Stock Symbol: AEM (NYSE and TSX)
(All
amounts expressed in U.S. dollars ("$" or "US$") unless otherwise
noted)
TORONTO, Feb. 14, 2018 /CNW/ - Agnico Eagle Mines
Limited (NYSE:AEM, TSX:AEM) ("Agnico Eagle" or the "Company")
today reported quarterly net income of $35.1 million, or net income of $0.15 per share for the fourth quarter of
2017. This result includes mark-to-market adjustments and
derivative losses of $1.0 million
($0.01 per share), non-recurring
losses of $6.8 million ($0.03 per share) and non-cash foreign currency
translation losses of $5.5 million
($0.02 per share). Excluding
these items would result in adjusted net income1 of
$48.4 million ($0.21 per share) for the fourth quarter of
2017. In the fourth quarter of 2016, the Company reported net
income of $62.7 million or
$0.28 per share.
Not included in the fourth quarter of 2017 adjusted net income
above is non-cash stock option expense of $4.1 million ($0.02
per share).
Fourth quarter 2017 cash provided by operating activities was
$166.9 million ($209.5 million before changes in non-cash
components of working capital). This compares to
cash provided by operating activities of $120.6 million in the fourth quarter of 2016
($120.3 million before changes in
non-cash components of working capital). The increase in cash
provided by operating activities before changes in non-cash
components of working capital during the current period, as
compared to the prior period, was mainly due to higher gold sales
(up 5%) and a higher realized gold price (up 7%).
"In 2017, we had another strong year of operating performance
exceeding our production forecast and beating our cost guidance for
the sixth consecutive year. We set a new annual production
record while recording the fewest number of lost time accidents,
and we also increased our gold reserves", said Sean Boyd, Agnico Eagle's Chief Executive
Officer. "Furthermore, we continue to make excellent progress
on our Nunavut development
projects which has allowed us to advance the expected start-up of
Meliadine and increase our production guidance for 2018 and
2019. With projected production on track to reach
approximately 2.0 million ounces with lower unit costs in 2020, the
Company will be focusing on increasing its reserve base and
advancing its development pipeline to enhance the production
profile and grow free cash flow", added Mr. Boyd.
____________________
|
1 Adjusted
net income is a non-GAAP measure. For a discussion regarding
the Company's use of non-GAAP measures, please see "Note Regarding
Certain Measures of Performance".
|
Fourth quarter and full year 2017 highlights include:
- Gold production and costs better than forecast for sixth
consecutive year – Payable production2 in 2017 was
1,713,533 ounces of gold on production costs per ounce of gold of
$621, with total cash costs per
ounce3 of $558, compared
to most recent guidance of 1,680,000 ounces of gold at total cash
costs per ounce of $585. All-in
sustaining costs per ounce4 ("AISC") for 2017 were
$804, compared to most recent
guidance of $845 per ounce
- Gold production forecasts increased for 2018 and 2019 as
Meliadine start up advanced and Meadowbank extended into 2019;
production guidance for 2020 is unchanged at 2.0 million ounces
– The production forecast for 2018 is now 1.53 million ounces,
compared to previous guidance of 1.5 million ounces. The midpoint
of production guidance for 2019 is now 1.7 million ounces, compared
to previous guidance of 1.6 million ounces. First production at
Meliadine is now expected in the second quarter of 2019, which
is approximately one quarter ahead of the initial schedule. The
midpoint of production guidance for 2020 is 2.0 million ounces,
which is unchanged from previous guidance
- Transitioning to lower unit costs by 2020 as production
ramps up – In 2018, total cash costs per ounce are forecast to
be between $625 and $675 and AISC are forecast to be between
$890 and $940 per ounce. The increased unit costs over the
2017 period are largely due to lower expected gold production in
2018 than in 2017. As the Nunavut business transitions from the
Meadowbank deposit to Amaruq and Meliadine, with much higher gold
production expected in 2020, total cash costs per ounce are
forecast to decline to between $600
and $650, while AISC are forecast to
decline to between $825 and
$875 per ounce
- Gold Reserves continue to grow as average grade
increases – 2017 mineral reserves, net of 2017 production,
increased by 3.1% to 20.6 million ounces (257 million tonnes
grading 2.49 grams per tonne ("g/t") gold), while the gold reserve
grade increased by approximately 7.7% from the previous year. A
large portion of the increase comes from mineral resource
conversion at Amaruq. Measured and indicated mineral resources
declined by 2.6% and inferred mineral resources declined by 4.3%,
however, grades of these mineral resources increased.
- Kittila Shaft Approved for Construction – The Company's
Board of Directors has approved an expansion to add a 1,044 metre
deep shaft and increase expected mill throughput by 25 percent to
2.0 million tonnes per annum ("mtpa") at Kittila. The expansion
will be phased in over four years at a capital cost of
approximately 160 million euros and
is expected to result in a 50,000 to 70,000 ounce annual increase
in gold production at reduced operating costs beginning in 2021.
The shaft is expected to provide access to the mineral resource
areas below 1,150 metres which could further extend the mine
life
- A quarterly dividend of $0.11
per share has been declared
___________________
|
2 Payable
production of a mineral means the quantity of mineral produced
during a period contained in products that are sold by the Company,
whether such products are shipped during the period or held as
inventory at the end of the period.
|
3 Total
cash costs per ounce is a non-GAAP measure, and unless otherwise
specified, is reported on a by-product basis. For a
reconciliation to production costs and for total cash costs on a
co-product basis, see "Reconciliation of Non-GAAP Financial
Performance Measures" below. See also "Note Regarding Certain
Measures of Performance".
|
4
All-in-sustaining costs per ounce is a non-GAAP measure, and unless
otherwise specified, is reported on a by-product basis. For a
reconciliation to production costs and for all-in sustaining costs
on a co-product basis, see "Reconciliation of Non-GAAP Financial
Performance Measures" below. See also "Note Regarding Certain
Measures of Performance".
|
Fourth Quarter and Full Year 2017 Financial and Production
Highlights
In the fourth quarter of 2017, strong operational performance
continued at the Company's mines. Payable production in the
fourth quarter of 2017 was 413,212 ounces of gold, compared to
426,433 ounces in the fourth quarter of 2016. A detailed
description of the production performance of each mine is set out
below.
Production costs per ounce for the fourth quarter of 2017 were
$697, compared to $598 in the fourth quarter of 2016. Total
cash costs per ounce for the fourth quarter of 2017 were
$592, compared to $552 in the fourth quarter of 2016. The
increase in production costs per ounce and cash costs per ounce for
the fourth quarter, when compared to the prior-year period, is as a
result of higher minesite costs and lower production in the
quarter. AISC for the fourth quarter of 2017 were
$905, compared to $832 in the fourth quarter of 2016 due to higher
total cash costs and increased sustaining capital spending. A
detailed description of the cost performance of each mine is set
out below.
For the full year 2017, the Company recorded net income of
$243.9 million, or $1.06 per share. In 2016, the Company
recorded net income of $158.8
million, or $0.71 per
share. The increase was primarily due to higher revenue as a
result of higher realized metal prices and higher metal sales
volumes.
For the full year 2017, cash provided by operating activities
was $767.6 million ($839.4 million before changes in non-cash
components of working capital), as compared with the full year
2016, when cash provided by operating activities was $778.6 million ($714.2
million before changes in non-cash components of working
capital). The increase in cash provided by operating
activities before changes in working capital for the full year 2017
were mainly due to higher revenue as a result of higher realized
metal prices and higher metal sales volumes.
For the sixth consecutive year, Agnico Eagle has reported annual
gold production in excess of annual guidance. The Company's
payable production for the full year 2017 was 1,713,533 ounces of
gold, compared to most recent guidance of 1,680,000 ounces.
In 2016, full year production was 1,662,888 ounces. A
detailed description of the production performance of each mine is
set out below.
Production costs per ounce for the full year 2017 were
$621, which was the same
as 2016. Total cash costs per ounce for the full year
2017 were $558, below most recent
guidance of between $570 and
$600. In 2016, total cash costs
per ounce were $573. The
decrease in cash costs per ounce for full year 2017, when compared
to the prior-year period, is primarily due to higher production in
2017.
AISC for 2017 was $804 per ounce,
below most recent guidance of between $820 and $870. This compares with AISC of
$824 per ounce in 2016. The
lower AISC in 2017 period is primarily due to lower total cash
costs per ounce and higher production. A detailed description
of the cost performance of each mine is set out below.
Capital Spending and Liquidity - Existing Cash and Undrawn
Credit Facility Provide Financial Flexibility
The Company continues to maintain its investment grade balance
sheet and has adequate financial flexibility to finance capital
requirements at its various mines and development projects from
operating cash flow, cash and cash equivalents, short term
investments and undrawn credit lines.
Cash and cash equivalents and short term investments increased
to $643.9 million at December 31, 2017, from the December 31, 2016 balance of $548.4 million.
The outstanding balance on the Company's credit facility
remained nil at December 31,
2017. This results in available credit lines of approximately
$1.2 billion, not including the
uncommitted $300 million accordion
feature.
In the first quarter of 2018, the Company marketed notes to
institutional investors on a private placement basis. The
Company expects to issue $350 million
of notes with a weighted average maturity of 13.9 years and a
weighted average interest rate of 4.57% in April. The other
terms of the notes are expected to be substantially the same as the
terms of the existing outstanding notes of the Company.
Total capital expenditures for the full year 2017 were
$875 million, compared to most recent
guidance of $895 million. The
lower capital expenditures largely related to a reduction in
development capital spending at LaRonde Zone 5 and Goldex, offset
by higher development capital spending at Canadian Malartic.
A portion of the capital not spent in 2017 has been rolled forward
into the 2018 capital forecast.
Capital
Expenditures
|
|
|
|
|
(In thousands of
US dollars)
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
December 31,
2017
|
|
December 31,
2017
|
Sustaining
Capital
|
|
|
|
|
LaRonde
mine
|
|
$
|
16,883
|
|
$
|
67,128
|
Canadian Malartic
mine
|
|
27,281
|
|
67,878
|
Meadowbank
mine
|
|
6,008
|
|
22,720
|
Kittila
mine
|
|
20,679
|
|
57,079
|
Goldex
mine
|
|
11,709
|
|
30,061
|
Lapa mine
|
|
-
|
|
-
|
Pinos Altos
mine
|
|
12,501
|
|
39,986
|
Creston Mascota
deposit at Pinos Altos
|
|
2,446
|
|
6,753
|
La India
mine
|
|
1,750
|
|
8,159
|
Meliadine
project
|
|
-
|
|
-
|
|
|
|
|
|
Development
Capital
|
|
|
|
|
LaRonde
mine
|
|
$
|
10,302
|
|
$
|
22,621
|
Canadian Malartic
mine
|
|
10,714
|
|
18,671
|
Meadowbank
mine
|
|
12,173
|
|
88,796
|
Kittila
mine
|
|
11,096
|
|
30,710
|
Goldex
mine
|
|
3,060
|
|
26,989
|
Lapa mine
|
|
-
|
|
-
|
Pinos Altos
mine
|
|
851
|
|
9,351
|
Creston Mascota
deposit at Pinos Altos
|
|
909
|
|
1,355
|
La India
mine
|
|
29
|
|
2,624
|
Meliadine
project
|
|
87,175
|
|
372,071
|
Other
|
|
1,041
|
|
1,924
|
|
|
|
|
|
Total Capital
Expenditures
|
|
$
|
236,607
|
|
$
|
874,876
|
Quarterly Dividend Declared
Agnico Eagle's Board of Directors has declared a quarterly cash
dividend of $0.11 per common share,
payable on March 15, 2018 to
shareholders of record as of March 1,
2018. Agnico Eagle has now declared a cash dividend every
year since 1983.
Expected Dividend Record and Payment Dates for 2018
Record
Date
|
Payment
Date
|
March 1*
|
March 15*
|
June 1
|
June 15
|
August 31
|
September
14
|
November
30
|
December
14
|
Dividend Reinvestment Plan
Shareholders should use the following link for information on
the Company's dividend reinvestment plan: Dividend Reinvestment
Plan
Conference Call Tomorrow
The Company's senior management will host a conference call on
Thursday, February 15, 2018 at
11:00 AM (E.S.T.) to discuss
the Company's fourth quarter and full-year financial and operating
results.
Via Webcast:
A live audio webcast of the conference call will be available on
the Company's website www.agnicoeagle.com.
Via Telephone:
For those preferring to listen by telephone, please dial
647-427-7450 or toll-free 1-888-231-8191. To ensure your
participation, please call approximately five minutes prior to the
scheduled start of the call.
Replay Archive:
Please dial 1-416-849-0833 or toll-free 1-855-859-2056, access
code 5699104. The conference call replay will expire on
Thursday, March 15, 2018.
The webcast along with presentation slides will be archived for
180 days on the Company's website www.agnicoeagle.com.
New Three Year Guidance – Production Forecasts Increased for
2018 and 2019; while 2020 Remains on Track for Production of
Approximately 2.0 million ounces
The Company is announcing its detailed production and cost
guidance for 2018, and mine by mine production forecasts for 2018
through 2020. Production in 2018 is now forecast to be 1.53
million ounces (previously 1.5 million ounces). Given the
expected start up of several new operations, the Company is
now providing a range of production guidance for 2019 and
2020. Production in 2019 is now forecast to be between 1.63
and 1.77 million ounces (mid point of 1.7 million ounces), which
compares to previous guidance of 1.6 million ounces.
Production in 2020 is now forecast to be between 1.95 and 2.05
million ounces (mid point of 2.0 million ounces), which compares to
previous guidance of approximately 2.0 million ounces.
The increased production guidance for 2019 is partly due to
advancing the expected start-up of production at Meliadine to the
second quarter of 2019 (previously the third quarter of 2019), and
extension of production at Meadowbank (largely through the
processing of stockpiles).
Total cash costs per ounce in 2018 are expected to be between
$625 and $675 using a C$/US$ foreign exchange
rate assumption of 1.25. Total cash costs per ounce in 2018
are expected to be higher than in the 2017 period primarily due to
lower production volumes, stronger operating currencies (Canadian
dollar and euro), and slightly higher minesite costs per
tonne5 at several operations (Meadowbank, Pinos Altos and Creston Mascota). In
2020, using a C$/US$ foreign exchange rate assumption of 1.25,
total cash costs per ounce are forecast to decline to between
$600 and $650, largely due to higher production
volumes.
AISC for 2018 are expected to be between $890 and $940 per
ounce. The AISC per ounce in 2018 are expected to be higher
than in the 2017 period due to lower production and higher total
cash costs. In 2020, using a C$/US$ foreign
exchange rate assumption of 1.25, AISC are forecast to decline to
between $825 and $875 per ounce, largely due to higher production
and lower total cash costs per ounce.
By 2019, the Company expects to have four cornerstone production
assets (the LaRonde Complex, Canadian Malartic, Meliadine and the
Meadowbank Complex, which includes the Amaruq satellite deposit)
each with annual production rates of approximately 250,000 to
400,000 ounces of gold. Beyond 2019, the Company anticipates
the Meadowbank Complex production levels to increase as gold grades
mined are expected to rise at the Amaruq satellite deposit.
In addition, at Kittila, with the proposed expansion, annual
production in 2021 and beyond is expected to increase by
approximately 25-30% over current levels, to more than 250,000
ounces as new sources of ore are developed underground.
Following a period of increased development capital spending,
largely due to the construction of the Meliadine and Amaruq
projects in Nunavut, the Company
is forecasting a return to free cash generation in the second half
of 2019. At current foreign exchange rate assumptions
(1.25 C$/US$, 1.20 EUR/US$, 18.00
US$/MXP) total capital expenditures are forecast to be
approximately $1.08 billion in 2018
and between $650 and $700 million in 2019 and 2020. Annual
sustaining capital expenditures (included in the above) for 2019
and beyond are expected to remain stable at approximately
$300 to $325
million.
"We are excited to transition into a larger production base in
Nunavut next year. We have also
built a platform to drive further production growth beyond
2020. We expect that this increase in production will result
in growth in free cash flow per share, which could potentially
translate into higher dividends", said David Smith, Agnico Eagle's Senior Vice
President, Finance and Chief Financial Officer.
_______________
|
5 Minesite
costs per tonne is a non-GAAP measure. For a reconciliation
of this measure to production costs as reported in the financial
statements, see "Reconciliation of Non-GAAP Financial Performance
Measures" below. See also "Note Regarding Certain Measures of
Performance.
|
Additional Near-Term Production Potential (2019 to
2022)
The Company is evaluating several potential opportunities (none
of which has yet been approved for construction with the exception
of the Kittila shaft) at a number of existing operations to build
further value and enhance the production profile in 2019 through
2022. These opportunities are summarized in the table
below.
Minesite/Region
|
Opportunity
|
LaRonde
Complex
|
Potential for phased
development of LaRonde 3 (located below a depth of 3.1 kilometres)
where recent drilling continues to encounter high grade gold
intersections. Also the potential to mine additional ounces
from LaRonde Zone 5 and other nearby satellite zones
|
Goldex
|
Potential for
increased throughput from Deep Zone 1 and potential for advanced
development of Deep Zone 2. Also potential for increased
production from the South Zone and Akasaba West once permitting is
complete
|
Canadian Malartic
(50%)
|
Potential production
from near pit zones and/or Odyssey South underground
|
Meadowbank
Complex
|
Potential to
accelerate development schedule and drilling to expand known open
pit deposits and evaluate the underground potential at the Whale
Tail and V zones
|
Meliadine
|
Potential to
accelerate original construction schedule, advancement of Phase 2
pit implementation and testing the depth and lateral extensions of
the Wesmeg, Normeg and Tiriganiaq zones
|
Kittila
|
Expansion to 2.0
mtpa, including optimization of the Rimpi and Sisar zones via a new
shaft
|
Pinos Altos/Creston
Mascota
|
Evaluation of
satellite zones including Cubiro, Reyna de Plata and
Madrono.
|
La India
|
Evaluation of
satellite zones including El Realito
|
Development Pipeline Expected to Provide Further Production
Growth Beyond 2022
Agnico Eagle has a strong pipeline of development projects that
could provide further production growth beyond 2022. These
opportunities are typically at an earlier stage than those outlined
above. A summary of the longer term opportunities are
presented in the table below.
Minesite/Region
|
Opportunity
|
Goldex
|
Evaluation of the G
and South zones and the Deep 3 Zone (below 1,500 metres)
|
Canadian Malartic
(50%)
|
Evaluation of the
potential for production from Odyssey North underground and East
Malartic underground
|
Kittila
|
Further optimization
of underground mine and development of the lower mine with shaft
access (below 1,000 metres)
|
Meadowbank
Complex
|
Continued evaluation
of the regional potential at Amaruq
|
Meliadine
|
Further drill testing
of known zones and gold occurrences on the 80-kilometre-long
greenstone belt
|
Barsele
|
Testing additional
mineralized zones and evaluation of production potential
|
Santa
Gertrudis
|
Evaluation of known
mineralized trends with a view to potentially restart operations at
this past producing heap leach mine
|
El
Barqueno
|
Continue resource
expansion and studies to potentially define an initial development
plan
|
Kirkland Lake
(50%)*
|
Potential production
scenario at Upper Beaver and potential synergies from development
of other properties in the region
|
Hammond Reef
(50%)*
|
Potential for
production in a higher gold price environment
|
|
* Agnico Eagle
entered into an agreement to purchase the remaining 50% interest in
these Canadian Malartic Corporation ("CMC") assets indirectly owned
by Yamana Gold Inc. ("Yamana") in December 2017. The
transaction is expected to close in the first quarter of
2018. For the purposes of this news release, it is assumed
that 100% of the CMC Projects will be conveyed to Agnico Eagle on
March 31, 2018. For additional details on the transaction see
the Company's news release dated December 21, 2017.
|
Three-Year Guidance Plan Outlines a Growing Production
Profile with Declining Unit Costs
Mine by mine production and cost guidance for 2018, and mine by
mine production forecasts for 2019 and 2020 are set out
below. Evaluation of opportunities to further optimize and
improve production and unit cost forecasts is ongoing.
Estimated Payable
Gold Production
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017
Actual
|
|
2018
Forecast
|
|
2019
|
|
2020
|
|
|
|
|
Forecast
|
|
Forecast
|
|
|
|
|
Range
|
|
Mid-Point
|
|
Range
|
|
Mid-Point
|
Northern
Business
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LaRonde
|
|
348,870
|
|
350,000
|
|
355,000
|
365,000
|
|
360,000
|
|
355,000
|
365,000
|
|
360,000
|
|
LaRonde Zone
5
|
|
515
|
|
20,000
|
|
30,000
|
35,000
|
|
32,500
|
|
40,000
|
45,000
|
|
42,500
|
Lapa
|
|
48,613
|
|
10,000
|
|
-
|
-
|
|
-
|
|
-
|
-
|
|
-
|
Canadian Malartic
(50%)
|
316,731
|
|
325,000
|
|
320,000
|
330,000
|
|
325,000
|
|
340,000
|
350,000
|
|
345,000
|
Goldex
|
|
118,947
|
|
115,000
|
|
110,000
|
120,000
|
|
115,000
|
|
125,000
|
135,000
|
|
130,000
|
Kittila
|
|
196,938
|
|
190,000
|
|
185,000
|
195,000
|
|
190,000
|
|
205,000
|
225,000
|
|
215,000
|
Meadowbank
|
|
352,526
|
|
220,000
|
|
55,000
|
65,000
|
|
60,000
|
|
-
|
-
|
|
-
|
|
Amaruq
Deposit
|
|
-
|
|
-
|
|
135,000
|
190,000
|
|
162,500
|
|
260,000
|
270,000
|
|
265,000
|
Meliadine
|
|
-
|
|
-
|
|
165,000
|
175,000
|
|
170,000
|
|
380,000
|
390,000
|
|
385,000
|
|
|
1,383,140
|
|
1,230,000
|
|
1,355,000
|
1,475,000
|
|
1,415,000
|
|
1,705,000
|
1,780,000
|
|
1,742,500
|
Southern
Business
|
|
|
|
|
|
-
|
-
|
|
|
|
-
|
-
|
|
|
Pinos
Altos
|
|
180,859
|
|
170,000
|
|
160,000
|
170,000
|
|
165,000
|
|
140,000
|
150,000
|
|
145,000
|
Creston
Mascota
|
|
48,384
|
|
35,000
|
|
25,000
|
35,000
|
|
30,000
|
|
10,000
|
15,000
|
|
12,500
|
La India
|
|
101,150
|
|
90,000
|
|
85,000
|
95,000
|
|
90,000
|
|
95,000
|
105,000
|
|
100,000
|
|
|
330,393
|
|
295,000
|
|
270,000
|
300,000
|
|
285,000
|
|
245,000
|
270,000
|
|
257,500
|
Total Gold
Production
|
|
1,713,533
|
|
1,525,000
|
|
1,625,000
|
1,775,000
|
|
1,700,000
|
|
1,950,000
|
2,050,000
|
|
2,000,000
|
Total cash costs per ounce on a by-product basis of gold
produced ($ per ounce):
|
|
2017
|
|
2018
|
|
|
Actual
|
|
Forecast
|
Northern
Business
|
|
|
|
|
LaRonde
|
|
$
|
406
|
|
$
|
447
|
|
LaRonde Zone
5
|
|
-
|
|
712
|
Lapa
|
|
755
|
|
1,079
|
Canadian Malartic
(50%)
|
|
576
|
|
586
|
Goldex
|
|
610
|
|
682
|
Kittila
|
|
753
|
|
830
|
Meadowbank
|
|
614
|
|
893
|
|
|
$
|
577
|
|
$
|
654
|
Southern
Business
|
|
|
|
|
Pinos
Altos
|
|
395
|
|
569
|
Creston
Mascota
|
|
575
|
|
913
|
La India
|
|
580
|
|
651
|
|
|
$
|
478
|
|
$
|
635
|
Total
|
|
$
|
558
|
|
$
|
650
|
Currency and commodity assumptions used for 2018 cost estimates
and sensitivities are presented in the table below:
2018 commodity and
currency
price assumptions
|
Approximate impact
on total cash
costs per ounce basis
|
Silver
($/oz)
|
17.50
|
$1 / oz change in
silver price
|
$3
|
Copper
($/mt)
|
6,614
|
10% change in copper
price
|
$2
|
Zinc
($/mt)
|
3,086
|
10% change in zinc
price
|
$1
|
Diesel
(C$/ltr)
|
0.80
|
10% change in diesel
price
|
$3
|
C$/US$
|
1.25
|
1.0% change in
C$/US$
|
$4
|
EURO$/US$
|
1.20
|
1.0% change in
EURO$/US$
|
$1
|
US$/MXP
|
18.00
|
10% change in
US$/MXP
|
$5
|
In 2019, the estimated mid-point production level is currently
forecast to be approximately 1.70 million ounces of gold, increased
from the 1.60 million ounces in the February
2017 forecast. The Company is currently evaluating
potential opportunities to further optimize and improve production
levels in 2019 and beyond (see discussion below for additional
details).
In 2020, the estimated mid-point production level is currently
forecast to be approximately 2.0 million ounces of gold, which is
in line with the February 2017
forecast.
In 2019 and 2020, the Company expects total cash costs per ounce
and AISC to be below the 2018 ranges when using the same currency
and commodity assumptions as described above.
Depreciation Guidance
Agnico Eagle expects its 2018 depreciation and amortization
expense to be between $525 and
$575 million.
General & Administrative Cost Guidance
Agnico Eagle expects 2018 general and administration expense to
be between $75 and $85 million, excluding share based compensation.
In 2018, share based compensation expense is expected to be
between $30 and $40 million (including non-cash stock option
expense of between $15 and
$20 million).
Please see the supplemental financial data section of the
Financial and Operating Database on the Company's website for
additional historical financial data.
Tax Guidance for 2018
For 2018, the Company expects its effective tax rates to be:
Canada - 40% to 50%
Mexico - 35% to 40%
Finland - 20%
The Company's overall tax rate is expected to be between 40% and
45%.
Updated Three Year Guidance Plan
Since the prior three-year gold production guidance of
February 15, 2017 ("Previous
Guidance"), there have been several operating developments
resulting in changes to the overall three-year production
profile. Descriptions of these changes are set out below.
Northern Business
ABITIBI REGION, QUEBEC
LaRonde
Forecast
|
2017
|
2018
|
2019
|
2020
|
Previous Guidance
(oz)
|
315,000
|
360,000
|
365,000
|
n.a.
|
Current Guidance
(oz)
|
348,870
(actual)
|
350,000
|
360,000
|
360,000
|
LaRonde Forecast
2018
|
Ore Milled
('000 tonnes)
|
Gold (g/t)
|
Gold Mill
Recovery
(%)
|
Silver
(g/t)
|
Silver Mill
Recovery
(%)
|
Zinc (%)
|
Zinc Mill
Recovery
(%)
|
Copper (%)
|
Copper Mill
Recovery
(%)
|
Minesite
Costs per
Tonne
|
|
2,190
|
5.20
|
95.7%
|
18.64
|
77.7%
|
0.47%
|
67.5%
|
0.25%
|
82.2%
|
C$115
|
At LaRonde, the slightly lower production guidance for 2018 and
2019 (as compared to Previous Guidance) is primarily due to minor
changes in the mining sequence. The year-over-year production
forecasts through 2020 largely reflect an increase in grade closer
to that of the average mineral reserves as mining fully
transistions to the higher grade areas in the lower mine.
LaRonde Zone 5
Forecast
|
2017
|
2018
|
2019
|
2020
|
Previous Guidance
(oz)
|
n.a.
|
20,000
|
35,000
|
n.a.
|
Current Guidance
(oz)
|
515
(actual)
|
20,000
|
32,500
|
42,500
|
LaRonde Zone 5
2018
|
Ore Milled
('000 tonnes)
|
Gold (g/t)
|
Gold Mill
Recovery
(%)
|
Minesite
Cost Per
Tonne
|
Guidance
|
325
|
2.10
|
91.5%
|
C$55
|
LaRonde Zone 5 was approved for development in February 2017 and full permits were received in
2017. During the third quarter of 2017, a 7,700 tonne bulk
sample of development ore was processed at the Lapa gold circuit
(part of the LaRonde metallurgical complex) yielding 515 ounces of
gold. This bulk sample validated the metallurgical and pastefill
parameters. The revenue from the pre-commercial production
was deducted from the capital expenditures of the project.
Commercial production is expected to be achieved in the
third quarter of 2018. For additional technical details on
the project see the Company's news release dated February 15, 2017.
Lapa
Forecast
|
2017
|
2018
|
2019
|
2020
|
Previous Guidance
(oz)
|
15,000
|
-
|
-
|
n.a.
|
Current Guidance
(oz)
|
48,613
(actual)
|
10,000
|
n.a.
|
n.a.
|
Lapa Forecast
2018
|
Ore Milled
('000 tonnes)
|
Gold (g/t)
|
Gold Mill
Recovery
(%)
|
Minesite
Costs per
Tonne
|
|
100
|
3.75
|
83.0%
|
C$135
|
Mining operations at Lapa continued through year-end 2017 and
into the first quarter of 2018, with ore being stockpiled for
processing in 2018. Milling operations are now expected to
resume in March 2018 with processing
of Lapa ore expected to continue through to the commencement of
production from LaRonde Zone 5.
Canadian Malartic
Forecast
|
2017
|
2018
|
2019
|
2020
|
Previous Guidance
(oz)
|
300,000
|
325,000
|
320,000
|
n.a.
|
Current Guidance
(oz)
|
316,731
(actual)
|
325,000
|
325,000
|
345,000
|
Canadian Malartic
Forecast 2018
|
Ore Milled
('000 tonnes)
|
Gold (g/t)
|
Gold Mill
Recovery (%)
|
Minesite
Costs per Tonne
|
|
10,010
|
1.14
|
89.0%
|
C$25
|
At Canadian Malartic (in which Agnico Eagle has 50% ownership),
guidance for 2018 and 2019 is essentially unchanged from Previous
Guidance. Production in 2020 is expected to increase
primarily due to the mining of higher grades in the Barnat pit
(part of the Barnat expansion project).
Goldex
Forecast
|
2017
|
2018
|
2019
|
2020
|
Previous Guidance
(oz)
|
105,000
|
115,000
|
120,000
|
n.a.
|
Current Guidance
(oz)
|
118,947
(actual)
|
115,000
|
115,000
|
130,000
|
Goldex Forecast
2018
|
Ore Milled
('000 tonnes)
|
Gold (g/t)
|
Gold Mill
Recovery
(%)
|
Minesite
Costs per
Tonne
|
|
2,450
|
1.57
|
93.0%
|
C$40
|
At Goldex, guidance in 2018 and 2019 is essentially unchanged
from Previous Guidance. Production in 2020 is expected to
increase with the proposed start-up of operations at the Akasaba
West deposit.
Agnico Eagle acquired the Akasaba West gold-copper deposit in
January 2014. Located less than 30 kilometres from Goldex,
the Akasaba West deposit is expected to create flexibility and
synergies for the Company's operations in the Abitibi region by
utilizing extra milling capacity at both Goldex and LaRonde, while
reducing overall costs. The permitting process is ongoing and
the Company expects to begin sourcing open pit ore from Akasaba
West in 2020.
NUNAVUT REGION
Meadowbank
Forecast
|
2017
|
2018
|
2019
|
2020
|
Previous Guidance
(oz)
|
320,000
|
165,000
|
-
|
n.a.
|
Current Guidance
(oz)
|
352,526
(actual)
|
220,000
|
60,000
|
-
|
Meadowbank
Forecast 2018
|
Ore Milled
('000 tonnes)
|
Gold (g/t)
|
Gold Mill
Recovery
(%)
|
Minesite
Costs per
Tonne
|
|
3,275
|
2.30
|
90.9%
|
C$76
|
At Meadowbank, guidance for 2018 has increased over Previous
Guidance and production has been extended into 2019, which bridges
the gap between the cessation of mining activities at Meadowbank
and the expected start of operations at Amaruq in the third quarter
of 2019. The additional production comes from an extension of
the mine plan at the Vault and Phaser pits in 2018 and the Portage
pit in 2018 and 2019. In addition, production will be
supplemented from stockpiles in 2018 and 2019.
