

(1)

The Canadian Malartic property is owned by Canadian Malartic GP, in which the Company holds an indirect 50% interest, with the remaining 50% interest held indirectly by Yamana. The resources relating to the CHL Malartic prospect are not reserves and, therefore, the estimates above are exclusive of all resources relating to the CHL Malartic prospect. The 2014 proven and probable mineral reserve estimates set out in the table above were calculated using an assumed metallurgical gold recovery of between 81.7% and 90.1% and a cut off grade from 0.28 to 0.35 grams of gold per tonne, depending on the deposit. Gold cut off grades used for resource estimates were fixed at 100% of the applicable reserve cut off grade. The operating cost per tonne milled estimate for the Canadian Malartic mine in 2014 was C$19.76. The Company estimates that a 15% change in the gold price would result in an approximate 6% change in mineral reserves.

(2)

In addition to the mineral reserves set out above, at December 31, 2014, the Canadian Malartic mine (Agnico Eagle's 50% interest) contained measured mineral resources of 2,843,000 tonnes grading 0.84 grams of gold per tonne, indicated mineral resources of 32,708,000 tonnes grading 0.85 grams of gold per tonne and inferred mineral resources of 22,655,000 tonnes grading 0.76 grams of gold per tonne.

(3)

The following table sets out the reconciliation of mineral reserves (in nearest thousand tonnes) at the Canadian Malartic mine by category at December 31, 2014 with those at June 16, 2014, stating Agnico Eagle's 50% interest. Revision indicates additional mineral reserves converted from mineral resources during 2014.

		Proven		Probable		Total
June 15, 2014		28,824		102,797		131,621
Processed in 2014		5,263		–		5,263
Revision		1,408		(819	)	589
December 31, 2014		24,969		101,978		126,947

(4)

Complete information on the verification procedures, the quality assurance program, quality control procedures, expected payback period of capital, parameters and methods and other factors that may materially affect scientific and technical information presented in this AIF relating to the Canadian Malartic mine may be found in the Technical Report on the Mineral Resource and Mineral Reserve Estimates for the Canadian Malartic Property dated June 16, 2014, filed with Canadian securities regulatory authorities on SEDAR on August 13, 2014.

AGNICO EAGLE     75
ANNUAL INFORMATION FORM            

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Kittila Mine Mineral Reserves and Mineral Resources

			As at December 31,
			2014		2013		2012
Gold
	Proven mineral reserves – tonnes		921,000		1,104,000		1,461,000
	Average grade – gold grams per tonne		4.41		4.27		4.59
	Probable mineral reserves – tonnes		27,614,000		30,520,000		31,662,000
	Average grade – gold grams per tonne		4.95		4.65		4.49
Total proven and probable mineral reserves – tonnes			28,535,000		31,624,000		33,122,000
Average grade – gold grams per tonne			4.93		4.64		4.49
Total contained gold ounces			4,524,000		4,714,000		4,783,000

Notes:

(1)

The 2014 proven and probable mineral reserve estimates set out in the table above were calculated using a metallurgical gold recovery of 89.3%. Gold cut off grades used were 2.27 grams per tonne, undiluted (2.01 grams per tonne, diluted) for open pit mineral reserves and between 3.62 grams per tonne and 3.94 grams per tonne, undiluted (between 3.06 grams per tonne and 3.37 grams per tonne, diluted), depending on the deposit, for underground mineral reserves. Gold cut off grades used for resource estimates were fixed at 75% of the applicable reserve cut off grade. The open pit operating cost was estimated to be €49.89 per tonne in 2014, while the underground cost averaged €79.7 per tonne in 2014. The Company estimates that a 13.0% change in the gold price would result in an approximate 14.2% change in mineral reserves.

(2)

In addition to the mineral reserves set out above, at December 31, 2014, the Kittila mine contained measured mineral resources of 820,000 tonnes grading 2.78 grams of gold per tonne, indicated mineral resources of 13,351,000 tonnes grading 2.98 grams of gold per tonne and inferred mineral resources of 8,892,000 tonnes grading 4.30 grams of gold per tonne.

(3)

The breakdown of proven and probable mineral reserves between planned open pit operations and underground operations at the Kittila mine (with tonnage and contained ounces rounded to the nearest thousand) at December 31, 2014 is:

Category		Mining Method		Tonnes		Gold Grade (g/t)		Contained Gold (oz)
Proven mineral reserves		Open pit		207,000		3.53		23,000
Proven mineral reserves		Underground		714,000		4.67		107,000
Total proven mineral reserves				921,000		4.41		131,000
Probable mineral reserves		Open pit		139,000		3.46		15,000
Probable mineral reserves		Underground		27,475,000		4.96		4,378,000
Total probable mineral reserves				27,614,000		4.95		4,393,000

(4)

The following table sets out the reconciliation of mineral reserves (in nearest thousand tonnes) at the Kittila mine by category at December 31, 2014 with those at December 31, 2013. Revision indicates additional mineral reserves converted from mineral resources or other categories of mineral reserves and mineral reserves added from exploration activities during 2014.

		Proven		Probable		Total
December 31, 2013		1,104		30,520		31,624
Processed in 2014		1,156		–		1,156
Revision		973		(2,906	)	(1,933	)
December 31, 2014		921		27,614		28,535

(5)

Complete information on the verification procedures, the quality assurance program, quality control procedures, expected payback period of capital, parameters and methods and other factors that may materially affect scientific and technical information presented in this AIF relating to the Kittila mine may be found in the Technical Report on the December 31, 2009, Mineral Resource and Mineral Reserve Estimate and the Suuri Extension Project, Kittila Mine, Finland, filed with the Canadian securities regulatory authorities on SEDAR on March 4, 2010.

76     AGNICO EAGLE
           ANNUAL INFORMATION FORM

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Meadowbank Mine Mineral Reserves and Mineral Resources

			As at December 31,
			2014		2013		2012
Gold
	Proven mineral reserves – tonnes		1,090,000		1,128,000		1,764,000
	Average grade – gold grams per tonne		1.50		2.88		1.56
	Probable mineral reserves – tonnes		10,705,000		15,692,000		23,560,000
	Average grade – gold grams per tonne		3.24		3.26		2.91
Total proven and probable mineral reserves – tonnes			11,795,000		16,819,000		25,324,000
Average grade – gold grams per tonne			3.08		3.24		2.82
Total contained gold ounces			1,168,000		1,751,000		2,294,000

Notes:

(1)

The 2014 proven and probable mineral reserve estimates set out in the table above were calculated using a cut off grade that used a metallurgical gold recovery of 91.0% or 95.5%, depending on the deposit. The economic cut off grade used to determine the open pit mineral reserves varied from 1.51 grams of gold per tonne to 1.59 grams of gold per tonne, depending on the deposit, and is 1.10 to 1.25 grams of gold per tonne as a marginal cut off grade, depending on the deposit. Gold cut off grades used for resource estimates were fixed at 75% of the applicable reserve cut off grade. The estimated ore based operating costs used for the 2014 mineral reserve estimate varied between C$57.55 per tonne and C$57.95 per tonne, depending on the deposit, with an additional haulage cost of C$0.66 per tonne for Vault deposit mineral reserves. The Company estimates that a 10.0% change in the gold price would result in an approximate 1.8% change in mineral reserves.

(2)

In addition to the mineral reserves set out above, at December 31, 2014, the Meadowbank mine contained measured mineral resources of 432,000 tonnes grading 1.07 grams of gold per tonne, indicated mineral resources of 7,088,000 tonnes grading 3.44 grams of gold per tonne and inferred mineral resources of 3,321,000 tonnes of ore grading 3.96 grams of gold per tonne.

(3)

The following table sets out the reconciliation of mineral reserves (rounded to the nearest thousand tonnes) at the Meadowbank mine by category at December 31, 2014 with those at December 31, 2013. Revision indicates additional mineral reserves converted from mineral resources or other categories of mineral reserves, an update to mineral reserves based on changed mine plans, and mineral reserves added from exploration activities during 2014.

		Proven		Probable		Total
December 31, 2013		1,128		15,692		16,819
Processed in 2014		4,129		–		4,129
Revision		4,091		(4,987	)	(895	)
December 31, 2014		1,090		10,705		11,795

(4)

Complete information on the verification procedures, the quality assurance program, quality control procedures, expected payback period of capital, parameters and methods and other factors that may materially affect scientific and technical information presented in this AIF relating to the Meadowbank mine may be found in the Technical Report on the Mineral Resources and Mineral Reserves at Meadowbank Gold Mine, Nunavut, Canada as at December 31, 2011 filed with Canadian securities regulatory authorities on SEDAR on March 23, 2012.

AGNICO EAGLE     77
ANNUAL INFORMATION FORM            

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Meliadine Project Mineral Reserves and Mineral Resources

			As at December 31,
			2014		2013		2012
Gold
	Proven mineral reserves – tonnes		34,000		34,000		34,000
	Average grade – gold grams per tonne		7.31		7.31		7.31
	Probable mineral reserves – tonnes		13,910,000		11,943,000		13,266,000
	Average grade – gold grams per tonne		7.44		7.38		6.98
Total proven and probable mineral reserves – tonnes			13,944,000		11,977,000		13,300,000
Average grade – gold grams per tonne			7.44		7.38		6.98
Total contained gold ounces			3,335,000		2,841,000		2,987,000

Notes:

(1)

The 2014 proven and probable mineral reserve estimates set out in the table above were calculated using metallurgical gold recovery curves for the Tiriganiaq and Wesmeg deposits. The curves give a maximum recovery of 96.5% for Tiriganiaq and Wesmeg. The 2014 mineral resource estimates for Tiriganiaq-Normeg-Wesmeg, F Zone, Pump, Discovery and Wolf deposits were calculated using a fixed metallurgical gold recovery of 91.1%, 91.0%, 86.9%, 93.5% and 94.3%, respectively, for open pit resources and 93.4%, 91.7%, 90.0%, 95.5% and 95.7%, respectively, for underground resources. For the Tiriganiaq and Wesmeg deposits, the cut-off grade used to determine the open pit mineral reserves was 2.56 grams of gold per tonne, undiluted (1.81 grams of gold per tonne, diluted), and the cut-off grade used to determine the underground mineral reserves was 6.24 grams of gold per tonne, undiluted (4.80 grams of gold per tonne, diluted). Gold cut-off grades used for resource estimates were fixed at 75% of the applicable reserve cut-off grade for underground resource estimates and at 100% of the applicable reserve marginal cut-off grade for open pit resource estimates. The estimated operating cost used for the 2014 mineral reserve estimate was C$81.97 per tonne for open pit and C$176.44 per tonne for underground. The Company estimates that a 13.0% change in the gold price would result in an approximate 5.5% change in mineral reserves.

(2)

In addition to the mineral reserves set out above, at December 31, 2014, the Meliadine project contained indicated mineral resources of 20,246,000 tonnes grading 5.06 grams of gold per tonne and inferred mineral resources of 14,083,000 tonnes of ore grading 7.65 grams of gold per tonne.

(3)

The breakdown of mineral reserves between contemplated open pit operations and underground operations at the Meliadine project (with tonnage and contained ounces rounded to the nearest thousand) at December 31, 2014 is:

Category		Mining Method		Tonnes		Gold Grade (g/t)		Contained Gold (oz)
Proven mineral reserves		Open pit stockpile		34,000		7.31		8,000
Probable mineral reserves		Open pit		3,862,000		5.13		638,000
Probable mineral reserves		Underground		10,048,000		8.33		2,690,000
Total probable mineral reserves				13,910,000		7.44		3,327,000
Total proven and probable mineral reserves				13,944,000		7.44		3,335,000

(4)

Complete information on the verification procedures, the quality assurance program, quality control procedures, expected payback period of capital, parameters and methods and other factors that may materially affect scientific and technical information presented in this AIF relating to the Meliadine project may be found in the Updated Technical Report on the Meliadine Gold Project, Nunavut, Canada dated February 11, 2015, filed with Canadian securities regulatory authorities on March 12, 2015.

78     AGNICO EAGLE
           ANNUAL INFORMATION FORM

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Southern Business

Pinos Altos Mine Mineral Reserves and Mineral Resources

			As at December 31,
			2014		2013		2012
Gold and Silver
	Proven mineral reserves – tonnes		2,441,000		1,966,000		3,067,000
	Average gold grade – grams per tonne		3.27		2.54		2.54
	Average silver grade – grams per tonne		86.27		82.17		81.31
	Probable mineral reserves – tonnes		15,788,000		26,738,000		35,074,000
	Average gold grade – grams per tonne		2.97		2.45		2.18
	Average silver grade – grams per tonne		78.63		63.00		58.90
Total proven and probable mineral reserves – tonnes			18,230,000		28,703,000		38,141,000
Average gold grade – grams per tonne			3.01		2.46		2.21
Average silver grade – grams per tonne			79.65		64.32		60.71
Total contained gold ounces			1,763,000		2,266,000		2,714,000
Total contained silver ounces			46,682,000		59,354,000		74,441,000

Notes:

(1)

The mineral reserves in the above table for 2012 and 2013 include both Pinos Altos and the Creston Mascota deposit at Pinos Altos. The mineral reserves for 2014 include only the Pinos Altos mine. In 2014, for the first time, the Creston Mascota deposit at Pinos Altos mineral reserves are shown separately, immediately following this section.

(2)

The 2014 proven and probable mineral reserve estimates set out in the table above at the Pinos Altos mine (excluding the Creston Mascota deposit) are based on a net smelter return cut-off value of the open pit ore between $13.61 per tonne and $30.72 per tonne, depending on the processing method, and a net smelter return cut-off value of the underground ore of $59.79 per tonne. Gold cut-off grades used for resource estimates were fixed at 75% of the applicable reserve cut-off grade. The operating cost per tonne estimate for the Pinos Altos mine in 2014 was $48. The metallurgical gold recovery used in the reserve estimates varied between 59% and 94.6%, depending on the deposit and the processing method. The metallurgical silver recovery used in the reserve estimates varied between 11% and 44%, depending on the deposit and the processing method. The Company estimates that a 13.0% change in the gold price would result in an approximate 4% change in mineral reserves.

(3)

In addition to the mineral reserves set out above, at December 31, 2014, the Pinos Altos mine contained indicated mineral resources of 11,938,000 tonnes grading 1.84 grams of gold per tonne and 44.14 grams of silver per tonne and inferred mineral resources of 12,645,000 tonnes grading 1.22 grams of gold per tonne and 26.82 grams of silver per tonne.

(4)

The breakdown of mineral reserves between planned open pit operations and underground operations at the Pinos Altos mine (with tonnage and contained ounces rounded to the nearest thousand) at December 31, 2014 is:

Category		Mining Method		Tonnes		Gold Grade (g/t)		Silver Grade (g/t)		Contained Gold (oz)		Contained Silver (oz)
Proven mineral reserves		Open pit stock pile		48,000		1.93		65.87		3,000		101,000
Proven mineral reserves		Underground		2,394,000		3.30		86.68		254,000		6,671,000
Total proven mineral reserves				2,441,000		3.27		86.27		257,000		6,772,000
Probable mineral reserves		Open pit		3,840,000		3.02		75.28		373,000		9,294,000
Probable mineral reserves		Underground		11,948,000		2.95		79.70		1,132,000		30,616,000
Total probable mineral reserves				15,788,000		2.97		78.63		1,506,000		39,910,000
Total proven and probable mineral reserves				18,229,000		3.01		79.65		1,763,000		46,682,000

AGNICO EAGLE     79
ANNUAL INFORMATION FORM            

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(5)

The following table sets out the reconciliation of mineral reserves (in nearest thousand tonnes) at the Pinos Altos mine (excluding the Creston Mascota deposit) by category at December 31, 2014 with those at December 31, 2013. Revision indicates additional mineral reserves converted from mineral resources or other categories of mineral reserves and mineral reserves added from exploration activities during 2014.

		Proven		Probable		Total
December 31, 2013		1,680		19,912		21,591
Processed in 2014		2,520		–		2,520
Revision		3,281		(4,124	)	(841	)
December 31, 2014		2,441		15,788		18,230

(6)

Complete information on the verification procedures, the quality assurance program, quality control procedures, expected payback period of capital, parameters and methods and other factors that may materially affect scientific and technical information presented in this AIF relating to the Pinos Altos mine may be found in the Pinos Altos Gold-Silver Mining Project, Chihuahua State, Mexico, Technical Report on the Mineral Resources and Reserves as of December 31, 2008 filed with the Canadian securities regulatory authorities on SEDAR on March 25, 2009.

Creston Mascota Deposit at Pinos Altos Mineral Reserves and Mineral Resources

			As at December 31,
			2014		2013		2012
Gold and Silver
	Proven mineral reserves – tonnes		187,000		–		–
	Average gold grade – grams per tonne		0.76		–		–
	Average silver grade – grams per tonne		8.60		–		–
	Probable mineral reserves – tonnes		5,657,000		–		–
	Average gold grade – grams per tonne		1.27		–		–
	Average silver grade – grams per tonne		13.63		–		–
Total proven and probable mineral reserves – tonnes			5,844,000		–		–
Average gold grade – grams per tonne			1.25		–		–
Average silver grade – grams per tonne			13.47		–		–
Total contained gold ounces			236,000		–		–
Total contained silver ounces			2,530,000		–		–

Notes:

(1)

The mineral reserves in the above table for 2014 include only the Creston Mascota deposit at Pinos Altos, which are shown separately for the first time. In 2012 and 2013, the Creston Mascota deposit at Pinos Altos mineral reserves were shown combined with the mineral reserves from the Pinos Altos mine, immediately preceding this section.

(2)

The 2014 proven and probable mineral reserve estimates set out in the table above at the Creston Mascota deposit at Pinos Altos are based on a net smelter return cut-off value of the open pit ore of $9.79 per tonne. Gold cut-off grades used for resource estimates were fixed at 75% of the applicable reserve cut-off grade. The operating cost per tonne estimate for the Creston Mascota deposit at Pinos Altos in 2014 was $16. The metallurgical gold recovery used in the reserve estimates was 65%. The metallurgical silver recovery used in the reserve estimates was 16%. The Company estimates that a 13.0% change in the gold price would result in less than 1% change in mineral reserves.

(3)

In addition to the mineral reserves set out above, at December 31, 2014, the Creston Mascota deposit at Pinos Altos contained indicated mineral resources of 2,229,000 tonnes grading 0.68 grams of gold per tonne and 4.69 grams of silver per tonne and inferred mineral resources of 4,462,000 tonnes grading 1.07 grams of gold per tonne and 13.98 grams of silver per tonne.

80     AGNICO EAGLE
           ANNUAL INFORMATION FORM

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(4)

The following table sets out the reconciliation of mineral reserves (rounded to the nearest thousand tonnes) at the Pinos Altos mine (including the Creston Mascota deposit) by category at December 31, 2014 with those at December 31, 2013. Revision indicates additional mineral reserves converted from mineral resources or other categories of mineral reserves and mineral reserves added from exploration activities during 2014.

		Proven		Probable		Total
December 31, 2013		286		6,826		7,112
Processed in 2014		1,794		–		1,794
Revision		1,695		(1,169	)	526
December 31, 2014		187		5,657		5,844

(5)

Complete information on the verification procedures, the quality assurance program, quality control procedures, expected payback period of capital, parameters and methods and other factors that may materially affect scientific and technical information presented in this AIF relating to the Creston Mascota deposit at Pinos Altos may be found in the Pinos Altos Gold-Silver Mining Project, Chihuahua State, Mexico, Technical Report on the Mineral Resources and Reserves as of December 31, 2008 filed with the Canadian securities regulatory authorities on SEDAR on March 25, 2009.

La India Mine Mineral Reserves and Mineral Resources

			As at December 31,
			2014		2013		2012
Gold
	Proven mineral reserves – tonnes		99,000		228,000
	Average grade – gold grams per tonne		0.53		0.64
	Probable mineral reserves – tonnes		24,783,000		26,868,000		33,457,000
	Average grade – gold grams per tonne		0.85		0.87		0.72
Total proven and probable mineral reserves – tonnes			24,882,000		27,096,000		33,457,000
Average grade – gold grams per tonne			0.85		0.87		0.72
Total contained gold ounces			679,000		758,000		776,000

Notes:

(1)

The 2014 proven and probable mineral reserve estimates set out in the table above for the La India mine (including the Tarachi deposit) were calculated using an average metallurgical gold recovery of 45% to 76.5% depending on the zone. The economic cut-off grade used to determine the open pit reserves was 0.32 grams of gold per tonne and 0.26 grams of gold per tonne as the marginal cut-off grade. Gold cut off grades used for resource estimates were fixed at 75% of the applicable reserve cut off grade. The estimated operating cost used for the 2014 mineral reserve estimate was $8.84 per tonne. The Company estimates that a 13.0% change in the gold price would result in an approximate 9% change in mineral reserves.

(2)

In addition to the mineral reserves set out above, at December 31, 2014, the La India mine (including the Tarachi deposit) contained measured mineral resources of 2,667,000 tonnes grading 0.38 grams of gold per tonne and 3.06 grams of silver per tonne, indicated mineral resources of 51,799,000 tonnes grading 0.39 grams of gold per tonne and 0.20 grams of silver per tonne and inferred mineral resources of 82,562,000 tonnes of ore grading 0.37 grams of gold per tonne and 0.04 grams of silver per tonne.

(3)

The following table shows the reconciliation of mineral reserves (rounded to the nearest thousand tonnes) at the La India mine by category at December 31, 2014 with those at December 31, 2013. Revision means additional mineral reserves converted from mineral resources or other categories of mineral reserves and mineral reserves added from exploration activities during 2014.

		Proven		Probable		Total
December 31, 2013		228		26,868		27,096
Processed in 2014		4,773		–		4,773
Revision		4,644		(2,085	)	2,559
December 31, 2014		99		24,783		24,882

(4)

Complete information on the verification procedures, the quality assurance program, quality control procedures, expected payback period of capital, parameters and methods and other factors that may materially affect scientific and technical information presented in this AIF relating to the La India mine project may be found in the Technical Report on the June 30, 2012 Update of the Mineral Resources and Mineral Reserves, La India Gold Project, Municipality of Sahuaripa, Sonora, Mexico, dated August 31, 2012, filed with the Canadian securities regulatory authorities on SEDAR on October 12, 2012.

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Principal Products and Distribution

The Company earns a significant portion of its revenue and cash flow from the production and sale of gold in both dore bar and concentrate form. The remainder of revenue and cash flow is generated from the production and sale of byproduct metals, namely silver, zinc and copper. The gold produced by the Company is sold in refined form, primarily in the London spot market. As a result, the Company is not dependent on any particular purchaser of its principal product.

Employees

As of December 31, 2014, the Company had 6,599 employees comprised of 4,999 permanent employees, 1,308 contractors, 222 temporary employees and 70 students. Of the permanent employees, 841 were employed at the LaRonde mine, 198 at the Lapa mine, 241 at the Goldex mine, 687 at the Canadian Malartic mine (with an additional 51 in the Canadian Malartic office), 399 at the Kittila mine (with an additional 11 at the Finnish exploration group), 693 at the Meadowbank mine (with 683 at Baker Lake and Meadowbank and 10 in Quebec), 16 at the Meliadine project, 929 at the Pinos Altos mine, 238 at the Creston Mascota deposit at Pinos Altos, 357 at the La India mine, 24 in the exploration group in Canada and the United States, 72 in the exploration group in Mexico, 122 at the regional technical office in Abitibi and 120 at the corporate head office in Toronto. The number of permanent employees of the Company at the end of 2014, 2013 and 2012 was 5,187, 4,259 and 4,045, respectively.

Competitive Conditions

The precious metal exploration and mining business is a highly competitive business. The Company competes with other mining and exploration companies in connection with the acquisition of mining claims and leases, the sourcing of raw materials and supplies used in connection with mining operations and the recruitment and retention of qualified employees.

The ability of the Company to continue its mining business in the future will depend not only on its ability to develop its current properties, but also on its ability to select and acquire suitable producing properties or prospects for precious metal development or exploration. See "Risk Factors" for a description of additional competitive risks the Company faces.

Sustainable Development

In 2014, the Company continued the process of incorporating health, safety and environmental sustainability into all aspects and stages of its business, from the corporate objectives and executive responsibility of 'maintaining high standards in sustainability' to exploration and acquisition activities, day to day operating and site closure. This integration began in 2012 with the adoption of an integrated Health, Safety, Environment and Social Acceptability Policy referred to as the "Sustainable Development Policy" that reflects the Company's commitment to responsible mining practices. This policy replaced the previous environmental and health and safety policies. The Company believes that the Sustainable Development Policy will lead to the achievement of more sustainable practices through oversight and accountability.

The Sustainable Development Policy operates through the development and implementation of a formal and integrated Health, Safety and Environmental Management System, termed the Responsible Mining Management System (the "RMMS"), across all divisions of the Company. The aim of the RMMS is to further promote a culture of accountability and leadership in managing health, safety, environmental and social acceptability matters. RMMS implementation is supported by software widely used in the Canadian mining industry that is consistent with the ISO 14001 Environmental Management System and the OHSAS 18001 Health and Safety Management System.

The RMMS incorporates the Company's commitments as a signatory to the International Cyanide Management Code (the "Cyanide Code"), a voluntary program which addresses the safe production, transport, storage, handling and disposal of cyanide. The Company became a signatory to the Cyanide Code in September 2011 and is seeking to have the Kittila, Pinos Altos and Meadowbank mines audited and certified under the Cyanide Code by an independent third party within the three year deadline. External audits were performed in 2014 and certification is expected following the submission of the audit reports.

The RMMS also integrates the requirements of the Mining Association of Canada's industry leading Towards Sustainable Mining Initiative (the "TSM Initiative"), as well as the Global Reporting Initiative's sustainability reporting guidelines for the mining industry. In December 2010, the Company became a member of the Mining Association of Canada and endorsed the TSM Initiative. The TSM Initiative was developed to help mining companies evaluate the quality, comprehensiveness and robustness of their management systems under six performance elements: crisis management; energy and greenhouse gas emissions management; tailings management; biodiversity conservation management; health and safety;

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and aboriginal relations and community outreach. A gap analysis audit of the TSM Initiative was carried out in 2014. An external audit is planned for the first quarter of 2015.

The Company has adopted and implemented the World Gold Council's Conflict-Free Gold Standard. This implementation was initiated on January 1, 2013.

The Company's Sustainable Development Policy is available on the Company's website at www.agnicoeagle.com. The Canadian Malartic mine's sustainable development report is available at its website, www.canadianmalartic.com.

Employee Health and Safety

There was one contractor fatality at the Pinos Altos mine in 2014 which occurred during shaft sinking. The Company's overall health and safety performance, as measured by accident frequency, improved during 2014. A combined lost-time and restricted work accident frequency rate (excluding the Canadian Malartic mine) of 1.48 was achieved, an 18% reduction from the 2013 rate of 1.7 and substantially below the target rate of 2.1. This is the best combined accident frequency rate ever recorded by the Company. Extensive health and safety training was also provided to all employees during 2014.

One of the measures implemented by the Company to improve safety performance is the workplace safety card system. This system was implemented across all of the Company's operations, in Canada and abroad, to strengthen the risk-based training program. Developed by the Quebec Mining Association (the "AMQ"), the safety card system teaches workers and supervisors to use risk-based thinking in their duties. Workers and their supervisors must meet every day to discuss on-the-job health and safety matters. The safety card system also allows the Company's workers and supervisors to document daily inspections and record observations on conditions in the workplace, as well as the nature of risks, issues and other relevant information. In addition, it allows supervisors to exchange and analyze all relevant information between shifts and various technical services to improve efficiency and safety.

In 2014, the AMQ acknowledged the Company's strong performance in the area of health and safety, recognizing 20 of the Company's supervisors from the LaRonde, Lapa and Goldex mines for keeping their workers safe. The supervisors received AMQ security trophy awards for 50,000, 100,000 and 150,000 hours supervised without a lost-time accident.

Each of the Company's mining operations has its own Emergency Response Plan and has personnel trained to respond to safety, fire and environmental emergencies. Each mine also maintains the appropriate response equipment. In 2014, the corporate crisis management plan was updated to align with industry best practices and the TSM Initiative requirements. Emergency response simulations were also performed at all divisions. The TSM Initiative also contains a Health and Safety protocol. A gap analysis of compliance with the protocol was conducted in 2014 and an external audit will be part of the external TSM Initiative audit to be carried out at the beginning of 2015.

The Canadian Malartic mine's combined accident frequency rate in 2014 was 1.52 compared to an objective of 2.7, and decreased significantly from the 2013 rate of 3.1.

Community

The Company's ultimate goal, at each of its operations worldwide, is to hire as much of its workforce as possible, including management teams, directly from the local region in which the operation is located. In 2014, the overall company average for local hiring was 81%. The Company believes that providing employment is one of the most significant contributions it can make to the communities in which it operates.

The Company continued its efforts in community development agreements in Nunavut. The Meadowbank IIBA was renewed and negotiations are progressing well on an agreement on the IIBA for the Meliadine project. In 2014, the Company also initiated a dialogue with First Nations in the Abitibi. Canadian Malartic GP has entered into negotiations with First Nations around the Kirkland Lake project and has also initiated a dialogue with First Nations in the Abitibi region.

In 2014, the Company continued to work closely with neighboring communities to develop alternative employment and business opportunities to help diversify local economies.

The Canadian Malartic mine continued its contribution to the economic development fund (FEMO) which was established prior to mine development to diversify the local economy throughout the mine life so that the town of Malartic is well equipped to face the eventual mine closure. The Canadian Malartic mine has also participated in forums initiated by the town council on the future of the town of Malartic. All hiring at the Canadian Malartic mine is from the local area.

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Stakeholder mapping exercises were performed at all divisions to support the development of local community engagement plans. As well, community liaison committees were active in 2014. In Finland such committees are fairly new and the implementation of the Kittila mine community liaison committee was well received by the local population.

2014 was the final year of the three-year Mining Matters program sponsored by the Company for the schools in the Kivalliq region of Nunavut. The goal of the program was to show young people that there are interesting jobs and careers for them in the north, and that the mining industry can be a key source of these opportunities.

In 2014, the Company continued its support of the Kivalliq Mine Training Society and for the unique upward mobility training program for Inuit employees developed at Meadowbank. This program provides training and career path opportunities for Inuit with limited education and work experience in the area of heavy equipment operations, mill operations and site services. Skills acquired through the program are easily transferable to other sectors of the Nunavut economy.

For the seventh year in a row, the Pinos Altos mine was certified as a Socially Responsible Company by the Mexican Centre for Philanthropy (Centro Mexicano para la Filantropía) and the Alliance for Social Responsibility of Enterprises (Alianza por la Responsabilidad Social Empresarial en México). This certification recognizes the excellence of the social responsibility practices at the Pinos Altos mine.

The Company continues to support a number of community health and educational initiatives in the region surrounding the Pinos Altos mine, including the establishment of a local sewing cooperative and donating material for the construction of new classrooms or for the repair of existing classrooms.

The Company's Code of Business Conduct and Ethics Policy is available on the Company's website at www.agnicoeagle.com.

Environmental Protection

The Company's exploration activities and mining and processing operations are subject to the federal, state, provincial, regional and local environmental laws and regulations in the jurisdictions in which the Company's activities and facilities are located. These include requirements for planning and implementing the closure and reclamation of mining properties and related financial assurance. Each mine is subject to environmental assessment and permitting processes during development and, in operation, has an environmental management system consistent with ISO 140001 as well as an internal audit program. The Company works closely with regulatory authorities in each jurisdiction where it operates to ensure ongoing compliance.

The Company has reported greenhouse gas emissions and climate change risk factors annually to the Carbon Disclosure Project since 2007.

The LaRonde mine received an infraction notice in 2014 for a tailings line puncture that occurred in December 2013. The affected area was immediately cleaned up and no further action is required. The Meadowbank mine was under investigation in 2014 by Environment Canada and Aboriginal Affairs and Northern Development Canada for a seepage event that occurred in 2013. The investigation process is still ongoing.

The Canadian Malartic mine has received 28 infractions in 2014, mostly related to noise, blasting fumes and overpressure, a decrease from the 41 infractions received in 2013. Action plans have been established to continue this reduction.

The Company's total liability for reclamation and closure cost obligations at December 31, 2014 was $256.7 million and the Company's reclamation expense for the year ended December 31, 2014 were $8.2 million. For more information please see note 13 to the Annual Financial Statements.

The Company's Environmental Policy is available on the Company's website at www.agnicoeagle.com.

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RISK FACTORS

The operations of the Company are speculative due to the high-risk nature of its business, which is the acquisition, financing, exploration, development and operation of mining properties. These risk factors could materially affect the Company's financial condition and/or future operating results and could cause actual events to differ materially from those described in forward-looking statements relating to the Company. These are not the only risks and uncertainties that the Company faces. Additional risks and uncertainties not presently known to the Company or that the Company currently considers immaterial may also impair its business operations.

The Company's financial performance and results may fluctuate widely due to volatile and unpredictable commodity prices.

The Company's earnings are directly related to commodity prices, as revenues are derived from the sale of gold, silver, zinc, and copper. Gold prices, which have the greatest impact on the Company's financial performance, fluctuate widely and are affected by numerous factors, including, central bank purchases and sales, producer hedging and de-hedging activities, expectations of inflation, investment demand, the relative exchange rate of the U.S. dollar with other major currencies, interest rates, global and regional demand, political and economic conditions, production costs in major gold-producing regions, speculative positions taken by investors or traders in gold and changes in supply, including worldwide production levels, all of which are beyond the Company's control. The aggregate effect of these factors is impossible to predict with accuracy. In addition, the price of gold has on occasion been subject to very rapid short-term changes because of speculative activities or world events. Fluctuations in gold prices may materially adversely affect the Company's financial performance or results of operations. If the market price of gold falls below the Company's total cash costs per ounce of production at one or more of its mines or projects at that time and remains so for any sustained period, the Company may experience losses and/or may curtail or suspend some or all of its exploration, development and mining activities at such mines or projects or at other mines or projects. In addition, such fluctuations may require changes to the mine plans. The Company's current mine plans and mineral reserve and mineral resource estimates are based on a gold price of $1,150 per ounce, other than the Canadian Malartic mine, where mineral reserves and mineral resources are based on a gold price of $1,300 per ounce (see "Operations and Production – Mineral Reserves and Mineral Resources – Information on Mineral Reserves and Mineral Resources of the Company"); if the price of gold falls below such levels, the mines may be rendered uneconomic and production may be suspended. In addition, lower gold prices may require the mine plans to be changed, which may result in reduced production, higher costs than anticipated or both and estimates of mineral reserves and mineral resources may be reduced. Further, the prices received from the sale of the Company's byproduct metals produced at its LaRonde mine (silver, zinc and copper) and its Pinos Altos and Canadian Malartic mines (silver) affect the Company's ability to meet its targets for total cash costs per ounce or all-in sustaining costs per ounce of gold produced when such measures are calculated on a by-product basis. These byproduct metal prices fluctuate widely and are also affected by numerous factors beyond the Company's control. The Company's policy and practice is not to sell forward its future gold production; however, under the Company's price risk management policy, approved by the Board of Directors, the Company may review this practice on a project by project basis. See "Risk Profile – Metal Prices and Foreign Currencies" and "Risk Profile – Financial Instruments" in the Annual MD&A for more details on the Company's use of derivative instruments. The Company occasionally uses derivative instruments to mitigate the effects of fluctuating byproduct metal prices; however, these measures may not be successful.

The volatility of gold prices is illustrated in the following table which sets out, for the periods indicated, the high, low and average afternoon fixing prices for gold on the London Bullion Market (the "London P.M. Fix").

		2015 (to March 12)		2014		2013		2012		2011		2010
High price ($ per ounce)		1,296		1,385		1,694		1,792		1,895		1,421
Low price ($ per ounce)		1,150		1,142		1,192		1,540		1,319		1,058
Average price ($ per ounce)		1,229		1,266		1,411		1,669		1,572		1,125

On March 12, 2015, the London P.M. Fix was $1,152 per ounce of gold.

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The assumptions that underlie the estimate of future operating results and the strategies used to mitigate the effects of risks of metal prices are set out in "Operations and Production – Mineral Reserves and Mineral Resources – Information on Mineral Reserves and Mineral Resources of the Company" and under the heading "Risk Profile" in the Annual MD&A.

Based on 2015 production estimates, the approximate sensitivities of the Company's after-tax income to a 10% change in certain metal prices from 2014 market average prices are as follows:

		Income per share
Gold		$0.68
Silver		$0.03
Zinc		$0.01
Copper		$0.02

Sensitivities of the Company's after-tax income to changes in metal prices will increase with increased production.

The Company is largely dependent upon its mining and milling operations at its Meadowbank mine in Nunavut and any adverse condition affecting those operations may have a material adverse effect on the Company.

The Company's operations at the Meadowbank mine in Nunavut accounted for approximately 32% of the Company's gold production in 2014 and are expected to account for approximately 25% of the Company's gold production in 2015. Also, in 2014 the Meadowbank mine accounted for approximately 34% of the Company's operating margin. In 2011, gold production at the Meadowbank mine was approximately 90,000 ounces below the Company's expectations as a result of issues that included a fire that destroyed the minesite's kitchen facilities and higher than anticipated dilution. Any adverse condition affecting mining or milling conditions at the Meadowbank mine could be expected to have a material adverse effect on the Company's financial performance and results of operations (see "– If the Company experiences mining accidents or other adverse conditions, the Company's mining operations may yield less gold than indicated by its estimated gold production" below). Gold production at the Meadowbank mine is also subject to risks relating to operating in a remote location (see "– The Company may experience difficulties operating its Meadowbank mine and developing the Meliadine project as a result of their remote location" below). The Company also anticipates using revenue generated by its operations at the Meadowbank mine to finance a substantial portion of its capital expenditures in 2015, including projects at the Pinos Altos mine and the Meliadine project.

Unless the Company acquires or develops other significant gold-producing assets, the Company will continue to be dependent on its operations at the Meadowbank mine for a substantial portion of its gold production and cash flow provided by operating activities. The Company's current life of mine plans for the Meadowbank mine contemplates the final year of gold production in 2017, and there can be no assurance that the Company's current exploration and development programs at Meadowbank (including the Amaruq advanced exploration property) or its other mining projects will result in any new economically viable mining operations or yield new mineral reserves to replace and expand current mineral reserves.

The Company may experience difficulties operating its Meadowbank mine and developing the Meliadine project as a result of their remote location.

The Meadowbank mine, which is the Company`s largest mine in terms of production and operating margin, is located in the Kivalliq District of Nunavut in northern Canada, approximately 70 kilometres north of Baker Lake. In addition, the Amaruq property, located 50 kilometres northwest of the Meadowbank mine, one of the Company's advanced exploration properties, is being considered as a possible satellite operation to the Meadowbank mine. The closest major city to the Meadowbank mine is Winnipeg, Manitoba, approximately 1,500 kilometres to the south. The Company constructed a 110-kilometre all-weather road from Baker Lake, which provides summer shipping access via Hudson Bay to the Meadowbank mine. However, the Company's operations are constrained by the remoteness of the mine, particularly as the port of Baker Lake is only accessible approximately 2.5 months per year. Most of the materials that the Company requires for the operation of the Meadowbank mine must be transported through the port of Baker Lake during this shipping season, which may be further truncated due to weather conditions. If the Company is unable to acquire and transport necessary supplies during this time, it may result in a slowdown or stoppage of operations at the Meadowbank

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mine. Furthermore, if major equipment fails, items necessary to replace or repair such equipment may have to be shipped through Baker Lake during this window. Failure to have available the necessary materials required for operations or to repair or replace malfunctioning equipment at the Meadowbank mine may require the slowdown or stoppage of operations. For example, a March 2011 fire at the kitchen facilities of the Meadowbank mine required operations to be reduced at the mine, which resulted in gold production at the mine being below expected levels in 2011.

The Company's Meliadine project, 290 kilometres southeast of the Meadowbank mine, is also located in the Kivalliq District of Nunavut, approximately 25 kilometres northwest of the hamlet of Rankin Inlet on the west coast of Hudson Bay. Most of the materials that the Company requires to operate the advanced exploration program, and may require if it determines to build a mine in the future, must be transported through the port of Rankin Inlet during its approximately 14-week shipping season. If the Company cannot identify and procure suitable equipment and materials within a timeframe that permits transporting them to the project within this shipping season, it could result in delays and/or cost increases in the exploration program and, if the Company determines to build a mine, any construction or development on the property.

The remoteness of the Meadowbank mine and Meliadine project also necessitates the use of fly-in/fly-out camps for the accommodation of site employees and contractors, which may have an impact on the Company's ability to attract and retain qualified mining, exploration and construction personnel. If the Company is unable to attract and retain sufficient personnel or contractors on a timely basis, the Company's operations at the Meadowbank mine and future development plans at the Meliadine project may be adversely affected.

If the Company experiences mining accidents or other adverse conditions, the Company's mining operations may yield less gold than indicated by its estimated gold production.

The Company's gold production may fall below estimated levels as a result of mining accidents such as cave-ins, rock falls, rock bursts, pit wall failures, fires or flooding or as a result of other operational problems such as a failure of a production hoist, autoclave, filter press or semi-autogenous grinding mill. In addition, production may be reduced if, during the course of mining or processing, unfavourable weather conditions, ground conditions, high geomechanical stress areas or seismic activity are encountered, ore grades are lower than expected, the physical or metallurgical characteristics of the ore are less amenable than expected to mining or treatment, dilution increases, electrical power is interrupted or heap leach processing results in containment discharge. While the Company met production forecasts in 2014, it failed to do so in six of the previous ten years primarily due to: higher than expected dilution in 2004 at LaRonde; increased stress levels in a sill pillar requiring the temporary closure of production sublevels in 2005 at LaRonde; delays in the commissioning of the Goldex production hoist and the Kittila autoclave in 2008; and autoclave issues at Kittila, filtering issues at Pinos Altos and dilution issues at Lapa in 2009. In 2010, gold production was below the initial anticipated range primarily as a result of lower throughput at the Meadowbank mine mill due to a bottleneck in the crushing circuit and continued autoclave issues at the Kittila mine in the first half of the year. In 2011, gold production was below the initial anticipated range primarily as a result of suspension of mining operations at the Goldex mine due to geotechnical concerns with the rock above the mining horizon, a fire in the Meadowbank mine kitchen complex that negatively impacted production, and lower than expected grades at the Meadowbank and LaRonde mines. Although gold production since 2012 has exceeded the Company's forecasts, gold production in 2012 was negatively impacted due to the temporary suspension of heap leach operations at the Creston Mascota deposit at Pinos Altos as a result of issues with the phase one leach pad liner, gold production in 2013 was negatively impacted due to an extended maintenance shutdown at Kittila during the second quarter, during which the mine only operated for 14 days, and a 16-day unplanned shutdown related to the LaRonde hoist drive and gold production in 2014 was negatively impacted due to ten days of downtime resulting from a production hoist drive failure. Occurrences of this nature and other accidents, adverse conditions or operational problems in future years may result in the Company's failure to achieve current or future production estimates.

The Company's total cash costs and all-in sustaining costs per ounce of gold production depend, in part, on external factors that are subject to fluctuation and, if such costs increase, some or all of the Company's activities may become unprofitable.

The Company's total cash costs per ounce and all-in sustaining costs per ounce of gold are dependent on a number of factors, including the exchange rate between the U.S. dollar and the Canadian dollar, Euro or Mexican peso, smelting and refining charges, production royalties, the price of gold and byproduct metals (when calculated on a by-product basis) and the cost of inputs used in mining operations. At the LaRonde mine, the Company's total cash costs and all-in sustaining costs per ounce of production (when calculated on a by-product basis) are affected by the prices and production levels of byproduct zinc, silver and copper, the revenue from which is offset against the cost of gold production. At the Canadian

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Malartic mine, the Company's total cash costs and all-in sustaining costs per ounce of production (when calculated on a by-product basis) are affected by the prices and production levels of byproduct silver, the revenue from which is offset against the cost of gold production. Total cash costs and all-in sustaining costs per ounce from the Company's operations at the Pinos Altos and La India mines are affected by the exchange rate between the U.S. dollar and the Mexican peso and the price and (when calculated on a by-product basis) production level of byproduct silver, the revenue from which is offset against the cost of gold production. Total cash costs and all-in sustaining costs per ounce from the Company's operations at its mines in Canada and the Kittila mine are affected by changes in the exchange rates between the U.S. dollar and the Canadian dollar and the Euro, respectively. Total cash costs and all-in sustaining costs per ounce at all of the Company's mines are also affected by the costs of inputs used in mining operations, including labour (including contractors), steel, chemical reagents and energy. All of these factors are beyond the Company's control. If the Company's total cash costs or all-in sustaining costs per ounce of gold rise above the market price of gold and remain so for any sustained period, the Company may experience losses and may curtail or suspend some or all of its exploration, development and mining activities.

Total cash costs and all-in sustaining costs per ounce are not recognized measures under US GAAP or IFRS, and this data may not be comparable to data presented by other gold producers. Management uses these generally accepted industry measures in evaluating operating performance and believes that they are realistic indicators of such performance and useful in allowing year over year comparisons. These data also reflect the Company's ability to generate cash flow and operating income at various gold prices. This additional information should be considered together with other data prepared in accordance with US GAAP or IFRS, as the case may be, and is not necessarily indicative of operating costs or cash flow measures prepared in accordance with US GAAP or IFRS. See the Annual MD&A for reconciliation of total cash costs and all-in sustaining costs per ounce and minesite costs per tonne to their closest IFRS measure and "Introductory Notes – Note to Investors Concerning Certain Measures of Performance" for a discussion of non-GAAP measures.

The Company's recently opened mines, mine construction projects and expansion projects are subject to risks associated with new mine development, which may result in delays in the start-up of mining operations, delays in existing operations and unanticipated costs.

The Company's production forecasts are based on full production being achieved at all of its mines, and the Company's ability to achieve and maintain full production rates at these mines is subject to a number of risks and uncertainties. Production from these mines in 2015 may be lower than anticipated if the anticipated full production rate cannot be achieved.

The LaRonde mine extension, which commenced operation in late 2011, is one of the deepest operations in the Western Hemisphere with an expected maximum depth of 3,110 metres below the surface and, in 2015, 79% of the LaRonde mine's production is anticipated to be from the LaRonde mine extension. The operations of the LaRonde mine extension rely on new infrastructure for hauling ore and materials to the surface, including a winze (or internal shaft) and a series of ramps linking mining deposits to the Penna Shaft that services current operations at the LaRonde mine. The depth of the operations poses significant challenges to the Company, such as geomechanical and seismic risks and ventilation and air conditioning requirements, which may result in difficulties and delays in achieving gold production objectives. Operations at the lower level of the LaRonde mine are subject to high levels of geomechanical stress and there are few resources available to assist the Company in modelling the geomechanical conditions at these depths, which may result in the Company not being able to extract the ore at these levels as currently contemplated. In 2012, challenges associated with excess heat and congestion at the lower parts of the mine delayed the ramp up of production and in 2013, throughput at the LaRonde mine was reduced as a result of 16 days of unplanned shut down to the hoist drive. In 2014, ten days of downtime resulting from a production hoist drive failure resulted in annual production at LaRonde being approximately 10,000 ounces below the Company`s expectations. The LaRonde mine extension has not yet begun to operate at expected steady-state levels.

The further development of the Kittila and Pinos Altos mines, as well as the development of the new mining zones at the Goldex mine, requires the construction and operation of new underground mining infrastructure and, at Kittila, milling operations were required to be expanded. The construction and operation of underground mining facilities and the expansion of milling facilities are subject to a number of risks, including unforeseen geological formations, implementation of new mining or milling processes, delays in obtaining required construction, environmental or operating permits and engineering and mine or mill design adjustments.

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Mineral reserve and mineral resource estimates are only estimates and such estimates may not accurately reflect future mineral recovery.

The figures for mineral reserves and mineral resources published by the Company are estimates and no assurance can be given that the anticipated tonnages and grades will be achieved or that the indicated level of recovery of gold will be realized. Mineral reserve and resource estimates are based on gold recoveries in small scale laboratory tests and may not be indicative of the mineralization in the entire orebody and the Company may not be able to achieve similar results in larger scale tests under on-site conditions or during production. The ore grade actually recovered by the Company may differ from the estimated grades of the mineral reserves and mineral resources. The estimates of mineral reserves and mineral resources have been determined based on assumed metal prices, foreign exchange rates and operating costs. For example, the Company has estimated proven and probable mineral reserves based on, among other things, a $1,150 per ounce gold price ($1,300 for Canadian Malartic). The monthly average gold price has been above $1,150 per ounce from May 2010; however, prior to that time, monthly average gold prices were below $1,150 per ounce. Prolonged declines in the market price of gold (or applicable byproduct metal prices) may render mineral reserves containing relatively lower grades of mineralization uneconomical to recover and could materially reduce the Company's mineral reserves. Should such reductions occur, the Company may be required to take a material write-down of its investment in mining properties, reduce the carrying value of one or more of its assets or delay or discontinue production or the development of new projects, resulting in increased net losses and reduced cash flow. The Company used an assumed $1,300 gold price to test for impairment of its mines and concluded no impairments existed as at December 31, 2014. Market price fluctuations of gold (or applicable byproduct metal prices), as well as increased production costs or reduced recovery rates, may render mineral reserves containing relatively lower grades of mineralization uneconomical to recover and may ultimately result in a restatement of mineral resources. Short-term factors relating to the mineral reserve, such as the need for orderly development of orebodies or the processing of new or different grades, may impair the profitability of a mine in any particular accounting period.

Mineral resource estimates for properties that have not commenced production or at deposits that have not yet been exploited are based, in most instances, on very limited and widely spaced drill hole information, which is not necessarily indicative of conditions between and around the drill holes. Accordingly, such mineral resource estimates may require revision as more drilling information becomes available or as actual production experience is gained.

The Company may experience problems in executing acquisitions or managing and integrating any completed acquisitions with its existing operations.

The Company regularly evaluates opportunities to acquire securities or assets of other mining businesses. Such acquisitions may be significant in size, may change the scale of the Company's business and may expose the Company to new geographic, political, operating, financial or geological risks. The Company's success in its acquisition activities depends on its ability to identify suitable acquisition candidates, acquire them on acceptable terms and integrate their operations successfully with those of the Company. Any acquisition would be accompanied by risks, such as: the difficulty of assimilating the operations and personnel of any acquired businesses; the potential disruption of the Company's ongoing business; the inability of management to maximize the financial and strategic position of the Company through the successful integration of acquired assets and businesses; the maintenance of uniform standards, controls, procedures and policies; the impairment of relationships with employees, customers and contractors as a result of any integration of new management personnel; and the potential unknown liabilities (including any prior bribery or corruption activities) associated with acquired assets and businesses. In addition, the Company may need additional capital to finance an acquisition. Debt financing related to any acquisition may expose the Company to the risks related to increased leverage, while equity financing may cause existing shareholders to suffer dilution. The Company is permitted under the terms of its unsecured revolving bank credit facility and its guaranteed senior unsecured notes referred to under "Material Contracts" below to incur additional unsecured indebtedness, provided that it maintains certain financial ratios and meets financial condition covenants and, in the case of the bank credit facility, that no event of default under the bank credit facility has occurred and is continuing, or would occur as a result of the incurrence or assumption of such indebtedness. There can be no assurance that the Company would be successful in overcoming these or any other problems encountered in connection with such acquisitions.

The Company may experience operational difficulties at its foreign operations.

The Company's operations include a mine in Finland and two mines in northern Mexico. Collectively, these mines accounted for approximately 30% of the Company's gold production in 2014 and are expected to account for 31% of the Company's gold production in 2015. These operations are subject to various levels of political, economic and other risks

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and uncertainties that are different from those encountered at the Company's Canadian properties. These risks and uncertainties vary from country to country and may include: extreme fluctuations in currency exchange rates; high rates of inflation; labour unrest; risks of war or civil unrest; expropriation and nationalization; renegotiation or nullification of existing concessions, licences, permits and contracts; illegal mining; corruption; restrictions on foreign exchange and repatriation; hostage taking; changing political conditions; and currency controls. In addition, the Company must comply with multiple and potentially conflicting regulations in Canada, the United States, Finland and Mexico, including export requirements, taxes, tariffs, import duties and other trade barriers, as well as health, safety and environmental requirements.

Changes, if any, in mining or investment policies or shifts in political attitude in Finland or Mexico may adversely affect the Company's operations or profitability. Operations may be affected in varying degrees by government regulations with respect to matters including restrictions on production, price controls, export controls, currency controls or restrictions, currency remittance, income and other taxes, expropriation of property, foreign investment, maintenance of claims, environmental legislation, land use, land claims of local people, water use and mine safety. Failure to comply strictly with applicable laws, regulations and local practices relating to mineral rights applications and tenure could result in loss, reduction or expropriation of entitlements or the imposition of additional local or foreign parties as joint venture partners with carried or other interests.

In addition, Finland and Mexico have significantly different laws and regulations than Canada and there are cultural and language differences between these countries and Canada. Also, the Company faces challenges inherent in efficiently managing employees over large geographical distances, including the challenges of staffing and managing operations in several international locations and implementing appropriate systems, policies, benefits and compliance programs. These challenges may divert management's attention to the detriment of the Company's other operations. There can be no assurance that difficulties associated with the Company's foreign operations can be successfully managed.

In the future, the Company may choose to operate in foreign jurisdictions other than Finland and Mexico. Such operations would inherently be subject to various levels of political, economic and other risks and uncertainties that are different from those encountered at the Company's Canadian, Finnish and Mexican properties.

The Company is subject to the risks normally associated with the conduct of joint operations.

The Company holds an indirect 50% interest in the Canadian Malartic mine through the Canadian Malartic GP, with the remaining interest in this property being held indirectly by Yamana. The Company's interest in the Canadian Malartic mine is subject to the risks normally associated with the conduct of partnerships and other joint operations. The existence or occurrence of one or more of the following circumstances and events could have a material adverse effect on Company's profitability or the viability of its interests held through joint operations, which could have a material adverse effect on the Company's financial performance and results of operations: (i) lack of control over the joint operations and disagreement with partners on how to explore, develop and operate mines efficiently; (ii) inability to exert influence over certain strategic decisions made in respect of jointly held properties; (iii) inability of partners to meet their obligations to the joint operation or third parties; (iv) litigation between joint venture partners regarding joint operation matters; and (v) liability that might accrue to partners as a result of the failure of the joint venture or general partnership to satisfy their obligations. The Company may enter into additional joint ventures or partnerships in the future.

To the extent that the Company is not the operator of its joint venture properties, the success of any operations will be dependent on the operators for the timing of activities related to these properties and the Company will be largely unable to direct or control the activities of the operators. The Company is subject to the decisions made by the operator in the operation of the property, and will rely on the operators for accurate information about the properties. Although the Company expects that the operators of the properties to which it owns an interest will operate these properties with the highest standards and in accordance with the respective operating agreements, there can be no assurance that all decisions of the operators will achieve the expected goals.

Fluctuations in foreign currency exchange rates in relation to the U.S. dollar may adversely affect the Company's results of operations.

The Company's operating results and cash flow are significantly affected by changes in the U.S. dollar/Canadian dollar exchange rate. All of the Company's revenues are earned in U.S. dollars but the majority of its operating costs at the LaRonde, Lapa, Goldex, Canadian Malartic and Meadowbank mines, as well as the Meliadine project, are incurred in Canadian dollars. The U.S. dollar/Canadian dollar exchange rate has fluctuated significantly over the last several years. From January 1, 2010 to January 1, 2015, the Noon Buying Rate fluctuated from a high of C$1.1643 per $1.00 to a low of

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C$0.9949 per $1.00. Historical fluctuations in the U.S. dollar/Canadian dollar exchange rate are not necessarily indicative of future exchange rate fluctuations. Based on the Company's anticipated 2015 after-tax operating results, a 10% change in the U.S. dollar/Canadian dollar exchange rate from the 2014 market average exchange rate would affect net income by approximately $0.29 per share. To attempt to mitigate its foreign exchange risk and minimize the impact of exchange rate movements on operating results and cash flow, the Company has periodically used foreign currency options and forward foreign exchange contracts to purchase Canadian dollars; however, there can be no assurance that these strategies will be effective. See "Risk Profile – Metal Prices and Foreign Currencies" in the Annual MD&A for a description of the assumptions underlying the sensitivity and the strategies used to mitigate the effects of risks. In addition, the majority of the Company's operating costs at the Kittila mine are incurred in Euros and a significant portion of operating costs at the Pinos Altos and La India mines are incurred in Mexican pesos. Each of these currencies has fluctuated significantly against the U.S. dollar over the past several years. There can be no assurance that the Company's foreign exchange derivatives strategies will be successful or that foreign exchange fluctuations will not materially adversely affect the Company's financial performance and results of operations.

The Company estimates the recoverable amount of long-lived assets and goodwill using assumptions and if the carrying value of an asset or goodwill is then determined to be greater than its actual recoverable amount, an impairment is recognized reducing the Company's earnings.

The Company conducts annual impairment assessments of goodwill and at the end of each reporting period the Company assesses whether there is any indication that long-lived assets (such as mining properties and plant and equipment) may be impaired. If an indicator of impairment exists, the recoverable amount of the asset is calculated in order to determine if any impairment loss is required. Testing for impairment involves a comparison of the recoverable amount of the cash generating unit to its carrying value. An impairment charge is recognized for any excess of the carrying amount of the asset group or reporting unit over its recoverable amount. As at December 31, 2014, the Company tested for impairment of its mines and projects and concluded no impairments existed.

The assessment for impairment is subjective and requires management to make estimates and assumptions for a number of factors including estimates of production levels, mineral resources and reserves, operating costs and capital expenditures reflected in the Company's life-of-mine plans, as well as economic factors beyond management's control, such as gold prices, discount rates and observable net asset value multiples. Should management's estimates and assumptions regarding these factors be incorrect, the Company may be required to realize impairment charges, which will reduce the Company's earnings. The timing and amount of such impairment charges is difficult to predict.

The Company's recently completed transition to reporting its financial results under IFRS may also have an effect on the frequency and amount of impairment charges. Under US GAAP, a two-step approach is used for long-lived asset impairment testing whereby long-lived assets are first tested for recoverability based on their expected undiscounted cash flows. If a long-lived asset's expected undiscounted cash flow exceeds the recorded carrying amount, no impairment charge is required. If the expected undiscounted cash flow is lower than the recorded carrying amount, the long-lived assets are written down to their estimated fair value. IFRS prescribes a one-step approach for asset impairment testing and measurement whereby an asset's recoverable amount is compared directly against its recorded carrying amount. Under IFRS, an asset's recoverable amount is determined as the higher of the estimated fair value less costs to sell or value in use (which is measured using discounted cash flows). If an asset's recoverable amount is less than the recorded carrying amount, an impairment charge is required. The difference in the approach to asset impairment testing and measurement may result in more frequent impairment charges under IFRS, where asset carrying values previously supported under US GAAP on an undiscounted cash flow basis cannot be supported on a discounted cash flow basis.

If the Company fails to comply with restrictive covenants in its debt instruments, the Company's ability to borrow under its unsecured revolving bank credit facility could be limited and the Company may then default under other debt agreements, which could harm the Company's business.

The Company's unsecured revolving bank credit facility limits, among other things, the Company's ability to permit the creation of certain liens, make investments other than investments in businesses related to mining or a business ancillary or complementary to mining, dispose of the Company's material assets or, in certain circumstances, pay dividends. In addition, the Company's guaranteed senior unsecured notes limit, among other things, the Company's ability to permit the creation of certain liens, carry on business unrelated to mining or dispose of the Company's material assets. The bank credit facility and the guaranteed senior unsecured notes also require the Company to maintain specified financial ratios and meet financial condition covenants. Events beyond the Company's control, including changes in general economic and business conditions, may affect the Company's ability to satisfy these covenants, which could result in a default under

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the bank credit facility or the guaranteed senior unsecured notes and, by extension, the Company's uncommitted letter of credit facility. At March 12, 2015, there was approximately $471 million drawn under the bank credit facility (including outstanding letters of credit) and approximately C$181 million drawn under the letter of credit facility. If an event of default under the unsecured revolving bank credit facility or the guaranteed senior unsecured notes occurs, the Company would be unable to draw down further on the bank credit facility and the lenders could elect to declare all principal amounts outstanding thereunder at such time, together with accrued interest, to be immediately due and it could cause an event of default under the Company's guaranteed senior unsecured notes and the uncommitted letter of credit facility. An event of default under the unsecured revolving bank credit facility, the guaranteed senior unsecured notes or the uncommitted letter of credit facility may also give rise to an event of default under other existing and future debt agreements and, in such event, the Company may not have sufficient funds to repay amounts owing under such agreements.

The exploration of mineral properties is highly speculative, involves substantial expenditures and is frequently unsuccessful.