Amaruq
Forecast
|
2017
|
2018
|
2019
|
2020
|
Previous Guidance
(oz)
|
n.a.
|
n.a.
|
135,000
|
255,000
|
Current Guidance
(oz)
|
n.a.
|
n.a.
|
162,500
|
265,000
|
The Amaruq satellite deposit at Meadowbank was approved for
development in February 2017, pending
the receipt of the required permits that are currently expected to
be received late in the secondquarter of 2018. In late 2017,
the Company completed an internal technical study on the Amaruq
deposit. The results of this study are being incorporated
into a new National Instrument 43-101 Standards of Disclosure for
Mineral Projects ("NI 43-101") technical report for the Meadowbank
Complex, which is expected to be filed in March 2018.
Production is currently forecast to begin in the third quarter
of 2019 (approximately four to five months of production in
2019). Production in 2019 is expected to be between 135,000
and 190,000 ounces, with a mid-point of 162,500 ounces. In
2020, production is expected to be between 260,000 and 270,000
ounces, with a mid-point of 265,000 ounces, which is a slight
improvement over Previous Guidance. In 2019 and 2020, the
increase over Previous Guidance is largely due to a more robust
mining plan outlined in the updated technical study. The
Company continues to investigate additional opportunities to
optimize the mining plan at Amaruq.
Additional details on the project (including updated operational
parameters) are described below.
Meliadine
Forecast
|
2017
|
2018
|
2019
|
2020
|
Previous Guidance
(oz)
|
n.a.
|
n.a.
|
125,000
|
375,000
|
Current Guidance
(oz)
|
n.a.
|
n.a.
|
170,000
|
385,000
|
The Meliadine project was approved for development in February
2017. Given the progress of construction and development
activities in 2017, and the acceleration of capital spending from
2019 into 2018, the mine is now expected to begin production in the
second quarter of 2019, which is approximately one quarter ahead of
previous forecasts. The production forecast has the potential
to further increase in 2019 depending on the progress of
development at the Meliadine project.
FINLAND
Kittila
Forecast
|
2017
|
2018
|
2019
|
2020
|
Previous Guidance
(oz)
|
190,000
|
200,000
|
210,000
|
n.a.
|
Current Guidance
(oz)
|
196,938
(actual)
|
190,000
|
190,000
|
215,000
|
Kittila Forecast
2018
|
Ore Milled
('000 tonnes)
|
Gold (g/t)
|
Gold Mill
Recovery
(%)
|
Minesite
Costs per
Tonne
|
|
1,685
|
4.08
|
86.0%
|
€
78.00
|
At Kittila, guidance for 2018 and 2019 is slightly below the
Previous Guidance due to a re-evaluation of the block model based
on reconciliation data. This has resulted in slightly lower
grades in the planned mining areas for 2018 and 2019, which has led
to a reduction in expected production levels over the next two
years. In 2017, the Company validated the potential to
increase throughput rates to 2.0 mtpa from the then current rate of
1.6 mtpa. As a result, the Company's Board of Directors has
approved the expansion of the Kittila mine, which will include a
mill modification and installation of a 1,044 metre deep shaft.
The increased throughput rate is further supported by additional
drilling that has yielded favourable results in the Rimpi and Sisar
zones (see the Kittila operational section below for recent drill
results).
The new production guidance for 2020 reflects the partial impact
of the expansion (starting in late 2020). Additional details
on the expansion project (including operational parameters) are
described below.
Southern Business
Pinos Altos
Forecast
|
2017
|
2018
|
2019
|
2020
|
Previous Guidance
(oz)
|
170,000
|
175,000
|
175,000
|
n.a.
|
Current Guidance
(oz)
|
180,859
(actual)
|
170,000
|
165,000
|
145,000
|
Pinos Altos
Forecast 2018
|
Total Ore
('000 tonnes)
|
Gold (g/t)
|
Gold
Recovery (%)
|
Silver
(g/t)
|
Silver Mill
Recovery (%)
|
Minesite
Costs per
Tonne
|
|
2,230
|
2.50
|
94.9%
|
57.00
|
58.0%
|
$
62
|
At Pinos Altos, guidance for
2018 is slightly lower than Previous Guidance as open pit mining
activities are expected to be completed by mid-year. The
decrease in 2019 production compared to Previous Guidance reflects
the introduction of lower grade ore from the Sinter deposit.
Studies are ongoing to evaluate the potential to develop other
satellite zones such as Cubiro and Reyna de Plata.
Creston Mascota
Forecast
|
2017
|
2018
|
2019
|
2020
|
Previous Guidance
(oz)
|
40,000
|
30,000
|
5,000
|
n.a.
|
Current Guidance
(oz)
|
48,384
(actual)
|
35,000
|
30,000
|
12,500
|
Creston Mascota
Forecast 2018
|
Total Ore
('000 tonnes)
|
Gold (g/t)
|
Gold
Recovery
(%)
|
Silver
(g/t)
|
Silver
Recovery
(%)
|
Minesite
Costs per
Tonne
|
|
1,770
|
1.01
|
60.9%
|
19.72
|
24.1%
|
$
21
|
At Creston Mascota, guidance in 2018 and 2019 reflects the
addition of the Bravo deposit into
the mine plan (due to conversion of mineral resources to mineral
reserves). The increase in the minesite cost per tonne at
Creston Mascota in 2018 (as compared to prior years) is affected by
increased waste stripping (primarily at Bravo) and higher fuel costs relating to
longer trucking distances. Costs are expected to return to
levels that are more typical in 2019. Exploration is focused
on expanding mineral reserves and mineral resources to sustain and
grow production past 2019.
La India
Forecast
|
2017
|
2018
|
2019
|
2020
|
Previous Guidance
(oz)
|
100,000
|
110,000
|
110,000
|
n.a.
|
Current Guidance
(oz)
|
101,150
(actual)
|
90,000
|
90,000
|
100,000
|
La India Forecast
2018
|
Total Ore
('000 tonnes)
|
Gold (g/t)
|
Gold
Recovery
(%)
|
Silver
(g/t)
|
Silver
Recovery
(%)
|
Minesite
Costs per
Tonne
|
|
6,000
|
0.74
|
63.0%
|
2.72
|
15.7%
|
$
10
|
At La India, guidance in 2018 and 2019 is below Previous
Guidance reflecting changes in the grade, mining sequence and lower
recoveries. Production in 2020 is expected to return to
levels that are more in line with average historical
production.
Studies are ongoing to evaluate the potential to develop other
satellite zones such as El Cochi
and El Realito.
Amaruq Project – Initial Mineral Reserves Declared;
Budget and Schedule Remain on Track for Start-up in the Third
Quarter of 2019
Agnico Eagle has a 100% interest in the Amaruq project at
Meadowbank, which includes the Whale Tail and V Zone deposits. The
project is located on a large 99,878 hectare property,
approximately 50 kilometres northwest of the Meadowbank mine.
A significant gold discovery was made on the property in 2013, and
activities since that time have focused on the development of
satellite mineralization to feed the existing Meadowbank mill.
In February 2017, the Company's
Board of Directors approved the Amaruq project for development
pending the receipt of the required permits. During the
course of 2017, activities continued with the intent of bringing
the project into production in the third quarter of 2019.
A conventional open pit mining operation is forecast to begin on
the Whale Tail deposit in the third quarter of 2019. Other
satellite deposits, such as the V Zone, are expected to be included
into the mine plan pending receipt of additional permitting.
This mining operation will utilize the existing infrastructure at
the Meadowbank mine (mining equipment, mill, tailings, camp and
airstrip). Additional infrastructure will be built at the
Amaruq site (truck shop/warehouse, fuel storage and a larger camp
facility). In addition, a new truck fleet will be required
for hauling ore to the Meadowbank mill.
The project will be accessed by a 64-kilometre road from the
Meadowbank site. This road was completed as an exploration
road in August 2017, and the Company
expects to expand it to a production road once all of the necessary
permits are received. The ore will be hauled to the
Meadowbank mill using off-road type trucks and the mill is expected
to operate at 9,000 tonnes per day ("tpd"). The mill will
require minor modifications, specifically the addition of a
continuous gravity and regrind circuit.
The initial plan calls for the production of approximately 2.1
million ounces of gold between 2019 and 2024, with pre-mining
activities starting in 2018 at the Whale Tail deposit, leaving
approximately 60% of the current mineral reserve and mineral
resource base uncovered by the mine plan.
The Whale Tail Project is currently in the permitting
process. Once the Federal Minister of Indigenous and Northern
Affairs Canada ("INAC") approves the project, the Nunavut Impact
Review Board will be in a position to finalize the Whale Tail
Project Certificate (the "WTPC"). Once the WTPC is finalized,
the Company expects the Nunavut Water Board will finalize the Whale
Tail Water License A for submission to INAC for final
approval. The Company expects that the final approvals for
the Whale Tail project will be received late in the second quarter
of 2018.
In 2017, capital expenditures at Amaruq were $89 million, compared to guidance of $100 million. Amaruq capital expenditures
were included with Meadowbank development capital expenditures
disclosed for 2017. Key activities included the completion of
the exploration road from the Meadowbank mine, approximately 98,000
metres of exploration drilling (details are provided in the
Meadowbank operational section below), the construction of a portal
for the development of an underground ramp starting in 2018,
testing of ore haulage trucks and completion of the updated
technical study.
Amaruq Operating Parameters Updated in New Technical Study
In late 2017, the Company completed an updated technical study
on the Amaruq deposit, the results of which are being incorporated
into a new NI 43-101 technical report for the Meadowbank Complex,
that is expected to be filed in March 2018.
At December 31, 2017, the Amaruq
satellite deposit at Meadowbank was estimated to contain an open
pit mineral reserve of 2.4 million ounces (20.1 million tonnes
grading 3.67 g/t gold), an open pit and underground indicated
mineral resource of 1.0 million ounces (8.8 million tonnes grading
3.62 g/t gold) and an open pit and underground inferred mineral
resource of 1.7 million ounces (8.7 million tonnes grading 6.25 g/t
gold). Further details on the mineral resources are set
out in the mineral reserve and mineral resource section of
this news release.
Updated Amaruq operating parameters from the NI 43-101 technical
report and the updated guidance for 2018 are set out in the table
below.
Amaruq Project
Summary
|
|
|
|
|
|
Estimated
Production
|
2,093,922 gold
ounces
|
Average
metallurgical recovery
|
Approximately
93%
|
Average Annual
gold production
|
Approximately 135,000
to 190,000 ounces, mid-point 162,500 ounces (2019)
|
|
Approximately 260,000
to 270,000 ounces, mid-point 265,000 ounces (2020)
|
|
Approximately 332,500
ounces (2021)
|
|
Approximately 421,000
ounces (2022 to 2024)
|
|
|
Average Annual
Mill throughput
|
Approximately
1,642,500 tonnes (2019)
|
|
Approximately
3,285,000 tonnes (2020 to 2024)
|
|
|
Minesite costs per
tonne
|
Approximately C$115
to C$120 per tonne milled (Life of Mine)
|
|
|
Average total cash
costs on a by-product basis
|
Approximately $800 to
$840 per ounce of gold produced (Life of Mine)
|
Average all-in
sustaining costs per ounce
|
Approximately $910 to
$920 per ounce of gold produced (Life of Mine)
|
|
|
Mine
life
|
Approximately 6
years
|
Initial capital
costs
|
Approximately $330
million
|
Sustaining capital
costs
|
Approximately $25
million per year
|
Reclamation
costs
|
Approximately $25
million
|
|
|
|
Economic
Analysis:
|
|
US$1,200 per ounce
gold
|
|
US$/C$ exchange rate
of $1.25
|
|
Statutory income tax
rate: Approximately 26%
|
The main differences in the new operating parameters compared to
the 2017 guidance (see the Company's news release dated
February 15, 2017) are slightly
higher minesite costs per tonne, which results in slightly higher
total cash costs. The increase in minesite costs per tonne
relates primarily to the need to mine additional waste tonnes in
the updated 2017 mining plan, and a slight increase in labour costs
and materials.
The Company has also provided more conservative production
guidance for 2019 and 2020 compared to the NI 43-101 technical
report in order to reflect the start-up of mining activities.
However, the new guidance for 2019 and 2020 is higher than
the forecasts presented in the Company's news release dated
February 15, 2017.
Initial capital costs and sustaining capital costs are unchanged
from previous 2017 guidance at approximately $330 million, and approximately $25 million per year respectively. Mine
reclamation costs are now estimated to be approximately
$25 million (an increase of
$9 million over the 2017
estimate).
2018 Amaruq Activities – Continued Focus on Exploration, Site
Development Activities and Installation of the Underground
Exploration Ramp
Capital expenditures at Amaruq in 2018 are forecast to be
approximately $175 million, which is
an increase of approximately $15
million over the previous guidance. The increase
largely relates to the accelerated procurement of additional
equipment and materials for the 2018 sealift.
Given the exploration drilling success at depth below the
planned open pits (see the summary of Amaruq 2017 exploration
activities in the Meadowbank operations section below), it was
decided to begin excavation of a portal and underground ramp in
late 2017. The first round of the ramp was blasted in early
January 2018, and approximately 1,210
metres of underground development is planned for 2018 at a cost of
approximately $21 million, which will
be expensed and not included in capital costs. The
main purpose of building the ramp is to carry out additional
exploration drilling and evaluate the potential for underground
mining activities at both the Whale Tail and V zones.
The first phase of a planned 67,000-metre exploration drill
program (costing approximately $14.2
million) and a 14,900-metre delineation drill program
(costing approximately $2.4 million)
commenced in February 2018. The goals of the
exploration drill program are to:
- Infill and expand the known mineral resource at the V Zone
- Test for westerly extensions of the Whale Tail deposit
- Further evaluate the underground potential of the Whale Tail
deposit and the V Zone
- Test other favourable targets to potentially outline additional
sources of open pit ore
The estimated capital budget for the Amaruq satellite deposit at
Meadowbank in 2019 is approximately $66
million. Work will be focused on site development
(primarily dykes and surface infrastructure) and pre-stripping
activities ahead of the proposed commencement of mining in the
third quarter of 2019.
Meliadine Project – Production Now Expected to Begin
in the Second Quarter of 2019, Approximately One Quarter Ahead of
Previous Forecasts; Project Remains On Budget
Located near Rankin Inlet, Nunavut,
Canada, the Meliadine project was acquired in July 2010, and is Agnico Eagle's largest gold
deposit in terms of mineral resources. The Company owns 100%
of the 111,757 hectare property.
The forecast parameters surrounding the Company's proposed
Meliadine operations below were based on a preliminary economic
assessment, which is preliminary in nature and include inferred
mineral resources that are too speculative geologically to have
economic considerations applied to them that would enable them to
be categorized as mineral reserves and there is no certainty that
the forecast production amounts will be realized. The basis
for the preliminary economic assessment and the qualifications and
assumptions made by the qualified person who undertook the
preliminary economic assessment are set out in this news
release. The results of the preliminary economic assessment
had no impact on the results of any pre-feasibility or feasibility
study in respect of Meliadine.
In February 2017, Company's Board
of Directors approved the construction of the Meliadine
project. The mine was forecast to begin operations in the
third quarter of 2019. However, given the progress
of construction and development activities in 2017, the
Meliadine project is now expected to begin production in the second
quarter of 2019.
With the advancement of the production schedule, new guidance
estimates 2019 gold production of approximately 170,000 ounces,
compared to previous guidance of 125,000 ounces. In 2020,
production guidance has been increased to 385,000 ounces of gold
from the previous guidance of 375,000 ounces.
At December 31, 2017, the
Meliadine property was estimated to contain proven and probable
mineral reserves of 3.7 million ounces of gold (16.0 million tonnes
grading 7.12 g/t gold), indicated mineral resources of 3.1 million
ounces of gold (25.3 million tonnes grading 3.77 g/t gold) and
inferred mineral resources of 2.7 million ounces of gold (13.8
million tonnes grading 6.04 g/t gold). In addition, there are
numerous other known gold occurrences along the 80-kilometre-long
greenstone belt that require further evaluation.
In a comparison with the 2016 mineral reserve and mineral
resources estimate, the increase in mineral reserves relates
primarily to the conversion of indicated mineral resources, while
the slight decline in grade is primarily due to a change in reserve
parameters. The decrease in indicated mineral resources
relates primarily to the conversion to mineral reserves, while the
decline in grade is mainly due to the application of the Mine Stope
Optimization ("MSO") process, which removes small and isolated
blocks from various deposits. The decline in the grade and
the contained ounces of the inferred mineral resources is mainly
due to the application of the MSO process.
Production is now forecast to be approximately 5.7 million
ounces of gold over a 15 year mine life. This compares to
previous production guidance in 2017 of approximately 5.3 million
ounces of gold over a 14 year mine life. The current
production forecast represents approximately 60% of the known
mineral reserve and mineral resource base. For additional
technical details on the project see the Company's news release
dated February 15, 2017.
Update on Meliadine Development Activities in 2017
The total initial capital cost of the Meliadine project remains
unchanged at $900 million. Last
year the Company spent approximately $372
million, which was in line with the updated guidance set out
in the Company's new release dated October
25, 2017.
Key activities in 2017 included:
- Full enclosure of the mill, administration/warehouse and
generator buildings
- All arctic corridors in place with glycol heating system
operational
- Completion of the camp complex with nine wings
- Installation of underground ventilation and heating completed
in December
- Completion of a fuel storage tank in Rankin Inlet and onsite
- Successful commissioning of surface utilities (potable water,
sewage and effluent treatment plant, boilers, heating system,
generators and incinerator)
- 5,551 metres of underground development (including the start of
a second ramp system from underground)
- Construction of second ramp portal from surface
- Approximately 18,000 metres of conversion drilling (focused on
the Pump and Wesmeg zones) and approximately 12,000 metres of
delineation drilling
- Over 55% of the 2018 and 2019 stopes have been delineated
2018 Activities and Additional Opportunities to Create Value at
Meliadine
Given the strong progress made on the project in 2017, capital
spending in 2018 is now forecast to be approximately $398 million, which is an increase of
approximately $18 million over the
2018 forecast presented last year. This acceleration of
capital spending is expected to result in the commencement of
production in the second quarter of 2019, approximately one quarter
ahead of previous forecast. The remaining project capital to
be spent in 2019 is forecast to be approximately $130 million.
Key activities in 2018 are planned to include:
- Approximately 9,475 metres of underground development
- Accelerated conversion drill program at Tiriganiaq from surface
using a directional drill rig
- Approximately 19,000 metres of conversion drilling and
approximately 10,000 metres of minesite exploration
drilling
- Award remaining procurement packages by the first quarter of
2018, with follow up for delivery on the 2018 sealift
- Completion of Rankin Inlet
by-pass road before the 2018 sealift
- Continue installation of mechanical, piping, electrical wiring
and instrumentation in the process plant for commissioning in the
first quarter of 2019
- Completion of the multi services building
- Installation of SAG mill and completion of CIL tanks following
the 2018 sealift
- A 7,000 metre regional exploration drill program
The Company believes that there are numerous opportunities to
create additional value, both at the mine and on the large land
package. These include:
- Optimization of the current mine plan (advance Phase 2 pit
implementation)
- Potential to optimize labour costs once the mine is in
operation (via improved use of telecommunications)
- Minesite exploration upside through mineral resource conversion
and expansion of known ore zones (most zones are open below a
vertical depth of 450 metres)
- Potential for the discovery of new deposits along the 80
kilometre-long greenstone belt
Kittila Expansion Approved for Construction – Increased
Production and Lower Operating Costs Expected By 2021
In 2017, the Company reviewed the potential to increase
throughput rates at Kittila to 2.0 mtpa from the current rate of
1.6 mtpa. Based on this review, the Company's Board of
Directors has approved the expansion, which includes the
construction of a 1,044 metre deep shaft, a processing plant
expansion as well as other infrastructure and service upgrades.
The expansion project is expected to increase the efficiency of
the mine and decrease or maintain current operating costs while
providing access to the deeper mining horizons. In addition,
the shaft is expected to provide access to the mineral resource
areas below 1,150 metres, where recent exploration programs have
shown promising results (see Kittila operating section for recent
exploration drill results).
The total capital cost for the expansion project is
approximately 160 million euros with
phased expenditures from 2018 through 2021. Additional
details on the project include:
- Installation of a 1,044 metre deep shaft with hoisting capacity
of 2.7 mtpa (2.0 mtpa of ore and 0.7 mtpa of waste)
- Four phase mill expansion to increase throughput from the
current level of 1.6 mtpa to 2.0 mtpa by 2021
- Mill expansion will involve installation of a secondary
crushing circuit, new thickener and reactor capacity, and minor
modifications to the existing grinding circuit and autoclave
- Total capital cost to first ounce is approximately 160 million euros (which includes approximately
120 million euros for the shaft and
40 million euros for the mill
expansion)
- Average annual gold production is expected to increase by
50,000 to 70,000 ounces per year starting in 2021
Kittila Expansion Parameters
|
|
|
Average annual mill
throughput
|
mtpa
|
2.0
|
Average mill
recovery
|
%
|
86%
|
Average gold
grade
|
g/t
|
4.64
|
Average annual gold
production
|
ozs
|
250,000 to
260,000
|
Average total cash
costs per ounce
|
US$
|
$685-$700
|
Life-of-mine
|
years
|
14
|
2018 capital
cost
|
million
euros
|
21
|
2019 capital
cost
|
million
euros
|
70
|
2020 capital
cost
|
million
euros
|
58
|
2021 capital
cost
|
million
euros
|
11
|
Exchange
rate
|
euro:US$
|
1.2
|
Gold price
|
US$
|
1,300
|
Gold price
|
euro
|
1,083
|
Capital Expenditures Expected to Decline Significantly After
Startup of Nunavut Operations in 2019; Sustaining Capital
Costs Stable through 2020
Based on the Company's budget assumptions, the Company expects
to fund this year's capital expenditures, which are estimated to
total approximately $1.08 billion,
from operating cash flow and expected cash balances.
The estimated capital expenditures for 2018 include
approximately $267 million of
sustaining capital at the Company's operating mines and
$796 million on growth projects, as
set out in the table below. Additionally, approximately
$22 million is estimated to be spent
on capitalized exploration and approximately $137 million on expensed exploration and project
evaluation.
Estimated 2018
Capital Expenditures
|
|
|
|
|
(In thousands of
US dollars)
|
|
|
|
|
|
|
|
|
|
|
|
Sustaining
Capital
|
Development
Capital
|
Capitalized
Exploration
|
|
|
|
|
|
LaRonde
mine
|
|
$
|
74,700
|
$
|
8,300
|
$
|
2,100
|
LaRonde Zone 5
deposit
|
|
3,800
|
14,300
|
-
|
Canadian Malartic
mine
|
|
53,900
|
37,900
|
-
|
Meadowbank
mine
|
|
14,600
|
-
|
-
|
Amaruq
deposit
|
|
-
|
175,000
|
2,400
|
Kittila
mine
|
|
56,300
|
104,300
|
3,600
|
Goldex
mine
|
|
20,800
|
25,100
|
5,200
|
Lapa mine
|
|
-
|
-
|
-
|
Pinos Altos
mine
|
|
30,200
|
3,600
|
300
|
Creston Mascota
deposit at Pinos Altos
|
|
3,600
|
15,300
|
1,900
|
La India
mine
|
|
7,900
|
13,200
|
400
|
Meliadine
project
|
|
-
|
398,400
|
5,600
|
Other
|
|
1,300
|
200
|
-
|
Total Capital
Expenditures
|
|
$
|
267,100
|
$
|
795,600
|
$
|
21,500
|
2018 Exploration Program and Budget – Main Focus on Amaruq,
Canadian Malartic mine, New Zone at LaRonde 3, Barsele, the
Sisar Zone at Kittila, Satellite Targets at Pinos Altos and La India, Santa Gertrudis and El Barqueno
A large component of the 2018 exploration program will be
focused on the Amaruq satellite deposit at Meadowbank in
Nunavut, the LaRonde 3 deep
deposit, the Barsele project in Sweden, the Sisar Zone at the Kittila mine in
Finland, satellite targets at the
Pinos Altos and La India mines in
Mexico, the Santa Gertrudis project in Sonora State,
Mexico and the El Barqueno project in Jalisco State,
Mexico. The goal of these exploration programs is to
delineate mineral reserves and mineral resources that can
supplement the Company's existing production profile.
At the Amaruq satellite deposit at Meadowbank, the first phase
of a planned 67,000-metre drill program (costing approximately
$14.2 million) commenced in January,
2018. The goals of this program are to:
- Infill and expand the known mineral resource at the V Zone
- Test for westerly extensions of the Whale Tail deposit
- Further evaluate the underground potential of the Whale Tail
deposit
- Test other favourable targets to potentially outline additional
sources of open pit ore
At the Canadian Malartic mine the exploration will be focused on
the Odyssey and East Malartic
deposits, drilling 140,000 metres at an estimated cost of
$8.6 million (50% basis for
costs).
At the LaRonde 3 deposit, approximately 16,900 metres of
drilling is expected for both conversion and exploration
drilling. Exploration expenditures in 2018 are expected to
total approximately $2.7 million.
At Barsele, approximately 35,000 metres of drilling (costing
approximately $6.9 million) will be
carried out with a focus on expanding the mineral resources along
strike and at depth, and testing the gap between the Central and
Avan zones.
At Kittila, approximately $7.6
million will be spent on 31,000 metres of further deep
drilling (including the Sisar Zone). The goal of this program
is to expand the mineral resources in the Northern part of the
property and demonstrate the economic potential of the Sisar Zone
as a new mining horizon at Kittila.
At Pinos Altos and Creston
Mascota, approximately 27,000 metres of drilling is planned to
explore satellite mining opportunities, like Cubiro, Reyna de Plata
and Calera with the objective of sustaining and expanding
production through mineral resource expansion. Exploration
expeditures in 2018 are expected to total approximately
$5.0 million.
At La India, approximately 38,000 metres of drilling (costing
approximately $8.8 million) will
target mineral resource expansion (at El
Realito and Los Tubos) and conversion (at El Cochi) to extend minelife.
Approximately 35,000 metres of additional drilling is expected
to be completed by the end of 2018 at the El Barqueno project,
principally at the El Rayo,
Tolteca, Mortero, Tierra Blanca, and Cebollas areas within the
south area of the El Barqueno project. Exploration
expenditures in 2018 are expected to total approximately
$9.7 million. The objective is
to expand the mineral resource and define an initial development
plan.
At the recently acquired Santa
Gertrudis project in Sonora,
Mexico, approximately 28,000 metres of drilling will be
focused on the evaluation of known mineralized at this past
producing heap leach mine. Exploration expenditures are expected to
be $7.2 million.
2018 Global Exploration program and budget including
expenditures and metres of drilling
|
|
|
Location/operation
|
Expensed
exploration
|
Capitalized
exploration
|
|
US$
millions
|
000
metres
|
US$
millions
|
000
metres
|
Nunavut
|
|
|
|
|
|
Amaruq
|
14.2
|
67.0
|
2.4
|
14.9
|
|
Amaruq
ramp
|
20.8
|
|
|
|
|
Meliadine
|
2.0
|
7.0
|
5.6
|
29.0
|
|
Others
|
7.0
|
20.5
|
|
|
Nunavut
subtotal
|
44.0
|
94.5
|
8.0
|
43.9
|
Quebec
|
|
|
|
|
|
LaRonde
|
2.7
|
16.9
|
2.1
|
17.9
|
|
Goldex
|
1.1
|
10.0
|
5.2
|
63.9
|
|
Others
|
1.2
|
9.0
|
|
|
Quebec
subtotal
|
5.0
|
35.9
|
7.3
|
81.8
|
|
Canadian Malartic
mine*
|
8.6
|
140.0
|
|
|
Canadian Malartic
Corporation projects
|
|
|
|
|
|
Kirkland Lake
projects, (including Upper Beaver)**
|
5.4
|
20.0
|
|
|
|
Others**
|
2.1
|
|
|
|
Canadian
Malartic Corporation subtotal
|
16.1
|
160.0
|
-
|
-
|
Europe
|
|
|
|
|
|
Kittila incl.
Kuotko
|
7.6
|
31.0
|
3.6
|
22.0
|
|
Barsele
|
6.9
|
35.0
|
|
|
|
Others
|
1.6
|
7.0
|
|
|
Europe
subtotal
|
16.1
|
73.0
|
3.6
|
22.0
|
USA
|
7.0
|
11.8
|
|
|
USA
subtotal
|
7.0
|
11.8
|
0.0
|
0.0
|
Mexico
|
|
|
|
|
|
Pinos Altos, Creston
Mascota
|
5.0
|
27.0
|
2.2
|
12.1
|
|
La India
|
8.8
|
38.0
|
0.4
|
2.0
|
|
El
Barqueno
|
9.7
|
35.0
|
|
|
|
Santa
Gertrudis
|
7.2
|
28.0
|
|
|
|
Others
|
2.4
|
6.0
|
|
|
Mexico
subtotal
|
33.1
|
134.0
|
2.6
|
14.1
|
G&A, land
fees, etc.
|
15.6
|
|
|
|
Totals
|
136.8
|
509.2
|
21.5
|
161.8
|
Numbers in table
have been rounded and therefore totals may differ slightly from the
addition of the numbers.
|
*For the Canadian
Malartic Mine operations, in which Agnico Eagle holds a 50%
indirect interest, the expenses in this table represent 50% of the
total expenses, but the metres represent 100% of the metres of
drilling.
|
** For the CMC
projects, the expenses in this table represent 50% of the total
expenses from January through March 2018 when the purchase of
Yamana's indirect 50% interest in the CMC Projects is assumed to
close and 100% of the total expenses for the rest of the year,
but the metres represent 100% of the metres of
drilling.
|
Successful Conversion at Key Projects Results in a 3.1%
Increase to the 2017 Mineral Reserves; Gold Reserve Grade
Increases
At December 31, 2017, the
Company's proven and probable mineral reserves (net of 2017
production) totalled 257 million tonnes of ore grading 2.49 g/t
gold, containing approximately 20.6 million ounces of gold.
This is an increase of approximately 600,000 ounces of gold (3.1%)
compared with the prior year. The Company's overall mineral
reserve gold grade improved to 2.49 g/t from 2.31 g/t, largely due
to the higher-than-average grade of new mineral reserves at Amaruq,
as well as an increase in the cut-off grade at several of the
Company's mining operations. Agnico Eagle has one of the
highest mineral reserve grades among its North American peers.
Highlights from the December 31,
2017 Mineral Reserve statement include:
- Initial mineral reserves at Amaruq satellite deposit at
Meadowbank of 2.4 million ounces of gold (20.1 million tonnes
grading 3.67 g/t gold) at open pit depth. This brings the
complement of mineral reserves at the Meadowbank Complex (including
Amaruq) to 2.7 million ounces of gold (24.8 million tonnes grading
3.40 g/t gold)
- Meliadine mine project's mineral reserve increased by 260,000
ounces to 3.7 million ounces of gold (16.1 million tonnes grading
7.12 g/t gold) as a result of conversion from indicated mineral
resources
- Mineral reserves at Goldex mine's Deep 1 deposit increased by
approximately 138,000 ounces of gold (3.5 million tonnes at 1.24
g/t gold) as a result of drilling, partially offset by production
from this zone in 2017
- Initial mineral reserves of 100,000 ounces of gold (2.0 million
tonnes grading 1.57 g/t gold) have also been estimated at the Bravo
Zone, more than offsetting the mine depletion at Creston Mascota in
2017
- Initial mineral reserves of 100,000 million ounces of gold (1.6
million tonnes grading 1.90 g/t) at Pinos
Altos' Sinter deposit
The Company's December 31, 2017
gold reserves are set out below, compared with the gold reserves a
year earlier:
Gold Mineral
Reserves
By Mine or
Deposit
|
Proven &
Probable
|
Average Gold
Mineral
Reserve Grade
(g/t)
|
Mineral
Reserve
(000s gold
ounces)
|
|
2017
|
2016
|
Change
(000s oz
gold)
|
2017
|
2016
|
Change
(g/t gold)
|
Northern
Business
|
|
|
|
|
|
|
LaRonde
|
2,647
|
3,053
|
-406
|
5.39
|
5.40
|
-0.01
|
LaRonde Zone
5
|
401
|
423
|
-22
|
2.00
|
2.10
|
-0.10
|
Canadian Malartic
(50%)
|
3,189
|
3,548
|
-359
|
1.10
|
1.08
|
0.02
|
Goldex
|
917
|
886
|
31
|
1.57
|
1.64
|
-0.07
|
Akasaba
West
|
145
|
142
|
3
|
0.87
|
0.89
|
-0.02
|
Lapa
|
15
|
38
|
-23
|
3.75
|
4.58
|
-0.83
|
Meadowbank
mine
|
345
|
711
|
-366
|
2.28
|
2.69
|
-0.41
|
Amaruq
|
2,366
|
-
|
2,366
|
3.67
|
-
|
-
|
Meadowbank (incl.
Amaruq)
|
2,710
|
711
|
1,999
|
3.40
|
2.69
|
0.71
|
Meliadine
|
3,677
|
3,417
|
260
|
7.12
|
7.32
|
-0.20
|
Upper Beaver
(50%)
|
698
|
698
|
0
|
5.43
|
5.43
|
0.00
|
Kittila
|
4,090
|
4,479
|
-389
|
4.74
|
4.64
|
0.10
|
Subtotal
|
18,490
|
17,396
|
1,094
|
2.78
|
2.65
|
0.13
|
Southern
Business
|
|
|
|
|
|
|
Pinos
Altos
|
1,273
|
1,424
|
-151
|
2.41
|
2.55
|
-0.14
|
Creston
Mascota
|
113
|
102
|
11
|
1.47
|
1.28
|
0.19
|
La India
|
679
|
1,020
|
-342
|
0.69
|
0.72
|
0.03
|
Subtotal
|
2,064
|
2,547
|
-482
|
1.30
|
1.24
|
0.06
|
Total Mineral
Reserves
|
20,554
|
19,943
|
611
|
2.49
|
2.31
|
0.18
|
Amounts set out in the table and in this news release
have been rounded to the nearest thousand. See "Detailed
Mineral Reserve and Mineral Resource Data (as at December 31, 2017)" at the end of this news
release for more details.
In prior years, economic parameters used to estimate mineral
reserves and mineral resources for all properties were determined
using historic three-year average metals prices and foreign
exchange rates in accordance with the U.S. Securities and Exchange
Commission (the "SEC") guidelines. These guidelines require
the use of prices that reflect current economic conditions at the
time of mineral reserve estimation, which the SEC has interpreted
to mean historic three-year average prices. Given the current
commodity price environment, Agnico Eagle has decided to continue
to use more conservative gold and silver prices.
Assumptions used for the December 31,
2017 mineral reserves estimate at all mines and advanced
projects reported by the Company
|
Metal
prices
|
Exchange
rates
|
|
Gold
(US$/oz)
|
Silver
(US$/oz)
|
Copper
(US$/lb)
|
Zinc
(US$/lb)
|
C$ per
US$1.00
|
Mexican
peso per
US$1.00
|
US$ per
€1.00
|
Long-life
operations and
projects –
|
$1,150
|
$16.00
|
$2.50
|
$1.00
|
C$1.20
|
MXP16.00
|
US$1.15
|
Short-life
operations – Lapa,
Meadowbank mine, Santos Nino
pit and Creston
Mascota satellite
operation at Pinos
Altos
|
C$1.25
|
MXP17.00
|
Not
applicable
|
Upper Canada,
Upper Beaver*,
Canadian Malartic mine**
|
$1,200
|
Not
applicable
|
2.75
|
Not
applicable
|
C$1.25
|
Not
applicable
|
Not
applicable
|
*The Upper Beaver
project has a C$125/tonne net smelter return (NSR)
|
**The Canadian
Malartic mine uses a cut-off grade between 0.35 g/t and 0.37 g/t
gold (depending on the deposit)
|
The above metal price assumptions are below the three-year
historic gold and silver price averages (from January 1, 2015 to December 31, 2017) of approximately $1,223 per ounce and $16.62 per ounce, respectively. The mineral
resources at all properties are estimated using 75% of the cut-off
grades used to estimate the mineral reserves.
The increase in the Company's mineral reserves is largely the
result of initial mineral reserves declared at the Amaruq satellite
deposit at Meadowbank and at the Bravo Zone at Creston Mascota,
successful drill programs and the reduction in cut-off grade at
Meliadine. Mineral reserves of 2.4 million ounces of gold (20
million tonnes grading 3.67 g/t gold) are estimated at the Amaruq
satellite deposit at Meadowbank, the result of conversion of
indicated and inferred mineral resources. The mineral
reserves are in the Whale Tail deposit (88%) and the IVR Zone
(12%), all at open pit depths. The Bravo Zone at the Creston
Mascota mine has declared initial mineral reserves of 101,000
ounces of gold (2.0 million tonnes grading 1.57 g/t gold and 34.74
g/t silver), which more than offset the 87,000 ounces of
in-situ gold mined at Creston Mascota in 2017.
Successful infill drilling and conversion from indicated mineral
resources led to a 138,000-ounce increase (3.5 million tonnes
grading 1.24 g/t gold) in gold reserves in the Deep 1 Zone at the
Goldex mine, more than offsetting the 127,000 ounces of
in-situ gold mined at Goldex in 2017. Both conversion
and a lower cut-off grade contributed to increasing the mineral
reserves at the Meliadine mine project, partially offset by
reclassification of marginal ore, for an overall increase of
260,000 ounces of contained gold.
At the Kittila mine, 59,000 ounces of gold resource ounces were
converted to mineral reserves, mainly at the Suuri and Roura zones;
this was more than offset by a reduction of 204,000 gold reserve
ounces due to a higher cut-off grade, as well as the 225,000 ounces
of gold mined in 2017, leading to an overall reduction of 389,000
ounces of gold in mineral reserves at Kittila.
The LaRonde mine extracted 366,000 ounces of in-situ gold
and had an overall reduction of 34,000 ounces from the Zone 20
North as a result of drilling.
At the Pinos Altos mine, the
mineral reserves declined by 151,000 ounces of gold in 2017 as a
result of 194,000 ounces of in-situ gold mined and a 156,000
ounce reduction due to the new design of the Santo Nino pit and the crown pillar
interpretation, partially offset by successful conversion at the
Cerro Colorado deposit and initial
mineral reserves at the Sinter deposit (97,000 ounces gold in 1.6
million tonnes grading 1.90 g/t gold, mostly at underground mining
depths).
The reconciliation of ore mined compared with the deposit model
led to a change of parameters at La India. These factors,
together with the 145,000 ounces of in-situ gold mined,
resulted in an overall decrease of 342,000 ounces of gold in
mineral reserves at the mine.
It is the Company's goal to maintain its global mineral reserves
at approximately 10 to 15 times its annual gold production
rate. The current mineral reserves are within this range when
compared to the Company's projected annual 2018 production
guidance.
In addition to gold, Agnico Eagle's proven and
probable mineral reserves include by-product metals of
approximately 47 million ounces of silver at the Pinos Altos, LaRonde, La India and Creston
Mascota mines (64.8 million tonnes grading an average of 22.7 g/t
silver), plus 134,000 tonnes of zinc and 35,000 tonnes of copper at
the LaRonde mine (15.3 million tonnes grading 0.88% zinc and 0.23%
copper), 26,000 tonnes of copper at the Akasaba West project (5.2
million tonnes grading 0.49% copper) and 10,000 tonnes of copper at
the Upper Beaver project (4.0 million tonnes grading 0.25%
copper).
At a gold price of $1,250 per
ounce (leaving all other assumptions unchanged), there would be an
approximate 5.5% increase in the gold contained in proven and
probable mineral reserves. Conversely, using a gold price of
$1,050 (leaving all other assumptions
unchanged), there would be an estimated 4.2% decrease in the gold
contained in proven and probable mineral reserves. For the
Canadian Malartic mine only, the above sensitivity was calculated
using a 10% variation in the assumed price of $1,200 per ounce gold.
Successful Conversion Decreases Measured and Indicated
Mineral Resources by 400,000 Ounces Gold With Grade Improved to
1.60 g/t; Inferred Mineral Resources Decrease by 700,000 Ounces
Gold With Gold Grade Increased to 2.87 g/t
Highlights from the December 31,
2017 Mineral Resource statement include:
- At the LaRonde mine below the 311 level, conversion drilling
led to the reclassification of approximately 800,000 ounces of gold
from inferred into indicated mineral resources
- Initial indicated mineral resources of 138,000 ounces of gold
(3.5 million tonnes grading 1.25 g/t gold) at the Barsele project
in Sweden (reflecting Agnico
Eagle's 55% interest)
- Initial inferred mineral resources containing 1.2 million
ounces of gold (19.0 million tonnes grading 2.02 g/t gold) at the
East Malartic project at the
Canadian Malartic mine property (reflecting Agnico Eagle's 50%
interest)
- Initial inferred mineral resources containing 876,000 ounces of
gold (6.0 million tonnes grading 4.50 g/t gold) at the Upper Canada deposit at Kirkland Lake (reflecting Agnico Eagle's 50%
interest as at the date hereof)
The Company's measured and indicated mineral resources now total
approximately 310 million tonnes grading 1.60 g/t gold, or 16.0
million ounces of gold. This represents approximately a 3%
decrease in ounces of gold (0.4 million ounces), a 7% decrease in
tonnage (24 million tonnes) and an improvement in grade to 1.60 g/t
gold compared with 1.53 g/t gold in the December 2016 measured and indicated mineral
resource (see the Company's new release dated February 15, 2017 for details).
Successful conversion to mineral reserves resulted in decreases in
measured and indicated mineral resources, particularly at Amaruq,
with smaller amounts at the Goldex Deep 1 Zone, Creston Mascota's
Bravo Zone, and the Sinter Zone at Pinos Altos. This loss was
more than offset by successful conversion of inferred to indicated
mineral resources, particularly at Amaruq, the LaRonde mine below
Level 311, Meliadine, Kittila, La India and the Barsele
project. The LaRonde mine below level 311 now has indicated
mineral resources of 1.1 million ounces of gold (4.6 million tonnes
grading 7.17 g/t gold).
In order to improve the quality of the mineral resources, Agnico
Eagle continues to review its processes and protocols used for
estimating mineral resources. The application of preliminary
mine plans, even for inferred mineral resources, is expected to
result in a better conversion ratio from mineral resources to
mineral reserves. As an example, the Tarachi mineral
resources are reported separately from La India for the first time
this year. A potential resource pit has been redefined at
Tarachi, which has led to a decrease in its indicated and inferred
resources.
The Company's inferred mineral resources now total 164 million
tonnes grading 2.87 g/t gold, or approximately 15.2 million ounces
of gold. This represents an approximate 4% decrease in ounces
of gold (0.7 million ounces), a 22% decrease in tonnage (48 million
tonnes) and an increase in grade to 2.87 g/t gold compared with
2.23 g/t gold in the December 2016
inferred mineral resources (see the Company's news release dated
February 15, 2017 for details).
Substantial initial inferred mineral resources have been declared
on the East Malartic and
Upper Canada projects. The
East Malartic deposit, which lies
on the Canadian Malartic mine property close to the Odyssey Zone,
has inferred mineral resources of 1.2 million ounces of gold (19.0
million tonnes grading 2.02 g/t gold) at underground depths above
the 1,000-metre elevation. At the Kirkland Lake project, the Upper Canada project has underground and open
pit inferred mineral resources of 876,000 ounces of gold (6.0
million tonnes grading 4.50 g/t gold). These numbers reflect
Agnico Eagle's current 50% ownership of Canadian Malartic mine and
the Kirkland Lake properties.
New drilling has also enhanced the inferred mineral resources at
Goldex, particularly at the Deep 2 and South zones, as well as at
the Odyssey Zone ( at the Canadian Malartic mine property).
Successful drilling campaigns to convert inferred to indicated
mineral resources, mentioned above, resulted in a reduction of the
inferred mineral resources, particularly at Amaruq where the
inferred mineral resources decreased by approximately 380,000
ounces to 1.7 million ounces of gold (8.7 million tonnes grading
6.25 g/t gold), mainly at depth in the Whale Tail deposit (51%) and
IVR Zone (42%), and the rest at open pit depths in the Whale Tail
deposit (6%) and the IVR Zone (1%). At LaRonde, 723,000
ounces of gold was converted from inferred to indicated mineral
resources, mainly below level 311. Inferred mineral resources
at LaRonde are now 932,000 ounces of gold (5.3 million tonnes
grading 5.49 g/t gold).
The change of protocols in the estimation process resulted in an
improved quality but reduced quantity of inferred mineral resources
at Meliadine of 2.7 million ounces of gold (13.8 tonnes grading
6.04 g/t gold). A more conservative resource estimation
strategy resulted in decreased inferred mineral resources at
Tarachi. An increased cut-off grade resulted in a small
decrease to the inferred mineral resources at Kittila.
The distribution of mineral resources by property is set out in
the following table. For full details including tonnage and
grade, see the "Detailed Mineral Reserve and Mineral Resource Data
(as at December 31, 2017)" below.
December 31, 2017 Mineral
Resources
|
|
Measured &
Indicated
|
|
Inferred
|
|
|
Mineral
Resources
|
|
Mineral
Resources
|
|
|
(000 oz
gold)
|
|
(000 oz
gold)
|
Northern
Business
|
|
|
|
|
LaRonde
|
|
1,348
|
|
932
|
LaRonde Zone
5
|
|
724
|
|
485
|
Ellison
|
|
68
|
|
253
|
Canadian Malartic
(50%)
|
|
645
|
|
234
|
Odyssey
(50%)
|
|
9
|
|
838
|
East Malartic
(50%)
|
|
-
|
|
1,235
|
Goldex
|
|
1,777
|
|
1,300
|
Akasaba
West
|
|
49
|
|
-
|
Lapa
|
|
94
|
|
135
|
Zulapa
|
|
-
|
|
39
|
Meadowbank
|
|
182
|
|
5
|
Amaruq
|
|
1,021
|
|
1,744
|
Meadowbank Complex
(incl. Amaruq)
|
|
1,203
|
|
1,749
|
Meliadine
|
|
3,068
|
|
2,686
|
Hammond Reef
(50%)
|
|
2,251
|
|
6
|
Upper Beaver
(Kirkland Lake) (50%)
|
|
202
|
|
708
|
Amalgamated Kirkland
(Kirkland Lake) (50%)
|
|
133
|
|
203
|
Anoki/McBean
(Kirkland Lake) (50%)
|
|
160
|
|
191
|
Upper Canada
(Kirkland Lake) (50%)
|
|
-
|
|
876
|
Kittila
|
|
2,057
|
|
1,260
|
Kylmäkangas,
Kuotko
|
|
-
|
|
279
|
Barsele
(55%)
|
|
138
|
|
761
|
Subtotal
|
|
13,924
|
|
14,170
|
|
|
|
|
|
Southern
Business
|
|
|
|
|
Pinos
Altos
|
|
947
|
|
516
|
Creston
Mascota
|
|
53
|
|
6
|
La India
|
|
409
|
|
92
|
Tarachi
|
|
294
|
|
68
|
El
Barqueno
|
|
327
|
|
318
|
Subtotal
|
|
2,030
|
|
999
|
Total Mineral
Resources
|
|
15,954
|
|
15,170
|
NORTHERN BUSINESS REVIEW
ABITIBI REGION, QUEBEC
Agnico Eagle is currently Quebec's largest gold producer with a 100%
interest in three mines (LaRonde, Goldex and Lapa) and a 50%
interest in the Canadian Malartic mine. These mines are
located within 50 kilometres of each other, which provide operating
synergies and allows for the sharing of technical expertise.
LaRonde Mine – Higher Tonnage and Grades Drive Record Annual
Gold Production
The 100% owned LaRonde mine in northwestern Quebec achieved commercial production in
1988.
LaRonde Mine -
Operating Statistics
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
|
December 31,
2017
|
|
December 31,
2016
|
Tonnes of ore milled
(thousands of tonnes)
|
|
585
|
|
572
|
Tonnes of ore milled
per day
|
|
6,359
|
|
6,220
|
Gold grade
(g/t)
|
|
5.14
|
|
4.75
|
Gold production
(ounces)
|
|
92,523
|
|
83,508
|
Production costs per
tonne (C$)
|
|
$
|
117
|
|
$
|
100
|
Minesite costs per
tonne (C$)
|
|
$
|
110
|
|
$
|
99
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
592
|
|
$
|
528
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
386
|
|
$
|
405
|
Production costs per tonne in the fourth quarter of 2017
increased when compared to the prior-year period due to increased
labour costs, higher underground and mill maintenance costs and the
timing of unsold concentrate. Production costs per ounce in
the fourth quarter of 2017 increased when compared to the
prior-year period due to the reasons described above, partially
offset by higher gold production due to higher grades.
Minesite costs per tonne in the fourth quarter of 2017 increased
when compared to the prior-year period due to increased labour
costs and higher underground and mill maintenance costs.
Total cash costs per ounce in the fourth quarter of 2017 decreased
when compared to the prior-year period due to higher gold
production and higher by-product metal revenues.
Production was higher in the fourth quarter of 2017 when
compared to the prior-year period as a result of slightly higher
throughput and higher grades due to the mining sequence in the
lower portion of the mine.
LaRonde Mine -
Operating Statistics
|
|
|
|
|
All metrics
exclude pre-production tonnes and ounces
|
|
Twelve Months
Ended
|
|
Twelve Months
Ended
|
|
|
December 31,
2017
|
|
December 31,
2016
|
Tonnes of ore milled
(thousands of tonnes)
|
|
2,246
|
|
2,240
|
Tonnes of ore milled
per day
|
|
6,153
|
|
6,121
|
Gold grade
(g/t)
|
|
5.05
|
|
4.44
|
Gold production
(ounces)
|
|
348,870
|
|
305,788
|
Production costs per
tonne (C$)
|
|
$
|
108
|
|
$
|
106
|
Minesite costs per
tonne (C$)
|
|
$
|
108
|
|
$
|
106
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
532
|
|
$
|
587
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
406
|
|
$
|
501
|
Production costs per tonne for the full year 2017 increased
slightly when compared to the prior-year period due to increased
labour costs and higher underground and mill maintenance
costs. Production costs per ounce for the full year 2017
decreased due to higher gold production.
Minesite costs per tonne for the full year 2017 increased
slightly when compared to the prior-year period due to increased
labour costs and higher underground and mill maintenance
costs. Total cash costs per ounce for the full year 2017
decreased when compared to the prior-year period due to higher gold
production and higher by-product metal revenues. In 2017, the
LaRonde mine produced approximately 6,510 tonnes of zinc (39% more
than in 2016), 1.3 million ounces of silver (27% more than in 2016)
and 4,501 tonnes of copper (2% more than in 2016).
Production was higher for the full year of 2017 when compared to
the prior-year period primarily due to higher grades mined from
stopes in the lower portion of the mine.
At the LaRonde 3 project, the Company is evaluating a phased
approach to development between the 311 level (a depth of 3.1
kilometres) and the 340 level (a depth of 3.4 kilometres).
Under this phased approach, an additional two to three levels will
be developed per year in either the east or west areas of the mine
through 2022. This is expected to result in the conversion of
approximately 1.0 million ounces of mineral resources into mineral
reserves, with full mining activities to be initiated in
2022. The Company believes that this phased approach is a
lower risk, less capital intensive option for developing the deeper
levels of the LaRonde mine.
Canadian Malartic Mine –Record Annual Production and Mill
Throughput
In June 2014, Agnico Eagle and
Yamana acquired all of the issued and outstanding common shares of
Osisko Mining Corporation and created the Canadian Malartic General
Partnership (the "Partnership"). The Partnership owns and
operates the Canadian Malartic mine in northwestern Quebec through a joint management
committee. Each of Agnico Eagle and Yamana has an indirect
50% ownership interest in the Partnership. All volume numbers
in this section reflect the Company's 50% interest in the Canadian
Malartic mine except as noted.
Canadian Malartic
Mine - Operating Statistics
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
|
December 31,
2017
|
|
December 31,
2016
|
Tonnes of ore milled
(thousands of tonnes)(100%)
|
|
5,229
|
|
4,865
|
Tonnes of ore milled
per day (100%)
|
|
56,842
|
|
52,881
|
Gold grade
(g/t)
|
|
1.09
|
|
1.01
|
Gold production
(ounces)(50%)
|
|
80,743
|
|
69,971
|
Production costs per
tonne (C$)
|
|
$
|
28
|
|
$
|
27
|
Minesite costs per
tonne (C$)
|
|
$
|
25
|
|
$
|
25
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
722
|
|
$
|
671
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
628
|
|
$
|
634
|
Production costs per tonne in the fourth quarter of 2017
slightly increased when compared to the prior-year period primarily
due to the use of additional contractors, partially offset by
higher throughput levels. Production costs per ounce in the
fourth quarter of 2017 increased when compared to the prior-year
period due the reason described above, partially offset by higher
production.
Minesite costs per tonne in the fourth quarter of 2017 were the
same when compared to the prior-year period. Total cash costs
per ounce in the fourth quarter of 2016 decreased when compared to
the prior-year period due to higher production.
Production was higher in the fourth quarter of 2017 when
compared to the prior-year period as a result of record quarterly
mill throughput and higher grades.
Canadian Malartic
Mine - Operating Statistics
|
|
|
|
|
|
|
Twelve Months
Ended
|
|
Twelve Months
Ended
|
|
|
December 31,
2017
|
|
December 31,
2016
|
Tonnes of ore milled
(thousands of tonnes)(100%)
|
|
20,358
|
|
19,641
|
Tonnes of ore milled
per day (100%)
|
|
55,774
|
|
53,665
|
Gold grade
(g/t)
|
|
1.09
|
|
1.04
|
Gold production
(ounces)(50%)
|
|
316,731
|
|
292,514
|
Production costs per
tonne (C$)
|
|
$
|
24
|
|
$
|
25
|
Minesite costs per
tonne (C$)
|
|
$
|
24
|
|
$
|
25
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
595
|
|
$
|
628
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
576
|
|
$
|
606
|
Production costs per tonne for the full year 2017 were the same
when compared to the prior-year period. Production costs per
ounce for the full year 2017 decreased when compared to the
prior-year period due to higher gold production.
Minesite costs per tonne for the full year 2017 were essentially
the same when compared to the prior-year period. Total cash
costs per ounce for the full year 2017 decreased when compared to
the prior-year period due to higher gold production.
Production was higher for the full year of 2017 when compared to
the prior-year period as a result of record annual mill throughput
and higher grades.
The Barnat extension project continues to progress on schedule
and on budget. Since the beginning of the fourth quarter of
2017, the following activities were completed:
- An acoustic screen (noise barrier) for the road deviation was
put in place
- A temporary bridge was being constructed (and became
operational in January 2018)
- Overload (new road bed foundation) preparation
Tree cutting has been completed over the Barnat deposit and
overburden stripping is ongoing. Production activities at
Barnat are scheduled to begin in late 2019.
At the Canadian Malartic mine, exploration programs are ongoing
to evaluate a number of near pit/underground targets. In
addition, the Partnership is exploring the East Malartic and the Odyssey properties,
which are located to the east of the Canadian Malartic open pit.
These opportunities have the potential to provide new sources
of ore for the Canadian Malartic mill.
Updated Mineral Resource at Odyssey and New Mineral Resource
Reported at East Malartic
The Odyssey property is composed of multiple mineralized bodies
spatially associated with a porphyritic intrusion close to the
contact of the Pontiac Group sediments and the Piché Group of
volcanic rocks. They are grouped into two elongated zones,
the Odyssey North and Odyssey South zones, that strike
east-southeast and dip steeply south. Odyssey North has been
traced from a depth of 600 to 1,300 metres below surface along a
strike length of approximately 1.5 kilometres. Odyssey South
currently has a strike length of 0.5 kilometres and has been
located between approximately 200 and 550 metres below surface.
During 2017, a total of 125 holes (86,051 metres) were completed
at the Odyssey property. The 2017 results have been
incorporated with previous work to update the mineral resource for
the Odyssey property (inclusive of the North and South
zones). Inferred mineral resources (on a 50% basis) are
estimated at 838,000 ounces of gold (11.2 million tonnes grading
2.32 g/t gold).
The inferred mineral resource includes a small contribution from
the Jupiter Zone, which is an internal zone that extends from the
Odyssey North Zone. Drilling carried out to date suggests
that these internal zones could increase mineral resources and
enhance the economics of the project by adding higher grade ounces
that would require minimal additional infrastructure to
access. Additional drilling is required to fully understand
the complex nature of these zones so that they can be integrated
into the mineral resource model.
In 2017, an initial inferred mineral resource was declared on
the East Malartic property, which
was a historical gold producer directly adjacent to the Canadian
Malartic Mine. Inferred mineral resources at East Malartic (on a 50% basis) are estimated
at 1.2 million ounces of gold (19.0 million tonnes grading 2.02 g/t
gold) to a depth of 1,000 metres.
Further details on mineral resources at the Odyssey and
East Malartic properties are set
out in the mineral reserve and mineral resource section of this
news release.
In 2018, the exploration focus will be on the shallower portions
of the Odyssey South and East Malartic Zone and further drilling to
better define the geometry of the higher-grade internal zones.
The 2018 exploration program consists of 140,000 metres of
drilling with a budgeted cost (50% basis) of $8.6 million.
In addition, permitting activities are underway for an
exploration ramp to provide underground access to the shallower
portions of the Odyssey South and East
Malartic deposits. Development of the ramp, which will
provide access for underground drilling, and collection of a bulk
sample, is expected to begin in late 2018. The goal of the
underground development program is to provide higher grade feed to
the Canadian Malartic mill and extend the current mine life.
Canadian Malartic Corporation
In addition to the Partnership, each of Agnico Eagle and Yamana
has an indirect 50% interest in CMC, which holds a portfolio of
exploration properties that includes properties in the Kirkland Lake area of Ontario and the Hammond Reef property in
Northern Ontario.
In December 2017, the Company
announced that it had reached an agreement to acquire all of
Yamana's indirect 50% interest in the Canadian exploration assets
of CMC (the "CMC Projects"). The transaction will not affect
the Canadian Malartic mine and related assets including Odyssey,
East Malartic, Midway and East
Amphi, which will continue to be jointly owned and operated by the
Company and Yamana through CMC and the Partnership. The
transaction is expected to close by the end of March 2018. As
a result of this transaction, the Company expects to record an
increase in the Company's mineral reserve and mineral resource
statement at year-end 2018. For additional details on the
transaction see the Company's news release dated December 21, 2017.
At December 31, 2017, an initial
inferred mineral resource was reported for the Upper Canada property. The Company's 50%
interest was 876,000 ounces of gold (6.0 million tonnes grading
4.50 g/t gold). The inferred mineral resource consists of
155,000 ounces of gold (2.4 million tonnes grading 1.97 g/t gold)
of material at open pit depths and 721,000 ounces of gold (3.6
million tonnes grading 6.22 g/t gold) of material at underground
depths.
The 2018 exploration program consists of 20,000 metres of
drilling at an estimated cost of $7.5
million8. This program will be reviewed
upon completion of the proposed transaction with Yamana.
__________________________
|
8
For the CMC projects, the exploration expenses represent 50% of the
total expenses from January through March 2018 when the purchase of
Yamana's indirect 50% interest in the CMC Projects is assumed to
close and 100% of the total expenses for the rest of the year, but
the metres represent 100% of the metres of drilling.
|
Lapa – Processing of Stockpiles Provides Additional
Production Until Start Up of LaRonde Zone 5
The 100% owned Lapa mine in northwestern Quebec achieved commercial production in
May 2009.
Lapa Mine -
Operating Statistics
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
|
December 31,
2017
|
|
December 31,
2016
|
Tonnes of ore milled
(thousands of tonnes)
|
|
—
|
|
130
|
Tonnes of ore milled
per day
|
|
—
|
|
1,410
|
Gold grade
(g/t)
|
|
—
|
|
3.90
|
Gold production
(ounces)
|
|
—
|
|
14,065
|
Production costs per
tonne (C$)
|
|
$
|
—
|
|
$
|
133
|
Minesite costs per
tonne (C$)
|
|
$
|
—
|
|
$
|
135
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
—
|
|
$
|
941
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
—
|
|
$
|
935
|
Mining operations at Lapa continued during the fourth quarter of
2017 and into the first quarter of 2018 at a reduced rate with ore
being stockpiled for processing in 2018.
Lapa Mine -
Operating Statistics
|
|
|
|
|
|
|
Twelve Months
Ended
|
|
Twelve Months
Ended
|
|
|
December 31,
2017
|
|
December 31,
2016
|
Tonnes of ore milled
(thousands of tonnes)
|
|
398
|
|
593
|
Tonnes of ore milled
per day
|
|
1,090
|
|
1,619
|
Gold grade
(g/t)
|
|
4.24
|
|
4.64
|
Gold production
(ounces)
|
|
48,410
|
|
73,930
|
Production costs per
tonne (C$)
|
|
$
|
128
|
|
$
|
118
|
Minesite costs per
tonne (C$)
|
|
$
|
120
|
|
$
|
121
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
801
|
|
$
|
717
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
755
|
|
$
|
732
|
Production costs per tonne for the full year 2017 increased when
compared to the prior-year period primarily due to lower throughput
levels. Production costs per ounce for the full year 2017
increased when compared to the prior-year period primarily due to
lower production.
Minesite costs per tonne for the full year 2017 were essentially
the same when compared to the prior-year period. Total cash
costs per ounce for the full year 2017 increased when compared to
the prior-year period due to lower production.
Production was lower for the full year of 2017 when compared to
the prior-year period as a result of lower throughput and lower
grades as the mine approaches the end of operations.
Milling operations are forecast to resume in March 2018 with processing expected to continue
through to the commencement of production from the LaRonde Zone 5
in the third quarter of 2018.
Goldex – Deep 1 Ramp Up Progressing Well; Deep 2 Exploration
Plan Accelerated
The 100% owned Goldex mine in northwestern Quebec began operation from the M and E
satellite zones in September
2013.
Goldex Mine -
Operating Statistics
|
|
|
|
|
All metrics
exclude pre-production tonnes and ounces
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
|
December 31,
2017
|
|
December 31,
2016
|
Tonnes of ore milled
(thousands of tonnes)
|
|
593
|
|
580
|
Tonnes of ore milled
per day
|
|
6,446
|
|
6,304
|
Gold grade
(g/t)
|
|
1.50
|
|
1.39
|
Gold production
(ounces)
|
|
27,033
|
|
24,170
|
Production costs per
tonne (C$)
|
|
$
|
47
|
|
$
|
35
|
Minesite costs per
tonne (C$)
|
|
$
|
43
|
|
$
|
37
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
806
|
|
$
|
632
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
719
|
|
$
|
657
|
Production costs per tonne in the fourth quarter of 2017
increased when compared to the prior-year period due to an
unplanned temporary hoist and mill shutdown in December, higher
consumable costs and adjustments to the mining sequence.
Production costs per ounce in the fourth quarter of 2017 increased
when compared to the prior-year period due the reasons described
above, partially offset by higher gold production.
Minesite costs per tonne in the fourth quarter of 2017 increased
when compared to the prior-year period due to an unplanned
temporary hoist and mill shutdown in December, higher consumable
costs and adjustments to the mining sequence. Total cash
costs per ounce in the fourth quarter of 2017 increased when
compared to the prior-year period due to the reasons described
above, partially offset by higher gold production.
Production was higher in the fourth quarter of 2017 when
compared to the prior-year period as a result of slightly higher
throughput, higher grades and slightly higher recoveries.