The Company's profitability is significantly affected by the costs and results of its exploration and development programs. As mines have limited lives based on proven and probable mineral reserves, the Company actively seeks to replace and expand its mineral reserves, primarily through exploration and development as well as through strategic acquisitions. Exploration for minerals is highly speculative in nature, involves many risks and is frequently unsuccessful. Among the many uncertainties inherent in any gold exploration and development program are the location of economic orebodies, the development of appropriate metallurgical processes, the receipt of necessary governmental permits, the acceptance or support of local stakeholders and the construction of mining and processing facilities. Substantial expenditures are required to pursue such exploration and development activities. Assuming discovery of an economic orebody, depending on the type of mining operation involved, several years may elapse from the initial phases of drilling until commercial operations are commenced and during such time the economic feasibility of production may change. Accordingly, there can be no assurance that the Company's current or future exploration and development programs will result in any new economically viable mining operations or yield new mineral reserves to replace and expand current mineral reserves.

The mining industry is highly competitive, and the Company may not be successful in competing for new mining properties.

There is a limited supply of desirable mineral properties available for claim staking, leasing, exploration or acquisition in the areas where the Company contemplates conducting activities. Many companies and individuals are engaged in the mining business, including large, established mining companies with substantial capabilities and long earnings records. The Company may be at a competitive disadvantage in acquiring mining properties, as it must compete with these companies and individuals, some of which have greater financial resources and larger technical staff than the Company. Accordingly, there can be no assurance that the Company will be able to compete successfully for new mining properties.

The success of the Company is dependent on good relations with its employees and on its ability to attract and retain employees and key personnel.

Production at the Company's mines and mine projects is dependent on the efforts of the Company's employees and contractors. The Company competes with mining and other companies on a global basis to attract and retain employees at all levels with appropriate technical skills and operating experience necessary to operate its mines. Relationships between the Company and its employees may be affected by changes in the scheme of labour relations that may be introduced by relevant government authorities in the jurisdictions that the Company operates. Changes in applicable legislation or in the relationship between the Company and its employees or contractors may have a material adverse effect on the Company's business, results of operations and financial condition.

The Company is also dependent on a number of key management personnel. The loss of the services of one or more of such key management personnel could have a material adverse effect on the Company. The Company's ability to manage its operating, development, exploration and financing activities will depend in large part on the efforts of these individuals.

The Company faces significant competition to attract and retain qualified personnel and there can be no assurance that the Company will be able to attract and retain such personnel.

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The Company may have difficulty financing its additional capital requirements for its planned mine construction, exploration and development.

The capital required for operations (including potential expansions) and the development of the Meliadine project and the exploration and development of the Company's properties, including continuing exploration and development projects in Quebec, Nunavut, Finland, Sweden, Mexico and Nevada, will require substantial expenditures. The Company expects that capital expenditures will be approximately $481 million in 2015. As at March 12, 2015, the Company had approximately $729 million available to be drawn down under its bank credit facility. Based on current funding available to the Company and expected cash from operations, the Company believes it has sufficient funds available to fund its projected 2015 capital expenditures for all of its current properties. However, if cash from operations is lower than expected or capital costs at these mines or projects exceed current estimates, if the Company incurs major unanticipated expenses related to exploration, development or maintenance of its properties, or if advances from the bank credit facility are unavailable, the Company may be required to seek additional financing to maintain its capital expenditures at planned levels. In addition, the Company will have additional capital requirements to the extent that it decides to expand its present operations and exploration activities, construct additional mining and processing operations at any of its properties or take advantage of opportunities for acquisitions, joint ventures or other business opportunities that may arise. Additional financing may not be available when needed or, if available, the terms of such financing may not be favourable to the Company and, if raised by offering equity securities, or securities convertible into equity securities, any additional financing may involve substantial dilution to existing shareholders. Failure to obtain any financing necessary for the Company's capital expenditure plans may result in a delay or indefinite postponement of exploration, development or production on any or all of the Company's properties, which may have a material adverse effect on the Company's business, financial condition and results of operations.

The continuing weakness in the global credit and capital markets could have a material adverse effect on the Company's liquidity and capital resources.

The credit and capital markets experienced significant deterioration in 2008, including, without limitation, the failure of significant and established financial institutions in the United States and abroad, and have continued to show weakness and volatility. These severe disruptions in the credit and capital markets continue to have a negative impact on the availability and terms of credit and capital. If uncertainties in these markets continue, or these markets deteriorate further, it could have a material adverse effect on the Company's liquidity, ability to raise capital and costs of capital. Failure to raise capital when needed or on reasonable terms may have a material adverse effect on the Company's business, financial condition and results of operations.

The Company's properties and mining operations may be subject to rights or claims of indigenous groups and the assertion of such rights or claims may impact the Company's ability to develop or operate its mining properties.

The Company operates in some areas currently or traditionally inhabited or used by indigenous peoples and subject to indigenous rights or claims. Accordingly, the Company is subject to the risk that one or more groups may oppose the continued operation, further development or new development of the Company's current or future properties. Such opposition may be directed through legal or administrative proceedings, or though protests or other campaigns against the Company's activities. Any such actions may have an adverse impact on the Company's operations. Although the Company attempts to develop and maintain good working relationships with all stakeholders, there can be no assurance that these relationships can be successfully managed.

The Company's operations are subject to numerous laws and extensive government regulations which may require significant expenditures or cause a reduction in levels of production, delay or the prevention of the development of new mining properties or otherwise cause the Company to incur costs that adversely affect the Company's results of operations.

The Company's mining and mineral processing operations, exploration activities and properties are subject to the laws and regulations of federal, provincial, state and local governments in the jurisdictions in which the Company operates. These laws and regulations are extensive and govern prospecting, exploration, development, production, exports, taxes, labour standards, occupational health and safety, waste disposal and tailings management, toxic substances, environmental protection, mine safety and other matters. Compliance with such laws and regulations increases the costs of planning, designing, drilling, developing, constructing, operating, managing, closing, reclaiming and rehabilitating mines and other facilities. New laws or regulations, amendments to current laws and regulations governing operations and activities on mining properties or more stringent implementation or interpretation thereof could have a material adverse effect on the

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Company, cause a reduction in levels of production and delay or prevent the development of new mining properties. Regulatory enforcement, in the form of infraction or compliance notices, has occurred at some of the Company's mines and while the current risks related to such enforcement are not expected to be material, the risk of material fines or corrective action cannot be ruled out in the future.

Due to the nature of the Company's mining operations, the Company may face liability, delays and increased production costs from environmental and industrial accidents and pollution, and the Company's insurance coverage may prove inadequate to satisfy future claims against the Company.

The business of gold mining is generally subject to risks and hazards, including environmental hazards (including hazardous substances such as cyanide), industrial accidents, unusual or unexpected rock formations, changes in the regulatory environment, cave-ins, rock bursts, rock falls, pit wall failures and flooding and gold bullion losses. Such occurrences could result in damage to, or destruction of, mineral properties or production facilities, personal injury or death, environmental damage, delays in mining, monetary losses and possible legal liability. As well, risks may arise with respect to the management of tailings, waste rock, mine closure and management of closed mine sites (whether the Company operated the mine site or acquired it after operations were conducted by others). The Company carries insurance to protect itself against certain risks of mining and processing in amounts that it considers to be adequate but which may not provide adequate coverage in certain unforeseen circumstances. The Company may also become subject to liability for pollution, cave-ins or other hazards against which it cannot insure or against which it has elected not to insure because of high premium costs or other reasons, or the Company may become subject to liabilities which exceed policy limits. In these circumstances, the Company may incur significant costs that could have a material adverse effect on its financial performance and results of operations. Financial assurances may also be required with respect to closure and rehabilitation costs.

Increased regulation of greenhouse gas emissions and climate change issues may adversely affect the Company's operations.

The Company operates in jurisdictions where regulatory requirements have taken effect or are proposed to monitor, report and/or reduce greenhouse gas emissions. Increased regulation of greenhouse gas emissions and climate change issues may adversely affect the Company's operations. For example, Canada has targeted to reduce greenhouse gas emissions by 17% from 2005 levels by 2020 through a sector-by-sector approach and intends to participate in the negotiation of a new international climate treaty, which would come into force in 2020. Canada's federal and provincial regulations also impose mandatory greenhouse gas emissions reporting requirements and Quebec mines are subject to a cap-and-trade regulation. Similarly, Finland participates in the European Union's cap-and-trade system and Mexico has enacted climate change legislation with a greenhouse gas emission reduction target of 30% (from business-as-usual levels) by 2020.

The Company monitors and reports annually its direct and indirect greenhouse gas emissions to the international Carbon Disclosure Project. In Quebec, the Company uses primarily hydroelectric power and is not a large producer of greenhouse gases. As a result, Quebec's new regulatory requirements are not expected to have a material adverse effect on the Company. The Meadowbank mine produces approximately 132,000 tonnes of greenhouse gases per year mostly from the production of electricity from diesel power generation, which is approximately 47% of the Company's total greenhouse gas emissions. It is expected that any mining operation at the Meliadine project will also use diesel power generation. The Pinos Altos mine purchases electricity that is largely fossil-fuel generated and is the Company's second highest greenhouse gas producer (at about 86,000 tonnes of greenhouse gases per year), which is approximately 22% of the Company's total direct greenhouse gas emissions. The LaRonde mine, with approximately 31,000 tonnes per year, is the Company's third highest producer of greenhouse gases. None of the Company's other operations emit more than 20,000 tonnes of greenhouse gases per year. While these evolving regulatory requirements in respect of greenhouse gases and the additional costs required to comply are not expected to have a material adverse effect on the Company's operations, such requirements may not be adopted as currently proposed, may be amended or may have unexpected effects on the Company and, as a result, may have a material adverse effect on the Company's financial performance and its results of operations.

Title to the Company's properties may be uncertain and subject to risks.

The acquisition of title to mineral properties is a very detailed and time-consuming process. Title to, and the area of, mineral concessions may be disputed. Although the Company believes it has taken reasonable measures to ensure proper title to its properties, there is no guarantee that title to any of its properties will not be challenged or impaired. Third parties may have valid claims on underlying portions of the Company's interests, including prior unregistered liens, agreements,

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transfers or claims, including land claims by indigenous groups, and title may be affected by, among other things, undetected defects. In addition, although the Company believes that it has sufficient surface rights for its operations, the Company may be unable to operate its properties as permitted or to enforce its rights in respect of its properties.

The Company is subject to the risk of litigation, the causes and costs of which cannot be known.

The Company is subject to litigation arising in the normal course of business and may be involved in disputes with other parties in the future which may result in litigation. The causes of potential future litigation cannot be known and may arise from, among other things, business activities, environmental laws, volatility in stock price or failure or alleged failure to comply with disclosure obligations. Currently, the Company is the subject of certain class action lawsuits relating to the Company's disclosure prior to the suspension of mining operations at the Goldex mine in October 2011, as described under "Legal Proceedings and Regulatory Actions" below. The results of litigation cannot be predicted with certainty. If the Company is unable to resolve these disputes favourably, either by judicial determination or settlement, it may have a material adverse effect on the Company's financial performance and results of operations.

In the event of a dispute involving the foreign operations of the Company, the Company may be subject to the exclusive jurisdiction of foreign courts or may not be successful in subjecting foreign persons to the jurisdiction of courts in Canada. The Company's ability to enforce its rights could have an adverse effect on its future cash flows, earnings, results of operations and financial condition.

The use of derivative instruments for the Company's byproduct metal production may prevent gains from being realized from subsequent byproduct metal price increases.

While the Company's general policy is not to sell forward its future gold production, the Company has used, and may in the future use, various byproduct metal derivative strategies, such as selling future contracts or purchasing put options. The Company continually evaluates the potential short and long term benefits of engaging in such derivative strategies based upon current market conditions. No assurance can be given, however, that the use of byproduct metal derivative strategies will benefit the Company in the future. There is a possibility that the Company could lock in forward deliveries at prices lower than the market price at the time of delivery. In addition, the Company could fail to produce enough byproduct metals to offset its forward delivery obligations, requiring the Company to purchase the metal in the spot market at higher prices to fulfill its delivery obligations or, for cash settled contracts, make cash payments to counterparties in excess of byproduct revenue. If the Company is locked into a lower than market price forward contract or has to buy additional quantities at higher prices, its net income could be adversely affected. None of the current contracts establishing the byproduct metal derivatives positions qualify for hedge accounting treatment under IFRS and therefore any year-end mark-to-market adjustments are recognized in the "Loss on derivative financial instruments" line item of the consolidated statements of income (loss) and comprehensive income. See "Risk Profile – Financial Instruments" in the Annual MD&A for additional information.

The trading price for the Company's securities is volatile.

The trading price of the Company's common shares has been and may continue to be subject to large fluctuations which may result in losses to investors. The trading price of the Company's common shares may increase or decrease in response to a number of events and factors, including:

•

changes in the market price of gold or other byproduct metals the Company sells;



•

events affecting economic circumstances in Canada, the United States and elsewhere;



•

trends in the mining industry and the markets in which the Company operates;



•

changes in financial estimates and recommendations by securities analysts;



•

acquisitions, divestitures and financings;



•

quarterly variations in operating results;



•

the operating and share price performance of other companies that investors may deem comparable; and



•

purchases or sales of large blocks of the Company's common shares or securities convertible into or exchangeable for the Company's common shares.

Wide price swings are currently common in the markets on which the Company's securities trade. This volatility may adversely affect the prices of the Company's common shares regardless of the Company's operating performance.

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The Company is subject to anti-corruption and anti-bribery laws.

The Company's operations are governed by, and involve interactions with, various levels of government in numerous countries. The Company is required to comply with anti-corruption and anti-bribery laws, including the Corruption of Foreign Public Officials Act (Canada) and the U.S. Foreign Corrupt Practices Act, as well as similar laws in the countries in which the Corporation conducts its business. Recently, there has been a general increase in the frequency of enforcement and the severity of penalties under such laws, resulting in greater scrutiny and punishment to companies convicted of violating anti-corruption and anti-bribery laws. The Company may be found liable for violations by not only its employees, but also by its third party agents. Although the Company has adopted a risk-based approach to mitigate such risks, including the implementation of policies to ensure compliance with such laws, such measures are not always effective in ensuring that the Company, its employees or third party agents will comply strictly with such laws. If the Company finds itself subject to an enforcement action or is found to be in violation of such laws, this may result in significant penalties, fines and/or sanctions imposed on the Company which could result in a material adverse effect on the Company's reputation, financial performance and results of operations.

The Company is dependent on information technology systems.

The Company's operations depend, in part, upon information technology systems. The Company`s information technology systems are subject to disruption, damage or failure from a number of sources, including, but not limited to, computer viruses, security breaches, natural disasters, power loss and defects in design. Although to date the Company has not experienced any material losses relating to information technology system disruptions, damage or failure, there can be no assurance that it will not incur such losses in future. Any of these and other events could result in information technology systems failures, operational delays, production downtimes, destruction or corruption of data, security breaches or other manipulation or improper use of the Company`s systems and networks, any of which could have adverse effects on the Company`s reputation, results of operations and financial performance.

The Company may not be able to comply with the requirements of Section 404 of the Sarbanes-Oxley Act.

Section 404 of the Sarbanes-Oxley Act of 2002 ("SOX") requires an annual assessment by management of the effectiveness of the Company's internal control over financial reporting. Section 404 of SOX also requires an annual attestation report by the Company's independent auditors addressing the effectiveness of the Company's internal control over financial reporting. The Company has completed its Section 404 assessment and received the auditors' attestation as of December 31, 2014.

If the Company fails to maintain the adequacy of its internal control over financial reporting, as such standards are modified, supplemented or amended from time to time, the Company may not be able to conclude that it has effective internal control over financial reporting in accordance with Section 404 of SOX. The Company's failure to satisfy the requirements of Section 404 of SOX on an ongoing, timely basis could result in the loss of investor confidence in the reliability of its financial statements, which in turn could harm the Company's business and negatively impact the trading price of its common shares or market value of its other securities. In addition, any failure to implement required new or improved controls, or difficulties encountered in their implementation, could harm the Company's operating results or cause it to fail to meet its reporting obligations. Future acquisitions of companies may provide the Company with challenges in implementing the required processes, procedures and controls in its acquired operations. Acquired companies may not have disclosure controls and procedures or internal control over financial reporting that are as thorough or effective as those required by securities laws currently applicable to the Company.

No evaluation can provide complete assurance that the Company's internal control over financial reporting will prevent misstatement due to error or fraud or will detect or uncover all control issues or instances of fraud, if any. The effectiveness of the Company's controls and procedures could also be limited by simple errors or faulty judgments. In addition, as the Company continues to expand, the challenges involved in maintaining adequate internal control over financial reporting will increase and will require that the Company continue to improve its internal control over financial reporting. The Company cannot be certain that it will be successful in continuing to comply with Section 404 of SOX.

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DIVIDENDS

The Company's current policy is to pay quarterly dividends on its common shares and, on February 11, 2015, the Company declared a quarterly dividend of $0.08 per common share, payable on March 16, 2015. In 2014, the dividend paid was $0.32 per common share (quarterly payments of $0.08 per common share). In 2013, the dividend paid was $0.88 per common share (quarterly payments of $0.22 per common share). In 2012, the dividend paid was $0.80 per common share (quarterly payments of $0.20 per common share). Although the Company expects to continue paying a cash dividend, future dividends will be at the discretion of the Board and will be subject to factors such as the Company's earnings, financial condition and capital requirements. The Company's bank credit facility contains a covenant that restricts the Company's ability to declare or pay dividends if certain events of default under the bank credit facility have occurred and are continuing.

DESCRIPTION OF CAPITAL STRUCTURE

The Company's authorized capital consists of an unlimited number of shares of one class designated as common shares. All outstanding common shares of the Company are fully paid and non-assessable. The holders of the common shares are entitled to one vote per share at meetings of shareholders and to receive dividends if, as and when declared by the directors of the Company. In the event of voluntary or involuntary liquidation, dissolution or winding-up of the Company, after payment of all outstanding debts, the remaining assets of the Company available for distribution would be distributed rateably to the holders of the common shares. Holders of the common shares of the Company have no pre-emptive, redemption, exchange or conversion rights. The Company may not create any class or series of shares or make any modification to the provisions attaching to the Company's common shares without the affirmative vote of two-thirds of the votes cast by the holders of the common shares.

RATINGS

The rating of the Company's notes (the "Notes") issued under the Note Purchase Agreements (as defined under "Material Contracts – Note Purchase Agreements") by the rating agency Dominion Bond Rating Service ("DBRS") as at December 31, 2014 is BBB (low) with a stable outlook.

DBRS's long-term credit ratings are on a rating scale that ranges from AAA to D, which represents the range from highest to lowest quality of securities rated. DBRS's BBB rating assigned to the Company's Notes is the fourth highest of the ten rating categories for long-term debt. Debt securities rated "BBB" are of adequate credit quality, and the capacity for the payment of financial obligations is considered acceptable. However, the obligor is fairly susceptible to adverse changes in financial and economic conditions, or there may be other adverse conditions present which reduce the strength of the obligor. A reference to "high" or "low" reflects the relative strength within the rating category. DBRS has also assigned a stable outlook to the rating, which indicates the direction DBRS considers the rating is headed should present trends continue.

The Company understands that the rating is based on, among other things, information furnished to the above rating agency by the Company and information obtained by the ratings agency from publicly available sources. The credit rating given to the Company's Notes by the rating agency is not a recommendation to buy, hold or sell debt instruments since such rating does not comment as to market price or suitability for a particular investor. There is no assurance that any rating will remain in effect for any given period of time or that any rating will not be revised or withdrawn entirely by a rating agency in the future if, in its judgment, circumstances so warrant. Credit ratings are intended to provide investors with: (i) an independent measure of the credit quality of an issue of securities; (ii) an indication of the likelihood of repayment for an issue of securities; and (iii) an indication of the capacity and willingness of the issuer to meet its financial obligations in accordance with the terms of those securities. The credit rating accorded to the Company's corporate debt may not reflect the potential impact of all risks on the value of debt instruments, including risks related to market or other factors discussed in this AIF. If the rating agency lowers the credit rating on the Company's corporate debt, particularly a downgrade below investment grade, it could adversely affect the Company's cost of financing and access to liquidity and capital. See also "Risk Factors".

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MARKET FOR SECURITIES

Common Shares

The Company's common shares are listed and traded on the TSX and on the New York Stock Exchange (the "NYSE") under the symbol "AEM". On March 12, 2015 the closing price of the common shares was C$36.19 on the TSX and $28.48 on the NYSE.

The following table sets forth the high and low sale prices and the average daily trading volume for the Company's common shares on the TSX and the NYSE since January 1, 2014.

		TSX						NYSE
		High (C$)		Low (C$)		Average Daily Volume		High ($)		Low ($)		Average Daily Volume
2014
January		35.36		28.21		1,215,000		31.67		25.98		2,793,100
February		39.00		34.12		1,393,500		34.98		30.77		2,989,600
March		39.30		33.12		983,100		35.46		29.85		2,042,400
April		35.12		29.27		1,338,100		32.03		26.58		2,483,200
May		36.70		31.83		944,000		33.69		28.97		2,049,700
June		41.15		32.48		1,342,200		38.53		29.74		1,977,800
July		45.92		39.89		1,188,200		42.41		36.60		2,056,800
August		44.12		40.05		734,200		40.40		36.48		1,526,600
September		40.79		32.31		1,184,000		37.38		28.84		2,553,800
October		37.48		25.05		1,151,400		33.25		22.20		3,173,800
November		31.07		25.16		1,316,400		27.67		22.08		3,673,700
December		30.21		25.24		1,182,500		26.33		21.65		2,799,900
2015
January		41.90		28.32		1,477,400		33.93		24.19		3,943,600
February		43.70		37.70		882,847		34.78		29.95		2,603,654
March (to March 12)		41.07		34.30		854,721		33.00		26.90		2,347,577

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DIRECTORS AND OFFICERS OF THE COMPANY

Directors

The following is a brief biography of each of the Company's directors:

Dr. Leanne M. Baker, of Sebastopol, California, is an independent director of Agnico Eagle. From November 2011 until June 2013, Dr. Baker was the President and Chief Executive Officer of Sutter Gold Mining Inc. Previously, Dr. Baker was employed by Salomon Smith Barney where she was one of the top-ranked mining sector equity analysts in the United States. Dr. Baker is a graduate of the Colorado School of Mines (M.S. and Ph.D. in mineral economics). Dr. Baker has been a director of Agnico Eagle since January 1, 2003, and is also a director of Sutter Gold Mining Inc. (a mining exploration company traded on the TSX Venture Exchange and the OTCQX), Reunion Gold Corporation (a mining exploration company traded on the TSX Venture Exchange) and McEwen Mining Inc. (a gold and silver producing company traded on the NYSE Arca and the TSX). Area of expertise: Corporate Finance and Mineral Economics.

Sean Boyd, CA, of Toronto, Ontario, is the Vice-Chairman, President and Chief Executive Officer and a director of Agnico Eagle. Mr. Boyd has been with Agnico Eagle since 1985. Prior to his appointment as Vice-Chairman, President and Chief Executive Officer in February 2012, Mr. Boyd served as Vice-Chairman and Chief Executive Officer from 2005 to 2012 and as President and Chief Executive Officer from 1998 to 2005, Vice-President and Chief Financial Officer from 1996 to 1998, Treasurer and Chief Financial Officer from 1990 to 1996, Secretary Treasurer during a portion of 1990 and Comptroller from 1985 to 1990. Prior to joining Agnico Eagle in 1985, he was a staff accountant with Clarkson Gordon (Ernst & Young). Mr. Boyd is a Chartered Accountant and a graduate of the University of Toronto (B.Comm.). Mr. Boyd has been a director of Agnico Eagle since April 14, 1998. Area of expertise: Executive Management and Finance.

Martine A. Celej, of Toronto, Ontario, is an independent director of Agnico Eagle. Ms. Celej is currently a Vice-President, Investment Advisor with RBC Dominion Securities and has been in the investment industry since 1989. She is a graduate of Victoria College at the University of Toronto (B.A. (Honours)). Ms. Celej became a director of Agnico Eagle on February 14, 2011. Area of expertise: Investment Management.

Robert J. Gemmell, of Toronto, Ontario, is an independent director of Agnico Eagle. Now retired, Mr. Gemmell spent 25 years as an investment banker in the United States and in Canada. Most recently, he was President and Chief Executive Officer of Citigroup Global Markets Canada and its predecessor companies (Salomon Brothers Canada and Salomon Smith Barney Canada) from 1996 to 2008. In addition, he was a member of the Global Operating Committee of Citigroup Global Markets from 2006 to 2008. Mr. Gemmell is a graduate of Cornell University (B.A.), Osgoode Hall Law School (LL.B.) and the Schulich School of Business (M.B.A.). Mr. Gemmell became a director of Agnico Eagle on January 1, 2011. Area of expertise: Corporate Finance and Business Strategy.

Bernard Kraft, CA, of Toronto, Ontario, is an independent director of Agnico Eagle. Mr. Kraft is a retired senior partner of the Toronto accounting firm Kraft, Berger LLP, Chartered Accountants and now serves as a consultant to that firm. He is also a principal in Kraft Yabrov Valuations Inc. Mr. Kraft is recognized as a Designated Specialist in Investigative and Forensic Accounting by the Canadian Institute of Chartered Accountants. Mr. Kraft is a member of the Canadian Institute of Chartered Business Valuators, the Association of Certified Fraud Examiners and the American Society of Appraisers. Mr. Kraft has been a director of Agnico Eagle since March 12, 1992, and is also a director and a member of the Audit Committee of Harte Gold Corp. Area of expertise: Audit and Accounting.

Mel Leiderman, FCPA, FCA, TEP, ICD.D, of Toronto, Ontario, is an independent director of Agnico Eagle. Mr. Leiderman is the senior partner of the Toronto accounting firm Lipton LLP, Chartered Accountants. He is a graduate of the University of Windsor (B.A.) and is a certified director of the Institute of Corporate Directors (ICD.D). He has been a director of Agnico Eagle since January 1, 2003 and is also a director and a chairman of the Audit Committee of Morguard North American Residential REIT. Area of expertise: Audit and Accounting.

Deborah McCombe, P. Geo.    of Toronto, Ontario, is an independent director of Agnico Eagle. Mrs. McCombe is the President and CEO of Roscoe Postle Associates Inc. ("RPA"). She has over 30 years' experience in exploration project management, feasibility studies, reserve estimation, due diligence studies and valuation studies. Prior to joining RPA, Ms. McCombe was Chief Mining Consultant for the Ontario Securities Commission and was involved in the development and implementation of NI 43-101. She is actively involved in industry associations as Chair of Committee for Mineral Reserves International Reporting Standards – (CIM), President of the Association of Professional Geoscientists of Ontario (2010 – 2011); a Director of the Prospectors and Developers Association of Canada (1999 – 2011); a CIM Distinguished Lecturer on NI 43-101; a member of the CIM Standing Committee on Reserve Definitions and is a member of the Canadian Securities Administrators Mining Technical Advisory and Monitoring Committee. Ms. McCombe holds a degree

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in Geology from the University of Western Ontario. Ms. McCombe became a director of Agnico Eagle on February 12, 2014. Area of expertise: Executive Management and Mining.

James D. Nasso, ICD.D, of Toronto, Ontario, is Chairman of the Board of Directors and an independent director of Agnico Eagle. Mr. Nasso is now retired. Mr. Nasso is a graduate of St. Francis Xavier University (B.Comm.) and is a certified director of the Institute of Corporate Directors (ICD.D). Mr. Nasso has been a director of Agnico Eagle since June 27, 1986. Area of expertise: Management and Business Strategy.

Dr. Sean Riley, of Antigonish, Nova Scotia, is an independent director of Agnico Eagle. Now retired, Dr. Riley served as President of St. Francis Xavier University from 1996 to 2014. Prior to 1996, his career was in finance and management, first in corporate banking and later in manufacturing. Dr. Riley is a graduate of St. Francis Xavier University (B.A. (Honours)) and of Oxford University (M. Phil, D. Phil, International Relations). Dr. Riley became a director of Agnico Eagle on January 1, 2011. Area of Expertise: Management and Business Strategy.

J. Merfyn Roberts, CA, of London, England, is an independent director of Agnico Eagle. Mr. Roberts was a fund manager and investment advisor for more than 25 years and has been closely associated with the mining industry. From 2007 until his retirement in 2011, he was a senior fund manager with CQS Management Ltd. in London. Mr. Roberts is a graduate of Liverpool University (B.Sc., Geology) and Oxford University (M.Sc., Geochemistry) and is a member of the Institute of Chartered Accountants in England and Wales. He has been a director of Agnico Eagle since June 17, 2008, and is also a director and a member of the Audit Committee of Eastern Platinum Limited and Newport Exploration Limited and a director of Blackheath Resources Inc. Area of expertise: Investment Management.

Howard R. Stockford, P.Eng., of Toronto, Ontario, is an independent director of Agnico Eagle. Mr. Stockford is a retired mining executive with 50 years of experience in the industry. Most recently, he was Executive Vice-President of Aur Resources Inc. ("Aur") and a director of Aur from 1984 until August 2007, when it was taken over by Teck Cominco Limited. Mr. Stockford has previously served as President of the CIM and is a member of the Association of Professional Engineers of Ontario, the Prospectors and Developers Association of Canada and the Society of Economic Geologists. Mr. Stockford is a graduate of the Royal School of Mines, Imperial College, London University, U.K. (B.Sc., Mining Geology). Mr. Stockford has been a director of Agnico Eagle since May 6, 2005. Area of expertise: Executive Management and Mining.

Pertti Voutilainen, M.Sc., M.Eng., of Espoo, Finland, is an independent director of Agnico Eagle. Mr. Voutilainen is a mining industry veteran. Until 2005, he was the Chairman of the board of directors of Riddarhyttan Resources AB. Previously, Mr. Voutilainen was the Chairman of the board of directors and Chief Executive Officer of Kansallis Banking Group and President after its merger with Union Bank of Finland until his retirement in 2000. He was also employed by Outokumpu Corp., Finland's largest mining and metals company, for 26 years, including as Chief Executive Officer for 11 years. Mr. Voutilainen holds the honorary title of Mining Counselor (Bergsrad), which was awarded to him by the President of the Republic of Finland in 2003. Mr. Voutilainen is a graduate of Helsinki University of Technology (M.Sc.), Helsinki University of Business Administration (M.Sc.) and Pennsylvania State University (M. Eng.). He has been a director of Agnico Eagle since December 13, 2005. Area of expertise: Mining and Finance.

The by-laws of Agnico Eagle provide that directors will hold office for a term expiring at the next annual meeting of shareholders of Agnico Eagle or until their successors are elected or appointed or the position is vacated. The Board annually appoints the officers of Agnico Eagle, who are subject to removal by resolution of the Board at any time, with or without cause (in the absence of a written agreement to the contrary).

Committees

The members of the Audit Committee are Dr. Leanne M. Baker (Chair), Bernard Kraft, Mel Leiderman and Dr. Sean Riley.

The members of the Compensation Committee are Robert J. Gemmell (Chair), Martine A. Celej, J. Merfyn Roberts and Howard R. Stockford.

The members of the Corporate Governance Committee are Pertti Voutilainen (Chair), Bernard Kraft, James D. Nasso and J. Merfyn Roberts.

The members of the Health, Safety, Environmental and Sustainable Development Committee are Deborah McCombe (Chair), James D. Nasso and Howard R. Stockford.

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Officers

The following is a brief biography of each of the Company's officers (for Mr. Boyd, see "Directors and Officers of the Company – Directors"):

Donald G. Allan, of Toronto, Ontario, is Senior Vice-President, Corporate Development of Agnico Eagle, a position he has held since December 14, 2006. Prior to that, Mr. Allan had been Vice-President, Corporate Development since May 6, 2002. Prior to that, Mr. Allan spent 16 years as an investment banker covering the mining and natural resources sectors with the firms Salomon Smith Barney and Merrill Lynch. Mr. Allan is a graduate of the Amos Tuck School, Dartmouth College (M.B.A.) and the University of Toronto (B.Comm.). Mr. Allan is also qualified as a Chartered Accountant.

Alain Blackburn, P.Eng., of Oakville, Ontario, is Senior Vice-President, Exploration of Agnico Eagle, a position he has held since December 14, 2006. Prior to that, Mr. Blackburn had been Vice-President, Exploration since October 1, 2002. Prior to that, Mr. Blackburn served as Agnico Eagle's Manager, Corporate Development from January 1999 and Exploration Manager from September 1996 to January 1999. Mr. Blackburn joined Agnico Eagle in 1988 as Chief Geologist at the LaRonde mine. Mr. Blackburn is a graduate of Université du Quebec de Chicoutimi (P.Eng.) and Université du Quebec en Abitibi-Temiscamingue (M.Sc.).

Picklu Datta, CA, of Toronto, Ontario is Senior Vice-President, Treasury and Finance of Agnico Eagle a position he has held since October 24, 2012. Mr. Datta was previously Vice-President, Treasurer and prior to that, he was Vice-President, Controller of Agnico Eagle. Mr. Datta joined the Company in April 2005 and has worked in the mining industry for approximately ten years. Before joining the mining industry, Mr. Datta worked at Philip Morris Companies in New York City for approximately eight years and the technology industry for three years in various financial management roles. Mr. Datta obtained his Bachelor of Commerce degree from the University of Toronto and acquired his Chartered Accountancy designation by articling with PricewaterhouseCoopers.

Louise Grondin, Ing. P.Eng., of Toronto, Ontario, is Senior Vice-President, Environment and Sustainable Development of Agnico Eagle, a position she has held since January 1, 2011. Prior to that, Ms. Grondin was Vice-President, Environment and Sustainable Development and before that she was the Regional Environmental Manager and Environmental Manager, LaRonde Division. Prior to her employment with Agnico Eagle, Ms. Grondin worked for Billiton Canada Ltd. as Manager Environment, Human Resources and Safety. Ms. Grondin is a graduate of the University of Ottawa (B.Sc.) and McGill University (M.Sc.). Ms. Grondin is a member of the Professional Engineers of Ontario since 1984 and of the Ordre des Ingénieurs du Québec since 2001.

Tim Haldane, P.Eng., of Tucson, Arizona, is Senior Vice-President, Operations – USA & Latin America of Agnico Eagle a position he has held since February 15, 2014. Prior to joining Agnico Eagle in May 2006, he was Vice President, Development for Glamis Gold Inc. Mr. Haldane has participated in numerous acquisition and development activities in North America and Central America, most recently including the Pinos Altos, Creston Mascota and La India Projects for Agnico Eagle. He is a graduate of the Montana School of Mines and Technology (B.S. Metallurgical Engineering) and has 35 years of experience in the precious metals and base metals industries.

R. Gregory Laing, B.A., LL.B., of Oakville, Ontario, is General Counsel, Senior Vice-President, Legal and Corporate Secretary of Agnico Eagle, a position he has held since December 14, 2006, prior to which, Mr. Laing had been General Counsel, Vice-President, Legal and Corporate Secretary since September 19, 2005. Prior to that, he was Vice President, Legal of Goldcorp Inc. from October 2003 to June 2005 and General Counsel, Vice President, Legal and Corporate Secretary of TVX Gold Inc. from October 1995 to January 2003. He worked as a corporate securities lawyer for two prominent Toronto law firms prior to that. Mr. Laing is a director of West Red Lake Gold Mines Inc. (a mining exploration company), traded on the Canadian National Stock Exchange. Mr. Laing is a graduate of the University of Windsor (LL.B.) and Queen's University (B.A.).

Marc Hubert Legault, P.Eng, of Mississauga, Ontario, is Senior Vice-President, Project Evaluations of Agnico Eagle, a position he has held since February 2012. Prior to that, he was Vice-President, Project Development since 2007. Mr. Legault has been with Agnico Eagle since 1988, when he was hired as an exploration geologist in Val d'Or, Quebec. Since then, he has taken on successively increasing responsibilities in the Company's exploration, mine geology and project evaluation activities. Mr. Legault is a graduate of Carleton University (M.Sc. in Geology) and Queen's University (B.Sc.H. in Geological Engineering). Marc is a registered Professional Engineer.

Jean Luk Pellerin, of Toronto, Ontario, is Senior Vice-President, Human Resources. Mr. Pellerin joined Agnico Eagle in January 2012. Prior to that, he spent four years at Transat A.T. Inc. as Senior Vice-President, Human Resources and Chief Talent Officer. Before Transat, Mr. Pellerin spent six years in consulting at the helm of his own firm and as National Partner

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with Mercer Consulting. He also held senior management and executive positions at Bombardier Inc., Domtar Corporation and General Electric. Mr. Pellerin has also taught in the MBA program at the H.E.C. Montreal, in the Master's program in Organizational Development, at American University and lectured at the McGill International Executive Institute. Mr. Pellerin is a graduate of Universite Laval in Industrial Relations.

Jean Robitaille, of Oakville, Ontario, is Senior Vice-President, Business Strategy and Technical Services of Agnico Eagle, a position he has held since February 2014. Prior to that, he served Agnico Eagle in various capacities since 1988, most recently as Senior Vice-President, Technical Services and Project Development, Vice-President, Metallurgy & Marketing, General Manager, Metallurgy & Marketing and Mill Superintendent and Project Manager for the expansion of the LaRonde mill. Prior to joining Agnico Eagle, Mr. Robitaille worked as a metallurgist with Teck Mining Group. Mr. Robitaille is a mining graduate of the College de l'Abitibi Témiscamingue with a specialty in mineral processing.

David Smith, P.Eng., of Toronto, Ontario, is Senior Vice-President, Finance and Chief Financial Officer of Agnico Eagle, a position he has held since October 24, 2012. Prior to that, he was Senior Vice-President, Strategic Planning and Investor Relations, a position he held since January 1, 2011, and prior to that he was Senior Vice-President, Investor Relations and prior to that he was Vice-President, Investor Relations. He started work in investor relations at Agnico Eagle in February 2005. Prior to that, Mr. Smith was a mining analyst for more than five years and held a variety of mining engineering positions, both in Canada and abroad. Mr. Smith is a Chartered Director, a member of the Board of Directors of the Denver Gold Group and an alternate Director of the World Gold Council. He is a graduate of Queen's University (B.Sc.) and the University of Arizona (M.Sc.). Mr. Smith is also a Professional Engineer.

Yvon Sylvestre, of Mississauga, Ontario, is Senior Vice-President, Operations – Canada & Europe, a position he has held since February 2014. Prior to that, he was Senior Vice-President, Operations, Vice-President, Construction; Mine General Manager at the Goldex division of Agnico Eagle and, previously, Mill Superintendent at the LaRonde division. Mr. Sylvestre is a Metallurgical Engineering Technology graduate from Cambrian College in Sudbury. Following graduation, he served as Metallurgist and Mill Superintendent at the Joutel division of Agnico Eagle and also held the position of Mill Superintendent at the Trollus division of Inmet Mining Corporation.

Shareholdings of Directors and Officers

As at March 12, 2015, the directors and executive officers of Agnico Eagle, as a group, beneficially owned, or controlled or directed, directly or indirectly, an aggregate of 367,852 common shares or approximately 0.17% of the 215,528,460 issued and outstanding common shares.

Cease Trade Orders, Bankruptcies, Penalties or Sanctions

No director or officer of the Company is, or within ten years prior to the date hereof has been, a director, chief executive officer or chief financial officer of any company (including the Company) that: (i) was subject to a cease trade order, an order similar to a cease trade order or an order that denied the relevant company access to any exemption under securities legislation, that was in effect for a period of more than 30 consecutive days, that was issued while the director or executive officer was acting in the capacity as director, chief executive officer or chief financial officer; or (ii) was subject to a cease trade order, an order similar to a cease trade order or an order that denied the relevant company access to any exemption under securities legislation, that was in effect for a period of more than 30 consecutive days, that was issued after the director or executive officer ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer.

Except as described below, no director or officer of the Company, or a shareholder holding a sufficient number of securities of the Company to affect materially the control of the Company: (i) is, or within ten years prior to the date hereof has been, a director or executive officer of any company (including the Company) that, while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets; or (ii) has, within ten years prior to the date hereof, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the director, executive officer or shareholder.

No director or officer of the Company, or a shareholder holding a sufficient number of securities of the Company to affect materially the control of the Company, has been subject to: (i) any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities

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regulatory authority; or (ii) any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable investor in making an investment decision.

Mr. Leiderman, a director of the Company, was a director of Colossus Minerals Inc. ("Colossus") from August 1, 2011 until his resignation on November 13, 2013. On February 7, 2014, Colossus filed a proposal to its creditors under the Bankruptcy and Insolvency Act (Canada). On February 25, 2014, the resolution approving an amended proposal was approved by the requisite majority of Colossus' creditors. On April 30, 2014, Colossus announced that it had completed the implementation of the court-approved proposal.

Conflicts of Interest

To the best of the Company's knowledge, and other than as disclosed in this AIF, there are no known existing or potential conflicts of interest between the Company and any director or officer of the Company, except that certain of the directors and officers of the Company serve as directors and officers of other public companies and therefore it is possible that a conflict may arise between their duties as a director or officer of the Company and their duties as a director or officer of such other company.

AUDIT COMMITTEE

The Audit Committee has two primary objectives. The first is to advise the Board of Directors in its oversight responsibilities regarding:

•

the quality and integrity of the Company's financial reports and information;



•

the Company's compliance with legal and regulatory requirements;



•

the effectiveness of the Company's internal controls for finance, accounting, internal audit, ethics and legal and regulatory compliance;



•

the performance of the Company's auditing, accounting and financial reporting functions;



•

the fairness of related party agreements and arrangements between the Company and related parties; and



•

the independent auditors' performance, qualifications and independence.

The second primary objective of the Audit Committee is to prepare the reports required to be included in management information circulars of the Company in accordance with applicable laws or the rules of applicable securities regulatory authorities.

The Board has adopted an Audit Committee charter, which provides that each member of the Audit Committee must be unrelated to and independent from the Company as determined by the Board in accordance with the applicable requirements of the laws governing the Company, the stock exchanges on which the Company's securities are listed and applicable securities regulatory authorities. In addition, each member must be financially literate and at least one member of the Audit Committee must be an audit committee financial expert, as the term is defined in the rules of the SEC. The Audit Committee charter is attached as Schedule A to this AIF.

Composition of the Audit Committee

The Audit Committee is composed entirely of directors who are unrelated to and independent from the Company (currently, Dr. Baker (Chair), Mr. Kraft, Mr. Leiderman and Dr. Riley), each of whom is financially literate, as the term is used in the CSA's Multilateral Instrument 52-110 – Audit Committees. In addition, Mr. Leiderman and Mr. Kraft are Chartered Accountants; Mr. Leiderman is currently in private practice and Mr. Kraft, while retired, remains active in the profession and the Board has determined that both of them qualify as audit committee financial experts, as the term is defined in the rules of the SEC.

Relevant Education and Experience

The education and experience of each member of the Audit Committee is set out under "Directors and Officers of the Company – Directors" above.

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Pre-Approval Policies and Procedures

In 2003, the Audit Committee established a policy to pre-approve all services provided by the Company's independent public accountant, Ernst & Young LLP. The Audit Committee determines which non-audit services the independent auditors are prohibited from providing and authorizes permitted non-audit services to be performed by the independent auditors to the extent those services are permitted by SOX and other applicable legislation and regulations. All fees paid to Ernst & Young LLP in 2014 were pre-approved by the Audit Committee.

External Auditor Service Fees

Ernst & Young LLP has served as the Company's independent public accountant for each of the fiscal years ended December 31, 2014 and 2013. Fees paid to Ernst & Young LLP in 2014 and 2013 are set out below.

		Year Ended December 31,
		2014		2013
		(C$ thousands)
Audit fees		2,489		2,118
Audit-related fees(1)		23		23
Tax fees(2)		1,475		293
All other fees(3)		752		56
Total(4)		4,739		2,490

Notes:

(1)

Audit related fees consist of fees paid for assurance and related services performed by the auditors that are reasonably related to the performance of the audit of the Company's financial statements. This includes consultation with respect to financial reporting, accounting standards and compliance with Section 404 of SOX.

(2)

Tax fees were paid for professional services relating to tax compliance, tax advice and tax planning. These services included the review of tax returns and tax planning and advisory services in connection with international and domestic taxation issues.

(3)

All other fees were paid for services other than the services described above and include fees for professional services rendered by the auditors in connection with the conversion to IFRS as well the translation of securities regulatory filings required to comply with securities laws in certain Canadian jurisdictions.

(4)

No other fees were paid to auditors in the previous two years.

LEGAL PROCEEDINGS AND REGULATORY ACTIONS

On March 8, 2012 and April 10, 2012, a Notice of Action and Statement of Claim (collectively, the "Ontario Claim") were issued by William Leslie, AFA Livforsakringsaktiebolag and certain other entities against the Company and certain of its current and former officers and directors. On September 27, 2012, the plaintiffs issued a Fresh as Amended Statement of Claim. The Fresh as Amended Statement of Claim alleges that the Company's public disclosure concerning water flow issues at the Goldex mine was misleading. The Ontario Claim was issued by the plaintiffs on behalf of all persons and entities who acquired securities of the Company during the period March 26, 2010 to October 19, 2011, excluding persons resident or domiciled in the Province of Quebec at the time they purchased or acquired such securities. The plaintiffs seek, among other things, damages of C$250 million. On April 17, 2013 an Order was granted on consent certifying the action and granting leave for the claims under Section 138 of the Securities Act (Ontario) to proceed. The Company intends to vigorously defend the action on the merits.

On March 28, 2012, the Company and certain of its current and former officers, some of whom also are or were directors of the Company, were named as respondents in a Motion for Leave to Institute a Class Action and for the Appointment of a Representative Plaintiff (the "Quebec Motion"). The action is on behalf of all persons and entities with fewer than 50 employees resident in Quebec who acquired securities of the Company between March 26, 2010 and October 19, 2011. The proposed class action is for damages of C$100 million arising as a result of allegedly misleading disclosure by the Company concerning its operations at the Goldex mine. On October 15, 2012, the plaintiffs served an amended Quebec Motion seeking leave to commence an action under the Securities Act (Quebec) in addition to seeking authorization to institute a class action. On October 1, 2013, the Quebec court certified the class action on terms identical to those set out in the consent Order granted in Ontario on April 17, 2013. No date has been set for the hearing to argue the class action on the merits. The Company intends to vigorously defend the action on the merits.

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INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS

Other than as described in this AIF, since January 1, 2013, no director, executive officer or 10% shareholder of the Company or any associate or affiliate of any such person or company, has or had any material interest, direct or indirect, in any transaction that has materially affected or will materially affect the Company or any of its subsidiaries.

TRANSFER AGENT AND REGISTRAR

The registrar and transfer agent for the Company's common shares is Computershare Trust Company of Canada, Toronto, Ontario.

MATERIAL CONTRACTS

The Company believes the following contracts constitute the only material contracts to which it is a party.

Credit Facility

On August 4, 2011, the Company amended and restated its credit facility with a group of financial institutions that provides a $1.2 billion unsecured revolving bank credit facility (the "Credit Facility"). The Credit Facility was subsequently amended on July 20, 2012 and September 8, 2014. The Credit Facility matures and all indebtedness thereunder is due and payable on June 22, 2019. The Company, with the consent of lenders representing at least 66²/3% of the aggregate commitments under the Credit Facility, may extend the term of the Credit Facility for additional one-year terms. The Credit Facility is available in multiple currencies through prime rate and base rate advances, priced at the applicable rate plus a margin that ranges from 0.45% to 1.75% depending on the Company`s credit rating and through LIBOR advances, bankers' acceptances and letters of credit, priced at the applicable rate plus a margin that ranges from 1.45% to 2.75% depending on the Company`s credit rating. The lenders under the Credit Facility are each paid a standby fee at a rate that ranges from 0.29% to 0.55% of the undrawn portion of the facility, depending on the Company`s credit rating. Payment and performance of the Company's obligations under the Credit Facility are guaranteed by each of its significant subsidiaries and certain of its other subsidiaries (the "Guarantors" and, together with the Company, each an "Obligor").

The Credit Facility contains covenants that limit, among other things, the ability of an Obligor to:

•

incur additional indebtedness;



•

pay or declare dividends or make other restricted distributions or payments in respect of the Company's equity securities if an event of default has occurred and is continuing;



•

make sales or other dispositions of material assets;



•

create liens on its existing or future assets, other than permitted liens;



•

enter into transactions with affiliates other than the Obligors, except on a commercially reasonable basis as if it were dealing with such person at arm's length;



•

make any investment or loan other than: investments in or loans to businesses related to mining or a business ancillary or complementary to mining; investments in cash equivalents; or certain inter-company investments or loans;



•

enter into or maintain certain derivative instruments; and



•

amalgamate or otherwise transfer its assets.

The Company is also required to maintain a total net debt to EBITDA ratio below a specified maximum value as well as a minimum tangible net worth. Events of default under the Credit Facility include, among other things:

•

the failure to pay principal when due and payable or interest, fees or other amounts payable within five business days of such amounts becoming due and payable;



•

the breach by the Company of any financial covenant;



•

the breach by any Obligor of any of its obligations or undertakings under the Credit Facility or related agreements or documents that is not cured within 30 days after written notice of the breach has been given to the Company;

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•

a default under any other indebtedness of the Obligors if the effect of such default is to accelerate, or to permit the acceleration of, the due date of such indebtedness in an aggregate amount of $50 million or more;



•

a change of control of the Company which is defined to occur upon (a) the acquisition, directly or indirectly, by any means whatsoever, by any person, or group of persons acting jointly or in concert, (collectively, an "offeror") of beneficial ownership of, or the power to exercise control or direction over, or securities convertible or exchangeable into, any securities of the Company carrying in aggregate (assuming the exercise of all such conversion or exchange rights in favour of the offeror) more than 50% of the aggregate votes represented by the voting stock then issued and outstanding or otherwise entitling the offeror to elect a majority of the board of directors of the Company, or (b) the replacement by way of election or appointment at any time of one-half or more of the total number of the then incumbent members of the board of directors of the Company, or the election or appointment of new directors comprising one-half or more of the total number of members of the board of directors in office immediately following such election or appointment; unless, in any such case, the nomination of such directors for election or their appointment is approved by the board of directors of the Company in office immediately preceding such nomination or appointment in circumstances where such nomination or appointment is made other than as a result of a dissident public proxy solicitation, whether actual or threatened (a "Change of Control"); and



•

various events relating to the bankruptcy or insolvency or winding- up, liquidation or dissolution or cessation of business of any Obligor.

As at March 12, 2015, there was approximately $471 million in the aggregate drawn under the Credit Facility (including outstanding letters of credit).

Letter of Credit Facility

On June 26, 2012, the Company entered into a letter of credit facility with The Bank of Nova Scotia, as lender, providing for a C$150 million uncommitted letter of credit facility (the "Letter of Credit Facility"). On November 5, 2013, the Company amended the Letter of Credit Facility to increase the maximum aggregate amount that may be outstanding thereunder at any time to C$175 million. On August 22, 2014, the Company and the lender agreed to increase the maximum aggregate amount that may be outstanding under the Letter of Credit Facility to C$185 million. Under the terms of the Letter of Credit Facility, the Company may request to be issued one or more letters of credit in a maximum aggregate amount outstanding at any time not exceeding C$185 million. The Letter of Credit Facility may be used by the Company to support (a) reclamation obligations of the Company or its subsidiaries or (b) non-financial or performance obligations of the Company or its subsidiaries that are not related to reclamation obligations. If the Company fails to pay any amount of a reimbursement obligation under the Letter of Credit Facility, including any interest thereon, on the date such amount is due, the overdue amount will bear interest at equal to 2% greater than the prime rate (as calculated under the Letter of Credit Facility). Payment and performance of the Company's obligations under the Letter of Credit Facility are guaranteed by the Guarantors.

Events of default under the Letter of Credit Facility include, among other things:

•

the failure to pay any amount drawn under the Letter of Credit Facility within three business days of when notified or demanded by the lender;



•

the breach by any Obligor of any obligation or undertaking under the Letter of Credit Facility or guarantee provided pursuant to the Letter of Credit Facility;



•

a default under any other indebtedness of the Obligors if the effect of such default is to accelerate, or to permit the acceleration of, the due date of such indebtedness in an aggregate amount of $50 million or more; and



•

a Change of Control.

The Letter of Credit Facility provides that upon an event of default, The Bank of Nova Scotia may declare immediately due and payable all amounts drawn under the Letter of Credit Facility.

As at March 12, 2015, there was approximately C$181 million in the aggregate drawn under the Letter of Credit Facility.

Note Purchase Agreements

On April 7, 2010, the Company entered into a note purchase agreement with certain institutional investors, providing for the issuance of the 2010 Notes consisting of $115 million 6.13% Series A senior notes due 2017, $360 million 6.67% Series B senior notes due 2020 and $125 million 6.77% Series C senior notes due 2022 (the "2010 Note Purchase

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Agreement"). On July 24, 2012, the Company entered into another note purchase agreement with certain institutional investors, providing for the issuance of the 2012 Notes consisting of $100 million 4.87% Series A senior notes due 2022 and $100 million 5.02% Series B senior notes due 2024 (together with the 2010 Note Purchase Agreement, the "Note Purchase Agreements"). Payment and performance of the Company's obligations under the Note Purchase Agreements, the notes issued pursuant thereto and the obligations of the Guarantors under the guarantees are guaranteed by the Guarantors.

The Note Purchase Agreements contain restrictive covenants that limit, among other things, the ability of an Obligor to:

•

enter into transactions with affiliates other than the Obligors, except on a commercially reasonable basis upon terms no less favourable to the Obligor than would be obtainable in a comparable arm's length transaction;



•

amalgamate or otherwise transfer its assets;



•

carry on business other than those related to mining or a business ancillary or complementary to mining;



•

engage in any dealings or transactions with any person or entity identified under certain anti-terrorism regulations;



•

create liens on its existing or future assets, other than permitted liens;



•

incur subsidiary indebtedness where the Obligor is a subsidiary of the Company; and



•

make sales or other dispositions of material assets.

The Company is also required to maintain the same financial ratios and the same minimum tangible net worth under the Note Purchase Agreements as under the Credit Facility. Events of default under the Note Purchase Agreements include, among other things:

•

the failure to pay principal or make whole amounts when due and payable or interest, fees or other amounts payable within five business days of such amounts becoming due and payable;



•

the breach by any Obligor of any other term or covenant that is not cured within 30 business days after the earlier of written notice of the breach having been given to the Company or actual knowledge of the breach is obtained;



•

the finding that any representation or warranty made by an Obligor was false or incorrect in any material respect on the date as of which it was made;



•

a default under any other indebtedness of the Obligors if the effect of such default is to accelerate, or to permit the acceleration of, the due date of such indebtedness in an aggregate amount of $50 million or more; and



•

various events relating to the bankruptcy or insolvency or winding- up, liquidation or dissolution or cessation of business of any Obligor.

The Note Purchase Agreements provide that, upon certain events of default, the notes automatically become due and payable without any further action. In addition, the Note Purchase Agreements contain a "Most Favored Lender" clause which acts to incorporate into the Note Purchase Agreements any grace periods upon an event of default that are shorter in the Credit Facility than in the Note Purchase Agreements.

INTERESTS OF EXPERTS

Ernst & Young LLP, the auditors of the Company, has advised the Company that it is independent of the Company in accordance with the Rules of Professional Conduct of the Institute of Chartered Accountants of Ontario and has complied with the SEC's rules on auditor independence.

ADDITIONAL INFORMATION

Additional information relating to the Company can be found on SEDAR at www.sedar.com, on the SEC's website at www.sec.gov and on the Company's website at www.agnicoeagle.com. Additional information, including directors' and officers' remuneration and indebtedness, principal holders of the Company's securities and securities authorized for issuance under equity compensation plans, is contained in the Company's management information circular dated March 12, 2015 relating to the annual and special meeting of shareholders of the Company scheduled for May 1, 2015. Additional financial information is provided in the Annual Financial Statements and Annual MD&A.

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SCHEDULE "A"

AUDIT COMMITTEE CHARTER OF THE COMPANY

This Charter shall govern the activities of the audit committee (the "Audit Committee") of the board of directors (the "Board of Directors") of Agnico Eagle Mines Limited (the "Corporation").

I.    PURPOSE OF THE AUDIT COMMITTEE

The Audit Committee (the "Committee") shall: (a) assist the Board of Directors in its oversight responsibilities with respect to: (i) the integrity of the Corporation's and it's subsidiaries financial statements, (ii) the Corporation's compliance with legal and regulatory requirements, (iii) the external auditor's qualifications and independence, and (iv) the performance of the Corporation's internal and external audit functions and; (b) prepare any report of the Audit Committee required to be included in the Corporation's annual report or proxy material. The head of the Corporation's internal audit function and the external auditors shall have direct and ready access to the Chair of the Committee.

The Committee shall have the authority to delegate to one or more of its members, responsibility for developing recommendations for consideration by the Committee with respect to any of the matters referred to in this Charter.

II.   COMPOSITION

The Audit Committee shall be comprised of a minimum of three directors. No member of the Audit Committee shall be an officer or employee of the Corporation or any of its affiliates for the purposes of the applicable corporate statute. Each member of the Audit Committee shall be an unrelated and independent director as determined by the Board of Directors in accordance with the applicable requirements of the laws governing the Corporation, the applicable stock exchanges on which the Corporation's securities are listed and applicable securities regulatory authorities. (See Schedule A for current requirements.)

Each member of the Audit Committee shall be financially literate. Unless the Audit Committee shall otherwise determine, a member of the Audit Committee shall be considered to be financially literate if he or she has the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by the Corporation's financial statements.

At least one member of the Audit Committee shall be a financial expert. (See Schedule B for definition.)

The members of the Audit Committee shall be appointed by the Board of Directors annually at the first meeting of the Board of Directors after a meeting of the shareholders at which directors are elected and shall serve until: the next annual meeting of the shareholders; they resign; their successors are duly appointed; or such member is removed from the Committee by the Board of Directors. The Board of Directors shall designate one member of the Audit Committee as the chair of the Audit Committee (the "Chair") or, if it fails to do so, the members of the Audit Committee shall appoint the Chair from among its members.

No member of the Audit Committee may earn fees from the Corporation or any of its subsidiaries other than directors fees (which fees may include cash and/or shares or restricted share units or other in-kind consideration ordinarily available to directors, as well as all of the regular benefits that other directors receive). For greater certainty, no member of the Audit Committee shall accept any consulting, advisory or other compensatory fee from the Corporation.

III.  MEETINGS

The Audit Committee shall meet at least quarterly or more frequently as required.

As a part of each meeting of the Audit Committee at which the Audit Committee recommends that the Board of Directors approve the annual audited financial statements or at which the Audit Committee reviews the quarterly financial statements, the Audit Committee shall meet in a separate session with the external auditor and, if desired, with management and/or the internal auditor. In addition, the Audit Committee or the Chair shall meet with management quarterly to review the Corporation's financial statements as described in Section IV.4 below and the Audit Committee or a designated member of the Audit Committee shall meet with the external auditors to review the Corporation's financial statements on a quarterly or other regular basis as the Audit Committee may deem appropriate.

The Audit Committee shall seek to act on the basis of consensus, but an affirmative vote of a majority of members of the Audit Committee participating in any meeting of the Audit Committee shall be sufficient for the adoption of any resolution.