Goldex Mine -
Operating Statistics
|
|
|
|
|
All metrics
exclude pre-production tonnes and ounces
|
|
Twelve Months
Ended
|
|
Twelve Months
Ended
|
|
|
December 31,
2017
|
|
December 31,
2016
|
Tonnes of ore milled
(thousands of tonnes)
|
|
2,396
|
|
2,545
|
Tonnes of ore milled
per day
|
|
6,564
|
|
6,954
|
Gold grade
(g/t)
|
|
1.53
|
|
1.60
|
Gold production
(ounces)
|
|
110,906
|
|
120,704
|
Production costs per
tonne (C$)
|
|
$
|
38
|
|
$
|
33
|
Minesite costs per
tonne (C$)
|
|
$
|
37
|
|
$
|
33
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
640
|
|
$
|
525
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
610
|
|
$
|
532
|
Production costs per tonne for the full year 2017 increased when
compared to the prior-year period (after deducting pre-commercial
tonnage) primarily due to lower throughput levels related to
smaller stope size. Production costs per ounce for the full
year 2017 increased when compared to the prior-year period due to
lower production and the reason described above (after deducting
pre-commercial ounces).
Minesite costs per tonne for the full year 2017 increased when
compared to the prior-year period (after deducting pre-commercial
tonnage) primarily due to lower throughput levels related to
smaller stope size. Total cash costs per ounce for the full
year 2017 increased when compared to the prior-year period due to
lower production and the reason described above (after deducting
pre-commercial ounces).
Production was lower for the full year 2017 when compared to the
prior-year period as a result of lower throughput and lower grades,
offset by slightly higher recoveries.
The Deep 1 ramp-up is on schedule with average daily throughput
expected to be approximately 3,500 tpd in 2018 as the establishment
of the mining pyramid progresses. Development of an
exploration ramp into the Deep 2 Zone commenced in December 2017, with exploration drilling expected
to continue throughout 2018.
Studies are ongoing to evaluate the potential to increase
throughput from the Deep 1 Zone and the potential to accelerate
mining activities on a portion of the Deep 2 Zone, both of which
could enhance production levels or extend the current mine life at
Goldex and reduce operating costs.
At the South Zone, drilling in the fourth quarter of 2017 was
used to interpret the zone and resulted in a significant increase
in the mineral resources. The South Zone is now estimated to
contain indicated mineral resources of 57,000 ounces of gold
(432,000 tonnes grading 4.09 g/t gold) and inferred mineral
resources of 169,000 ounces of gold (1.1 million tonnes grading
4.74 g/t gold). Metallurgical testing of the South Zone ore
is ongoing, but initial results indicated that it is compatible
with the Manitou tailings.
The first test stope in the South Zone is expected to be in place
in June 2018. Ore from the South Zone could potentially
provide supplemental feed to the Goldex mill.
Agnico Eagle acquired the Akasaba West gold-copper deposit in
January 2014. Located less than 30 kilometres from Goldex,
the Akasaba West deposit is expected to create flexibility and
synergies for the Company's operations in the Abitibi region by
utilizing extra milling capacity at both Goldex and LaRonde, while
reducing overall costs.
The public hearing process was completed on Akasaba in 2017 and
the project was deemed to be acceptable under certain conditions.
Provincial and Federal recommendations are expected in the
second half of 2018. The Company expects to start-up the
project in 2020.
NUNAVUT REGION
Agnico Eagle has identified Nunavut as a politically attractive and stable
jurisdiction with enormous geological potential. With the
Company's Meadowbank mine and two significant development assets
(Meliadine and the Amaruq satellite deposit at Meadowbank) and
other exploration projects, Nunavut has the potential to be a strategic
operating platform with the ability to generate strong production
and cash flows over several decades.
Meadowbank – Production Extended into Early 2019
The 100% owned Meadowbank mine in Nunavut, northern Canada, achieved commercial production in
March 2010.
Meadowbank Mine -
Operating Statistics
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
|
December 31,
2017
|
|
December 31,
2016
|
Tonnes of ore milled
(thousands of tonnes)
|
|
992
|
|
1,015
|
Tonnes of ore milled
per day
|
|
10,783
|
|
11,029
|
Gold grade
(g/t)
|
|
2.94
|
|
3.14
|
Gold production
(ounces)
|
|
85,046
|
|
94,770
|
Production costs per
tonne (C$)
|
|
$
|
72
|
|
$
|
66
|
Minesite costs per
tonne (C$)
|
|
$
|
76
|
|
$
|
72
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
653
|
|
$
|
551
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
653
|
|
$
|
579
|
Production costs per tonne in the fourth quarter of 2017
increased when compared to the prior-year period due to lower
throughput and the timing of unsold inventory. Production
costs per ounce in the fourth quarter of 2017 increased when
compared to the prior-year period due to lower production and the
reasons described above.
Minesite costs per tonne in the fourth quarter of 2017 increased
when compared to the prior-year period due to the reasons described
above. Total cash costs per ounce in the fourth quarter of
2017 increased when compared to the prior-year period due to lower
production and the reasons described above.
Production was lower in the fourth quarter of 2017 when compared
to the prior-year period as a result of lower throughput, lower
grades and slightly lower recoveries.
Meadowbank Mine -
Operating Statistics
|
|
|
|
|
|
|
Twelve Months
Ended
|
|
Twelve Months
Ended
|
|
|
December 31,
2017
|
|
December 31,
2016
|
Tonnes of ore milled
(thousands of tonnes)
|
|
3,853
|
|
3,915
|
Tonnes of ore milled
per day
|
|
10,556
|
|
10,697
|
Gold grade
(g/t)
|
|
3.12
|
|
2.70
|
Gold production
(ounces)
|
|
352,526
|
|
312,214
|
Production costs per
tonne (C$)
|
|
$
|
76
|
|
$
|
73
|
Minesite costs per
tonne (C$)
|
|
$
|
76
|
|
$
|
74
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
636
|
|
$
|
701
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
614
|
|
$
|
715
|
Production costs per tonne for the full year 2017 increased when
compared to the prior-year period due to lower throughput, a lower
amount of stripping costs being capitalized and timing of unsold
inventory. Production costs per ounce for the full year 2017
decreased when compared to the prior-year period due to higher
production.
Minesite costs per tonne for the full year 2017 increased when
compared to the prior-year period due to lower throughput and a
lower amount of stripping costs being capitalized. Total cash
costs per ounce for the full year 2017 decreased when compared to
the prior-year period due to higher production.
Production was higher for the full year 2017 when compared to
the prior-year period as a result of higher grades.
At the Meadowbank mine, production guidance for 2018 has
increased over Previous Guidance and production has been extended
into 2019, which bridges the gap between the cessation of mining
activities at the Meadowbank mine and the start of operations at
the Amaruq satellite deposit in the third quarter of 2019.
The additional production comes from an extension of the mine plan
at the Vault and Phaser pits in 2018 and the Portage pit in 2018
and 2019. In addition, production will be supplemented from
stockpiles in 2018 and 2019.
Amaruq Satellite Deposit – Drilling Explores Whale Tail and
IVR Deposits at Depth
Agnico Eagle has a 100% interest in the Amaruq satellite
deposit, approximately 50 kilometres northwest of the Meadowbank
mine. Amaruq is situated on a 99,878-hectare property, almost
adjacent to the 68,735-hectare Meadowbank property.
Development of the Amaruq property was approved in
February 2017 by the Company's Board
of Directors as a satellite deposit to supply ore to the existing
Meadowbank mill, pending the receipt of the required permits.
The results of an internal technical study on the Amaruq
project were described earlier in this news release.
The second phase of the 2017 Amaruq drill program commenced in
July and was completed in mid-December. Exploration at depth
continued on both the Whale Tail deposit and V Zone, well below the
planned pit depths.
In the fourth quarter of 2017, the Company drilled an additional
8,746 metres in 23 drill holes at the Amaruq project. The
total drilling for the year is 97,963 metres (463 holes).
Results from the program were last reported in the Company's news
release dated October 25, 2017.
Selected recent intercepts from the project are set out in the
table below. The drill hole collars are located on the Amaruq
project local geology map; the pierce points are shown on the
Amaruq project composite longitudinal section. All intercepts
reported for the Amaruq project show uncapped and capped grades
over estimated true widths, based on a preliminary geological
interpretation that is being updated as new information becomes
available with further drilling.
Recent exploration drill results from the Whale Tail (WT)
deposit and the V Zone, Amaruq project
|
|
|
|
|
|
|
|
Drill hole
|
Zone
|
From
(metres)
|
To
(metres)
|
Depth
of
midpoint
below
surface
(metres)
|
Estimated
true width
(metres)
|
Gold grade
(g/t)
(uncapped)
|
Gold grade
(g/t)
(capped)*
|
AMQ17-1433G
|
WT
|
783.0
|
792.2
|
694
|
6.5
|
6.4
|
6.4
|
|
including
|
|
787.9
|
792.2
|
697
|
3.0
|
11.6
|
11.6
|
|
and
|
WT
|
853.4
|
857.6
|
754
|
3.8
|
6.3
|
6.3
|
|
and
|
WT
|
883.6
|
892.0
|
782
|
5.9
|
7.1
|
7.1
|
AMQ17-1546
|
V Zone
|
500.8
|
511.5
|
469
|
10.1
|
5.0
|
5.0
|
|
and
|
V Zone
|
540.5
|
544.4
|
502
|
3.4
|
11.0
|
11.0
|
AMQ17-1547
|
V Zone
|
558.0
|
561.0
|
502
|
2.8
|
18.2
|
10.1
|
|
and
|
V Zone
|
569.4
|
576.2
|
513
|
6.4
|
11.3
|
11.3
|
|
and
|
V Zone
|
586.4
|
592.0
|
527
|
5.3
|
14.2
|
14.2
|
AMQ17-1556
|
WT Shoot
|
578.9
|
582.7
|
498
|
3.3
|
8.4
|
8.4
|
AMQ17-1561C
|
V Zone
|
563.7
|
568.5
|
494
|
4.2
|
10.2
|
10.2
|
|
and
|
V Zone
|
712.0
|
732.8
|
631
|
15.9
|
5.8
|
5.8
|
|
including
|
|
712.0
|
715.7
|
624
|
3.2
|
8.5
|
8.5
|
|
and
including
|
|
722.0
|
732.8
|
635
|
7.6
|
8.0
|
8.0
|
AMQ17-1562
|
WT North
|
637.1
|
643.2
|
562
|
3.5
|
18.7
|
18.7
|
AMQ17-1574B
|
WT North
|
682.3
|
687.9
|
569
|
5.4
|
12.0
|
12.0
|
AMQ17-1607A
|
WT North
|
573.0
|
577.0
|
503
|
3.1
|
9.3
|
9.3
|
|
and
|
WT
|
699.0
|
705.0
|
604
|
4.6
|
4.2
|
4.2
|
*
Holes at the Whale Tail deposit use a capping factor of 80 g/t
gold. Holes at the IVR deposit
(including the I
and V zones), Tugak, Buffalo and Mammoth 3 use a capping factor of
60 g/t gold.
|
[Amaruq Project Local Geology Map]
[Amaruq Project Composite Longitudinal Section]
V Zone
The V Zone consists of a series of parallel stacked quartz vein
structures striking northeast from near surface to as deep as 635
metres below surface; the dip of the structures steepen from 30
degrees near surface to 60 degrees at depth. Recent results
are from the deep part of the V Zone structures. Hole
AMQ17-1546 intersected 5.0 g/t gold over 10.1 metres at 469 metres
depth and 11.0 g/t gold over 3.4 metres at 502 metres, which helped
to expand the mineral resources westward at this depth. Hole
AMQ17-1547 extends the V Zone mineralization 100 metres to the east
with intercepts of 11.3 g/t gold over 6.4 metres and 14.2 g/t gold
over 5.3 metres at depths of 513 and 527 metres, respectively.
The style of V Zone mineralization and geological setting appear
to be changing with increasing depths. The gold-bearing
quartz veins that appear near surface continue to be seen in the V
Zone at depth, but there are also wider intervals of silica
flooding resembling those in the Whale Tail deposit. This
suggests that V Zone and Whale Tail could be part of the same
mineralized system with lateral mineralization changes from iron
formation-hosted to silica-flooding to vein-type, depending on the
host rock. An example is hole AMQ17-1561C that had two
intercepts; the lower one is located 100 metres west and 20 metres
deeper than the previously reported hole AMQ17-1475 (which was
previously reported in the Company's news release dated
September 5, 2017). The new
hole's lower interval is considered to be the deepest significant
intercept within the V Zone. Hole AMQ17-1561C returned 10.2
g/t gold over 4.2 metres at a depth of 494 metres and 5.8 g/t gold
over 15.9 metres at a depth of 631 metres. The V Zone remains
open at depth and laterally.
Whale Tail
The Whale Tail deposit has been defined over at least 2.3
kilometres of strike length and extends from surface to 915 metres
depth. The 2017 directional drilling program has allowed for
maximal accuracy while minimizing the time required to reach the
favourable geological target units in the Whale Tail deposit.
Hole AMQ17-1433G is a directional branch drilled towards the
north that returned a series of gold intervals within the
favourable volcano-sedimentary rock unit, returning 6.4 g/t gold
over 6.5 metres at 694 metres depth (including 11.6 g/t gold over
3.0 metres), 6.3 g/t gold over 3.8 metres at 754 metres depth and
7.1 g/t gold over 5.9 metres at 782 metres depth. These three
intervals are interpreted as parts of the same zone which is folded
within a steeply dipping panel.
Hole AMQ17-1607A drilled towards the south, and encountered
mineralization within the expected favourable geological unit host
to the Whale Tail deposit 43 metres west of previously reported
hole 1433D (see the Company's news release dated September 5, 2017), at approximately the same
depth. Results from the new hole were 4.2 g/t gold over 4.6
metres at 604 metres depth. This intercept extends the main
Whale Tail mineralized unit westward; the exploration potential
remains high at similar depths to the west, one of the targets of
the 2018 exploration drill program.
Hole AMQ17-1556 pierced the east-plunging Whale Tail oreshoot,
confirming the continuity and extending the mineralization
associated with this structure. The hole returned 8.4 g/t
gold over 3.3 metres. This hole is considered to be the most
easterly and the deepest interval in the oreshoot at a vertical
depth of 498 metres, and could lead to an increase in the estimated
underground mineral resources.
A gold-bearing quartz vein hosted in ultramafic rocks was
located in the eastern area of Whale Tail, well below the planned
open pit, approximately 50 metres north of the main Whale Tail
deposit. Hole AMQ17-1562 returned 18.7 g/t gold over 3.5
metres at a depth of 562 metres. A similar geological setting
was also encountered approximately 650 and 750 metres west of this
interval by two other recent drill holes. Hole
AMQ17-1574B intersected 12.0 g/t gold
over 5.4 metres at 569 metres depth, while hole AMQ17-1607A
intersected 9.3 g/t gold over 3.1 metres at 503 metres depth.
This structure appears to have developed as pods of veins
scattered along or near the geological contact between ultramafic
and sedimentary units.
The same mineralized structure was encountered at shallower
depths in previous drilling (see "Recent exploration drill results
from the new gold structure, Amaruq project" in the Company's news
release dated June 9, 2015). It
has been located approximately 50 to 100 metres north of and
parallel to the main Whale Tail deposit in this area, between the
depths of approximately 155 metres and 570 metres. The higher
gold grades observed locally throughout the structure offers some
additional potential to the future underground development of Whale
Tail, but the structure will require further drilling from
underground to determine if it could positively impact the economic
value of the project.
The Whale Tail deposit remains open at depth and along
strike.
The Amaruq deposits show underground potential below their
designed pits. The Whale Tail pit is expected to bottom at
285 metres, but its mineral resources reach to 900 metres depth,
while the IVR pit has an expected bottom of 120 metres, with
current mineral resources extending to 600 metres depth. An
exploration ramp will improve the efficiency of studying that deep
potential and determining the economics of mining at depth, well
before the pits are mined to their limits (estimated to be in
2024).
Excavation of a portal and underground ramp began in late
2017. The plan is to advance the ramp by approximately 120
metres depth (1.2 kilometres laterally) each year. Drilling
from underground is expected to begin in 2020 to infill and convert
inferred to indicated mineral resources, and to continue to expand
the deposits. The 2018 budget for ramp development (which
will be expensed, and is not included in the project capital) is
approximately $20.8 million.
FINLAND AND SWEDEN
Agnico Eagle's Kittila mine in Finland is the largest primary gold producer
in Europe and hosts the Company's
largest mineral reserves. Exploration activities continue to
expand the mineral reserves and mineral resources and the Company
has approved an expansion to add an underground shaft and increase
expected mill throughput by 25 percent to 2.0 mtpa. In
Sweden, the Company has a 55%
interest in the Barsele exploration project.
Kittila – Drilling Continues to Extend the Sisar Top
Area, Roura Zone and Rimpi Deep Area, and Supports Decision to
Proceed with Mine Expansion
The 100% owned Kittila mine in northern Finland achieved commercial production in
2009.
Kittila Mine -
Operating Statistics
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
|
December 31,
2017
|
|
December 31,
2016
|
Tonnes of ore milled
(thousands of tonnes)
|
|
394
|
|
401
|
Tonnes of ore milled
per day
|
|
4,280
|
|
4,355
|
Gold grade
(g/t)
|
|
4.32
|
|
4.84
|
Gold production
(ounces)
|
|
47,746
|
|
53,337
|
Production costs per
tonne (EUR)
|
|
$
|
83
|
|
$
|
80
|
Minesite costs per
tonne (EUR)
|
|
$
|
82
|
|
$
|
83
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
799
|
|
$
|
644
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
796
|
|
$
|
664
|
Production costs per tonne in the fourth quarter of 2017
increased when compared to the prior-year period due to lower
throughput levels and the timing of unsold inventory.
Production costs per ounce in the fourth quarter of 2017 increased
when compared to the prior-year period due to lower production and
the reasons described above.
Minesite costs per tonne in the fourth quarter of 2017 were
essentially the same when compared to the prior-year period.
Total cash costs per ounce in the fourth quarter of 2017 increased
when compared to the prior-year period due to lower production.
Production was lower in the fourth quarter of 2017 when compared
to the prior-year period as a result of slightly lower throughput
and lower grades.
Kittila Mine -
Operating Statistics
|
|
|
|
|
|
|
Twelve Months
Ended
|
|
Twelve Months
Ended
|
|
|
December 31,
2017
|
|
December 31,
2016
|
Tonnes
of ore milled (thousands of tonnes)
|
|
1,685
|
|
1,667
|
Tonnes of ore milled
per day
|
|
4,615
|
|
4,554
|
Gold grade
(g/t)
|
|
4.15
|
|
4.41
|
Gold production
(ounces)
|
|
196,938
|
|
202,508
|
Production costs per
tonne (EUR)
|
|
$
|
78
|
|
$
|
77
|
Minesite costs per
tonne (EUR)
|
|
$
|
78
|
|
$
|
77
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
753
|
|
$
|
701
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
753
|
|
$
|
699
|
Production costs per tonne for the full year 2017 were slightly
higher when compared to the prior-year period due to higher milling
costs. Production costs per ounce for the full year 2017
increased when compared to the prior-year period due to lower
production.
Minesite costs per tonne for the full year 2017 were essentially
the same when compared to the prior-year period. Total cash
costs per ounce for the full year 2017 increased when compared to
the prior-year period due to lower production.
Production was lower for the full year 2017 when compared to the
prior-year period as a result of lower grades.
Ongoing drilling activity at Kittila has demonstrated the
ability to add mineral reserves and mineral resources at
depth. With the recently approved expansion (see "Updated
Three Year Guidance Plan" above), the new shaft is expected to
unlock additional exploration potential in the deeper portions of
the mine (between 1,150 metres and 1,400 metres).
The main target of exploration at Kittila continues to be the
Sisar Zone, which is subparallel to and slightly east of the main
Kittila mineralization. Sisar has been located between
approximately 775 metres and 1,910 metres below surface, forming a
roughly triangular shape that remains open at depth and along
strike to the north and south. Mineral reserves in the Sisar
Zone form part of the total Kittila mineral reserve estimate.
The main exploration ramp is the platform now used for testing
the extensions of the Roura and Rimpi zones. Two internal
ramps are being driven off the main exploration ramp for converting
and exploring Sisar Top Zone and Rimpi deep mineral resources
between 800 and 1,000 metres below surface.
In the fourth quarter of 2017, 19 holes (8,700 metres) were
drilled in the Sisar Top, Sisar Central and Rimpi Deep zones;
assays are pending for many of the holes.
Selected recent drill results and drill hole collar coordinates
are set out in the table below. Pierce points for all these
holes are shown on the Kittila Composite Longitudinal Section.
All intercepts reported for the Kittila mine show uncapped
grades over estimated true widths, based on a current geological
interpretation that is being updated as new information becomes
available with further drilling.
Recent exploration drill results from the Sisar Zone and Main
Zone from Roura and the Rimpi Deep area at the Kittila mine
|
|
|
|
|
|
|
Drill hole
|
Zone
|
From
(metres)
|
To
(metres)
|
Depth of
midpoint
below
surface
(metres)
|
Estimated
true width
(metres)
|
Gold grade
(g/t)
(uncapped)
|
RIE17-609
|
Sisar Top
|
204.0
|
210.0
|
1,050
|
3.3
|
3.3
|
RIE17-615
|
Main -
Rimpi
|
68.1
|
79.0
|
910
|
10.7
|
4.5
|
RIE17-618
|
Sisar Top
(Rimpi)
|
407.0
|
410.9
|
1,076
|
3.2
|
3.2
|
RIE17-619
|
Main -
Rimpi
|
76.0
|
80.0
|
891
|
4.0
|
5.5
|
|
and
|
Main -
Rimpi
|
87.0
|
93.0
|
887
|
6.0
|
6.9
|
ROD-0763-15-001C
|
Main -
Roura
|
454.2
|
466.0
|
1,159
|
3.1
|
4.5
|
ROU17-601
|
Sisar Top
|
121.0
|
125.0
|
977
|
3.1
|
3.2
|
|
and
|
Sisar Top
|
135.0
|
142.0
|
983
|
5.5
|
4.5
|
ROU17-602
|
Sisar Top
|
155.0
|
167.0
|
1,029
|
7.2
|
5.4
|
|
and
|
Sisar Top
|
187.3
|
196.0
|
1,048
|
5.3
|
4.8
|
ROU17-603
|
Sisar Top
|
111.0
|
115.5
|
899
|
4.4
|
5.5
|
ROU17-604
|
Sisar Top
|
154.0
|
158.1
|
999
|
3.0
|
3.6
|
Recent intercepts at approximately 1,000 metres below surface
have successfully confirmed and infilled the mineral reserves and
mineral resources of the Sisar Top Zone in the sparsely drilled gap
between the Roura and Rimpi zones, approximately 70 to 100 metres
east of the Main Zone. Hole ROU17-602 in this area
intersected 5.4 g/t gold over 7.2 metres at 1,029 metres depth and
4.8 g/t gold over 5.3 metres at 1,048 metres depth.
Deep exploration continued to extend the Roura Main Zone
mineralization northward. Hole ROD-0763-15-001C intersected
4.5 g/t gold over 3.1 metres at 1,159 metres depth, approximately
30 metres north of the Main Zone mineral resources.
Exploration drilling of the Rimpi Deep area from the exploration
ramp has begun. Recent intercepts at approximately 900 metres
below surface have extended the Main Zone at Rimpi northward.
Hole RIE17-619 intersected 5.5 g/t gold over 4.0 metres at 891
metres depth and 6.9 g/t gold over 6.0 metres at 887 metres depth,
while hole RIE17-615 intersected 4.5 g/t gold over 10.7 metres at
910 metres depth. These results are not reflected in the new
mineral reserves estimate.
A long hole drilled from the ramp in the Rimpi Deep area
intersected mineralization 220 metres east of the Main Rimpi
Zone. Hole RIE17-618 intersected 3.2 g/t gold over 3.2 metres
at 1,076 metres depth. This intercept may represent a
northward extension of the Sisar Top Zone into the Rimpi
area. The intercept is approximately 200 metres north of the
Sisar mineralization, so it could represent a significant extension
of the Sisar Zone.
In 2017, $6.7 million was spent on
deep drilling at Kittila (which includes the Sisar Zone). The
2018 exploration program will consist of 31,000 metres of drilling
at an estimated cost of $7.6 million,
focused on extending the Roura and Rimpi zones.
Kittila mine exploration drill collar coordinates of selected
holes
|
Drill collar
coordinates*
|
Drill hole
ID
|
UTM North
|
UTM East
|
Elevation
(metres above
sea level)
|
Azimuth
(degrees)
|
Dip
(degrees)
|
Length
(metres)
|
RIE17-609
|
7538568
|
2558760
|
-689
|
101
|
-45
|
335
|
RIE17-615
|
7539500
|
2558638
|
-697
|
090
|
6
|
300
|
RIE17-618
|
7539500
|
2558638
|
-698
|
090
|
-25
|
469
|
RIE17-619
|
7539500
|
2558638
|
-696
|
089
|
20
|
419
|
ROD-0763-15-001C
|
7538398
|
2558631
|
-543
|
090
|
-64
|
921
|
ROU17-601
|
7538465
|
2558774
|
-706
|
095
|
-26
|
227
|
ROU17-602
|
7538465
|
2558774
|
-707
|
091
|
-40
|
282
|
ROU17-603
|
7538465
|
2558774
|
-705
|
082
|
14
|
162
|
ROU17-604
|
7538465
|
2558774
|
-707
|
077
|
-28
|
243
|
* Finnish
Coordinate System KKJ Zone 2
|
[Kittila Composite Longitudinal Section]
Barsele Project – 2017 Drilling Leads to Increased Mineral
Resources and Grades
On June 11, 2015, Agnico Eagle
acquired a 55% interest in the Barsele project in Sweden. The
Company can earn an additional 15% interest in the project through
the completion of a pre-feasibility study. The Barsele
property is known to contain intrusive-hosted gold mineralization
(the Central, Avan and Skiråsen zones) and gold-rich polymetallic
volcanogenic massive sulphide mineralization (the Norra Zone).
In 2017, a total of 123 diamond drill holes were completed for
58,281 metres. Drilling focused on expanding the mineral
resources on the Central, Avan and Skiråsen zones that are now
interpreted to be part of the same mineralized system extending
over approximately 2.7 kilometres of strike length. These
zones occur within a granodiorite that ranges in width from 200 to
500 metres over a strike length of more than eight
kilometres. Gold is generally associated with arsenopyrite
and low base metal content, but also occurs as native metal
locally.
In 2017, a new zone of gold mineralization was outlined by
drilling at Risberget, which is approximately 3.1 kilometres east
of the Skiråsen zone. The new zone is hosted by volcanic
rocks, but along the same deformation corridor as Skiråsen;
drilling yielded similar results to the other known mineralized
zones. Additional drilling will be carried out in 2018 to
further evaluate the mineral potential and investigate potential
strike extensions of this zone.
Drilling was also carried out to test for folded extensions of
the Nora Zone. Favourable mineralization was encountered but
additional drilling will be required to fully evaluate the mineral
potential.
At December 31, 2017, the Barsele
project was estimated (on a 55% basis) to contain an initial
indicated mineral reserve of 138,000 ounces of gold (3.5 million
tonnes grading 1.25 g/t gold), and an inferred mineral resource of
761,000 ounces of gold (10.2 million tonnes grading 2.31 g/t
gold). At open pit depths there is an indicated mineral
resource of 100,000 ounces of gold (2.9 million tonnes grading 1.07
g/t gold) and an inferred mineral resource of 57,000 ounces of gold
(1.6 million tonnes grading 1.12 g/t gold). At underground
depths, there is an indicated mineral resource of 38,000 ounces of
gold (0.5 million tonnes grading 2.18 g/t gold) and an inferred
mineral resource of 705,000 ounces of gold (8.7 million tonnes
grading 2.53 g/t gold).
In 2018, approximately 35,000 metres of drilling (at a budget of
$6.9 million) will be carried out
with a focus to expand and delineate higher grade areas within the
known zones and further evaluate the volcanogenic massive sulphide
potential.
SOUTHERN BUSINESS REVIEW
Agnico Eagle's Southern Business operations are focused in
Mexico. These operations have been the source of growing
precious metals production (gold and silver), stable operating
costs and strong free cash flow since 2009.
Pinos Altos – Production to
Commence at Sinter Deposit in Late 2018; Activities Ramping up on
Other Satellite Deposits through 2019
The 100% owned Pinos Altos mine
in northern Mexico achieved
commercial production in November
2009.
Pinos Altos Mine -
Operating Statistics
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
|
December 31,
2017
|
|
December 31,
2016
|
Tonnes of ore
processed (thousands of tonnes)
|
|
548
|
|
556
|
Tonnes of ore
processed per day
|
|
5,957
|
|
6,050
|
Gold grade
(g/t)
|
|
2.45
|
|
2.70
|
Gold production
(ounces)
|
|
40,406
|
|
46,685
|
Production costs per
tonne (USD)
|
|
$
|
56
|
|
$
|
48
|
Minesite costs per
tonne (USD)
|
|
$
|
54
|
|
$
|
51
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
761
|
|
$
|
567
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
485
|
|
$
|
390
|
Production costs per tonne in the fourth quarter of 2017
increased when compared to the prior-year period due to variations
in the proportions of heap leach ore to mill ore, variations in the
open pit ore to underground ore and fluctuations in the waste to
ore stripping ratio in the open pit mines. Production costs
per ounce in the fourth quarter of 2017 increased when compared to
the prior-year period due to the reasons described above and lower
gold production and lower by-product revenue.
Minesite costs per tonne in the fourth quarter of 2017 increased
when compared to the prior-year period due to the reasons described
above. Total cash costs per ounce in the fourth quarter of
2017 increased when compared to the prior-year period due to lower
gold production and lower by-product revenue.
Production was lower in the fourth quarter of 2017 when compared
to the prior-year period as a result of a reduction in mill
throughput, lower grades and lower recoveries, which were impacted
by a higher clay content in the ore.
Pinos Altos Mine -
Operating Statistics
|
|
|
|
|
|
|
Twelve Months
Ended
|
|
Twelve Months
Ended
|
|
|
December 31,
2017
|
|
December 31,
2016
|
Tonnes of ore
processed (thousands of tonnes)
|
|
2,308
|
|
2,260
|
Tonnes of ore
processed per day
|
|
6,323
|
|
6,175
|
Gold grade
(g/t)
|
|
2.62
|
|
2.78
|
Gold production
(ounces)
|
|
180,859
|
|
192,772
|
Production costs per
tonne (USD)
|
|
$
|
47
|
|
$
|
51
|
Minesite costs per
tonne (USD)
|
|
$
|
50
|
|
$
|
49
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
601
|
|
$
|
594
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
395
|
|
$
|
356
|
Production costs per tonne for the full year 2017 decreased when
compared to the prior-year period primarily due to variations in
the proportions of heap leach ore to mill ore, variations in the
open pit ore to underground ore, fluctuations in the waste to ore
stripping ratio in the open pit mines and the timing of unsold
inventory. Production costs per ounce for the full year 2017
increased when compared to the prior-year period due to lower
production.
Minesite costs per tonne for the full year 2017 were essentially
the same when compared to the prior-year period. Total cash
costs per ounce for the full year 2017 increased when compared to
the prior-year period due to lower gold and silver production.
Production was lower for the full year 2017 when compared to the
prior-year period as a result lower grades.
Several satellite mining opportunities exist around Pinos Altos that are being evaluated for their
incremental production potential.
The Sinter deposit, located immediately north of Pinos Altos, will be mined from underground
and a small open pit. At Sinter, permits have been received
for the construction of an exploration ramp, while permits are
pending for open pit mining. Portal and ramp development are
planned to commence in the first quarter of 2018, with initial
production expected to begin late in the fourth quarter of
2018.