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IV.  RESPONSIBILITIES AND DUTIES

The Audit Committee's primary responsibilities are to:

General

1.

review and assess the adequacy of this Charter at least annually and, where necessary or desirable, recommend changes to the Board of Directors;



2.

report to the Board of Directors regularly at such times as the Chair may determine to be appropriate but not less frequently than four times per year;



3.

follow the process established for all committees of the Board of Directors for assessing the Committee's performance;

Documents/Reports Review

4.

review the Corporation's financial statements and related management's discussion and analysis, Annual Information Form ("AIF") and related Form 40-F, Annual Report and any other annual reports or other financial information to be submitted to any governmental body or the public, including any certification, report, opinion or review rendered by the external auditors before they are approved by the Board of Directors and publicly disclosed;



5.

review with the Corporation's management and the external auditors, the Corporation's quarterly financial statements and related management's discussion and analysis, before they are released;



6.

ensure that adequate procedures are in place for the review of the issuer's disclosure of financial information extracted or derived from the issuer's financial statements other than the disclosure referred to in the two immediately preceding paragraphs and periodically assess the adequacy of such procedures;



7.

review the effects of regulatory and accounting initiatives, as well as off-balance sheet structures, on the financial statements of the Corporation;



8.

review with the Corporation's management any press release of the Corporation which contains financial information (paying particular attention to the use of any "pro forma" or "adjusted" non-GAAP information);



9.

review and assess, on a quarterly basis, management's risk assessment and risk management strategies including hedging and derivative strategies;

External Auditors

10.

recommend external auditors nominations to the Board of Directors to be put before the shareholders for appointment and, as necessary, the removal of any external auditor in office from time to time;



11.

approve the fees and other compensation to be paid to the external auditors;



12.

pre-approve all significant non-audit engagements to be provided to the Corporation with the external auditors;



13.

require the external auditors to submit to the Committee, on a regular basis (at least annually), a formal written statement delineating all relationships between the external auditors and the Corporation and discuss with the external auditors any relationships that might affect the external auditors' objectivity and independence;



14.

recommend to the Board of Directors any action required to ensure the independence of the external auditors;



15.

advise the external auditors of their ultimate accountability to the Board of Directors and the Committee;



16.

oversee the work of the external auditors engaged for the purpose of preparing an audit report or performing other audit, review and attest services for the issuer;



17.

evaluate the qualifications, performance and independence of the external auditors which are to report directly to the Committee, including (i) reviewing and evaluating the lead partner on the external auditors' engagement with the Corporation, (ii) considering whether the auditors' quality controls are adequate and the provision of permitted non-audit services is compatible with maintaining the auditors' independence, (iii) determine the

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rotation of the lead audit partner and the audit firm, and (iv) take into account the opinions of management and the internal audit function in assessing the external auditors' qualifications, independence and performance;

18.

present the Committee's conclusions with respect to its evaluation of external auditors to the Board of Directors and take such additional action to satisfy itself of the qualifications, performance and independence of external auditors and make further recommendations to the Board of Directors as it considers necessary;



19.

obtain and review a report from the external auditors at least annually regarding: the external auditors' internal quality-control procedures; material issues raised by the most recent internal quality-control review, or peer review, of the firm, or by any inquiry or investigation by governmental or professional authorities within the preceding five years respecting one or more external audits carried out by the firm; any steps taken to deal with any such issues; and all relationships between the external auditors and the Corporation;



20.

establish policies for the Corporation's hiring of employees or former employees of the external auditors;

Internal Auditor

21.

receive regular quarterly reports from the Corporation's internal auditor on the scope and material results of its internal audit activities commencing in 2007, based on the Internal Audit Charter;



22.

review and discuss the Company's Code of Business Conduct and Ethics and fraud policy and the actions taken to monitor and enforce compliance with the Code and policy;



23.

establish procedures for:



i)

the receipt, retention and treatment of complaints regarding accounting, internal controls or auditing matters;



ii)

the confidential, anonymous submission of concerns regarding questionable accounting, internal control and auditing matters; and



iii)

compliance with applicable foreign corrupt practices legislation, guidelines and practices.

Fraud Prevention and Detection

24.

overseeing and assessing management's controls and processes to prevent and detect fraud;



25.

receiving periodic reports from the internal auditors on findings of fraud as well as significant findings regarding the design and/or operation of internal controls and management responses

Financial Reporting Process

26.

periodically discuss the integrity, completeness and accuracy of the Corporation's internal controls and the financial statements with the external auditors in the absence of the Corporation's management;



27.

in consultation with the external auditors, review the integrity of the Corporation's financial internal and external reporting processes;



28.

consider the external auditors' assessment of the appropriateness of the Corporation's auditing and accounting principles as applied in its financial reporting;



29.

review and discuss with management and the external auditors at least annually and approve, if appropriate, any material changes to the Corporation's auditing and accounting principles and practices suggested by the external auditors, internal audit personnel or management;



30.

review and discuss with the Chief Executive Officer and the Chief Financial Officer the procedures undertaken in connection with the Chief Executive Officer and Chief Financial Officer certifications for the interim and annual filings with applicable securities regulatory authorities;



31.

review disclosures made by the Chief Executive Officer and Chief Financial Officer during their certification process for the annual and interim filings with applicable securities regulatory authorities about any significant deficiencies in the design or operation of internal controls which could adversely affect the Corporation's ability to

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record, process, summarize and report financial data or any material weaknesses in the internal controls, and any fraud involving management or other employees who have a significant role in the Corporation's internal controls;

32.

establish regular and separate systems of reporting to the Committee by management and the external auditors of any significant decision made in management's preparation of the financial statements, including the reporting of the view of management and the external auditors as to the appropriateness of such decisions;



33.

discuss during the annual audit, and review separately with each of management and the external auditors, any significant matters arising from the course of any audit, including any restrictions on the scope of work or access to required information; whether raised by management, the head of internal audit or the external auditors;



34.

resolve any disagreements between management and the external auditors regarding financial reporting;



35.

review with the external auditors and management the extent to which changes or improvements in financial or accounting practices, as approved by the Committee, have been implemented at an appropriate time subsequent to the implementation of such changes or improvements;



36.

establish procedures to receive, record and handle complaints concerning accounting, internal accounting controls or auditing matters, including procedures for confidential, anonymous submission by employees of concerns regarding questionable auditing or accounting matters;



37.

retain and determine the compensation of any independent counsel, accountants or other advisors to assist in its oversight responsibilities (the Committee shall not be required to obtain the approval of the Board of Directors for such purposes);



38.

discuss any management or internal control letters or proposals to be issued by the external auditors of the Corporation;

Disclosure Controls and Procedures

39.

obtain and review the statement of Corporate Disclosure Controls, Procedures and Policies prepared by the disclosure committee and, if appropriate, approve the disclosure controls and procedures set out in such statement and any changes made thereto;



40.

receive confirmation from the CEO and CFO that reports to be filed with Canadian Securities commissions, the SEC and any other applicable regulatory agency:



(a)

have been prepared in accordance with the Corporation's disclosure controls and procedures; and



(b)

contain no material misrepresentations or omissions and fairly presents, in all material respects, the financial condition, results of operations and cash flow as of and for the period covered by such reports;



41.

receive confirmation from the CEO and CFO that they have concluded that the disclosure controls and procedures are effective as of the end of the period covered by the reports;



42.

discuss with the CEO and CFO any reasons for which any of the confirmations referred to in the two preceding paragraphs cannot be given by the CEO and CFO;

Legal Compliance

43.

confirm that the Corporation's management has the proper review system in place to ensure that the Corporation's financial statements, reports, press releases and other financial information satisfy legal requirements;



44.

review legal compliance matters with the Corporation's legal counsel;



45.

review with the Corporation's legal counsel any legal matter that the Committee understands could have a significant impact on the Corporation's financial statements;



46.

conduct or authorize investigations into matters within the Committee's scope of responsibilities;

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47.

perform any other activities in accordance with the Charter, the Corporation's by-laws and governing law the Committee or the Board of Directors deems necessary or appropriate;

Related Party Transactions

48.

review the financial reporting of any transaction between the Corporation and any officer, director or other "related party" (including any shareholder holding an interest greater than 5% in the Corporation) or any entity in which any such person has a financial interest;

Reporting and Powers

49.

report to the Board of Directors following each meeting of the Committee and at such other times as the Board of Directors may consider appropriate; and



50.

exercise such other powers and perform such other duties and responsibilities as are incidental to the purposes, duties and responsibilities specified herein and as may from time to time be delegated to the Committee by the Board of Directors.

V.    LIMITATION OF RESPONSIBILITY

While the Audit Committee has the responsibilities and powers provided by this Charter, it is not the duty of the Audit Committee to plan or conduct audits or to determine that the Corporation's financial statements are complete and accurate and are in accordance with generally accepted accounting principles. This is the responsibility of management (with respect to whom the Audit Committee performs an oversight function) and the external auditors.

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SCHEDULE A
TO THE AUDIT COMMITTEE CHARTER OF THE CORPORATION

Unrelated Director

Under the Toronto Stock Exchange rules, "independent director" means a director who is:

(a)

not a member of management and is free from any interest and any business or other relationship which could reasonably be perceived to materially interfere with the director's ability to act with a view to the best interests of the issuer;



(b)

not currently, or has not been within the last three years, an officer, employee of or service provider to the issuer or any of its subsidiaries or affiliates; and



(c)

not an officer, employee or controlling shareholder of a company that has a material business relationship with the issuer.

Independent Director

National Instrument – 52-110

A director is "independent" if he or she has no direct or indirect material relationship with the issuer. The following summarizes the major aspects of the National Instrument (NI52-110) relating to the independence of a director.

Certain Relationships Automatically Exclude a Director From Serving on the Audit Committee

If a director (or a member of the director's immediate family) has a specified type of relationship with the issuer (which includes the issuer's parent and subsidiary entities), then that director will not be considered independent. NI52-110 assumes that the following persons have a material relationship with the issuer (and are therefore precluded from sitting on the audit committee):

Employment Relationships

•

an individual who is, or has been within the last three years, employee or executive officer of the issuer or an individual whose immediate family member is, or has been within the last three years, an executive officer of the issuer;



•

an individual who, or whose immediate family member, is, or has been within the last three years, an executive officer of another entity if any of the issuer's current executive officers serves or served at that same time on the compensation committee of that entity;



•

an individual who received, or whose immediate family member who is employed as an executive officer of the issuer who received, more than C$75,000 in direct compensation from the issuer during any 12 month period within the last three years (other than remuneration for acting as a member of the board of directors or any board committee of the issuer and fixed amounts received under a retirement plan for prior service with the issuer that is not contingent on continued service);

Relationships with Internal or External Auditors

•

an individual who is a partner or employee of the issuer's internal or external auditor or an individual who was within the last three years a partner or employee of the issuer's internal or external auditor and personally worked on the issuer's audit within that time;



•

an individual whose spouse, minor child or stepchild, or child or stepchild who shares a home with the individual, is (i) a partner of the issuer's internal or external auditor, (ii) an employee of the issuer's internal or external auditor and participates in its audit, assurance or tax compliance (but not tax planning) practice, (iii) or an individual who was within the last three years a partner or employee of the issuer's internal or external auditor and personally worked on the issuer's audit within that time;

Advisory or Consulting Relationships

•

an individual who accepts, directly or indirectly, any consulting, advisory or other compensatory fee from the issuer or any subsidiary entity of the issuer, other than remuneration for acting as a member of the board or any board

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committee or as a part-time chair or vice-chair of the board or any board committee, including the indirect acceptance of a fee by an individual's spouse, minor child or stepchild, or child or stepchild who shares the individual's home or by an entity in which such individual is a partner, member, officer such as a managing director or executive officer and which provides accounting, consulting, legal, investment banking or financial advisory services to the issuer or any subsidiary entity of the issuer; and

Relationships with Affiliated Entities

•

an individual who is an affiliated entity of the issuer or any of its subsidiary entities, where affiliated entity means a person that has the direct or indirect power to direct or cause the direction of management and the policies of the issuer or any of its subsidiary entities, whether through ownership of voting securities or otherwise (other than an individual who owns, directly or indirectly, ten percent of less of any class of voting securities of the issuer and is not an executive officer of the issuer) or an individual who is both a director and an employee of an affiliated entity or an executive officer, general partner or managing member of an affiliated entity.

The Materiality of Other Relationships is for the Board to Determine

If a director has a direct or indirect relationship with the issuer, then it will be material if, in the view of the issuer's board of directors, the relationship could reasonably interfere with the exercise of the director's independent judgement. These relationships may include commercial, charitable, industrial, banking, consulting, legal, accounting or familial relationships or any other relationship that the board considers to be material.

Exceptions to the Independence Requirement

NI52-110 provides exemptions from the independence requirements for:

•

audit committee members who cease to be independent for reasons outside their control (but only for a limited period of time);



•

directors appointed to the audit committee to fill a vacancy resulting from the death, disability or resignation of a member of the audit committee (but only for a limited period of time). The director appointed to fill the vacancy is also temporarily exempt from the financial literacy requirements;



•

audit committee members, under exceptional and limited circumstances as determined by the board in its reasonably judgment, who are not consultants or advisors, not an affiliated entity of the issuer or any of its subsidiary entities, not an employee or officer of the issuer or an immediate family member of such and do not act as chair of the audit committee (but only for a maximum period of two years); and



•

U.S. listed issuers complying with the audit committee requirements of their U.S. exchange or quotation system (provided they make the necessary disclosure in their AIF (Annual Information Form).

New York Stock Exchange Rules

Under the New York Stock Exchange rules, the following requirements must be met to qualify as an "Independent Director":

(a)

No director qualifies as "independent" unless the board of directors affirmatively determines that the director has no material relationship with the listed company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the company). Companies must disclose these determinations.



(b)

In addition, the following persons are not independent:



•

Any director who is (or who has an immediate family member who is) an executive officer, other than on an interim basis, of the listed company;



•

any director who receives (or who has an immediate family member who receives) more than $120,000 per year in direct compensation from the listed company;



•

any director who is (or who has an immediate family member who is, in a professional capacity) a partner or employee of the listed company's internal or external auditor;

AGNICO EAGLE     A-7
ANNUAL INFORMATION FORM            

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•

any director who is (or who has an immediate family member who is) employed as an executive officer of another company where any of the executives of the listed company also serves or served on that other company's compensation committee; and



•

any director who is an employee (or who has an immediate family member who is an executive officer) of another company that has made payments to, or received payments from, the listed company for property or services which exceeds the greater of $1 million or 2% of such other company's consolidated gross revenues.

Three Year "Cooling Off" Period.    For each of the categories above where a director is not (or is presumed not to be) independent, there is a three-year "cooling off" period. Accordingly, the existence of the prohibited relationship at any time during the preceding three years is presumed to impair independence.

Sarbanes-Oxley Act

(a)

In General.    Each member of the audit committee of the issuer shall be a member of the board of directors of the issuer, and shall otherwise be independent.



(b)

Criteria.    In order to be considered to be independent for purposes of this paragraph, a member of an audit committee of an issuer may not, other than in his or her capacity as a member of the audit committee, the board of directors or any other board committee:



•

accept any consulting, advisory or other compensatory fee from the issuer; or



•

be an affiliated person of the issuer or any subsidiary thereof.

Exemption Authority.    The Commission may exempt from the requirements of subparagraph (b) a particular relationship with respect to audit committee members, as the Commission determines appropriate in light of the circumstances.

A-8     AGNICO EAGLE
           ANNUAL INFORMATION FORM

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SCHEDULE B
TO THE AUDIT COMMITTEE CHARTER OF THE CORPORATION

Audit Committee Financial Expert

An "audit committee financial expert" must possess all of the following attributes:

(a)

an understanding of generally accepted accounting principles and financial statements;



(b)

the ability to assess the general application of such principles in connection with the accounting for estimates, accruals, and reserves;



(c)

experience preparing, auditing, analyzing or evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breath and complexity of issues that can reasonably be expected to be raised by the issuer's financial statements, or experience actively supervising one or more persons engaged in such activities;



(d)

an understanding of internal control over and procedures for financial reporting; and



(e)

an understanding of audit committee functions.

The audit committee financial expert must also have acquired those attributes through:

(a)

education and experience as a principal financial officer, principal accounting officer, controller, public accountant, auditor or experience in one or more positions that involve the performance of similar functions;



(b)

experience actively supervising a principal financial officer, principal accounting officer, controller, public accountant or auditor or person performing similar functions;



(c)

experience overseeing or assessing the performance of companies or public accountants for the preparation, auditing or evaluation of financial statements; or



(d)

other relevant experience.

"Active supervision" means the supervisor participated in, and contributed to, the process of addressing the same types of issues relating to the preparation, auditing, analysis and evaluation of financial statements as the person actually performing the work.

AGNICO EAGLE     B-1
ANNUAL INFORMATION FORM            

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Exhibit 99.1

AGNICO EAGLE MINES LIMITED ANNUAL INFORMATION FORM
INTRODUCTORY NOTES
Note to Investors Concerning Estimates of Mineral Reserves and Mineral Resources
Note to Investors Concerning Certain Measures of Performance
SELECTED FINANCIAL DATA
GLOSSARY OF SELECTED MINING TERMS
CORPORATE STRUCTURE
DESCRIPTION OF THE BUSINESS
GENERAL DEVELOPMENT OF THE BUSINESS
OPERATIONS AND PRODUCTION
RISK FACTORS
DIVIDENDS
DESCRIPTION OF CAPITAL STRUCTURE
RATINGS
MARKET FOR SECURITIES
DIRECTORS AND OFFICERS OF THE COMPANY
AUDIT COMMITTEE
LEGAL PROCEEDINGS AND REGULATORY ACTIONS
INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS
TRANSFER AGENT AND REGISTRAR
MATERIAL CONTRACTS
INTERESTS OF EXPERTS
ADDITIONAL INFORMATION
SCHEDULE "A" AUDIT COMMITTEE CHARTER OF THE COMPANY
SCHEDULE A TO THE AUDIT COMMITTEE CHARTER OF THE CORPORATION
SCHEDULE B TO THE AUDIT COMMITTEE CHARTER OF THE CORPORATION



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Exhibit 99.2

Annual Audited Consolidated Financial Statements
(Prepared in Accordance with International Financial Reporting Standards)

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON
INTERNAL CONTROL OVER FINANCIAL REPORTING

To the Board of Directors (the "Board") and Shareholders of Agnico Eagle Mines Limited:

We have audited Agnico Eagle Mines Limited's internal control over financial reporting as of December 31, 2014, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013 (the "COSO criteria"). Agnico Eagle Mines Limited's management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying management certification report on internal control over financial reporting. Our responsibility is to express an opinion on Agnico Eagle Mines Limited's internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that revenues and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

As indicated in the accompanying Management Certification, management's assessment of, and conclusion on the effectiveness of, internal control over financial reporting did not include the internal controls of Canadian Malartic Corporation, which is included in the 2014 consolidated financial statements of Agnico Eagle Mines Limited and constituted $2,141.7 million and $1,590.6 million of total assets and net assets, respectively, as of December 31, 2014 and $189.9 million and $8.9 million of revenues from mining operations and net loss, respectively, for the year then ended. Our audit of internal control over financial reporting of Agnico Eagle Mines Limited also did not include an evaluation of the internal control over financial reporting of Canadian Malartic Corporation.

In our opinion, Agnico Eagle Mines Limited maintained, in all material respects, effective internal control over financial reporting as of December 31, 2014 based on the COSO criteria.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Agnico Eagle Mines Limited as of December 31, 2014, December 31, 2013 and January 1, 2013, and the consolidated statements of income (loss) and comprehensive income (loss), equity and cash flows for each of the years ended December 31, 2014 and December 31, 2013, and our report dated March 25, 2015 expressed an unqualified opinion thereon.

		/s/ ERNST & YOUNG LLP
Toronto, Canada		Chartered Professional Accountants
March 25, 2015		Licensed Public Accountants

2   AGNICO EAGLE ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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MANAGEMENT CERTIFICATION

Management of Agnico Eagle Mines Limited ("Agnico Eagle" or the "Company") is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed by, or under the supervision of, the Company's Chief Executive Officer and Chief Financial Officer and effected by the Company's Board, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

On June 16, 2014, Agnico Eagle and Yamana Gold Inc. ("Yamana") jointly acquired 100.0% of the issued and outstanding shares of Osisko Mining Corporation ("Osisko") by way of a court-approved plan of arrangement (the "Arrangement") under the Canada Business Corporations Act. Under the Arrangement, Agnico Eagle and Yamana each indirectly acquired 50.0% of Osisko's issued and outstanding shares. Management has not evaluated the internal controls of Canadian Malartic Corporation (the successor to Osisko) in accordance with Question 3 of the Securities and Exchange Commission's Management's Report on Internal Control Over Financial Reporting and Certification of Disclosure in Exchange Act Periodic Reports Frequently Asked Questions. As a result, management's evaluation of the Company's internal control over financial reporting did not include an evaluation of the internal controls of Canadian Malartic Corporation and management's conclusion regarding the effectiveness of the Company's internal control over financial reporting does not extend to the internal controls of Canadian Malartic Corporation.

Inclusion of Canadian Malartic Corporation in the Company's 2014 consolidated financial statements constituted $2,141.7 million and $1,590.6 million of total assets and net assets, respectively, as of December 31, 2014 and $189.9 million and $8.9 million of revenues from mining operations and net loss, respectively, for the year then ended.

The Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of the Company's internal control over financial reporting as of December 31, 2014. In making this assessment, the Company's management used the criteria outlined by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control – Integrated Framework issued in 2013. Based on its assessment, management concluded that, as of December 31, 2014, the Company's internal control over financial reporting was effective.

The effectiveness of the Company's internal control over financial reporting as of December 31, 2014 has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report that appears herein.

Toronto, Canada March 25, 2015		By	/s/  SEAN BOYD       Sean Boyd Vice Chairman, President and Chief Executive Officer
		By	/s/  DAVID SMITH       David Smith Senior Vice-President, Finance and Chief Financial Officer

ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE   3

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board and Shareholders of Agnico Eagle Mines Limited:

We have audited the accompanying consolidated balance sheets of Agnico Eagle Mines Limited as of December 31, 2014, December 31, 2013 and January 1, 2013, and the related consolidated statements of income (loss) and comprehensive income (loss), equity and cash flows for each of the years ended December 31, 2014 and December 31, 2013. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Agnico Eagle Mines Limited at December 31, 2014, December 31, 2013 and January 1, 2013 and the consolidated results of its operations and its cash flows for each of the years ended December 31, 2014 and December 31, 2013 in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Agnico Eagle Mines Limited's internal control over financial reporting as of December 31, 2014, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013 and our report dated March 25, 2015 expressed an unqualified opinion thereon.

		/s/ ERNST & YOUNG LLP
Toronto, Canada		Chartered Professional Accountants
March 25, 2015		Licensed Public Accountants

4   AGNICO EAGLE ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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AGNICO EAGLE MINES LIMITED
CONSOLIDATED BALANCE SHEETS
(thousands of United States dollars, except share amounts)

				As at December 31, 2014			As at December 31, 2013			As at January 1, 2013
ASSETS
Current assets:
	Cash and cash equivalents			$	177,537		$	139,101		$	298,068
	Short-term investments				4,621			2,217			8,490
	Restricted cash (note 7)				33,122			28,723			25,450
	Trade receivables (notes 6 and 18)				59,716			67,300			67,750
	Inventories (note 8)				446,660			345,083			326,102
	Income taxes recoverable (note 24)				1,658			18,682			19,313
	Available-for-sale securities (notes 6 and 9)				56,468			74,581			44,719
	Fair value of derivative financial instruments (notes 6 and 21)				4,877			5,590			2,112
	Other current assets (note 10(a))				123,401			116,992			92,977
Total current assets					908,060			798,269			884,981
Non-current assets:
	Restricted cash (note 7)				20,899			–			–
	Goodwill (note 5)				582,461			39,017			229,279
	Property, plant and mine development (note 11)				5,301,496			3,694,461			4,220,289
	Other assets (note 10(b))				27,622			48,334			34,422
Total assets				$	6,840,538		$	4,580,081		$	5,368,971
LIABILITIES AND EQUITY
Current liabilities:
	Accounts payable and accrued liabilities (note 12)			$	206,180		$	173,374		$	185,329
	Reclamation provision (note 13)				6,769			3,452			16,816
	Dividends payable				–			–			37,905
	Interest payable (note 15)				13,816			13,803			13,602
	Income taxes payable (note 24)				19,328			7,523			10,061
	Finance lease obligations (note 14)				22,142			12,035			12,955
	Current portion of long-term debt (note 15)				52,182			–			–
	Fair value of derivative financial instruments (notes 6 and 21)				8,249			323			277
Total current liabilities					328,666			210,510			276,945
Non-current liabilities:
	Long-term debt (note 15)				1,322,461			987,356			814,164
	Reclamation provision (note 13)				249,917			184,009			185,741
	Deferred income and mining tax liabilities (note 24)				832,201			453,411			632,863
	Other liabilities (note 16)				38,803			27,389			26,056
Total liabilities					2,772,048			1,862,675			1,935,769
EQUITY
	Common shares (note 17):
		Outstanding – 215,192,887 common shares issued, less 956,653 shares held in a trust or by a depositary			4,599,788			3,294,007			3,241,922
	Stock options (notes 17 and 19)				200,830			184,078			157,875
	Warrants				–			–			24,858
	Contributed surplus				37,254			37,254			15,665
	Retained earnings (deficit)				(779,382	)		(800,074	)		592
	Accumulated other comprehensive income (loss)				10,000			2,141			(7,710	)
Total equity					4,068,490			2,717,406			3,433,202
Total liabilities and equity				$	6,840,538		$	4,580,081		$	5,368,971
Commitments and contingencies (note 26)

On behalf of the Board:

Sean Boyd CPA, CA, Director		Mel Leiderman FCPA, FCA, Director

See accompanying notes

ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE   5

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AGNICO EAGLE MINES LIMITED

CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)

(thousands of United States dollars, except per share amounts)

					Year Ended December 31,
					2014			2013
REVENUES
Revenues from mining operations (note 18)				$	1,896,766		$	1,638,406
COSTS, EXPENSES AND OTHER INCOME
Production(i)					1,004,559			866,082
Exploration and corporate development					56,002			44,236
Amortization of property, plant and mine development (note 11)					433,628			313,890
General and administrative					118,771			113,809
Impairment loss on available-for-sale securities (note 9)					15,763			32,476
Finance costs (note 15)					73,393			62,455
Loss on derivative financial instruments (note 21)					6,156			268
Gain on sale of available-for-sale securities (note 9)					(5,635	)		(74	)
Environmental remediation (note 13)					8,214			3,698
Impairment loss (note 23)					–			1,014,688
Foreign currency translation loss					3,781			1,769
Other (income) expenses					(7,004	)		3,396
Income (loss) before income and mining taxes					189,138			(818,287	)
Income and mining taxes expense (recovery) (note 24)					106,168			(131,582	)
Net income (loss) for the year				$	82,970		$	(686,705	)
Net income (loss) per share – basic (note 17)				$	0.43		$	(3.97	)
Net income (loss) per share – diluted (note 17)				$	0.39		$	(3.97	)
Cash dividends declared per common share				$	0.32		$	0.66
COMPREHENSIVE INCOME (LOSS)
Net income (loss) for the year				$	82,970		$	(686,705	)
Other comprehensive income (loss):
Items that may be subsequently reclassified to net income (loss):
	Available-for-sale securities and other investments:
		Unrealized loss			(720	)		(22,551	)
		Reclassification to impairment loss on available-for-sale securities (note 9)			15,763			32,476
		Reclassification to realized gain on sale of available-for-sale securities (note 9)			(5,635	)		(74	)
		Income tax impact of reclassification items (note 24)			(1,668	)		–
		Income tax impact of other comprehensive income (loss) items (note 24)			119			–
					7,859			9,851
Items that will not be subsequently reclassified to net income (loss):
	Pension benefit obligations:
		Remeasurement losses of pension benefit obligations (note 16(a))			(858	)		–
		Income tax impact (note 24)			233			–
					(625	)		–
Other comprehensive income for the year					7,234			9,851
Comprehensive income (loss) for the year				$	90,204		$	(676,854	)

Note:

(i)

Exclusive of amortization, which is shown separately.

See accompanying notes

6   AGNICO EAGLE ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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AGNICO EAGLE MINES LIMITED
CONSOLIDATED STATEMENTS OF EQUITY
(thousands of United States dollars, except share and per share amounts)

			Common Shares Outstanding
			Shares		Amount			Stock Options			Warrants			Contributed Surplus			Retained Earnings (Deficit)			Accumulated Other Comprehensive Income (Loss)			Total Equity
Balance December 31, 2012			172,102,870		$	3,241,922		$	157,875		$	24,858		$	15,665		$	592		$	(7,710	)	$	3,433,202
Net loss for the year			–			–			–			–			–			(686,705	)		–			(686,705	)
Other comprehensive income			–			–			–			–			–			–			9,851			9,851
Total comprehensive (loss) income			–			–			–			–			–			(686,705	)		9,851			(676,854	)
Transactions with owners:
	Shares issued under employee stock option plan (notes 17 and 19(a))		213,500			9,765			(3,292	)		–			–			–			–			6,473
	Stock options (notes 17 and 19(a))		–			–			29,495			–			–			–			–			29,495
	Shares issued under incentive share purchase plan (note 19(b))		812,946			23,379			–			–			–			–			–			23,379
	Shares issued under dividend reinvestment plan		858,107			25,837			–			–			–			–			–			25,837
	Warrant expiry		–			–			–			(24,858	)		21,589			–			–			(3,269	)
	Dividends declared ($0.66 per share)		–			–			–			–			–			(113,961	)		–			(113,961	)
	Restricted share unit plan (notes 17 and 19(c))		(33,448	)		(6,896	)		–			–			–			–			–			(6,896	)
Balance December 31, 2013			173,953,975		$	3,294,007		$	184,078		$	–		$	37,254		$	(800,074	)	$	2,141		$	2,717,406
Net income for the year			–			–			–			–			–			82,970			–			82,970
Other comprehensive (loss) income			–			–			–			–			–			(625	)		7,859			7,234
Total comprehensive income			–			–			–			–			–			82,345			7,859			90,204
Transactions with owners:
	Shares issued under employee stock option plan (notes 17 and 19(a))		582,925			21,083			(4,089	)		–			–			–			–			16,994
	Stock options (notes 17 and 19(a))		–			–			20,841			–			–			–			–			20,841
	Shares issued under incentive share purchase plan (note 19(b))		517,721			15,543			–			–			–			–			–			15,543
	Shares issued under dividend reinvestment plan		262,360			7,654			–			–			–			–			–			7,654
	Shares issued for joint acquisition of Osisko (note 5)		34,794,843			1,164,237			–			–			–			–			–			1,164,237
	Common shares held by a depositary relating to convertible debentures previously issued by Osisko (notes 5 and 17)		(871,680	)		(29,166	)		–			–			–			–			–			(29,166	)
	Shares issued for Cayden acquisition (note 5)		4,853,875			121,655			–			–			–			–			–			121,655
	Dividends declared ($0.32 per share)		–			–			–			–			–			(61,653	)		–			(61,653	)
	Restricted share unit plan (notes 17 and 19(c))		142,215			4,775			–			–			–			–			–			4,775
Balance December 31, 2014			214,236,234		$	4,599,788		$	200,830		$	–		$	37,254		$	(779,382	)	$	10,000		$	4,068,490

See accompanying notes

ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE   7

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AGNICO EAGLE MINES LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(thousands of United States dollars)

				Year Ended December 31,
				2014			2013
OPERATING ACTIVITIES
Net income (loss) for the year			$	82,970		$	(686,705	)
Add (deduct) items not affecting cash:
	Amortization of property, plant and mine development (note 11)			433,628			313,890
	Deferred income and mining taxes (note 24)			37,058			(183,976	)
	Gain on sale of available-for-sale securities (note 9)			(5,635	)		(74	)
	Stock-based compensation (note 19)			37,565			44,526
	Impairment loss on available-for-sale securities (note 9)			15,763			32,476
	Impairment loss (note 23)			–			1,014,688
	Foreign currency translation loss			3,781			1,769
	Other			23,430			22,719
Adjustment for settlement of reclamation provision				(4,160	)		(9,081	)
Changes in non-cash working capital balances:
	Trade receivables			17,237			450
	Income taxes			30,771			717
	Inventories			(1,354	)		(33,838	)
	Other current assets			787			(23,447	)
	Accounts payable and accrued liabilities			(3,391	)		(12,695	)
	Interest payable			(126	)		(376	)
Cash provided by operating activities				668,324			481,043
INVESTING ACTIVITIES
Additions to property, plant and mine development (note 11)				(475,412	)		(620,536	)
Acquisition of Cayden Resources Inc., net of cash and cash equivalents acquired (note 5)				3,477			–
Acquisition of Osisko Mining Corporation, net of cash and cash equivalents acquired (note 5)				(403,509	)		–
Acquisition of Urastar Gold Corporation, net of cash and cash equivalents acquired (note 5)				–			(10,051	)
Net (purchases) sales of short-term investments				(2,404	)		6,273
Net proceeds from sale of available-for-sale securities and warrants (note 9)				44,692			171
Purchase of available-for-sale securities and warrants (note 9)				(27,246	)		(59,804	)
Decrease (increase) in restricted cash (note 7)				8,783			(3,273	)
Cash used in investing activities				(851,619	)		(687,220	)
FINANCING ACTIVITIES
Dividends paid				(54,065	)		(126,266	)
Repayment of finance lease obligations (note 14)				(21,453	)		(10,605	)
Sale-leaseback financing (note 14)				1,027			10,928
Proceeds from long-term debt (note 15)				1,010,000			290,000
Repayment of long-term debt (note 15)				(724,050	)		(120,000	)
Long-term debt financing (note 15)				(2,127	)		–
Repurchase of common shares for restricted share unit plan (notes 17 and 19(c))				(7,518	)		(19,000	)
Proceeds on exercise of stock options (note 19(a))				16,994			8,006
Common shares issued (note 17)				10,428			15,666
Cash provided by financing activities				229,236			48,729
Effect of exchange rate changes on cash and cash equivalents				(7,505	)		(1,519	)
Net increase (decrease) in cash and cash equivalents during the year				38,436			(158,967	)
Cash and cash equivalents, beginning of year				139,101			298,068
Cash and cash equivalents, end of year			$	177,537		$	139,101
SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid (note 15)			$	67,632		$	58,152
Income and mining taxes paid			$	51,302		$	56,478

See accompanying notes

8   AGNICO EAGLE ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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AGNICO EAGLE MINES LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(thousands of United States dollars, except share and per share amounts, unless otherwise indicated)
December 31, 2014

1.   CORPORATE INFORMATION

Agnico Eagle Mines Limited ("Agnico Eagle" or the "Company") is principally engaged in the production and sale of gold, as well as related activities such as exploration and mine development. The Company's mining operations are located in Canada, Mexico and Finland and has exploration activities in Canada, Europe, Latin America and the United States. Agnico Eagle is a public company incorporated and domiciled in Canada with its head and registered office located at 145 King Street East, Suite 400, Toronto, Ontario, M5C 2Y7. The Company is listed on the Toronto Stock Exchange and the New York Stock Exchange. Agnico Eagle sells its gold production into the world market.

These consolidated financial statements were authorized for issuance by the Board of Directors on March 25, 2015.

2.   BASIS OF PRESENTATION

A)

Statement of Compliance

The accompanying consolidated financial statements of Agnico Eagle have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") in United States ("US") dollars.

These consolidated financial statements were prepared on a going concern basis under the historical cost method except for certain financial assets and liabilities which are measured at fair value. Significant accounting policies are presented in note 3 to these consolidated financial statements and have been consistently applied in each of the periods presented.

Prior to the adoption of IFRS, the Company's consolidated financial statements were prepared in accordance with United States generally accepted accounting principles ("US GAAP"). As these consolidated financial statements are the Company's first annual financial statements prepared in accordance with IFRS, disclosure of Agnico Eagle's elected transition exemptions and reconciliation and explanation of accounting policy differences compared to US GAAP are provided in note 29 to these consolidated financial statements.

In the opinion of management, the consolidated financial statements reflect all adjustments, which consist of normal and recurring adjustments necessary to present fairly the financial position as at December 31, 2014, December 31, 2013 and January 1, 2013 and the results of operations and cash flows for the years ended December 31, 2014 and December 31, 2013.

B)

Basis of Presentation

Subsidiaries

These consolidated financial statements include the accounts of Agnico Eagle and its consolidated subsidiaries. All intercompany balances, transactions, income and expenses and gains or losses have been eliminated on consolidation. Subsidiaries are consolidated where Agnico Eagle has the ability to exercise control. Control of an investee exists when Agnico Eagle is exposed to variable returns from the Company's involvement with the investee and has the ability to affect those returns through its power over the investee. The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the elements of control.

Joint Arrangements

A joint arrangement is defined as an arrangement in which two or more parties have joint control. Joint control is the contractually agreed sharing of control over an arrangement between two or more parties. This exists only when the decisions about the relevant activities that significantly affect the returns of the arrangement require the unanimous consent of the parties sharing control.

ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE   9

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AGNICO EAGLE MINES LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(thousands of United States dollars, except share and per share amounts, unless otherwise indicated)
December 31, 2014

2.   BASIS OF PRESENTATION (Continued)

A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement and have rights to the assets and obligations for the liabilities relating to the arrangement. These consolidated financial statements include the Company's interests in the assets, liabilities, revenues and expenses of the joint operations, from the date that joint control commenced. Agnico Eagle's interest in the Canadian Malartic Corporation, located in Quebec, has been accounted for as a joint operation.

3.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A)

Business Combinations

In a business combination, the acquisition method of accounting is used, whereby the purchase consideration is allocated to the fair value of identifiable assets acquired and liabilities assumed at the date of acquisition. Preliminary fair values allocated at a reporting date are finalized as soon as the relevant information is available, within a period not to exceed twelve months from the acquisition date with retroactive restatement of the impact of adjustments to those preliminary fair values effective as at the acquisition date. Acquisition related costs are expensed as incurred.

Purchase consideration may also include amounts payable if future events occur or conditions are met. Any such contingent consideration is measured at fair value and included in the purchase consideration at the acquisition date. Subsequent changes to the estimated fair value of contingent consideration are recorded through the consolidated statements of income (loss), unless the preliminary fair value of contingent consideration as at the acquisition date is finalized before the twelve month measurement period in which case the adjustment is allocated to the identifiable assets acquired and liabilities assumed retrospectively to the acquisition date.

Where the cost of the acquisition exceeds the fair values of the identifiable net assets acquired, the difference is recorded as goodwill. A gain is recorded through the consolidated statements of income (loss) if the cost of the acquisition is less than the fair values of the identifiable net assets acquired.

Non-controlling interests represent the fair value of net assets in subsidiaries that are not held by the Company as at the date of acquisition. Non-controlling interests are presented in the equity section of the consolidated balance sheets.

In a business combination achieved in stages, the Company remeasures any previously held equity interest at its acquisition date fair value and recognizes any gain or loss in the consolidated statements of income (loss).

B)

Non-current Assets and Disposal Groups Held For Sale and Discontinued Operations

The Company classifies a non-current asset or disposal group as held for sale if it is highly probable that they will be sold in their current condition, within one year from the date of classification. Assets and disposal groups that meet the criteria to be classified as an asset held for sale are measured at the lower of carrying amount and fair value less costs to dispose, and amortization on such assets ceases from the date they are classified as held for sale. Assets and disposal groups that meet the criteria to be classified as held for sale are presented separately in the consolidated balance sheets.

If the carrying amount of the asset prior to being classified as held for sale is greater than the fair value less costs to dispose, the Company recognizes an impairment loss. Any subsequent change in the measurement amount of items classified as held for sale is recognized as a gain, to the extent of any cumulative impairment charges previously recognized to the related asset or disposal group, or as a further impairment loss.

A discontinued operation is a component of the Company that can be clearly distinguished from the rest of the entity, both operationally and for financial reporting purposes that has been disposed of or is classified as held for

10   AGNICO EAGLE ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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sale and represents: a) a separate significant line of business or geographical area of operations; b) a part of a single co-ordinated plan to dispose of an area of operation; or c) a subsidiary acquired exclusively for resale. The results of the disposal groups or regions which are discontinued operations are presented separately in the consolidated statements of comprehensive income (loss).

C)

Foreign Currency Translation

The functional currency of the Company, for each subsidiary and for joint arrangements, is the currency of the primary economic environment in which it operates. The functional currency of all of the Company's operations is the US dollar.

Once the Company determines the functional currency of an entity, it is not changed unless there is a change in the relevant underlying transactions, events and circumstances. Any change in an entity's functional currency is accounted for prospectively from the date of the change, and the consolidated balance sheets are translated using the exchange rate at that date.

At the end of each reporting period, the Company translates foreign currency balances as follows:

•

Monetary items are translated at the closing rate in effect at the consolidated balance sheet date;



•

Non-monetary items that are measured in terms of historical cost are translated using the exchange rate at the date of the transaction. Items measured at fair value are translated at the exchange rate in effect at the date the fair value was measured; and



•

Revenue and expense items are translated using the average exchange rate during the period.



D)

Cash and Cash Equivalents

The Company's cash and cash equivalents include cash on hand and short-term investments in money market instruments with remaining maturities of three months or less at the date of purchase. The Company places its cash and cash equivalents and short-term investments in high quality securities issued by government agencies, financial institutions and major corporations and limits the amount of credit exposure by diversifying its holdings.

E)

Short-term Investments

The Company's short-term investments include financial instruments with remaining maturities of greater than three months but less than one year at the date of purchase. Short-term investments are designated as held to maturity for accounting purposes and are carried at amortized cost, which approximates market value given the short-term nature of these investments.

F)

Inventories

Inventories consist of ore stockpiles, concentrates, dore bars and supplies. Inventories are carried at the lower of cost and net realizable value ("NRV"). Cost is determined using the weighted average basis and includes all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. Cost of inventories includes direct costs of materials and labour related directly to mining and processing activities, including production phase stripping costs, amortization of property, plant and mine development directly involved in the related mining and production process, amortization of any stripping costs previously capitalized and directly attributable overhead costs. When interruptions to production occur, an adjustment is made to the costs included in inventories, such that they reflect normal capacity. Abnormal costs are expensed in the period they are incurred.

ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE   11

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The current portion of ore stockpiles, ore in leach pads and inventories is determined based on the expected amounts to be processed within the next twelve months. Ore stockpiles, ore on leach pads and inventories not expected to be processed or used within the next twelve months are classified as long-term.

NRV is estimated by calculating the net selling price less costs to be incurred in converting the relevant inventories to saleable product and delivering it to a customer. Costs to complete are based on management's best estimate as at the consolidated balance sheet date. An NRV impairment may be reversed in a subsequent period if the circumstances that triggered the impairment no longer exist.

G)

Financial Instruments

The Company's financial assets and liabilities (financial instruments) include cash and cash equivalents, short-term investments, restricted cash, trade receivables, available-for-sale securities, accounts payable and accrued liabilities, long-term debt (including convertible debentures) and derivative financial instruments. All financial instruments are recorded at fair value at recognition. Subsequent to initial recognition, financial instruments classified as trade receivables, accounts payable and accrued liabilities and long-term debt (excluding convertible debentures issued by Osisko that are now an obligation of Canadian Malartic GP) are measured at amortized cost using the effective interest method. Other financial assets and liabilities are recorded at fair value through the consolidated statements of income (loss).

Available-for-sale Securities

The Company's investments in available-for-sale securities consist primarily of investments in common shares of entities in the mining industry recorded using trade date accounting. Investments are designated as available-for-sale based on the criteria that the Company does not hold these for trading purposes. The cost basis of available-for-sale securities is determined using the average cost method and they are carried at fair value. Unrealized gains and losses recorded to measure available-for-sale securities at fair value are recognized in other comprehensive income (loss).

In the event that a decline in the fair value of an investment in available-for-sale securities occurs and the decline in value is considered to be significant or prolonged, an impairment charge is recorded in the consolidated statements of income (loss) and comprehensive income (loss). The Company assesses whether a decline in value is considered to be significant or prolonged by considering available evidence, including changes in general market conditions, specific industry and investee data, the length of time and the extent to which the fair value has been less than cost and the financial condition of the investee.

Derivative Instruments and Hedge Accounting

The Company uses derivative financial instruments (primarily option and forward contracts) to manage exposure to fluctuations in by-product metal prices, interest rates and foreign currency exchange rates and may use such means to manage exposure to certain input costs. The Company does not hold financial instruments or derivative financial instruments for trading purposes.

The Company recognizes all derivative financial instruments in the consolidated financial statements at fair value regardless of the purpose or intent for holding the instrument. Changes in the fair value of derivative financial instruments are either recognized periodically in the consolidated statements of income (loss) and comprehensive income (loss) or in equity as a component of accumulated other comprehensive income (loss), depending on the nature of the derivative financial instrument and whether it qualifies for hedge accounting. Financial instruments designated as hedges are tested for effectiveness at each reporting period. Realized gains and losses on those contracts that are proven to be effective are reported as a component of the related transaction.

12   AGNICO EAGLE ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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H)

Goodwill

Goodwill is recognized in a business combination if the cost of the acquisition exceeds the fair values of the identifiable net assets acquired. Goodwill is then allocated to the cash generating unit ("CGU") or group of CGUs that are expected to benefit from the synergies of the combination. A CGU is the smallest identifiable group of assets that generates cash inflows which are largely independent of the cash inflows from other assets or groups of assets.

The Company performs goodwill impairment tests on an annual basis as at December 31 each year. In addition, the Company assesses for indicators of impairment at each reporting period end and, if an indicator of impairment is identified, goodwill is tested for impairment at that time. If the carrying value of the CGU or group of CGUs to which goodwill is assigned exceeds its recoverable amount, an impairment loss is recognized. Goodwill impairment losses are not reversed.

The recoverable amount of a CGU or group of CGUs is measured as the higher of value in use and fair value less costs of disposal.

I)

Mining Properties, Plant and Equipment and Mine Development Costs

Mining properties, plant and equipment and mine development costs are recorded at cost, less accumulated amortization and accumulated impairment losses.

Mining Properties

The cost of mining properties includes the fair value attributable to proven and probable mineral reserves and mineral resources acquired in a business combination or asset acquisition, underground mine development costs, deferred stripping, capitalized exploration and evaluation costs and capitalized borrowing costs.

Significant payments related to the acquisition of land and mineral rights are capitalized as mining properties at cost. If a mineable ore body is discovered, such costs are amortized to income when production begins, using the units-of-production method, based on estimated proven and probable mineral reserves. If no mineable ore body is discovered, such costs are expensed in the period in which it is determined that the property has no future economic value. Cost components of a specific project that are included in the capital cost of the asset include salaries and wages directly attributable to the project, supplies and materials used in the project, and incremental overhead costs that can be directly attributable to the project.

Assets under construction are not amortized until the end of the construction period or once the production stage is achieved. Upon achieving the production stage, the capitalized construction costs are transferred to the appropriate category of plant and equipment.

Plant and Equipment

Expenditures for new facilities and improvements that can extend the useful lives of existing facilities are capitalized as plant and equipment at cost. The cost of an item of plant and equipment includes: its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates; any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management; and the estimate of the costs of dismantling and removing the item and restoring the site on which it is located other than costs that arise as a consequence of having used the item to produce inventories during the period.

Amortization of an asset begins when the asset is in the location and condition necessary for it to operate in the manner intended by management. Amortization ceases at the earlier of the date the asset is classified as held for sale or the date the asset is derecognized. Assets under construction are not amortized until the end of the

ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE   13

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construction period. Amortization is charged according to either the units-of-production method or on a straight-line basis, according to the pattern in which the asset's future economic benefits are expected to be consumed. The amortization method applied to an asset is reviewed at least annually.

Useful lives of property, plant and equipment are based on estimated mine lives as determined by proven and probable mineral reserves. Remaining mine lives at December 31, 2014 range from 3 to 20 years.

Mine Development Costs

Mine development costs incurred after the commencement of production are capitalized when they are expected to have a future economic benefit. Activities that are typically capitalized include costs incurred to build shafts, drifts, ramps, and access corridors which enables the Company to extract ore underground.

The Company records amortization on underground mine development costs on a units-of-production basis based on the estimated tonnage of proven and probable mineral reserves of the identified component of the ore body. The units-of-production method defines the denominator as the total tonnage of proven and probable mineral reserves.

Deferred Stripping

In open pit mining operations, it is necessary to remove overburden and other waste materials to access ore from which minerals can be extracted economically. The process of mining overburden and waste materials is referred to as stripping.

During the development stage of the mine, stripping costs are capitalized as part of the cost of building, developing and constructing the mine and are amortized once the mine has entered the production stage.

During the production stage of a mine, stripping costs are recorded as a part of the cost of inventories unless these costs are expected to provide a future economic benefit and, in such cases, are capitalized to property, plant and mine development.

Production stage stripping costs provide a future economic benefit when:

•

It is probable that the future economic benefit (e.g., improved access to the ore body) associated with the stripping activity will flow to the Company;



•

The Company can identify the component of the ore body for which access has been improved; and



•

The costs relating to the stripping activity associated with that component can be measured reliably.

Capitalized production stage stripping costs are amortized over the expected useful life of the identified component of the ore body that becomes more accessible as a result of the stripping activity.

Borrowing Costs

Borrowing costs are capitalized to qualifying assets. Qualifying assets are assets that take a substantial period of time to prepare for the Company's intended use, which includes projects that are in the exploration and evaluation, development or construction stages.

Borrowing costs attributable to the acquisition, construction or production of qualifying assets are added to the cost of those assets until such time as the assets are substantially ready for their intended use. All other borrowing costs are recognized as finance costs in the period in which they are incurred. Where the funds used to finance a qualifying asset form part of general borrowings, the amount capitalized is calculated using a weighted average of rates applicable to the relevant borrowings during the period.

14   AGNICO EAGLE ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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Leases

The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at the inception date, including whether the fulfillment of the arrangement is dependent on the use of a specific asset or assets or whether the arrangement conveys a right to use the asset.

Leasing arrangements that transfer substantially all the risks and rewards of ownership of the asset to the Company are classified as finance leases. Finance leases are recorded as an asset with a corresponding liability at an amount equal to the lower of the fair value of the leased assets and the present value of the minimum lease payments. Each lease payment is allocated between the liability and finance costs using the effective interest rate method, whereby a constant rate of interest expense is recognized on the balance of the liability outstanding. The interest element of the lease is charged to the consolidated statement of income (loss) as a finance cost. An asset leased under a finance lease is amortized over the shorter of the lease term and its useful life.

All other leases are recognized as operating leases. Operating lease payments are recognized as an operating expense in the consolidated statements of income (loss) on a straight-line basis over the lease term.

J)

Development Stage Expenditures

Development stage expenditures are costs incurred to obtain access to proven and probable mineral reserves and provide facilities for extracting, treating, gathering, transporting and storing the minerals. The development stage of a mine commences when the technical feasibility and commercial viability of extracting the mineral resource has been determined. Costs that are directly attributable to mine development are capitalized as property, plant and mine development to the extent that they are necessary to bring the property to commercial production.

Abnormal costs are expensed as incurred. Indirect costs are included only if they can be directly attributed to the area of interest. General and administrative costs are capitalized as part of the development expenditures when the costs are directly attributed to a specific mining development project.

Commercial Production

A mine construction project is considered to have entered the production stage when the mine construction assets are available for use. In determining whether mine construction assets are considered available for use, the criteria considered include, but are not limited to, the following:

•

Completion of a reasonable period of testing mine plant and equipment;



•

Ability to produce minerals in saleable form (within specifications); and



•

Ability to sustain ongoing production of minerals.

When a mine construction project moves into the production stage, amortization commences, the capitalization of certain mine construction costs ceases and expenditures are either capitalized to inventories or expensed as incurred. Exceptions include costs incurred for additions or improvements to property, plant and mine development and open-pit stripping activities.

K)

Impairment of Long-lived Assets

At the end of each reporting period the Company assesses whether there is any indication that long-lived assets may be impaired. If an indicator of impairment exists, the recoverable amount of the asset is calculated in order to determine if any impairment loss is required. If it is not possible to estimate the recoverable amount of the individual asset, assets are grouped at the CGU level for the purpose of assessing the recoverable amount. An impairment loss is recognized for any excess of the carrying amount of the CGU over its recoverable amount. The impairment loss

ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE   15

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related to a CGU is first allocated to goodwill and the remaining loss is allocated on a pro-rata basis to the remaining long-lived assets of the CGU based on their carrying amounts.

Any impairment charge that is taken on a long-lived asset except goodwill is reversed if there are subsequent changes in the estimates or significant assumptions that were used to recognize the impairment loss that result in an increase in the recoverable amount of the CGU. If an indicator of impairment reversal has been identified, a recovery should be recognized to the extent the recoverable amount of the asset exceeds its carrying amount. The amount of the reversal is limited to the difference between the current carrying amount and the amount which would have been the carrying amount had the earlier impairment not been recognized and amortization of that carrying amount had continued. Impairments and subsequent reversals are recorded in the consolidated statement of income (loss) in the period in which they occur.

L)

Debt

Debt is initially recorded at fair value, net of financing costs incurred. Debt is subsequently measured at amortized cost. Any difference between the amounts received and the redemption value of the debt is recognized in the consolidated statements of income (loss) over the period to maturity using the effective interest rate method. Convertible debentures are accounted for as a financial liability measured at fair value in the consolidated statements of income (loss).

M)

Reclamation Provisions

Asset retirement obligations ("AROs") arise from the acquisition, development and construction of mining properties and plant and equipment due to government controls and regulations that protect the environment on the closure and reclamation of mining properties. The major parts of the carrying amount of AROs relate to tailings and heap leach pad closure and rehabilitation, demolition of buildings and mine facilities, ongoing water treatment and ongoing care and maintenance of closed mines. The Company recognizes an ARO at the time the environmental disturbance occurs or a constructive obligation is determined to exist based on the Company's best estimate of the timing and amount of expected cash flows expected to be incurred. When the ARO provision is recognized, the corresponding cost is capitalized to the related item of property, plant and mine development. Reclamation provisions that result from disturbance in the land to extract ore in the current period is included in the cost of inventories.

The timing of the actual environmental remediation expenditures is dependent on a number of factors such as the life and nature of the asset, the operating licence conditions and the environment in which the mine operates. Reclamation provisions are measured at the expected value of future cash flows discounted to their present value using a risk-free interest rate. AROs are adjusted each period to reflect the passage of time (accretion). Accretion expense is recorded in financing costs each period. Upon settlement of an ARO, the Company records a gain or loss if the actual cost differs from the carrying amount of the ARO. Settlement gains/losses are recorded in the consolidated statements of income (loss).

Expected cash flows are updated to reflect changes in facts and circumstances. The principal factors that can cause expected cash flows to change are the construction of new processing facilities, changes in the quantities of material in proven and probable mineral reserves and a corresponding change in the life-of-mine plan, changing ore characteristics that impact required environmental protection measures and related costs, changes in water quality that impact the extent of water treatment required and changes in laws and regulations governing the protection of the environment.

Each reporting period, provisions for AROs are remeasured to reflect any changes to significant assumptions, including the amount and timing of expected cash flows and risk-free interest rates. Changes to the reclamation

16   AGNICO EAGLE ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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provision resulting from changes in estimate are added to or deducted from the cost of the related asset, except for reclamation provisions that result from disturbance in the land to extract ore or where the reduction of the reclamation provision exceeds the carrying value of the related assets in which case the asset is reduced to nil and the remaining adjustment is recognized in the consolidated statements of income (loss).

Environmental remediation liabilities ("ERLs") are differentiated from AROs in that they do not arise from environmental contamination in the normal operation of a long-lived asset or from a legal or constructive obligation to treat environmental contamination resulting from the acquisition, construction or development of a long-lived asset. The Company is required to recognize a liability for obligations associated with ERLs arising from past acts. ERLs are measured by discounting the expected related cash flows using a risk-free interest rate. The Company prepares estimates of the timing and amount of expected cash flows when an ERL is incurred. Each reporting period, the Company assesses cost estimates and other assumptions used in the valuation of ERLs to reflect events, changes in circumstances and new information available. Changes in these cost estimates and assumptions have a corresponding impact on the value of the ERL. Any change in the value of ERLs results in a corresponding charge or credit to the consolidated statements of income (loss). Upon settlement of an ERL, the Company records a gain or loss if the actual cost differs from the carrying amount of the ERL in the consolidated statements of income (loss).

N)

Post-employment Benefits

In Canada, the Company maintains a defined contribution plan covering all of its employees (the "Basic Plan"). The Basic Plan is funded by Company contributions based on a percentage of income for services rendered by employees. In addition, the Company has a supplemental plan for designated executives at the level of Vice-President or above (the "Supplemental Plan"). Under the Supplemental Plan, an additional 10.0% of the designated executives' income is contributed by the Company. The Company does not offer any other post-retirement benefits to its employees.

The Company also provides a non-registered supplementary executive retirement defined benefit plan for certain current and former senior officers (the "Executives Plan"). The Executives Plan benefits are generally based on the employee's years of service and level of compensation. Pension expense related to the Executives Plan is the net of the cost of benefits provided (including the cost of any benefits provided for past service), the net interest cost on the net defined liability/asset, and the effects of settlements and curtailments related to special events. Pension fund assets are measured at their current fair values. The costs of pension plan improvements are recognized immediately in expense when they occur. Remeasurements of the net defined benefit liability are recognized immediately in other comprehensive income (loss) and are subsequently transferred to retained earnings.

Defined Contribution Plan

The Company recognizes the contributions payable to a defined contribution plan in exchange for services rendered by employees as an expense, unless another policy requires or permits the inclusion of the contribution in the cost of an asset. After deducting contributions already paid, a liability is recorded throughout each period to reflect unpaid but earned contributions. If the contribution paid exceeds the contribution due for the service before the end of the reporting period, the Company recognizes that excess as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund.

Defined Benefit Plan

Plan assets are measured at their fair value at the consolidated balance sheet date and are deducted from the present value of plan liabilities to arrive at a net defined benefit liability/asset. The defined benefit obligation reflects the expected future payments required to settle the obligation resulting from employee service in the current and prior periods.

ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE   17

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Current service cost represents the actuarially calculated present value of the benefits earned by the active employees in each period and reflects the economic cost for each period based on current market conditions. The current service cost is based on the most recent actuarial valuation. The net interest on the net defined benefit liability/asset is the change during the period in the defined benefit liability/asset that arises from the passage of time.

Past service cost represents the change in the present value of the defined benefit obligation resulting from a plan amendment or curtailment. Past service costs from plan amendments that increase or decrease vested or unvested benefits are recognized immediately in net income (loss) at the earlier of when the related plan amendment occurs or when the entity recognizes related restructuring costs or termination benefits.

Gains or losses on plan settlements are measured as the difference in the present value of the defined benefit obligation and settlement price. This results in a gain or loss being recognized when the benefit obligation settles. Actuarial gains and losses are recorded on the consolidated balance sheets as part of the benefit plan's funded status. Gains and losses are recognized immediately in other comprehensive income (loss) and are subsequently transferred to retained earnings and are not subsequently recognized in net income (loss).

O)

Contingent Liabilities and Other Provisions

Provisions are recognized when a present obligation exists (legal or constructive), as a result of a past event, for which it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The amount recognized as a provision is the best estimate of the expenditure required to settle the obligation at the consolidated balance sheet date, measured using the expected cash flows discounted for the time value of money. The increase in provision (accretion) due to the passage of time is recognized as a finance cost in the consolidated statements of income (loss).

Contingent liabilities are possible obligations whose existence will be confirmed only on the occurrence or non-occurrence of uncertain future events outside the entity's control, or present obligations that are not recognized because it is not probable that an outflow of economic benefits would be required to settle the obligation or the amount cannot be measured reliably. Contingent liabilities are not recognized but are disclosed and described in the notes to the consolidated financial statements, including an estimate of their potential financial effect and uncertainties relating to the amount or timing of any outflow, unless the possibility of settlement is remote. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company, with assistance from its legal counsel, evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought.

P)

Stock-based Compensation

The Company offers equity-settled awards (the employee stock option plan, incentive share purchase plan and restricted share unit plan) to certain employees, officers and directors of the Company.

Employee Stock Option Plan ("ESOP")

The Company's ESOP provides for the granting of options to directors, officers, employees and service providers to purchase common shares. Options have exercise prices equal to the market price on the day prior to the date of grant. The fair value of these options is recognized in the consolidated statements of income (loss) and comprehensive income (loss) or in the consolidated balance sheets if capitalized as part of property, plant and mine development over the applicable vesting period as a compensation cost. Any consideration paid by employees on exercise of options or purchase of common shares is credited to share capital.

18   AGNICO EAGLE ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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Fair value is determined using the Black-Scholes option valuation model, which requires the Company to estimate the expected volatility of the Company's share price and the expected life of the stock options. Limitations with existing option valuation models and the inherent difficulties associated with estimating these variables create difficulties in determining a reliable single measure of the fair value of stock option grants. The cost is recorded over the vesting period of the award to the same expense category of the award recipient's payroll costs and the corresponding entry is recorded in equity. Equity-settled awards are not remeasured subsequent to the initial grant date. The dilutive impact of stock option grants is factored into the Company's reported diluted net income (loss) per share. The stock option expense incorporates an expected forfeiture rate, estimated based on expected employee turnover.

Incentive Share Purchase Plan ("ISPP")

Under the ISPP, directors (excluding non-executive directors), officers and employees (the participants) of the Company may contribute up to 10.0% of their basic annual salaries and the Company contributes an amount equal to 50.0% of each participant's contribution. All common shares subscribed for under the ISPP are issued by the Company.

The Company records an expense equal to its cash contribution to the ISPP. No forfeiture rate is applied to the amounts accrued. Where an employee leaves prior to the vesting date, any accrual for contributions by the Company during the vesting period related to that employee is reversed.

Restricted Share Unit ("RSU") Plan

The RSU plan is open to directors and certain employees including senior executives of the Company. Common shares are purchased and held in a trust until they have vested. The cost is recorded over the vesting period of the award to the same expense category as the award recipient's payroll costs. The cost of the RSUs is recorded within equity until settled. Equity-settled awards are not remeasured subsequent to the initial grant date.

Q)

Revenue Recognition

Revenue from mining operations consists of gold revenues, net of smelting, refining, transportation and other marketing charges. Revenues from by-product metal sales are shown net of smelter charges as part of revenues from mining operations.