The Cubiro deposit is an underground exploration opportunity,
located immediately west of the Creston Mascota mine, which is
envisioned to potentially produce high grade ore that will be
trucked to the Pinos Altos
processing facilities as early as in 2022. At the Cubiro
deposit, a change of land use permit was approved in the fourth
quarter of 2017, and the access road is under construction with
completion expected in May 2018. Portal and ramp development
will be initiated once the access road is completed and 420 metres
of underground development is planned for 2018. Underground
exploration and delineation are expected to commence in early
2019.
The Reyna de Plata deposit is an exploration opportunity also
located north of Pinos Altos
facilities. At the Reyna de Plata deposit, exploration
permits were received in the fourth quarter of 2017 and a
5,000-metre drill program commenced in mid-January 2018.
Different mining options are currently being studied for the
potential exploitation of the deposit.
Creston Mascota – Mining Transitions to Bravo Deposit;
Drilling Continues to Extend Mineralization at Bravo and Madrono
The Creston Mascota heap leach has been operating as a satellite
operation to the Pinos Altos mine
since late 2010.
Creston Mascota
deposit at Pinos Altos - Operating Statistics
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
|
December 31,
2017
|
|
December 31,
2016
|
Tonnes of ore
processed (thousands of tonnes)
|
|
558
|
|
524
|
Tonnes of ore
processed per day
|
|
6,065
|
|
5,694
|
Gold grade
(g/t)
|
|
1.08
|
|
1.18
|
Gold production
(ounces)
|
|
14,012
|
|
11,213
|
Production costs per
tonne (USD)
|
|
$
|
17
|
|
$
|
15
|
Minesite costs per
tonne (USD)
|
|
$
|
17
|
|
$
|
15
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
665
|
|
$
|
707
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
591
|
|
$
|
649
|
Production costs per tonne in the fourth quarter of 2017
increased when compared to the prior-year period due to a lower
amount of stripping costs being capitalized and the timing of
unsold inventory, partially offset by higher throughput
levels. Production costs per ounce in the fourth quarter of
2017 decreased when compared to the prior-year period due to higher
production.
Minesite costs per tonne in the fourth quarter of 2017 increased
when compared to the prior-year period due to a lower amount of
stripping costs being capitalized, partially offset by higher
throughput levels. Total cash costs per ounce in the fourth
quarter of 2017 decreased when compared to the prior-year period
due higher production.
Production was slightly higher in the fourth quarter of 2017
when compared to the prior-year period due to higher
throughput.
Creston Mascota
deposit at Pinos Altos - Operating Statistics
|
|
|
|
|
|
|
Twelve Months
Ended
|
|
Twelve Months
Ended
|
|
|
December 31,
2017
|
|
December 31,
2016
|
Tonnes of ore
processed (thousands of tonnes)
|
|
2,196
|
|
2,119
|
Tonnes of ore
processed per day
|
|
6,016
|
|
5,790
|
Gold grade
(g/t)
|
|
1.23
|
|
1.12
|
Gold production
(ounces)
|
|
48,384
|
|
47,296
|
Production costs per
tonne (USD)
|
|
$
|
14
|
|
$
|
13
|
Minesite costs per
tonne (USD)
|
|
$
|
15
|
|
$
|
13
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
651
|
|
$
|
578
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
575
|
|
$
|
516
|
Production costs per tonne for the full year 2017 were slightly
higher when compared to the prior-year period due to higher waste
haulage costs as a result of longer trucking distances and a lower
amount of stripping costs being capitalized. Production costs
per ounce for the full year 2017 increased when compared to the
prior-year period due to the reasons described above, partially
offset by slightly higher production.
Minesite costs per tonne for the full year 2017 increased when
compared to the prior-year period due to higher waste haulage costs
as a result of longer trucking distances and a lower amount of
stripping costs being capitalized. Total cash costs per ounce
for the full year 2017 increased when compared to the prior-year
period due to the reasons described above, partially offset by
higher production.
Production was slightly higher for the full year 2017 when
compared to the prior-year period reflecting higher throughput and
higher grades offset, in part, by lower recoveries.
A plan is underway to attempt to improve the process plant
efficiency. Engineering is also underway on the Phase V heap
leach pad, which will be an extension to the existing facility.
Immediately south of the Creston Mascota facilities, the
Bravo deposit (a new open pit
orebody) is in pre-production development. The first phase of
pre-stripping and the road to the waste dump were completed in the
fourth quarter of 2017. Construction activities also
continued on the haul road with work expected to be finished late
in the first quarter of 2018.
Exploration drilling in the fourth quarter of 2017 focused on
the high grade Madrono Zone, immediately southeast of the Creston
Mascota pit, including 8,552 metres of conversion, step-out and
exploration drilling in 53 holes. Madrono is a potential
satellite mining opportunity for processing at Pinos Altos.
Drilling results for Bravo were
last reported in the Company's news release dated July 26, 2017, and Madrono results were last
reported in the Company's news release dated October 25, 2017.
Selected recent drill results from the Bravo and Madrono zones and drill hole collar
coordinates are set out in the tables below. The collars are
also located on the Creston Mascota Area Local Geology Map.
All intercepts reported for the Bravo and Madrono zones show uncapped and
capped gold and silver grades over estimated true widths, based on
a preliminary geological interpretation that will be updated as new
information becomes available with further drilling.
Recent exploration drill results from the Bravo and Madrono Zones at the Creston Mascota
mine
|
|
|
|
|
|
|
|
|
|
Drill Hole
|
Vein
|
From
(metres)
|
To
(metres)
|
Depth of
midpoint
below
surface
(metres)
|
Estimated
true width
(m)
|
Gold grade
(g/t)
(uncapped)
|
Gold
grade
(g/t)
(capped)
|
Silver grade
(g/t)
(uncapped)
|
Silver
grade
(g/t)
(capped)
|
BRV17-238
|
Bravo
|
67.5
|
88.1
|
69
|
19.9
|
1.1
|
1.1
|
39
|
31
|
BRV17-241
|
Bravo
|
60.0
|
70.0
|
79
|
8.7
|
2.2
|
2.2
|
37
|
37
|
BRV17-243
|
Bravo
|
52.5
|
67.3
|
63
|
13.9
|
1.5
|
1.5
|
45
|
45
|
BRV17-246
|
Bravo
|
66.0
|
76.0
|
77
|
9.4
|
1.9
|
1.9
|
44
|
44
|
BRV17-256
|
Bravo
|
80.6
|
88.3
|
86
|
7.8
|
5.6
|
4.6
|
80
|
80
|
MAD17-110
|
Madrono
|
88.8
|
108.0
|
97
|
16.6
|
1.6
|
1.6
|
22
|
22
|
|
and
|
Madrono
|
114.2
|
120.0
|
111
|
5.1
|
4.4
|
3.1
|
37
|
37
|
MAD17-113
|
Madrono
|
88.5
|
106.5
|
64
|
16.3
|
2.1
|
2.1
|
7
|
7
|
MAD17-116
|
Madrono
|
154.8
|
172.4
|
178
|
16.0
|
5.2
|
2.6
|
48
|
48
|
|
including
|
|
156.9
|
160.2
|
174
|
3.0
|
23.3
|
10.0
|
182
|
182
|
MAD17-120
|
Madrono
|
149.5
|
155.4
|
172
|
5.9
|
4.3
|
4.3
|
78
|
75
|
MAD17-123
|
Madrono
|
112.5
|
119.5
|
138
|
6.6
|
3.8
|
3.7
|
66
|
66
|
Cut-off value 0.30
g/t gold, maximum 3.0 metres internal dilution
|
Holes at the Bravo
and Madrono zones use a capping factor of 10 g/t gold and 200 g/t
silver.
|
Bravo and Madrono Zones at
Creston Mascota mine exploration drill collar
coordinates
|
Drill collar
coordinates*
|
Drill Hole
ID
|
UTM North
|
UTM East
|
Elevation
(metres above
sea level)
|
Azimuth
(degrees)
|
Dip
(degrees)
|
Length
(metres)
|
BRV17-238
|
3135117
|
760213
|
1,636
|
120
|
-50
|
120
|
BRV17-241
|
3135098
|
760182
|
1,605
|
091
|
-71
|
89
|
BRV17-243
|
3135078
|
760197
|
1,603
|
090
|
-60
|
96
|
BRV17-246
|
3135050
|
760115
|
1,573
|
090
|
-59
|
117
|
BRV17-256
|
3135325
|
760222
|
1,678
|
090
|
-45
|
105
|
MAD17-110
|
3134925
|
761696
|
2,141
|
051
|
-45
|
273
|
MAD17-113
|
3134957
|
761696
|
2,158
|
030
|
-46
|
171
|
MAD17-116
|
3134856
|
761646
|
2,092
|
049
|
-46
|
246
|
MAD17-120
|
3134825
|
761680
|
2,094
|
051
|
-46
|
222
|
MAD17-123
|
3134782
|
761730
|
2,101
|
050
|
-45
|
201
|
*
Coordinate System UTM Nad 27 Zone
|
[Creston Mascota Area Local Geology Map]
Results from 35 drill holes in the Bravo Zone in 2017 have
confirmed down-dip mineralization as well as favorable gold and
silver grades and widths. Examples include hole BRV17-256,
which had an intercept of 4.6 g/t gold and 80 g/t silver over 7.8
metres at 86 metres depth. Approximately 220 metres south of
this, hole BRV17-241 intersected 2.2 g/t gold and 37 g/t silver
over 8.7 metres at 79 metres depth. Approximately 85 metres
farther southwest, hole BRV17-246 reported 1.9 g/t gold and 44 g/t
silver over 9.4 metres at 77 metres depth. These intercepts
indicate new mineralized zones beneath the current Bravo pit limit. These favourable
results have led to an increase in the mineral resources at the
Bravo Zone announced in this news release.
The quartz vein systems at Madrono are nearly vertical.
While the dominant strike of the veins is to the northwest, there
is also a set of steep veins that strike almost east-west.
Where these two vein sets intersect, the quartz vein material
thickens into steeply plunging shoots including gold and
silver. In addition, the north-west-striking veins host
shallowly plunging horizontal shoots of gold-bearing quartz, which
are possibly flexures caused by fault movement along uneven vein
surfaces.
Current drilling in the Madrono Zone is testing the underground
potential of the shallowly plunging high grade zones and vein
junctions with increased thickness potential. Select results
are reported from the 23 recent drill holes at the Madrono and
Santa Martha veins.
Testing the east-west Madrono Vein, hole MAD17-113 (drilling to
the north-northeast) intersected 2.1 g/t gold and 7 g/t silver over
16.3 metres at 64 metres depth. From the same drill set-up,
hole MAD17-110 (drilling to the northeast) intersected what is
interpreted as the intersection of the two vein systems, reporting
two intercepts: 1.6 g/t gold and 22 g/t silver over 16.6 metres at
97 metres depth and 3.1 g/t gold and 37 g/t silver over 5.1 metres
at 111 metres depth. Hole MAD17-116 may be returning results
from the same intersection of two the veins at greater depth; the
hole reported 2.6 g/t gold and 48 g/t silver over 5.2 metres at 178
metres depth, including 10.0 g/t gold and 182 g/t silver over 3.0
metres. These results, coupled with previous drilling in the
area, show continuity of the Madrono Vein structure at depths
between 64 and 245 metres below surface over a strike length of 480
metres.
In the northwest-striking Santa Martha Vein, the new drill
results confirm the continuity of the vein, including results such
as hole MAD17-120 that intersected 4.3 g/t gold and 75 g/t silver
over 5.9 metres at 172 metres depth, 1.3 g/t gold and 24 g/t silver
over 22.0 metres at 159 metres depth, and hole MAD176-123 that
yielded 3.7 g/t gold and 66 g/t silver over 6.6 metres at 138
metres depth. These intercepts confirm the thicknesses and
locally high gold and silver grades in the Santa Martha Vein over a
strike length of 800 metres between 100 and 200 metres depth.
The results of the current drill program have increased the gold
and silver grades of the Madrono Zone. The Madrono Zone
continues to be open at depth.
La India – Exploration
Focused on Extending Near-Pit Mineralization and Other Near-Mine
Targets
The La India mine in Sonora,
Mexico, located approximately 70 kilometres from the
Company's Pinos Altos mine,
achieved commercial production in February
2014.
La India Mine -
Operating Statistics
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
|
December 31,
2017
|
|
December 31,
2016
|
Tonnes of ore
processed (thousands of tonnes)
|
|
1,692
|
|
1,540
|
Tonnes of ore
processed per day
|
|
18,391
|
|
16,744
|
Gold grade
(g/t)
|
|
0.70
|
|
0.87
|
Gold production
(ounces)
|
|
25,500
|
|
28,714
|
Production costs per
tonne (USD)
|
|
$
|
10
|
|
$
|
10
|
Minesite costs per
tonne (USD)
|
|
$
|
11
|
|
$
|
9
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
669
|
|
$
|
510
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
678
|
|
$
|
437
|
Production costs per tonne in the fourth quarter of 2017 were
the same when compared to the prior-year period. Production
costs per ounce in the fourth quarter of 2017 increased when
compared to the prior-year period due to lower production, higher
contractor costs to accelerate open pit mine development, higher
maintenance costs and higher ore and waste haulage costs as a
result of longer trucking distances from the Main Zone pit.
Minesite costs per tonne in the fourth quarter of 2017 increased
when compared to the prior-year period due to higher contractor
costs to accelerate open pit mine development, higher maintenance
costs and higher ore and waste haulage costs as mentioned
above. Total cash costs per ounce in the fourth quarter of
2017 increased when compared to the prior-year period due to lower
gold and silver production and the reasons described above.
Production was slightly lower in the fourth quarter of 2017 when
compared to the prior-year period due to lower grades.
La India Mine -
Operating Statistics
|
|
|
|
|
|
|
Twelve Months
Ended
|
|
Twelve Months
Ended
|
|
|
December 31,
2017
|
|
December 31,
2016
|
Tonnes of ore
processed (thousands of tonnes)
|
|
5,965
|
|
5,837
|
Tonnes of ore
processed per day
|
|
16,342
|
|
15,949
|
Gold grade
(g/t)
|
|
0.69
|
|
0.81
|
Gold production
(ounces)
|
|
101,150
|
|
115,162
|
Production costs per
tonne (USD)
|
|
$
|
10
|
|
$
|
9
|
Minesite costs per
tonne (USD)
|
|
$
|
11
|
|
$
|
9
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
604
|
|
$
|
432
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
580
|
|
$
|
395
|
Production costs per tonne for the full year 2017 were slightly
higher when compared to the prior-year period due to higher
contractor costs to accelerate open pit mine development, higher
maintenance costs and higher ore and waste haulage costs.
Production costs per ounce for the full year 2017 increased when
compared to the prior-year period due to lower production and the
reasons described above.
Minesite costs per tonne for the full year 2017 were higher when
compared to the prior-year period due to higher contractor costs to
accelerate open pit mine development, higher maintenance costs and
higher ore and waste haulage costs. Total cash costs per
ounce for the full year 2017 increased when compared to the
prior-year period due to lower gold production and by-product
revenue and the reasons described above.
Production was slightly lower for the full year 2017 when
compared to the prior period due to lower grades.
Construction of a new heap leach pad is expected to begin late
in the second quarter of 2018. The new heap leach will be
phased to match the mineral reserve and mineral resource profile of
the mine. Approximately 62% of the land has been acquired for
construction of the new power line and permitting is in progress
with construction expected to start late in the second quarter of
2018.
Mineral reserves at La India declined by 341,000 ounces of gold
(33%), while measured and indicated mineral resources increased by
130,000 ounces of gold (47%). The decline in mineral reserves
is primarily due to mining production and reclassification to
mineral resources due to an increase in the capping factor in order
to improve reserve reconciliation and cut-off grade adjusted
related to slightly higher minesite costs. The increase in
measured and indicated mineral resources is mainly due to new
drilling results and reclassification of reserves.
In order to further increase mineral reserves and mineral
resources, drilling is ongoing. In the fourth quarter of
2017, drilling was carried out on the Main Zone to evaluate the
potential to extend mineralization below the current pit design and
to explore opportunities to extend mineralization outside the
currently planned pit limits.
Drilling was also carried out at the nearby El Realito and El
Cochi zones in the second half, with encouraging
results. These areas are currently being drilled to evaluate
the potential to increase mineral reserves and mineral resources in
close proximity to the current mining areas. Drilling results
for the La India property were last reported in the Company's news
release dated September 5, 2017.
Mine-site exploration at the La India property from August
through December 2017 included 7,252
metres (55 holes) of the 25,500-metre budget in 2017. The
mine-site exploration in this period comprised 3,864 metres (24
holes) in the Main Zone, 1,422 metres (11 holes) at El Realito and 1,966 metres (20 holes) at El
Cochi. In addition, the regional exploration at the La India
property in 2017 included 10,514 metres (45 holes).
Selected recent drill results from the La India mine property
and the drill hole collar coordinates are set out in the tables
below. The collars are located on the La India Area Property
and Location Map. All intercepts reported for the La India
mine property show uncapped and capped gold and silver grades over
estimated true widths, based on a preliminary geological
interpretation that will be updated as new information becomes
available with further drilling.
Additional drilling is planned in the El Realito, Los Tubos, El Cochi, Main Zone, Chipriona and Tarachi
areas in 2018.
Recent exploration drill results from the La India mine
area
|
|
|
|
|
|
|
|
|
|
Drill Hole
|
Vein
|
From
(metres)
|
To
(metres)
|
Depth of
midpoint
below
surface (metres)
|
Estimated
true width
(m)
|
Gold grade
(g/t)
(uncapped)
|
Gold
grade (g/t)
(capped)
|
Silver grade
(g/t)
(uncapped)
|
Silver grade
(g/t)
(capped)
|
INER17-098
|
El Realito
|
21.9
|
53.2
|
43.8
|
21.7
|
1.7
|
1.7
|
4
|
4
|
INER17-099
|
El Realito
|
72.3
|
94
|
81.6
|
18.4
|
1.8
|
1.8
|
15
|
15
|
INER17-106
|
El Realito
|
39
|
45
|
52
|
4.6
|
1.3
|
1.3
|
5
|
5
|
INER17-112
|
El Realito
|
39
|
53.5
|
37.1
|
13.6
|
1.4
|
1.4
|
2
|
2
|
INER17-115
|
El Realito
|
0
|
22
|
12
|
19.1
|
0.8
|
0.8
|
9
|
9
|
INER17-121
|
El Realito
|
79
|
88
|
73.5
|
5.7
|
4.5
|
3.3
|
20
|
20
|
|
including
|
|
80.2
|
84
|
82.1
|
2.4
|
9.0
|
6.1
|
39
|
39
|
|
and
|
El Realito
|
137
|
157
|
147
|
12.8
|
1.6
|
1.6
|
6
|
6
|
INM17-1266
|
Main
|
0
|
39
|
19
|
37.0
|
1.3
|
1.0
|
1
|
1
|
|
and
|
Main
|
60.6
|
115.1
|
83
|
51.2
|
1.4
|
1.4
|
9
|
9
|
INM17-1268
|
Main
|
102.3
|
119.7
|
111
|
17.2
|
1.0
|
1.0
|
2
|
2
|
INM17-1279
|
Main
|
109.7
|
144
|
126.8
|
28.1
|
0.7
|
0.7
|
2
|
2
|
Holes at the La
India mine use a capping factor of 10 g/t gold and 200 g/t
silver.
|
La India mine area
exploration drill hole collar coordinates
|
Drill Hole Collar
Coordinates*
|
Drill Hole
ID
|
UTM North
|
UTM
East
|
Elevation
(metres
above sea
level)
|
Azimuth
(degrees)
|
Dip
(degrees)
|
Length
(metres)
|
INER17-098
|
3178416
|
708874
|
1,929
|
130
|
-45
|
87
|
INER17-099
|
3178175
|
708777
|
1,990
|
130
|
-45
|
126
|
INER17-106
|
3178473
|
708639
|
1,863
|
130
|
-60
|
70
|
INER17-112
|
3178326
|
709166
|
2,041
|
045
|
-70
|
99
|
INER17-115
|
3178468
|
708906
|
1,927
|
130
|
-45
|
81
|
INER17-121
|
3177917
|
708825
|
2,014
|
000
|
-90
|
186
|
INM17-1266
|
3176252
|
707033
|
1,745
|
090
|
-75
|
180
|
INM17-1268
|
3176324
|
706618
|
1,742
|
000
|
-90
|
150
|
INM17-1279
|
3176324
|
706542
|
1,754
|
000
|
-90
|
180
|
*
Coordinate System UTM NAD27 Mexico 12 Zone
|
[La India Area Property and Location Map]
La India's Main Zone
During the fourth quarter of 2017, infill and step-out drilling
was carried out on La India's Main Zone. Drilling intersected
encouraging intervals both inside and outside the existing pit
limits. For example, hole INM17-1266 cut two mineralized
intercepts within and below the current pit limit: 1.0 g/t gold and
1 g/t silver over 37.0 metres at 19.0 metres depth and 1.4 g/t gold
and 9 g/t silver over 51.2 metres at 83 metres depth.
The mineralized system remains open along strike, and shows
significant potential at depth; parallel mineralized structures
have not yet been tested. The drill program is currently
testing extensions of the mineralized system in order to expand the
mineral resource.
El Realito Zone
Exploration drilling is defining and extending the
mineralization at the El Realito
satellite project, which is approximately 1.5 kilometres east of
the North and La India zones, to evaluate the potential to increase
mineral resources in close proximity to the existing La India
mining operations, with encouraging results. Initial
indicated mineral resources have been declared at El Realito in the current estimate.
At El Realito, an exploration
program is defining and extending the mineralization on the
northwest flank of Realito
hill. The El Realito
mineralization is found in northeast-striking subvertical parallel
structural corridors of breccia that appear to have acted as
conduits, bringing gold and silver mineralization into the
favourable subhorizontal volcanic rock layers (the lower
porphyritic dacite).
One of the best recent results is hole INER17-121 that
intersected 3.3 g/t gold and 20 g/t silver over 5.7 metres at 73.5
metres depth and 1.6 g/t gold and 6 g/t silver over 12.8 metres at
147 metres depth. This hole has extended the structural
corridor by 100 metres to the southwest. In the same area,
hole INER17-099 intersected 1.8 g/t gold and 15 g/t silver over
18.4 metres at 81.6 metres depth.
A second structural corridor has been located approximately 100
metres northwest of and subparallel to the first one, confirmed by
recent drilling. Drillhole INER17-115 intersected 0.8 g/t
gold and 9 g/t silver over 19.1 metres at 12.0 metres depth, and
nearby hole INER17-098 intersected 1.7 g/t gold and 4 g/t silver
over 21.7 metres at 43.8 metres depth.
El Barqueno – 2018 Program Primarily Focused Testing New
Regional Targets and Advancing Conceptual Mining Studies
Agnico Eagle acquired its 100% interest in the El Barqueno
project in November 2014 with the
acquisition of Cayden Resources Inc. The 32,840-hectare
property is in the Guachinango
gold-silver mining district of Jalisco State in west-central,
Mexico, approximately 150
kilometres west of the state capital of Guadalajara.
The El Barqueno project contains a number of known mineralized
zones and several prospects. In the fourth quarter of 2017, a
total of 36 diamond drill holes (10,693 metres) were completed.
For the full year, 155 diamond drill holes (48,630 metres)
were completed.
Drilling in 2017 was primarily focused on the Cuauhtémoc,
El Rayo and Las Bolas target
areas. Initial drill testing also encountered a new zone of
mineralization at San Gregorio,
which is located to the northeast of the Azteca-Zapoteca
deposit.
El Barqueno is estimated to contain 327,000 ounces of gold and
1.3 million ounces of silver in indicated mineral resources (8.0
million tonnes grading 1.27 g/t gold and 4.96 g/t silver) and
318,000 ounces of gold and 4.9 million ounces of silver in inferred
mineral resources (8.2 million tonnes grading 1.21 g/t gold and
18.44 g/t silver).
2018 Exploration Plans
Approximately 35,000 metres of drilling is expected to be
completed in 2018 at the El Barqueno project, with a principal
focus on testing new target areas. Exploration expenditures
in 2018 are expected to total approximately $9.7 million.
While it is too early to estimate the full extent of the mineral
resources and the number of deposits with economic potential at El
Barqueno, the Company has the experience of developing
cost-efficient mining operations in Mexico and increasing their size through
successful exploration as well as metallurgical innovation.
This experience will be applied as El Barqueno continues to be
explored and studied.
Agnico Eagle believes that El Barqueno ultimately has the
potential to be developed into a series of open pits utilizing heap
leach and/or mill processing, similar to the Pinos Altos mine. The Company is
evaluating conceptual mine design scenarios and additional
metallurgical testing is continuing at El Barqueno.
Santa Gertrudis –
Compilation of Historical Data Underway; Drilling Expected to Start
in the First Quarter of 2018
Agnico Eagle acquired its 100% interest in the Santa Gertrudis gold property in November 2017 from GoGold Resources Inc.
("GoGold"). The 42,000-hectare property is located
approximately 180 kilometres north of Hermosillo in Sonora, Mexico.
The property was the site of a historical heap leach operation
that produced approximately 565,000 ounces of gold at a grade of
2.1 g/t gold from 1991 to 1994. The property was previously
in production, substantial surface infrastructure is already in
place, including pre-stripped pits, haul roads, water sources and
buildings.
Three favourable geological trends with a potential strike
length of 18 kilometres have been identified on the property with
limited drilling between deposits. In addition, GoGold had
previously reported high-grade mineralization along
northeast-trending structures.
Compilation of historical data is currently in progress (2,600
drill holes were completed since 1988) and camp rehabilitation is
underway. Drilling is expected to begin later in the first
quarter of 2018. The initial program will consist of 28,000
metres at a budget of approximately $7.2
million.
Annual General Meeting
Friday, April 27, 2018 at
11:00 am (E.D.T.)
Delta Hotel (SoCo Ballroom)
75 Lower Simcoe Street
Toronto, Ontario
About Agnico Eagle
Agnico Eagle is a senior Canadian gold mining company that has
produced precious metals since 1957. Its eight mines are
located in Canada, Finland and Mexico, with exploration and development
activities in each of these countries as well as in the United States and Sweden. The
Company and its shareholders have full exposure to gold prices due
to its long-standing policy of no forward gold sales. Agnico
Eagle has declared a cash dividend every year since 1983.
Further Information
For further information regarding Agnico Eagle, contact Investor
Relations at info@agnicoeagle.com or call (416) 947-1212.
Note Regarding Certain Measures of Performance
This news release discloses certain measures, including "total
cash costs per ounce", "all-in sustaining costs per ounce",
"minesite costs per tonne" and "adjusted net income" that are not
standardized measures under IFRS. These data may not be
comparable to data reported by other issuers. For a
reconciliation of these measures to the most directly comparable
financial information reported in the consolidated financial
statements prepared in accordance with IFRS, other than adjusted
net income, see "Reconciliation of Non-GAAP Financial Performance
Measures" below.
The total cash costs per ounce of gold produced is reported on
both a by-product basis (deducting by-product metal revenues from
production costs) and co-product basis (before by-product metal
revenues). The total cash costs per ounce of gold produced on
a by-product basis is calculated by adjusting production costs as
recorded in the consolidated statements of income for by-product
revenues, unsold concentrate inventory production costs, smelting,
refining and marketing charges and other adjustments, and then
dividing by the number of ounces of gold produced. The total
cash costs per ounce of gold produced on a co-product basis is
calculated in the same manner as the total cash costs per ounce of
gold produced on a by-product basis except that no adjustment is
made for by-product metal revenues. Accordingly, the
calculation of total cash costs per ounce of gold produced on a
co-product basis does not reflect a reduction in production costs
or smelting, refining and marketing charges associated with the
production and sale of by-product metals. The total cash
costs per ounce of gold produced is intended to provide information
about the cash-generating capabilities of the Company's mining
operations. Management also uses these measures to monitor
the performance of the Company's mining operations. As market
prices for gold are quoted on a per ounce basis, using the total
cash costs per ounce of gold produced on a by-product basis measure
allows management to assess a mine's cash-generating capabilities
at various gold prices.
The Company calculates all-in sustaining costs per ounce of gold
produced on a by-product basis as the aggregate of total cash costs
per ounce on a by-product basis, sustaining capital expenditures
(including capitalized exploration), general and administrative
expenses (including stock options) and reclamation expenses, and
then dividing by the number of ounces of gold produced. The
all-in sustaining costs per ounce of gold produced on a co-product
basis is calculated in the same manner as the all-in sustaining
costs per ounce of gold produced on a by-product basis, except that
the total cash costs per ounce on a co-product basis are used,
meaning no adjustment is made for by-product metal revenues.
All-in sustaining costs per ounce is used to show the full cost of
gold production from current operations. Management is aware
that these per ounce measures of performance can be affected by
fluctuations in foreign exchange rates and, in the case of total
cash costs per ounce of gold produced on a by-product basis,
by-product metal prices. Management compensates for these
inherent limitations by using these measures in conjunction with
minesite costs per tonne (discussed below) as well as other data
prepared in accordance with IFRS.
Minesite costs per tonne are calculated by adjusting production
costs as recorded in the consolidated statements of income for
unsold concentrate inventory production costs, and then dividing by
tonnes of ore processed. As the total cash costs per ounce of
gold produced can be affected by fluctuations in by‑product metal
prices and foreign exchange rates, management believes that
minesite costs per tonne provides additional information regarding
the performance of mining operations, eliminating the impact of
varying production levels. Management also uses this measure
to determine the economic viability of mining blocks. As each
mining block is evaluated based on the net realizable value of each
tonne mined, in order to be economically viable the estimated
revenue on a per tonne basis must be in excess of the minesite
costs per tonne. Management is aware that this per tonne
measure of performance can be impacted by fluctuations in
processing levels and compensates for this inherent limitation by
using this measure in conjunction with production costs prepared in
accordance with IFRS.
Adjusted net income is calculated by adjusting the basic net
income per share as recorded in the consolidated statements of
income for foreign currency translation gains and losses,
mark-to-market adjustments, non-recurring gains and losses and
unrealized gains and losses on financial instruments.
Management uses adjusted net income to evaluate the underlying
operating performance of the Company and to assist with the
planning and forecasting of future operating results.
Management believes that adjusted net income is a useful measure of
performance because foreign currency translation gains and losses,
mark-to-market adjustments, non-recurring gains and losses and
unrealized gains and losses on financial instruments do not reflect
the underlying operating performance of the Company and may not be
indicative of future operating results.
Management also performs sensitivity analyses in order to
quantify the effects of fluctuating foreign exchange rates and
metal prices. This news release also contains information as
to estimated future total cash costs per ounce, all-in sustaining
costs per ounce and minesite costs per tonne. The estimates
are based upon the total cash costs per ounce, all-in sustaining
costs per ounce and minesite costs per tonne that the Company
expects to incur to mine gold at its mines and projects and,
consistent with the reconciliation of these actual costs referred
to above, do not include production costs attributable to accretion
expense and other asset retirement costs, which will vary over time
as each project is developed and mined. It is therefore not
practicable to reconcile these forward-looking non-GAAP financial
measures to the most comparable IFRS measure.
Forward-Looking Statements
The information in this news release has been prepared as at
February 14, 2018. Certain
statements contained in this news release constitute
"forward-looking statements" within the meaning of the United
States Private Securities Litigation Reform Act of 1995 and
"forward-looking information" under the provisions of Canadian
provincial securities laws and are referred to herein as
"forward-looking statements". When used in this news release,
the words "anticipate", "could", "estimate", "expect", "forecast",
"future", "plan", "possible", "potential", "will" and similar
expressions are intended to identify forward-looking
statements. Such statements include, without limitation: the
Company's forward-looking production guidance, including estimated
ore grades, project timelines, drilling results, metal production,
life of mine estimates, total cash costs per ounce, all-in
sustaining costs per ounce, minesite costs per tonne, other
expenses and cash flows; the estimated timing and conclusions of
technical reports and other studies; the methods by which ore will
be extracted or processed; statements concerning the Company's
plans to build operations at Meliadine, Amaruq, LaRonde Zone 5 and
Akasaba West and the Company's expansion plans at Kitilla,
including the timing and funding thereof; statements concerning
other expansion projects, recovery rates, mill throughput,
optimization and projected exploration expenditures, including
costs and other estimates upon which such projections are based;
statements regarding timing and amounts of capital expenditures and
other assumptions; estimates of future mineral reserves, mineral
resources, mineral production, optimization efforts and sales;
estimates of future capital expenditures and other cash needs, and
expectations as to the funding thereof; statements as to the
projected development of certain ore deposits, including estimates
of exploration, development and production and other capital costs
and estimates of the timing of such exploration, development and
production or decisions with respect to such exploration,
development and production; estimates of mineral reserves and
mineral resources; statements regarding the Company's ability to
obtain the necessary permits and authorizations in connection with
its exploration, development and mining operations and the
anticipated timing thereof; statements regarding anticipated future
exploration; the anticipated timing of events with respect to the
Company's mine sites; statements concerning the closing of the
acquisition of certain assets of CMC and statements regarding the
sufficiency of the Company's cash resources and other statements
regarding anticipated trends with respect to the Company's
operations, exploration and the funding thereof. Such
statements reflect the Company's views as at the date of this news
release and are subject to certain risks, uncertainties and
assumptions, and undue reliance should not be placed on such
statements. Forward-looking statements are necessarily based
upon a number of factors and assumptions that, while considered
reasonable by Agnico Eagle as of the date of such statements, are
inherently subject to significant business, economic and
competitive uncertainties and contingencies. The material
factors and assumptions used in the preparation of the forward
looking statements contained herein, which may prove to be
incorrect, include, but are not limited to, the assumptions set
forth herein and in management's discussion and analysis
("MD&A") and the Company's Annual Information Form ("AIF") for
the year ended December 31, 2016
filed with Canadian securities regulators and that are included in
its Annual Report on Form 40-F for the year ended December 31, 2016 ("Form 40-F") filed with the
SEC as well as: that there are no significant disruptions affecting
operations; that production, permitting, development and expansion
at each of Agnico Eagle's properties proceeds on a basis consistent
with current expectations and plans; that the relevant metal
prices, foreign exchange rates and prices for key mining and
construction supplies will be consistent with Agnico Eagle's
expectations; that Agnico Eagle's current estimates of mineral
reserves, mineral resources, mineral grades and metal recovery are
accurate; that there are no material delays in the timing for
completion of ongoing growth projects; that the Company's current
plans to optimize production are successful; and that there are no
material variations in the current tax and regulatory
environment. Many factors, known and unknown, could cause the
actual results to be materially different from those expressed or
implied by such forward looking statements. Such risks
include, but are not limited to: the volatility of prices of gold
and other metals; uncertainty of mineral reserves, mineral
resources, mineral grades and mineral recovery estimates;
uncertainty of future production, project development, capital
expenditures and other costs; foreign exchange rate fluctuations;
financing of additional capital requirements; cost of exploration
and development programs; mining risks; community protests,
including by First Nations groups; risks associated with foreign
operations; the unfavorable outcome of litigation involving the
Partnership; governmental and environmental regulation; the
volatility of the Company's stock price; and risks associated with
the Company's currency, fuel and by-product metal derivative
strategies. For a more detailed discussion of such risks and
other factors that may affect the Company's ability to achieve the
expectations set forth in the forward-looking statements contained
in this news release, see the AIF and MD&A filed on SEDAR at
www.sedar.com and included in the Form 40-F filed on EDGAR at
www.sec.gov, as well as the Company's other filings with the
Canadian securities regulators and the SEC. Other than as
required by law, the Company does not intend, and does not assume
any obligation, to update these forward-looking statements.
Notes to Investors Regarding the Use of Mineral
Resources
Cautionary Note to Investors Concerning Estimates of Measured
and Indicated Mineral Resources
This news release uses the terms "measured mineral resources"
and "indicated mineral resources". Investors are advised that
while those terms are recognized and required by Canadian
regulations, the SEC does not recognize them. Investors
are cautioned not to assume that any part or all of mineral
deposits in these categories will ever be converted into
mineral reserves.
Cautionary Note to Investors Concerning Estimates of
Inferred Mineral Resources
This news release also uses the term "inferred mineral
resources". Investors are advised that while this term is
recognized and required by Canadian regulations, the SEC does not
recognize it. "Inferred mineral resources" have a great
amount of uncertainty as to their existence, and great uncertainty
as to their economic and legal feasibility. It cannot be
assumed that all or any part of an inferred mineral resource will
ever be upgraded to a higher category. Under Canadian rules,
estimates of inferred mineral resources may not form the basis of
feasibility or pre-feasibility studies, except in rare cases.
Investors are cautioned not to assume that any
part or all of an inferred mineral resource
exists, or is economically or legally mineable.
Scientific and Technical Data
The scientific and technical information contained in this news
release relating to Quebec
operations has been approved by Christian Provencher, Eng.,
Vice-President, Canada; relating
to Nunavut operations has been
approved by Dominique Girard, Eng., Vice-President, Nunavut
Operations; relating to the Finland operations has been approved by
Francis Brunet, Eng., Corporate Director Mining; relating to
Southern Business operations has been approved by Marc Legault,
Eng., Senior Vice President, Operations – U.S.A., Mexico & Latin
America; and relating to exploration has been approved by
Alain Blackburn, Eng., Senior
Vice-President, Exploration and Guy Gosselin, Eng. and P.Geo.,
Vice-President, Exploration. Each of them is a "Qualified
Person" for the purposes of NI 43-101.
The scientific and technical information relating to Agnico
Eagle's mineral reserves and mineral resources contained herein
(other than the Canadian Malartic mine) has been approved by Daniel
Doucet, Eng., Senior Corporate Director, Reserve Development; and
relating to mineral reserves and mineral resources at the Canadian
Malartic mine contained herein has been approved by Donald Gervais, P.Geo., Director of Technical
Services at CMC. Each of them is a "Qualified Person" for the
purposes of NI 43-101.
DETAILED MINERAL RESERVES AND MINERAL RESOURCES DATA
AGNICO EAGLE MINES
LIMITED DETAILED MINERAL RESERVES AND RESOURCES DATA
|
|
|
|
|
|
As of December 31,
2017
|
|
|
|
|
|
|
|
|
|
MINERAL
RESERVES
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATIONS
|
|
|
PROVEN
|
PROBABLE
|
PROVEN &
PROBABLE
|
GOLD
|
Mining
Method
|
Ownership
|
000
Tonnes
|
g/t
|
000 Oz
Au
|
000
Tonnes
|
g/t
|
000 Oz
Au
|
000
Tonnes
|
g/t
|
000 Oz
Au
|
LaRonde
|
Underground
|
100%
|
5,746
|
4.94
|
912
|
9,533
|
5.66
|
1,735
|
15,279
|
5.39
|
2,647
|
LaRonde Zone
5
|
Underground
|
100%
|
3,758
|
2.02
|
244
|
2,477
|
1.97
|
157
|
6,236
|
2.00
|
401
|
Canadian
Malartic
|
Open Pit
|
50%
|
24,990
|
0.95
|
760
|
65,509
|
1.15
|
2,429
|
90,499
|
1.10
|
3,189
|
Goldex
|
Underground
|
100%
|
181
|
1.61
|
9
|
18,006
|
1.57
|
907
|
18,186
|
1.57
|
917
|
Akasaba
West
|
Open Pit
|
100%
|
-
|
|
-
|
5,194
|
0.87
|
145
|
5,194
|
0.87
|
145
|
Lapa
|
Underground
|
100%
|
127
|
3.75
|
15
|
-
|
|
-
|
127
|
3.75
|
15
|
Meadowbank
|
Open Pit
|
100%
|
1,820
|
1.36
|
79
|
2,888
|
2.86
|
265
|
4,708
|
2.28
|
345
|
Amaruq
|
Open Pit
|
100%
|
-
|
|
-
|
20,063
|
3.67
|
2,366
|
20,063
|
3.67
|
2,366
|
Meadowbank Complex
Total
|
|
|
1,820
|
1.36
|
79
|
22,951
|
3.57
|
2,631
|
24,771
|
3.40
|
2,710
|
Meliadine
|
Open Pit
|
100%
|
48
|
7.17
|
11
|
3,693
|
5.19
|
617
|
3,741
|
5.22
|
628
|
Meliadine
|
Underground
|
100%
|
-
|
|
-
|
12,317
|
7.70
|
3,050
|
12,317
|
7.70
|
3,050
|
Meliadine
Total
|
|
|
48
|
7.17
|
11
|
16,010
|
7.12
|
3,666
|
16,058
|
7.12
|
3,677
|
Upper
Beaver
|
Underground
|
50%
|
-
|
|
-
|
3,996
|
5.43
|
698
|
3,996
|
5.43
|
698
|
Kittilä
|
Underground
|
100%
|
971
|
4.26
|
133
|
25,894
|
4.75
|
3,957
|
26,865
|
4.74
|
4,090
|
Pinos
Altos
|
Open Pit
|
100%
|
74
|
1.06
|
3
|
1,159
|
0.95
|
35
|
1,233
|
0.96
|
38
|
Pinos
Altos
|
Underground
|
100%
|
4,229
|
2.58
|
351
|
10,973
|
2.51
|
885
|
15,202
|
2.53
|
1,235
|
Pinos Altos
Total
|
|
|
4,304
|
2.55
|
353
|
12,132
|
2.36
|
920
|
16,435
|
2.41
|
1,273
|
Creston
Mascota
|
Open Pit
|
100%
|
21
|
0.90
|
1
|
2,368
|
1.47
|
112
|
2,389
|
1.47
|
113
|
La India
|
Open Pit
|
100%
|
266
|
0.49
|
4
|
30,394
|
0.69
|
674
|
30,660
|
0.69
|
679
|
Totals
|
|
|
42,232
|
1.86
|
2,523
|
214,464
|
2.62
|
18,031
|
256,696
|
2.49
|
20,554
|
|
|
|
|
|
|
|
|
|
|
|
|
SILVER
|
Mining
Method
|
Ownership
|
000
Tonnes
|
g/t
|
000 Oz
Ag
|
000
Tonnes
|
g/t
|
000 Oz
Ag
|
000
Tonnes
|
g/t
|
000 Oz
Ag
|
LaRonde
|
Underground
|
100%
|
5,746
|
16.79
|
3,102
|
9,533
|
18.78
|
5,755
|
15,279
|
18.03
|
8,857
|
Pinos
Altos
|
Open Pit
|
100%
|
74
|
63.45
|
152
|
1,159
|
23.41
|
872
|
1,233
|
25.83
|
1,024
|
Pinos
Altos
|
Underground
|
100%
|
4,229
|
68.38
|
9,297
|
10,973
|
67.16
|
23,693
|
15,202
|
67.50
|
32,990
|
Pinos Altos
Total
|
subtotal
|
|
4,304
|
68.29
|
9,449
|
12,132
|
62.98
|
24,565
|
16,435
|
64.37
|
34,015
|
Creston
Mascota
|
Open Pit
|
100%
|
21
|
9.56
|
6
|
2,368
|
30.36
|
2,311
|
2,389
|
30.18
|
2,318
|
La India
|
Open Pit
|
100%
|
266
|
3.40
|
29
|
30,394
|
2.14
|
2,094
|
30,660
|
2.15
|
2,123
|
Totals
|
|
|
10,336
|
37.87
|
12,587
|
54,427
|
19.84
|
34,725
|
64,763
|
22.72
|
47,312
|
|
|
|
|
|
|
|
|
|
|
|
|
COPPER
|
Mining
Method
|
Ownership
|
000
Tonnes
|
%
|
tonnes
Cu
|
000
Tonnes
|
%
|
tonnes
Cu
|
000
Tonnes
|
%
|
tonnes
Cu
|
LaRonde
|
Underground
|
100%
|
5,746
|
0.22
|
12,874
|
9,533
|
0.23
|
22,252
|
15,279
|
0.23
|
35,126
|
Akasaba
West
|
Open Pit
|
100%
|
-
|
|
-
|
5,194
|
0.49
|
25,535
|
5,194
|
0.49
|
25,535
|
Upper
Beaver
|
Underground
|
50%
|
-
|
|
-
|
3,996
|
0.25
|
9,990
|
3,996
|
0.25
|
9,990
|
Totals
|
|
|
5,746
|
0.22
|
12,874
|
18,724
|
0.31
|
57,776
|
24,470
|
0.29
|
70,651
|
|
|
|
|
|
|
|
|
|
|
|
|
ZINC
|
Mining
Method
|
Ownership
|
000
Tonnes
|
%
|
tonnes
Zn
|
000
Tonnes
|
%
|
tonnes
Zn
|
000
Tonnes
|
%
|
tonnes
Zn
|
LaRonde
|
Underground
|
100%
|
5,746
|
0.41
|
23,405
|
9,533
|
1.17
|
111,079
|
15,279
|
0.88
|
134,484
|
Totals
|
|
|
5,746
|
0.41
|
23,405
|
9,533
|
1.17
|
111,079
|
15,279
|
0.88
|
134,484
|
|
|
|
MINERAL
RESOURCES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATIONS
|
|
MEASURED
|
INDICATED
|
MEASURED &
INDICATED
|
INFERRED
|
GOLD
|
Mining
Method
|
Ownership
|
000
Tonnes
|
g/t
|
000 Oz
Au
|
000
Tonnes
|
g/t
|
000 Oz
Au
|
000
Tonnes
|
g/t
|
000 Oz
Au
|
000
Tonnes
|
g/t
|
000 Oz
Au
|
LaRonde
|
Underground
|
100%
|
-
|
|
-
|
7,789
|
5.38
|
1,348
|
7,789
|
5.38
|
1,348
|
5,285
|
5.49
|
932
|
LaRonde Zone
5
|
Underground
|
100%
|
-
|
|
-
|
9,306
|
2.42
|
724
|
9,306
|
2.42
|
724
|
2,826
|
5.33
|
485
|
Ellison
|
Underground
|
100%
|
-
|
|
-
|
651
|
3.25
|
68
|
651
|
3.25
|
68
|
2,323
|
3.39
|
253
|
Canadian
Malartic
|
Open Pit
|
50%
|
295
|
0.45
|
4
|
1,008
|
0.46
|
15
|
1,303
|
0.46
|
19
|
1,105
|
0.96
|
34
|
Canadian
Malartic
|
Underground
|
50%
|
1,742
|
1.48
|
83
|
9,969
|
1.69
|
543
|
11,711
|
1.66
|
626
|
3,713
|
1.67
|
200
|
Canadian Malartic
Total
|
|
|
2,037
|
1.33
|
87
|
10,977
|
1.58
|
558
|
13,014
|
1.54
|
645
|
4,818
|
1.51
|
234
|
Odyssey
|
Underground
|
50%
|
-
|
|
-
|
108
|
2.45
|
9
|
108
|
2.45
|
9
|
11,246
|
2.32
|
838
|
East
Malartic
|
Underground
|
100%
|
-
|
|
-
|
-
|
|
-
|
-
|
|
-
|
18,974
|
2.02
|
1,235
|
Goldex
|
Underground
|
100%
|
12,360
|
1.86
|
739
|
18,267
|
1.77
|
1,038
|
30,627
|
1.80
|
1,777
|
26,871
|
1.51
|
1,300
|
Akasaba
West
|
Open Pit
|
100%
|
-
|
|
-
|
2,184
|
0.70
|
49
|
2,184
|
0.70
|
49
|
-
|
|
-
|
Lapa
|
Underground
|
100%
|
159
|
3.62
|
18
|
576
|
4.07
|
75
|
734
|
3.97
|
94
|
587
|
7.16
|
135
|
Zulapa
|
Open Pit
|
100%
|
-
|
|
-
|
-
|
|
-
|
-
|
|
-
|
391
|
3.14
|
39
|
Meadowbank
|
Open Pit
|
100%
|
199
|
1.00
|
6
|
2,386
|
2.29
|
175
|
2,585
|
2.19
|
182
|
68
|
2.17
|
5
|
Amaruq
|
Open Pit
|
100%
|
-
|
|
-
|
7,118
|
3.15
|
720
|
7,118
|
3.15
|
720
|
978
|
4.30
|
135
|
Amaruq
|
Underground
|
100%
|
-
|
|
-
|
1,661
|
5.64
|
301
|
1,661
|
5.64
|
301
|
7,704
|
6.50
|
1,609
|
Amaruq
Total
|
|
|
-
|
|
-
|
8,779
|
3.62
|
1,021
|
8,779
|
3.62
|
1,021
|
8,682
|
6.25
|
1,744
|
Meadowbank
Complex
Total
|
|
|
199
|
1.00
|
6
|
11,165
|
3.33
|
1,197
|
11,364
|
3.29
|
1,203
|
8,751
|
6.22
|
1,749
|
Meliadine
|
Open Pit
|
100%
|
-
|
|
-
|
10,481
|
3.46
|
1,166
|
10,481
|
3.46
|
1,166
|
909
|
4.56
|
133
|
Meliadine
|
Underground
|
100%
|
-
|
|
-
|
14,799
|
4.00
|
1,901
|
14,799
|
4.00
|
1,901
|
12,935
|
6.14
|
2,553
|
Meliadine
Total
|
|
|
-
|
|
-
|
25,280
|
3.77
|
3,068
|
25,280
|
3.77
|
3,068
|
13,844
|
6.04
|
2,686
|
Hammond
Reef
|
Open Pit
|
50%
|
82,831
|
0.70
|
1,862
|
21,377
|
0.57
|
389
|
104,208
|
0.67
|
2,251
|
251
|
0.74
|
6
|
Upper
Beaver
|
Underground
|
50%
|
-
|
|
-
|
1,818
|
3.45
|
202
|
1,818
|
3.45
|
202
|
4,344
|
5.07
|
708
|
AK Project
|
Underground
|
50%
|
-
|
|
-
|
634
|
6.51
|
133
|
634
|
6.51
|
133
|
1,187
|
5.32
|
203
|
Anoki-McBean
|
Underground
|
50%
|
-
|
|
-
|
934
|
5.33
|
160
|
934
|
5.33
|
160
|
1,263
|
4.70
|
191
|
Upper
Canada
|
Open Pit
|
50%
|
-
|
|
-
|
-
|
|
-
|
-
|
|
-
|
2,443
|
1.97
|
155
|
Upper
Canada
|
Underground
|
50%
|
-
|
|
-
|
-
|
|
-
|
-
|
|
-
|
3,606
|
6.22
|
721
|
Upper Canada
Total
|
|
|
-
|
|
-
|
-
|
|
-
|
-
|
|
-
|
6,049
|
4.50
|
876
|
Kittilä
|
Open Pit
|
100%
|
-
|
|
-
|
229
|
3.41
|
25
|
229
|
3.41
|
25
|
373
|
3.89
|
47
|
Kittilä
|
Underground
|
100%
|
1,592
|
2.59
|
132
|
18,909
|
3.12
|
1,899
|
20,501
|
3.08
|
2,032
|
8,992
|
4.20
|
1,213
|
Kittilä
Total
|
|
|
1,592
|
2.59
|
132
|
19,138
|
3.13
|
1,924
|
20,730
|
3.09
|
2,057
|
9,364
|
4.18
|
1,260
|
Kuotko
|
Open Pit
|
100%
|
-
|
|
-
|
-
|
|
-
|
-
|
|
-
|
284
|
3.18
|
29
|
Kylmäkangas
|
Underground
|
100%
|
-
|
|
-
|
-
|
|
-
|
-
|
|
-
|
1,896
|
4.11
|
250
|
Barsele
|
Open Pit
|
55%
|
-
|
|
-
|
2,911
|
1.07
|
100
|
2,911
|
1.07
|
100
|
1,574
|
1.12
|
57
|
Barsele
|
Underground
|
55%
|
-
|
|
-
|
544
|
2.18
|
38
|
544
|
2.18
|
38
|
8,667
|
2.53
|
705
|
Barsele
Total
|
|
|
-
|
|
-
|
3,455
|
1.25
|
138
|
3,455
|
1.25
|
138
|
10,241
|
2.31
|
761
|
Pinos
Altos
|
Open Pit
|
100%
|
-
|
|
-
|
621
|
1.10
|
22
|
621
|
1.10
|
22
|
6,165
|
0.61
|
120
|
Pinos
Altos
|
Underground
|
100%
|
-
|
|
-
|
15,537
|
1.85
|
925
|
15,537
|
1.85
|
925
|
5,040
|
2.44
|
396
|
Pinos Altos
Total
|
|
|
-
|
|
-
|
16,158
|
1.82
|
947
|
16,158
|
1.82
|
947
|
11,205
|
1.43
|
516
|
Creston
Mascota
|
Open Pit
|
100%
|
-
|
|
-
|
2,503
|
0.66
|
53
|
2,503
|
0.66
|
53
|
591
|
0.29
|
6
|
La India
|
Open Pit
|
100%
|
16,252
|
0.32
|
168
|
11,150
|
0.67
|
240
|
27,402
|
0.46
|
409
|
7,055
|
0.41
|
92
|
Tarachi
|
Open Pit
|
100%
|
-
|
|
-
|
22,665
|
0.40
|
294
|
22,665
|
0.40
|
294
|
6,476
|
0.33
|
68
|
El Barqueño
Gold
|
Open Pit
|
100%
|
-
|
|
-
|
7,980
|
1.27
|
327
|
7,980
|
1.27
|
327
|
8,199
|
1.21
|
318
|
Totals
|
|
|
115,429
|
0.81
|
3,014
|
194,115
|
2.07
|
12,940
|
309,544
|
1.60
|
15,954
|
164,319
|
2.87
|
15,170
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SILVER
|
Mining
Method
|
Ownership
|
000
Tonnes
|
g/t
|
000 Oz
Ag
|
000
Tonnes
|
g/t
|
000 Oz
Ag
|
000
Tonnes
|
g/t
|
000 Oz
Ag
|
000
Tonnes
|
g/t
|
000 Oz
Ag
|
LaRonde
|
Underground
|
100%
|
-
|
|
-
|
7,789
|
20.20
|
5,058
|
7,789
|
20.20
|
5,058
|
5,285
|
12.13
|
2,060
|
Kylmäkangas
|
Underground
|
100%
|
-
|
|
-
|
-
|
|
-
|
-
|
|
-
|
1,896
|
31.11
|
1,896
|
Pinos
Altos
|
Open Pit
|
100%
|
-
|
|
-
|
621
|
20.07
|
401
|
621
|
20.07
|
401
|
6,165
|
20.85
|
4,133
|
Pinos
Altos
|
Underground
|
100%
|
-
|
|
-
|
15,537
|
45.28
|
22,621
|
15,537
|
45.28
|
22,621
|
5,040
|
37.67
|
6,104
|
Pinos Altos
Total
|
|
|
-
|
|
-
|
16,158
|
44.32
|
23,022
|
16,158
|
44.32
|
23,022
|
11,205
|
28.42
|
10,237
|
Creston
Mascota
|
Open Pit
|
100%
|
-
|
|
-
|
2,503
|
6.80
|
547
|
2,503
|
6.80
|
547
|
591
|
5.97
|
113
|
La India
|
Open Pit
|
100%
|
16,252
|
1.80
|
942
|
11,150
|
4.64
|
1,663
|
27,402
|
2.96
|
2,605
|
7,055
|
2.83
|
642
|
Tarachi
|
Open Pit
|
100%
|
-
|
|
-
|
22,665
|
0.00
|
-
|
22,665
|
0.00
|
-
|
6,476
|
0.00
|
-
|
El Barqueño
Silver
|
Open Pit
|
100%
|
-
|
|
-
|
-
|
|
-
|
-
|
|
-
|
9,160
|
107.30
|
31,599
|
El Barqueño
Gold
|
Open Pit
|
100%
|
-
|
|
-
|
7,980
|
4.96
|
1,272
|
7,980
|
4.96
|
1,272
|
8,199
|
18.44
|
4,860
|
Totals
|
|
|
16,252
|
1.80
|
942
|
68,245
|
14.39
|
31,563
|
84,497
|
11.96
|
32,505
|
49,866
|
32.07
|
51,408
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COPPER
|
Mining
Method
|
Ownership
|
000
Tonnes
|
%
|
Tonnes
Cu
|
000
Tonnes
|
%
|
Tonnes
Cu
|
000
Tonnes
|
%
|
Tonnes
Cu
|
000
Tonnes
|
%
|
Tonnes
Cu
|
LaRonde
|
Underground
|
100%
|
-
|
|
-
|
7,789
|
0.27
|
20,997
|
7,789
|
0.27
|
20,997
|
5,285
|
0.23
|
11,993
|
Akasaba
West
|
Open Pit
|
100%
|
-
|
|
-
|
2,184
|
0.41
|
9,004
|
2,184
|
0.41
|
9,004
|
-
|
|
-
|
Upper
Beaver
|
Underground
|
50%
|
-
|
|
-
|
1,818
|
0.14
|
2,567
|
1,818
|
0.14
|
2,567
|
4,344
|
0.20
|
8,642
|
El Barqueño
Gold
|
Open Pit
|
100%
|
-
|
|
-
|
7,980
|
0.19
|
14,908
|
7,980
|
0.19
|
14,908
|
8,199
|
0.19
|
15,802
|
Totals
|
|
|
-
|
|
-
|
19,771
|
0.24
|
47,476
|
19,771
|
0.24
|
47,476
|
17,828
|
0.20
|
36,437
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ZINC
|
Mining
Method
|
Ownership
|
000
Tonnes
|
%
|
Tonnes
Zn
|
000
Tonnes
|
%
|
Tonnes
Zn
|
000
Tonnes
|
%
|
Tonnes
Zn
|
000
Tonnes
|
%
|
Tonnes
Zn
|
LaRonde
|
Underground
|
100%
|
-
|
|
-
|
7,789
|
0.76
|
59,228
|
7,789
|
0.76
|
59,228
|
5,285
|
0.40
|
21,026
|
Totals
|
|
|
-
|
|
-
|
7,789
|
0.76
|
59,228
|
7,789
|
0.76
|
59,228
|
5,285
|
0.40
|
21,026
|
Mineral reserves are not a subset of mineral resources. Tonnage
amounts and contained metal amounts presented in this table have
been rounded to the nearest thousand, so aggregrate amounts may
differ from column totals.
Cautionary Note To U.S. Investors - The SEC permits U.S.
mining companies, in their filings with the SEC, to disclose only
those mineral deposits that a company can economically and legally
extract or produce. Agnico Eagle reports mineral reserve and
mineral resource estimates in accordance with the Canadian
Institute of Mining, Metallurgy and Petroleum Best Practice
Guidelines for Exploration and Best Practice Guidelines
for Estimation of Mineral Resources and Mineral
Reserves, in accordance with NI 43-101. These standards
are similar to those used by the SEC's Industry Guide No. 7, as
interpreted by Staff at the SEC ("Guide 7"). However, the
definitions in NI 43-101 differ in certain respects from those
under Guide 7. Accordingly, mineral reserve information
contained herein may not be comparable to similar information
disclosed by U.S. companies. Under the requirements of the
SEC, mineralization may not be classified as a "reserve" unless the
determination has been made that the mineralization could be
economically and legally produced or extracted at the time the
reserve determination is made. A "final" or "bankable"
feasibility study is required to meet the requirements to designate
mineral reserves under Guide 7. Agnico Eagle uses certain
terms in this news release, such as "measured", "indicated",
"inferred" and "resources" that the SEC guidelines strictly
prohibit U.S. registered companies from including in their filings
with the SEC.
In prior periods, mineral reserves for all properties were
typically estimated using historic three-year average metals prices
and foreign exchange rates in accordance with the SEC
guidelines. These guidelines require the use of prices that
reflect current economic conditions at the time of mineral reserve
determination, which the Staff of the SEC has interpreted to mean
historic three-year average prices. Given the current
commodity price environment, Agnico Eagle has decided to use price
assumptions that are below the three-year averages.
Assumptions used for the December 31,
2017 mineral reserves estimate at all mines and advanced
projects reported by the Company
|
Metal
prices
|
Exchange
rates
|
|
Gold
(US$/oz)
|
Silver
(US$/oz)
|
Copper
(US$/lb)
|
Zinc
(US$/lb)
|
C$ per
US$1.00
|
Mexican peso per
US$1.00
|
US$ per
€1.00
|
Long-life operations
and projects
|
$1,150
|
$16.00
|
$2.50
|
$1.00
|
C$1.20
|
MXP16.00
|
US$1.15
|
Short-life operations
– Lapa, Meadowbank mine, Santos Nino pit and Creston Mascota
satellite operation at Pinos Altos
|
C$1.25
|
MXP17.00
|
Not
applicable
|
Upper Canada, Upper
Beaver*, Canadian Malartic mine**
|
$1,200
|
Not
applicable
|
2.75
|
Not
applicable
|
C$1.25
|
Not
applicable
|
Not
applicable
|
*The Upper Beaver
project has a C$125/tonne net smelter return (NSR)
|
**The Canadian
Malartic mine uses a cut-off grade between 0.35 g/t and 0.37 g/t
gold (depending on the deposit)
|
NI 43-101 requires mining companies to disclose mineral reserves
and mineral resources using the subcategories of "proven mineral
reserves", "probable mineral reserves", "measured mineral
resources", "indicated mineral resources" and "inferred mineral
resources". Mineral resources that are not mineral reserves
do not have demonstrated economic viability.
A mineral reserve is the economically mineable part of a
measured and/or indicated mineral resource. It includes
diluting materials and allowances for losses, which may occur when
the material is mined or extracted and is defined by studies at
pre-feasibility or feasibility level as appropriate that include
application of modifying factors. Such studies demonstrate
that, at the time of reporting, extraction could reasonably be
justified. The mineral reserves presented in this news
release are separate from and not a portion of the mineral
resources.
Modifying factors are considerations used to convert mineral
resources to mineral reserves. These include, but are not
restricted to, mining, processing, metallurgical, infrastructure,
economic, marketing, legal, environmental, social and governmental
factors.
A proven mineral reserve is the economically mineable part of a
measured mineral resource. A proven mineral reserve implies a
high degree of confidence in the modifying factors. A
probable mineral reserve is the economically mineable part of an
indicated and, in some circumstances, a measured mineral
resource. The confidence in the modifying factors applying to
a probable mineral reserve is lower than that applying to a proven
mineral reserve.
A mineral resource is a concentration or occurrence of solid
material of economic interest in or on the Earth's crust in such
form, grade or quality and quantity that there are reasonable
prospects for eventual economic extraction. The location,
quantity, grade or quality, continuity and other geological
characteristics of a mineral resource are known, estimated or
interpreted from specific geological evidence and knowledge,
including sampling.
A measured mineral resource is that part of a mineral resource
for which quantity, grade or quality, densities, shape and physical
characteristics are estimated with confidence sufficient to allow
the application of modifying factors to support detailed mine
planning and final evaluation of the economic viability of the
deposit. Geological evidence is derived from detailed and
reliable exploration, sampling and testing and is sufficient to
confirm geological and grade or quality continuity between points
of observation. An indicated mineral resource is that part of
a mineral resource for which quantity, grade or quality, densities,
shape and physical characteristics are estimated with sufficient
confidence to allow the application of modifying factors in
sufficient detail to support mine planning and evaluation of the
economic viability of the deposit. Geological evidence is
derived from adequately detailed and reliable exploration, sampling
and testing and is sufficient to assume geological and grade or
quality continuity between points of observation. An inferred
mineral resource is that part of a mineral resource for which
quantity and grade or quality are estimated on the basis of limited
geological evidence and sampling. Geological evidence is
sufficient to imply but not verify geological and grade or quality
continuity.
Investors are cautioned not to assume that part or all of an
inferred mineral resource exists, or is economically
or legally mineable.