Revenue from the sale of gold and silver is recognized when the following conditions have been met:

•

The Company has transferred to the buyer the significant risks and rewards of ownership;



•

The Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;



•

The amount of revenue can be measured reliably;



•

It is probable that the economic benefits associated with the transaction will flow to the Company; and



•

The costs incurred or to be incurred in respect of the transaction can be measured reliably.

Revenue from gold and silver in the form of dore bars is recorded when the refined gold or silver is sold and delivered to the customer. Generally, all of the gold and silver in the form of dore bars recovered in the Company's milling process is sold in the period in which it is produced.

Under the terms of the Company's concentrate sales contracts with third-party smelters, final prices for the metals contained in the concentrate are determined based on the prevailing spot market metal prices on a specified future date, which is established as of the date that the concentrate is delivered to the smelter. The Company records

ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE   19

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revenues under these contracts based on forward prices at the time of delivery, which is when the risks and rewards of ownership of the concentrate passes to the third-party smelters. The terms of the contracts result in differences between the recorded estimated price at delivery and the final settlement price. These differences are adjusted through revenue at each subsequent financial statement date.

R)

Exploration and Evaluation Expenditures

Exploration and evaluation expenditures are the costs incurred in the initial search for mineral deposits with economic potential or in the process of obtaining more information about existing mineral deposits. Exploration expenditures typically include costs associated with prospecting, sampling, mapping, diamond drilling and other work involved in searching for ore. Evaluation expenditures are the costs incurred to establish the technical and commercial viability of developing mineral deposits identified through exploration activities or by acquisition.

Exploration and evaluation expenditures are expensed as incurred unless it can be demonstrated that the project will generate future economic benefit. When it is determined that a project can generate future economic benefit the costs are capitalized in the property, plant and mine development line item of the consolidated balance sheets.

The exploration and evaluation phase ends when the technical feasibility and commercial viability of extracting the mineral is demonstrable.

S)

Net Income (Loss) Per Share

Basic net income (loss) per share is calculated by dividing net income (loss) for a given period by the weighted average number of common shares outstanding during that same period. Diluted net income (loss) per share reflects the potential dilution that could occur if holders with rights to convert instruments to common shares exercise these rights. Convertible debt is dilutive whenever its impact on net income (loss), including mark-to-market gains (losses), interest and tax expense, per ordinary share obtainable on conversion is less than basic net income (loss) per share. The weighted average number of common shares used to determine diluted net income (loss) per share includes an adjustment, using the treasury stock method, for stock options outstanding and warrants outstanding. Under the treasury stock method:

•

The exercise of options or warrants is assumed to occur at the beginning of the period (or date of issuance, if later);



•

The proceeds from the exercise of options or warrants plus the future period compensation expense on options granted are assumed to be used to purchase common shares at the average market price during the period; and



•

The incremental number of common shares (the difference between the number of shares assumed issued and the number of shares assumed purchased) is included in the denominator of the diluted net income (loss) per share calculation.



T)

Income Taxes

Current tax and deferred tax expenses are recognized in the consolidated statements of income (loss) except to the extent that they relate to a business combination, or to items recognized directly in equity or in other comprehensive income (loss).

Current tax expense is based on substantively enacted statutory tax rates and laws at the consolidated balance sheet date.

Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the tax basis of such assets and liabilities measured using tax rates and laws

20   AGNICO EAGLE ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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that are substantively enacted at the consolidated balance sheet date and effective for the reporting period when the temporary differences are expected to reverse.

Deferred taxes are not recognized where:

•

The deferred tax liability arises from the initial recognition of goodwill;



•

The deferred tax asset or liability arises on the initial recognition of an asset or liability in an acquisition that is not a business combination and, at the time of the acquisition, affects neither net income (loss) nor income (loss) before income and mining taxes; and



•

For temporary differences relating to investments in subsidiaries and jointly controlled entities to the extent that the Company can control the timing of the temporary difference and it is probable that they will not reverse in the foreseeable future.

Deferred tax assets are recognized for unused losses carried forward and deductible temporary differences to the extent that it is probable that future taxable net income will be available against which they can be utilized except as noted above.

At each reporting period, previously unrecognized deferred tax assets are reassessed to determine whether it has become probable that future taxable net income will allow the deferred tax assets to be recovered.

Recently Issued Accounting Pronouncements

IFRS 9 – Financial Instruments

In July 2014, the IASB issued IFRS 9 – Financial Instruments which brings together the classification and measurement, impairment and hedge accounting phases of the IASB's project to replace IAS 39 – Financial Instruments: Recognition and Measurement. Application of the standard is mandatory for annual periods beginning on or after January 1, 2018, with early adoption permitted. Agnico Eagle is evaluating the impact of the adoption of IFRS 9 on the Company's consolidated financial statements along with the timing of adoption.

IFRS 15 – Revenue from Contracts with Customers

In May 2014, the IASB issued IFRS 15 – Revenue from Contracts with Customers, which establishes principles that an entity shall apply to report useful information to users of financial statements about the nature, amount, timing, and uncertainty of revenue and cash flows arising from a contract with a customer. Application of the standard is mandatory for annual reporting periods beginning on or after January 1, 2017, with earlier adoption permitted. Agnico Eagle is evaluating the impact of the adoption of IFRS 15 on the Company's consolidated financial statements along with the timing of adoption.

ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE   21

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AGNICO EAGLE MINES LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(thousands of United States dollars, except share and per share amounts, unless otherwise indicated)
December 31, 2014

4.   SIGNIFICANT JUDGMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of these consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Management believes that the estimates used in the preparation of the consolidated financial statements are reasonable; however, actual results may differ materially from these estimates. The key areas where significant judgments, estimates and assumptions have been made are summarized below.

Proven and Probable Mineral Reserves

Proven and probable mineral reserves are estimates of the amount of ore that can be economically and legally extracted from the Company's mining properties. The estimates are based on information compiled by appropriately qualified persons as defined under the Canadian Securities Administrators' National Instrument 43-101 – Standards of Disclosure for Mineral Projects ("NI 43-101"). Such an analysis relating to the geological and technical data on the size, depth, shape and grade of the ore body and suitable production techniques and recovery rates requires complex geological judgments to interpret the data. The estimation of recoverable proven and probable mineral reserves is based upon factors such as estimates of foreign exchange rates, commodity prices, future capital requirements and production costs, along with geological assumptions and judgments made in estimating the size and grade of the ore body.

As the economic assumptions used may change and as additional geological information is acquired during the operation of a mine, estimates of proven and probable mineral reserves may change. Such changes may impact the Company's consolidated balance sheets and consolidated statements of income (loss) and comprehensive income (loss), including:

•

The carrying value of the Company's property, plant and mine development and goodwill may be affected due to changes in estimated future cash flows;



•

Amortization charges in the consolidated statements of income (loss) and comprehensive income (loss) may change where such charges are determined using the units-of-production method or where the useful life of the related assets change;



•

Capitalized stripping costs recognized in the consolidated balance sheets as either part of mining properties or as part of inventories or charged to income may change due to changes in the ratio of ore to waste extracted; and



•

Reclamation provisions may change where changes to the proven and probable mineral reserve estimates affect expectations about when such activities will occur and the associated cost of these activities.

Exploration and Evaluation Expenditures

The application of the Company's accounting policy for exploration and evaluation expenditures requires judgment to determine whether future economic benefits are likely to arise and whether activities have reached a stage that permits a reasonable assessment of the existence of proven and probable mineral reserves.

Production Stage of a Mine

As each mine is unique in nature, significant judgment is required to determine the date that a mine enters the production stage. The Company considers the factors outlined in note 3 to these consolidated financial statements to make this determination.

Contingencies

Contingencies can be either possible assets or possible liabilities arising from past events which, by their nature, will be resolved only when one or more uncertain future events occur or fail to occur. The assessment of the existence and potential

22   AGNICO EAGLE ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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impact of contingencies inherently involves the exercise of significant judgment and the use of estimates regarding the outcome of future events.

Reclamation Provisions

Environmental remediation costs will be incurred by the Company at the end of the operating life of the Company's mining properties. Management assesses its reclamation provision each reporting period or when new information becomes available. The ultimate environmental remediation costs are uncertain, and cost estimates can vary in response to many factors, including estimates of the extent and costs of reclamation activities, technological changes, regulatory changes, cost increases as compared to the inflation rates, and changes in discount rates. These uncertainties may result in future actual expenditures differing from the amount of the current provision. As a result, there could be significant adjustments to the provisions established that would affect future financial results. The reclamation provision as at the reporting date represents management's best estimate of the present value of the future environmental remediation costs required.

Income and Mining Taxes

Management is required to make estimates regarding the tax basis of assets and liabilities and related deferred income and mining tax assets and liabilities, amounts recorded for uncertain tax positions, the measurement of income and mining tax expense, and estimates of the timing of repatriation of income. Several of these estimates require management to make assessments of future taxable profit and, if actual results are significantly different than the Company's estimates, the ability to realize the deferred income and mining tax assets recorded on the consolidated balance sheets could be affected.

Impairment of Goodwill and Non-current Assets

The Company evaluates each asset or CGU (excluding goodwill, which is assessed annually regardless of indicators) in each reporting period to determine if any indicators of impairment exist. When completing an impairment test, the Company calculates the estimated recoverable amount of CGUs, which requires management to make estimates and assumptions with respect to items such as future production levels, operating and capital costs, long-term commodity prices, foreign exchange rates, discount rates, exploration potential, and closure and environmental remediation costs. These estimates and assumptions are subject to risk and uncertainty. Therefore, there is a possibility that changes in circumstances will have an impact on these projections, which may impact the recoverable amount of assets or CGUs. Accordingly, it is possible that some or the entire carrying amount of the assets or CGUs may be further impaired or the impairment charge reduced with the impact recognized in the consolidated statements of income (loss) and comprehensive income (loss).

Joint Arrangements

Judgment is required to determine when the Company has joint control of a contractual arrangement, which requires a continuous assessment of the relevant activities and when the decisions in relation to those activities require unanimous consent. Judgment is also continually required to classify a joint arrangement as either a joint operation or a joint venture when the arrangement has been structured through a separate vehicle. Classifying the arrangement requires the Company to assess its rights and obligations arising from the arrangement. Specifically, the Company considers the legal form of the separate vehicle, the terms of the contractual arrangement and other relevant facts and circumstances. This assessment often requires significant judgment, and a different conclusion on joint control, or whether the arrangement is a joint operation or a joint venture, may have a material impact on the accounting treatment.

ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE   23

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Management evaluated its joint arrangement with Yamana to each acquire 50.0% of the shares of Osisko under the principles of IFRS 11 Joint Arrangements. The Company concluded that the arrangement qualified as a joint operation upon considering the following significant factors:

•

The requirement that the joint operators purchase all output from the investee and investee restrictions on selling the output to any third party;



•

The parties to the arrangement are substantially the only source of cash flow contributing to the continuity of the arrangement; and



•

If the selling price drops below cost, the joint operators are required to cover any obligations the entity cannot satisfy.

5.   ACQUISITIONS

Cayden Resources Inc.

On November 28, 2014, the Company acquired all of the issued and outstanding common shares of Cayden Resources Inc. ("Cayden"), including common shares issuable on the exercise of Cayden's outstanding options and warrants, pursuant to a court-approved plan of arrangement under the Business Corporations Act (British Columbia). Cayden is an exploration company focused on the discovery of precious metals in Mexico.

The total purchase price of $122.1 million was comprised of $0.5 million in cash and 4,853,875 Agnico Eagle common shares issued from treasury. The Cayden acquisition was accounted for as an asset acquisition and transaction costs associated with the acquisition totaling $3.2 million were capitalized to the mining properties acquired.

The following table sets out the allocation of the purchase price to assets acquired and liabilities assumed, based on management's estimates of fair value:

Total purchase price:
Cash paid for acquisition		$	476
Agnico Eagle common shares issued for acquisition			121,655
Total purchase price to allocate		$	122,131
Fair value of assets acquired and liabilities assumed:
Mining properties		$	117,178
Cash and cash equivalents			3,953
Trade receivables(i)			141
Income taxes recoverable			1,942
Other current assets			129
Plant and equipment			68
Accounts payable and accrued liabilities			(1,280	)
Net assets acquired		$	122,131

Note:

(i)

The fair value of trade receivables approximates the gross contractual amounts receivable.

24   AGNICO EAGLE ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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Osisko Mining Corporation

On June 16, 2014, Agnico Eagle and Yamana jointly acquired 100.0% of the issued and outstanding shares of Osisko by way of a court-approved plan of arrangement (the "Arrangement") under the Canada Business Corporations Act.

Under the Arrangement, Agnico Eagle and Yamana each indirectly acquired 50.0% of Osisko's issued and outstanding shares. As part of the Arrangement, the Canadian Malartic mine in Quebec was transferred to the newly formed Canadian Malartic GP in which each of Agnico Eagle and Yamana have an indirect 50.0% interest. Agnico Eagle and Yamana will also jointly explore the Kirkland Lake assets, the Hammond Reef project and the Pandora and Wood-Pandora properties through their indirect joint ownership of Canadian Malartic Corporation (the successor to Osisko).

Each outstanding share of Osisko was exchanged under the Arrangement for: (i) C$2.09 in cash (Agnico Eagle's 50.0% share was C$1.045); (ii) 0.07264 of an Agnico Eagle common share (a value of C$2.64 based on the closing price of C$36.29 for Agnico Eagle common shares on the Toronto Stock Exchange as of June 16, 2014); (iii) 0.26471 of a Yamana common share; and (iv) 0.1 of one common share of Osisko Gold Royalties Ltd., a company that was newly formed in connection with the Arrangement and is now traded on the Toronto Stock Exchange.

Pursuant to the Arrangement, the following assets of Osisko were transferred to Osisko Gold Royalties Ltd.: (i) a 5.0% net smelter royalty on the Canadian Malartic mine; (ii) C$157.0 million in cash; (iii) a 2.0% net smelter royalty on the Kirkland Lake assets, the Hammond Reef project, and certain other exploration properties retained by Canadian Malartic Corporation; (iv) all assets and liabilities of Osisko in its Guerrero camp in Mexico; and (v) certain other investments and assets.

Agnico Eagle has recognized its interest in the assets, liabilities, revenues and expenses of Osisko in accordance with the Company's rights and obligations prescribed by the Arrangement, as the joint arrangement was determined to be a joint operation under IFRS.

Agnico Eagle's transaction costs associated with the acquisition totaling $16.7 million were expensed through the general and administrative line item of the consolidated statements of income (loss) and comprehensive income (loss) during year ended December 31, 2014.

Agnico Eagle's share of the June 16, 2014 preliminary purchase price of Osisko was comprised of the following:

Cash paid for acquisition		$	462,728
Agnico Eagle common shares issued for acquisition			1,135,071
Total Agnico Eagle preliminary purchase price to allocate		$	1,597,799

A fair value approach was applied by management in developing preliminary estimates of the fair value of identifiable assets and liabilities contributed to the newly formed Osisko joint operation. Preliminary estimates of fair value represent all information available as of the acquisition date. However, estimates of fair value may be materially adjusted during the measurement period as new information about the facts and circumstances that existed as of the acquisition date is obtained.

ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE   25

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The following table sets out the allocation of Agnico Eagle's share of the purchase price to attributable assets acquired and liabilities assumed pursuant to the Arrangement, based on management's preliminary estimates of fair value:

Fair value of assets acquired and liabilities assumed:
Property, plant and mine development		$	1,452,148
Goodwill(i)			543,444
Cash and cash equivalents			59,219
Restricted cash			35,528
Trade receivables(ii)			9,653
Inventories			51,477
Other current assets			11,420
Accounts payable and accrued liabilities			(49,391	)
Reclamation provision			(20,776	)
Long-term debt			(151,333	)
Deferred income and mining tax liabilities			(343,590	)
Net assets acquired		$	1,597,799

Notes:

(i)

Goodwill is currently allocated to the Canadian Malartic mine segment, however the allocation of goodwill has not yet been finalized.

(ii)

The fair value of trade receivables approximates the gross contractual amounts receivable.

The joint acquisition of Osisko is a strategic fit with the Company's skill set and its other operating assets in the area. The Company believes that goodwill associated with the joint acquisition of Osisko arose principally because of the following factors: (1) the value implicit in the Company's ability to sustain and/or grow its business by increasing proven and probable mineral reserves and mineral resources through new discoveries; and (2) the requirement to record a deferred tax liability for the difference between the assigned values and the tax bases of assets acquired and liabilities assumed in a business combination at amounts that do not reflect fair value.

The Company's indirect 50.0% interest in Canadian Malartic GP resulted in revenues from mining operations of $189.9 million and a net loss of $15.8 million between the June 16, 2014 completion of the Arrangement and December 31, 2014.

26   AGNICO EAGLE ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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Pro forma results of operations for the Company assuming the joint acquisition of Osisko described above had occurred as of January 1, 2014 are set out below:

		Year Ended December 31, 2014
Pro forma revenue from mining operations for the year		$	2,055,990
Pro forma net income for the year		$	41,866

The Company's pro forma net income for the year has been adjusted for the following material, non-recurring items: Agnico Eagle transaction costs totaling $16.7 million expensed through the general and administrative line item of the Company; a $79.1 million loss incurred on the transfer of assets to Osisko Gold Royalties Ltd. expensed through the other (income) expense line item of Osisko; and the deduction of acquisition-related fees totaling $46.1 million expensed through the general and administrative line item of Osisko. All other adjustments are related to the application of preliminary estimates of fair value to Osisko assets acquired and liabilities assumed and the alignment of accounting policies consistent with those made to Osisko's results in the post-acquisition period.

Urastar Gold Corporation

On May 16, 2013, the Company completed the acquisition of all of the issued and outstanding common shares of Urastar Gold Corporation ("Urastar") pursuant to a court-approved plan of arrangement under the Business Corporations Act (British Columbia) for cash consideration of $10.1 million. The Urastar acquisition was accounted for as a business combination and goodwill of $9.8 million was recognized on the Company's consolidated balance sheets.

The transaction costs associated with the acquisition totaling $0.7 million were expensed through the general and administrative line item of the consolidated statements of income (loss) and comprehensive income (loss) during the year ended December 31, 2013.

ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE   27

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The following table sets out the allocation of the purchase price to assets acquired and liabilities assumed, based on management's estimates of fair value:

Total purchase price:
Cash paid for acquisition		$	10,127
Fair value of assets acquired and liabilities assumed:
Mining properties		$	1,994
Goodwill			9,802
Cash and cash equivalents			76
Trade receivables			731
Other current assets			12
Plant and equipment			2
Accounts payable and accrued liabilities			(791	)
Other liabilities			(1,573	)
Deferred income and mining tax liabilities			(126	)
Net assets acquired		$	10,127

The Company believes that goodwill for the Urastar acquisition arose principally because of the value implicit in the Company's ability to grow its business by increasing proven and probable mineral reserves and mineral resources through new discoveries.

Pro forma results of operations for the Company assuming the acquisition of Urastar described above had occurred as of January 1, 2013 are detailed below. On a pro forma basis, there would have been no effect on the Company's consolidated revenues.

		Year Ended December 31, 2013
Pro forma net loss for the year		$	(689,199	)
Pro forma net loss per share – basic		$	(3.99	)

6.   FAIR VALUE MEASUREMENT

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. All assets and liabilities for which fair value is measured or disclosed in the

28   AGNICO EAGLE ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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consolidated financial statements are categorized within the fair value hierarchy, described, as follows, based on the lowest-level input that is significant to the fair value measurement as a whole:

Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2 – Quoted prices in markets that are not active or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and

Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs.

For items that are recognized at fair value on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by reassessing their classification at the end of each reporting period.

During the year ended December 31, 2014, there were no transfers between Level 1 and Level 2 fair value measurements, and no transfers into or out of Level 3 fair value measurements.

The Company's financial assets and liabilities include cash and cash equivalents, short-term investments, restricted cash, trade receivables, available-for-sale securities, accounts payable and accrued liabilities, long-term debt (including convertible debentures issued by Osisko and now an obligation of Canadian Malartic GP) and derivative financial instruments.

The fair values of cash and cash equivalents, short-term investments, restricted cash and accounts payable and accrued liabilities approximate their carrying values due to their short-term nature.

Long-term debt (excluding convertible debentures issued by Osisko and now an obligation of Canadian Malartic GP) is recorded on the consolidated balance sheets at amortized cost and the fair value is provided in note 15 to these consolidated financial statements for disclosure purposes only.

The following table sets out the Company's financial assets and liabilities measured at fair value on a recurring basis as at December 31, 2014 using the fair value hierarchy:

		Level 1			Level 2			Level 3			Total
Financial assets:
Trade receivables		$	–		$	59,716		$	–		$	59,716
Available-for-sale securities			51,653			4,815			–			56,468
Fair value of derivative financial instruments			–			4,877			–			4,877
Total financial assets		$	51,653		$	69,408		$	–		$	121,061
Financial liabilities:
Convertible debentures		$	–		$	–		$	34,678		$	34,678
Fair value of derivative financial instruments			–			8,249			–			8,249
Total financial liabilities		$	–		$	8,249		$	34,678		$	42,927

ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE   29

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The following table sets out the Company's financial assets and liabilities measured at fair value on a recurring basis as at December 31, 2013 using the fair value hierarchy:

		Level 1			Level 2			Level 3			Total
Financial assets:
Trade receivables		$	–		$	67,300		$	–		$	67,300
Available-for-sale securities			74,581			–			–			74,581
Fair value of derivative financial instruments			–			5,590			–			5,590
Total financial assets		$	74,581		$	72,890		$	–		$	147,471
Financial liabilities:
Fair value of derivative financial instruments		$	–		$	323		$	–		$	323

The following table sets out the Company's financial assets and liabilities measured at fair value on a recurring basis as at January 1, 2013 using the fair value hierarchy:

		Level 1			Level 2			Level 3			Total
Financial assets:
Trade receivables		$	–		$	67,750		$	–		$	67,750
Available-for-sale securities			44,719			–			–			44,719
Fair value of derivative financial instruments			–			2,112			–			2,112
Total financial assets		$	44,719		$	69,862		$	–		$	114,581
Financial liabilities:
Fair value of derivative financial instruments		$	–		$	277		$	–		$	277

Valuation Techniques

Trade Receivables

Trade receivables from provisional invoices for concentrate sales are valued using quoted forward rates derived from observable market data based on the month of expected settlement (classified within Level 2 of the fair value hierarchy).

Available-for-sale Securities

Available-for-sale securities representing shares of publicly traded entities are recorded at fair value using quoted market prices (classified within Level 1 of the fair value hierarchy). Available-for-sale securities representing shares of non-publicly traded entities are recorded at fair value using external broker-dealer quotations (classified within Level 2 of the fair value hierarchy).

30   AGNICO EAGLE ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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AGNICO EAGLE MINES LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(thousands of United States dollars, except share and per share amounts, unless otherwise indicated)
December 31, 2014

6.   FAIR VALUE MEASUREMENT (Continued)

Derivative Financial Instruments

Derivative financial instruments classified within Level 2 of the fair value hierarchy are recorded at fair value using external broker-dealer quotations or option pricing models that utilize a variety of inputs that are a combination of quoted prices and market-corroborated inputs. Derivative financial instruments are classified as at fair value through the consolidated statements of income (loss).

Convertible Debentures

Convertible debentures issued by Osisko and now an obligation of Canadian Malartic GP are reported at fair value and classified within Level 3 of the fair value hierarchy and constitute contracts which may result in the payment of cash and issuance of publicly-traded shares. Fair value was calculated with consideration given to the influence of a variety of inputs including quoted market prices and interest rates. Convertible debentures are included in the current portion of long-term debt line item in the consolidated balance sheets.

7.   RESTRICTED CASH

As part of the Company's insurance programs fronted by a third party provider and reinsured through the Company's internal insurance program, the third party provider requires that cash of $5.8 million be restricted as at December 31, 2014 (December 31, 2013 – $6.9 million; January 1, 2013 – $4.7 million).

As part of the Company's tax planning, $32.0 million was contributed to a qualified environmental trust ("QET") in December 2011 to fulfill the requirement of financial security for costs related to the environmental remediation of the Goldex mine. During the year ended December 31, 2014, $0.1 million (2013 – $2.8 million) was withdrawn from the QET to fund the environmental remediation expenditures. As at December 31, 2014, $15.5 million (December 31, 2013 – $16.8 million; January 1, 2013 – $20.7 million) remained in the QET.

At December 31, 2014, cash of $11.8 million (December 31, 2013 – nil; January 1, 2013 – nil) was restricted representing 50.0% of amounts held by a depositary to satisfy obligations in connection with the senior unsecured convertible debentures previously issued by Osisko that are now the obligation of Canadian Malartic GP.

As at December 31, 2014, cash of $20.9 million (December 31, 2013 – nil; January 1, 2013 – nil) was restricted representing 50.0% of the deposits in respect of environmental guarantees in the Province of Quebec made by Canadian Malartic GP in connection with its ownership of the Canadian Malartic mine.

On December 30, 2013, the Company deposited $5.0 million into a restricted account in connection with a Subscription Agreement to acquire 5,000 shares of Tocqueville Bullion Reserve, Ltd. at a price of $1,000 per share. The acquisition was completed subsequent to year end on January 2, 2014.

ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE   31

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8.   INVENTORIES

		As at December 31, 2014			As at December 31, 2013			As at January 1, 2013
Ore in stockpiles and on leach pads		$	51,970		$	33,504		$	38,745
Concentrates and dore bars			111,912			58,419			64,728
Supplies			282,778			253,160			222,629
Total current inventories		$	446,660		$	345,083		$	326,102
Non-current ore in stockpiles and on leach pads(i)			25,125			46,179			32,711
Total inventories		$	471,785		$	391,262		$	358,813

Note:

(i)

Ore that the Company does not expect to process within 12 months is classified as long-term and is recorded in the other assets line item on the consolidated balance sheets.

During the year ended December 31, 2014, a charge of $4.6 million (2013 – $3.2 million) was recorded within production costs to reduce the carrying value of inventories to its net realizable value.

9.   AVAILABLE-FOR-SALE SECURITIES

		As at December 31, 2014			As at December 31, 2013			As at January 1, 2013
Cost		$	74,928		$	111,169		$	59,516
Accumulated impairment losses			(30,090	)		(40,653	)		(7,117	)
Unrealized gains in accumulated other comprehensive income (loss)			11,815			11,530			1,902
Unrealized losses in accumulated other comprehensive income (loss)			(185	)		(7,465	)		(9,582	)
Total estimated fair value of available-for-sale securities		$	56,468		$	74,581		$	44,719

During the year ended December 31, 2014, the Company received proceeds of $41.4 million (2013 – $0.2 million) and recognized a gain before income taxes of $5.6 million (2013 – $0.1 million) on the sale of certain available-for-sale securities.

During the year ended December 31, 2014, the Company recorded an impairment loss of $15.8 million (2013 – $32.5 million) on certain available-for-sale securities that were determined to have an impairment that was significant or prolonged.

32   AGNICO EAGLE ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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10. OTHER ASSETS

(a)

Other Current Assets

		As at December 31, 2014			As at December 31, 2013			As at January 1, 2013
Federal, provincial and other sales taxes receivable		$	70,143		$	71,053		$	36,400
Prepaid expenses			39,608			35,396			36,119
Insurance receivable			113			1,369			6,553
Receivables from employees			395			780			1,800
Retirement compensation arrangement plan refundable tax receivable			–			–			4,044
Other			13,142			8,394			8,061
Total other current assets		$	123,401		$	116,992		$	92,977

(b)

Other Assets

		As at December 31, 2014			As at December 31, 2013			As at January 1, 2013
Non-current ore in stockpiles and on leach pads		$	25,125		$	46,179		$	32,711
Other assets			2,497			2,155			1,711
Total other assets		$	27,622		$	48,334		$	34,422

ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE   33

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11. PROPERTY, PLANT AND MINE DEVELOPMENT

		Mining Properties			Plant and Equipment			Mine Development Costs			Construction in Progress			Total
As at January 1, 2013		$	1,138,680		$	2,189,152		$	695,406		$	197,051		$	4,220,289
Additions			157,511			65,069			155,022			233,958			611,560
Capitalized borrowing costs			–			–			–			3,518			3,518
Disposals			–			(15,603	)		–			–			(15,603	)
Acquisitions			1,994			2			–			–			1,996
Amortization			(28,342	)		(245,886	)		(38,447	)		–			(312,675	)
Impairment loss			(449,590	)		(328,798	)		(36,236	)		–			(814,624	)
Transfers between categories(i)			–			19,966			57,252			(77,218	)		–
As at December 31, 2013			820,253			1,683,902			832,997			357,309			3,694,461
Additions			94,081			203,605			163,912			43,780			505,378
Capitalized borrowing costs			–			1,056			–			650			1,706
Disposals			(2,526	)		(6,142	)		–			–			(8,668	)
Acquisitions			904,403			664,991			–			–			1,569,394
Amortization			(79,363	)		(290,530	)		(90,882	)		–			(460,775	)
Transfers between categories(i)			1,534			305,512			(175,889	)		(131,157	)		–
As at December 31, 2014		$	1,738,382		$	2,562,394		$	730,138		$	270,582		$	5,301,496
As at January 1, 2013:
Cost		$	2,019,192		$	3,094,535		$	975,176		$	197,051		$	6,285,954
Accumulated amortization and net impairments			(880,512	)		(905,383	)		(279,770	)		–			(2,065,665	)
Net carrying amount – January 1, 2013		$	1,138,680		$	2,189,152		$	695,406		$	197,051		$	4,220,289
As at December 31, 2013:
Cost		$	2,178,697		$	3,138,194		$	1,187,449		$	357,309		$	6,861,649
Accumulated amortization and net impairments			(1,358,444	)		(1,454,292	)		(354,452	)		–			(3,167,188	)
Net carrying amount – December 31, 2013		$	820,253		$	1,683,902		$	832,997		$	357,309		$	3,694,461
As at December 31, 2014:
Cost		$	3,176,189		$	4,334,707		$	1,175,472		$	270,582		$	8,956,950
Accumulated amortization and net impairments			(1,437,807	)		(1,772,313	)		(445,334	)		–			(3,655,454	)
Net carrying amount – December 31, 2014		$	1,738,382		$	2,562,394		$	730,138		$	270,582		$	5,301,496

Note:

(i)

Upon achieving commercial production at the Goldex mine's M and E Zones in October 2013 and at the La India mine in February 2014, related costs accumulated in construction in progress were reclassified.

34   AGNICO EAGLE ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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Geographic Information:

		As at December 31, 2014			As at December 31, 2013			As at January 1, 2013
Northern Business:
Canada		$	3,418,287		$	1,942,979		$	2,658,970
Finland			825,292			762,717			732,918
Southern Business:
Mexico			1,047,669			978,496			817,703
United States			10,248			10,269			10,698
Total property, plant and mine development		$	5,301,496		$	3,694,461		$	4,220,289

12. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

		As at December 31, 2014			As at December 31, 2013			As at January 1, 2013
Trade payables		$	91,120		$	80,242		$	89,289
Wages payable			36,263			35,881			35,752
Accrued liabilities			36,099			16,366			27,372
Other liabilities			42,698			40,885			32,916
Total accounts payable and accrued liabilities		$	206,180		$	173,374		$	185,329

In 2014 and 2013, the other liabilities balance consisted primarily of various employee payroll tax withholdings and other payroll taxes.

13. RECLAMATION PROVISION

Agnico Eagle's reclamation provision includes both asset retirement obligations and environmental remediation liabilities. Reclamation provision estimates are based on current legislation, third party estimates, management's estimates and feasibility study calculations. Assumptions based on current economic conditions, which the Company believes are reasonable, have been used to estimate the reclamation provision. However, actual reclamation costs will ultimately depend on future economic conditions and costs for the necessary reclamation work. Changes in reclamation provision estimates during the period reflect changes in cash flow estimates as well as assumptions including discount and inflation rates. The discount rates used in the calculation of the reclamation provision at December 31, 2014 ranged between 1.03% and 2.54% (December 31, 2013 – between 1.40% and 3.49%).

ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE   35

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The following table reconciles the beginning and ending carrying amounts of the Company's asset retirement obligations. The settlement of the obligation is estimated to occur through to 2041.

		Year Ended December 31, 2014			Year Ended December 31, 2013
Asset retirement obligations – long-term, beginning of year		$	171,472		$	173,708
Asset retirement obligations – current, beginning of year			1,029			4,630
Current year additions and changes in estimate, net			69,420			(2,868	)
Current year attributable additions upon joint acquisition of Osisko			20,776			–
Current year accretion			5,173			4,456
Liabilities settled			(1,714	)		(853	)
Foreign exchange revaluation			(20,678	)		(6,572	)
Reclassification from long-term to current, end of year			(2,863	)		(1,029	)
Asset retirement obligations – long-term, end of year		$	242,615		$	171,472

The following table reconciles the beginning and ending carrying amounts of the Company's environmental remediation liability. The settlement of the obligation is estimated to occur through to 2020.

		Year Ended December 31, 2014			Year Ended December 31, 2013
Environmental remediation liability – long-term, beginning of year		$	12,537		$	12,033
Environmental remediation liability – current, beginning of year			2,423			12,186
Current year additions and changes in estimate, net			563			1,005
Liabilities settled			(3,202	)		(9,045	)
Foreign exchange revaluation			(1,113	)		(1,219	)
Reclassification from long-term to current, end of year			(3,906	)		(2,423	)
Environmental remediation liability – long-term, end of year		$	7,302		$	12,537

14. LEASES

(a)

Finance Leases

The Company has entered into sale-leaseback agreements with third parties for various fixed and mobile equipment within Canada. These arrangements represent sale-leaseback transactions in accordance with IAS 17 – Leases. The sale-leaseback agreements have an average effective annual interest rate of 5.25% and the average length of the contracts is five years.

36   AGNICO EAGLE ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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All of the sale-leaseback agreements have end of lease clauses that qualify as bargain purchase options that the Company expects to execute. As at December 31, 2014, the total net book value of assets recorded under sale-leaseback finance leases amounted to $12.9 million (December 31, 2013 – $29.5 million; January 1, 2013 – $19.1 million).

The Company has agreements with third party providers of mobile equipment. These arrangements represent finance leases in accordance with the guidance in IAS 17 – Leases. The leases are for five to seven years and have an average effective annual interest rate of 4.4%.

As a result of its June 16, 2014 joint acquisition of Osisko, Agnico Eagle assumed indirect attributable secured finance lease obligations of C$38.3 million ($35.3 million) provided in separate tranches with maturities ranging between 2015 and 2019 and a 7.5% interest rate. As at December 31, 2014, the Company's attributable finance lease obligations amounted to $31.7 million.

The following table sets out future minimum lease payments under finance leases together with the present value of the net minimum lease payments:

		Minimum Finance Lease Payments			Interest			Present Value			Minimum Finance Lease Payments			Interest			Present Value			Minimum Finance Lease Payments			Interest			Present Value
		As at December 31, 2014									As at December 31, 2013									As at January 1, 2013
Within 1 year		$	23,587		$	1,445		$	22,142		$	12,776		$	741		$	12,035		$	14,052		$	1,097		$	12,955
Between 1 – 5 years			22,232			1,095			21,137			12,482			639			11,843			12,616			508			12,108
Total		$	45,819		$	2,540		$	43,279		$	25,258		$	1,380		$	23,878		$	26,668		$	1,605		$	25,063

As at December 31, 2014, the total net book value of assets recorded under finance leases, including sale-leaseback finance leases, was $61.7 million (December 31, 2013 – $40.0 million; January 1, 2013 – $31.5 million). The amortization of assets recorded under finance leases is included in the amortization of property, plant and mine development line item of the consolidated statements of income (loss) and comprehensive income (loss).

ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE   37

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(b)

Operating Leases

The Company has a number of operating lease agreements involving office facilities. Some of the leases for office facilities contain escalation clauses for increases in operating costs and property taxes. Future minimum lease payments required to meet obligations that have initial or remaining non-cancellable lease terms in excess of one year are as follows:

		As at December 31, 2014			As at December 31, 2013			As at January 1, 2013
Within 1 year		$	1,051		$	1,783		$	1,434
Between 1 – 3 years			1,619			1,854			1,850
Between 3 – 5 years			1,452			1,652			1,635
Thereafter			1,549			2,470			3,473
Total		$	5,671		$	7,759		$	8,392

During the year ended December 31, 2014, $1.2 million (year ended December 31, 2013 – $1.6 million) of operating lease payments were recognized in the consolidated statements of income (loss).

15. LONG-TERM DEBT

		As at December 31, 2014			As at December 31, 2013			As at January 1, 2013
Credit Facility(i)		$	492,470		$	192,611		$	20,190
2012 Notes(i)			198,549			198,378			198,207
2010 Notes(i)			596,966			596,367			595,767
Attributable convertible debentures(ii)			34,679			–			–
Other attributable debt instruments			51,979			–			–
Total debt			1,374,643			987,356			814,164
Less: current portion			52,182			–			–
Total long-term debt		$	1,322,461		$	987,356		$	814,164

(i)

Inclusive of deferred financing costs.

(ii)

Attributable convertible debentures have a contractual maturity in 2017 but are included in the current portion of long-term debt on the consolidated balance sheets.

The fair value of long-term debt (excluding convertible debentures issued by Osisko that are now an obligation of Canadian Malartic GP) is determined by applying a discount rate, reflecting the credit spread based on the Company's credit rating, to future related cash flows. As at December 31, 2014, the Company's long-term debt had a fair value of $1,498.4 million (December 31, 2013 – $1,103.9 million; January 1, 2013 – $968.7 million).

38   AGNICO EAGLE ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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Scheduled Debt Principal Repayments

		2015			2016			2017			2018			2019			2020 and Thereafter			Total
Credit Facility		$	–		$	–		$	–		$	–		$	500,000		$	–		$	500,000
2012 Notes			–			–			–			–			–			200,000			200,000
2010 Notes			–			–			115,000			–			–			485,000			600,000
Attributable convertible debentures			–			–			32,325			–			–			–			32,325
Other attributable debt instruments			17,503			17,238			17,238			–			–			–			51,979
Total		$	17,503		$	17,238		$	164,563		$	–		$	500,000		$	685,000		$	1,384,304

Credit Facility

On June 22, 2010, the Company amended and restated one of its two unsecured revolving bank credit facilities (the "Credit Facility") and terminated its other unsecured revolving bank credit facility, increasing the amount available from an aggregate $900.0 million to $1,200.0 million.

On July 20, 2012, the Company further amended the Credit Facility, extending the maturity date from June 22, 2016 to June 22, 2017 and amending pricing terms.

On September 5, 2014, the Company further amended the Credit Facility, extending the maturity date from June 22, 2017 to June 22, 2019 and amending pricing terms.

At December 31, 2014, the Credit Facility was drawn down by $500.0 million (December 31, 2013 – $200.0 million; January 1, 2013 – $30.0 million). Amounts drawn down, together with outstanding letters of credit under the Credit Facility, resulted in Credit Facility availability of $699.0 million at December 31, 2014.

2012 Notes

On July 24, 2012, the Company closed a $200.0 million private placement of guaranteed senior unsecured notes (the "2012 Notes") which, on issuance, had a weighted average maturity of 11.0 years and weighted average yield of 4.95%.

The following table sets out details of the individual series of the 2012 Notes:

		Principal			Interest Rate		Maturity Date
Series A		$	100,000		4.87%		7/23/2022
Series B			100,000		5.02%		7/23/2024
Total		$	200,000

ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE   39

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2010 Notes

On April 7, 2010, the Company closed a $600.0 million private placement of guaranteed senior unsecured notes (the "2010 Notes") which, on issuance, had a weighted average maturity of 9.84 years and weighted average yield of 6.59%.

The following table sets out details of the individual series of the 2010 Notes:

		Principal			Interest Rate		Maturity Date
Series A		$	115,000		6.13%		4/7/2017
Series B			360,000		6.67%		4/7/2020
Series C			125,000		6.77%		4/7/2022
Total		$	600,000

Acquisition of Osisko

In connection with its joint acquisition of Osisko on June 16, 2014, Canadian Malartic GP was assigned and assumed certain outstanding debt obligations of Osisko relating to the Canadian Malartic mine. Agnico Eagle's indirect attributable share of such debt instruments is as follows:

•

A secured loan facility in the principal amount of C$75.0 million ($69.1 million) with scheduled C$20.0 million repayments on June 30, 2015, June 30, 2016 and June 30, 2017 and a 6.875% per annum interest rate. A scheduled repayment of C$15.0 million ($14.1 million) was made subsequent to the June 16, 2014 acquisition date, resulting in attributable outstanding principal of $51.7 million as at December 31, 2014. On September 29, 2014, Canadian Malartic GP amended the acquired secured loan facility (the "CMGP Loan") with no change to maturity or pricing terms.

•

Senior unsecured convertible debentures with principal outstanding of C$37.5 million ($34.6 million), a November 2017 maturity date and a 6.875% interest rate. As at the June 16, 2014 acquisition date, the convertible debentures had an attributable fair value of $44.9 million. As at December 31, 2014, the convertible debentures had principal outstanding of $32.3 million and an attributable fair value of $34.7 million. An $8.0 million mark-to-market gain was recorded in the other (income) expenses line item of the consolidated statements of income (loss) related to the convertible debentures between the June 16, 2014 acquisition date and December 31, 2014.

•

A loan with principal outstanding of C$2.1 million ($2.0 million) with monthly repayments scheduled through the first quarter of 2015 and a 0.0% interest rate. As at December 31, 2014, the Company's attributable loan principal outstanding amounted to $0.3 million.

Covenants

Payment and performance of Agnico Eagle's obligations under the Credit Facility, 2012 Notes and 2010 Notes is guaranteed by each of its significant subsidiaries and certain of its other subsidiaries (the "Guarantors").

The Credit Facility contains covenants that limit, among other things, the ability of the Company to incur additional indebtedness, make distributions in certain circumstances and sell material assets.

The 2012 Notes and 2010 Notes contain covenants that restrict, among other things, the ability of the Company to amalgamate or otherwise transfer its assets, sell material assets, carry on a business other than one related to mining and the ability of the Guarantors to incur indebtedness.

40   AGNICO EAGLE ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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AGNICO EAGLE MINES LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(thousands of United States dollars, except share and per share amounts, unless otherwise indicated)
December 31, 2014

15. LONG-TERM DEBT (Continued)

The Credit Facility, 2012 Notes and 2010 Notes also require the Company to maintain a total net debt to EBITDA ratio below a specified maximum value.

The CMGP Loan requires Canadian Malartic GP to maintain a minimum EBITDA to interest expense ratio and a maximum debt to EBITDA ratio.

The Company was in compliance with all covenants contained in the Credit Facility, 2012 Notes and 2010 Notes as at December 31, 2014. Canadian Malartic GP was in compliance with all CMGP Loan covenants as at December 31, 2014.

Interest on Long-term Debt

Total long-term debt interest costs incurred during the year ended December 31, 2014 were $56.9 million (2013 – $58.0 million).

Total borrowing costs capitalized to property, plant and mine development during the year ended December 31, 2014 were $1.7 million (2013 – $3.5 million) at a capitalization rate of 1.28% (2013 – 1.48%).

During the year ended December 31, 2014, cash interest paid on the Credit Facility was $7.5 million (2013 – $1.8 million), cash standby fees paid on the Credit Facility were $5.1 million (2013 – $4.8 million) and cash interest paid on the 2010 Notes and 2012 Notes was $49.4 million (2013 – $49.4 million).

16. OTHER LIABILITIES

Other liabilities consist of the following:

		As at December 31, 2014			As at December 31, 2013			As at January 1, 2013
Long-term portion of capital lease obligations (note 14(a))		$	21,137		$	11,843		$	12,108
Pension benefit obligations (note 16(a))			17,507			15,278			13,808
Other			159			268			140
Total other liabilities		$	38,803		$	27,389		$	26,056

(a)

Pension Benefit Obligations

Executives Plan

Agnico Eagle provides the Executives Plan for certain current and former senior officers. It is considered a defined benefit plan as defined in IAS 19 – Employee Benefits with a pension formula based on final average earnings in excess of the amounts payable from the registered plan. Assets for the Executives Plan consist of deposits on hand with regulatory authorities that are refundable when benefit payments are made or on the ultimate wind-up of the plan. The estimated average remaining service life of the plan at December 31, 2014 is 4.0 years. The funded status of the Executives Plan is based on actuarial valuations performed as of December 31, 2014.

ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE   41

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The funded status of the Executives Plan for 2014 and 2013 is as follows:

			Year Ended December 31,
		2014			2013
Reconciliation of the Executives Plan assets:
Executives Plan assets, beginning of year		$	2,346		$	2,373
Agnico Eagle's contributions			372			374
Benefit payments			(239	)		(244	)
Interest on Executives Plan assets			111			92
Net return on Executives Plan assets excluding interest			(111	)		(92	)
Effect of exchange rate changes			(201	)		(157	)
Executives Plan assets, end of year			2,278			2,346
Reconciliation of Executives Plan defined benefit obligation:
Defined benefit obligation, beginning of year			11,298			10,818
Service cost			470			456
Benefit payments			(239	)		(244	)
Interest cost			550			431
Actuarial losses (gains) arising from changes in economic assumptions			1,581			(1,569	)
Actuarial (gains) losses arising from changes in demographic assumptions			(164	)		779
Actuarial (gains) losses arising from Executives Plan experience			(584	)		1,363
Effect of exchange rate changes			(1,017	)		(736	)
Defined benefit obligation, end of year			11,895			11,298
Net defined benefit liability, end of year		$	9,617		$	8,952

The components of Agnico Eagle's pension expense recognized in the consolidated statements of income (loss) relating to the Executives Plan are as follows:

			Year Ended December 31,
		2014			2013
Service cost		$	470		$	457
Interest cost on defined benefit obligation			550			431
Interest on Executives Plan assets			(111	)		(92	)
Pension expense		$	909		$	796

42   AGNICO EAGLE ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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The remeasurements of the net defined benefit liability recognized in other comprehensive income (loss) relating to the Executives Plan are as follows:

			Year Ended December 31,
		2014			2013
Actuarial losses relating to the defined benefit obligation		$	833		$	573
Net return on Executives Plan assets excluding interest			111			92
Total remeasurements of the net defined benefit liability		$	944		$	665

In 2015, the Company expects to make contributions of $0.3 million and benefit payments of $0.1 million related to the Executives Plan.

The following table sets out significant weighted average assumptions used in measuring the Company's Executives Plan defined benefit obligation:

		As at December 31,
		2014		2013
Assumptions:
Rate of return on Executives Plan assets		4.9%		4.0%
Discount rate – beginning of year		4.9%		4.0%
Discount rate – end of year		4.0%		4.9%
Rate of compensation increase		3.0%		3.0%

The discount rate was modified between periods to reflect the change in market interest rates prevailing on high quality corporate bonds. Other assumptions are the same as those used as at December 31, 2013.

The following is a summary of the effect of changes in significant actuarial assumptions on the Company's Executives Plan defined benefit obligation:

			As at December 31, 2014
Change in assumption:
0.5% increase in discount rate		$	(851	)
0.5% decrease in discount rate			943
0.5% increase in the rate of compensation increase			110
0.5% decrease in the rate of compensation increase			(109	)

ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE   43

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The summary of the effect of changes in significant actuarial assumptions was prepared using the same methods and actuarial assumptions as those used for the calculation of the Executives Plan defined benefit obligation as at the end of the fiscal year, except for the change in the single actuarial assumption being evaluated. The modification of several actuarial assumptions at the same time could lead to different results.

Other Plans

In addition to the Executives Plan, the Company maintains the Basic Plan and the Supplemental Plan. Under the Basic Plan, Agnico Eagle contributes 5.0% of certain employees' base employment compensation to a defined contribution plan. In 2014, $11.1 million (2013 – $12.5 million) was contributed to the Basic Plan, $0.1 million of which related to contributions for key management personnel (2013 – $0.1 million). Effective January 1, 2008, the Company adopted the Supplemental Plan for designated executives at the level of Vice-President or above. The Supplemental Plan is funded by the Company through notional contributions equal to 10.0% of the designated executive's earnings for the year (including salary and short-term bonus). In 2014, the Company made $1.5 million (2013 – $1.2 million) in notional contributions to the Supplemental Plan, $0.1 million (2013 – $0.1 million) of which related to contributions for key management personnel. The Supplemental Plan is accounted for as a cash balance plan.

17. EQUITY

Common Shares

The Company's authorized share capital includes an unlimited number of common shares with no par value. As at December 31, 2014, Agnico Eagle's issued common shares totaled 215,192,887 (December 31, 2013 – 174,181,163; January 1, 2013 – 172,296,610), less 956,653 common shares held in a trust or by a depositary to satisfy obligations in connection with the senior unsecured convertible debentures previously issued by Osisko that are now the obligation of Canadian Malartic GP (December 31, 2013 – 227,188 common shares held in a trust; January 1, 2013 – 193,740 common shares held in a trust).

84,973 common shares are held in a trust in connection with the Company's restricted share unit ("RSU") plan (December 31, 2013 – 227,188 common shares held in a trust). The trust has been evaluated under IFRS 10 – Consolidated Financial Statements and is consolidated in the accounts of the Company, with shares held in trust offset against the Company's issued shares in its consolidated financial statements. The common shares purchased and held in a trust are excluded from the basic net income (loss) per share calculations until they have vested. All of the non-vested common shares held in a trust are included in the diluted net income (loss) per share calculations, unless the impact is anti-dilutive.

As part of the Company's joint acquisition of Osisko on June 16, 2014 (see note 5 to these consolidated financial statements for details), 871,680 Agnico Eagle common shares are held by a depositary to satisfy obligations under the senior unsecured convertible debentures previously issued by Osisko (now an obligation of Canadian Malartic GP) if converted in the future. These Agnico Eagle common shares held by a depositary are not currently considered outstanding as they will not be voted and as accrued dividends may, at Agnico Eagle's discretion, revert back to the Company. These common shares are excluded from the calculation of basic net income (loss) per share and are included in the calculation of diluted net income (loss) per share, unless the impact is anti-dilutive.

44   AGNICO EAGLE ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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The following table sets out the maximum number of common shares that would be outstanding if all dilutive instruments outstanding at December 31, 2014 were exercised:

Common shares outstanding at December 31, 2014		214,236,234
Employee stock options		11,913,210
Common shares held in a trust in connection with the RSU plan (note 19(c))		84,973
Common shares held by a depositary relating to convertible debentures previously issued by Osisko (note 5)		871,680
Total		227,106,097

Net Income (Loss) Per Share

The following table sets out the weighted average number of common shares used in the calculation of basic and diluted net income (loss) per share:

				Year Ended December 31,
			2014			2013
Net income (loss) for the year – basic			$	82,970		$	(686,705	)
Net income (loss) for the year – diluted			$	75,625		$	(686,705	)
Weighted average number of common shares outstanding – basic (in thousands)				195,223			172,893
	Add: Dilutive impact of common shares held by a depositary relating to convertible debentures previously issued by Osisko			475			–
	Add: Dilutive impact of common shares related to the RSU plan			259			–
	Add: Dilutive impact of employee stock options			244			–
Weighted average number of common shares outstanding – diluted (in thousands)				196,201			172,893
Net income (loss) per share – basic			$	0.43		$	(3.97	)
Net income (loss) per share – diluted			$	0.39		$	(3.97	)

Diluted net income (loss) per share have been calculated using the treasury stock method. In applying the treasury stock method, outstanding employee stock options with an exercise price greater than the average quoted market price of the common shares for the period outstanding are not included in the calculation of diluted net income (loss) per share as the impact would be anti-dilutive.

The dilutive impact of convertible debentures previously issued by Osisko, including both their impact on diluted net income and the dilutive impact of related common shares held by a depositary in connection with any conversion thereof, has been included in the calculation of net income per share for the year ended December 31, 2014.

For the year ended December 31, 2014, 9,102,210 employee stock options were excluded from the calculation of diluted net income per share as their impact would have been anti-dilutive.

For the year ended December 31, 2013, the impact of any additional shares issued under the employee stock option plan or shares related to the RSU plan were excluded from the calculation of net loss per share as their impact would have been anti-dilutive due to the net loss recorded for the year.

ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE   45

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18. REVENUES FROM MINING OPERATIONS AND TRADE RECEIVABLES

Agnico Eagle is a gold mining company with mining operations in Canada, Mexico and Finland. The Company earns a significant proportion of its revenues from the production and sale of gold in both dore bar and concentrate form. The remainder of revenue and cash flow is generated by the production and sale of by-product metals. The revenue from by-product metals is primarily generated by production at the LaRonde mine in Canada (silver, zinc and copper) and the Pinos Altos mine in Mexico (silver).

The cash flow and profitability of the Company's operations are significantly affected by the market price of gold and, to a lesser extent, silver, zinc and copper. The prices of these metals can fluctuate significantly and are affected by numerous factors beyond the Company's control.

During the year ended December 31, 2014, three customers each contributed more than 10.0% of total revenues from mining operations for a combined total of approximately 65.0% of revenues from mining operations in the Northern and Southern business units. As gold can be sold through numerous gold market traders worldwide, the Company is not economically dependent on a limited number of customers for the sale of its product.

Trade receivables are recognized once the transfer of ownership for the metals sold has occurred and reflect the amounts owing to the Company in respect of its sales of dore bars or concentrates to third parties prior to the satisfaction in full of the payment obligations of the third parties. As at December 31, 2014, the Company had $59.7 million (December 31, 2013 – $67.3 million; January 1, 2013 – $67.8 million) in receivables relating to provisionally priced concentrate sales. For the year ended December 31, 2014, the Company recognized mark-to-market losses of $0.8 million (2013 – $0.3 million) on concentrate receivables.

			Year Ended December 31,
		2014			2013
Revenues from mining operations:
Gold		$	1,807,927		$	1,500,354
Silver			62,466			100,895
Zinc			9,901			16,685
Copper			16,479			20,653
Lead(i)			(7	)		(181	)
Total revenues from mining operations		$	1,896,766		$	1,638,406

Note:

(i)

Lead concentrate revenues of $0.1 million in 2014 (2013 – $0.9 million) are netted against direct fees of $0.1 million (2013 – $1.1 million). Other metal revenues derived from lead concentrate in 2014 included gold revenue of nil (2013 – $7.9 million) and silver revenue of nil (2013 – $2.8 million). Other metal revenues derived from lead concentrate are included in their respective metal categories in the above table.

In 2014, precious metals (gold and silver) accounted for 98.6% of Agnico Eagle's revenues from mining operations (2013 – 97.7%). The remaining revenues from mining operations consisted of net by-product metal revenues. In 2014, these net by-product metal revenues as a percentage of total revenues from mining operations were 0.5% from zinc (2013 – 1.0%) and 0.9% from copper (2013 – 1.3%).

46   AGNICO EAGLE ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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19. STOCK-BASED COMPENSATION

(a)

Employee Stock Option Plan ("ESOP")

The Company's ESOP provides for the grant of stock options to directors, officers, employees and service providers to purchase common shares. Under the ESOP, stock options are granted at the fair market value of the underlying shares on the day prior to the date of grant. The number of common shares that may be reserved for issuance to any one person pursuant to stock options (under the ESOP or otherwise), warrants, share purchase plans or other arrangements may not exceed 5.0% of the Company's common shares issued and outstanding at the date of grant.

On April 24, 2001, the Compensation Committee of the Board of Directors adopted a policy pursuant to which stock options granted after that date have a maximum term of five years. In 2013, the shareholders approved a resolution to increase the number of common shares reserved for issuance under the ESOP to 27,800,000.

Of the 3,187,500 stock options granted under the ESOP in 2014, 796,875 stock options vested immediately. The remaining stock options, all of which expire in 2019, vest in equal installments on each anniversary date of the grant over a three-year period. Of the 2,803,000 stock options granted under the ESOP in 2013, 700,750 stock options vested immediately. The remaining stock options, all of which expire in 2018, vest in equal installments on each anniversary date of the grant over a three-year period. Upon the exercise of stock options under the ESOP, the Company issues common shares from treasury to settle the obligation.

The following table sets out activity with respect to Agnico Eagle's outstanding stock options:

		Number of Stock Options		Weighted Average Exercise Price			Number of Stock Options		Weighted Average Exercise Price
		Year Ended December 31, 2014					Year Ended December 31, 2013
Outstanding, beginning of year		11,283,535		C$	56.02		10,587,126		C$	56.60
Granted		3,187,500			28.07		2,803,000			52.13
Exercised		(582,925	)		31.46		(213,500	)		37.06
Forfeited		(250,750	)		53.08		(540,206	)		58.15
Expired		(1,724,150	)		62.64		(1,352,885	)		54.67
Outstanding, end of year		11,913,210		C$	48.84		11,283,535		C$	56.02
Options exercisable, end of year		7,503,335		C$	55.98		7,248,295		C$	59.39

The average share price of Agnico Eagle's common shares during the year ended December 31, 2014 was C$34.83 (2013 – C$33.72)

The weighted average grant date fair value of stock options granted in 2014 was C$6.53 (2013 – C$10.63).

ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE   47

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The following table sets out information about Agnico Eagle's stock options outstanding and exercisable at December 31, 2014:

		Number Outstanding		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price			Number Exercisable		Weighted Average Exercise Price
Range of Exercise Prices:		Stock Options Outstanding							Stock Options Exercisable
C$28.03 – C$59.71		9,725,131		2.45 years		C$	42.66		5,315,256		C$	47.61
C$60.72 – C$83.08		2,188,079		1.01 years			76.31		2,188,079			76.31
C$28.03 – C$83.08		11,913,210		2.18 years		C$	48.84		7,503,335		C$	55.98

The weighted average remaining contractual term of stock options exercisable at December 31, 2014 was 1.5 years.

The Company has reserved for issuance 11,913,210 common shares in the event that these stock options are exercised.

The number of common shares available for the grant of stock options under the ESOP as at December 31, 2014 and December 31, 2013 was 3,595,276 and 4,807,876, respectively.

Subsequent to the year ended December 31, 2014, 3,048,010 stock options were granted under the ESOP, of which 683,998 stock options vested within 30 days of the grant. The remaining stock options, all of which expire in 2020, vest in equal installments on each anniversary date of the grant over a three-year period.

Agnico Eagle estimated the fair value of stock options under the Black-Scholes option pricing model using the following weighted average assumptions:

		Year Ended December 31,
		2014		2013
Risk-free interest rate		1.52%		1.40%
Expected life of stock options (in years)		2.6		2.5
Expected volatility of Agnico Eagle's share price		42.5%		35.7%
Expected dividend yield		3.82%		1.82%

The Company uses historical volatility to estimate the expected volatility of Agnico Eagle's share price. The expected term of stock options granted is derived from historical data on employee exercise and post-vesting employment termination experience.

The total compensation expense for the ESOP recorded in the general and administrative line item of the consolidated statements of income (loss) and comprehensive income (loss) for 2014 was $20.8 million (2013 – $24.6 million). Of the total compensation cost for the ESOP, $0.8 million was capitalized as part of the property, plant and mine development line item of the consolidated balance sheets in 2014 (2013 – $3.3 million).

48   AGNICO EAGLE ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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(b)

Incentive Share Purchase Plan

On June 26, 1997, the Company's shareholders approved an incentive share purchase plan (the "Purchase Plan") to encourage directors, officers and employees ("Participants") to purchase Agnico Eagle's common shares at market value. In 2009, the Purchase Plan was amended to remove non-executive directors as eligible Participants.

Under the Purchase Plan, Participants may contribute up to 10.0% of their basic annual salaries and the Company contributes an amount equal to 50.0% of each Participant's contribution. All common shares subscribed for under the Purchase Plan are issued by the Company. The total compensation cost recognized in 2014 related to the Purchase Plan was $5.2 million (2013 – $7.8 million).

In 2014, 517,721 common shares were subscribed for under the Purchase Plan (2013 – 812,946) for a value of $15.5 million (2013 – $23.4 million). In May 2014, the Company's shareholders approved an increase in the maximum number of common shares reserved for issuance under the Purchase Plan to 6,100,000 from 5,000,000. As at December 31, 2014, Agnico Eagle has reserved for issuance 1,412,186 common shares (2013 – 829,907) under the Purchase Plan.

(c)

Restricted Share Unit Plan

In 2009, the Company implemented the RSU plan for certain employees. Effective January 1, 2012, the RSU plan was amended to include directors and senior executives of the Company.

A deferred compensation balance is recorded for the total grant date value on the date of each RSU plan grant. The deferred compensation balance is recorded as a reduction of equity and is amortized as compensation expense over the applicable vesting period of two to three years.

In 2014, 298,877 (2013 – 425,114) RSUs were granted with a grant date fair value of $28.62 (2013 – $48.25). In 2014, the Company funded the RSU plan by transferring $7.5 million (2013 – $19.0 million) to an employee benefit trust that then purchased common shares of the Company in the open market. The grant date fair value of the RSUs generally approximates the cost of purchasing the shares in the open market. Once vested, the common shares in the trust are distributed to settle the obligation along with a cash payment reflecting the accumulated amount that would have been paid as dividends had the common shares been outstanding.