A feasibility study is a comprehensive technical and economic
study of the selected development option for a mineral project that
includes appropriately detailed assessments of applicable modifying
factors, together with any other relevant operational factors and
detailed financial analysis that are necessary to demonstrate, at
the time of reporting, that extraction is reasonably justified
(economically mineable). The results of the study may
reasonably serve as the basis for a final decision by a proponent
or financial institution to proceed with, or finance, the
development of the project. The confidence level of the study
will be higher than that of a pre-feasibility study.
Additional Information
Additional information about each of the mineral projects that
is required by NI 43-101, sections 3.2 and 3.3 and paragraphs
3.4(a), (c) and (d) can be found in Technical Reports, which may be
found at www.sedar.com. Other important operating information
can be found in the Company's AIF, MD&A and Form 40-F.
Property/Project
name
and location
|
Date of most
recent
Technical Report (NI
43-101) filed on
SEDAR
|
LaRonde, LaRonde Zone
5 &
Ellison, Quebec, Canada
|
March 23,
2005
|
Canadian Malartic,
Quebec, Canada
|
June 16,
2014
|
Kittila, Kuotko
and
Kylmakangas, Finland
|
March 4,
2010
|
Meadowbank,
Nunavut,
Canada
|
February 15,
2012
|
Goldex, Quebec,
Canada
|
October 14,
2012
|
Lapa, Quebec,
Canada
|
June 8,
2006
|
Meliadine,
Nunavut,
Canada
|
February 11,
2015
|
Hammond Reef,
Ontario, Canada
|
July 2,
2013
|
Upper Beaver
(Kirkland Lake property), Ontario, Canada
|
November 5,
2012
|
Pinos Altos and
Creston Mascota, Mexico
|
March 25,
2009
|
La India,
Mexico
|
August 31,
2012
|
AGNICO EAGLE MINES
LIMITED
|
SUMMARY OF
OPERATIONS KEY PERFORMANCE INDICATORS
|
(thousands of
United States dollars, except where noted)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
December 31,
|
|
Year Ended
December 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
Operating
margin(i)by mine:
|
|
|
|
|
|
|
|
Northern
Business
|
|
|
|
|
|
|
|
|
LaRonde
mine
|
$
|
73,686
|
|
$
|
44,058
|
|
$
|
299,000
|
|
$
|
208,684
|
|
Lapa mine
|
1,567
|
|
3,762
|
|
25,786
|
|
39,186
|
|
Goldex
mine
|
13,532
|
|
13,506
|
|
68,650
|
|
86,420
|
|
Meadowbank
mine
|
49,196
|
|
50,807
|
|
224,661
|
|
165,060
|
|
Canadian Malartic
mine(ii)
|
56,348
|
|
40,430
|
|
215,873
|
|
188,285
|
|
Kittila
mine
|
23,245
|
|
27,596
|
|
100,489
|
|
110,475
|
Southern
Business
|
|
|
|
|
|
|
|
|
Pinos Altos
mine
|
36,563
|
|
34,909
|
|
149,179
|
|
179,820
|
|
Creston Mascota
deposit at Pinos Altos
|
9,144
|
|
6,470
|
|
32,308
|
|
35,626
|
|
La India
mine
|
14,284
|
|
22,560
|
|
68,816
|
|
92,784
|
Total operating
margin(i)
|
277,565
|
|
244,098
|
|
1,184,762
|
|
1,106,340
|
Gain on impairment
reversal
|
—
|
|
(120,161)
|
|
—
|
|
(120,161)
|
Amortization of
property, plant and mine development
|
129,478
|
|
151,399
|
|
508,739
|
|
613,160
|
Exploration,
corporate and other
|
85,113
|
|
97,447
|
|
333,642
|
|
344,880
|
Income before income
and mining taxes
|
62,974
|
|
115,413
|
|
342,381
|
|
268,461
|
Income and mining
taxes expense
|
27,876
|
|
52,759
|
|
98,494
|
|
109,637
|
Net income for the
period
|
$
|
35,098
|
|
$
|
62,654
|
|
$
|
243,887
|
|
$
|
158,824
|
Net income per share
— basic (US$)
|
$
|
0.15
|
|
$
|
0.28
|
|
$
|
1.06
|
|
$
|
0.71
|
Net income per share
— diluted (US$)
|
$
|
0.15
|
|
$
|
0.28
|
|
$
|
1.05
|
|
$
|
0.70
|
|
|
|
|
|
|
|
|
Cash
flows:
|
|
|
|
|
|
|
|
Cash provided by
operating activities
|
$
|
166,930
|
|
$
|
120,601
|
|
$
|
767,557
|
|
$
|
778,617
|
Cash used in
investing activities
|
$
|
(377,304)
|
|
$
|
(180,543)
|
|
$
|
(1,000,052)
|
|
$
|
(553,490)
|
Cash used in/provided
by financing activities
|
$
|
(10,101)
|
|
$
|
(19,360)
|
|
$
|
329,167
|
|
$
|
190,386
|
|
|
|
|
|
|
|
|
Realized prices
(US$):
|
|
|
|
|
|
|
|
Gold (per
ounce)
|
$
|
1,279
|
|
$
|
1,196
|
|
$
|
1,261
|
|
$
|
1,249
|
Silver (per
ounce)
|
$
|
16.72
|
|
$
|
16.76
|
|
$
|
17.07
|
|
$
|
17.28
|
Zinc (per
tonne)
|
$
|
3,215
|
|
$
|
2,346
|
|
$
|
2,829
|
|
$
|
2,047
|
Copper (per
tonne)
|
$
|
6,806
|
|
$
|
5,578
|
|
$
|
6,345
|
|
$
|
4,827
|
|
|
|
|
|
|
|
|
Payable
production(iii):
|
|
|
|
|
|
|
|
Gold
(ounces):
|
|
|
|
|
|
|
|
|
Northern
Business
|
|
|
|
|
|
|
|
|
|
LaRonde
mine
|
92,523
|
|
83,508
|
|
349,385
|
|
305,788
|
|
|
Lapa mine
|
203
|
|
14,065
|
|
48,613
|
|
73,930
|
|
|
Goldex
mine
|
27,033
|
|
24,170
|
|
118,947
|
|
120,704
|
|
|
Meadowbank
mine
|
85,046
|
|
94,770
|
|
352,526
|
|
312,214
|
|
|
Canadian Malartic
mine(ii)
|
80,743
|
|
69,971
|
|
316,731
|
|
292,514
|
|
|
Kittila
mine
|
47,746
|
|
53,337
|
|
196,938
|
|
202,508
|
|
Southern
Business
|
|
|
|
|
|
|
|
|
|
Pinos Altos
mine
|
40,406
|
|
46,685
|
|
180,859
|
|
192,772
|
|
|
Creston Mascota
deposit at Pinos Altos
|
14,012
|
|
11,213
|
|
48,384
|
|
47,296
|
|
|
La India
mine
|
25,500
|
|
28,714
|
|
101,150
|
|
115,162
|
Total gold
(ounces)
|
413,212
|
|
426,433
|
|
1,713,533
|
|
1,662,888
|
|
|
|
|
|
|
|
|
Silver (thousands of
ounces):
|
|
|
|
|
|
|
|
|
Northern
Business
|
|
|
|
|
|
|
|
|
|
LaRonde
mine
|
360
|
|
272
|
|
1,254
|
|
988
|
|
|
Lapa mine
|
—
|
|
—
|
|
3
|
|
5
|
|
|
Goldex
mine
|
—
|
|
—
|
|
1
|
|
1
|
|
|
Meadowbank
mine
|
67
|
|
53
|
|
275
|
|
221
|
|
|
Canadian Malartic
mine(ii)
|
88
|
|
81
|
|
341
|
|
340
|
|
|
Kittila
mine
|
3
|
|
4
|
|
13
|
|
12
|
|
Southern
Business
|
|
|
|
|
|
|
|
|
|
Pinos Altos
mine
|
612
|
|
641
|
|
2,535
|
|
2,505
|
|
|
Creston Mascota
deposit at Pinos Altos
|
84
|
|
48
|
|
281
|
|
201
|
|
|
La India
mine
|
51
|
|
138
|
|
313
|
|
486
|
Total silver
(thousands of ounces)
|
1,265
|
|
1,237
|
|
5,016
|
|
4,759
|
|
|
|
|
|
|
|
|
Zinc
(tonnes)
|
2,010
|
|
1,745
|
|
6,510
|
|
4,687
|
Copper
(tonnes)
|
1,266
|
|
944
|
|
4,501
|
|
4,416
|
|
|
|
|
|
|
|
|
Payable metal
sold:
|
|
|
|
|
|
|
|
Gold
(ounces):
|
|
|
|
|
|
|
|
|
Northern
Business
|
|
|
|
|
|
|
|
|
|
LaRonde
mine
|
91,795
|
|
67,803
|
|
353,440
|
|
293,161
|
|
|
Lapa mine
|
2,808
|
|
14,621
|
|
50,928
|
|
74,219
|
|
|
Goldex
mine
|
27,797
|
|
24,059
|
|
119,200
|
|
119,894
|
|
|
Meadowbank
mine
|
80,990
|
|
85,318
|
|
353,506
|
|
305,638
|
|
|
Canadian Malartic
mine(ii)(iv)
|
83,750
|
|
67,900
|
|
299,030
|
|
278,194
|
|
|
Kittila
mine
|
48,079
|
|
51,687
|
|
197,702
|
|
202,702
|
|
Southern
Business
|
|
|
|
|
|
|
|
|
|
Pinos Altos
mine
|
44,350
|
|
43,410
|
|
173,026
|
|
199,462
|
|
|
Creston Mascota
deposit at Pinos Altos
|
13,448
|
|
11,695
|
|
47,251
|
|
48,312
|
|
|
La India
mine
|
23,979
|
|
29,320
|
|
99,691
|
|
109,283
|
Total gold
(ounces)
|
416,996
|
|
395,813
|
|
1,693,774
|
|
1,630,865
|
|
|
|
|
|
|
|
|
Silver (thousands of
ounces):
|
|
|
|
|
|
|
|
|
Northern
Business
|
|
|
|
|
|
|
|
|
|
LaRonde
mine
|
348
|
|
257
|
|
1,251
|
|
981
|
|
|
Lapa mine
|
1
|
|
1
|
|
7
|
|
2
|
|
|
Goldex
mine
|
—
|
|
—
|
|
1
|
|
1
|
|
|
Meadowbank
mine
|
85
|
|
58
|
|
275
|
|
222
|
|
|
Canadian Malartic
mine(ii)(iv)
|
90
|
|
77
|
|
329
|
|
312
|
|
|
Kittila
mine
|
2
|
|
3
|
|
11
|
|
11
|
|
Southern
Business
|
|
|
|
|
|
|
|
|
|
Pinos Altos
mine
|
655
|
|
598
|
|
2,397
|
|
2,587
|
|
|
Creston Mascota
deposit at Pinos Altos
|
82
|
|
58
|
|
265
|
|
193
|
|
|
La India
mine
|
50
|
|
152
|
|
316
|
|
452
|
Total silver
(thousands of ounces):
|
1,313
|
|
1,204
|
|
4,852
|
|
4,761
|
|
|
|
|
|
|
|
|
Zinc
(tonnes)
|
1,221
|
|
902
|
|
6,316
|
|
3,554
|
Copper
(tonnes)
|
1,328
|
|
1,001
|
|
4,599
|
|
4,522
|
|
|
|
|
|
|
|
|
Total cash costs
per ounce of gold produced — co-product basis
(US$)(v):
|
|
|
|
|
|
|
|
Northern
Business
|
|
|
|
|
|
|
|
|
LaRonde
mine(vi)
|
$
|
615
|
|
$
|
589
|
|
$
|
607
|
|
$
|
668
|
|
Lapa
mine(vii)
|
—
|
|
935
|
|
757
|
|
732
|
|
Goldex
mine(viii)
|
719
|
|
657
|
|
611
|
|
532
|
|
Meadowbank
mine
|
670
|
|
589
|
|
628
|
|
727
|
|
Canadian Malartic
mine(ii)
|
648
|
|
655
|
|
594
|
|
626
|
|
Kittila
mine
|
797
|
|
665
|
|
754
|
|
700
|
Southern
Business
|
|
|
|
|
|
|
|
|
Pinos Altos
mine
|
730
|
|
616
|
|
634
|
|
585
|
|
Creston Mascota
deposit at Pinos Altos
|
689
|
|
708
|
|
669
|
|
588
|
|
La India
mine
|
711
|
|
515
|
|
634
|
|
468
|
Weighted average
total cash costs per ounce of gold produced
|
$
|
680
|
|
$
|
626
|
|
$
|
637
|
|
$
|
643
|
|
|
|
|
|
|
|
|
Total cash costs
per ounce of gold produced — by-product basis
(US$)(v):
|
|
|
|
|
|
|
|
Northern
Business
|
|
|
|
|
|
|
|
|
LaRonde
mine(vi)
|
$
|
386
|
|
$
|
405
|
|
$
|
406
|
|
$
|
501
|
|
Lapa
mine(vii)
|
—
|
|
935
|
|
755
|
|
732
|
|
Goldex
mine(viii)
|
719
|
|
657
|
|
610
|
|
532
|
|
Meadowbank
mine
|
653
|
|
579
|
|
614
|
|
715
|
|
Canadian Malartic
mine(ii)
|
628
|
|
634
|
|
576
|
|
606
|
|
Kittila
mine
|
796
|
|
664
|
|
753
|
|
699
|
Southern
Business
|
|
|
|
|
|
|
|
|
Pinos Altos
mine
|
485
|
|
390
|
|
395
|
|
356
|
|
Creston Mascota
deposit at Pinos Altos
|
591
|
|
649
|
|
575
|
|
516
|
|
La India
mine
|
678
|
|
437
|
|
580
|
|
395
|
Weighted average
total cash costs per ounce of gold produced
|
$
|
592
|
|
$
|
552
|
|
$
|
558
|
|
$
|
573
|
Notes:
|
(i) Operating margin
is calculated as revenues from mining operations less production
costs.
|
(ii) The information
set out in this table reflects the Company's 50% interest in the
Canadian Malartic mine since the date of acquisition.
|
(iii) Payable
production (a non-GAAP non-financial performance measure) is the
quantity of mineral produced during a period contained in products
that have been or will be sold by the Company, whether such
products are sold during the period or held as inventories at the
end of the period.
|
(iv) The Canadian
Malartic mine's payable metal sold excludes the 5.0% net smelter
royalty in favour of Osisko Gold Royalties Ltd.
|
(v) Total cash costs
per ounce of gold produced is not a recognized measure under IFRS
and this data may not be comparable to data reported by other gold
producers. Total cash costs per ounce of gold produced is reported
on both a by-product basis (deducting by-product metal revenues
from production costs) and co-product basis (without deducting
by-product metal revenues). Total cash costs per ounce of gold
produced on a by-product basis is calculated by adjusting
production costs as recorded in the consolidated statements of
income and comprehensive income for by-product metal revenues,
unsold concentrate inventory production costs, smelting, refining
and marketing charges and other adjustments, and then dividing by
the number of ounces of gold produced. Total cash costs per ounce
of gold produced on a co-product basis is calculated in the same
manner as total cash costs per ounce of gold produced on a
by-product basis except that no adjustment for by-product metal
revenues is made. Accordingly, the calculation of total cash costs
per ounce of gold produced on a co-product basis does not reflect a
reduction in production costs or smelting, refining and marketing
charges associated with the production and sale of by-product
metals. The Company believes that these generally accepted industry
measures provide a realistic indication of operating performance
and provide useful comparison points between periods. Total cash
costs per ounce of gold produced is intended to provide information
about the cash generating capabilities of the Company's mining
operations. Management also uses these measures to monitor the
performance of the Company's mining operations. As market prices
for gold are quoted on a per ounce basis, using the total cash
costs per ounce of gold produced on a by-product basis measure
allows management to assess a mine's cash generating capabilities
at various gold prices. Management is aware that these per ounce
measures of performance can be affected by fluctuations in exchange
rates and, in the case of total cash costs of gold produced on a
by-product basis, by-product metal prices. Management compensates
for these inherent limitations by using these measures in
conjunction with minesite costs per tonne as well as other data
prepared in accordance with IFRS. Management also performs
sensitivity analyses in order to quantify the effects of
fluctuating metal prices and exchange rates.
|
(vi) The LaRonde
mine's per ounce of gold produced calculations exclude 515 ounces
for the twelve months ended December 31, 2017 of payable gold
production and the associated costs related to LaRonde Zone 5 which
were produced prior to the achievement of commercial
production.
|
(vii) The Lapa mine's
per ounce of gold produced calculations exclude 203 ounces for the
twelve months ended December 31, 2017 of payable gold production as
a result of the Lapa mill being placed on temporary
maintenance.
|
(viii) The Goldex
mine's per ounce of gold produced calculations exclude 8,041 ounces
for the twelve months ended December 31, 2017 of payable gold
production and the associated costs related to the Deep 1 Zone
which were produced prior to the achievement of commercial
production.
|
AGNICO EAGLE MINES
LIMITED
|
CONSOLIDATED
BALANCE SHEETS
|
(thousands of
United States dollars, except share amounts, IFRS
basis)
|
(Unaudited)
|
|
|
|
|
|
|
|
As at December
31,
2017
|
|
As at December
31,
2016
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
632,978
|
|
$
|
539,974
|
|
Short-term
investments
|
|
10,919
|
|
8,424
|
|
Restricted
cash
|
|
422
|
|
398
|
|
Trade
receivables
|
|
12,000
|
|
8,185
|
|
Inventories
|
|
500,976
|
|
443,714
|
|
Income taxes
recoverable
|
|
13,598
|
|
—
|
|
Available-for-sale
securities
|
|
122,775
|
|
92,310
|
|
Fair value of
derivative financial instruments
|
|
17,240
|
|
364
|
|
Other current
assets
|
|
150,626
|
|
136,810
|
Total current
assets
|
|
1,461,534
|
|
1,230,179
|
Non-current
assets:
|
|
|
|
|
|
Restricted
cash
|
|
801
|
|
764
|
|
Goodwill
|
|
696,809
|
|
696,809
|
|
Property, plant and
mine development
|
|
5,626,552
|
|
5,106,036
|
|
Other
assets
|
|
79,905
|
|
74,163
|
Total
assets
|
|
$
|
7,865,601
|
|
$
|
7,107,951
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
|
$
|
290,722
|
|
$
|
228,566
|
|
Reclamation
provision
|
|
10,038
|
|
9,193
|
|
Interest
payable
|
|
12,894
|
|
14,242
|
|
Income taxes
payable
|
|
16,755
|
|
35,070
|
|
Finance lease
obligations
|
|
3,412
|
|
5,535
|
|
Current portion of
long-term debt
|
|
—
|
|
129,896
|
|
Fair value of
derivative financial instruments
|
|
—
|
|
1,120
|
Total current
liabilities
|
|
333,821
|
|
423,622
|
Non-current
liabilities:
|
|
|
|
|
|
Long-term
debt
|
|
1,371,851
|
|
1,072,790
|
|
Reclamation
provision
|
|
345,268
|
|
265,308
|
|
Deferred income and
mining tax liabilities
|
|
827,341
|
|
819,562
|
|
Other
liabilities
|
|
40,329
|
|
34,195
|
Total
liabilities
|
|
2,918,610
|
|
2,615,477
|
EQUITY
|
|
|
|
|
Common
shares:
|
|
|
|
|
|
Outstanding —
232,793,335 common shares issued, less 542,894 shares held in
trust
|
|
5,288,432
|
|
4,987,694
|
|
Stock
options
|
|
186,754
|
|
179,852
|
|
Contributed
surplus
|
|
37,254
|
|
37,254
|
|
Deficit
|
|
(595,797)
|
|
(744,453)
|
|
Accumulated other
comprehensive income
|
|
30,348
|
|
32,127
|
Total
equity
|
|
4,946,991
|
|
4,492,474
|
Total liabilities and
equity
|
|
$
|
7,865,601
|
|
$
|
7,107,951
|
AGNICO EAGLE MINES
LIMITED
|
CONSOLIDATED
STATEMENTS OF INCOME
|
(thousands of
United States dollars, except per share amounts, IFRS
basis)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
|
|
December
31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES
|
|
|
|
|
|
|
|
Revenues from mining
operations
|
$
|
565,254
|
|
$
|
499,210
|
|
$
|
2,242,604
|
|
$
|
2,138,232
|
|
|
|
|
|
|
|
|
COSTS, EXPENSES
AND OTHER INCOME
|
|
|
|
|
|
|
|
Production(i)
|
287,689
|
|
255,112
|
|
1,057,842
|
|
1,031,892
|
Exploration and
corporate development
|
31,708
|
|
35,846
|
|
141,450
|
|
146,978
|
Amortization of
property, plant and mine development
|
129,478
|
|
151,399
|
|
508,739
|
|
613,160
|
General and
administrative
|
28,570
|
|
32,147
|
|
115,064
|
|
102,781
|
Impairment loss on
available-for-sale securities
|
1,286
|
|
—
|
|
8,532
|
|
—
|
Finance
costs
|
21,092
|
|
19,795
|
|
78,931
|
|
74,641
|
Loss (gain) on
derivative financial instruments
|
550
|
|
(9)
|
|
(20,990)
|
|
(9,468)
|
Gain on sale of
available-for-sale securities
|
—
|
|
—
|
|
(168)
|
|
(3,500)
|
Environmental
remediation
|
893
|
|
(1,597)
|
|
1,219
|
|
4,058
|
Gain on impairment
reversal
|
—
|
|
(120,161)
|
|
—
|
|
(120,161)
|
Foreign currency
translation loss (gain)
|
5,492
|
|
(1,661)
|
|
13,313
|
|
13,157
|
Other (income)
expenses
|
(4,478)
|
|
12,926
|
|
(3,709)
|
|
16,233
|
Income before income
and mining taxes
|
62,974
|
|
115,413
|
|
342,381
|
|
268,461
|
Income and mining
taxes expense
|
27,876
|
|
52,759
|
|
98,494
|
|
109,637
|
Net income for the
period
|
$
|
35,098
|
|
$
|
62,654
|
|
$
|
243,887
|
|
$
|
158,824
|
|
|
|
|
|
|
|
|
Net income per share
- basic
|
$
|
0.15
|
|
$
|
0.28
|
|
$
|
1.06
|
|
$
|
0.71
|
Net income per share
- diluted
|
$
|
0.15
|
|
$
|
0.28
|
|
$
|
1.05
|
|
$
|
0.70
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding (in thousands):
|
|
|
|
|
|
|
|
Basic
|
231,916
|
|
224,785
|
|
230,252
|
|
222,737
|
Diluted
|
234,065
|
|
227,444
|
|
232,461
|
|
225,754
|
|
|
|
|
|
|
|
|
Note:
|
|
|
|
|
|
|
|
(i)Exclusive of amortization, which is
shown separately.