Compensation expense related to the RSU plan was $12.8 million in 2014 (2013 – $12.1 million). Compensation expense related to the RSU plan is included as part of the general and administrative line item of the consolidated statements of income (loss) and comprehensive income (loss).

Subsequent to the year ended December 31, 2014, 377,000 RSUs were granted under the RSU plan which vest in 2018.

20. CAPITAL AND FINANCIAL RISK MANAGEMENT

The Company's activities expose it to a variety of financial risks: market risk (including interest rate risk, commodity price risk and foreign currency risk), credit risk, and liquidity risk. The Company's overall risk management policy is to support the delivery of the Company's financial targets while minimizing the potential adverse effects on the Company's performance.

Risk management is carried out by a centralized treasury department under policies approved by the Board of Directors. The Company ensures that financial activities are governed by policies and procedures and that financial risks are identified, measured and managed in accordance with its policies and risk tolerance.

ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE   49

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a)

Market Risk

Market risk is the risk that changes in market factors, such as interest rates, commodity prices and foreign exchange rates, will affect the value of Agnico Eagle's financial instruments. The Company can choose to either accept market risk or mitigate it through the use of derivatives and other economic hedging strategies.

i.

Interest Rate Risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate as a result of changes in market interest rates. The Company's exposure to the risk of changes in market interest rates relates primarily to the Company's long-term debt obligations which have floating interest rates.

The following table shows the impact of a 1.0% increase or decrease in interest rates on income (loss) before income and mining taxes. The impact on equity is the same as the impact on income (loss) before income and mining taxes.

			Year Ended December 31,
		2014			2013
1.0% Increase		$	(3,548	)	$	(966	)
1.0% Decrease		$	3,548		$	966

ii.

Commodity Price Risk



a.

Metal Prices

Agnico Eagle's revenues from mining operations and net income (loss) are sensitive to metal prices. Changes in the market price of gold may be attributed to numerous factors such as demand, global mine production levels, central bank purchases and sales and investor sentiment. Changes in the market prices of by-product metals (silver, zinc and copper) may be attributed to factors such as demand and global mine production levels.

In order to mitigate the impact of fluctuating by-product metal prices, the Company occasionally enters into derivative financial instrument contracts under its Risk Management Policies and Procedures, approved by the Board. The Company has a long-standing policy of no forward gold sales. However, the policy does allow the Company to use other economic hedging strategies where appropriate to mitigate by-product metal pricing risks. The Company occasionally buys put options, enters into price collars and enters into forward contracts to protect minimum by-product metal prices while maintaining full exposure to the price of gold. The Risk Management Committee has approved the strategy of using short-term call options in an attempt to enhance the realized by-product metal prices. The Company's policy does not allow speculative trading.

b.

Fuel

To mitigate the risks associated with fluctuating diesel fuel prices, the Company uses derivative financial instruments as economic hedges of the price risk on a portion of its diesel fuel costs (refer to note 21 to these consolidated financial statements for further details on derivative financial instruments).

iii.

Foreign Currency Risk

The Company receives payment for all of its metal sales in US dollars and pays most of its operating and capital costs in Canadian dollars, Euros or Mexican pesos. This gives rise to significant currency risk exposure. The

50   AGNICO EAGLE ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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Company enters into currency economic hedging transactions under the Company's Foreign Exchange Risk Management Policies and Procedures, approved by the Board, to hedge part of its foreign currency exposure. The policy does not permit the hedging of translation exposure (that is, the gains and losses that arise from the accounting translation of Canadian dollar, Euro or Mexican peso denominated assets and liabilities into US dollars), as it does not give rise to cash exposure. The Company's foreign currency derivative financial instrument strategy includes the use of purchased puts, sold calls, collars and forwards that are not held for speculative purposes (refer to note 21 to these consolidated financial statements for further details on the Company's derivative financial instruments).

The following table sets out the translation impact on income before income and mining taxes and equity for the year ended December 31, 2014 of a 10.0% change in the exchange rate of the US dollar relative to the Canadian dollar, Euro and Mexican peso, with all other variables held constant.

			Impact on Income Before Income and Mining Taxes and Equity
		10.0% Strengthening of the US Dollar			10.0% Weakening of the US Dollar
Canadian dollar		$	22,147		$	(22,147	)
Euro		$	5,249		$	(5,249	)
Mexican peso		$	2,471		$	(2,471	)

b)

Credit Risk

Credit risk is the risk that a third party might fail to fulfill its obligations under the terms of a financial instrument. Credit risk arises from cash and cash equivalents, short-term investments, restricted cash, trade receivables and derivative financial instruments. The Company holds its cash and cash equivalents, restricted cash and short-term investments in highly rated financial institutions resulting in a low level of credit risk. For trade receivables and derivative financial instruments, historical levels of default have been negligible, resulting in a low level of credit risk. The Company mitigates credit risk by dealing with recognized credit worthy counterparties and limiting concentration risk. For derivative financial instrument liabilities, the Company assumes no credit risk when the fair value of an instrument is negative. The maximum exposure to credit risk is equal to the carrying amount of the instruments as follows:

		As at December 31, 2014			As at December 31, 2013			As at January 1, 2013
Cash and cash equivalents		$	177,537		$	139,101		$	298,068
Short-term investments			4,621			2,217			8,490
Restricted cash			54,021			28,723			25,450
Trade receivables			59,716			67,300			67,750
Derivative financial instrument assets			4,877			5,590			2,112
Total		$	300,772		$	242,931		$	401,870

ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE   51

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c)

Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. The Company monitors its risk of a shortage of funds by monitoring its debt rating and projected cash flows taking into account the maturity dates of existing debt and other payables. The Company manages exposure to liquidity risk by maintaining cash balances, having access to undrawn credit facilities and access to public debt markets. Contractual maturities relating to finance lease obligations are detailed in note 14 to these consolidated financial statements and contractual maturities relating to long-term debt are detailed in note 15 to these consolidated financial statements. Other financial liabilities, including accounts payable and accrued liabilities and derivative financial instruments, have maturities within one year of December 31, 2014.

d)

Capital Risk Management

The Company's primary capital management objective is to maintain an optimal capital structure to support current and long-term business activities and to provide financial flexibility in order to maximize value for equity holders.

Agnico Eagle's capital structure comprises a mix of long-term debt and total equity as follows:

		As at December 31, 2014			As at December 31, 2013			As at January 1, 2013
Long-term debt		$	1,374,643		$	987,356		$	814,164
Total equity			4,068,490			2,717,406			3,433,202
Total		$	5,443,133		$	3,704,762		$	4,247,366

The Company manages its capital structure and makes adjustments to it based on changes in economic conditions and the requirements of financial covenants. To effectively manage its capital requirements, Agnico Eagle has in place a rigorous planning, budgeting and forecasting process to ensure it has the appropriate liquidity to meet its operating and growth objectives. The Company has the ability to adjust its capital structure by various means.

See note 15 to these consolidated financial statements for details related to Agnico Eagle's compliance with its long-term debt covenants.

21. DERIVATIVE FINANCIAL INSTRUMENTS

Currency Risk Management

The Company utilizes foreign exchange economic hedges to reduce the variability in expected future cash flows arising from changes in foreign currency exchange rates. The Company is primarily exposed to currency fluctuations relative to the US Dollar as a portion of the Company's operating costs and capital expenditures are denominated in foreign currencies; primarily the Canadian dollar, the Euro and the Mexican Peso. These potential currency fluctuations increase the volatility of, and could have a significant impact on, the Company's production costs. The economic hedges relate to a portion of the foreign currency denominated cash outflows arising from foreign currency denominated expenditures. The Company does not apply hedge accounting to these arrangements.

As at December 31, 2014, the Company had outstanding foreign exchange zero cost collars. The purchase of US dollar put options was financed through selling US dollar call options at a higher level such that the net premium payable to the different counterparties by the Company was nil. At December 31, 2014, the zero cost collars related to $24.0 million of 2015 expenditures and the Company recognized mark-to-market adjustments in the loss on derivative financial instruments line item of the consolidated statements of income (loss) and comprehensive income (loss). Mark-to-market gains (losses) related to foreign exchange derivative financial instruments are recorded at fair value based on broker-dealer quotations that utilize period end forward pricing of the applicable foreign currency to calculate fair value.

52   AGNICO EAGLE ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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AGNICO EAGLE MINES LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(thousands of United States dollars, except share and per share amounts, unless otherwise indicated)
December 31, 2014

21. DERIVATIVE FINANCIAL INSTRUMENTS (Continued)

The Company's other foreign currency derivative strategies in 2014 and 2013 consisted mainly of writing US dollar call options with short maturities to generate premiums that would, in essence, enhance the spot transaction rate received when exchanging US dollars for Canadian dollars. All of these derivative transactions expired prior to year end such that no derivatives were outstanding as at December 31, 2014 or December 31, 2013. The call option premiums were recognized in the loss on derivative financial instruments line item of the consolidated statements of income (loss) and comprehensive income (loss).

Commodity Price Risk Management

To mitigate the risks associated with fluctuating diesel fuel prices, the Company uses derivative financial instruments as economic hedges of the price risk on a portion of diesel fuel costs associated with the Meadowbank mine's diesel fuel exposure as it relates to operating costs. There were derivative financial instruments outstanding at December 31, 2014 relating to 14.0 million gallons of heating oil. Derivative financial instruments that expired in 2013 and totaled 10.5 million gallons of heating oil were entered into at an average price of $2.99 per gallon, which was approximately 55.0% of the Meadowbank mine's expected 2013 diesel fuel operating costs. The related mark-to-market adjustments prior to settlement were recognized in the loss on derivative financial instruments line item of the consolidated statements of income (loss) and comprehensive income (loss). No heating oil derivative financial instruments were outstanding at December 31, 2013. The Company does not apply hedge accounting to these arrangements.

Mark-to-market gains (losses) related to heating oil derivative financial instruments are based on broker-dealer quotations that utilize year end forward pricing to calculate fair value.

As at December 31, 2014 and December 31, 2013, there were no metal derivative positions. The Company may from time to time utilize short-term financial instruments as part of its strategy to minimize risks and optimize returns on its by-product metal sales.

The following table sets out a summary of the amounts recognized in the loss on derivative financial instruments line item of the consolidated statements of income (loss) and comprehensive income (loss):

			Year Ended December 31,
		2014			2013
Premiums realized on written foreign exchange call options		$	2,725		$	3,375
Realized loss on warrants			(4,263	)		(2,827	)
Unrealized gain (loss) on warrants(i)			3,426			(488	)
Realized gain on currency and commodity derivatives			20			60
Unrealized loss on currency and commodity derivatives(i)			(8,064	)		(388	)
Total loss on derivative financial instruments		$	(6,156	)	$	(268	)

Note:

(i)

Unrealized gains and losses on financial instruments that did not qualify for hedge accounting are recognized through the loss on derivative financial instruments line item of the consolidated statements of income (loss) and comprehensive income (loss) and through the other line item of the consolidated statements of cash flows.

ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE   53

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22. SEGMENTED INFORMATION

Agnico Eagle operates in a single industry, namely exploration for and production of gold. The Company's primary operations are in Canada, Mexico and Finland. The Company identifies its reportable segments as those operations whose operating results are reviewed by the Chief Operating Decision Maker ("CODM"), the Chief Executive Officer for the purpose of allocating resources and assessing performance and that represent more than 10.0% of the combined revenue from mining operations, income or loss or total assets of all operating segments. Each of the Company's significant operating mines and projects are considered to be separate operating segments. Certain operating segments that do not meet the quantitative thresholds are still disclosed when the Company believes that the information is useful. The CODM also reviews segment income (defined as revenues from mining operations less production costs, exploration and corporate development expenses and impairment losses) on a mine-by-mine basis. The following are the Company's reportable segments organized according to their relationship with the Company's three business units and reflect how the Company manages its business and how it classifies its operations for planning and measuring performance:

Northern Business:		LaRonde mine, Lapa mine, Goldex mine, Meadowbank mine, Canadian Malartic mine, Meliadine project and Kittila mine
Southern Business:		Pinos Altos mine, Creston Mascota deposit at Pinos Altos and La India mine
Exploration:		United States Exploration office, Europe Exploration office, Canada Exploration offices, Latin America Exploration office and Cayden acquisition assets

Revenues from mining operations and production costs for the reportable segments are reported net of intercompany transactions.

Corporate and other assets and specific income and expense items are not allocated to reportable segments.

54   AGNICO EAGLE ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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Year Ended December 31, 2014:			Revenues from Mining Operations			Production Costs			Exploration and Corporate Development			Segment Income (Loss)
Northern Business:
LaRonde mine			$	308,794		$	(188,736	)	$	–		$	120,058
Lapa mine				115,254			(61,056	)		–			54,198
Goldex mine				125,574			(64,836	)		–			60,738
Meadowbank mine				575,856			(270,824	)		–			305,032
Canadian Malartic mine (note 5)				189,900			(113,916	)		–			75,984
Kittila mine				176,520			(116,893	)		–			59,627
Total Northern Business				1,491,898			(816,261	)		–			675,637
Southern Business:
Pinos Altos mine				251,783			(123,342	)		–			128,441
Creston Mascota deposit at Pinos Altos				59,573			(28,007	)		–			31,566
La India mine				93,512			(36,949	)		–			56,563
Total Southern Business				404,868			(188,298	)		–			216,570
Exploration				–			–			(56,002	)		(56,002	)
Segments totals			$	1,896,766		$	(1,004,559	)	$	(56,002	)	$	836,205
Total segments income												$	836,205
Corporate and other:
	Amortization of property, plant and mine development												(433,628	)
	General and administrative												(118,771	)
	Impairment loss on available-for-sale securities												(15,763	)
	Finance costs												(73,393	)
	Loss on derivative financial instruments												(6,156	)
	Gain on sale of available-for-sale securities												5,635
	Environmental remediation												(8,214	)
	Foreign currency translation loss												(3,781	)
	Other income												7,004
Income before income and mining taxes												$	189,138

ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE   55

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Year Ended December 31, 2013:			Revenues from Mining Operations			Production Costs			Exploration and Corporate Development			Impairment Loss			Segment Income (Loss)
Northern Business:
LaRonde mine			$	329,900		$	(228,640	)	$	–		$	–		$	101,260
Lapa mine				141,167			(69,371	)		–			(67,894	)		3,902
Goldex mine				21,418			(15,339	)		–			–			6,079
Meadowbank mine				591,473			(318,414	)		–			(307,503	)		(34,444	)
Meliadine project				–			–			–			(639,291	)		(639,291	)
Kittila mine				209,723			(97,934	)		–			–			111,789
Total Northern Business				1,293,681			(729,698	)		–			(1,014,688	)		(450,705	)
Southern Business:
Pinos Altos mine				303,203			(116,959	)		–			–			186,244
Creston Mascota deposit at Pinos Altos				41,522			(19,425	)		–			–			22,097
Total Southern Business				344,725			(136,384	)		–			–			208,341
Exploration				–			–			(44,236	)		–			(44,236	)
Segments totals			$	1,638,406		$	(866,082	)	$	(44,236	)	$	(1,014,688	)	$	(286,600	)
Total segments loss															$	(286,600	)
Corporate and other:
	Amortization of property, plant and mine development															(313,890	)
	General and administrative															(113,809	)
	Impairment loss on available-for-sale securities															(32,476	)
	Finance costs															(62,455	)
	Loss on derivative financial instruments															(268	)
	Gain on sale of available-for-sale securities															74
	Environmental remediation															(3,698	)
	Foreign currency translation loss															(1,769	)
	Other expenses															(3,396	)
Loss before income and mining taxes															$	(818,287	)

56   AGNICO EAGLE ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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			Total Assets as at
		December 31, 2014			December 31, 2013			January 1, 2013
Northern Business:
LaRonde mine		$	856,489		$	842,856		$	829,491
Lapa mine			74,131			77,667			167,948
Goldex mine			205,101			220,438			166,503
Meadowbank mine			660,278			711,746			1,016,924
Canadian Malartic mine (note 5)			2,099,815			–			–
Meliadine project			487,901			438,837			1,015,578
Kittila mine			931,335			863,933			860,314
Total Northern Business			5,315,050			3,155,477			4,056,758
Southern Business:
Pinos Altos mine			573,786			551,537			625,821
Creston Mascota deposit at Pinos Altos			84,176			86,839			69,649
La India mine			543,297			525,089			377,080
Total Southern Business			1,201,259			1,163,465			1,072,550
Exploration			144,580			21,686			20,122
Corporate and other			179,649			239,453			219,541
Total assets		$	6,840,538		$	4,580,081		$	5,368,971

ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE   57

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The following table sets out the changes in the carrying amount of goodwill by segment for the year ended December 31, 2013:

		Meliadine Project			La India Mine			Total
Cost:
Balance at January 1, 2013		$	200,064		$	29,215		$	229,279
Acquisition of Urastar (note 5)			–			9,802			9,802
Balance at December 31, 2013			200,064			39,017			239,081
Accumulated impairment:
Balance at January 1, 2013			–			–			–
Impairment loss			(200,064	)		–			(200,064	)
Balance at December 31, 2013			(200,064	)		–			(200,064	)
Carrying amount at December 31, 2013		$	–		$	39,017		$	39,017

The following table sets out the changes in the carrying amount of goodwill by segment for the year ended December 31, 2014:

		Meliadine Project			La India Mine			Canadian Malartic Mine			Total
Cost:
Balance at December 31, 2013		$	200,064		$	39,017		$	–		$	239,081
Joint acquisition of Osisko (note 5)			–			–			543,444			543,444
Balance at December 31, 2014			200,064			39,017			543,444			782,525
Accumulated impairment:
Balance at December 31, 2013			(200,064	)		–			–			(200,064	)
Balance at December 31, 2014			(200,064	)		–			–			(200,064	)
Carrying amount at December 31, 2014		$	–		$	39,017		$	543,444		$	582,461

58   AGNICO EAGLE ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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The following table sets out capital expenditures by segment:

		Capital Expenditures Year Ended December 31,
		2014			2013
Northern Business:
LaRonde mine		$	76,651		$	84,292
Lapa mine			20,198			22,738
Goldex mine			34,330			65,063
Meadowbank mine			65,883			109,290
Canadian Malartic mine			36,083			–
Meliadine project			48,270			61,412
Kittila mine			106,220			83,770
Total Northern Business			387,635			426,565
Southern Business:
Pinos Altos mine			48,365			52,862
Creston Mascota deposit at Pinos Altos			10,852			17,823
La India mine			22,692			116,786
Total Southern Business			81,909			187,471
Corporate and other			5,868			6,500
Total capital expenditures		$	475,412		$	620,536

The following table sets out revenues from mining operations by geographic area:

		Year Ended December 31,
		2014			2013
Canada		$	1,315,378		$	1,083,958
Mexico			404,868			344,725
Finland			176,520			209,723
Total revenues from mining operations		$	1,896,766		$	1,638,406

ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE   59

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The following table sets out non-current assets by geographic area:

		Non-current Assets as at
		December 31, 2014			December 31, 2013			January 1, 2013
Canada		$	3,986,008		$	1,950,706		$	2,869,024
Mexico			1,095,160			1,029,139			861,707
Finland			841,062			791,698			742,561
United States			10,248			10,269			10,698
Total non-current assets		$	5,932,478		$	3,781,812		$	4,483,990

23. IMPAIRMENT LOSSES AND REVERSALS

Impairment Losses

The Company performs goodwill impairment tests on an annual basis as at December 31 each year. In addition, the Company assesses for indicators of impairment at each reporting period end and if an indicator of impairment is identified, goodwill and non-current assets are tested for impairment at that time. If an indicator of impairment exists, the recoverable amount of the asset is calculated in order to determine if any impairment loss is required. An impairment loss is recognized for any excess of the carrying amount of the asset over its recoverable amount.

The estimated recoverable amount of the Canadian Malartic CGU as at December 31, 2014 was determined on the basis of fair value less costs to dispose of the mine. The estimated recoverable amount of the Canadian Malartic mine was calculated by discounting the estimated future net cash flows over the estimated life of the mine using a discount rate of 7.6%, commensurate with the estimated level of risk associated with the Canadian Malartic mine. The recoverable amount calculation was based on an estimate of future production levels applying gold prices of $1,300 per ounce (in real terms), foreign exchange rates of US$0.88:C$1.00 to US$0.91:C$1.00, an inflation rate of 2.0%, and capital, operating and reclamation costs based on applicable life-of-mine plans. The Canadian Malartic mine's estimated recoverable amount exceeded its carrying amount at December 31, 2014. The discounted cash flow approach uses significant unobservable inputs and is therefore considered a Level 3 fair value measurement under the fair value hierarchy.

As at December 31, 2013, the Company identified the continued decline in the market price of gold as an indicator of potential impairment for the Company's long-lived assets. As a result of the identification of this indicator, the Company estimated the recoverable amounts of all CGUs using updated assumptions and estimates and concluded that the Lapa mine, Meadowbank mine and Meliadine project were impaired.

60   AGNICO EAGLE ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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The following impairment losses were recorded as at December 31, 2013 as a result of the impairment evaluation:

				As at December 31, 2013
			Pre-impairment Carrying Value			Impairment Loss			Post-impairment Carrying Value
Property, plant and mine development:
	Lapa mine		$	136,618		$	(67,894	)	$	68,724
	Meadowbank mine			770,733			(307,503	)		463,230
	Meliadine project			841,932			(439,227	)		402,705
	Total		$	1,749,283		$	(814,624	)	$	934,659
Goodwill:
	Meliadine project		$	200,064		$	(200,064	)	$	–
Total impairment loss						$	(1,014,688	)

The estimated recoverable amount of the Lapa mine CGU was $74.0 million as at December 31, 2013, representing the fair value less costs to dispose of the mine. The estimated recoverable amount of the Lapa mine was calculated by discounting the estimated future net cash flows over the estimated life of the mine using a discount rate of 5.5% (in nominal terms), commensurate with the estimated level of risk associated with the Lapa mine. The recoverable amount calculation was based on an estimate of future production levels applying gold prices of $1,238 to $1,300 per ounce (in real terms), foreign exchange rates of US$0.90:C$1.00 to US$0.93:C$1.00, an inflation rate of 2.0%, an average gold recovery rate of 78.3% and capital, operating and reclamation costs based on applicable life-of-mine plans. As the Lapa mine's carrying amount exceeded its estimated recoverable amount at December 31, 2013, an impairment loss of $67.9 million was recognized. The Lapa mine impairment loss was allocated $7.2 million to mining properties, $24.4 million to plant and equipment and $36.3 million to mine development costs. The discounted cash flow approach uses significant unobservable inputs and is therefore considered a Level 3 fair value measurement under the fair value hierarchy.

The estimated recoverable amount of the Meadowbank mine CGU was $490.0 million as at December 31, 2013, representing the fair value less costs to dispose of the mine. The estimated recoverable amount of the Meadowbank mine was calculated by discounting the estimated future net cash flows over the estimated life of the mine using a discount rate of 6.5% (in nominal terms), commensurate with the estimated level of risk associated with the Meadowbank mine. The recoverable amount calculation was based on an estimate of future production levels applying gold prices of $1,238 to $1,300 per ounce (in real terms), foreign exchange rates of US$0.90:C$1.00 to US$0.93:C$1.00, an inflation rate of 2.0%, an average gold recovery rate of 92.3% and capital, operating and reclamation costs based on applicable life-of-mine plans. As the Meadowbank mine's carrying amount exceeded its estimated recoverable amount at December 31, 2013, an impairment loss of $307.5 million was recognized. The Meadowbank mine impairment loss was allocated $3.1 million to mining properties and $304.4 million to plant and equipment. The discounted cash flow approach uses significant unobservable inputs and is therefore considered a Level 3 fair value measurement under the fair value hierarchy.

Estimated after-tax discounted future net cash flows of reporting units with goodwill, including the Meliadine and La India projects, were calculated as at December 31, 2013. The estimated recoverable amount of the Meliadine project was $400.0 million as at December 31, 2013, representing the fair value less costs to dispose of the project. The estimated recoverable amount for the Meliadine project was calculated by discounting the estimated future net cash flows over the

ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE   61

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estimated life-of-mine using a discount rate of 8.0% (in nominal terms), commensurate with the estimated level of risk associated with the Meliadine project. The recoverable amount calculation was based on an estimate of future production levels applying gold prices of $1,238 to $1,300 per ounce (in real terms), foreign exchange rates of US$0.90:C$1.00 to US$0.93:C$1.00, an inflation rate of 2.0%, an average gold recovery rate of 95.1% and capital, operating and reclamation costs based on applicable life-of-mine plans. As the Meliadine project's carrying amount exceeded its estimated recoverable amount at December 31, 2013, an impairment loss of $639.3 million was recognized, of which $200.1 million was allocated to write down goodwill to nil with the balance allocated to mining properties. No goodwill impairment loss was required relating to the La India project as at December 31, 2013. The discounted cash flow approach uses significant unobservable inputs and is therefore considered a Level 3 fair value measurement under the fair value hierarchy.

Estimated after-tax discounted future net cash flows of reporting units with goodwill were calculated as at January 1, 2013. The estimated recoverable amount for the Meliadine project was calculated by discounting the estimated future net cash flows over the estimated life-of-mine using a discount rate of 6.8% (in nominal terms), commensurate with the estimated level of risk associated with the Meliadine project. The recoverable amount calculation was based on an estimate of future production levels applying gold prices of $1,400 per ounce (in real terms), foreign exchange rates of US$0.94:C$1.00 to US$1.00:C$1.00, an inflation rate of 2.0%, an average gold recovery rate of 95.0% and capital, operating and reclamation costs based on applicable life-of-mine plans. The estimated recoverable amount exceeded the carrying amount at January 1, 2013. The discounted cash flow approach uses significant unobservable inputs and is therefore considered a Level 3 fair value measurement under the fair value hierarchy.

Discount rates were based on each asset group's weighted average cost of capital, of which the two main components are the cost of equity and the after-tax cost of debt. Cost of equity was calculated based on the capital asset pricing model, incorporating the risk-free rate of return based on Government of Canada marketable bond yields as at the valuation date, the Company's beta coefficient adjustment to the market equity risk premium based on the volatility of the Company's return in relation to that of a comparable market portfolio, plus a size premium and Company-specific risk factor. Cost of debt was determined by applying an appropriate market indication of the Company's borrowing capabilities and the corporate income tax rate applicable to each asset group's jurisdiction.

Impairment Reversals

On October 19, 2011, the Company suspended mining operations and gold production at the Goldex mine due to geotechnical concerns with the rock above the mining horizon. As a result, the Company undertook immediate investigation and remediation efforts. As at September 30, 2011, the Company recognized an impairment loss of $237.1 million relating to the value of property, plant and mine development assets and $16.6 million relating to the underground ore stockpile. Additionally, the remaining proven and probable mineral reserves were reclassified as mineral resources. Operations in the Goldex Extension Zone ("GEZ") remain suspended indefinitely.

Exploration drilling continued on several mineralized zones on the Goldex mine property near the GEZ after mining operations were suspended in October 2011. A team of independent consultants and Agnico Eagle staff performed a thorough review, including a preliminary economic assessment, to determine whether future mining operations on the property, including the M and E Zones, would be viable. After a review of the preliminary economic assessment, Agnico Eagle's Board of Directors approved the M and E Zones for development on July 25, 2012. A NI 43-101 compliant technical report and a feasibility study supporting the exploitation of the M and E Zones at the Goldex mine was prepared by Agnico Eagle in the fourth quarter of 2012. The feasibility study supported the first proven and probable mineral reserves at the Goldex mine since the suspension of operations at the GEZ. Commercial production was achieved at the Goldex mine's M and E Zones in October 2013.

The Company completed a comparison of the carrying amount versus the recoverable amount of the Goldex mine at its IFRS transition date of January 1, 2013. IAS 36 – Impairment of Assets indicates that an impairment loss recognized in a prior

62   AGNICO EAGLE ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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period can be reversed only if there is a change in the estimates used to determine the mine's recoverable amount since the last impairment loss was recognized. Consequently, the reversal of an impairment loss should reflect an increase in the service potential of an asset since the date the entity last recorded an impairment loss.

The identification of ore bodies at the Goldex mine that may be successfully mined and are supported by feasibility studies are indicators for the reversal (or partial reversal) of the impairment loss recognized in 2011. The feasibility study represents an observable indication that the value of related assets has increased significantly and a favourable change to the extent and manner in which the asset is expected to be used. There is significant judgment involved in the determination of whether a previously recognized impairment loss should be reversed.

The Company recognized an impairment loss on the Goldex mine as no future value could be attributed to its assets beyond their residual values as at September 30, 2011. Accordingly, the capitalized costs associated with the mine site and the related property, plant and mine development assets were written down to their residual values. Upon reviewing the assets that were previously impaired, the Company determined that certain property, plant and mine development assets would be used to generate cash inflows at the newly developed M and E Zones.

The estimated recoverable amount of the Goldex mine CGU was determined as at January 1, 2013 using a discounted cash flow analysis to estimate fair value less costs to dispose of the mine. Significant assumptions used to estimate the recoverable amount of the Goldex mine included a discount rate of 5.0% (in nominal terms), gold prices of $1,473 to $1,665 per ounce (in real terms), foreign exchange rates of US$0.90:C$1.00 to US$0.93:C$1.00, an inflation rate of 2.0%, an average gold recovery rate of 93.0% and capital, operating and reclamation costs based on updated life-of-mine plans. As the Goldex mine CGU's estimated recoverable amount exceeded the previous carrying amount less amortization that would have been recognized had the assets not been impaired, an impairment reversal of $109.7 million was recognized to increase the carrying amount of related plant and equipment to an amortized cost of $163.8 million.

24. INCOME AND MINING TAXES

Income and mining taxes expense (recovery) is made up of the following components:

				Year Ended December 31,
			2014			2013
Current income and mining taxes			$	69,110		$	52,394
Deferred income and mining taxes:
	Origination and reversal of temporary differences			37,058			(236,975	)
	Imposition of new tax laws			–			52,999
Total income and mining taxes expense (recovery)			$	106,168		$	(131,582	)

ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE   63

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The income and mining taxes expense (recovery) is different from the amount that would have been calculated by applying the Canadian statutory income tax rate as a result of the following:

				Year Ended December 31,
			2014			2013
Combined federal and composite provincial tax rates				26.0%			26.3%
Expected income tax expense (recovery) at statutory income tax rate			$	49,082		$	(215,455	)
Increase (decrease) in income and mining taxes resulting from:
	Mining taxes			28,857			(38,203	)
	Tax law changes			–			52,999
	Impact of foreign tax rates			(7,462	)		(8,421	)
	Permanent differences			14,042			83,672
	Impact of foreign exchange on deferred income tax balances			21,649			(6,174	)
Total income and mining taxes expense (recovery)			$	106,168		$	(131,582	)

The statutory rate is lower in 2014 than in 2013 due to a change in the provincial allocation arising from operations.

The following table sets out the components of Agnico Eagle's net deferred income and mining tax liabilities:

		As at December 31, 2014			As at December 31, 2013			As at January 1, 2013
Mining properties		$	1,084,758		$	658,662		$	810,219
Net operating and capital loss carry forwards			(123,933	)		(114,142	)		(100,399	)
Mining taxes			(54,643	)		(42,394	)		(37,694	)
Reclamation provisions and other liabilities			(73,981	)		(48,715	)		(39,263	)
Total deferred income and mining tax liabilities		$	832,201		$	453,411		$	632,863

64   AGNICO EAGLE ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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			Year Ended December 31,
		2014			2013
Deferred income and mining tax liabilities – beginning of year		$	453,411		$	632,863
Income and mining tax impact recognized in net income (loss)			33,884			(179,452	)
Income tax impact recognized in other comprehensive income			1,316			–
Attributable deferred income and mining tax liabilities jointly acquired from Osisko			343,590			–
Deferred income and mining tax liabilities – end of year		$	832,201		$	453,411

The Company operates in different jurisdictions and, accordingly, it is subject to income and other taxes under the various tax regimes in the countries in which it operates. The tax rules and regulations in many countries are highly complex and subject to interpretation. The Company may be subject in the future to a review of its historic income and other tax filings and in connection with such reviews, disputes can arise with the taxing authorities over the interpretation or application of certain tax rules and regulations to the Company's business conducted within the country involved.

The deductible temporary differences and unused tax losses in respect of which a deferred tax asset has not been recognized in the consolidated balance sheets are as follows:

		As at December 31, 2014			As at December 31, 2013			As at January 1, 2013
Net capital loss carry forwards		$	83,353		$	56,500		$	55,940
Other deductible temporary differences			204,293			205,360			131,491
Unrecognized deductible temporary differences and unused tax losses		$	287,646		$	261,860		$	187,431

Capital loss carry forwards and other deductible temporary differences have no expiry date.

Income taxes of $2,648.5 million have not been recorded for undistributed income as at December 31, 2014 (December 31, 2013 – $2,124.5 million; January 1, 2013 – $1,967.7 million) as the Company is able to control the timing of the remittance, and it is probable there will be no remittance in the foreseeable future.

The Company is subject to taxes in Canada, Mexico and Finland, each with varying statutes of limitations. Prior taxation years generally remain subject to examination.

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25. EMPLOYEE BENEFITS AND COMPENSATION OF KEY MANAGEMENT PERSONNEL

During the year ended December 31, 2014, employee benefits expense was $493.3 million (2013 – $503.2 million). Included within this amount is compensation for key management personnel. There were no material related party transactions in 2014 or 2013 other than compensation of key management personnel. Key management personnel include the members of the Board of Directors and the senior leadership team. Compensation for key management personnel was as follows:

			Year ended December 31,
		2014			2013
Salaries, short-term incentives and other benefits		$	6,629		$	7,131
Post-employment benefits			2,009			1,619
Share-based payments			4,688			8,756
Total		$	13,326		$	17,506

26. COMMITMENTS AND CONTINGENCIES

As part of its ongoing business and operations, the Company has been required to provide assurance in the form of letters of credit for environmental and site restoration costs, custom credits, government grants and other general corporate purposes. As at December 31, 2014, the total amount of these guarantees was $172.3 million.

Certain of the Company's properties are subject to royalty arrangements. The following are the most significant royalty arrangements:

•

The Company has a royalty agreement with the Finnish government relating to the Kittila mine. Starting 12 months after the Kittila mine's operations commenced, the Company has been required to pay 2.0% on net smelter returns, defined as revenue less processing costs. The royalty is paid on an annual basis in the following year.



•

The Company is committed to pay a royalty on production from certain properties in Quebec, Canada. The type of royalty agreements include, but are not limited to, net profits interest royalties and net smelter return royalties, with percentages ranging from 2.5% to 5.0%.



•

The Company is committed to pay a royalty on production from certain properties in Mexico. The type of royalty agreements include, but are not limited to, net profits interest royalties and net smelter return royalties, with percentages ranging from 0.5% to 3.5%.

The Company regularly enters into various earn-in and shareholder agreements, often with commitments to pay net smelter return and other royalties.

66   AGNICO EAGLE ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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The Company had the following purchase commitments as at December 31, 2014, of which $2.8 million related to capital expenditures:

			Purchase Commitments
2015		$	15,873
2016			9,946
2017			7,294
2018			5,864
2019			5,172
Thereafter			27,878
Total		$	72,027

27. SUBSEQUENT EVENTS

Dividends Declared

On February 11, 2015, Agnico Eagle announced that the Board approved the payment of a quarterly cash dividend of $0.08 per common share (a total value of approximately $17.1 million), paid on March 16, 2015 to holders of record of the common shares of the Company on March 2, 2015.

Sale of Probe Mines Limited Common Shares and Warrants

On January 27, 2015, the Company completed the sale of 7,320,200 common shares and 2,347,951 common share purchase warrants of Probe Mines Limited ("Probe") pursuant to a previously announced purchase agreement. Total proceeds of C$43.4 million were comprised of cash consideration of C$5.00 per Probe common share and C$2.90 per Probe common share purchase warrant and a total gain on sale of C$33.6 million was recognized. Upon the closing of the transaction, Agnico Eagle holds no common shares and 3,277,049 common share purchase warrants of Probe.

Malartic CHL Prospect

On February 22, 2015, Agnico Eagle entered into a binding letter of intent (the "LOI") with Canadian Malartic GP, Yamana and Abitibi Royalties Inc. ("Abitibi") regarding the Malartic CHL prospect, adjacent to the Canadian Malartic mine. Pursuant to the LOI, and subject to certain conditions, Abitibi agreed to sell its 30.0% interest in the Malartic CHL prospect to the purchasers in exchange for 459,197 Agnico Eagle common shares and 3,549,695 Yamana common shares for total consideration of approximately C$35.0 million (based on the respective closing prices of such shares on the Toronto Stock Exchange on February 20, 2015, the date immediately prior to the public announcement by Abitibi of entering into the LOI) and 3.0% net smelter return royalties to Abitibi and Osisko Gold Royalties Ltd. on the Malartic CHL prospect. The completion of the transactions contemplated under the LOI was conditional upon, among other things, the execution of a definitive acquisition agreement and the termination, settlement and release of all prior agreements, claims and proceedings relating to the Malartic CHL prospect, including the proceedings previously instituted by Abitibi against Osisko (the predecessor to Canadian Malartic Corporation). Subsequently, Abitibi and the purchasers entered into a definitive acquisition agreement dated March 19, 2015, completed the transactions with Abitibi on the terms contemplated under the LOI. In accordance with the terms of a Release, Discharge and Transaction Agreement dated March 19, 2015 entered into concurrent with the

ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE   67

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closing of the transactions by Abitibi, Agnico Eagle, Yamana, Canadian Malartic GP and Canadian Malartic Corporation (as the successor to Osisko), each of the parties released and discharged the others with respect to all proceedings previously commenced by Abitibi with respect to the Malartic CHL prospect, all without admission of any liability by any party.

28. ONGOING LITIGATION

Securities Class Action Lawsuits

On March 8, 2012 and April 10, 2012, a Notice of Action and Statement of Claim (collectively, the "Ontario Claim") were issued by William Leslie, AFA Livforsakringsaktiebolag and certain other entities against the Company and certain of its current and former officers, some of whom also are or were directors of the Company. On September 27, 2012, the plaintiffs issued a Fresh as Amended Statement of Claim. The Fresh as Amended Statement of Claim alleges that the Company's public disclosure concerning water flow issues at its Goldex mine was misleading. The Ontario Claim was issued by the plaintiffs on behalf of all persons and entities who acquired securities of the Company during the period March 26, 2010 to October 19, 2011, excluding persons resident or domiciled in the Province of Quebec at the time they purchased or acquired such securities. The plaintiffs seek, among other things, damages of C$250.0 million. On April 17, 2013 an Order was granted on consent certifying the action and granting leave for the claims under Section 138 of the Securities Act (Ontario) to proceed. The Company intends to vigorously defend the action on the merits. No amounts have been recorded for any potential liability arising from this matter.

On March 28, 2012, the Company and certain of its current and former officers, some of whom also are or were directors of the Company, were named as respondents in a Motion for Leave to Institute a Class Action and for the Appointment of a Representative Plaintiff (the "Quebec Motion"). The action is on behalf of all persons and entities with fewer than 50 employees resident in Quebec who acquired securities of the Company between March 26, 2010 and October 19, 2011. The proposed class action is for damages of C$100.0 million arising as a result of allegedly misleading disclosure by the Company concerning its operations at the Goldex mine. On October 15, 2012, the plaintiffs served an amended Quebec Motion seeking leave to commence an action under the Securities Act (Quebec) in addition to seeking authorization to institute a class action. On October 1, 2013, the Quebec court certified the class action on terms identical to those set out in the consent Order granted in Ontario on April 17, 2013. No date has been set for the hearing to argue the class action on the merits. The Company intends to vigorously defend the action on the merits. No amounts have been recorded for any potential liability arising from this matter.

Canadian Malartic Corporation Litigation

On June 6, 2014, Clifton Star Resources Inc. ("Clifton") instituted proceedings against Osisko (now Canadian Malartic Corporation) seeking, among other things, an order that Osisko pay Clifton C$22.5 million in damages. In the proceedings, Clifton alleged, among other things, that Osisko was obligated to lend Clifton C$22.5 million (the "Loan") on or around December 1, 2002 pursuant to a December 10, 2009 commitment letter and a December 10, 2009 Duparquet Mining Camp Option and Joint Venture Agreement, each between Clifton and Osisko, and that Osisko's failure to advance the Loan resulted in damages to Clifton. Clifton further alleged that the Loan was intended to be used to make payments under certain option agreements between Clifton and third parties which entitled Clifton to acquire shares of such third parties that owned interests in the concessions comprising the Duparquet Project. Following the joint acquisition of Osisko by Agnico Eagle and Yamana on June 16, 2014, Agnico Eagle and Yamana engaged in discussions with Clifton to advance the settlement of such claims. Effective March 2, 2015, Canadian Malartic Corporation ("CMC") (the successor to Osisko) entered into a settlement agreement with Clifton, pursuant to which CMC paid Clifton approximately C$5.3 million in consideration for a full and final release of all claims arising from the facts described in the Clifton proceedings, the whole without any admission of liability by CMC. Concurrently, under two separate non-brokered private placements, each of Agnico Eagle and Yamana subscribed for 4,772,786 common shares of Clifton at a price of C$0.60 per share, for total proceeds to Clifton of approximately

68   AGNICO EAGLE ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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C$5.7 million. As a result of the closing of the private placement, Agnico Eagle now holds 4,772,786 common shares of Clifton representing, as of March 2, 2015, approximately 9.9% of Clifton's issued and outstanding common shares.

29. TRANSITION TO IFRS

Agnico Eagle has adopted IFRS effective July 1, 2014. The Company's transition date is January 1, 2013 (the "transition date") and has prepared its opening IFRS consolidated balance sheet as at that date. These consolidated financial statements have been prepared in accordance with the accounting policies described in note 3 to these consolidated financial statements.

(a)

Optional Exemptions from Retrospective Application

In preparing these consolidated financial statements in accordance with IFRS 1, the Company has applied certain of the optional exemptions from full retrospective application of IFRS. The optional exemptions applied are described below.

Business Combinations

IFRS 3 – Business Combinations has not been applied to acquisitions of subsidiaries, which are considered businesses for IFRS, that occurred before January 1, 2013. Accordingly, the Company has not restated business combinations that took place prior to the transition date.

Leases

The Company has applied the transitional provision in IFRIC 4 – Determining Whether an Arrangement Contains a Lease and has assessed all arrangements based upon the conditions in place as at January 1, 2013.

Share-based Payment

IFRS 2 – Share-based Payment has not been applied to equity instruments in share-based payment transactions that were granted on or before November 7, 2002, nor has it been applied to equity instruments granted after November 7, 2002 that vested before January 1, 2013.

Cumulative Translation Difference

The Company has elected to set the previous accumulated cumulative translation amount, which was included in accumulated other comprehensive loss, to zero as at January 1, 2013 and absorbed the balance into retained earnings.

Reclamation Provision

The Company has elected to take a simplified approach to calculate and record the reclamation provision related asset on its January 1, 2013 transition date IFRS consolidated balance sheet. The reclamation provision as at the transition date has been measured in accordance with IAS 37 – Provisions, Contingent Liabilities and Contingent Assets. The reclamation provision calculated on the transition date was discounted back to the date when each first arose, at which date the corresponding asset was set up and then amortized to its carrying amount as at January 1, 2013.

Borrowing Costs

IAS 23 – Borrowing Costs has been applied prospectively from the transition date. As a result, the Company has not restated for borrowing costs capitalized under US GAAP on qualifying assets prior to the date of transition to IFRS.

ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE   69

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Stripping Costs

As at January 1, 2013, any previously recognized asset balance that resulted from stripping activity undertaken during the production phase (predecessor stripping asset) was reclassified as a part of an existing asset to which the stripping activity related, to the extent that there remained an identifiable component of the ore body with which the predecessor stripping asset could be associated. If there was no identifiable component of the ore body to which the predecessor stripping asset related, it was recognized in opening retained earnings.

(b)

Reconciliations of Equity Between US GAAP and IFRS

The following reconciliations summarize the impact on the Company's US GAAP financial statements as a result of adopting IFRS. Explanations of the impact of the adjustments are provided in the explanatory notes following the reconciliations.

The following table sets out a reconciliation of the Company's total equity reported in accordance with US GAAP to its total equity reported in accordance with IFRS as at January 1, 2013:

			References		Common Shares			Stock Options			Warrants			Contributed Surplus			Retained Earnings			Accumulated Other Comprehensive Loss			Total Equity
Equity as reported under US GAAP					$	3,241,922		$	148,032		$	24,858		$	15,665		$	7,046		$	(27,311	)	$	3,410,212
Adjustments to reported equity:
	Property, plant and mine development		(i	)		–			–			–			–			(13,542	)		–			(13,542	)
	Reclamation provisions		(iii	)		–			–			–			–			(42,190	)		–			(42,190	)
	Reversal of impairments		(v	)		–			–			–			–			109,684			–			109,684
	Cumulative translation adjustment		(vi	)		–			–			–			–			(16,244	)		16,244			–
	Share-based payments		(vii	)		–			9,843			–			–			(9,843	)		–			–
	Income and mining taxes		(viii	)		–			–			–			–			(27,216	)		–			(27,216	)
	Other, net		(ix	)		–			–			–			–			(7,103	)		3,357			(3,746	)
Equity as reported under IFRS					$	3,241,922		$	157,875		$	24,858		$	15,665		$	592		$	(7,710	)	$	3,433,202

70   AGNICO EAGLE ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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The following table sets out a reconciliation of the Company's total equity reported in accordance with US GAAP to its total equity reported in accordance with IFRS as at December 31, 2013:

			References		Common Shares			Stock Options			Contributed Surplus			Deficit			Accumulated Other Comprehensive Income (Loss)			Total Equity
Equity as reported under US GAAP					$	3,294,007		$	174,470		$	37,254		$	(513,441	)	$	(15,141	)	$	2,977,149
Adjustments to reported equity:
	Property, plant and mine development		(i	)		–			–			–			(10,172	)		–			(10,172	)
	Production stripping costs		(ii	)		–			–			–			45,372			–			45,372
	Reclamation provisions		(iii	)		–			–			–			(44,941	)		–			(44,941	)
	Impairment of assets		(iv	)		–			–			–			(480,035	)		–			(480,035	)
	Reversal of impairments		(v	)		–			–			–			101,977			–			101,977
	Cumulative translation adjustment		(vi	)		–			–			–			(16,244	)		16,244			–
	Share-based payments		(vii	)		–			9,608			–			(9,465	)		–			143
	Income and mining taxes		(viii	)		–			–			–			134,503			–			134,503
	Other, net		(ix	)		–			–			–			(7,628	)		1,038			(6,590	)
Equity as reported under IFRS					$	3,294,007		$	184,078		$	37,254		$	(800,074	)	$	2,141		$	2,717,406

ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE   71

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(c)

Reconciliation of Net Loss Between US GAAP and IFRS

The following table sets out a reconciliation of the Company's net loss reported in accordance with US GAAP to its net loss reported in accordance with IFRS for the year ended December 31, 2013:

			References		Year Ended December 31, 2013
Net loss as reported under US GAAP					$	(406,526	)
Adjustments to reported net loss:
	Property, plant and mine development		(i	)		3,370
	Production stripping costs		(ii	)		45,372
	Reclamation provisions		(iii	)		(2,753	)
	Impairment of assets		(iv	)		(480,035	)
	Reversal of impairments		(v	)		(7,707	)
	Share-based payments		(vii	)		378
	Income and mining taxes		(viii	)		161,719
	Other, net		(ix	)		(523	)
Net loss as reported under IFRS					$	(686,705	)

(d)

Reconciliation of Other Comprehensive Income Between US GAAP and IFRS

The following table sets out a reconciliation of the Company's other comprehensive income reported in accordance with US GAAP to its other comprehensive income reported in accordance with IFRS for the year ended December 31, 2013:

			Reference		Year Ended December 31, 2013
Other comprehensive income as reported under US GAAP					$	12,170
Adjustments to reported other comprehensive income:
	Other, net		(ix	)		(2,319	)
Other comprehensive income as reported under IFRS					$	9,851

(e)

Consolidated Statements of Cash Flows Between US GAAP and IFRS

The adoption of IFRS did not have a material impact on the Company's consolidated statements of cash flows reported in accordance with IFRS as compared to US GAAP. However, cash flows related to production stripping costs were reclassified between operating activities and investing activities on the Company's consolidated statements of cash flows.

72   AGNICO EAGLE ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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(f)

References



(i)

Property, Plant and Mine Development

Revenues, net of certain costs, earned as a part of the Company's testing and commissioning of property, plant and mine development were previously recognized in income in accordance with US GAAP. Under the principles of IFRS, this income is recognized as a reduction to the cost of the related items of property, plant and mine development to which the testing and commissioning activities relate.

(ii)

Production Stripping Costs

Under IFRS, production phase stripping costs for open pit mines are capitalized to property, plant and mine development if the stripping activities provide a probable future economic benefit, a component of ore body can be identified, and the costs related to the stripping activity can be measured reliably. Under US GAAP, stripping costs were recognized to inventories and subsequently included in production costs. Capitalized stripping costs also resulted in an adjustment to the amortization of property, plant and mine development.

(iii)

Reclamation Provisions

Under IFRS, reclamation provisions are remeasured each reporting period for changes in discount rates and exchange rates in addition to changes in the estimated timing or amount of future cash flows. Under US GAAP, the Company's reclamation provisions were updated only as a result of changes in the estimated timing or amount of future cash flows to settle the obligations.

(iv)

Impairment of Assets

As at December 31, 2013, an additional impairment charge of $38,234 was recognized for the Meadowbank mine to impair assets as a result of IFRS adjustments, which brought the total impairment loss to $307,503 for the year ended December 31, 2013. As a result of changes in methodology for the recognition of impairment losses under IFRS, an impairment loss of $439,227 was recognized to impair the property, plant and mine development assets of the Meliadine project. Please see Note 23 to these consolidated financial statements for further detail.

(v)

Reversal of Impairments

Under IFRS, an entity is required to assess whether there are indicators for the reversal of previously recognized impairment charges to long-lived assets, other than goodwill. On transition to IFRS, the Company concluded that a reversal of impairment losses on certain items of property, plant and mine development in operation at the Goldex mine was required. Please see Note 23 to these consolidated financial statements for further detail.

(vi)

Cumulative Translation Adjustment

The Company has elected to set the cumulative translation adjustment, which was included in accumulated other comprehensive loss, to zero as at January 1, 2013, absorbing the balance into retained earnings.

(vii)

Share-based Payments

Under US GAAP, stock options that vested in equal increments over a three-year period were treated as a single grant for the purposes of valuation. The value of the grant was then amortized evenly over the vesting period. IFRS 2 – Share-Based Payment has been applied to stock options that had not vested prior to January 1, 2013. Where stock options issued under the Company's share-based compensation plan vest over a number of periods, each vesting amount is valued as a separate tranche and each tranche is amortized over

ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE   73

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its individual vesting period. The result of the treatment of share-based payments under IFRS as compared with US GAAP is to accelerate the recognition of compensation costs.

(viii)

Income and Mining Taxes

There are differences between IFRS and US GAAP regarding the accounting for income taxes that resulted in an adjustment with respect to the recognition and measurement of deferred income and mining taxes on transition to IFRS. Further, as summarized above, the carrying amounts of assets and liabilities for financial reporting purposes have been adjusted on conversion to IFRS resulting in a change to deferred taxes recognized previously under US GAAP.

(ix)

Other, Net

The other, net amount contains individually insignificant adjustments relating to pension benefits, hedge accounting, available-for-sale securities and underground ore stockpiles.

74   AGNICO EAGLE ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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Exhibit 99.3

Management's Discussion and Analysis
(Prepared in Accordance with International Financial Reporting Standards)
for the year ended December 31, 2014

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AGNICO EAGLE MINES LIMITED

MANAGEMENT'S DISCUSSION AND ANALYSIS

Table of Contents

			Page
Executive Summary			1
Strategy			1
Portfolio Overview			2
Key Performance Drivers			4
Balance Sheet Review			6
Results of Operations			7
	Revenues from Mining Operations		7
	Production Costs		9
	Exploration and Corporate Development Expense		12
	Amortization of Property, Plant and Mine Development		13
	General and Administrative Expense		13
	Impairment Loss on Available-for-sale Securities		13
	Finance Costs		14
	Impairment Loss		14
	Foreign Currency Translation Loss		16
	Income and Mining Taxes Expense (Recovery)		16
Liquidity and Capital Resources			16
	Operating Activities		17
	Investing Activities		17
	Financing Activities		17
	Contractual Obligations		19
	Off-Balance Sheet Arrangements		19
	2015 Liquidity and Capital Resources Analysis		20
Quarterly Results Review			20
Outlook			21
	Gold Production Growth		21
	Financial Outlook		23
Risk Profile			25
	Metal Prices and Foreign Currencies		26
	Cost Inputs		27
	Interest Rates		27

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	Financial Instruments		27
	Operational Risk		27
	Regulatory Risk		30
Controls Evaluation			30
Outstanding Securities			30
Governance			30
Sustainable Development Management			30
Employee Health and Safety			31
Community			31
Environment			31
International Financial Reporting Standards			32
	Reconciliations from US GAAP to IFRS		32
Critical IFRS Accounting Policies and Accounting Estimates			32
	Derivative Instruments and Hedge Accounting		33
	Goodwill		33
	Mining Properties, Plant and Equipment and Mine Development Costs		33
	Development Stage Expenditures		35
	Impairment of Long-lived Assets		35
	Reclamation Provisions		35
	Stock-based Compensation		36
	Revenue Recognition		37
	Income Taxes		37
Recently Adopted and Recently Issued Accounting Pronouncements and Developments			38
Mineral Reserve Data			38
Non-GAAP Financial Performance Measures			40
Summarized Quarterly Data			52
Three Year Financial and Operating Summary			59

This Management's Discussion and Analysis ("MD&A") dated March 25, 2015 of Agnico Eagle Mines Limited ("Agnico Eagle" or the "Company") should be read in conjunction with the Company's annual consolidated financial statements for the year ended December 31, 2014 that were prepared in accordance with International Financial Reporting Standards ("IFRS"). The Company has adopted IFRS as its basis of accounting, replacing United States generally accepted accounting principles ("US GAAP") effective July 1, 2014. Certain figures in this MD&A are presented in accordance with US GAAP and have been labeled accordingly. The annual consolidated financial statements and this MD&A are presented in United States dollars ("US dollars", "$" or "US$"), unless otherwise specified. Certain information in this MD&A is presented in Canadian dollars ("C$") or European Union euros ("Euro" or "€"). Additional information relating to the Company, including the Company's Annual Information Form for the year ended December 31, 2014 (the "AIF"), is available on the Canadian Securities Administrators' (the "CSA") SEDAR website at www.sedar.com.

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NOTE TO INVESTORS CONCERNING FORWARD-LOOKING INFORMATION

Certain statements in this MD&A, referred to herein as "forward-looking statements", 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. These statements relate to, among other things, the Company's plans, objectives, expectations, estimates, beliefs, strategies and intentions and can generally be identified by the use of words such as "anticipate", "believe", "budget", "could", "estimate", "expect", "forecast", "intend", "likely", "may", "plan", "project", "schedule", "should", "target", "will", "would" or other variations of these terms or similar words. Forward-looking statements in this report include, but are not limited to, the following: the Company's outlook for 2015 and future periods; statements regarding future earnings, and the sensitivity of earnings to gold and other metal prices; anticipated levels or trends for prices of gold and by-product metals mined by the Company or for exchange rates between currencies in which capital is raised, revenue is generated or expenses are incurred by the Company; estimates of future mineral production and sales; estimates of future costs, including mining costs, total cash costs per ounce of gold produced, all-in sustaining costs per ounce of gold produced, minesite costs per tonne and other expenses; estimates of future capital expenditure, exploration expenditure and other cash needs, and expectations as to the funding thereof; statements regarding the projected exploration, development and exploitation 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 thereto; estimates of mineral reserves, mineral resources and ore grades and statements regarding anticipated future exploration results; estimates of cash flow; estimates of mine life; anticipated timing of events with respect to the Company's minesites, mine construction projects and exploration projects; estimates of future costs and other liabilities for environmental remediation; statements regarding anticipated legislation and regulation regarding climate change and estimates of the impact on the Company; and other anticipated trends with respect to the Company's capital resources and results of operations.

Forward-looking statements are necessarily based upon a number of factors and assumptions that, while considered reasonable by Agnico Eagle as of the date of such statements, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The factors and assumptions of Agnico Eagle upon which the forward-looking statements in this MD&A are based, and which may prove to be incorrect, include, but are not limited to, the assumptions set out elsewhere in this MD&A and in the AIF as well as: that there are no significant disruptions affecting Agnico Eagle's operations, whether due to labour disruptions, supply disruptions, damage to equipment, natural or man-made occurrences, political changes, mining or milling issues, title issues or otherwise; that permitting, development and expansion at each of Agnico Eagle's mines and mine development projects proceed on a basis consistent with current expectations, and that Agnico Eagle does not change its exploration or development plans relating to such projects; that the exchange rates between the Canadian dollar, Euro, Mexican peso and the US dollar will be approximately consistent with current levels or as detailed in this MD&A and in the AIF; that prices for gold, silver, zinc, copper and lead will be consistent with Agnico Eagle's expectations; that prices for key mining and construction supplies, including labour costs, remain consistent with Agnico Eagle's current expectations; that production meets expectations; that Agnico Eagle's current estimates of mineral reserves, mineral resources, mineral grades and mineral recovery are accurate; that there are no material delays in the timing for completion of development projects; and that there are no material variations in the current tax and regulatory environment that affect Agnico Eagle.

The forward-looking statements in this MD&A reflect the Company's views as at the date of this MD&A and involve known and unknown risks, uncertainties and other factors which could cause the actual results, performance or achievements of the Company or industry results to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the risks described in this MD&A, the risk factors described in the AIF and in the Company's other documents filed with the Canadian securities commissions and the U.S. Securities and Exchange Commission (the "SEC"). Given these uncertainties, readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date made. Except as otherwise required by law, the Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statements to reflect any change in the Company's expectations or any change in events, conditions or circumstances on which any such statement is based. This MD&A contains information regarding anticipated total cash costs per ounce of gold produced, all-in sustaining costs per ounce of gold produced and minesite costs per tonne in respect of the Company or at certain of the Company's mines and mine development projects. The Company believes that these generally accepted industry measures are realistic indicators of operating performance and are useful in allowing year over year comparisons. Investors are cautioned that this information may not be suitable for other purposes.

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NOTE TO INVESTORS CONCERNING ESTIMATES OF MINERAL RESOURCES

Cautionary Note to Investors Concerning Estimates of Measured and Indicated Mineral Resources

This document uses the terms "measured mineral resources" and "indicated mineral resources". Investors are advised that while these 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 document 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 as to their economic and legal feasibility. It cannot be assumed that any part or all 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.

NOTE TO INVESTORS CONCERNING NON-GAAP FINANCIAL PERFORMANCE MEASURES

This MD&A presents certain financial performance measures, including "total cash costs per ounce of gold produced", "minesite costs per tonne", "adjusted net income" and "all-in sustaining costs per ounce of gold produced", that are not recognized measures under IFRS. This data may not be comparable to data presented by other gold producers. For a reconciliation of these financial performance measures to the figures presented in the consolidated financial statements prepared in accordance with IFRS and a discussion of management's use of this data see Non-GAAP Financial Performance Measures in this MD&A. The Company believes that these generally accepted industry measures are realistic indicators of operating performance and are useful in allowing comparisons between periods. Non-GAAP financial performance measures should be considered together with other data prepared in accordance with IFRS. This MD&A also contains non-GAAP financial performance measure information for projects under development incorporating information that will vary over time as each project is developed and mined. It is therefore not practicable to reconcile these forward-looking non-GAAP financial performance measures to the most comparable IFRS measure.

iv

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Executive Summary

Agnico Eagle is a senior Canadian gold mining company that has produced precious metals since 1957. The Company's nine mines are located in Canada, Mexico and Finland, with exploration and development activities in each of these regions as well as in the United States. 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.

Agnico Eagle earns a significant proportion of its revenue and cash flow from the production and sale of gold in both dore bar and concentrate form. The remainder of revenue and cash flow is generated by the production and sale of by-product metals, primarily silver, zinc and copper. In 2014, Agnico Eagle recorded total cash costs per ounce of gold produced of $637 on a by-product basis and $721 on a co-product basis on payable gold production of 1,429,288 ounces. The average realized price of gold decreased by 7.7% from $1,366 per ounce in 2013 to $1,261 per ounce in 2014.

Over the past six years, Agnico Eagle has evolved from operating two gold mines in Canada to being an international gold mining company with nine gold mines at the end of 2014. Each mine is located in what the Company believes to be a politically stable country that is supportive of the mining industry. The political stability of the regions in which Agnico Eagle operates helps to provide confidence in its current and future prospects and profitability. This is important for Agnico Eagle as it believes that many of its new mines and recently acquired mining projects have long-term mining potential.

Key Results

•

Record annual payable gold production of 1,429,288 ounces during 2014, an increase of 30.0% compared with 2013 payable gold production of 1,099,335 ounces.



•

Total cash costs per ounce of gold produced of $637 on a by-product basis and $721 on a co-product basis in 2014, a 1.7% and 10.5% decrease compared with 2013, respectively.



•

All-in sustaining costs per ounce of gold produced of $954 on a by-product basis and $1,038 on a co-product basis in 2014.



•

On June 16, 2014, Agnico Eagle and Yamana Gold Inc. ("Yamana") jointly acquired 100.0% of Osisko Mining Corporation ("Osisko") by way of a plan of arrangement under the Canada Business Corporations Act (the "Arrangement"). As a result of the Arrangement, Agnico Eagle and Yamana each indirectly own 50.0% of Osisko and Canadian Malartic GP, which now holds the Canadian Malartic mine. Agnico Eagle and Yamana will also jointly explore, through their indirect joint ownership of Canadian Malartic Corporation (the successor to Osisko), the Kirkland Lake assets, the Hammond Reef project and the Pandora and Wood-Pandora properties.



•

Proven and probable gold reserves totaled 20.0 million ounces at December 31, 2014, including 4.3 million attributable ounces resulting from the Osisko acquisition, compared with 16.9 million ounces at December 31, 2013.



•

Commercial production was achieved at the La India mine on February 1, 2014.



•

Cayden Resources Inc. ("Cayden") was acquired in November 2014, adding the promising El Barqueno property in Mexico to the Company's portfolio of assets.



•

The Company's operations are located in mining-friendly regions that the Company believes have low political risk and long-term mining potential.



•

The Company maintains a solid financial position and forecasts being fully funded for its currently planned growth.



•

The Company has strong senior management continuity as its chief executive officer has 30 years of service with the Company.



•

In February 2015, the Company declared a quarterly cash dividend of $0.08 per common share. Agnico Eagle has now declared a cash dividend every year since 1983.

Strategy

Agnico Eagle's strategy is to build a high quality, manageable business that generates superior long-term returns per share by:

1.

Increasing gold production in lower risk jurisdictions

MANAGEMENT'S DISCUSSION AND ANALYSIS AGNICO EAGLE   1

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•

The Company expects gold production growth to approximately 1.5 million ounces in 2017.



2.

Increasing operating and free cash flows



•

The Company's goal is to increase net free cash flow through higher production, controlled operating costs and disciplined capital spending.



3.

Providing meaningful dividends



•

Agnico Eagle has now declared a cash dividend every year since 1983.



4.

Minimizing share dilution



•

Historically, acquisitions have been completed with minimal share dilution.



5.

Operating in a socially responsible manner



•

The Company strives to create economic value by operating in a safe, socially and environmentally responsible manner while contributing to the prosperity of its employees and the communities in which it operates.

Portfolio Overview

Northern Business

Canada – LaRonde Mine

The 100% owned LaRonde mine in northwestern Quebec, the Company's first mine, achieved commercial production in 1988. The LaRonde mine extension achieved commercial production in December 2011 and is expected to extend the life of the mine through 2024. The LaRonde mine's proven and probable mineral reserves were approximately 3.4 million ounces at December 31, 2014.

The commissioning of new cooling and ventilation infrastructure at the LaRonde mine in 2014 improved operating flexibility and increased production from the deeper portions of the mine. The newly operational deeper mining horizons provide access to higher grade reserves and a higher ratio of gold to by-product metals and are expected to result in steadily increased production levels through 2017.

In 2014, work continued on the installation of a coarse ore conveyor system that will extend from the deeper mining horizons to an existing crusher. This new conveyor system is expected to be commissioned in the second half of 2015 and is expected to further improve operating flexibility and reduce congestion in the deeper portions of the mine.

Canada – Lapa Mine

Commercial production was achieved at the 100% owned Lapa mine in northwestern Quebec in May 2009. The Lapa mine's proven and probable mineral reserves were approximately 0.2 million ounces at December 31, 2014. Based on the current life of mine plan, 2016 is expected to be the last year of full production at the Lapa mine.

Canada – Goldex Mine

On October 19, 2011, the Company suspended mining operations and gold production at the 100% owned Goldex mine in northwestern Quebec due to geotechnical concerns with the rock above the mining horizon. As of September 30, 2011, Agnico Eagle recorded an impairment loss on its investment in the Goldex mine (net of expected residual value) and its underground ore stockpile. All of the remaining 1.6 million ounces of proven and probable mineral reserves at the Goldex mine, other than ore stockpiled on the surface, were reclassified as mineral resources. An environmental remediation liability was recorded as of September 30, 2011 reflecting anticipated costs of remediation. The Goldex mill completed processing feed from the remaining Goldex Extension Zone ("GEZ") surface stockpile in October of 2011. Operations in the GEZ remain suspended indefinitely.

Exploration drilling continued on several mineralized zones on the Goldex mine property near the GEZ after mining operations were suspended in October of 2011. A team of independent consultants and Agnico Eagle staff performed a thorough review, including a preliminary economic assessment, to determine whether future mining operations on the property, including the M and E Zones, would be viable. After a review of the assessment, Agnico Eagle's Board of Directors (the "Board") approved the M and E Zones for development using existing Goldex mine infrastructure such as the shaft and mill. Commercial production was achieved at the Goldex mine's M and E Zones in October 2013.

2   AGNICO EAGLE MANAGEMENT'S DISCUSSION AND ANALYSIS

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As a result of the Company's restatement of comparative information under IFRS, a $109.7 million impairment loss reversal was recorded as at the January 1, 2013 IFRS transition date. Specific long-lived assets associated with the GEZ that were impaired as at September 30, 2011 due to the suspension of mining operations, including the Goldex mine's shaft and mill, were subsequently incorporated into the development plan for the Goldex mine's M and E Zones, which was approved by the Board in July 2012.

Rehabilitation work continues on the Goldex mine's ramp to provide access to the M3 and M4 satellite zones for planned conversion drilling in 2015. Development of an exploration ramp into the DX Zone (a portion of the Deep Zone) has been accelerated with a goal of outlining a mineable reserve and the completion of a technical study by early 2016. The Goldex mine's proven and probable mineral reserves were approximately 0.3 million ounces at December 31, 2014.

Canada – Canadian Malartic Mine

Agnico Eagle and Yamana jointly acquired 100.0% of Osisko on June 16, 2014 by way of the Arrangement. As a result of the Arrangement, Agnico Eagle and Yamana each indirectly own 50.0% of Osisko and Canadian Malartic GP, which now holds the Canadian Malartic mine in northwestern Quebec. Agnico Eagle and Yamana will also jointly explore, through their indirect ownership of Canadian Malartic Corporation (the successor to Osisko), the Kirkland Lake assets, the Hammond Reef project and the Pandora and Wood-Pandora properties.

On August 13, 2014, the Company filed a technical report related to the Canadian Malartic mine providing an update on reserves and resources. Agnico Eagle's attributable proven and probable mineral reserves at the Canadian Malartic mine were approximately 4.3 million ounces at December 31, 2014.

Canada – Meadowbank Mine

In 2007, the Company acquired Cumberland Resources Ltd., which held a 100% interest in the Meadowbank gold project in Nunavut, Canada. Commercial production was achieved by Agnico Eagle at the Meadowbank mine in March 2011. The Meadowbank mine's proven and probable mineral reserves were approximately 1.2 million ounces at December 31, 2014.

The 100% owned Amaruq project is located approximately 50 kilometers northwest of the Meadowbank mine in Nunavut, Canada. A significant drill program is planned at the Amaruq project in 2015 to expand the initial 1.5 million mineral resource base with the goal of potentially developing the deposit as a satellite operation to the Meadowbank mine.

Canada – Meliadine Project

On July 6, 2010, Agnico Eagle acquired its 100% interest in the Meliadine project in Nunavut, Canada through its acquisition of Comaplex Minerals Corp. Activities at the Meliadine project during 2014 included infill and step-out diamond drilling, ramp development, permitting, camp operation and work on an updated technical study. Budgeted 2015 Meliadine project capital expenditures of $64.0 million are focused on further underground development, camp operation, construction activities, permitting and technical services. The Meliadine project had proven and probable mineral reserves of 3.3 million ounces at December 31, 2014.

Finland – Kittila Mine

The 100% owned Kittila mine in northern Finland, which is geologically similar to the Abitibi region of Quebec, was added to the Company's portfolio through the acquisition of Riddarhyttan Resources AB in 2005. Construction at the Kittila mine was completed in 2008 and commercial production was achieved in May 2009. Proven and probable mineral reserves at the Kittila mine amounted to 4.5 million ounces at December 31, 2014.

As a result of the completion of the Kittila mine's mill expansion project ahead of schedule in 2014, production is expected to increase and unit costs are expected to decrease as throughput ramps up to design capacity of 4,000 tonnes per day.

The development of the Rimpi Zone is expected to provide additional feed to the Kittila mine's mill. Drilling on the Rimpi Zone has outlined a significant zone of mineralization with potentially improved widths and grades compared with zones currently being mined. The main underground ramp at the Kittila mine is being extended to reach the Rimpi Zone, providing further drill access to test extensions of the known mineralized zones at depth. Additionally, a new surface ramp is being developed to access shallower portions of the Rimpi Zone.

MANAGEMENT'S DISCUSSION AND ANALYSIS AGNICO EAGLE   3

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Agnico Eagle is also evaluating the potential of the Kuotko deposit, located approximately 15 kilometres north of the Kittila mine, as an open pit feeding the Kittila mine mill. A drilling program is expected to commence in the first quarter of 2015 to infill and expand the existing inferred resource.

Southern Business

Mexico – Pinos Altos Mine

In 2006, the Company completed the acquisition of the Pinos Altos property, then an advanced stage exploration property in northern Mexico. Commercial production was achieved at the Pinos Altos mine in November 2009. The Pinos Altos mine's proven and probable mineral reserves were approximately 1.8 million ounces at December 31, 2014.

A $106.0 million shaft sinking project remains on schedule for completion in 2016 at the Pinos Altos mine. Upon completion, it is expected that this new shaft will facilitate improved matching of mining and mill capacity as the open pit mining operation winds down.

Mexico – Creston Mascota Deposit at Pinos Altos

The 100% owned Creston Mascota deposit at Pinos Altos is located approximately seven kilometers northwest of the main deposit at the Pinos Altos mine in northern Mexico. Commercial production was achieved at the Creston Mascota deposit at Pinos Altos in March 2011. Proven and probable mineral reserves were approximately 0.2 million ounces at the Creston Mascota deposit at Pinos Altos at December 31, 2014.

The completion of the Phase Three heap leach pad and agglomeration projects, combined with the future expansion of the Phase Four heap leach pad are expected to result in increased production in 2015.

Mexico – La India Mine

Agnico Eagle completed its acquisition of Grayd Resource Corporation ("Grayd") on January 23, 2012. Grayd owned the La India project, which is located approximately 70 kilometers northwest of the Pinos Altos mine in northern Mexico. In September 2012, development and construction of the La India mine was approved by the Board and commercial production was achieved in February 2014. The La India mine's proven and probable mineral reserves were approximately 0.7 million ounces at December 31, 2014.

Installation of a fine material bypass system in the crushing circuit was in full operation in the fourth quarter of 2014, resulting in a 42.0% increase in tonnes crushed in the fourth quarter of 2014 compared with the third quarter of 2014. Engineering and design of the Phase Two heap leach pad commenced in 2014 with detailed engineering and construction evaluation expected to take place in early 2015.

Mexico – El Barqueno Project

On November 28, 2014, the Company acquired Cayden Resources Inc. ("Cayden") pursuant to a court-approved plan of arrangement. Cayden holds a 100.0% interest in the Morelos Sur property as well as an option to acquire a 100% interest in the El Barqueno property, both located in Mexico.

The Company believes that the El Barqueno property may have the potential to be developed as a combination open pit/underground mine with mill and heap leach processing and mineralization similar to the Pinos Altos mine. Agnico Eagle plans to complete a $15.0 million exploration program at the El Barqueno project in 2015 with a goal of developing an initial mineral resource by the end of the year.

Key Performance Drivers

The key drivers of financial performance for Agnico Eagle include:

•

The spot price of gold, silver, zinc and copper;



•

Production volumes;



•

Production costs; and



•

Canadian dollar/US dollar, Euro/US dollar and Mexican peso/US dollar exchange rates.

4   AGNICO EAGLE MANAGEMENT'S DISCUSSION AND ANALYSIS

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Spot Price of Gold, Silver, Zinc and Copper

Gold Prices ($ per ounce)

In 2014, the average market price per ounce of gold was 10.3% lower than in 2013. The Company's average realized price per ounce of gold in 2014 was 7.7% lower than in 2013.

SILVER ($ per ounce)		ZINC ($ per tonne)		COPPER ($ per tonne)

Net by-product (primarily silver, zinc and copper) revenue is treated as a reduction of production costs in calculating total cash costs per ounce of gold produced on a by-product basis. Agnico Eagle's realized sales price for silver decreased by 18.5% in 2014 compared with 2013 while realized sales prices for zinc increased by 16.6% and realized sales prices for copper decreased by 7.9% over the same period. Significant quantities of by-product metals are produced by the LaRonde mine (silver, zinc, and copper) and the Pinos Altos mine (silver).

The Company has never sold gold forward, which allows the Company to take full advantage of rising gold prices. Management believes that low-cost production is the best protection against a decrease in gold prices.

MANAGEMENT'S DISCUSSION AND ANALYSIS AGNICO EAGLE   5

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Production Volumes and Costs

Changes in production volumes have a direct impact on the Company's financial results. Total payable gold production was 1,429,288 ounces in 2014, up 30.0% from 1,099,335 ounces in 2013. This increase in production volumes was due primarily to the addition of 143,008 attributable ounces from the Company's acquired interest in the Canadian Malartic mine in 2014, a full year of production at the Goldex mine's M and E Zones in 2014 after having achieved commercial production in October 2013, the achievement of commercial production at the La India mine in February 2014, and increases in gold grade at the LaRonde and Meadowbank mines in 2014 compared with 2013.

Production costs are discussed in detail in the Results of Operations section below.

Foreign Exchange Rates (Ratio to US$)

The exchange rate of the Canadian dollar, Mexican peso and Euro relative to the US dollar is an important financial driver for the Company for the following reasons:

•

All revenues are earned in US dollars;



•

A significant portion of operating costs at the LaRonde, Lapa, Goldex, Meadowbank and Canadian Malartic mines are incurred in Canadian dollars;



•

A significant portion of operating costs at the Pinos Altos mine, the Creston Mascota deposit at Pinos Altos and the La India mine are incurred in Mexican pesos; and



•

A significant portion of operating costs at the Kittila mine are incurred in Euros.

The Company mitigates part of its foreign currency exposure by using currency hedging strategies.

CANADIAN DOLLAR		MEXICAN PESO		EURO

On average, the Canadian dollar, Mexican Peso and Euro all weakened relative to the US dollar in 2014 compared with 2013, decreasing costs denominated in local currencies when translated into US dollars for reporting purposes.

Balance Sheet Review

Total assets at December 31, 2014 of $6,840.5 million increased by 49.4% compared with December 31, 2013 total assets of $4,580.1 million. Of the total $2,260.4 million increase in total assets between December 31, 2013 and December 31, 2014, $2,141.9 million related to the Company's June 16, 2014 joint acquisition of Osisko and $125.3 million related to the November 28, 2014 acquisition of Cayden.

Cash and cash equivalents were $177.5 million at December 31, 2014, an increase of $38.4 million compared with December 31, 2013, due primarily to increased gold production and average realized gold prices resulting in increased revenues from mining operations between 2013 and 2014, a net drawdown on long-term debt and decreased capital expenditures between periods, partially offset by net cash paid for the joint acquisition of Osisko.

Available-for-sale securities decreased from $74.6 million at December 31, 2013 to $56.5 million at December 31, 2014 due primarily to $35.8 million in sales and $15.8 million in impairments, partially offset by $23.8 million in new investments and unrealized fair value gains recorded during 2014.

Restricted cash increased by $25.3 million between December 31, 2013 and December 31, 2014 due primarily to cash restricted in relation to the reclamation of properties acquired from Osisko and $11.6 million held by a depositary as at December 31, 2014 to satisfy obligations in connection with the senior unsecured convertible debentures previously issued by Osisko and assumed by Canadian Malartic GP.

6   AGNICO EAGLE MANAGEMENT'S DISCUSSION AND ANALYSIS

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Inventories increased to $446.7 million at December 31, 2014 compared with $345.1 million at December 31, 2013 due primarily to $42.6 million of attributable inventories as at December 31, 2014 associated with the Osisko acquisition and the buildup of ore on leach pads and concentrate inventories at the La India mine, which achieved commercial production in February 2014. Non-current ore in stockpiles decreased by 45.6% to $25.1 million at December 31, 2014 compared with December 31, 2013 due primarily to an updated Kittila mine plan that required the reclassification of ore stockpiles from long-term to short-term.

Goodwill increased by $543.4 million between December 31, 2013 and December 31, 2014 due to goodwill recorded on the June 16, 2014 joint acquisition of Osisko.

Property, plant and mine development increased by $1,607.0 million to $5,301.5 million at December 31, 2014 compared with December 31, 2013 due primarily to the addition of $787.2 million in mining properties and $661.0 million in plant and equipment relating to the joint acquisition of Osisko and the addition of $120.3 million in mining properties relating to the acquisition of Cayden as at December 31, 2014. A further $475.4 million increase in property, plant and mine development related to capital expenditures during 2014 was partially offset by amortization expense of $433.6 million.

Total liabilities increased to $2,772.0 million at December 31, 2014 from $1,862.7 million at December 31, 2013. Of the total $909.4 million increase in total liabilities between December 31, 2013 and December 31, 2014, $551.3 million related to the Company's joint acquisition of Osisko and the consolidation of the Company's indirect interest in the Canadian Malartic mine.

Accounts payable and accrued liabilities increased by $32.8 million between December 31, 2013 and December 31, 2014 due primarily to the addition of $30.1 million of Osisko-related accounts payable and accrued liabilities as at December 31, 2014.

Long-term debt increased by $387.3 million between December 31, 2013 and December 31, 2014 due primarily to a net $300.0 million drawdown under the Company's $1.2 billion unsecured revolving credit facility (the "Credit Facility") during 2014 and $86.7 million in attributable debt assumed upon the joint acquisition of Osisko.

Agnico Eagle's reclamation provision increased by $69.2 million between December 31, 2013 and December 31, 2014 due primarily to the addition of a $21.5 million Osisko-related reclamation provision as at December 31, 2014 and to the re-measurement of the Company's reclamation provisions applying updated expected cash flows and assumptions as at December 31, 2014.

Deferred income and mining tax liabilities increased by $378.8 million between December 31, 2013 and December 31, 2014 due primarily to the addition of $344.6 million of Osisko-related deferred income and mining tax liabilities as at December 31, 2014.

Fair Value of Derivative Financial Instruments

The Company occasionally enters into contracts to limit the risk associated with decreased by-product metal prices, increased foreign currency costs (including capital expenditures) and input costs. The contracts act as economic hedges of underlying exposures and are not held for speculative purposes. Agnico Eagle does not use complex derivative contracts to hedge exposures. The fair value of the Company's derivative financial instruments is outlined in the derivative financial instruments note to the annual consolidated financial statements.

Results of Operations

Agnico Eagle reported net income of $83.0 million, or $0.43 per share, in 2014 compared with a net loss of $686.7 million, or $3.97 per share, in 2013. In 2012, the Company reported net income of $310.9 million, or $1.82 per share (US GAAP basis). In 2014, the operating margin (revenues from mining operations less production costs) increased to $892.2 million from $772.3 million in 2013. In 2012, operating margin was $1,020.0 million (US GAAP basis).

Revenues from Mining Operations

Revenues from mining operations increased by 15.8% to $1,896.8 million in 2014 from $1,638.4 million in 2013 due primarily to increased gold production, partially offset by lower sales prices realized on gold and silver and lower silver production in 2014 compared with 2013. Revenues from mining operations were $1,917.7 million in 2012 (US GAAP basis).

Sales of precious metals (gold and silver) accounted for 98.6% of revenues from mining operations in 2014, up from 97.7% in 2013 and 96.6% in 2012. The increase in the percentage of revenues from precious metals compared with 2013 is due primarily to increased gold production, partially offset by lower sales prices realized on gold and silver and decreased silver

MANAGEMENT'S DISCUSSION AND ANALYSIS AGNICO EAGLE   7

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and zinc production. Revenues from mining operations are accounted for net of related smelting, refining, transportation and other charges.

The table below sets out revenues from mining operations, production volumes and sales volumes by metal:

		2014		2013		2012
		(IFRS)		(IFRS)		(US GAAP)(i)
		(thousands of United States dollars)
Revenues from mining operations:
Gold		$1,807,927		$1,500,354		$1,712,665
Silver		62,466		100,895		140,221
Zinc		9,901		16,685		45,797
Copper		16,479		20,653		19,019
Lead(ii)		(7	)	(181	)	12
Total revenues from mining operations		$1,896,766		$1,638,406		$1,917,714
Payable production(iii):
Gold (ounces)		1,429,288		1,099,335		1,043,811
Silver (thousands of ounces)		3,564		4,623		4,646
Zinc (tonnes)		10,515		19,814		38,637
Copper (tonnes)		4,997		4,835		4,126
Payable metal sold:
Gold (ounces)		1,425,338		1,098,382		1,028,062
Silver (thousands of ounces)		3,633		4,694		4,556
Zinc (tonnes)		10,535		20,432		42,604
Copper (tonnes)		5,003		4,838		4,115

Notes:

(i)

As the year ended December 31, 2012 occurred prior to the Company's January 1, 2013 US GAAP to IFRS transition date, data has been presented in accordance with US GAAP for this period.

(ii)

Lead concentrate revenues of $0.1 million in 2014 (2013 – $0.9 million; 2012 – $2.7 million) are netted against direct fees of $0.1 million (2013 – $1.1 million; 2012 – $2.7 million). Other metal revenues derived from lead concentrate in 2014 included gold revenue of nil (2013 – $7.9 million; 2012 – $25.1 million) and silver revenue of nil (2013 – $2.8 million; 2012 – $7.4 million). Other metal revenues derived from lead concentrate are included in their respective metal categories in the above table.

(iii)

Payable production 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 inventory at the end of the period.

Revenues from gold sales increased by $307.6 million or 20.5% in 2014 compared with 2013. Gold production increased by 30.0% to 1,429,288 ounces in 2014 from 1,099,335 ounces in 2013 due primarily to the addition of 143,008 attributable ounces from the acquired interest in the Canadian Malartic mine, 79,623 ounces of additional production from the Goldex mine's M and E Zones reflecting a full year of production in 2014 after having achieved commercial production in October 2013, 71,913 ounces of additional production from the La India mine, which achieved commercial production in February 2014, increased gold grade and mill recovery rates at the LaRonde and Meadowbank mines and a 40.6% increase in heap leach ore stacked at the Creston Mascota deposit at Pinos Altos. Partially offsetting the overall increase in gold production were decreased gold grade at the Pinos Altos and Lapa mines in 2014 compared with 2013. Agnico Eagle's average realized gold price decreased by 7.7% to $1,261 per ounce in 2014 from $1,366 per ounce in 2013.

Revenues from silver sales decreased by $38.4 million or 38.1% in 2014 compared with 2013 due primarily to an 18.5% decline in the realized silver price and lower silver grade at both the LaRonde and Pinos Altos mines. Revenues from zinc

8   AGNICO EAGLE MANAGEMENT'S DISCUSSION AND ANALYSIS

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sales decreased by $6.8 million or 40.7% to $9.9 million in 2014 compared with 2013 due primarily to lower zinc grade and mill recovery rates at the LaRonde mine, partially offset by a 16.6% increase in the realized zinc price between periods. Revenues from copper sales decreased by $4.2 million or 20.2% in 2014 compared with 2013 due primarily to a 7.9% decline in the realized copper price and lower tonnes of ore milled at the LaRonde mine.

Production Costs

Production costs increased to $1,004.6 million in 2014 compared with $866.1 million in 2013 due primarily to the addition of $113.9 million in attributable production costs from the acquired interest in the Canadian Malartic mine, $49.5 million in additional production costs from the Goldex mine's M and E Zones and $36.9 million in production costs from the newly operational La India mine. Partially offsetting the overall increase in production costs between 2013 and 2014 was the impact of a weaker Canadian dollar, Mexican Peso and Euro relative to the US dollar and decreased throughput at the LaRonde mine. Production costs were $897.7 million in 2012 (US GAAP basis).

The table below sets out production costs by mine:

		2014		2013		2012
		(IFRS)		(IFRS)		(US GAAP)(i)
		(thousands of United States dollars)
LaRonde mine		$188,736		$228,640		$225,647
Lapa mine		61,056		69,371		73,376
Goldex mine		64,836		15,339		–
Meadowbank mine		270,823		318,414		347,710
Canadian Malartic mine		113,917		–		–
Kittila mine		116,893		97,934		98,037
Pinos Altos mine		123,342		116,959		128,618
Creston Mascota deposit at Pinos Altos		28,007		19,425		24,324
La India mine		36,949		–		–
Total production costs		$1,004,559		$866,082		$897,712

Note:

(i)

As the year ended December 31, 2012 occurred prior to the Company's January 1, 2013 US GAAP to IFRS transition date, data has been presented in accordance with US GAAP for this period.

The discussion of production costs below refers to "total cash costs per ounce of gold produced" and "minesite costs per tonne", neither of which are recognized measures under IFRS. For a reconciliation of these measures to production costs and a discussion of their use by the Company, see Non-GAAP Financial Performance Measures in this MD&A.

Production costs at the LaRonde mine were $188.7 million in 2014, a 17.5% decrease compared with 2013 production costs of $228.6 million due primarily to lower throughput and a weaker Canadian dollar relative to the US dollar between periods. During 2014, the LaRonde mine processed an average of 5,713 tonnes of ore per day compared with 6,354 tonnes of ore per day during 2013. The decrease in throughput between periods was due primarily to a planned 2014 shutdown for the installation of replacement hoist drives at the Penna shaft. Minesite costs per tonne decreased to C$99 in 2014 compared with C$101 in 2013 due primarily to general cost decreases.

Production costs at the Lapa mine were $61.1 million in 2014, a 12.0% decrease compared with 2013 production costs of $69.4 million due primarily to a weaker Canadian dollar relative to the US dollar and costs reductions between periods. During 2014, the Lapa mine processed an average of 1,750 tonnes of ore per day, comparable to the 1,755 tonnes of ore per day processed during 2013. Minesite costs per tonne decreased to C$107 in 2014 compared with C$110 in 2013 due primarily to lower labour costs and improved cost controls related to consumables between periods.

MANAGEMENT'S DISCUSSION AND ANALYSIS AGNICO EAGLE   9

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Production costs at the Goldex mine were $64.8 million in 2014 compared with $15.3 million in 2013 reflecting a full year of production at the Goldex mine's M and E Zones in 2014 after having achieved commercial production in October 2013. During 2014, the Goldex mine processed an average of 5,799 tonnes of ore per day and minesite costs per tonne were C$33.

Production costs at the Meadowbank mine were $270.8 million in 2014, a 14.9% decrease compared with 2013 production costs of $318.4 million due primarily to a weaker Canadian dollar relative to the US dollar and cost reductions between periods. During 2014, the Meadowbank mine processed an average of 11,313 tonnes of ore per day compared with 11,350 tonnes of ore per day processed during 2013. Minesite costs per tonne decreased to C$73 in 2014 compared with C$78 in 2013, due primarily to overall productivity gains and improved cost controls.

On June 16, 2014, Agnico Eagle acquired an indirect 50.0% interest in the Canadian Malartic mine as a result of the joint acquisition of Osisko. Subsequent to its acquisition in 2014, the Canadian Malartic mine incurred attributable production costs of $113.9 million, processed an average of 26,448 attributable tonnes of ore per day and recorded attributable minesite costs per tonne of C$22.

Production costs at the Kittila mine were $116.9 million in 2014, an increase of 19.4% compared with 2013 production costs of $97.9 million due primarily to increased throughput and costs associated with the 2014 mill expansion. During 2014, the Kittila mine processed an average of 3,168 tonnes of ore per day, an increase of 23.8% compared with the 2,559 tonnes of ore per day processed during 2013 due primarily to the completion of the mill expansion in September 2014 and to an extended maintenance shutdown in the second quarter of 2013. Minesite costs per tonne increased to €78 in 2014 compared with €73 in 2013 due primarily to increased consumables usage in 2014 related to the mill expansion.

Production costs at the Pinos Altos mine were $123.3 million in 2014, an increase of 5.5% compared with 2013 production costs of $117.0 million due primarily to increased costs related to planned processing methodology and mine sequencing. During 2014, the Pinos Altos mine mill processed an average of 5,350 tonnes of ore per day, an increase of 1.7% compared with the 5,262 tonnes of ore per day processed during 2013. In 2014, approximately 567,800 tonnes of ore were stacked on the Pinos Altos mine leach pad, a decrease of 29.5% compared with the approximate 805,200 tonnes of ore stacked in 2013 due primarily to mine sequencing. Minesite costs per tonne increased to $48 in 2014 compared with $43 in 2013 due primarily to an increase in the proportion of milled ore relative to ore stacked on the leach pad and in the proportion of underground ore relative to open pit ore mined in 2014.

Production costs at the Creston Mascota deposit at Pinos Altos were $28.0 million in 2014, an increase of 44.2% compared with 2013 production costs of $19.4 million, due primarily to the temporary suspension of active leaching between October 1, 2012 and March 13, 2013. During 2014, approximately 1,793,800 tonnes of ore were stacked on the leach pad at the Creston Mascota deposit at Pinos Altos, an increase of 40.6% compared with the approximate 1,276,200 tonnes of ore stacked in 2013. Minesite costs per tonne remained unchanged at $16 between 2013 and 2014.

The La India mine achieved commercial production in February 2014. During 2014, the La India mine incurred production costs of $36.9 million, stacked approximately 4,773,200 tonnes of ore on the leach pad and recorded minesite costs per tonne of $8.

10   AGNICO EAGLE MANAGEMENT'S DISCUSSION AND ANALYSIS

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Total Production Costs by Category

Total cash costs per ounce of gold produced is presented on both a by-product basis (deducting by-product metal revenues from production costs) and co-product basis (before by-product metal revenues). Total cash costs per ounce of gold produced on a by-product basis is calculated by adjusting production costs as recorded in the consolidated statements of income (loss) and comprehensive income (loss) for by-product revenues, unsold concentrate inventory production costs, non-cash reclamation provisions, deferred stripping costs 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.

Total cash costs per ounce of gold produced on a by-product basis, representing the weighted average of all of the Company's producing mines, decreased to $637 in 2014 compared with $648 in 2013 and $640 in 2012 (US GAAP basis). Total cash costs per ounce of gold produced on a co-product basis decreased to $721 in 2014 compared with $806 in 2013 and $889 in 2012 (US GAAP basis).

•

At the LaRonde mine, total cash costs per ounce of gold produced on a by-product basis decreased to $668 in 2014 compared with $767 in 2013 due primarily to a 12.6% increase in gold production and decreased labour, electricity and chemical costs. Partially offsetting the overall decrease in total cash costs per ounce of gold produced on a by-product basis, by-product revenue was significantly lower in 2014 as the LaRonde mine transitioned to ore sourced from lower levels, which has lower by-product metal content, and lower silver and copper sales prices were realized in 2014 compared with 2013. Total cash costs per ounce of gold produced on a co-product basis decreased to $1,055 in 2014 compared with $1,433 in 2013, reflecting the increase in gold production and costs noted above.



•

At the Lapa mine, total cash costs per ounce of gold produced on a by-product basis decreased to $667 in 2014 compared with $677 in 2013 due primarily to the successful implementation of cost cutting measures, partially offset by an 8.0% decrease in gold production. Total cash costs per ounce of gold produced on a co-product basis decreased to $667 in 2014 compared with $678 in 2013 as a result of the same factors as noted above.



•

Total cash costs per ounce of gold produced on a by-product basis at the Goldex mine decreased to $638 in 2014 compared with $894 in 2013 due primarily to an increase in gold production from 20,810 ounces in 2013 to 100,433 ounces in 2014 in addition to successfully implemented cost containment measures. Total cash costs per ounce of gold produced on a co-product basis decreased to $638 in 2014 compared with $894 in 2013 as a result of the same factors as noted above. Commercial production was achieved at the Goldex mine's M and E Zones in October 2013.



•

At the Meadowbank mine, total cash costs per ounce of gold produced on a by-product basis decreased to $599 in 2014 compared with $723 in 2013 due primarily to mining cost reductions and a 5.2% increase in gold production.

MANAGEMENT'S DISCUSSION AND ANALYSIS AGNICO EAGLE   11

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Total cash costs per ounce of gold produced on a co-product basis decreased to $604 in 2014 compared with $729 in 2013 as a result of the same factors as noted above.

•

Since the Company's joint acquisition of the Canadian Malartic mine on June 16, 2014, attributable total cash costs per ounce of gold produced on a by-product basis for 2014 were $701. Attributable total cash costs per ounce of gold produced on a co-product basis were $721 between June 16, 2014 and December 31, 2014.



•

At the Kittila mine, total cash costs per ounce of gold produced on a by-product basis increased to $845 in 2014 compared with $598 in 2013 due primarily to higher costs associated with the 2014 mill expansion and a 3.2% decrease in gold production. Total cash costs per ounce of gold produced on a co-product basis increased to $846 in 2014 compared with $599 in 2013 as a result of the same factors as noted above.



•

Total cash costs per ounce of gold produced on a by-product basis at the Pinos Altos mine increased to $533 in 2014 compared with $372 in 2013 due primarily to a 5.9% decrease in gold production and significantly lower by-product revenue. Total cash costs per ounce of gold produced on a co-product basis increased to $718 in 2014 compared with $657 in 2013, reflecting the decrease in gold production noted above.



•

Total cash costs per ounce of gold produced on a by-product basis at the Creston Mascota deposit at Pinos Altos increased to $578 in 2014 compared with $509 in 2013 due primarily to the costs associated with a significant increase in the tonnes of ore stacked between periods. Partially offsetting the overall increase in total cash costs per ounce of gold produced on a by-product basis, there was a 40.6% increase in gold production in 2014 as a result of the temporary suspension of active leaching between October 1, 2012 and March 13, 2013. Total cash costs per ounce of gold produced on a co-product basis increased to $611 in 2014 compared with $534 in 2013 due primarily to the increase in the tonnes of ore stacked between periods noted above.



•

Since achieving commercial production in February 2014, total cash costs per ounce of gold produced on a by-product basis at the La India mine amounted to $487 for 2014. Total cash costs per ounce of gold produced on a co-product basis for the period of commercial production in 2014 were $532.

Exploration and Corporate Development Expense

Exploration and Corporate Development Expense increased by 26.6% to $56.0 million in 2014 from $44.2 million in 2013. Exploration and Corporate Development Expense was $109.5 million in 2012 (US GAAP basis).

A summary of the Company's significant 2014 exploration and corporate development activities is set out below:

•

In Canada, exploration expenses increased by 36.6% to $27.8 million in 2014 compared with 2013 due primarily to $3.2 million in attributable exploration expenses related to the acquired interest in Canadian Malartic GP, exploration at the Amaruq project in Nunavut and at the Akasaba West property in Quebec.



•

Exploration expenses increased by 9.5% to $8.0 million in Latin America, decreased by 25.3% to $2.6 million in the United States and increased by 9.1% to $5.0 million in Europe in 2014 compared with 2013.



•

The Company's corporate development team remained active in 2014, completing the joint acquisition of Osisko and the acquisition of Cayden during the year.

12   AGNICO EAGLE MANAGEMENT'S DISCUSSION AND ANALYSIS

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The table below sets out exploration expense by region and total corporate development expense:

			2014			2013			2012
			(IFRS)			(IFRS)			(US GAAP)(i)
			(thousands of United States dollars)
Canada		$	27,773		$	20,339		$	60,360
Latin America			8,006			7,311			28,419
United States			2,615			3,501			7,397
Europe			5,044			4,624			7,458
Corporate development expense			12,564			8,461			5,866
Total exploration and corporate development expense		$	56,002		$	44,236		$	109,500

Note:

(i)

As the year ended December 31, 2012 occurred prior to the Company's January 1, 2013 US GAAP to IFRS transition date, data has been presented in accordance with US GAAP for this period.

Amortization of Property, Plant and Mine Development

Amortization of property, plant and mine development expense increased to $433.6 million in 2014 compared with $313.9 million in 2013 and $271.9 million in 2012 (US GAAP basis). The increase in amortization of property, plant and mine development between 2013 and 2014 was due primarily to the consolidation of the acquired interest in the Canadian Malartic mine and the achievement of commercial production at the Goldex mine's M and E Zones in October 2013 and at the La India mine in February 2014. Amortization expense commences once operations are in commercial production. The overall increase in amortization of property, plant and mine development was partially offset by impairment losses recorded on property, plant and mine development at the Meadowbank and Lapa mines as at December 31, 2013.

General and Administrative Expense

General and administrative expense increased to $118.8 million in 2014 from $113.8 million in 2013 due primarily to transaction costs of $16.7 million associated with the joint acquisition of Osisko in 2014, attributable Canadian Malartic GP general and administrative expenses of $3.2 million in 2014, increased consulting costs and an increase in charitable donations between periods. General and administrative expense amounted to $119.1 million in 2012 (US GAAP basis). Partially offsetting the overall increase in general and administrative expense, employee compensation and insurance expenses decreased between 2013 and 2014.

Impairment Loss on Available-for-sale Securities

Impairment loss on available-for-sale securities was $15.8 million in 2014 compared with $32.5 million in 2013 and $12.7 million in 2012 (US GAAP basis). Impairment loss evaluations of available-for-sale securities are based on whether a decline in fair value is considered to be significant or prolonged.

MANAGEMENT'S DISCUSSION AND ANALYSIS AGNICO EAGLE   13

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Finance Costs

Finance costs increased to $73.4 million in 2014 compared with $62.5 million in 2013 and $57.9 million in 2012 (US GAAP basis). The table below sets out the components of finance costs:

			2014			2013			2012
			(IFRS)			(IFRS)			(US GAAP)(i)
			(thousands of United States dollars)
Stand-by fees on credit facilities		$	4,605		$	4,946		$	3,734
Amortization of credit facilities, financing and note issuance costs			2,757			3,192			3,432
Interest on credit facility			7,499			1,999			3,460
Interest on notes			49,414			49,414			43,886
Accretion expense on reclamation provisions			5,173			4,456			–
Other interest and penalties			5,651			1,966			4,869
Interest capitalized to construction in progress			(1,706	)		(3,518	)		(1,494	)
Total finance costs		$	73,393		$	62,455		$	57,887

Note:

(i)

As the year ended December 31, 2012 occurred prior to the Company's January 1, 2013 US GAAP to IFRS transition date, data has been presented in accordance with US GAAP for this period.

See Liquidity and Capital Resources – Financing Activities in this MD&A for details on the credit facility and notes referenced above.

Impairment Loss

At the end of each reporting period the Company assesses whether there is any indication that long-lived assets may be impaired. If an indicator of impairment exists, the recoverable amount of the asset is calculated in order to determine if any impairment loss is required. An impairment loss is recognized for any excess of the carrying amount of the asset over its recoverable amount. The recoverable amounts are based on each asset's future cash flows and represents each asset's fair value less costs of disposal.

Based on assessments completed by the Company, no impairment losses were required in 2014 or in 2012 (US GAAP basis).

As at December 31, 2013, the Company identified the continued decline in the market price of gold as an indicator of potential impairment for the Company's long-lived assets. As a result of the identification of this indicator, the Company estimated the recoverable amounts of all cash generating units using updated assumptions and estimates and concluded that the Lapa mine, Meadowbank mine and Meliadine project were impaired.

14   AGNICO EAGLE MANAGEMENT'S DISCUSSION AND ANALYSIS

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The following impairment losses were recorded as at December 31, 2013 as a result of the impairment evaluation:

				As at December 31, 2013
			Pre-impairment Carrying Value			Impairment Loss			Post-impairment Carrying Value			Impairment Loss (net of tax)
				(thousands of United States dollars)
Property, plant and mine development:
	Lapa mine		$	136,618		$	(67,894	)	$	68,724		$	(41,687	)
	Meadowbank mine			770,733			(307,503	)		463,230			(226,618	)
	Meliadine project			841,932			(439,227	)		402,705			(279,788	)
			$	1,749,283		$	(814,624	)	$	934,659		$	(548,093	)
Goodwill:
	Meliadine project		$	200,064		$	(200,064	)	$	–		$	(200,064	)
						$	(1,014,688	)				$	(748,157	)

The estimated recoverable amount of the Lapa mine CGU was $74.0 million as at December 31, 2013, representing the fair value less costs to dispose of the mine. The estimated recoverable amount of the Lapa mine was calculated by discounting the estimated future net cash flows over the estimated life of the mine using a discount rate of 5.5% (in nominal terms), commensurate with the estimated level of risk associated with the Lapa mine. The recoverable amount calculation was based on an estimate of future production levels applying gold prices of $1,238 to $1,300 per ounce (in real terms), foreign exchange rates of US$0.90:C$1.00 to US$0.93:C$1.00, an inflation rate of 2.0%, an average gold recovery rate of 78.3% and capital, operating and reclamation costs based on applicable life-of-mine plans. As the Lapa mine's carrying amount exceeded its estimated recoverable amount at December 31, 2013, an impairment loss of $67.9 million was recognized. The Lapa mine impairment loss was allocated $7.2 million to mining properties, $24.4 million to plant and equipment and $36.3 million to mine development costs. The discounted cash flow approach uses significant unobservable inputs and is therefore considered a Level 3 fair value measurement under the fair value hierarchy.

The estimated recoverable amount of the Meadowbank mine CGU was $490.0 million as at December 31, 2013, representing the fair value less costs to dispose of the mine. The estimated recoverable amount of the Meadowbank mine was calculated by discounting the estimated future net cash flows over the estimated life of the mine using a discount rate of 6.5% (in nominal terms), commensurate with the estimated level of risk associated with the Meadowbank mine. The recoverable amount calculation was based on an estimate of future production levels applying gold prices of $1,238 to $1,300 per ounce (in real terms), foreign exchange rates of US$0.90:C$1.00 to US$0.93:C$1.00, an inflation rate of 2.0%, an average gold recovery rate of 92.3% and capital, operating and reclamation costs based on applicable life-of-mine plans. As the Meadowbank mine's carrying amount exceeded its estimated recoverable amount at December 31, 2013, an impairment loss of $307.5 million was recognized. The Meadowbank mine impairment loss was allocated $3.1 million to mining properties and $304.4 million to plant and equipment. The discounted cash flow approach uses significant unobservable inputs and is therefore considered a Level 3 fair value measurement under the fair value hierarchy.

Estimated after-tax discounted future net cash flows of reporting units with goodwill, including the Meliadine and La India projects, were calculated as at December 31, 2013. The estimated recoverable amount of the Meliadine project was $400.0 million as at December 31, 2013, representing the fair value less costs to dispose of the project. The estimated recoverable amount for the Meliadine project was calculated by discounting the estimated future net cash flows over the estimated life-of-mine using a discount rate of 8.0% (in nominal terms), commensurate with the estimated level of risk associated with the Meliadine project. The recoverable amount calculation was based on an estimate of future production levels applying gold prices of $1,238 to $1,300 per ounce (in real terms), foreign exchange rates of US$0.90:C$1.00 to US$0.93:C$1.00, an inflation rate of 2.0%, an average gold recovery rate of 95.1% and capital, operating and reclamation costs based on applicable life-of-mine plans. As the Meliadine project's carrying amount exceeded its estimated recoverable amount at December 31, 2013, an impairment loss of $639.3 million was recognized, of which $200.1 million was allocated

MANAGEMENT'S DISCUSSION AND ANALYSIS AGNICO EAGLE   15

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to write down goodwill to nil with the balance allocated to mining properties. No goodwill impairment loss was required relating to the La India project as at December 31, 2013. The discounted cash flow approach uses significant unobservable inputs and is therefore considered a Level 3 fair value measurement under the fair value hierarchy.

Discount rates were based on each asset group's weighted average cost of capital, of which the two main components are the cost of equity and the after-tax cost of debt. Cost of equity was calculated based on the capital asset pricing model, incorporating the risk-free rate of return based on Government of Canada marketable bond yields as at the valuation date, the Company's beta coefficient adjustment to the market equity risk premium based on the volatility of the Company's return in relation to that of a comparable market portfolio, plus a size premium and Company-specific risk factor. Cost of debt was determined by applying an appropriate market indication of the Company's borrowing capabilities and the corporate income tax rate applicable to each asset group's jurisdiction.

Management's estimates of future net cash flows are subject to risk and uncertainties. Therefore, it is reasonably possible that changes could occur which may affect the recoverability of the Company's long-lived assets and goodwill. This may have a material effect on the Company's consolidated financial statements.

A discounted cash flow approach was used to estimate fair value less costs to dispose, which represents the recoverable amount of property, plant and mine development assets that was used to determine the impairment loss amounts. The total impairment loss recorded during the year ended December 31, 2013 was $1,014.7 million.

Foreign Currency Translation Loss

The Company's operating results and cash flow are significantly impacted by changes in the exchange rate between the US dollar and the Canadian dollar, Mexican peso and Euro as all of the Company's revenues are earned in US dollars while a significant portion of its operating and capital costs are incurred in Canadian dollars, Mexican pesos and Euros. During the period from January 1, 2012 through December 31, 2014, the daily US dollar (noon) exchange rate as reported by the Bank of Canada has fluctuated between C$0.97 and C$1.16, 11.98 Mexican pesos and 14.80 Mexican pesos and €0.72 and €0.83 per US$1.00.

A foreign currency translation loss of $3.8 million was recorded in 2014 compared with $1.8 million in 2013 and $16.3 million in 2012 (US GAAP basis). On average, the US dollar strengthened against the Canadian dollar, Mexican peso and Euro in 2014 compared with 2013. The US dollar also strengthened against the Canadian dollar, Mexican peso and Euro between December 31, 2013 and December 31, 2014. The net foreign currency translation loss in 2014 is due primarily to the translation impact of current assets denominated in Mexican pesos, Canadian dollars and Euros, offset partially by the translation impact of current liabilities denominated in Canadian dollars, Mexican pesos and Euros.

Income and Mining Taxes Expense (Recovery)

In 2014, the Company recorded income and mining taxes expense of $106.2 million on income before income and mining taxes of $189.1 million at an effective tax rate of 56.1%. The Company's 2014 effective tax rate was higher than the applicable statutory tax rate of 26.0% due primarily to the impact of mining taxes, foreign exchange and non-deductible permanent differences. In 2013, an income and mining taxes recovery of $131.6 million was recorded on a loss before income and mining taxes of $818.3 million due primarily to impairment losses recorded on the Meliadine project, the Meadowbank mine and the Lapa mine as at December 31, 2013. 2013 income and mining taxes were also impacted by non-deductible permanent differences and a deferred tax charge relating to the 2013 enactment of the Special Mining Duty in Mexico. The effective tax rate was 28.5% in 2012 (US GAAP basis).

Liquidity and Capital Resources

At December 31, 2014, the Company's cash and cash equivalents, short-term investments and current restricted cash totaled $215.3 million, compared with $170.0 million at December 31, 2013. The Company's policy is to invest excess cash in highly liquid investments of the highest credit quality to eliminate risks associated with these investments. Such investments with remaining maturities at time of purchase greater than three months are classified as short-term investments. Decisions regarding the length of maturities are based on cash flow requirements, rates of return and various other factors.

Working capital (current assets less current liabilities) decreased to $579.4 million at December 31, 2014 from $587.8 million at December 31, 2013.

16   AGNICO EAGLE MANAGEMENT'S DISCUSSION AND ANALYSIS

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Operating Activities

Cash provided by operating activities increased by $187.3 million to $668.3 million in 2014 compared with 2013 due primarily to a 30.0% increase in gold production and the impact of a weaker Canadian dollar and Mexican peso relative to the US dollar on costs between periods. The increase in cash provided by operating activities was partially offset by a 16.0% increase in production costs and a 7.7% decrease in the average realized price of gold between 2013 and 2014. Cash provided by operating activities was $696.0 million in 2012 (US GAAP basis).

Investing Activities

Cash used in investing activities increased to $851.6 million in 2014 from $687.2 million in 2013 due primarily to $403.5 million in net cash expenditures associated with the Company's June 16, 2014 joint acquisition of Osisko, partially offset by a $145.1 million decrease in capital expenditures, a $44.5 million increase in net proceeds from the sale of available-for-sale securities and a $32.6 million decrease in purchases of available-for-sale securities and warrants between periods. Cash used in investing activities was $376.2 million in 2012, including capital expenditures of $445.6 million and $73.4 million in net proceeds from the sale of available-for-sale securities (US GAAP basis).

In 2014, the Company invested cash of $475.4 million in projects and sustaining capital expenditures. Capital expenditures in 2014 included $106.2 million at the Kittila mine, $76.6 million at the LaRonde mine, $65.9 million at the Meadowbank mine, $48.4 million at the Pinos Altos mine, $48.3 million at the Meliadine project, $36.1 million at the Canadian Malartic mine (the Company's attributable portion), $34.3 million at the Goldex mine, $22.7 million at the La India mine, $20.2 million at the Lapa mine and $16.7 million at the Creston Mascota deposit at Pinos Altos and other projects. The $145.1 million decrease in capital expenditures between 2013 and 2014 was due primarily to significant construction expenditures that were incurred in 2013 relating to the La India project and the Goldex mine's M and E Zones. Capitalization of expenditures for the La India project and the Goldex mine's M and E Zones commenced in September 2012 and October 2012, while commercial production was achieved in February 2014 and October 2013, respectively. Partially offsetting the overall decrease in capital expenditures between 2013 and 2014 were $36.1 million in attributable capital expenditures related to the Canadian Malartic mine since it was jointly acquired on June 16, 2014.

On November 28, 2014, the Company acquired all of the issued and outstanding common shares of Cayden, including common shares issuable on the exercise of Cayden's outstanding options and warrants, pursuant to a court-approved plan of arrangement. The total purchase price of $122.1 million was comprised of $0.5 million in cash and 4,853,875 Agnico Eagle common shares issued from treasury. The Cayden acquisition was accounted for as an asset acquisition and transaction costs associated with the acquisition totaling $3.2 million were capitalized to the mining properties acquired.

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 Osisko and Canadian Malartic GP, which now holds the Canadian Malartic mine. Agnico Eagle and Yamana will also jointly explore other properties that were held by Osisko (now Canadian Malartic Corporation) at the time of acquisition. Agnico Eagle has recognized its interest in the assets, liabilities, revenues and expenses of Osisko in accordance with the Company's rights and obligations prescribed by the Arrangement under IFRS. Agnico Eagle's share of Osisko's June 16, 2014 purchase price was comprised of cash payments totaling $462.7 million and 33,923,212 Agnico Eagle common shares valued at $1,135.1 million.

On May 16, 2013, the Company acquired all of the issued and outstanding common shares of Urastar Gold Corporation ("Urastar") pursuant to a court-approved plan of arrangement under the Business Corporations Act (British Columbia) for cash consideration of $10.1 million. The Urastar acquisition was accounted for as a business combination and goodwill of $9.8 million was recognized on the Company's consolidated balance sheets.

In 2014, the Company purchased $27.2 million of available-for-sale securities and warrants compared with $59.8 million in 2013 and $2.7 million in 2012 (US GAAP basis). In 2014, the Company received net proceeds of $44.7 million from the sale of available-for-sale securities compared with $0.2 million in 2013 and $73.4 million in 2012 (US GAAP basis). The Company's investments in available-for-sale securities consist primarily of investments in common shares of entities in the mining industry.

Financing Activities

Cash provided by financing activities was $229.2 million in 2014 compared with $48.7 million in 2013 due primarily to a $116.0 million increase in net proceeds from long-term debt and a $72.2 million decrease in dividends paid between

MANAGEMENT'S DISCUSSION AND ANALYSIS AGNICO EAGLE   17

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periods. Cash used in financing activities was $202.6 million in 2012, including the net repayment of long-term debt of $290.0 million and the issuance of the 2012 Notes for $200.0 million (US GAAP basis).

In 2014, the Company paid dividends of $54.1 million compared with $126.3 million in 2013 and $118.1 million in 2012 (US GAAP basis). Agnico Eagle has declared a cash dividend every year since 1983. Although the Company expects to continue paying dividends, future dividends will be at the discretion of the Board and will be subject to factors such as income, financial condition and capital requirements.

On July 24, 2012, the Company closed a private placement consisting of $200.0 million of guaranteed senior unsecured notes (the "2012 Notes"). The 2012 Notes mature in 2022 and 2024 and at issuance had a weighted average maturity of 11.0 years and weighted average yield of 4.95%. Proceeds from the 2012 Notes were used to repay amounts outstanding under the Credit Facility.

On September 5, 2014, the Company amended and restated its $1.2 billion Credit Facility, extending the maturity date from June 22, 2017 to June 22, 2019 and amending pricing terms. As at December 31, 2014, the Company's outstanding balance under the Credit Facility was $500.0 million. Credit Facility availability is reduced by outstanding letters of credit, amounting to $1.0 million at December 31, 2014. As at December 31, 2014, $699.0 million was available for future drawdown under the Credit Facility.

On November 5, 2013, the Company amended its credit agreement with a financial institution relating to its uncommitted letter of credit facility (the "Letter of Credit Facility"). The amount available under the Letter of Credit Facility increased from C$150.0 million to C$175.0 million. The obligations of the Company under the Letter of Credit Facility are guaranteed by certain of its subsidiaries. The Letter of Credit Facility may be used to support the reclamation obligations or non-financial or performance obligations of the Company or its subsidiaries. As at December 31, 2014, $155.8 million had been drawn under the Letter of Credit Facility. On August 22, 2014, the financial institution and the Company agreed that the Company may draw up to C$185.0 million under the Letter of Credit Facility.

On April 7, 2010, the Company closed a private placement consisting of $600.0 million of guaranteed senior unsecured notes due in 2017, 2020 and 2022 (the "2010 Notes") with a weighted average maturity of 9.84 years and weighted average yield of 6.59%. Proceeds from the offering of the 2010 Notes were used to repay amounts under the Company's then outstanding credit facilities.

In connection with its joint acquisition of Osisko on June 16, 2014, Canadian Malartic GP was assigned and assumed certain outstanding debt obligations of Osisko relating to the Canadian Malartic mine. Agnico Eagle's indirect attributable share of such debt instruments is as follows:

•

A secured loan facility in the principal amount of C$75.0 million ($69.1 million) with scheduled C$20.0 million repayments on June 30, 2015, June 30, 2016 and June 30, 2017 and a 6.875% per annum interest rate. A scheduled repayment of C$15.0 million ($14.1 million) was made subsequent to the June 16 2014 acquisition date, resulting in attributable outstanding principal of $51.7 million as at December 31, 2014. On September 29, 2014, Canadian Malartic GP amended the acquired secured loan facility (the "CMGP Loan") with no change to maturity or pricing terms.



•

Senior unsecured convertible debentures with principal outstanding of C$37.5 million ($34.6 million), a November 2017 maturity date and a 6.875% interest rate. As at the June 16, 2014 acquisition date, the convertible debentures had an attributable fair value of $44.9 million. As at December 31, 2014, the convertible debentures had principal outstanding of $32.3 million and an attributable fair value of $34.7 million.



•

A loan with principal outstanding of C$2.1 million ($2.0 million) with monthly repayments scheduled through the first quarter of 2015 and a 0.0% interest rate. As at December 31, 2014, the Company's attributable loan principal outstanding amounted to $0.3 million.

The Company was in compliance with all covenants contained within the Credit Facility, Letter of Credit Facility, 2012 Notes and 2010 Notes as at December 31, 2014. Canadian Malartic GP was in compliance with all CMGP Loan covenants as at December 31, 2014.

The Company issued common shares for gross proceeds of $10.4 million and $15.7 million in 2014 and 2013, respectively, attributable to the Company's incentive share purchase plan and dividend re-investment plan.

18   AGNICO EAGLE MANAGEMENT'S DISCUSSION AND ANALYSIS

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Contractual Obligations

Agnico Eagle's contractual obligations as at December 31, 2014 are set out below:

			Total			2015			2016-2017			2018-2019			Thereafter
			(millions of United States dollars)
Reclamation provisions(i)		$	349.7		$	6.8		$	9.5		$	26.5		$	306.9
Purchase commitments			72.0			15.9			17.2			11.0			27.9
Pension obligations(ii)			5.9			0.1			0.2			1.0			4.6
Finance and operating leases			51.5			24.7			18.1			7.2			1.5
Long-term debt(iii)			1,384.3			17.5			181.8			500.0			685.0
Total(iv)		$	1,863.4		$	65.0		$	226.8		$	545.7		$	1,025.9

Notes:

(i)

Mining operations are subject to environmental regulations that require companies to reclaim and remediate land disturbed by mining operations. The Company has submitted closure plans to the appropriate governmental agencies which estimate the nature, extent and costs of reclamation for each of its mining properties. Expected reclamation cash flows are presented above on an undiscounted basis. Reclamation provisions recorded in the Company's consolidated financial statements are measured at the expected value of future cash flows discounted to their present value using a risk-free interest rate.

(ii)

The Company provides a non-registered supplementary executive retirement defined benefit plan for certain senior officers (the "Executives Plan"). The Executives Plan provides pension benefits to certain senior officers equal to 2.0% of their final three-year average pensionable earnings for each year of service with the Company, less the annual pension payable under the Company's basic defined contribution pension plan. Payments under the Executives Plan are secured by letter of credit from a Canadian chartered bank. The figures presented in this table have been actuarially determined.

(iii)

With respect to the Company's long-term debt obligations, the Company has assumed that repayment will occur on each instrument's respective maturity date.

(iv)

The Company's future operating cash flows are expected to be sufficient to satisfy its contractual obligations.

Off-Balance Sheet Arrangements

The Company's off-balance sheet arrangements as at December 31, 2014 include operating leases of $5.7 million (see Note 14(b) to the consolidated financial statements) and outstanding letters of credit for environmental and site restoration costs, custom credits, government grants and other general corporate purposes of $172.3 million of (see Note 26 to the consolidated financial statements). If the Company were to terminate these off-balance sheet arrangements, the Company's liquidity position (as outlined in the table below) is sufficient to satisfy any related penalties or obligations.

MANAGEMENT'S DISCUSSION AND ANALYSIS AGNICO EAGLE   19

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2015 Liquidity and Capital Resources Analysis

The Company believes that it has sufficient capital resources to satisfy its 2015 mandatory expenditure commitments (including the contractual obligations set out above) and discretionary expenditure commitments. The following table sets out expected capital requirements and resources for 2015:

		Amount
			(millions of United States dollars)
2015 Mandatory Commitments:
Contractual obligations (from table above)		$	65.0
Accounts payable and accrued liabilities (as at December 31, 2014)			206.2
Interest payable (as at December 31, 2014)			13.8
Income taxes payable (as at December 31, 2014)			19.3
Total 2015 mandatory expenditure commitments		$	304.3
2015 Discretionary Commitments:
Expected 2015 capital expenditures		$	481.0
Total 2015 mandatory and discretionary expenditure commitments		$	785.3
2015 Capital Resources:
Cash, cash equivalents and short-term investments (as at December 31, 2014)		$	182.2
Budgeted 2015 cash provided by operating activities			572.8
Working capital, excluding cash, cash equivalents and short-term investments (as at December 31, 2014)			397.2
Available under the Credit Facility (as at December 31, 2014)			699.0
Total 2015 Capital Resources		$	1,851.2

While the Company believes its capital resources will be sufficient to satisfy all 2015 commitments (mandatory and discretionary), the Company may choose to decrease certain of its discretionary expenditure commitments, which includes certain capital expenditures, should unexpected financial circumstances arise in the future. The Company believes that it will continue to generate sufficient capital resources to satisfy its planned development and growth activities.

Quarterly Results Review

For the Company's detailed 2014 and 2013 quarterly financial and operating results see Summarized Quarterly Data in this MD&A.