|
|
|
|
|
|
|
|
AGNICO EAGLE MINES
LIMITED
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(thousands of
United States dollars, IFRS basis)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
|
|
December
31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
OPERATING
ACTIVITIES
|
|
|
|
|
|
|
|
Net income for the
period
|
$
|
35,098
|
|
$
|
62,654
|
|
$
|
243,887
|
|
$
|
158,824
|
Add (deduct) items
not affecting cash:
|
|
|
|
|
|
|
|
|
Amortization of
property, plant and mine development
|
129,478
|
|
151,399
|
|
508,739
|
|
613,160
|
|
Deferred income and
mining taxes
|
15,750
|
|
9,678
|
|
10,855
|
|
7,609
|
|
Gain on sale of
available-for-sale securities
|
—
|
|
—
|
|
(168)
|
|
(3,500)
|
|
Stock-based
compensation
|
9,417
|
|
8,731
|
|
43,674
|
|
33,804
|
|
Impairment loss on
available-for-sale securities
|
1,286
|
|
—
|
|
8,532
|
|
—
|
|
Gain on impairment
reversal
|
—
|
|
(120,161)
|
|
—
|
|
(120,161)
|
|
Foreign currency
translation loss (gain)
|
5,492
|
|
(1,661)
|
|
13,313
|
|
13,157
|
|
Other
|
15,069
|
|
10,413
|
|
15,362
|
|
14,012
|
Adjustment for
settlement of reclamation provision
|
(2,085)
|
|
(788)
|
|
(4,824)
|
|
(2,719)
|
Changes in non-cash
working capital balances:
|
|
|
|
|
|
|
|
|
Trade
receivables
|
(4,256)
|
|
(286)
|
|
(3,815)
|
|
(471)
|
|
Income
taxes
|
(16,901)
|
|
26,433
|
|
(31,913)
|
|
28,082
|
|
Inventories
|
7,750
|
|
(12)
|
|
(64,889)
|
|
20,355
|
|
Other current
assets
|
26,163
|
|
32,583
|
|
(13,722)
|
|
53,009
|
|
Accounts payable and
accrued liabilities
|
(44,033)
|
|
(46,950)
|
|
44,694
|
|
(35,408)
|
|
Interest
payable
|
(11,298)
|
|
(11,432)
|
|
(2,168)
|
|
(1,136)
|
Cash provided by
operating activities
|
166,930
|
|
120,601
|
|
767,557
|
|
778,617
|
|
|
|
|
|
|
|
|
INVESTING
ACTIVITIES
|
|
|
|
|
|
|
|
Additions to
property, plant and mine development
|
(296,277)
|
|
(166,567)
|
|
(874,153)
|
|
(516,050)
|
Acquisitions, net of
cash and cash equivalents acquired
|
(71,989)
|
|
—
|
|
(71,989)
|
|
(12,434)
|
Net (purchases) sales
of short-term investments
|
(737)
|
|
378
|
|
(2,495)
|
|
(980)
|
Net proceeds from
sale of available-for-sale securities and other
investments
|
—
|
|
—
|
|
333
|
|
9,461
|
Purchases of
available-for-sale securities and other investments
|
(8,299)
|
|
(14,408)
|
|
(51,724)
|
|
(33,774)
|
(Increase) decrease
in restricted cash
|
(2)
|
|
54
|
|
(24)
|
|
287
|
Cash used in
investing activities
|
(377,304)
|
|
(180,543)
|
|
(1,000,052)
|
|
(553,490)
|
|
|
|
|
|
|
|
|
FINANCING
ACTIVITIES
|
|
|
|
|
|
|
|
Dividends
paid
|
(20,285)
|
|
(20,281)
|
|
(76,075)
|
|
(71,375)
|
Repayment of finance
lease obligations
|
(914)
|
|
(2,375)
|
|
(5,252)
|
|
(10,004)
|
Proceeds from
long-term debt
|
—
|
|
—
|
|
280,000
|
|
125,000
|
Repayment of
long-term debt
|
—
|
|
—
|
|
(410,412)
|
|
(405,374)
|
Notes
issuance
|
—
|
|
—
|
|
300,000
|
|
350,000
|
Long-term debt
financing
|
(1,220)
|
|
(920)
|
|
(3,505)
|
|
(3,415)
|
Repurchase of common
shares for stock-based compensation plans
|
(25)
|
|
(34)
|
|
(24,684)
|
|
(15,576)
|
Proceeds on exercise
of stock options
|
9,452
|
|
1,552
|
|
44,199
|
|
192,103
|
Common shares
issued
|
2,891
|
|
2,698
|
|
224,896
|
|
29,027
|
Cash (used in)
provided by financing activities
|
(10,101)
|
|
(19,360)
|
|
329,167
|
|
190,386
|
Effect of exchange
rate changes on cash and cash equivalents
|
(2,013)
|
|
715
|
|
(3,668)
|
|
311
|
Net (decrease)
increase in cash and cash equivalents during the
period
|
(222,488)
|
|
(78,587)
|
|
93,004
|
|
415,824
|
Cash and cash
equivalents, beginning of period
|
855,466
|
|
618,561
|
|
539,974
|
|
124,150
|
Cash and cash
equivalents, end of period
|
$
|
632,978
|
|
$
|
539,974
|
|
$
|
632,978
|
|
$
|
539,974
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL CASH
FLOW INFORMATION
|
|
|
|
|
|
|
|
Interest
paid
|
$
|
33,814
|
|
$
|
31,353
|
|
$
|
78,885
|
|
$
|
71,401
|
Income and mining
taxes paid
|
$
|
31,322
|
|
$
|
20,681
|
|
$
|
127,915
|
|
$
|
105,184
|
AGNICO EAGLE MINES
LIMITED
|
RECONCILIATION OF
NON-GAAP FINANCIAL PERFORMANCE MEASURES
|
(thousands of
United States dollars, except where noted)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Production
Costs by Mine
|
|
Three Months
Ended
December 31,
2017
|
|
Three Months
Ended
December 31,
2016
|
|
Year Ended
December 31, 2017
|
|
Year Ended D
December 31, 2016
|
(thousands of
United States dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LaRonde
mine
|
|
$
|
|
|
54,756
|
|
$
|
|
|
44,056
|
|
$
|
|
|
185,488
|
|
$
|
|
|
179,496
|
Lapa mine
|
|
2,073
|
|
13,233
|
|
38,786
|
|
52,974
|
Goldex
mine
|
|
21,785
|
|
15,284
|
|
71,015
|
|
63,310
|
Meadowbank
mine
|
|
55,505
|
|
52,246
|
|
224,364
|
|
218,963
|
Canadian Malartic
mine(i)
|
|
58,295
|
|
46,930
|
|
188,568
|
|
183,635
|
Kittila
mine
|
|
38,146
|
|
34,352
|
|
148,272
|
|
141,871
|
Pinos Altos
mine
|
|
30,752
|
|
26,450
|
|
108,726
|
|
114,557
|
Creston Mascota
deposit at Pinos Altos
|
|
9,315
|
|
7,923
|
|
31,490
|
|
27,341
|
La India
mine
|
|
17,062
|
|
14,638
|
|
61,133
|
|
49,745
|
Production costs per
the consolidated statements of income and
comprehensive income
|
|
$
|
|
|
287,689
|
|
$
|
|
|
255,112
|
|
$
|
|
|
1,057,842
|
|
$
|
|
|
1,031,892
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Production Costs to Total Cash Costs per Ounce of Gold Produced
(ii)by Mine and Reconciliation of Production Costs to
Minesite Costs per Tonne(iii) by Mine
|
(thousands of
United States dollars, except as noted)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LaRonde
Mine
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Year
Ended
|
|
Year
Ended
|
Per Ounce of Gold
Produced(ii)(vi)
|
|
December 31,
2017
|
|
December 31,
2016
|
|
December 31,
2017
|
|
December 31,
2016
|
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
Gold production
(ounces)
|
|
|
|
92,523
|
|
|
|
83,508
|
|
|
|
348,870
|
|
|
|
305,788
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
54,756
|
|
$
|
592
|
|
$
|
44,056
|
|
$
|
528
|
|
$
|
185,488
|
|
$
|
532
|
|
$
|
179,496
|
|
$
|
587
|
|
Inventory and other
adjustments(iv)
|
|
2,105
|
|
23
|
|
5,171
|
|
61
|
|
26,246
|
|
75
|
|
24,914
|
|
81
|
Cash operating costs
(co-product basis)
|
|
$
|
56,861
|
|
$
|
615
|
|
$
|
49,227
|
|
$
|
589
|
|
$
|
211,734
|
|
$
|
607
|
|
$
|
204,410
|
|
$
|
668
|
|
By-product metal
revenues
|
|
(21,106)
|
|
(229)
|
|
(15,403)
|
|
(184)
|
|
(70,054)
|
|
(201)
|
|
(51,136)
|
|
(167)
|
Cash operating costs
(by-product basis)
|
|
$
|
35,755
|
|
$
|
386
|
|
$
|
33,824
|
|
$
|
405
|
|
$
|
141,680
|
|
$
|
406
|
|
$
|
153,274
|
|
$
|
501
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LaRonde
Mine
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Year
Ended
|
|
Year
Ended
|
Per
Tonne(iii)(vii)
|
|
December 31,
2017
|
|
December 31,
2016
|
|
December 31,
2017
|
|
December 31,
2016
|
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
Tonnes of ore milled
(thousands of tonnes)
|
|
|
|
585
|
|
|
|
572
|
|
|
|
2,246
|
|
|
|
2,240
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
54,756
|
|
$
|
94
|
|
$
|
44,056
|
|
$
|
77
|
|
$
|
185,488
|
|
$
|
83
|
|
$
|
179,496
|
|
$
|
80
|
Production costs
(C$)
|
|
C$
|
68,535
|
|
C$
|
117
|
|
C$
|
57,302
|
|
C$
|
100
|
|
C$
|
243,638
|
|
C$
|
108
|
|
C$
|
237,934
|
|
C$
|
106
|
Inventory and other
adjustments (C$)(v)
|
|
(3,953)
|
|
(7)
|
|
(517)
|
|
(1)
|
|
(1,107)
|
|
—
|
|
(1,447)
|
|
—
|
Minesite operating
costs (C$)
|
|
C$
|
64,582
|
|
C$
|
110
|
|
C$
|
56,785
|
|
C$
|
99
|
|
C$
|
242,531
|
|
C$
|
108
|
|
C$
|
236,487
|
|
C$
|
106
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lapa
Mine
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Year
Ended
|
|
Year
Ended
|
Per Ounce of Gold
Produced(ii)(viii)
|
|
December 31,
2017
|
|
December 31,
2016
|
|
December 31,
2017
|
|
December 31,
2016
|
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
Gold production
(ounces)
|
|
|
|
—
|
|
|
|
14,065
|
|
|
|
48,410
|
|
|
|
73,930
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
2,073
|
|
$
|
—
|
|
$
|
13,233
|
|
$
|
941
|
|
$
|
38,786
|
|
$
|
801
|
|
$
|
52,974
|
|
$
|
717
|
|
Inventory and other
adjustments(iv)
|
|
(2,060)
|
|
—
|
|
(82)
|
|
(6)
|
|
(2,143)
|
|
(44)
|
|
1,173
|
|
15
|
Cash operating costs
(co-product basis)
|
|
$
|
13
|
|
$
|
—
|
|
$
|
13,151
|
|
$
|
935
|
|
$
|
36,643
|
|
$
|
757
|
|
$
|
54,147
|
|
$
|
732
|
|
By-product metal
revenues
|
|
(13)
|
|
—
|
|
(6)
|
|
—
|
|
(112)
|
|
(2)
|
|
(28)
|
|
—
|
Cash operating costs
(by-product basis)
|
|
$
|
—
|
|
$
|
—
|
|
$
|
13,145
|
|
$
|
935
|
|
$
|
36,531
|
|
$
|
755
|
|
$
|
54,119
|
|
$
|
732
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lapa
Mine
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Year
Ended
|
|
Year
Ended
|
Per
Tonne(iii)
|
|
December 31,
2017
|
|
December 31,
2016
|
|
December 31,
2017
|
|
December 31,
2016
|
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
Tonnes of ore milled
(thousands of tonnes)
|
|
|
|
—
|
|
|
|
130
|
|
|
|
398
|
|
|
|
593
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
2,073
|
|
$
|
—
|
|
$
|
13,233
|
|
$
|
102
|
|
$
|
38,786
|
|
$
|
97
|
|
$
|
52,974
|
|
$
|
89
|
Production costs
(C$)
|
|
C$
|
2,639
|
|
C$
|
—
|
|
C$
|
17,335
|
|
C$
|
133
|
|
C$
|
50,976
|
|
C$
|
128
|
|
C$
|
69,941
|
|
C$
|
118
|
Inventory and other
adjustments (C$)(v)
|
|
(2,639)
|
|
—
|
|
198
|
|
2
|
|
(3,166)
|
|
(8)
|
|
1,580
|
|
3
|
Minesite operating
costs (C$)
|
|
C$
|
—
|
|
C$
|
—
|
|
C$
|
17,533
|
|
C$
|
135
|
|
C$
|
47,810
|
|
C$
|
120
|
|
C$
|
71,521
|
|
C$
|
121
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goldex
Mine
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Year
Ended
|
|
Year
Ended
|
Per Ounce of Gold
Produced(ii)(ix)
|
|
December 31,
2017
|
|
December 31,
2016
|
|
December 31,
2017
|
|
December 31,
2016
|
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
Gold production
(ounces)
|
|
|
|
27,033
|
|
|
|
24,170
|
|
|
|
110,906
|
|
|
|
120,704
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
21,784
|
|
$
|
806
|
|
$
|
15,284
|
|
$
|
632
|
|
$
|
71,014
|
|
$
|
640
|
|
$
|
63,310
|
|
$
|
525
|
|
Inventory and other
adjustments(iv)
|
|
(2,349)
|
|
(87)
|
|
598
|
|
25
|
|
(3,289)
|
|
(29)
|
|
912
|
|
7
|
Cash operating costs
(co-product basis)
|
|
$
|
19,435
|
|
$
|
719
|
|
$
|
15,882
|
|
$
|
657
|
|
$
|
67,725
|
|
$
|
611
|
|
$
|
64,222
|
|
$
|
532
|
|
By-product metal
revenues
|
|
(3)
|
|
—
|
|
(5)
|
|
—
|
|
(24)
|
|
(1)
|
|
(26)
|
|
—
|
Cash operating costs
(by-product basis)
|
|
$
|
19,432
|
|
$
|
719
|
|
$
|
15,877
|
|
$
|
657
|
|
$
|
67,701
|
|
$
|
610
|
|
$
|
64,196
|
|
$
|
532
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goldex
Mine
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Year
Ended
|
|
Year
Ended
|
Per
Tonne(iii)*
|
|
December 31,
2017
|
|
December 31,
2016
|
|
December 31,
2017
|
|
December 31,
2016
|
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
Tonnes of ore milled
(thousands of tonnes)
|
|
|
|
593
|
|
|
|
580
|
|
|
|
2,396
|
|
|
|
2,545
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
21,784
|
|
$
|
37
|
|
$
|
15,284
|
|
$
|
26
|
|
$
|
71,014
|
|
$
|
30
|
|
$
|
63,310
|
|
$
|
25
|
Production costs
(C$)
|
|
C$
|
27,642
|
|
C$
|
47
|
|
C$
|
20,379
|
|
C$
|
35
|
|
C$
|
91,998
|
|
C$
|
38
|
|
C$
|
83,835
|
|
C$
|
33
|
Inventory and other
adjustments (C$)(v)
|
|
(2,147)
|
|
(4)
|
|
896
|
|
2
|
|
(2,404)
|
|
(1)
|
|
1,231
|
|
—
|
Minesite operating
costs (C$)
|
|
C$
|
25,495
|
|
C$
|
43
|
|
C$
|
21,275
|
|
C$
|
37
|
|
C$
|
89,594
|
|
C$
|
37
|
|
C$
|
85,066
|
|
C$
|
33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Meadowbank
Mine
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Year
Ended
|
|
Year
Ended
|
Per Ounce of Gold
Produced(ii)
|
|
December 31,
2017
|
|
December 31,
2016
|
|
December 31,
2017
|
|
December 31,
2016
|
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
Gold production
(ounces)
|
|
|
|
85,046
|
|
|
|
94,770
|
|
|
|
352,526
|
|
|
|
312,214
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
55,505
|
|
$
|
653
|
|
$
|
52,246
|
|
$
|
551
|
|
$
|
224,364
|
|
$
|
636
|
|
$
|
218,963
|
|
$
|
701
|
|
Inventory and other
adjustments(iv)
|
|
1,495
|
|
17
|
|
3,608
|
|
38
|
|
(3,127)
|
|
(8)
|
|
8,105
|
|
26
|
Cash operating costs
(co-product basis)
|
|
$
|
57,000
|
|
$
|
670
|
|
$
|
55,854
|
|
$
|
589
|
|
$
|
221,237
|
|
$
|
628
|
|
$
|
227,068
|
|
$
|
727
|
|
By-product metal
revenues
|
|
(1,430)
|
|
(17)
|
|
(1,021)
|
|
(10)
|
|
(4,714)
|
|
(14)
|
|
(3,837)
|
|
(12)
|
Cash operating costs
(by-product basis)
|
|
$
|
55,570
|
|
$
|
653
|
|
$
|
54,833
|
|
$
|
579
|
|
$
|
216,523
|
|
$
|
614
|
|
$
|
223,231
|
|
$
|
715
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Meadowbank
Mine
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Year
Ended
|
|
Year
Ended
|
Per
Tonne(iii)
|
|
December 31,
2017
|
|
December 31,
2016
|
|
December 31,
2017
|
|
December 31,
2016
|
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
Tonnes of ore milled
(thousands of tonnes)
|
|
|
|
992
|
|
|
|
1,015
|
|
|
|
3,853
|
|
|
|
3,915
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
55,505
|
|
$
|
56
|
|
$
|
52,246
|
|
$
|
51
|
|
$
|
224,364
|
|
$
|
58
|
|
$
|
|
218,963
|
|
$
|
56
|
Production costs
(C$)
|
|
C$
|
71,048
|
|
C$
|
72
|
|
C$
|
67,309
|
|
C$
|
66
|
|
C$
|
292,216
|
|
C$
|
76
|
|
C$
|
|
284,748
|
|
C$
|
73
|
Inventory and other
adjustments (C$)(v)
|
|
4,397
|
|
4
|
|
5,371
|
|
6
|
|
1,512
|
|
—
|
|
5,681
|
|
1
|
Minesite operating
costs (C$)
|
|
C$
|
75,445
|
|
C$
|
76
|
|
C$
|
72,680
|
|
C$
|
72
|
|
C$
|
293,728
|
|
C$
|
76
|
|
C$
|
290,429
|
|
C$
|
74
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Canadian Malartic
Mine(i)
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Year
Ended
|
|
Year
Ended
|
Per Ounce of Gold
Produced(ii)
|
|
December 31,
2017
|
|
December 31,
2016
|
|
December 31,
2017
|
|
December 31,
2016
|
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
Gold production
(ounces)
|
|
|
|
80,743
|
|
|
|
69,971
|
|
|
|
316,731
|
|
|
|
292,514
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
58,296
|
|
$
|
722
|
|
$
|
46,930
|
|
$
|
671
|
|
$
|
188,569
|
|
$
|
595
|
|
$
|
183,635
|
|
$
|
628
|
|
Inventory and other
adjustments(iv)
|
|
(6,010)
|
|
(74)
|
|
(1,116)
|
|
(16)
|
|
(497)
|
|
(1)
|
|
(553)
|
|
(2)
|
Cash operating costs
(co-product basis)
|
|
$
|
52,286
|
|
$
|
648
|
|
$
|
45,814
|
|
$
|
655
|
|
$
|
188,072
|
|
$
|
594
|
|
$
|
183,082
|
|
$
|
626
|
|
By-product metal
revenues
|
|
(1,593)
|
|
(20)
|
|
(1,468)
|
|
(21)
|
|
(5,759)
|
|
(18)
|
|
(5,821)
|
|
(20)
|
Cash operating costs
(by-product basis)
|
|
$
|
50,693
|
|
$
|
628
|
|
$
|
44,346
|
|
$
|
634
|
|
$
|
182,313
|
|
$
|
576
|
|
$
|
177,261
|
|
$
|
606
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Canadian Malartic
Mine(i)
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Year
Ended
|
|
Year
Ended
|
Per
Tonne(iii)
|
|
December 31,
2017
|
|
December 31,
2016
|
|
December 31,
2017
|
|
December 31,
2016
|
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
Tonnes of ore milled
(thousands of tonnes)
|
|
|
|
2,615
|
|
|
|
2,433
|
|
|
|
10,179
|
|
|
|
9,821
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
58,296
|
|
$
|
22
|
|
$
|
46,930
|
|
$
|
19
|
|
$
|
188,569
|
|
$
|
19
|
|
$
|
183,635
|
|
$
|
19
|
Production costs
(C$)
|
|
C$
|
73,736
|
|
C$
|
28
|
|
C$
|
66,395
|
|
C$
|
27
|
|
C$
|
243,903
|
|
C$
|
24
|
|
C$
|
244,333
|
|
C$
|
25
|
Inventory and other
adjustments (C$)(v)
|
|
(9,225)
|
|
(3)
|
|
(5,747)
|
|
(2)
|
|
(3,567)
|
|
—
|
|
(3,399)
|
|
—
|
Minesite operating
costs (C$)
|
|
C$
|
64,511
|
|
C$
|
25
|
|
C$
|
60,648
|
|
C$
|
25
|
|
C$
|
240,336
|
|
C$
|
24
|
|
C$
|
240,934
|
|
C$
|
25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kittila
Mine
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Year
Ended
|
|
Year
Ended
|
Per Ounce of Gold
Produced(ii)
|
|
December 31,
2017
|
|
December 31,
2016
|
|
December 31,
2017
|
|
December 31,
2016
|
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
Gold production
(ounces)
|
|
|
|
47,746
|
|
|
|
53,337
|
|
|
|
196,938
|
|
|
|
202,508
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
38,146
|
|
$
|
799
|
|
$
|
34,352
|
|
$
|
644
|
|
$
|
148,272
|
|
$
|
753
|
|
$
|
141,871
|
|
$
|
701
|
|
Inventory and other
adjustments(iv)
|
|
(109)
|
|
(2)
|
|
1,101
|
|
21
|
|
213
|
|
1
|
|
(26)
|
|
(1)
|
Cash operating costs
(co-product basis)
|
|
$
|
38,037
|
|
$
|
797
|
|
$
|
35,453
|
|
$
|
665
|
|
$
|
148,485
|
|
$
|
754
|
|
$
|
141,845
|
|
$
|
700
|
|
By-product metal
revenues
|
|
(39)
|
|
(1)
|
|
(59)
|
|
(1)
|
|
(192)
|
|
(1)
|
|
(200)
|
|
(1)
|
Cash operating costs
(by-product basis)
|
|
$
|
37,998
|
|
$
|
796
|
|
$
|
35,394
|
|
$
|
664
|
|
$
|
148,293
|
|
$
|
753
|
|
$
|
141,645
|
|
$
|
699
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kittila
Mine
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Year
Ended
|
|
Year
Ended
|
Per
Tonne(iii)
|
|
December 31,
2017
|
|
December 31,
2016
|
|
December 31,
2017
|
|
December 31,
2016
|
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
Tonnes of ore milled
(thousands of tonnes)
|
|
|
|
394
|
|
|
|
401
|
|
|
|
1,685
|
|
|
|
1,667
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
38,146
|
|
$
|
97
|
|
$
|
34,352
|
|
$
|
86
|
|
$
|
148,272
|
|
$
|
88
|
|
$
|
141,871
|
|
$
|
85
|
Production costs
(€)
|
|
€
|
32,525
|
|
€
|
83
|
|
€
|
32,221
|
|
€
|
80
|
|
€
|
131,111
|
|
€
|
78
|
|
€
|
128,599
|
|
€
|
77
|
Inventory and other
adjustments(€)(v)
|
|
(144)
|
|
(1)
|
|
1,011
|
|
3
|
|
(79)
|
|
—
|
|
(505)
|
|
—
|
Minesite operating
costs (€)
|
|
€
|
32,381
|
|
€
|
82
|
|
€
|
33,232
|
|
€
|
83
|
|
€
|
131,032
|
|
€
|
78
|
|
€
|
128,094
|
|
€
|
77
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pinos Altos
Mine
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Year
Ended
|
|
Year
Ended
|
Per Ounce of Gold
Produced(ii)
|
|
December 31,
2017
|
|
December 31,
2016
|
|
December 31,
2017
|
|
December 31,
2016
|
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
Gold production
(ounces)
|
|
|
|
40,406
|
|
|
|
46,685
|
|
|
|
180,859
|
|
|
|
192,772
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
30,752
|
|
$
|
761
|
|
$
|
26,450
|
|
$
|
567
|
|
$
|
108,726
|
|
$
|
601
|
|
$
|
114,557
|
|
$
|
594
|
|
Inventory and other
adjustments(iv)
|
|
(1,263)
|
|
(31)
|
|
2,285
|
|
49
|
|
5,926
|
|
33
|
|
(1,840)
|
|
(9)
|
Cash operating costs
(co-product basis)
|
|
$
|
29,489
|
|
$
|
730
|
|
$
|
28,735
|
|
$
|
616
|
|
$
|
114,652
|
|
$
|
634
|
|
$
|
112,717
|
|
$
|
585
|
|
By-product metal
revenues
|
|
(9,874)
|
|
(245)
|
|
(10,532)
|
|
(226)
|
|
(43,169)
|
|
(239)
|
|
(44,118)
|
|
(229)
|
Cash operating costs
(by-product basis)
|
|
$
|
19,615
|
|
$
|
485
|
|
$
|
18,203
|
|
$
|
390
|
|
$
|
71,483
|
|
$
|
395
|
|
$
|
68,599
|
|
$
|
356
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pinos Altos
Mine
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Year
Ended
|
|
Year
Ended
|
Per
Tonne(iii)
|
|
December 31,
2017
|
|
December 31,
2016
|
|
December 31,
2017
|
|
December 31,
2016
|
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
Tonnes of ore
processed (thousands of tonnes)
|
|
|
|
548
|
|
|
|
556
|
|
|
|
2,308
|
|
|
|
2,260
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
30,752
|
|
$
|
56
|
|
$
|
26,450
|
|
$
|
48
|
|
$
|
108,726
|
|
$
|
47
|
|
$
|
114,557
|
|
$
|
51
|
Inventory and other
adjustments(v)
|
|
(991)
|
|
(2)
|
|
1,728
|
|
3
|
|
6,065
|
|
3
|
|
(3,698)
|
|
(2)
|
Minesite operating
costs
|
|
$
|
29,761
|
|
$
|
54
|
|
$
|
28,178
|
|
$
|
51
|
|
$
|
114,791
|
|
$
|
50
|
|
$
|
110,859
|
|
$
|
49
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Creston Mascota
deposit at Pinos Altos
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Year
Ended
|
|
Year
Ended
|
Per Ounce of Gold
Produced(ii)
|
|
December 31,
2017
|
|
December 31,
2016
|
|
December 31,
2017
|
|
December 31,
2016
|
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
Gold production
(ounces)
|
|
|
|
14,012
|
|
|
|
11,213
|
|
|
|
48,384
|
|
|
|
47,296
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
9,315
|
|
$
|
665
|
|
$
|
7,923
|
|
$
|
707
|
|
$
|
31,490
|
|
$
|
651
|
|
$
|
27,341
|
|
$
|
578
|
|
Inventory and other
adjustments(iv)
|
|
339
|
|
24
|
|
15
|
|
1
|
|
862
|
|
18
|
|
472
|
|
10
|
Cash operating costs
(co-product basis)
|
|
$
|
9,654
|
|
$
|
689
|
|
$
|
7,938
|
|
$
|
708
|
|
$
|
32,352
|
|
$
|
669
|
|
$
|
27,813
|
|
$
|
588
|
|
By-product metal
revenues
|
|
(1,368)
|
|
(98)
|
|
(657)
|
|
(59)
|
|
(4,535)
|
|
(94)
|
|
(3,426)
|
|
(72)
|
Cash operating costs
(by-product basis)
|
|
$
|
8,286
|
|
$
|
591
|
|
$
|
7,281
|
|
$
|
649
|
|
$
|
27,817
|
|
$
|
575
|
|
$
|
24,387
|
|
$
|
516
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Creston Mascota
deposit at Pinos Altos
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Year
Ended
|
|
Year
Ended
|
Per
Tonne(iii)
|
|
December 31,
2017
|
|
December 31,
2016
|
|
December 31,
2017
|
|
December 31,
2016
|
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
Tonnes of ore
processed (thousands of tonnes)
|
|
|
|
558
|
|
|
|
524
|
|
|
|
2,196
|
|
|
|
2,119
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
9,315
|
|
$
|
17
|
|
$
|
7,923
|
|
$
|
15
|
|
$
|
31,490
|
|
$
|
14
|
|
$
|
27,341
|
|
$
|
13
|
Inventory and other
adjustments(v)
|
|
254
|
|
—
|
|
(191)
|
|
—
|
|
559
|
|
1
|
|
(77)
|
|
—
|
Minesite operating
costs
|
|
$
|
9,569
|
|
$
|
17
|
|
$
|
7,732
|
|
$
|
15
|
|
$
|
32,049
|
|
$
|
15
|
|
$
|
27,264
|
|
$
|
13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
La India
Mine
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Year
Ended
|
|
Year
Ended
|
Per Ounce of Gold
Produced(ii)
|
|
December 31,
2017
|
|
December 31,
2016
|
|
December 31,
2017
|
|
December 31,
2016
|
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
Gold production
(ounces)
|
|
|
|
25,500
|
|
|
|
28,714
|
|
|
|
101,150
|
|
|
|
115,162
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
17,062
|
|
$
|
669
|
|
$
|
14,638
|
|
$
|
510
|
|
$
|
61,133
|
|
$
|
604
|
|
$
|
49,745
|
|
$
|
432
|
|
Inventory and other
adjustments(iv)
|
|
1,057
|
|
42
|
|
142
|
|
5
|
|
2,958
|
|
30
|
|
4,189
|
|
36
|
Cash operating costs
(co-product basis)
|
|
$
|
18,119
|
|
$
|
711
|
|
$
|
14,780
|
|
$
|
515
|
|
$
|
64,091
|
|
$
|
634
|
|
$
|
53,934
|
|
$
|
468
|
|
By-product metal
revenues
|
|
(823)
|
|
(33)
|
|
(2,224)
|
|
(78)
|
|
(5,392)
|
|
(54)
|
|
(8,453)
|
|
(73)
|
Cash operating costs
(by-product basis)
|
|
$
|
17,296
|
|
$
|
678
|
|
$
|
12,556
|
|
$
|
437
|
|
$
|
58,699
|
|
$
|
580
|
|
$
|
45,481
|
|
$
|
395
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
La India
Mine
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Year
Ended
|
|
Year
Ended
|
Per
Tonne(iii)
|
|
December 31,
2017
|
|
December 31,
2016
|
|
December 31,
2017
|
|
December 31,
2016
|
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
Tonnes of ore
processed (thousands of tonnes)
|
|
|
|
1,692
|
|
|
|
1,540
|
|
|
|
5,965
|
|
|
|
5,837
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
17,062
|
|
$
|
10
|
|
$
|
14,638
|
|
$
|
10
|
|
$
|
61,133
|
|
$
|
10
|
|
$
|
49,745
|
|
$
|
9
|
Inventory and other
adjustments(v)
|
|
766
|
|
1
|
|
(231)
|
|
(1)
|
|
1,545
|
|
1
|
|
2,909
|
|
—
|
Minesite operating
costs
|
|
$
|
17,828
|
|
$
|
11
|
|
$
|
14,407
|
|
$
|
9
|
|
$
|
62,678
|
|
$
|
11
|
|
$
|
52,654
|
|
$
|
9
|
Notes:
|
(i) The information
set out in this table reflects the Company's 50% interest in the
Canadian Malartic mine since the date of acquisition.
|
(ii) Total cash costs
per ounce of gold produced is not a recognized measure under IFRS
and this data may not be comparable to data reported by other gold
producers. Total cash costs per ounce of gold produced is reported
on both a by-product basis (deducting by-product metal revenues
from production costs) and co-product basis (without deducting
by-product metal revenues). Total cash costs per ounce of gold
produced on a by-product basis is calculated by adjusting
production costs as recorded in the consolidated statements of
income and comprehensive income for by-product metal revenues,
inventory production costs, smelting, refining and marketing
charges and other adjustments, and then dividing by the number of
ounces of gold produced. Total cash costs per ounce of gold
produced on a co-product basis is calculated in the same manner as
total cash costs per ounce of gold produced on a by-product basis
except that no adjustment for by-product metal revenues is made.
Accordingly, the calculation of total cash costs per ounce of gold
produced on a co-product basis does not reflect a reduction in
production costs or smelting, refining and marketing charges
associated with the production and sale of by-product metals. The
Company believes that these generally accepted industry measures
provide a realistic indication of operating performance and provide
useful comparison points between periods. Total cash costs per
ounce of gold produced is intended to provide information about the
cash generating capabilities of the Company's mining operations.
Management also uses these measures to monitor the performance of
the Company's mining operations. As market prices for gold are
quoted on a per ounce basis, using the total cash costs per ounce
of gold produced on a by-product basis measure allows management to
assess a mine's cash generating capabilities at various gold
prices. Management is aware that these per ounce measures of
performance can be affected by fluctuations in exchange rates and,
in the case of total cash costs of gold produced on a by-product
basis, by-product metal prices. Management compensates for these
inherent limitations by using these measures in conjunction with
minesite costs per tonne as well as other data prepared in
accordance with IFRS. Management also performs sensitivity analyses
in order to quantify the effects of fluctuating metal prices and
exchange rates.
|
(iii) Minesite costs
per tonne is not a recognized measure under IFRS and this data may
not be comparable to data reported by other gold producers. This
measure is calculated by adjusting production costs as shown in the
consolidated statements of income and comprehensive income for
inventory production costs, and then dividing by tonnes of ore
milled. As the total cash costs per ounce of gold produced measure
can be affected by fluctuations in by-product metal prices and
exchange rates, management believes that the minesite costs per
tonne measure provides additional information regarding the
performance of mining operations, eliminating the impact of varying
production levels. Management also uses this measure to determine
the economic viability of mining blocks. As each mining block is
evaluated based on the net realizable value of each tonne mined, in
order to be economically viable the estimated revenue on a per
tonne basis must be in excess of the minesite costs per tonne.
Management is aware that this per tonne measure of performance can
be impacted by fluctuations in processing levels and compensates
for this inherent limitation by using this measure in conjunction
with production costs prepared in accordance with IFRS.
|
(iv) Under the
Company's revenue recognition policy, revenue is recognized when
legal title and risk is transferred. As total cash costs per ounce
of gold produced are calculated on a production basis, an inventory
adjustment is made to reflect the portion of production not yet
recognized as revenue. Other adjustments include the addition of
smelting, refining and marketing charges to production
costs.
|
(v) This inventory
and other adjustment reflects production costs associated with the
portion of production still in inventory.
|
(vi) The LaRonde
mine's per ounce of gold produced calculations exclude 515 ounces
for the twelve months ended December 31, 2017 of payable gold
production and the associated costs related to LaRonde Zone 5 which
were produced prior to the achievement of commercial
production.
|
(vii) The LaRonde
mine's per tonne calculations exclude 7,709 tonnes and the
associated costs related to LaRonde Zone 5 which were processed
prior to the achievement of commercial production.
|
(viii) The Lapa
mine's per ounce of gold produced calculations exclude 203 ounces
for the twelve months ended December 31, 2017 of payable gold
production as a result of the Lapa mill being placed on temporary
maintenance.
|
(ix) The Goldex
mine's per ounce of gold produced calculations exclude 8,041 ounces
for the twelve months ended December 31, 2017 of payable gold
production and the associated costs related to the Deep 1 Zone
which were produced prior to the achievement of commercial
production.
|
* The Goldex mine's
per tonne calculations exclude 175,514 tonnes for the twelve months
ended December 31, 2017 and the associated costs related to the
Deep 1 Zone which were processed prior to the achievement of
commercial production.
|
Reconciliation of
Production Costs to All-in Sustaining Costs per Ounce of Gold
Produced
|
|
|
|
|
|
|
|
|
|
|
|
|
(United States
dollars per ounce of gold produced, except where
noted)
|
Three Months
Ended
December 31, 2017
|
|
Three Months
Ended
December 31, 2016
|
|
Year Ended
December 31, 2017
|
|
Year Ended
December 31, 2016
|
Production costs per
the consolidated statements of income and
comprehensive income
|
$
|
287,689
|
|
$
|
255,112
|
|
$
|
1,057,842
|
|
$
|
1,031,892
|
Adjusted gold
production(ounces)(i)(ii)(iii)
|
413,009
|
|
426,433
|
|
1,704,774
|
|
1,662,888
|
Production costs per
ounce of adjusted gold production(i)(ii)(iii)
|
$
|
697
|
|
$
|
598
|
|
$ 621
|
|
$
|
621
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory and other
adjustments(iv)
|
(17)
|
|
28
|
|
16
|
|
22
|
Total cash costs per
ounce of gold produced (co-product basis)(v)
|
$
|
680
|
|
$
|
626
|
|
$
|
637
|
|
$
|
643
|
By-product metal
revenues
|
(88)
|
|
(74)
|
|
(79)
|
|
(70)
|
Total cash costs per
ounce of gold produced (by-product basis)(v)
|
$
|
592
|
|
$
|
552
|
|
$
|
558
|
|
$
|
573
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Sustaining capital
expenditures (including capitalized exploration)
|
241
|
|
203
|
|
176
|
|
187
|
General and
administrative expenses (including stock options)
|
69
|
|
75
|
|
67
|
|
62
|
Non-cash reclamation
provision and other
|
3
|
|
2
|
|
3
|
|
2
|
All-in sustaining
costs per ounce of gold produced (by-product basis)
|
$
|
905
|
|
$
|
832
|
|
$
|
804
|
|
$
|
824
|
By-product metal
revenues
|
88
|
|
74
|
|
79
|
|
70
|
All-in sustaining
costs per ounce of gold produced (co-product basis)
|
$
|
993
|
|
$
|
906
|
|
$
|
883
|
|
$
|
894
|
Notes:
|
(i) The LaRonde
mine's per ounce of gold produced calculations exclude 515 ounces
for the twelve months ended December 31, 2017 of payable gold
production and the associated costs related to LaRonde Zone 5 which
were produced prior to the achievement of commercial
production.
|
(ii) The Lapa mine's
per ounce of gold produced calculations exclude 203 ounces for the
twelve months ended December 31, 2017 of payable gold production as
a result of the Lapa mill being placed on temporary
maintenance.
|
(iii) The Goldex
mine's per ounce of gold produced calculations exclude 8,041 ounces
for the twelve months ended December 31, 2017 of payable gold
production and the associated costs related to the Deep 1 Zone
which were produced prior to the achievement of commercial
production.
|
(iv) Under the
Company's revenue recognition policy, revenue is recognized when
legal title and risk is transferred. As total cash costs per ounce
of gold produced are calculated on a production basis, this
inventory adjustment reflects the sales margin on the portion of
production not yet recognized as revenue.
|
(v) Total cash costs
per ounce of gold produced is not a recognized measure under IFRS
and this data may not be comparable to data presented by other gold
producers. Total cash costs per ounce of gold produced is presented
on both a by-product basis (deducting by-product metal revenues
from production costs) and co-product basis (without deducting
by-product metal revenues). Total cash costs per ounce of gold
produced on a by-product basis is calculated by adjusting
production costs as recorded in the consolidated statements of
income and comprehensive income for by-product metal revenues,
inventory production costs, smelting, refining and marketing
charges and other adjustments, and then dividing by the number of
ounces of gold produced. Total cash costs per ounce of gold
produced on a co-product basis is calculated in the same manner as
total cash costs per ounce of gold produced on a by-product basis
except that no adjustment for by-product metal revenues is made.
Accordingly, the calculation of total cash costs per ounce of gold
produced on a co-product basis does not reflect a reduction in
production costs or smelting, refining and marketing charges
associated with the production and sale of by-product metals. The
Company believes that these generally accepted industry measures
provide a realistic indication of operating performance and provide
useful comparison points between periods. Total cash costs per
ounce of gold produced is intended to provide information about the
cash generating capabilities of the Company's mining operations.
Management also uses these measures to monitor the performance of
the Company's mining operations. As market prices for gold are
quoted on a per ounce basis, using the total cash costs per ounce
of gold produced on a by-product basis measure allows management to
assess a mine's cash generating capabilities at various gold
prices. Management is aware that these per ounce measures of
performance can be affected by fluctuations in exchange rates and,
in the case of total cash costs of gold produced on a by-product
basis, by-product metal prices. Management compensates for these
inherent limitations by using these measures in conjunction with
minesite costs per tonne as well as other data prepared in
accordance with IFRS. Management also performs sensitivity analysis
in order to quantify the effects of fluctuating metal prices and
exchange rates.
|
SOURCE Agnico Eagle Mines Limited