Revenues from mining operations increased by 15.1% to $503.1 million in the fourth quarter of 2014 compared with $437.2 million in the fourth quarter of 2013 due primarily to a 20.2% increase in payable gold production, partially offset by lower sales prices realized on gold and silver between periods. Production costs increased by 24.6% to $287.3 million in the fourth quarter of 2014 compared with $230.5 million in the fourth quarter of 2013 due primarily to the addition of $51.3 million in attributable production costs from the acquired interest in the Canadian Malartic mine and the addition of production costs from the newly operational La India mine. Amortization of property, plant and mine development increased by $48.3 million to $139.1 million in the fourth quarter of 2014 compared with the fourth quarter of 2013 due primarily to the consolidation of the acquired interest in the Canadian Malartic mine and the achievement of commercial production at the La India mine in February 2014. An impairment loss of $1,014.7 million was recorded in the fourth quarter of 2013 compared with nil in the fourth quarter of 2014. Based on an impairment evaluation of the Company's long-lived assets as at December 31, 2013, pre-tax impairment losses of $639.3 million, $307.5 million and $67.9 million were recorded relating to the Meliadine project, the Meadowbank mine and the Lapa mine, respectively. As a result, a net loss of $21.3 million was recorded in the fourth quarter of 2014 compared with a net loss of $780.3 million in the fourth quarter of 2013.

20   AGNICO EAGLE MANAGEMENT'S DISCUSSION AND ANALYSIS

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Cash provided by operating activities of $164.0 million in the fourth quarter of 2014 compared with $140.8 million in the fourth quarter of 2013 due primarily to a 20.2% increase in payable gold production and a 4.4% increase in operating margin (revenues from mining operations less production costs), partially offset by decreases in the average realized price of gold and silver and a $5.6 million increase in exploration and corporate development expenses between periods.

Outlook

The following section contains "forward-looking statements" and "forward-looking information" within the meaning of applicable securities laws. Please see "Note to Investors Concerning Forward-Looking Information" for a discussion of assumptions and risks relating to such statements and information.

Gold Production Growth

LaRonde Mine

In 2015, payable gold production at the LaRonde mine is expected to be approximately 245,000 ounces. Over the 2015 to 2017 period, average annual payable gold production at the LaRonde mine is expected to be approximately 292,000 ounces. The commissioning of a cooling plant at the LaRonde mine has helped to enhance productivity by reducing heat and congestion in the lower section of the mine and provides additional flexibility in the mining plan. As a result, production from the deeper areas of the mine is expected to ramp up substantially through 2017. In addition, a new course ore conveyor system that is scheduled to be commissioned in late 2015 is expected to further enhance flexibility in the lower section of the mine. Total cash costs per ounce of gold produced on a by-product basis at the LaRonde mine are expected to be approximately $576 in 2015 compared with $668 in 2014, reflecting expectations of higher gold grade and increased production.

Lapa Mine

In 2015, payable gold production at the Lapa mine is expected to be approximately 75,000 ounces. Average annual payable gold production is expected to be approximately 62,500 ounces in 2015 and 2016 at the Lapa mine. 2015 and 2016 are the final two years of full production based on the Lapa mine's current life of mine plan with production expected to decline progressively due to lower tonnage and stope availability. The Company expects that the Lapa mine will only operate for a portion of 2016. Additional exploration results from the Zulapa Z7 and Z8 Zones could potentially extend the mine life beyond 2016. Total cash costs per ounce of gold produced on a by-product basis at the Lapa mine are expected to be approximately $769 in 2015 compared with $667 in 2014, reflecting expectations of decreased production and lower gold grade.

Goldex Mine

The Goldex mine achieved commercial production from the M and E Zones in October 2013. In 2015, payable gold production at the Goldex mine is expected to be approximately 100,000 ounces. Over the 2015 to 2017 period, average annual payable gold production at the Goldex mine is expected to be approximately 97,000 ounces. Continued exploitation of the M3 and M4 Zones is expected to maintain relatively constant production levels and costs at the Goldex mine through 2017. Exploration and development has accelerated on the Deep Zone with a goal of outlining a mineable mineral reserve and the completion of a technical study by early 2016. New development related to the Deep Zone and the nearby Akasaba West deposit could potentially extend the mine life beyond 2017. Total cash costs per ounce of gold produced on a by-product basis at the Goldex mine are expected to be approximately $618 in 2015 compared with $638 in 2014.

Meadowbank Mine

In 2015, payable gold production at the Meadowbank mine is expected to be approximately 400,000 ounces. Over the 2015 to 2017 period, average annual payable gold production at the Meadowbank mine is expected to be approximately 352,000 ounces. Higher than expected grades were mined in the Goose pit in the first half of 2014, resulting in higher than expected production in 2014. Production levels are expected to decrease progressively through 2017 due to a decline in gold grade as the current mineral reserve base is depleted. It is expected that approximately 55.0% of the total 2015 production from the Meadowbank mine will occur in the second half of the year due to higher grades being mined from the Portage E3 pit. The Company is evaluating a potential expansion of the Vault pit, with a decision expected in 2015 that could expand production beginning in 2017 and impact the distribution of production ounces between 2016 and 2018. A significant drill program is planned at the Amaruq project in 2015 to expand the initial inferred mineral resource base with a goal of potentially developing the deposit as a Meadowbank mine satellite operation. Total cash costs per ounce of gold

MANAGEMENT'S DISCUSSION AND ANALYSIS AGNICO EAGLE   21

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produced on a by-product basis at the Meadowbank mine are expected to be approximately $656 in 2015 compared with $599 in 2014, reflecting expectations of decreased production and lower gold grade.

Canadian Malartic Mine

The Canadian Malartic mine was jointly acquired by Agnico Eagle and Yamana on June 16, 2014. In 2015, attributable payable gold production at the Canadian Malartic mine is expected to be approximately 280,000 ounces. Over the 2015 to 2017 period, average annual attributable payable gold production at the Canadian Malartic mine is expected to be approximately 287,000 ounces. Mill throughput levels at the Canadian Malartic mine are expected to increase toward capacity by the second half of 2015, contingent upon updating existing operating permits. Total cash costs per ounce of gold produced on a by-product basis at the Canadian Malartic mine are expected to be approximately $609 in 2015 compared with $701 in 2014.

Kittila Mine

In 2015, payable gold production at the Kittila mine is expected to be approximately 185,000 ounces. Over the 2015 to 2017 period, average annual payable gold production at the Kittila mine is expected to be approximately 187,000 ounces. A mill expansion completed in 2014 has significantly increased capacity at the Kittila mine which is expected to be utilized through a combination of increased mine throughput and the processing of surface stockpiles. As part of the initiative to increase mine throughput, development of a ramp system related to the Rimpi Zone will be prioritized. Total cash costs per ounce of gold produced on a by-product basis at the Kittila mine are expected to be approximately $711 in 2015 compared with $845 in 2014, reflecting increased expected production.

Pinos Altos Mine

In 2015, payable gold production at the Pinos Altos mine is expected to be approximately 175,000 ounces. Over the 2015 to 2017 period, average annual payable gold production at the Pinos Altos mine is expected to be approximately 175,000 ounces. Mill throughput at the Pinos Altos mine has increased steadily from the original design rate of 4,000 tonnes per day to an average of approximately 5,500 tonnes per day. Total cash costs per ounce of gold produced on a by-product basis at the Pinos Altos mine are expected to be approximately $526 in 2015 compared with $533 in 2014.

Creston Mascota deposit at Pinos Altos

In 2015, payable gold production at the Creston Mascota deposit at Pinos Altos is expected to be approximately 50,000 ounces. Over the 2015 to 2017 period, average annual payable gold production at the Creston Mascota deposit at Pinos Altos is expected to be approximately 45,000 ounces. The completion of construction on the Phase 3 leach pad and the installation of a new agglomerator to increase crushed ore processing capabilities in 2014 have combined to increase expected production at the Creston Mascota deposit at Pinos Altos in 2015 compared with 2014. Further drilling on the Bravo deposit is planned for 2015 to evaluate it as a potential source of future additional production. Total cash costs per ounce of gold produced on a by-product basis at the Creston Mascota deposit at Pinos Altos are expected to be approximately $559 in 2015 compared with $578 in 2014, reflecting increased expected production.

La India Mine

The La India mine achieved commercial production in February 2014. In 2015, payable gold production at the La India mine is expected to be approximately 90,000 ounces. Over the 2015 to 2017 period, average annual payable gold production at the La India mine is expected to be approximately 92,000 ounces in line with design expectations. Total cash costs per ounce of gold produced on a by-product basis at the La India mine are expected to be approximately $491 in 2015 compared with $487 in 2014.

Growth Summary

With the achievement of commercial production at the Kittila, Lapa and Pinos Altos mines in 2009, the Meadowbank mine in 2010, the Creston Mascota deposit at Pinos Altos and LaRonde mine extension in 2011, the Goldex mine M and E Zones in 2013 and the La India mine in 2014 along with the joint acquisition of the Canadian Malartic mine on June 16, 2014, Agnico Eagle has transformed from a one mine operation to a nine mine senior gold mining company over the last seven years. In 2014, the Company achieved record annual payable gold production of 1,429,288 ounces. As the Company continues its next growth phase from this expanded production platform, it expects to continue to deliver on its vision and strategy. Annual

22   AGNICO EAGLE MANAGEMENT'S DISCUSSION AND ANALYSIS

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payable gold production is expected to increase to approximately 1,600,000 ounces in 2015, representing an 11.9% increase compared with 2014. The Company expects that the main contributors to targeted increases in payable gold production, mineral reserves and mineral resources in 2015 will include:

•

A full year of attributable production from the Canadian Malartic mine, jointly acquired on June 16, 2014



•

Increased production from the Kittila mine due to the successful 2014 completion of its mill expansion



•

Increased production from the LaRonde mine due to the successful commissioning of a cooling plant and the resulting enhanced productivity in the lower section of the mine



•

A full year of production from the La India mine which achieved commercial production in February 2014



•

Continued conversion of Agnico Eagle's current mineral resources to mineral reserves

Financial Outlook

Revenue from Mining Operations and Production Costs

In 2015, the Company expects to continue to generate solid cash flow with payable gold production of approximately 1,600,000 ounces, up from 1,429,288 ounces in 2014 due primarily to a full year of attributable operations from the Canadian Malartic mine that was jointly acquired on June 16, 2014, increased mill throughput at the Kittila mine facilitated by the mill expansion completed in 2014, and increased production from the higher grade deeper portions of the LaRonde mine facilitated by new cooling and ventilation infrastructure commissioned during 2014.

The table below sets out actual payable production in 2014 and estimated payable production in 2015:

		2015 Estimate		2014 Actual
Gold (ounces)		1,600,000		1,429,288
Silver (thousands of ounces)		3,987		3,564
Zinc (tonnes)		7,612		10,515
Copper (tonnes)		5,322		4,997

In 2015, the Company is expecting total cash costs per ounce of gold produced on a by-product basis at the LaRonde mine to be $576 compared with $668 in 2014. In calculating estimates of total cash costs per ounce of gold produced on a by-product basis for the LaRonde mine, net silver, zinc and copper by-product revenue is treated as a reduction to production costs. Therefore, production and price assumptions for by-product metals play an important role in the LaRonde mine's total cash costs per ounce of gold produced on a by-product basis estimate due to its significant by-product production. In addition, the Pinos Altos mine generates significant silver by-product production. An increase in by-product metal prices above forecast levels would result in improved total cash costs per ounce of gold produced on a by-product basis at these mines. Total cash costs per ounce of gold produced on a co-product basis are expected to be $869 in 2015 at the LaRonde mine compared with $1,055 in 2014.

As production costs at the LaRonde, Lapa, Goldex, Meadowbank and Canadian Malartic mines are denominated primarily in Canadian dollars, production costs at the Kittila mine are denominated primarily in Euros and production costs at the Pinos Altos mine, the Creston Mascota deposit at Pinos Altos and the La India mine are denominated primarily in Mexican pesos, the Canadian dollar/US dollar, Euro/US dollar and Mexican peso/US dollar exchange rates also have an impact on the total cash costs per ounce of gold produced estimates both on a by-product and co-product basis.

MANAGEMENT'S DISCUSSION AND ANALYSIS AGNICO EAGLE   23

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The table below sets out the metal price and exchange rate assumptions used in deriving the estimated 2015 total cash costs per ounce of gold produced on a by-product basis (production estimates for each metal are shown in the table above) as well as the actual market average closing prices for each variable for the period of January 1, 2015 through March 13, 2015:

			2015 Assumptions			Actual Market Average (January 1, 2015 – March 13, 2015)
Gold (per ounce)		$	1,200		$	1,228
Silver (per ounce)		$	18.00		$	16.79
Zinc (per tonne)		$	2,000		$	2,088
Copper (per tonne)		$	6,614		$	5,786
C$/US$ exchange rate (C$)		$	1.20		$	1.23
Euro/US$ exchange rate (Euros)		€	0.85		€	0.88
Mexican peso/US$ exchange rate (Mexican pesos)			12.75			14.90

See Risk Profile – Metal Prices and Foreign Currencies in this MD&A for the estimated impact on 2015 total cash costs per ounce of gold produced on a by-product basis of a 10% change in assumed metal prices and exchange rates.

Exploration and Corporate Development Expenditures

In 2015, Agnico Eagle expects to incur expenditures of $107.0 million on minesite, advanced project and greenfield exploration. Exploration expenditures are expected to be focused on the Amaruq project in Nunavut, Canada (located approximately 50 kilometers northwest of the Meadowbank mine) and the El Barqueno project in Jalisco State, Mexico (acquired on November 28, 2014 as part of Cayden Resources Inc.). A significant drill program is planned at the Amaruq project in 2015 with the goal of potentially developing the deposit as a satellite operation to the Meadowbank mine. The Company believes that the El Barqueno project may have the potential to be developed as a combination open pit/underground mine with mill and heap leach processing and mineralization similar to the Pinos Altos mine. Agnico Eagle plans to complete a $15.0 million exploration program at the El Barqueno project in 2015 with a goal of developing an initial mineral resource by the end of the year.

Exploration programs are designed to infill and expand known deposits and test other favourable target areas that could ultimately supplement the Company's existing production profile. Exploration is success driven and thus these estimates could change materially based on the results of the various exploration programs. When it is determined that a project can generate future economic benefit, the costs of drilling and development to further delineate the ore body on such a property are capitalized. In 2015, the Company expects to capitalize $13.0 million on drilling and development related to further delineating ore bodies and converting mineral resources into mineral reserves.

Other Expenses

General and administrative expenses are expected to decrease to between $88.0 million and $103.0 million in 2015 compared with $118.8 million in 2014. Amortization of property, plant and mine development is expected to increase to between $550.0 million and $575.0 million in 2015 compared with $433.6 million in 2014 due primarily to the consolidation of a full year of attributable amortization related to Canadian Malartic mine and to significant expected increases in gold production at the Kittila and LaRonde mines between periods. The Company's effective tax rate is expected to be between 40.0% and 45.0% in 2015.

Capital Expenditures

Capital expenditures, including sustaining capital, construction and development costs and capitalized exploration costs, are expected to total approximately $481.0 million in 2015. The Company expects to fund its 2015 capital expenditures through

24   AGNICO EAGLE MANAGEMENT'S DISCUSSION AND ANALYSIS

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operating cash flow from the sale of its gold production and the associated by-product metals. Significant components of the expected 2015 capital expenditures program include the following:

•

$304.0 million in sustaining capital expenditures relating to the LaRonde mine ($67.0 million), Pinos Altos mine ($50.0 million), Kittila mine ($50.0 million), Meadowbank mine ($43.0 million), Canadian Malartic mine ($40.0 million – portion attributable to the Company), La India mine ($25.0 million), Goldex mine ($14.0 million), the Creston Mascota deposit at Pinos Altos ($10.0 million) and the Lapa mine ($5.0 million);



•

$164.0 million in capitalized development expenditures relating to the Meliadine project ($64.0 million), Pinos Altos mine ($44.0 million), Goldex mine ($26.0 million), Canadian Malartic mine ($19.0 million – portion attributable to the Company) and the Kittila mine ($11.0 million); and



•

$13.0 million in capitalized drilling expenditures.

The Company continues to examine other possible corporate development opportunities which may result in the acquisition of companies or assets with securities, cash or a combination thereof. If cash is used to fund acquisitions, Agnico Eagle may be required to issue debt or securities to satisfy cash requirements.

All-in Sustaining Costs per Ounce of Gold Produced

Based on the recommendations of the World Gold Council made in 2013, the Company has modified its calculation of all-in sustaining costs per ounce of gold produced for 2014. All-in sustaining costs per ounce of gold produced is presented on both a by-product basis (deducting by-product metal revenues from production costs) and co-product basis (before by-product metal revenues). All-in sustaining costs per ounce of gold produced on a by-product basis is calculated as the aggregate of total cash costs per ounce of gold produced on a by-product basis and sustaining capital expenditures (including capitalized exploration), general and administrative expenses (including stock options) and non-cash reclamation provision expense per ounce of gold produced. All-in sustaining costs per ounce of gold produced on a co-product basis is calculated in the same manner as all-in sustaining costs per ounce of gold produced on a by-product basis except that no adjustment for by-product metal revenues is made to total cash costs per ounce of gold produced. The calculation of all-in sustaining 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.

Prior to modifying its calculation of all-in sustaining costs per ounce of gold produced for 2014 based on the recommendations of the World Gold Council, the Company calculated all-in sustaining costs per ounce of gold produced on a by-product basis as the aggregate of total cash costs per ounce of gold produced on a by-product basis and sustaining capital expenditures, general and administrative expenses (net of stock options) and exploration and corporate development expenses (excluding greenfield exploration) per ounce of gold produced. All-in sustaining costs per ounce of gold produced on a co-product basis would have been calculated in the same manner as all-in sustaining costs per ounce of gold produced on a by-product basis except that no adjustment for by-product metal revenues, net of smelting, refining and marketing charges would have been made to total cash costs per ounce of gold produced.

Agnico Eagle's all-in sustaining costs per ounce of gold produced on a by-product basis are expected to be approximately $880 to $900 in 2015.

Risk Profile

The Company mitigates the likelihood and potential severity of the various risks it encounters in its day-to-day operations through the application of high standards in the planning, construction and operation of its mining facilities. Emphasis is placed on hiring and retaining competent personnel and developing their skills through training, including safety and loss control training. The Company's operating and technical personnel have a solid track record of developing and operating precious metal mines and several of the Company's mines have received safety and development awards. Nevertheless, the Company and its employees continue efforts to improve workplace safety with an emphasis on safety procedure training for both mining and supervisory employees.

The Company also mitigates some of its normal business risk through the purchase of insurance coverage. An Insurable Risk Management Policy, approved by the Board, governs the purchase of insurance coverage and restricts coverage to insurance companies of the highest credit quality. For a more complete list of the risk factors affecting the Company, please see "Risk Factors" in the AIF.

MANAGEMENT'S DISCUSSION AND ANALYSIS AGNICO EAGLE   25

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Metal Prices and Foreign Currencies

Agnico Eagle's net income (loss) is sensitive to metal prices and the Canadian dollar/US dollar, Mexican peso/US dollar and Euro/US dollar exchange rates. For the purpose of the sensitivity analyses set out in the table below, the Company applied the following metal price and exchange rate assumptions for 2015:

•

Gold – $1,200 per ounce;



•

Silver – $18 per ounce;



•

Zinc – $2,000 per tonne;



•

Copper – $6,614 per tonne;



•

Canadian dollar/US dollar – C$1.20 per $1.00;



•

Euro/US dollar – €0.85 per $1.00; and



•

Mexican peso/US dollar – 12.75 Mexican pesos per $1.00.

Changes in the market price of gold may be attributed to numerous factors such as demand, global mine production levels, central bank purchases and sales and investor sentiment. Changes in the market prices of other metals may be attributed to factors such as demand and global mine production levels. Changes in exchange rates may be attributed to factors such as supply and demand for currencies and economic conditions in each country or currency area. In 2014, the ranges of metal prices and exchange rates were as follows:

•

Gold: $1,131 – $1,392 per ounce, averaging $1,266 per ounce;



•

Silver: $14 – $22 per ounce, averaging $19 per ounce;



•

Zinc: $1,934 – $2,420 per tonne, averaging $2,164 per tonne;



•

Copper: $6,305 – $7,440 per tonne, averaging $6,863 per tonne;



•

Canadian dollar/US dollar: C$1.06 – C$1.17 per $1.00, averaging C$1.10 per $1.00;



•

Euro/US dollar: €0.71 – €0.83 per $1.00, averaging €0.75 per $1.00; and



•

Mexican peso/US dollar: 12.82 – 14.94 Mexican pesos per $1.00, averaging 13.31 Mexican pesos per $1.00.

The following table sets out the impact on estimated 2015 total cash costs per ounce of gold produced on a by-product basis of specifically identified changes in assumed metal prices and exchange rates. Specifically identified changes in each variable were considered in isolation while holding all other assumptions constant. Based on historical market data and the 2014 price ranges shown above, these specifically identified changes in assumed metal prices and exchange rates are reasonably likely in 2015.

Changes in Variable		Impact on Estimated 2015 Total Cash Costs per Ounce of Gold Produced (By-Product Basis)
Silver – $1 per ounce		$2
Zinc – 10%		–
Copper – 10%		–
Canadian dollar/US dollar – 1%		$5
Euro/US dollar – 1%		$1
Mexican peso/US dollar – 10%		$1

In order to mitigate the impact of fluctuating by-product metal prices, the Company occasionally enters into derivative financial instrument contracts under its Risk Management Policies and Procedures, approved by the Board. The Company

26   AGNICO EAGLE MANAGEMENT'S DISCUSSION AND ANALYSIS

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has a long-standing policy of no forward gold sales. However, the policy does allow the Company to use other hedging strategies where appropriate to mitigate foreign exchange and by-product metal pricing risks. The Company occasionally buys put options, enters into price collars and enters into forward contracts to protect minimum by-product metal prices while maintaining full exposure to the price of gold. The Risk Management Committee has approved the strategy of using short-term call options in an attempt to enhance the realized by-product metal prices. The Company's policy does not allow speculative trading.

The Company receives payment for all of its metal sales in US dollars and pays most of its operating and capital costs in Canadian dollars, Euros or Mexican pesos. This gives rise to significant currency risk exposure. The Company enters into currency hedging transactions under the Company's Foreign Exchange Risk Management Policies and Procedures, approved by the Board, to hedge part of its foreign currency exposure. The policy does not permit the hedging of translation exposure (that is, the gains and losses that arise from the accounting translation of Canadian dollar, Euro or Mexican peso denominated assets and liabilities into US dollars), as it does not give rise to cash exposure. The Company's foreign currency derivative financial instrument strategy includes the use of purchased puts, sold calls, collars and forwards that are not held for speculative purposes.

Cost Inputs

The Company considers and may enter into risk management strategies to mitigate price risk on certain consumables including, but not limited to, diesel fuel. These strategies have largely been confined to longer term purchasing contracts but may include financial and derivative instruments.

Interest Rates

The Company's current exposure to market risk for changes in interest rates relates primarily to drawdowns on its Credit Facility and its investment portfolio. Drawdowns on the Credit Facility are used primarily to fund a portion of the capital expenditures related to the Company's development projects and working capital requirements. As at December 31, 2014, the Company had drawn down $500.0 million on the Credit Facility. In addition, the Company invests its cash in investments with short maturities or with frequent interest reset terms and a credit rating of R1-High or better. As a result, the Company's interest income fluctuates with short-term market conditions. As at December 31, 2014, short-term investments amounted to $4.6 million.

Amounts drawn under the Credit Facility are subject to floating interest rates based on benchmark rates available in the United States and Canada or on LIBOR. In the past, the Company has entered into derivative instruments to hedge against unfavorable changes in interest rates. The Company will continue to monitor its interest rate exposure and may enter into such agreements to manage its exposure to fluctuating interest rates.

Financial Instruments

The Company occasionally enters into contracts to limit the risk associated with decreased by-product metal prices, increased foreign currency costs (including capital expenditures) and input costs. The contracts act as economic hedges of underlying exposures and are not held for speculative purposes. Agnico Eagle does not use complex derivative contracts to hedge exposures.

Using financial instruments creates various financial risks. Credit risk is the risk that the counterparties to financial contracts will fail to perform on an obligation to the Company. Credit risk is partially mitigated by dealing with high quality counterparties such as major banks. Market liquidity risk is the risk that a financial position cannot be liquidated quickly. The Company primarily mitigates market liquidity risk by spreading out the maturity of financial contracts over time, usually based on projected production levels for the specific metal being hedged, such that the relevant markets will be able to absorb the contracts. Mark-to-market risk is the risk that an adverse change in market prices for metals will affect financial condition. Because derivative contracts are primarily used as economic hedges, changes in mark-to-market value may impact income. For a description of the accounting treatment of derivative financial instruments, please see "Critical IFRS Accounting Policies and Accounting Estimates – Derivative Instruments and Hedge Accounting" in this MD&A.

Operational Risk

The business of gold mining is generally subject to risks and hazards, including environmental hazards, industrial accidents, unusual or unexpected rock formations, changes in the regulatory environment, cave-ins, rock bursts, rock falls, ground conditions, pit wall failures, flooding and gold bullion losses. The occurrence of these or similar types of events and

MANAGEMENT'S DISCUSSION AND ANALYSIS AGNICO EAGLE   27

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circumstances may result in damage to, or destruction of, mineral properties or production facilities, personal injury or death, environmental damage, delays in mining, monetary losses and possible legal liability. The Company carries insurance to protect itself against certain risks of mining and processing in amounts that it considers to be adequate but which may not provide adequate coverage in certain unforeseen circumstances. The Company may also become subject to liability for pollution, cave-ins or other hazards against which it cannot insure or against which it has elected not to insure because of high premium costs or other reasons, or the Company may become subject to liabilities which exceed policy limits. In these circumstances, the Company may be required to incur significant costs that could have a material adverse effect on its financial performance and results of operations.

The Company's gold production and operating margin has diversified over the last seven years, reflecting the transition from one mine to nine mines at the end of 2014. However, the Meadowbank mine accounted for approximately 31.7% of the Company's payable gold production in 2014, and is expected to continue to account for a significant portion of payable gold production in future years.

The following table sets out estimated 2015 payable gold production by mine:

		Estimated Payable Gold Production (Ounces)		Estimated Payable Gold Production (%)
LaRonde mine		245,000		15
Lapa mine		75,000		5
Goldex mine		100,000		6
Meadowbank mine		400,000		25
Canadian Malartic mine		280,000		17
Kittila mine		185,000		12
Pinos Altos mine		175,000		11
Creston Mascota deposit at Pinos Altos		50,000		3
La India mine		90,000		6
Total		1,600,000		100

Mining is a complex and unpredictable business and, therefore, actual payable gold production may differ from estimates. Adverse conditions affecting mining or milling may have a material adverse impact on the Company's financial performance and results of operations. The Company anticipates using revenue generated by its operations to finance the capital expenditures required at its mine projects.

The Company's payable gold production may fall below estimated levels as a result of occurrences such as cave-ins, rock falls, rock bursts, pit wall failures, fires or flooding or as a result of other operational problems such as a failure of a production hoist, an autoclave, a filter press or a grinding mill. Payable gold production may also be reduced if, during the course of mining or processing, unfavorable weather conditions, ground conditions or seismic activity are encountered, ore grades are lower than expected, the physical or metallurgical characteristics of the ore are less amenable than expected to mining or treatment or dilution increases, electrical power is interrupted or heap leach processing results in containment discharge. The Company has failed to meet payable gold production forecasts in the past due to adverse conditions such as rock falls, production drilling challenges, lower than planned mill recoveries and grades, higher than expected dilution, mine structural issues and delays in the commencement of production and ramp up at new mines. On October 19, 2011, the Company suspended mining operations and gold production at the Goldex mine's Goldex Extension Zone indefinitely due to geotechnical concerns with the rock above the mining horizon, significantly impacting Agnico Eagle's payable gold production. On September 30, 2012, the Creston Mascota deposit at Pinos Altos experienced a movement of leached ore from the upper lifts of the Phase One leach pad, resulting in a temporary suspension of active leaching through March 13, 2013 and significantly impacting the Company's payable gold production. Occurrences of this nature and other accidents,

28   AGNICO EAGLE MANAGEMENT'S DISCUSSION AND ANALYSIS

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adverse conditions or operational problems in future years may result in the Company's failure to achieve current or future production estimates.

The LaRonde mine extension is one of the deepest operations in the Western Hemisphere, with an expected maximum depth of over 3 kilometers. The operations of the LaRonde mine extension rely on new infrastructure for hauling ore and materials to the surface, including a winze (or internal shaft) and a series of ramps linking mining deposits to the Penna Shaft that services current operations at the LaRonde mine. In 2012, challenges associated with heat and congestion in the LaRonde mine extension caused a delay in the expected ramp up in gold production. Although a new cooling plant began operating in December 2013, the depth of the operations could continue to pose significant challenges to the Company, such as geomechanical risks and ventilation and air conditioning requirements, which may result in difficulties and delays in achieving gold production objectives.

The continued sustaining development of the LaRonde mine extension is subject to a number of risks and challenges, including unforeseen geological formations, the implementation of new mining processes, and engineering and mine design adjustments. These occurrences may result in operational delays and in additional costs being incurred by the Company beyond those budgeted.

The figures for mineral reserves and mineral resources published by the Company are estimates, and no assurance can be given that the anticipated tonnages and grades will be achieved or that the indicated level of recovery of gold will be realized. The ore grade actually recovered by the Company may differ from the estimated grades of the mineral reserves and mineral resources. The estimates of mineral reserves and mineral resources have been determined based on, among other things, assumed metal prices, foreign exchange rates and operating costs. Prolonged declines in the market price of gold (or applicable by-product metal prices) may render mineral reserves containing relatively lower grades of mineralization uneconomical to recover and could materially reduce the Company's mineral reserves. Should such reductions occur, the Company may be required to record a material impairment loss on its investment in mining properties or delay or discontinue production or the development of new projects, resulting in net losses and reduced cash flow. Market price fluctuations of gold (or applicable by-product metal prices), as well as increased production costs or reduced recovery rates, may render mineral reserves containing relatively lower grades of mineralization uneconomical to recover and may ultimately result in a restatement of mineral resources. Short-term factors relating to the mineral reserve, such as the need for orderly development of orebodies or the processing of new or different grades, may impair the profitability of a mine in any particular reporting period.

Mineral resource estimates for properties that have not commenced production or at deposits that have not yet been exploited are based, in most instances, on very limited and widely spaced drill hole information, which is not necessarily indicative of conditions between and around the drill holes. Accordingly, such mineral resource estimates may require revision as more drilling information becomes available or as actual production experience is gained.

The Company's operations include a mine in Finland and mines in Mexico. These operations are exposed to various levels of political, economic and other risks and uncertainties that are different from those encountered at the Company's Canadian properties. These risks and uncertainties vary from country to country and may include: extreme fluctuations in currency exchange rates; high rates of inflation; labour unrest; risks of war or civil unrest; expropriation and nationalization; renegotiation or nullification of existing concessions, licenses, permits and contracts; illegal mining; corruption; restrictions on foreign exchange and repatriation; hostage taking; and changing political conditions and currency controls. In addition, the Company must comply with multiple and potentially conflicting regulations in Canada, the United States, Europe and Mexico, including export requirements, taxes, tariffs, import duties and other trade barriers, as well as health, safety and environmental requirements.

The Company's Meadowbank mine is located in the Kivalliq District of Nunavut in northern Canada, approximately 70 kilometers north of Baker Lake. Though the Company built a 110 kilometre all-weather road from Baker Lake, which provides summer shipping access via Hudson Bay to the Meadowbank mine, the Company's operations are constrained by the remoteness of the mine, particularly as the port of Baker Lake is only accessible approximately 2.5 months per year. Most of the materials that the Company requires for the operation of the Meadowbank mine must be transported through the port of Baker Lake during this shipping season, which may be further truncated due to weather conditions. If the Company is not able to acquire and transport necessary supplies during this time, this may result in a slowdown or stoppage of operations at the Meadowbank mine. Furthermore, if major equipment fails, any items necessary to replace or repair such equipment may have to be shipped through Baker Lake during this window. Failure to have the necessary materials required for operations or to repair or replace malfunctioning equipment at the Meadowbank mine may require the slowdown or stoppage of operations.

MANAGEMENT'S DISCUSSION AND ANALYSIS AGNICO EAGLE   29

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Regulatory Risk

The Company's mining and mineral processing operations, exploration activities and properties are subject to the laws and regulations of federal, provincial, state and local governments in the jurisdictions in which the Company operates. These laws and regulations are extensive and govern prospecting, exploration, development, production, exports, taxes, labour standards, occupational health and safety, waste disposal, toxic substances, environmental protection, mine safety and other matters. Compliance with such laws and regulations increases the costs of planning, designing, drilling, developing, constructing, operating, closing, reclaiming and rehabilitating mines and other facilities. New laws or regulations, amendments to current laws and regulations governing operations and activities of mining companies or more stringent implementation or interpretation thereof could have a material adverse impact on the Company, cause a reduction in levels of production and delay or prevent the development of new mining properties.

Controls Evaluation

The Company's management is responsible for establishing and maintaining adequate internal control over financial reporting ("ICFR") and disclosure controls and procedures ("DC&P"). The Company's management, under the supervision of the Company's Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of its ICFR and DC&P as at December 31, 2014. Based on this evaluation, management concluded that the Company's ICFR and DC&P were effective.

Outstanding Securities

The following table sets out the maximum number of common shares that would be outstanding if all dilutive instruments outstanding at March 13, 2015 were exercised:

Common shares outstanding at March 13, 2015		214,121,157
Employee stock options		73,650
Common shares held in a trust in connection with the restricted share unit plan		461,973
Common shares held by a depositary relating to convertible debentures previously issued by Osisko		871,680
Total		215,528,460

Governance

Agnico Eagle's Sustainable Development Policy, approved by the Board of Directors in 2012, formally outlines the guiding principles and commitments to be upheld by the Company. The Sustainable Development Policy is based on four fundamental values of sustainable development at Agnico Eagle: respect for our employees; protection of the environment; safe operations; and respect for our communities.

Sustainable Development Management

In 2014, the Company continued the process of integrating sustainability into all aspects and stages of its business, from the corporate objectives and executive responsibility of 'maintaining high standards in sustainability' to exploration and acquisition activities, day to day operating and site closure plans. This integration will lead to employees taking greater ownership towards the implementation of responsible mining practices.

This integration process is done through the development and implementation of a formal Health, Safety, Environment and Community Management System, termed the Responsible Mining Management System ("RMMS"). The aim of the RMMS is to further promote a culture of accountability and leadership in managing health, safety, environmental and social acceptability matters. RMMS documentation is supported by the software Intelex, which is widely used in the Canadian mining industry and is consistent with the ISO 14001 Environmental Management System and the BS OHSAS 18001 Occupational Health and Safety Management System.

Agnico Eagle became a signatory of the International Cyanide Management Code (the "Cyanide Code") in 2011. The Company's commitments as a signatory to the Cyanide Code are incorporated in the RMMS. In 2014, third-party Cyanide Code audits were conducted at the Kittila, Pinos Altos and Meadowbank mines. The Kittila mine achieved Cyanide Code requirements certification early in 2015 and the Pinos Altos and Meadowbank mines are expected to receive Cyanide Code requirements certification later in 2015.

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The RMMS also integrates the requirements of the Mining Association of Canada's industry leading Towards Sustainable Mining Initiative (the "TSM Initiative"), as well as the Global Reporting Initiative's sustainability reporting guidelines for the mining industry. In December 2010, Agnico Eagle became a member of the Mining Association of Canada and endorsed the TSM Initiative. The TSM Initiative was developed to help mining companies evaluate the quality, comprehensiveness and robustness of their management systems under six performance elements: crisis management; energy and greenhouse gas emissions management; tailings management; biodiversity conservation management; health and safety; and aboriginal relations and community outreach. In 2015, all of Agnico Eagle's mines are expected to complete an external audit evaluating the TSM protocols.

Employee Health and Safety

The Company is responsible for providing employees with a safe working environment and with the tools and training to carry out their duties in an efficient and safe manner. In 2014, Agnico Eagle's combined lost-time accident ("LTA") frequency rate was significantly lower than its target rate, and 13.0% lower than 2013. The Company has now achieved its lowest ever combined LTA rate for the second year in a row.

In 2014, a Company-wide risk assessment exercise was carried out to identify and classify health and safety risks – as well as risks to the environment and local communities. In 2015, it is expected that each Agnico Eagle operation will prepare and implement an action plan to reduce risks identified through the risk assessment exercise.

One of the measures implemented by the Company to improve safety performance is the workplace safety card system. This system was implemented across the Company to strengthen its risk-based training program. Developed by the Quebec Mining Association, the safety card system teaches workers and supervisors to use risk-based thinking in their duties. Workers and their supervisors must meet each day to discuss on-the-job health and safety matters. The safety card system also allows the Company's workers and supervisors to document daily inspections and record observations on conditions in the workplace, as well as the nature of risks, issues and other relevant information. In addition, it allows supervisors to exchange and analyze relevant information between shifts to improve efficiency and safety.

Each of the Company's mining operations has its own Emergency Response Plan and has personnel trained to respond to safety, fire and environmental emergencies. Each mine also maintains the appropriate response equipment.

Community

The Company's goal at each of its operations is to hire as much as possible of its workforce, including management teams, directly from the local region in which the operation is located. In 2014, the proportion of Agnico Eagle`s mine workforce hired locally was 83.0% while the proportion of the mine management team hired locally was 71.0%. The Company believes that providing employment is one of the most significant contributions it can make to the communities in which it operates.

2014 was the last year of a substantial three-year investment in an educational program known as Mining Matters' Aboriginal Education and Outreach Programs in the Kivalliq region of Nunavut. The goal of the program was to show young people that there are interesting jobs and careers for them in the north, and that the mining industry can be a key source of these opportunities.

Agnico Eagle works closely with neighboring communities to develop alternative employment and business opportunities to help diversify local economies. The Company also continues to support a number of community health and educational initiatives surrounding its mines.

Environment

In 2014, one notice of infraction was received by the LaRonde mine for a tailings line puncture. The tailings were immediately removed and no further action was considered necessary.

The Meadowbank mine experienced isolated non-compliance events at the Portage attenuation pond effluent which has since been shut down permanently. One non-compliance event was also experienced at the Vault pit attenuation pond effluent. An investigation related to a seepage event from a waste rock pile at the Meadowbank mine continued throughout 2014.

The Nunavut Impact Review Board ("NIRB") public hearings on the Meliadine project took place in August 2014 and a Project Certificate was issued by the NIRB.

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The Canadian Malartic mine received 28 infractions in 2014, mostly related to noise, blasting fumes and overpressure, representing a 32.0% reduction compared with the number of infractions received in 2013.

The La India mine received a notice of infraction in September 2014 from a regulatory inspection of the segregation of wood and scrap metal.

The appeal process related to the July 2013 Kittila mine updated environmental permit continued in 2014. The Company is appealing some of the requirements included in the permit. A final decision is expected in 2015.

International Financial Reporting Standards

The Company has adopted IFRS as its basis of accounting, replacing US GAAP effective July 1, 2014. As a result, Agnico Eagle's consolidated financial statements for 2014 are reported in accordance with IFRS, with comparative information restated under IFRS and a transition date of January 1, 2013. Certain figures in this MD&A are presented in accordance with US GAAP and have been labeled accordingly.

Generally Accepted Accounting Principles ("GAAP") for Canadian publicly accountable enterprises became IFRS as issued by the International Accounting Standards Board in 2011 and the US Securities and Exchange Commission ("SEC") in the United States accepts financial statements prepared in accordance with IFRS without reconciliation to US GAAP from foreign private issuers. Accordingly, Agnico Eagle decided to convert its basis of accounting to IFRS to enhance the comparability of its financial statements to the Company's peers in the mining industry.

Agnico Eagle developed and executed a detailed IFRS conversion plan including an assessment phase, an impact analysis and design phase and an implementation phase, culminating in the Company's initial reporting in accordance with IFRS in the third quarter of 2014.

Reconciliations from US GAAP to IFRS

The Company's consolidated financial statements for 2014 include the following reconciliations from Agnico Eagle's previous US GAAP basis of accounting to IFRS:

•

Total equity as at the January 1, 2013 transition date;



•

Total equity as at December 31, 2013; and



•

Net loss and other comprehensive income for the year ended December 31, 2013.

Critical IFRS Accounting Policies and Accounting Estimates

Agnico Eagle's significant IFRS accounting policies are disclosed in the Summary of Significant Accounting Policies note to the consolidated financial statements. Significant accounting policy changes as a result of adopting IFRS are disclosed in the explanatory notes following the reconciliations between US GAAP and IFRS in the Transition to IFRS note to the consolidated financial statements.

In preparing these consolidated financial statements in accordance with IFRS 1 First-time Adoption of International Financial Reporting Standards ("IFRS 1"), the Company has applied certain of the optional exemptions from full retrospective application of IFRS. Optional IFRS 1 exemptions applied by Agnico Eagle are disclosed in the Transition to IFRS note to the consolidated financial statements.

The preparation of the consolidated financial statements in accordance with IFRS requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. In making judgments about the carrying value of assets and liabilities, the Company uses estimates based on historical experience and assumptions that are considered reasonable in the circumstances. Although the Company evaluates its accounting estimates periodically, actual results may differ from these estimates.

The Company believes the following critical accounting policies relate to its more significant judgments and estimates used in the preparation of its consolidated financial statements. Management has discussed the development and selection of the following critical accounting policies with the Audit Committee which has reviewed the Company's disclosure in this MD&A.

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Derivative Instruments and Hedge Accounting

The Company uses derivative financial instruments (primarily option and forward contracts) to manage exposure to fluctuations in by-product metal prices, interest rates and foreign currency exchange rates and may use such means to manage exposure to certain input costs. The Company does not hold financial instruments or derivative financial instruments for trading purposes.

The Company recognizes all derivative financial instruments in the consolidated financial statements at fair value regardless of the purpose or intent for holding the instrument. Changes in the fair value of derivative financial instruments are either recognized periodically in the consolidated statements of income (loss) and comprehensive income (loss) or in equity as a component of accumulated other comprehensive income (loss), depending on the nature of the derivative financial instrument and whether it qualifies for hedge accounting. Financial instruments designated as hedges are tested for effectiveness at each reporting period. Realized gains and losses on those contracts that are proven to be effective are reported as a component of the related transaction.

Goodwill

Goodwill is recognized in a business combination if the cost of the acquisition exceeds the fair values of the identifiable net assets acquired. Goodwill is then allocated to the cash generating unit ("CGU") or group of CGUs that are expected to benefit from the synergies of the combination. A CGU is the smallest identifiable group of assets that generates cash inflows which are largely independent of the cash inflows from other assets or groups of assets.

The Company performs goodwill impairment tests on an annual basis as at December 31 each year. In addition, the Company assesses for indicators of impairment at each reporting period end and, if an indicator of impairment is identified, goodwill is tested for impairment at that time. If the carrying value of the CGU or group of CGUs to which goodwill is assigned exceeds its recoverable amount, an impairment loss is recognized. Goodwill impairment losses are not reversed.

The recoverable amount of a CGU or group of CGUs is measured as the higher of value in use and fair value less costs of disposal.

Mining Properties, Plant and Equipment and Mine Development Costs

Mining properties, plant and equipment and mine development costs are recorded at cost, less accumulated amortization and accumulated impairment losses.

Mining Properties

The cost of mining properties includes the fair value attributable to proven and probable mineral reserves and mineral resources acquired in a business combination or asset acquisition, underground mine development costs, deferred stripping, capitalized exploration and evaluation costs and capitalized interest.

Significant payments related to the acquisition of land and mineral rights are capitalized as mining properties at cost. If a mineable ore body is discovered, such costs are amortized to income when production begins, using the units-of-production method, based on estimated proven and probable mineral reserves. If no mineable ore body is discovered, such costs are expensed in the period in which it is determined that the property has no future economic value. Cost components of a specific project that are included in the capital cost of the asset include salaries and wages directly attributable to the project, supplies and materials used in the project, and incremental overhead costs that can be directly attributable to the project.

Assets under construction are not amortized until the end of the construction period or once the production stage is achieved. Upon achieving the production stage, the capitalized construction costs are transferred to the appropriate category of plant and equipment.

Plant and Equipment

Expenditures for new facilities and improvements that can extend the useful lives of existing facilities are capitalized as plant and equipment at cost. The cost of an item of plant and equipment includes: its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates; any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management; and the estimate of the costs of dismantling and removing the item and restoring the site on which it is located other than costs that arise as a consequence of having used the item to produce inventories during the period.

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Amortization of an asset begins when the asset is in the location and condition necessary for it to operate in the manner intended by management. Amortization ceases at the earlier of the date the asset is classified as held for sale or the date the asset is derecognized. Assets under construction are not amortized until the end of the construction period. Amortization is charged according to either the units-of-production method or on a straight-line basis, according to the pattern in which the asset's future economic benefits are expected to be consumed. The amortization method applied to an asset is reviewed at least annually.

Mine Development Costs

Mine development costs incurred after the commencement of production are capitalized when they are expected to have a future economic benefit. Activities that are typically capitalized include costs incurred to build shafts, drifts, ramps, and access corridors which enables the Company to extract ore underground.

The Company records amortization on underground mine development costs on a units-of-production basis based on the estimated tonnage of proven and probable mineral reserves of the identified component of the ore body. The units-of-production method defines the denominator as the total tonnage of proven and probable mineral reserves.

Deferred Stripping

In open pit mining operations, it is necessary to remove overburden and other waste materials to access ore from which minerals can be extracted economically. The process of mining overburden and waste materials is referred to as stripping.

During the development stage of the mine, stripping costs are capitalized as part of the cost of building, developing and constructing the mine and are amortized once the mine has entered the production stage.

During the production stage of a mine, stripping costs are recorded as a part of the cost of inventories unless these costs are expected to provide a future economic benefit and, in such cases, are capitalized to property, plant and mine development.

Production stage stripping costs provide a future economic benefit when:

•

It is probable that the future economic benefit (e.g., improved access to the ore body) associated with the stripping activity will flow to the Company;



•

The Company can identify the component of the ore body for which access has been improved; and



•

The costs relating to the stripping activity associated with that component can be measured reliably.

Capitalized production stage stripping costs are amortized over the expected useful life of the identified component of the ore body that becomes more accessible as a result of the stripping activity.

Borrowing Costs

Borrowing costs are capitalized to qualifying assets. Qualifying assets are assets that take a substantial period of time to prepare for the Company's intended use, which includes projects that are in the exploration and evaluation, development or construction stages.

Borrowing costs attributable to the acquisition, construction or production of qualifying assets are added to the cost of those assets until such time as the assets are substantially ready for their intended use. All other borrowing costs are recognized as finance costs in the period in which they are incurred. Where the funds used to finance a qualifying asset form part of general borrowings, the amount capitalized is calculated using a weighted average of rates applicable to the relevant borrowings during the period.

Leases

The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at the inception date, including whether the fulfillment of the arrangement is dependent on the use of a specific asset or assets or whether the arrangement conveys a right to use the asset.

Leasing arrangements that transfer substantially all the risks and rewards of ownership of the asset to the Company are classified as finance leases. Finance leases are recorded as an asset with a corresponding liability at an amount equal to the lower of the fair value of the leased assets and the present value of the minimum lease payments. Each lease payment is allocated between the liability and finance costs using the effective interest rate method, whereby a constant rate of interest

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expense is recognized on the balance of the liability outstanding. The interest element of the lease is charged to the consolidated statement of income (loss) as a finance cost. An asset leased under a finance lease is amortized over the shorter of the lease term and its useful life.

All other leases are recognized as operating leases. Operating lease payments are recognized as an operating expense in the consolidated statements of income (loss) on a straight-line basis over the lease term.

Development Stage Expenditures

Development stage expenditures are costs incurred to obtain access to proven and probable mineral reserves and provide facilities for extracting, treating, gathering, transporting and storing the minerals. The development stage of a mine commences when the technical feasibility and commercial viability of extracting the mineral resource has been determined. Costs that are directly attributable to mine development are capitalized as property, plant and mine development to the extent that they are necessary to bring the property to commercial production.

Abnormal costs are expensed as incurred. Indirect costs are included only if they can be directly attributed to the area of interest. General and administrative costs are capitalized as part of the development expenditures when the costs are directly attributed to a specific mining development project.

Commercial Production

A mine construction project is considered to have entered the production stage when the mine construction assets are available for use. In determining whether mine construction assets are considered available for use, the criteria considered include, but are not limited to, the following:

•

Completion of a reasonable period of testing mine plant and equipment;



•

Ability to produce minerals in saleable form (within specifications); and



•

Ability to sustain ongoing production of minerals.

When a mine construction project moves into the production stage, amortization commences, the capitalization of certain mine construction costs ceases and expenditures are either capitalized to inventories or expensed as incurred. Exceptions include costs incurred for additions or improvements to property, plant and mine development and open-pit stripping activities.

Impairment of Long-lived Assets

At the end of each reporting period the Company assesses whether there is any indication that long-lived assets may be impaired. If an indicator of impairment exists, the recoverable amount of the asset is calculated in order to determine if any impairment loss is required. If it is not possible to estimate the recoverable amount of the individual asset, assets are grouped at the CGU level for the purpose of assessing the recoverable amount. An impairment loss is recognized for any excess of the carrying amount of the CGU over its recoverable amount. The impairment loss related to a CGU is first allocated to goodwill and the remaining loss is allocated on a pro-rata basis to the remaining long-lived assets of the CGU based on their carrying amounts.

Any impairment charge that is taken on a long-lived asset except goodwill is reversed if there are subsequent changes in the estimates or significant assumptions that were used to recognize the impairment loss that result in an increase in the recoverable amount of the CGU. If an indicator of impairment reversal has been identified, a recovery should be recognized to the extent the recoverable amount of the asset exceeds its carrying amount. The amount of the reversal is limited to the difference between the current carrying amount and the amount which would have been the carrying amount had the earlier impairment not been recognized and amortization of that carrying amount had continued. Impairments and subsequent reversals are recorded in the consolidated statement of income (loss) in the period in which they occur.

Reclamation Provisions

Asset retirement obligations ("AROs") arise from the acquisition, development and construction of mining properties and plant and equipment due to government controls and regulations that protect the environment on the closure and reclamation of mining properties. The major parts of the carrying amount of AROs relate to tailings and heap leach pad closure and rehabilitation, demolition of buildings and mine facilities, ongoing water treatment and ongoing care and maintenance of closed mines. The Company recognizes an ARO at the time the environmental disturbance occurs or a

MANAGEMENT'S DISCUSSION AND ANALYSIS AGNICO EAGLE   35

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constructive obligation is determined to exist based on the Company's best estimate of the timing and amount of expected cash flows expected to be incurred. When the ARO provision is recognized, the corresponding cost is capitalized to the related item of property, plant and mine development. Reclamation provisions that result from disturbance in the land to extract ore in the current period is included in the cost of inventories.

The timing of the actual environmental remediation expenditures is dependent on a number of factors such as the life and nature of the asset, the operating licence conditions and the environment in which the mine operates. Reclamation provisions are measured at the expected value of future cash flows discounted to their present value using a risk-free interest rate. AROs are adjusted each period to reflect the passage of time (accretion). Accretion expense is recorded in financing costs each period. Upon settlement of an ARO, the Company records a gain or loss if the actual cost differs from the carrying amount of the ARO. Settlement gains/losses are recorded in the consolidated statements of income (loss).

Expected cash flows are updated to reflect changes in facts and circumstances. The principal factors that can cause expected cash flows to change are the construction of new processing facilities, changes in the quantities of material in proven and probable mineral reserves and a corresponding change in the life-of-mine plan, changing ore characteristics that impact required environmental protection measures and related costs, changes in water quality that impact the extent of water treatment required and changes in laws and regulations governing the protection of the environment.

Each reporting period, provisions for AROs are remeasured to reflect any changes to significant assumptions, including the amount and timing of expected cash flows and risk-free interest rates. Changes to the reclamation provision resulting from changes in estimate are added to or deducted from the cost of the related asset, except where the reduction of the reclamation provision exceeds the carrying value of the related assets in which case the asset is reduced to nil and the remaining adjustment is recognized in the consolidated statements of income (loss).

Environmental remediation liabilities ("ERLs") are differentiated from AROs in that they do not arise from environmental contamination in the normal operation of a long-lived asset or from a legal or constructive obligation to treat environmental contamination resulting from the acquisition, construction or development of a long-lived asset. The Company is required to recognize a liability for obligations associated with ERLs arising from past acts. ERLs are measured by discounting the expected related cash flows using a risk-free interest rate. The Company prepares estimates of the timing and amount of expected cash flows when an ERL is incurred. Each reporting period, the Company assesses cost estimates and other assumptions used in the valuation of ERLs to reflect events, changes in circumstances and new information available. Changes in these cost estimates and assumptions have a corresponding impact on the value of the ERL. Any change in the value of ERLs results in a corresponding charge or credit to the consolidated statements of income (loss). Upon settlement of an ERL, the Company records a gain or loss if the actual cost differs from the carrying amount of the ERL in the consolidated statements of income (loss).

Stock-based Compensation

The Company offers equity-settled awards (the employee stock option plan, incentive share purchase plan and restricted share unit plan) to certain employees, officers and directors of the Company.

Employee Stock Option Plan ("ESOP")

The Company's ESOP provides for the granting of options to directors, officers, employees and service providers to purchase common shares. Options have exercise prices equal to the market price on the day prior to the date of grant. The fair value of these options is recognized in the consolidated statements of income (loss) and comprehensive income (loss) or in the consolidated balance sheets if capitalized as part of property, plant and mine development over the applicable vesting period as a compensation cost. Any consideration paid by employees on exercise of options or purchase of common shares is credited to share capital.

Fair value is determined using the Black-Scholes option valuation model, which requires the Company to estimate the expected volatility of the Company's share price and the expected life of the stock options. Limitations with existing option valuation models and the inherent difficulties associated with estimating these variables create difficulties in determining a reliable single measure of the fair value of stock option grants. The cost is recorded over the vesting period of the award to the same expense category of the award recipient's payroll costs and the corresponding entry is recorded in equity. Equity-settled awards are not remeasured subsequent to the initial grant date. The dilutive impact of stock option grants is factored into the Company's reported diluted net income (loss) per share. The stock option expense incorporates an expected forfeiture rate, estimated based on expected employee turnover.

36   AGNICO EAGLE MANAGEMENT'S DISCUSSION AND ANALYSIS

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Incentive Share Purchase Plan ("ISPP")

Under the ISPP, directors (excluding non-executive directors), officers and employees (the participants) of the Company may contribute up to 10% of their basic annual salaries and the Company contributes an amount equal to 50% of each participant's contribution. All common shares subscribed for under the ISPP are issued by the Company.

The Company records an expense equal to its cash contribution to the ISPP. No forfeiture rate is applied to the amounts accrued. Where an employee leaves prior to the vesting date, any accrual for contributions by the Company during the vesting period related to that employee is reversed.

Restricted Share Unit ("RSU") Plan

The RSU plan is open to directors and certain employees including senior executives of the Company. RSUs are measured at fair value at the grant date of the award using the Black-Scholes option valuation model and are re-measured to fair value at each reporting period until settlement. The cost is then recorded over the vesting period of the award. This expense, and any changes in the fair value of the award, is recorded to the same expense category of the award recipient's payroll costs. The cost of the RSUs is recorded within liabilities until settled.

Revenue Recognition

Revenue from mining operations consists of gold revenues, net of smelting, refining, transportation and other marketing charges. Revenues from by-product metal sales are shown net of smelter charges as part of revenues from mining operations.

Revenue from the sale of gold and silver is recognized when the following conditions have been met:

•

The Company has transferred to the buyer the significant risks and rewards of ownership;



•

The Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;



•

The amount of revenue can be measured reliably;



•

It is probable that the economic benefits associated with the transaction will flow to the Company; and



•

The costs incurred or to be incurred in respect of the transaction can be measured reliably.

Revenue from gold and silver in the form of dore bars is recorded when the refined gold or silver is sold and delivered to the customer. Generally, all of the gold and silver in the form of dore bars recovered in the Company's milling process is sold in the period in which it is produced.

Under the terms of the Company's concentrate sales contracts with third-party smelters, final prices for the metals contained in the concentrate are determined based on the prevailing spot market metal prices on a specified future date, which is established as of the date that the concentrate is delivered to the smelter. The Company records revenues under these contracts based on forward prices at the time of delivery, which is when the risks and rewards of ownership of the concentrate passes to the third-party smelters. The terms of the contracts result in differences between the recorded estimated price at delivery and the final settlement price. These differences are adjusted through revenue at each subsequent financial statement date.

Income Taxes

Current tax and deferred tax expenses are recognized in the consolidated statements of income (loss) except to the extent that they relate to a business combination, or to items recognized directly in equity or in other comprehensive income (loss).

Current tax expense is based on substantively enacted statutory tax rates and laws at the consolidated balance sheet date.

Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the tax basis of such assets and liabilities measured using tax rates and laws that are substantively enacted at the consolidated balance sheet date and effective for the reporting period when the temporary differences are expected to reverse.

Deferred taxes are not recognized where:

•

The deferred tax liability arises from the initial recognition of goodwill;

MANAGEMENT'S DISCUSSION AND ANALYSIS AGNICO EAGLE   37

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•

The deferred tax asset or liability arises on the initial recognition of an asset or liability in an acquisition that is not a business combination and, at the time of the acquisition, affects neither the accounting profit nor taxable profit or loss; and



•

For temporary differences relating to investments in subsidiaries and jointly controlled entities to the extent that the Company can control the timing of the temporary difference and it is probable that they will not reverse in the foreseeable future.

Deferred tax assets are recognized for unused losses carried forward and deductible temporary differences to the extent that it is probable that future taxable profit will be available against which they can be utilized except as noted above.

At each reporting period, previously unrecognized deferred tax assets are reassessed to determine whether it has become probable that future taxable profit will allow the deferred tax assets to be recovered.

Recently Adopted and Recently Issued Accounting Pronouncements and Developments

See note 3 to the Company's consolidated financial statements for recently issued accounting pronouncements and developments.

Mineral Reserve Data

The scientific and technical information set out in this MD&A has been approved by the following "qualified persons" as defined under the CSA's National Instrument 43-101 Standards of Disclosure for Mineral Properties: mineral reserves and mineral resources (other than for the Canadian Malartic mine) – Daniel Doucet, ing., Senior Corporate Director, Reserve Development; mineral reserves and mineral resources (for the Canadian Malartic mine) – Donald Gervais, ing., Director of Technical Services at Canadian Malartic Corporation; environmental – Louise Grondin, P.Eng., Senior Vice-President, Environment and Sustainable Development; mining operations, Southern Business – Tim Haldane, P.Eng., Senior Vice-President, Operations – USA & Latin America; metallurgy – Paul Cousin, ing., Vice-President, Metallurgy; and mining operations, Northern Business – Christian Provencher, ing., Vice-President, Canada. The Company's mineral reserves estimate was derived from internally generated data or geology reports. Four of the Company's reserve and resource estimates (Kittila, Meliadine, Pinos Altos and La India) have been audited by independent consultants.

The assumptions used for the mineral reserve estimates at all mines and projects reported in this MD&A (except the Canadian Malartic mine) as at December 31, 2014 are $1,150 per ounce gold, $18.00 per ounce silver, $1.00 per pound zinc, $3.00 per pound copper, $0.91 per pound lead and exchange rates of C$1.08 per US$1.00, €0.77 per US$1.00 and 13.00 Mexican pesos per $1.00.

For the Canadian Malartic mine, the Company has reported its attributable mineral reserve estimates as at June 16, 2014 in the Mineral Reserve Estimates for the Canadian Malartic Property as filed with Canadian securities regulatory authorities on SEDAR on August 13, 2014, adjusted for attributable 2014 production. The assumptions used for the mineral reserve estimates reported in this MD&A for the Canadian Malartic mine as at December 31, 2014 are $1,300 per ounce gold and an exchange rate of C$1.10 per US$1.00.

38   AGNICO EAGLE MANAGEMENT'S DISCUSSION AND ANALYSIS

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Proven and Probable Mineral Reserves by Property(i)		Tonnes		Gold Grade (Grams per Tonne)		Contained Gold (Ounces)(ii)
Proven Mineral Reserves
LaRonde mine		4,460,000		3.76		538,000
Lapa mine		832,000		5.87		157,000
Goldex mine		203,000		1.70		11,000
Meadowbank mine		1,090,000		1.50		53,000
Canadian Malartic mine		24,969,000		0.92		736,000
Meliadine project		34,000		7.31		8,000
Kittila mine		921,000		4.41		131,000
Pinos Altos mine		2,441,000		3.27		257,000
Creston Mascota deposit at Pinos Altos		187,000		0.76		5,000
La India mine		99,000		0.53		2,000
Total Proven Mineral Reserves		35,236,000		1.67		1,898,000
Probable Mineral Reserves
LaRonde mine		16,072,000		5.60		2,893,000
Lapa mine		74,000		5.50		13,000
Goldex mine		6,893,000		1.49		329,000
Meadowbank mine		10,705,000		3.24		1,116,000
Canadian Malartic mine		101,978,000		1.10		3,593,000
Meliadine project		13,910,000		7.44		3,327,000
Kittila mine		27,614,000		4.95		4,393,000
Pinos Altos mine		15,788,000		2.97		1,506,000
Creston Mascota deposit at Pinos Altos		5,657,000		1.27		231,000
La India mine		24,783,000		0.85		677,000
Total Probable Mineral Reserves		223,474,000		2.52		18,078,000
Total Proven and Probable Mineral Reserves		258,710,000		2.40		19,976,000

Notes:

(i)

Complete information on the verification procedures, the quality assurance program, quality control procedures, operating and capital cost assumptions, parameters and methods and other factors that may materially affect scientific and technical information presented in this MD&A and definition of certain terms used herein may be found in: the AIF under the caption "Information on Mineral Reserves and Mineral Resources of the Company"; the 2005 LaRonde Mineral Resource & Mineral Reserve Estimate filed with Canadian securities regulatory authorities on SEDAR on March 23, 2005; the Technical Report on the Lapa Gold Project filed with Canadian securities regulatory authorities on SEDAR on June 8, 2006; the Technical Report on the December 31, 2009 Mineral Reserve and Mineral Resource Estimate and the Suuri Extension Project, Kittila Mine, Finland filed with the Canadian securities regulatory authorities on SEDAR on March 4, 2010; the Technical Report on the Mineral Resources and Mineral Reserves at Meadowbank Gold Mine, Nunavut, Canada as at December 31, 2011 filed with Canadian securities regulatory authorities on SEDAR on March 23, 2012; the Pinos Altos Gold-Silver Mining Project, Chihuahua State, Mexico, Technical Report on Mineral Resources and Reserves as of December 31, 2008 filed with Canadian securities regulatory authorities on March 25, 2009; the Technical Report on the December 31, 2010 Mineral Resource and Mineral Reserve Estimate, Meliadine Gold Project, Nunavut, Canada filed with Canadian securities regulatory authorities on SEDAR on March 8, 2011; the Technical Report on the June 30, 2012 Update of the Mineral Resources and Mineral Reserves, La India Gold Project, Municipality of Sahuaripa, Sonora, Mexico dated August 31, 2012 filed with Canadian securities regulatory authorities on SEDAR on October 12, 2012; the Technical Report on Restatement of the Mineral Resources at Goldex Mine, Quebec, Canada as at October 19, 2011 filed with Canadian securities regulatory authorities on SEDAR on December 5, 2011; the Technical Report on Production of the M and E Zones at Goldex Mine dated October 14, 2012 filed with the Canadian securities regulatory authorities on SEDAR on November 1, 2012 and the Technical Report on the Mineral Resource and Mineral Reserve Estimates for the Canadian Malartic Property as at June 16, 2014 filed with Canadian securities regulatory authorities on SEDAR on August 13, 2014.

(ii)

Total contained gold ounces does not include equivalent gold ounces for the by-product metals contained in the mineral reserves.

MANAGEMENT'S DISCUSSION AND ANALYSIS AGNICO EAGLE   39

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Non-GAAP Financial Performance Measures

This MD&A presents certain financial performance measures, including adjusted net income, total cash costs per ounce of gold produced (on both a by-product and co-product basis), minesite costs per tonne and all-in sustaining costs per ounce of gold produced, that are not recognized measures under IFRS. This data may not be comparable to data presented by other gold producers. Non-GAAP financial performance measures should be considered together with other data prepared in accordance with IFRS.

Adjusted Net Income

Adjusted net income is not a recognized measure under IFRS and this data may not be comparable to data presented by other gold producers. This measure is calculated by adjusting net income (loss) as recorded in the consolidated statements of income (loss) and comprehensive income (loss) for non-recurring, unusual and other items. The Company believes that this generally accepted industry measure allows the evaluation of the results of continuing operations and is useful in making comparisons between periods. Adjusted net income is intended to provide investors with information about the Company's continuing income generating capabilities. Management uses this measure to monitor and plan for the operating performance of the Company in conjunction with other data prepared in accordance with IFRS.

				2014			2013			2012
				(IFRS)			(IFRS)			(US GAAP)(i)
				(thousands of United States dollars)
Net income (loss) for the period – basic			$	82,970		$	(686,705	)	$	310,916
Net income (loss) for the period – diluted			$	75,625		$	(686,705	)	$	310,916
	Impairment loss on available-for-sale securities			15,763			32,476			12,732
	Gain on sale of available-for-sale securities			(5,635	)		(74	)		(9,733	)
	Foreign currency translation loss			3,781			1,769			16,320
	Stock options expense			20,092			26,398			33,792
	Mark-to-market (gain) loss on warrants			(3,426	)		488			1,295
	Loss on settlement of warrants			4,263			2,827			50
	Mark-to-market gain on convertible debentures issued by Osisko(ii)			(7,995	)		–			–
	Impairment loss (net of tax)			–			748,157			–
	Income and mining taxes adjustments			23,323			44,256			–
	Other			11,151			18,050			6,311
Adjusted net income for the period – basic			$	144,287		$	187,642		$	371,683
Adjusted net income for the period – diluted			$	144,937		$	187,642		$	371,683
Net income (loss) per share – basic			$	0.43		$	(3.97	)	$	1.82
Net income (loss) per share – diluted			$	0.39		$	(3.97	)	$	1.81
Adjusted net income per share – basic			$	0.74		$	1.09		$	2.17
Adjusted net income per share – diluted			$	0.74		$	1.09		$	2.17

Notes:

(i)

As the year ended December 31, 2012 occurred prior to the Company's January 1, 2013 US GAAP to IFRS transition date, adjusted net income data has been presented in accordance with US GAAP for this period.

(ii)

Adjustment for mark-to-market gain on convertible debentures issued by Osisko (now an obligation of Canadian Malartic GP) is excluded from the calculation of adjusted net income for the year on a diluted basis as it is already incorporated in the calculation of net income for the year on a diluted basis.

40   AGNICO EAGLE MANAGEMENT'S DISCUSSION AND ANALYSIS

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Total Cash Costs per Ounce of Gold Produced and Minesite Costs per Tonne

The Company believes that total cash costs per ounce of gold produced and minesite costs per tonne are realistic indicators of operating performance and are useful in allowing year over year comparisons. However, both of these non-GAAP generally accepted industry measures should be considered together with other data prepared in accordance with IFRS. These measures, taken by themselves, are not necessarily indicative of operating costs or cash flow measures prepared in accordance with IFRS.

Total cash costs per ounce of gold produced is presented on both a by-product basis (deducting by-product metal revenues from production costs) and co-product basis (before by-product metal revenues). Total cash costs per ounce of gold produced on a by-product basis is calculated by adjusting production costs as recorded in the consolidated statements of income (loss) and comprehensive income (loss) for by-product revenues, unsold concentrate inventory production costs, smelting, refining and marketing charges and other adjustments, and then dividing by the number of ounces of gold produced. Total cash costs per ounce of gold produced on a co-product basis is calculated in the same manner as total cash costs per ounce of gold produced on a by-product basis except that no adjustment for by-product metal revenues is made. 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. 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 cost 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 per ounce of gold produced on a by-product basis, by-product metal prices. Management compensates for these inherent limitations by using these measures in conjunction with minesite costs per tonne (discussed below) as well as other data prepared in accordance with IFRS. Management also performs sensitivity analyses in order to quantify the effects of fluctuating exchange rates and metal prices.

Agnico Eagle's primary business is gold production and the focus of its current operations and future development is on maximizing returns from gold production, with other metal production being incidental to the gold production process. Accordingly, all metals other than gold are considered by-products.

Total cash costs per ounce of gold produced is presented on a by-product basis because (i) the majority of the Company's revenues are gold revenues, (ii) the Company mines ore, which contains gold, silver, zinc, copper and other metals, (iii) it is not possible to specifically assign all costs to revenues from the gold, silver, zinc, copper and other metals the Company produces, and (iv) it is the method used by management and the Board to monitor operations.

Minesite costs per tonne is calculated by adjusting production costs as shown in the consolidated statements of income (loss) and comprehensive income (loss) for unsold concentrate inventory production costs and other adjustments and then dividing by tonnes of ore processed. As the total cash costs per ounce of gold produced measure can be impacted 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. Management is aware that this per tonne measure of performance can be impacted by fluctuations in production levels and compensates for this inherent limitation by using this measure in conjunction with production costs prepared in accordance with IFRS.

Total cash costs per ounce of gold produced and minesite costs per tonne have been restated to conform with IFRS for all reported periods.

The following tables set out a reconciliation of total cash costs per ounce of gold produced (on both a by-product basis and co-product basis) and minesite costs per tonne to production costs, exclusive of amortization, as presented in the consolidated statements of income (loss) and comprehensive income (loss) in accordance with IFRS.

MANAGEMENT'S DISCUSSION AND ANALYSIS AGNICO EAGLE   41

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Total Production Costs by Mine

			Year Ended December 31, 2014			Year Ended December 31, 2013			Year Ended December 31, 2012
			(IFRS)			(IFRS)			(US GAAP)(i)
			(thousands of United States dollars)
Production costs per the consolidated statements of income (loss) and comprehensive income (loss)		$	1,004,559		$	866,082		$	897,712
LaRonde mine			188,736			228,640			225,647
Lapa mine			61,056			69,371			73,376
Goldex mine(ii)			64,836			15,339			–
Meadowbank mine			270,824			318,414			347,710
Canadian Malartic mine(iii)			113,916			–			–
Kittila mine(iv)			116,893			97,934			98,037
Pinos Altos mine			123,342			116,959			128,618
Creston Mascota deposit at Pinos Altos(v)			28,007			19,425			24,324
La India mine(vi)			36,949			–			–
Total		$	1,004,559		$	866,082		$	897,712

Reconciliation of Production Costs to Total Cash Costs per Ounce of Gold Produced^(vii) by Mine

LaRonde Mine – Total Cash Costs per Ounce of Gold Produced(vii)				Year Ended December 31, 2014			Year Ended December 31, 2013			Year Ended December 31, 2012
				(IFRS)			(IFRS)			(US GAAP)(i)
				(thousands of United States dollars, except as noted)
Production costs			$	188,736		$	228,640		$	225,647
Adjustments:
	Inventory and other adjustments(viii)			27,070			31,855			51,322
Cash operating costs (co-product basis)			$	215,806		$	260,495		$	276,969
	By-product metal revenues			(79,015	)		(121,035	)		(185,387	)
Cash operating costs (by-product basis)			$	136,791		$	139,460		$	91,582
Gold production (ounces)				204,652			181,781			160,875
Total cash costs per ounce of gold produced ($ per ounce)(vii):
	Co-product basis		$	1,055		$	1,433		$	1,722
	By-product basis		$	668		$	767		$	569

42   AGNICO EAGLE MANAGEMENT'S DISCUSSION AND ANALYSIS

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Lapa Mine – Total Cash Costs per Ounce of Gold Produced(vii)				Year Ended December 31, 2014			Year Ended December 31, 2013			Year Ended December 31, 2012
				(IFRS)			(IFRS)			(US GAAP)(i)
				(thousands of United States dollars, except as noted)
Production costs			$	61,056		$	69,371		$	73,376
Adjustments:
	Inventory and other adjustments(viii)			750			(1,105	)		716
Cash operating costs (co-product basis)			$	61,806		$	68,266		$	74,092
	By-product metal revenues			(61	)		(22	)		(84	)
Cash operating costs (by-product basis)			$	61,745		$	68,244		$	74,008
Gold production (ounces)				92,622			100,730			106,191
Total cash costs per ounce of gold produced ($ per ounce)(vii):
	Co-product basis		$	667		$	678		$	698
	By-product basis		$	667		$	677		$	697

Goldex Mine – Total Cash Costs per Ounce of Gold Produced(ii)(vii)				Year Ended December 31, 2014			Year Ended December 31, 2013			Year Ended December 31, 2012
				(IFRS)			(IFRS)			(US GAAP)(i)
				(thousands of United States dollars, except as noted)
Production costs			$	64,836		$	15,339		$	–
Adjustments:
	Inventory and other adjustments(viii)			(720	)		1,924			–
Cash operating costs (co-product basis)			$	64,116		$	17,263		$	–
	By-product metal revenues			(20	)		(3	)		–
Cash operating costs (by-product basis)			$	64,096		$	17,260		$	–
Gold production (ounces)				100,433			19,305			–
Total cash costs per ounce of gold produced ($ per ounce)(vii):
	Co-product basis		$	638		$	894		$	–
	By-product basis		$	638		$	894		$	–

MANAGEMENT'S DISCUSSION AND ANALYSIS AGNICO EAGLE   43

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Meadowbank Mine – Total Cash Costs per Ounce of Gold Produced(vii)				Year Ended December 31, 2014			Year Ended December 31, 2013			Year Ended December 31, 2012
				(IFRS)			(IFRS)			(US GAAP)(i)
				(thousands of United States dollars, except as noted)
Production costs			$	270,824		$	318,414		$	347,710
Adjustments:
	Inventory and other adjustments(viii)			2,688			(4,601	)		(10,729	)
Cash operating costs (co-product basis)			$	273,512		$	313,813		$	336,981
	By-product metal revenues			(2,420	)		(2,343	)		(2,757	)
Cash operating costs (by-product basis)			$	271,092		$	311,470		$	334,224
Gold production (ounces)				452,877			430,613			366,030
Total cash costs per ounce of gold produced ($ per ounce)(vii):
	Co-product basis		$	604		$	729		$	921
	By-product basis		$	599		$	723		$	913

Canadian Malartic Mine – Total Cash Costs per Ounce of Gold Produced(iii)(vii)				Year Ended December 31, 2014			Year Ended December 31, 2013			Year Ended December 31, 2012
				(IFRS)			(IFRS)			(US GAAP)(i)
				(thousands of United States dollars, except as noted)
Production costs			$	113,916		$	–		$	–
Adjustments:
	Inventory and other adjustments(viii)			(10,862	)		–			–
Cash operating costs (co-product basis)			$	103,054		$	–		$	–
	By-product metal revenues			(2,771	)
Cash operating costs (by-product basis)			$	100,283		$	–		$	–
Gold production (ounces)				143,008			–			–
Total cash costs per ounce of gold produced ($ per ounce)(vii):
	Co-product basis		$	721		$	–		$	–
	By-product basis		$	701		$	–		$	–

44   AGNICO EAGLE MANAGEMENT'S DISCUSSION AND ANALYSIS

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Kittila Mine – Total Cash Costs per Ounce of Gold Produced(iv)(vii)				Year Ended December 31, 2014			Year Ended December 31, 2013			Year Ended December 31, 2012
				(IFRS)			(IFRS)			(US GAAP)(i)
				(thousands of United States dollars, except as noted)
Production costs			$	116,893		$	97,934		$	98,037
Adjustments:
	Inventory and other adjustments(iv)(viii)			3,051			(13,442	)		1,628
Cash operating costs (co-product basis)			$	119,944		$	84,492		$	99,665
	By-product metal revenues			(124	)		(125	)		(223	)
Cash operating costs (by-product basis)			$	119,820		$	84,367		$	99,442
Gold production (ounces)				141,742			141,031			175,878
Total cash costs per ounce of gold produced ($ per ounce)(vii):
	Co-product basis		$	846		$	599		$	567
	By-product basis		$	845		$	598		$	565

Pinos Altos Mine – Total Cash Costs per Ounce of Gold Produced(vii)				Year Ended December 31, 2014			Year Ended December 31, 2013			Year Ended December 31, 2012
				(IFRS)			(IFRS)			(US GAAP)(i)
				(thousands of United States dollars, except as noted)
Production costs			$	123,342		$	116,959		$	128,618
Adjustments:
	Inventory and other adjustments(viii)			(581	)		2,473			(7,911	)
Cash operating costs (co-product basis)			$	122,761		$	119,432		$	120,707
	By-product metal revenues			(31,643	)		(51,773	)		(70,057	)
Cash operating costs (by-product basis)			$	91,118		$	67,659		$	50,650
Gold production (ounces)				171,019			181,773			183,662
Total cash costs per ounce of gold produced ($ per ounce)(vii):
	Co-product basis		$	718		$	657		$	657
	By-product basis		$	533		$	372		$	276

MANAGEMENT'S DISCUSSION AND ANALYSIS AGNICO EAGLE   45

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Creston Mascota deposit at Pinos Altos – Total Cash Costs per Ounce of Gold Produced(v)(vii)				Year Ended December 31, 2014			Year Ended December 31, 2013			Year Ended December 31, 2012
				(IFRS)			(IFRS)			(US GAAP)(i)
				(thousands of United States dollars, except as noted)
Production costs			$	28,007		$	19,425		$	24,324
Adjustments:
	Inventory and other adjustments(v)(viii)			1,232			(2,289	)		(6,673	)
Cash operating costs (co-product basis)			$	29,239		$	17,136		$	17,651
	By-product metal revenues			(1,574	)		(795	)		(2,144	)
Cash operating costs (by-product basis)			$	27,665		$	16,341		$	15,507
Gold production (ounces)				47,842			32,120			47,615
Total cash costs per ounce of gold produced ($ per ounce)(vii):
	Co-product basis		$	611		$	534		$	371
	By-product basis		$	578		$	509		$	326

La India Mine – Total Cash Costs per Ounce of Gold Produced(vi)(vii)				Year Ended December 31, 2014			Year Ended December 31, 2013			Year Ended December 31, 2012
				(IFRS)			(IFRS)			(US GAAP)(i)
				(thousands of United States dollars, except as noted)
Production costs			$	36,949		$	–		$	–
Adjustments:
	Inventory and other adjustments(viii)			1,172			–			–
Cash operating costs (co-product basis)			$	38,121		$	–		$	–
	By-product metal revenues			(3,230	)
Cash operating costs (by-product basis)			$	34,891		$	–		$	–
Gold production (ounces)				71,601			–			–
Total cash costs per ounce of gold produced ($ per ounce)(vii):
	Co-product basis		$	532		$	–		$	–
	By-product basis		$	487		$	–		$	–

46   AGNICO EAGLE MANAGEMENT'S DISCUSSION AND ANALYSIS

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Reconciliation of Production Costs to Minesite Costs per Tonne^(ix) by Mine

LaRonde Mine – Minesite Costs per Tonne(ix)			Year Ended December 31, 2014			Year Ended December 31, 2013			Year Ended December 31, 2012
			(IFRS)			(IFRS)			(US GAAP)(i)
			(thousands of United States dollars, except as noted)
Production costs		$	188,736		$	228,640		$	225,647
Inventory and other adjustments(x)			(1,511	)		(6,259	)		(1,437	)
Minesite operating costs		$	187,225		$	222,381		$	224,210
Minesite operating costs (thousands of C$)		C$	206,858		C$	229,004		C$	225,159
Tonnes of ore milled (thousands of tonnes)			2,085			2,319			2,359
Minesite costs per tonne (C$)(ix)		C$	99		C$	99		C$	95

Lapa Mine – Minesite Costs per Tonne(ix)			Year Ended December 31, 2014			Year Ended December 31, 2013			Year Ended December 31, 2012
			(IFRS)			(IFRS)			(US GAAP)(i)
			(thousands of United States dollars, except as noted)
Production costs		$	61,056		$	69,371		$	73,376
Inventory and other adjustments(x)			545			(1,216	)		245
Minesite operating costs		$	61,601		$	68,155		$	73,621
Minesite operating costs (thousands of C$)		C$	68,128		C$	70,194		C$	73,813
Tonnes of ore milled (thousands of tonnes)			639			640			641
Minesite costs per tonne (C$)(ix)		C$	107		C$	110		C$	115

Goldex Mine – Minesite Costs per Tonne(ii)(ix)			Year Ended December 31, 2014			Year Ended December 31, 2013			Year Ended December 31, 2012
			(IFRS)			(IFRS)			(US GAAP)(i)
			(thousands of United States dollars, except as noted)
Production costs		$	64,836		$	15,339		$	–
Inventory and other adjustments(x)			(797	)		1,895			–
Minesite operating costs		$	64,039		$	17,234		$	–
Minesite operating costs (thousands of C$)		C$	70,728		C$	18,093		C$	–
Tonnes of ore milled (thousands of tonnes)			2,117			492			–
Minesite costs per tonne (C$)(ix)		C$	33		C$	37		C$	–

MANAGEMENT'S DISCUSSION AND ANALYSIS AGNICO EAGLE   47

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Meadowbank Mine – Minesite Costs per Tonne(ix)			Year Ended December 31, 2014			Year Ended December 31, 2013			Year Ended December 31, 2012
			(IFRS)			(IFRS)			(US GAAP)(i)
			(thousands of United States dollars, except as noted)
Production costs		$	270,824		$	318,414		$	347,710
Inventory and other adjustments(x)			2,539			(5,222	)		(12,009	)
Minesite operating costs		$	273,363		$	313,192		$	335,701
Minesite operating costs (thousands of C$)		C$	300,635		C$	322,677		C$	336,431
Tonnes of ore milled (thousands of tonnes)			4,129			4,143			3,821
Minesite costs per tonne (C$)(ix)		C$	73		C$	78		C$	88

Canadian Malartic Mine – Minesite Costs per Tonne(iii)(ix)			Year Ended December 31, 2014			Year Ended December 31, 2013			Year Ended December 31, 2012
			(IFRS)			(IFRS)			(US GAAP)(i)
			(thousands of United States dollars, except as noted)
Production costs		$	113,916		$	–		$	–
Inventory and other adjustments(x)			(11,656	)		–			–
Minesite operating costs		$	102,260		$	–		$	–
Minesite operating costs (thousands of C$)		C$	113,818		C$	–		C$	–
Tonnes of ore milled (thousands of tonnes)			5,263			–			–
Minesite costs per tonne (C$)(ix)		C$	22		C$	–		C$	–

Kittila Mine – Minesite Costs per Tonne(iv)(ix)			Year Ended December 31, 2014			Year Ended December 31, 2013			Year Ended December 31, 2012
			(IFRS)			(IFRS)			(US GAAP)(i)
			(thousands of United States dollars, except as noted)
Production costs		$	116,893		$	97,934		$	98,037
Inventory and other adjustments(iv)(x)			2,560			(13,848	)		1,018
Minesite operating costs		$	119,453		$	84,086		$	99,055
Minesite operating costs (thousands of €)		€	89,987		€	64,102		€	75,305
Tonnes of ore milled (thousands of tonnes)			1,156			883			1,090
Minesite costs per tonne (€)(ix)		€	78		€	73		€	69

48   AGNICO EAGLE MANAGEMENT'S DISCUSSION AND ANALYSIS

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Pinos Altos Mine – Minesite Costs per Tonne(ix)			Year Ended December 31, 2014			Year Ended December 31, 2013			Year Ended December 31, 2012
			(IFRS)			(IFRS)			(US GAAP)(i)
			(thousands of United States dollars, except as noted)
Production costs		$	123,342		$	116,959		$	128,618
Inventory and other adjustments(x)			(2,376	)		(821	)		(10,152	)
Minesite operating costs		$	120,966		$	116,138		$	118,466
Tonnes of ore processed (thousands of tonnes)			2,520			2,726			2,862
Minesite costs per tonne (US$)(ix)		$	48		$	43		$	41

Creston Mascota deposit at Pinos Altos – Minesite Costs per Tonne(v)(ix)			Year Ended December 31, 2014			Year Ended December 31, 2013			Year Ended December 31, 2012
			(IFRS)			(IFRS)			(US GAAP)(i)
			(thousands of United States dollars, except as noted)
Production costs		$	28,007		$	19,425		$	24,324
Inventory and other adjustments(v)(x)			870			(2,564	)		(7,058	)
Minesite operating costs		$	28,877		$	16,861		$	17,266
Tonnes of ore processed (thousands of tonnes)			1,794			1,023			1,454
Minesite costs per tonne (US$)(ix)		$	16		$	16		$	12

La India Mine – Minesite Costs per Tonne(vi)(ix)			Year Ended December 31, 2014			Year Ended December 31, 2013			Year Ended December 31, 2012
			(IFRS)			(IFRS)			(US GAAP)(i)
			(thousands of United States dollars, except as noted)
Production costs		$	36,949		$	–		$	–
Inventory and other adjustments(x)			778			–			–
Minesite operating costs		$	37,727		$	–		$	–
Tonnes of ore processed (thousands of tonnes)			4,442			–			–
Minesite costs per tonne (US$)(ix)		$	8		$	–		$	–

Notes:

(i)

As the year ended December 31, 2012 occurred prior to the Company's January 1, 2013 US GAAP to IFRS transition date, data has been presented in accordance with US GAAP.

(ii)

The Goldex mine's M and E Zones achieved commercial production on October 1, 2013.

(iii)

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 Osisko (now Canadian Malartic Corporation) and Canadian Malartic GP, 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.

(iv)

The calculations of total cash costs per ounce of gold produced and minesite costs per tonne exclude the Kittila mine's results for the second quarter of 2013. Due to an extended maintenance shutdown, the Kittila mine only operated for 14 days during the second quarter of 2013. The Kittila mine incurred $18,159 in production costs during the second quarter of 2013, which were removed from the calculation of total cash costs per ounce of gold produced and minesite costs per tonne by means of the inventory and other adjustments line in their respective reconciliation tables.

(v)

The calculations of total cash costs per ounce of gold produced and minesite costs per tonne exclude the Creston Mascota deposit at Pinos Altos' results for the fourth quarter of 2012 and first quarter of 2013 due to the temporary suspension of active leaching between October 1, 2012 and March 13, 2013. The Creston Mascota deposit at Pinos Altos incurred $6,439 in production costs during the fourth quarter of 2012 and $3,117 in production costs during the first quarter of 2013, which were removed from the calculation of total cash costs per ounce of gold produced and minesite costs per tonne by means of the inventory and other adjustments line in their respective reconciliation tables.

(vi)

The La India mine achieved commercial production on February 1, 2014. 3,492 ounces of payable gold production were excluded from the calculation of total cash costs per ounce of gold produced in the first quarter of 2014 as they were produced prior to the achievement of commercial production.

MANAGEMENT'S DISCUSSION AND ANALYSIS AGNICO EAGLE   49

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(vii)

Total cash costs per ounce of gold produced is not a recognized measure under IFRS or US GAAP and this data may not be comparable to data presented by other gold producers. Total cash costs per ounce of gold produced is presented on both a by-product basis (deducting by-product metal revenues from production costs) and co-product basis (before by-product metal revenues). Under IFRS, total cash costs per ounce of gold produced on a by-product basis is calculated by adjusting production costs as recorded in the consolidated statements of income (loss) for by-product 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. Under US GAAP, total cash costs per ounce of gold produced on a by-product basis is calculated by adjusting production costs as recorded in the consolidated statements of income (loss) for by-product metal revenues, unsold concentrate inventory production costs, non-cash reclamation provisions, deferred stripping 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 (discussed below) as well as other data prepared in accordance with IFRS and US GAAP. Management also performs sensitivity analyses in order to quantify the effects of fluctuating metal prices and exchange rates.

(viii)

Under the Company's revenue recognition policy, revenue is recognized on concentrates when legal title passes. 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, as well as the production costs referenced in notes (iv) and (v) above. Under US GAAP, this adjustment also includes deferred stripping costs and non-cash reclamation provision.

(ix)

Minesite costs per tonne is not a recognized measure under IFRS or US GAAP and this data may not be comparable to data presented by other gold producers. Under IFRS, this measure is calculated by adjusting production costs as shown in the consolidated statements of income (loss) for unsold concentrate inventory production costs, and then dividing by tonnes of ore milled. Under US GAAP, this measure is calculated by adjusting production costs as shown in the consolidated statements of income (loss) for unsold concentrate inventory production costs, non-cash reclamation provisions, deferred stripping costs, and then dividing by tonnes of ore milled. As the total cash costs per ounce of gold produced measure can be impacted 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 and US GAAP.

(x)

This inventory and other adjustment reflects production costs associated with unsold concentrates, as well as the production cost adjustments referenced in notes (iv) and (v) above. Under US GAAP, this adjustment also includes deferred stripping costs and non-cash reclamation provision.

All-in Sustaining Costs per Ounce of Gold Produced

All-in sustaining costs per ounce of gold produced is not a recognized measure under IFRS and this data may not be comparable to data presented by other gold producers. The Company believes that this measure provides information about operating performance. However, this non-GAAP measure should be considered together with other data prepared in accordance with IFRS as it is not necessarily indicative of operating costs or cash flow measures prepared in accordance with IFRS.

Based on the recommendations of the World Gold Council made in 2013, the Company has modified its calculation of all-in sustaining costs per ounce of gold produced for 2014. All-in sustaining costs per ounce of gold produced is presented on both a by-product basis (deducting by-product metal revenues from production costs) and co-product basis (before by-product metal revenues). All-in sustaining costs per ounce of gold produced on a by-product basis is calculated as the aggregate of total cash costs per ounce of gold produced on a by-product basis and sustaining capital expenditures (including capitalized exploration), general and administrative expenses (including stock options) and non-cash reclamation provision expense per ounce of gold produced. All-in sustaining costs per ounce of gold produced on a co-product basis is calculated in the same manner as all-in sustaining costs per ounce of gold produced on a by-product basis except that no adjustment for by-product metal revenues is made to total cash costs per ounce of gold produced. The calculation of all-in sustaining 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.

Prior to modifying its calculation of all-in sustaining costs per ounce of gold produced for 2014 based on the recommendations of the World Gold Council, the Company calculated all-in sustaining costs per ounce of gold produced on a by-product basis as the aggregate of total cash costs per ounce of gold produced on a by-product basis and sustaining capital expenditures, general and administrative expenses (net of stock options) and exploration and corporate development expenses (excluding greenfield exploration) per ounce of gold produced. All-in sustaining costs per ounce of gold produced on a co-product basis would have been calculated in the same manner as all-in sustaining costs per ounce of gold produced on a by-product basis except that no adjustment for by-product metal revenues, net of smelting, refining and marketing charges would have been made to total cash costs per ounce of gold produced.

50   AGNICO EAGLE MANAGEMENT'S DISCUSSION AND ANALYSIS

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The following table sets out a reconciliation of production costs to all-in sustaining costs per ounce of gold produced for 2014 on both a by-product basis (deducting by-product metal revenues from production costs) and co-product basis (before by-product metal revenues).

Reconciliation of Production Costs to All-in Sustaining Costs per Ounce of Gold Produced

(United States dollars per ounce of gold produced, except where noted)			Year Ended December 31, 2014
Production costs per the consolidated statements of income (loss) and comprehensive income (loss) (thousands of United States dollars)			$1,004,559
Adjusted gold production (ounces)(i)			1,425,796
Production costs per ounce of adjusted gold production(i)			$705
Adjustments:
	Inventory and other adjustments(ii)		16
Total cash costs per ounce of gold produced (co-product basis)(iii)			$721
	By-product metal revenues		(84)
Total cash costs per ounce of gold produced (by-product basis)(iii)			$637
Adjustments:
	Sustaining capital expenditures (including capitalized exploration)		230
	General and administrative expenses (including stock options)		83
	Non-cash reclamation provision		4
All-in sustaining costs per ounce of gold produced (by-product basis)			$954
	By-product metal revenues		84
All-in sustaining costs per ounce of gold produced (co-product basis)			$1,038

Notes:

(i)

The La India mine achieved commercial production on February 1, 2014. 3,492 ounces of payable gold production were excluded from the calculation of total cash costs per ounce of gold produced in the first quarter of 2014 as they were produced prior to the achievement of commercial production.

(ii)

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. Other adjustments include the addition of smelting, refining and marketing charges to production costs.

(iii)

Total cash costs per ounce of gold produced is not a recognized measure under IFRS and this data may not be comparable to data presented by other gold producers. Total cash costs per ounce of gold produced is presented on both a by-product basis (deducting by-product metal revenues from production costs) and co-product basis (before by-product metal revenues). Total cash costs per ounce of gold produced on a by-product basis is calculated by adjusting production costs as recorded in the consolidated statements of income (loss) and comprehensive income (loss) 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.

MANAGEMENT'S DISCUSSION AND ANALYSIS AGNICO EAGLE   51

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SUMMARIZED QUARTERLY DATA
(thousands of United States dollars, except where noted)

				Three Months Ended
				March 31, 2014			June 30, 2014			September 30, 2014			December 31, 2014			Total 2014
Operating margin(i):
Revenues from mining operations			$	491,767		$	438,521		$	463,388		$	503,090		$	1,896,766
Production costs				218,066			229,383			269,793			287,317			1,004,559
Total operating margin(i)				273,701			209,138			193,595			215,773			892,207
Operating margin(i) by mine:
Northern Business
	LaRonde mine			45,425			26,402			14,696			33,535			120,058
	Lapa mine			15,340			9,050			13,748			16,060			54,198
	Goldex mine			9,525			13,283			17,237			20,693			60,738
	Meadowbank mine			123,961			88,728			52,504			39,839			305,032
	Canadian Malartic mine(ii)			–			3,668			33,224			39,092			75,984
	Kittila mine			19,003			14,184			12,128			14,312			59,627
Southern Business
	Pinos Altos mine			39,064			33,417			28,837			27,123			128,441
	Creston Mascota deposit at Pinos Altos			7,714			7,428			8,032			8,392			31,566
	La India mine(iii)			13,669			12,978			13,189			16,727			56,563
Total operating margin(i)				273,701			209,138			193,595			215,773			892,207
Amortization of property, plant and mine development				83,481			93,656			117,396			139,095			433,628
Exploration, corporate and other				43,502			81,665			69,884			74,390			269,441
Income before income and mining taxes				146,718			33,817			6,315			2,288			189,138
Income and mining taxes				43,661			17,571			21,365			23,571			106,168
Net income (loss) for the period			$	103,057		$	16,246		$	(15,050	)	$	(21,283	)	$	82,970
Net income (loss) per share – basic (US$)			$	0.59		$	0.09		$	(0.07	)	$	(0.10	)	$	0.43
Net income (loss) per share – diluted (US$)			$	0.59		$	0.09		$	(0.10	)	$	(0.12	)	$	0.39
Cash flows:
Cash provided by operating activities			$	250,396		$	182,728		$	71,244		$	163,956		$	668,324
Cash used in investing activities			$	(108,288	)	$	(488,543	)	$	(131,662	)	$	(123,126	)	$	(851,619	)
Cash (used in) provided by financing activities			$	(98,086	)	$	381,950		$	(35,943	)	$	(18,685	)	$	229,236
Realized prices (US$):
Gold (per ounce)			$	1,308		$	1,291		$	1,249		$	1,202		$	1,261
Silver (per ounce)			$	20.62		$	19.45		$	17.72		$	15.60		$	18.27
Zinc (per tonne)			$	2,027		$	2,142		$	2,365		$	2,216		$	2,224
Copper (per tonne)			$	6,386		$	6,893		$	7,500		$	5,961		$	6,596

52   AGNICO EAGLE MANAGEMENT'S DISCUSSION AND ANALYSIS

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Payable production(iv):
Gold (ounces):
Northern Business
	LaRonde mine			59,352			48,494			37,490			59,316			204,652
	Lapa mine			23,409			18,821			24,781			25,611			92,622
	Goldex mine			19,430			23,929			27,611			29,463			100,433
	Meadowbank mine			156,444			118,161			91,557			86,715			452,877
	Canadian Malartic mine(ii)			–			11,878			64,761			66,369			143,008
	Kittila mine			38,552			31,830			28,230			43,130			141,742
Southern Business
	Pinos Altos mine			45,217			43,978			41,155			40,669			171,019
	Creston Mascota deposit at Pinos Altos			10,317			11,159			13,377			12,989			47,842
	La India mine(iii)			13,700			17,809			20,311			23,273			75,093
Total gold (ounces)				366,421			326,059			349,273			387,535			1,429,288
Silver (thousands of ounces):
Northern Business
	LaRonde mine			349			345			224			357			1,275
	Meadowbank mine			26			25			34			49			134
	Canadian Malartic mine(ii)			–			10			66			75			151
	Kittila mine			2			1			1			3			7
Southern Business
	Pinos Altos mine			460			422			425			424			1,731
	Creston Mascota deposit at Pinos Altos			16			18			26			28			88
	La India mine(iii)			27			40			44			67			178
Total silver (thousands of ounces)				880			861			820			1,003			3,564
Zinc (tonnes)				2,060			3,793			2,230			2,432			10,515
Copper (tonnes)				1,554			1,058			989			1,396			4,997

MANAGEMENT'S DISCUSSION AND ANALYSIS AGNICO EAGLE   53

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Payable metal sold:
Gold (ounces):
Northern Business
	LaRonde mine			58,100			48,115			39,279			56,844			202,338
	Lapa mine			23,451			18,162			22,422			28,054			92,089
	Goldex mine			19,607			22,255			26,762			31,702			100,326
	Meadowbank mine			147,502			118,176			98,604			87,741			452,023
	Canadian Malartic mine(ii)			–			16,377			60,093			66,219			142,689
	Kittila mine			37,429			31,519			28,209			42,609			139,766
Southern Business
	Pinos Altos mine			46,810			43,058			41,143			45,457			176,468
	Creston Mascota deposit at Pinos Altos			10,228			10,737			12,793			12,940			46,698
	La India mine(iii)			14,632			15,025			19,265			24,019			72,941
Total gold (ounces)				357,759			323,424			348,570			395,585			1,425,338
Silver (thousands of ounces):
Northern Business
	LaRonde mine			340			322			249			367			1,278
	Meadowbank mine			28			24			32			49			133
	Canadian Malartic mine(ii)			–			15			57			68			140
	Kittila mine			2			1			1			2			6
Southern Business
	Pinos Altos mine			507			430			430			456			1,823
	Creston Mascota deposit at Pinos Altos			14			18			18			34			84
	La India mine(iii)			26			34			42			67			169
Total silver (thousands of ounces)				917			844			829			1,043			3,633
Zinc (tonnes)				1,673			2,458			3,936			2,468			10,535
Copper (tonnes)				1,542			1,074			988			1,399			5,003

54   AGNICO EAGLE MANAGEMENT'S DISCUSSION AND ANALYSIS

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				Three Months Ended
				March 31, 2013			June 30, 2013			September 30, 2013			December 31, 2013			Total 2013
Operating margin(i):
Revenues from mining operations			$	420,423		$	336,423		$	444,320		$	437,240		$	1,638,406
Production costs				206,380			206,433			222,774			230,495			866,082
Total operating margin(i)				214,043			129,990			221,546			206,745			772,324
Operating margin(i) by mine:
Northern Business
	LaRonde mine			33,012			15,544			25,461			27,243			101,260
	Lapa mine			21,774			16,576			15,303			18,143			71,796
	Goldex mine(v)			–			–			–			6,079			6,079
	Meadowbank mine			55,124			46,459			90,658			80,818			273,059
	Kittila mine			44,861			(171	)		39,150			27,949			111,789
Southern Business
	Pinos Altos mine			61,447			46,044			40,529			38,224			186,244
	Creston Mascota deposit at Pinos Altos			(2,175	)		5,538			10,445			8,289			22,097
Total operating margin(i)				214,043			129,990			221,546			206,745			772,324
Amortization of property, plant and mine development				70,759			73,077			79,266			90,788			313,890
Impairment loss				–			–			–			1,014,688			1,014,688
Exploration, corporate and other				73,251			73,413			53,725			61,644			262,033
Income (loss) before income and mining taxes				70,033			(16,500	)		88,555			(960,375	)		(818,287	)
Income and mining taxes (recovery)				23,831			11,053			13,637			(180,103	)		(131,582	)
Net income (loss) for the period			$	46,202		$	(27,553	)	$	74,918		$	(780,272	)	$	(686,705	)
Net income (loss) per share – basic (US$)			$	0.27		$	(0.16	)	$	0.43		$	(4.49	)	$	(3.97	)
Net income (loss) per share – diluted (US$)			$	0.27		$	(0.16	)	$	0.43		$	(4.49	)	$	(3.97	)

MANAGEMENT'S DISCUSSION AND ANALYSIS AGNICO EAGLE   55

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Cash flows:
Cash provided by operating activities			$	164,450		$	87,439		$	88,365		$	140,789		$	481,043
Cash used in investing activities			$	(159,857	)	$	(230,423	)	$	(153,012	)	$	(143,928	)	$	(687,220	)
Cash (used in) provided by financing activities			$	(69,504	)	$	18,677		$	68,745		$	30,811		$	48,729
Realized prices (US$):
Gold (per ounce)			$	1,611		$	1,336		$	1,333		$	1,244		$	1,366
Silver (per ounce)			$	29		$	19		$	22		$	20		$	22
Zinc (per tonne)			$	2,002		$	1,753		$	1,874		$	1,958		$	1,907
Copper (per tonne)			$	7,570		$	6,551		$	7,330		$	7,275		$	7,160

56   AGNICO EAGLE MANAGEMENT'S DISCUSSION AND ANALYSIS

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Payable production(iv):
Gold (ounces):
Northern Business
	LaRonde mine			39,073			46,119			45,253			51,336			181,781
	Lapa mine			26,868			23,178			24,361			26,323			100,730
	Goldex mine(v)			–			–			1,505			19,305			20,810
	Meadowbank mine			81,818			91,873			133,489			123,433			430,613
	Kittila mine			43,145			5,389			56,177			41,710			146,421
Southern Business
	Pinos Altos mine			44,164			47,383			43,736			46,490			181,773
	Creston Mascota deposit at Pinos Altos			1,907			10,147			11,307			10,666			34,027
	La India mine(iii)			–			–			–			3,180			3,180
Total gold (ounces)				236,975			224,089			315,828			322,443			1,099,335
Silver (thousands of ounces):
Northern Business
	LaRonde mine			611			424			571			496			2,102
	Meadowbank mine			22			23			26			29			100
	Kittila mine			2			–			2			2			6
Southern Business
	Pinos Altos mine			613			605			600			548			2,366
	Creston Mascota deposit at Pinos Altos			3			14			14			15			46
	La India mine(iii)			–			–			–			3			3
Total silver (thousands of ounces)				1,251			1,066			1,213			1,093			4,623
Zinc (tonnes)				8,239			3,455			3,648			4,472			19,814
Copper (tonnes)				1,082			1,280			1,241			1,232			4,835

MANAGEMENT'S DISCUSSION AND ANALYSIS AGNICO EAGLE   57

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Payable metal sold:
Gold (ounces):
Northern Business
	LaRonde mine			39,588			46,953			47,185			50,763			184,489
	Lapa mine			23,939			25,644			24,306			28,784			102,673
	Goldex mine(v)			–			–			–			16,991			16,991
	Meadowbank mine			80,012			87,798			132,010			130,928			430,748
	Kittila mine			44,340			12,752			48,027			43,442			148,561
Southern Business
	Pinos Altos mine			44,523			48,770			44,554			45,117			182,964
	Creston Mascota deposit at Pinos Altos			587			8,112			12,761			10,496			31,956
Total gold (ounces)				232,989			230,029			308,843			326,521			1,098,382
Silver (thousands of ounces):
Northern Business
	LaRonde mine			583			487			584			525			2,179
	Meadowbank mine			22			23			26			28			99
	Kittila mine			1			2			1			1			5
Southern Business
	Pinos Altos mine			586			640			588			553			2,367
	Creston Mascota deposit at Pinos Altos			–			14			16			14			44
Total silver (thousands of ounces)				1,192			1,166			1,215			1,121			4,694
Zinc (tonnes)				6,999			5,280			3,030			5,123			20,432
Copper (tonnes)				1,067			1,291			1,253			1,227			4,838

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 the Arrangement. As a result of the Arrangement, Agnico Eagle and Yamana each indirectly own 50.0% of Osisko (now Canadian Malartic Corporation) and Canadian Malartic GP, 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)

The La India mine achieved commercial production on February 1, 2014.

(iv)

Payable production (a non-GAAP 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.

(v)

The Goldex mine's M and E Zones achieved commercial production on October 1, 2013.

58   AGNICO EAGLE MANAGEMENT'S DISCUSSION AND ANALYSIS

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THREE YEAR FINANCIAL AND OPERATING SUMMARY
(thousands of United States dollars, except where noted)

				2014			2013			2012
				(IFRS)			(IFRS)			(US GAAP)(i)
Revenues from mining operations			$	1,896,766		$	1,638,406		$	1,917,714
Production costs				1,004,559			866,082			897,712
Operating margin(ii)				892,207			772,324			1,020,002
Amortization of property, plant and mine development				433,628			313,890			271,861
Impairment loss				–			1,014,688			–
Exploration, corporate and other				269,441			262,033			313,000
Income (loss) before income and mining taxes				189,138			(818,287	)		435,141
Income and mining taxes				106,168			(131,582	)		124,225
Net income (loss) for the year			$	82,970		$	(686,705	)	$	310,916
Net income (loss) per share – basic			$	0.43		$	(3.97	)	$	1.82
Net income (loss) per share – diluted			$	0.39		$	(3.97	)	$	1.81
Operating cash flow			$	668,324		$	481,043		$	696,007
Investing cash flow			$	(851,619	)	$	(687,220	)	$	(376,156	)
Financing cash flow			$	229,236		$	48,729		$	(202,606	)
Dividends declared per share			$	0.32		$	0.66		$	1.02
Capital expenditures			$	475,412		$	620,536		$	445,550
Average gold price per ounce realized			$	1,261		$	1,366		$	1,667
Average exchange rate – C$ per $			C$	1.1047		C$	1.0301		C$	0.9994
Weighted average number of common shares outstanding – basic (thousands)				195,223			172,893			171,250
Working capital (including undrawn credit lines)			$	1,278,353		$	1,586,676		$	1,795,495
Total assets			$	6,840,538		$	4,580,081		$	5,256,119
Long-term debt			$	1,374,643		$	987,356		$	830,000
Total equity			$	4,068,490		$	2,717,406		$	3,410,212

MANAGEMENT'S DISCUSSION AND ANALYSIS AGNICO EAGLE   59

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Operating Summary
LaRonde mine
Revenues from mining operations			$	308,794		$	329,900		$	399,243
Production costs				188,736			228,640			225,647
Operating margin(ii)			$	120,058		$	101,260		$	173,596
Amortization of property, plant and mine development				64,945			59,455			47,912
Gross profit			$	55,113		$	41,805		$	125,684
Tonnes of ore milled				2,085,300			2,319,132			2,358,499
Gold – grams per tonne				3.24			2.63			2.36
Gold production – ounces				204,652			181,781			160,875
Silver production – thousands of ounces				1,275			2,102			2,244
Zinc production – tonnes				10,515			19,814			38,637
Copper production – tonnes				4,997			4,835			4,126
Total cash costs per ounce of gold produced ($ per ounce basis):
Production costs			$	922		$	1,258		$	1,403
Adjustments:
	Inventory and other adjustments(iii)			133			175			335
	Non-cash reclamation provision(iv)			–			–			(16	)
Total cash costs per ounce of gold produced (co-product basis)(v)			$	1,055		$	1,433		$	1,722
	By-product metal revenues			(387	)		(666	)		(1,153	)
Total cash costs per ounce of gold produced (by-product basis)(v)			$	668		$	767		$	569
Minesite costs per tonne(vi)			C$	99		C$	99		C$	95
Lapa mine
Revenues from mining operations			$	115,254		$	141,167		$	173,753
Production costs				61,056			69,371			73,376
Operating margin(ii)			$	54,198		$	71,796		$	100,377
Amortization of property, plant and mine development				25,991			43,986			42,216
Gross profit			$	28,207		$	27,810		$	58,161
Tonnes of ore milled				638,800			640,422			640,306
Gold – grams per tonne				5.59			6.06			6.48
Gold production – ounces				92,622			100,730			106,191

60   AGNICO EAGLE MANAGEMENT'S DISCUSSION AND ANALYSIS

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Total cash costs per ounce of gold produced ($ per ounce basis):
Production costs			$	659		$	689		$	691
Adjustments:
	Inventory and other adjustments(iii)			8			(11	)		5
	Non-cash reclamation provision(iv)			–			–			2
Total cash costs per ounce of gold produced (co-product basis)(v)			$	667		$	678		$	698
	By-product metal revenues			–			(1	)		(1	)
Total cash costs per ounce of gold produced (by-product basis)(v)			$	667		$	677		$	697
Minesite costs per tonne(vi)			C$	107		C$	110		C$	115
Goldex mine
Revenues from mining operations			$	125,574		$	21,418		$	–
Production costs				64,836			15,339			–
Operating margin(ii)			$	60,738		$	6,079		$	–
Amortization of property, plant and mine development				52,552			8,915			–
Gross profit			$	8,186		$	(2,836	)	$	–
Tonnes of ore milled				2,116,777			527,654			–
Gold – grams per tonne				1.60			1.35			–
Gold production – ounces				100,433			20,810			–
Total cash costs per ounce of gold produced ($ per ounce basis)(vii):
Production costs			$	646		$	795		$	–
Adjustments:
	Inventory and other adjustments(iii)			(8	)		99			–
Total cash costs per ounce of gold produced (co-product basis)(v)			$	638		$	894		$	–
	By-product metal revenues			–			–			–
Total cash costs per ounce of gold produced (by-product basis)(v)			$	638		$	894		$	–
Minesite costs per tonne(vi)(vii)			C$	33		C$	37		C$	–
Meadowbank mine
Revenues from mining operations			$	575,856		$	591,473		$	609,625
Production costs				270,824			318,414			347,710
Operating margin(ii)			$	305,032		$	273,059		$	261,915
Amortization of property, plant and mine development				119,545			130,373			114,114
Gross profit			$	185,487		$	142,686		$	147,801

MANAGEMENT'S DISCUSSION AND ANALYSIS AGNICO EAGLE   61

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Tonnes of ore milled				4,129,100			4,142,840			3,820,911
Gold – grams per tonne				3.61			3.43			3.17
Gold production – ounces				452,877			430,613			366,030
Silver production – thousands of ounces				135			100			91
Total cash costs per ounce of gold produced ($ per ounce basis):
Production costs			$	598		$	739		$	950
Adjustments:
	Inventory and other adjustments(iii)			6			(10	)		16
	Non-cash reclamation provision(iv)			–			–			(4	)
	Stripping costs(viii)			–			–			(41	)
Total cash costs per ounce of gold produced (co-product basis)(v)			$	604		$	729		$	921
	By-product metal revenues			(5	)		(6	)		(8	)
Total cash costs per ounce of gold produced (by-product basis)(v)			$	599		$	723		$	913
Minesite costs per tonne(vi)			C$	73		C$	78		C$	88
Canadian Malartic mine(ix)
Revenues from mining operations			$	189,900		$	–		$	–
Production costs				113,916			–			–
Operating margin(ii)			$	75,984		$	–		$	–
Amortization of property, plant and mine development				40,973			–			–
Gross profit			$	35,011		$	–		$	–
Tonnes of ore milled				5,263,100			–			–
Gold – grams per tonne				0.95			–			–
Gold production – ounces				143,008			–			–
Silver production – thousands of ounces				151			–			–
Total cash costs per ounce of gold produced ($ per ounce basis):
Production costs			$	797		$	–		$	–
Adjustments:
	Inventory and other adjustments(iii)			(76	)		–			–
Total cash costs per ounce of gold produced (co-product basis)(v)			$	721		$	–		$	–
	By-product metal revenues			(20	)		–			–
Total cash costs per ounce of gold produced (by-product basis)(v)			$	701		$	–		$	–
Minesite costs per tonne(vi)			C$	22		C$	–		C$	–

62   AGNICO EAGLE MANAGEMENT'S DISCUSSION AND ANALYSIS

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Kittila mine
Revenues from mining operations			$	176,520		$	209,723		$	284,429
Production costs				116,893			97,934			98,037
Operating margin(ii)			$	59,627		$	111,789		$	186,392
Amortization of property, plant and mine development				33,683			27,597			30,091
Gross profit			$	25,944		$	84,192		$	156,301
Tonnes of ore milled				1,156,400			934,224			1,090,365
Gold – grams per tonne				4.57			5.40			5.68
Gold production – ounces				141,742			146,421			175,878
Silver production – thousands of ounces				7			6			–
Total cash costs per ounce of gold produced ($ per ounce basis)(x):
Production costs			$	825		$	565		$	557
Adjustments:
	Inventory and other adjustments(iii)			21			34			13
	Non-cash reclamation provision(iv)			–			–			(3	)
Total cash costs per ounce of gold produced (co-product basis)(v)			$	846		$	599		$	567
	By-product metal revenues			(1	)		(1	)		(2	)
Total cash costs per ounce of gold produced (by-product basis)(v)			$	845		$	598		$	565
Minesite costs per tonne(vi)(x)			€	78		€	73		€	69
Pinos Altos mine
Revenues from mining operations			$	251,783		$	303,203		$	363,113
Production costs				123,342			116,959			128,618
Operating margin(ii)			$	128,441		$	186,244		$	234,495
Amortization of property, plant and mine development				42,957			36,267			31,051
Gross profit			$	85,484		$	149,977		$	203,444
Tonnes of ore processed				2,520,400			2,725,703			2,862,309
Gold – grams per tonne				2.22			2.20			2.17
Gold production – ounces				171,019			181,773			183,662
Silver production – thousands of ounces				1,731			2,366			2,237

MANAGEMENT'S DISCUSSION AND ANALYSIS AGNICO EAGLE   63

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Total cash costs per ounce of gold produced ($ per ounce basis):
Production costs			$	721		$	643		$	700
Adjustments:
	Inventory and other adjustments(iii)			(3	)		14			27
	Non-cash reclamation provision(iv)			–			–			(1	)
	Stripping costs(viii)			–			–			(69	)
Total cash costs per ounce of gold produced (co-product basis)(v)			$	718		$	657		$	657
	By-product metal revenues			(185	)		(285	)		(381	)
Total cash costs per ounce of gold produced (by-product basis)(v)			$	533		$	372		$	276
Minesite costs per tonne(vi)			$	48		$	43		$	41
Creston Mascota deposit at Pinos Altos
Revenues from mining operations			$	59,573		$	41,522		$	87,551
Production costs				28,007			19,425			24,324
Operating margin(ii)			$	31,566		$	22,097		$	63,227
Amortization of property, plant and mine development				9,626			7,297			6,477
Gross profit			$	21,940		$	14,800		$	56,750
Tonnes of ore processed				1,793,800			1,276,159			1,532,362
Gold – grams per tonne				1.30			1.43			1.74
Gold production – ounces				47,842			34,027			51,175
Silver production – thousands of ounces				88			46			74
Total cash costs per ounce of gold produced ($ per ounce basis)(xi):
Production costs			$	585		$	508		$	376
Adjustments:
	Inventory and other adjustments(iii)			26			26			7
	Non-cash reclamation provision(iv)			–			–			(12	)
Total cash costs per ounce of gold produced (co-product basis)(v)			$	611		$	534		$	371
	By-product metal revenues			(33	)		(25	)		(45	)
Total cash costs per ounce of gold produced (by-product basis)(v)			$	578		$	509		$	326
Minesite costs per tonne(vi)(xi)			$	16		$	16		$	12

64   AGNICO EAGLE MANAGEMENT'S DISCUSSION AND ANALYSIS

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La India mine(xii)
Revenues from mining operations			$	93,512		$	–		$	–
Production costs				36,949			–			–
Operating margin(ii)			$	56,563		$	–		$	–
Amortization of property, plant and mine development				43,356			–			–
Gross profit			$	13,207		$	–		$	–
Tonnes of ore processed				4,773,190			–			–
Gold – grams per tonne				0.98			–			–
Gold production – ounces				75,093			–			–
Silver production – thousands of ounces				178			–			–
Total cash costs per ounce of gold produced ($ per ounce basis)(xii):
Production costs			$	516		$	–		$	–
Adjustments:
	Inventory and other adjustments(iii)			16			–			–
Total cash costs per ounce of gold produced (co-product basis)(v)			$	532		$	–		$	–
	By-product metal revenues			(45	)		–			–
Total cash costs per ounce of gold produced (by-product basis)(v)			$	487		$	–		$	–
Minesite costs per tonne(vi)(xii)			$	8		$	–		$	–

Notes:

(i)	As the year ended December 31, 2012 occurred prior to the Company's January 1, 2013 US GAAP to IFRS transition date, data has been presented in accordance with US GAAP.
(ii)	Operating margin is calculated as revenues from mining operations less production costs.
(iii)	Under the Company's revenue recognition policy, revenue is recognized on concentrates when legal title passes. 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. Other adjustments include the addition of smelting, refining and marketing charges to production costs.
(iv)	Non-cash reclamation provision adjustment is related to US GAAP financial reporting years. The adjustment is no longer required under IFRS.
(v)	Total cash costs per ounce of gold produced is not a recognized measure under IFRS or US GAAP and this data may not be comparable to data presented by other gold producers. Total cash costs per ounce of gold produced is presented on both a by-product basis (deducting by-product metal revenues from production costs) and co-product basis (before by-product metal revenues). Under IFRS, total cash costs per ounce of gold produced on a by-product basis is calculated by adjusting production costs as recorded in the consolidated statements of income (loss) for by-product 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. Under US GAAP, total cash costs per ounce of gold produced on a by-product basis is calculated by adjusting production costs as recorded in the consolidated statements of income (loss) for by-product metal revenues, unsold concentrate inventory production costs, non-cash reclamation provisions, deferred stripping 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 (discussed below) as well as other data prepared in accordance with IFRS and US GAAP. Management also performs sensitivity analyses in order to quantify the effects of fluctuating metal prices and exchange rates.

MANAGEMENT'S DISCUSSION AND ANALYSIS AGNICO EAGLE   65

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(vi)	Minesite costs per tonne is not a recognized measure under IFRS or US GAAP and this data may not be comparable to data presented by other gold producers. Under IFRS, this measure is calculated by adjusting production costs as shown in the consolidated statements of income (loss) for unsold concentrate inventory production costs, and then dividing by tonnes of ore milled. Under US GAAP, this measure is calculated by adjusting production costs as shown in the consolidated statements of income (loss) for unsold concentrate inventory production costs, non-cash reclamation provisions, deferred stripping costs, and then dividing by tonnes of ore milled. As the total cash costs per ounce of gold produced measure can be impacted 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 and US GAAP.
(vii)	The Goldex mine's M and E Zones achieved commercial production on October 1, 2013. Excludes the Goldex mine's results for the third quarter of 2013. Initial non-commercial payable gold production of 1,505 ounces was achieved at the Goldex mine's M and E Zones during the third quarter of 2013.
(viii)	The Company reports total cash costs per ounce of gold produced and minesite costs per tonne using a common industry practice of deferring certain stripping costs that can be attributed to future production. Under US GAAP it was necessary to adjust for these stripping costs to enhance the comparability of total cash costs per ounce of gold produced and minesite costs per tonne to the Company's peers within the mining industry.
(ix)	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 Osisko (now Canadian Malartic Corporation) and Canadian Malartic GP, 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.
(x)	The calculations of total cash costs per ounce of gold produced and minesite costs per tonne exclude the Kittila mine's results for the second quarter of 2013. Due to an extended maintenance shutdown, the Kittila mine only operated for 14 days during the second quarter of 2013. The Kittila mine incurred $18,159 in production costs during the second quarter of 2013, which were removed from the calculation of total cash costs per ounce of gold produced and minesite costs per tonne by means of the inventory and other adjustments line.
(xi)	Excludes results from the Creston Mascota deposit at Pinos Altos for the first quarter of 2013 and the fourth quarter of 2012 due to an unexpected movement of leached ore at the Phase One leach pad, resulting in the temporary suspension of active leaching between October 1, 2012 and March 13, 2013. The Creston Mascota deposit at Pinos Altos incurred $3,117,000 and $6,439,000 in production costs during the first quarter of 2013 and the fourth quarter of 2012, respectively, which were excluded from the calculation of total cash costs per ounce of gold produced and minesite costs per tonne.
(xii)	The La India mine achieved commercial production on February 1, 2014. 3,492 ounces of payable gold production were excluded from the calculation of total cash costs per ounce of gold produced in the first quarter of 2014 as they were produced prior to the achievement of commercial production.

66   AGNICO EAGLE MANAGEMENT'S DISCUSSION AND ANALYSIS

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Exhibit 99.3

AGNICO EAGLE MINES LIMITED MANAGEMENT'S DISCUSSION AND ANALYSIS
NOTE TO INVESTORS CONCERNING FORWARD-LOOKING INFORMATION
NOTE TO INVESTORS CONCERNING ESTIMATES OF MINERAL RESOURCES

Cautionary Note to Investors Concerning Estimates of Measured and Indicated Mineral Resources
Cautionary Note to Investors Concerning Estimates of Inferred Mineral Resources

NOTE TO INVESTORS CONCERNING NON-GAAP FINANCIAL PERFORMANCE MEASURES
Gold Prices ($ per ounce)
Total Production Costs by Category
SUMMARIZED QUARTERLY DATA (thousands of United States dollars, except where noted)
THREE YEAR FINANCIAL AND OPERATING SUMMARY (thousands of United States dollars, except where noted)