Stock Symbol: AEM (NYSE and TSX) TORONTO, Feb. 20
/PRNewswire-FirstCall/ -- Agnico-Eagle Mines Limited
("Agnico-Eagle" or the "Company") today reported record quarterly
net income of $65.2 million, or $0.46 per share for the fourth
quarter of 2007. This result includes a gain of $29.8 million, or
$0.21 per share, on the reduction of income tax rates. In the
fourth quarter of 2006, the Company reported net income of $41.9
million, or $0.35 per share. Earnings per share in the fourth
quarter of 2007 were diluted by the issuance of approximately 6.9
million common shares on the exercise of the Company's outstanding
warrants and the issuance of 13.8 million shares earlier in the
year in connection with the acquisition of Cumberland Resources
Ltd. Fourth quarter cash provided by operating activities decreased
to $43.3 million from $84.5 million in the fourth quarter of 2006,
due to lower byproduct metal prices and working capital movements.
"Record financial results were achieved this quarter as we prepare
to open the first of our five new gold mines in April," said Sean
Boyd, Vice-Chairman and Chief Executive Officer. "In addition, with
our Kittila mine in Finland set to open this September, our gold
output in 2008 is expected to rise more than 50% from the 2007
level," added Mr. Boyd. Fourth quarter 2007 highlights include: -
Strong Operating Results - steady metal output and cost control
contributed to record operating earnings and strong cash flow - Low
Costs - Low total cash costs per ounce(1) at LaRonde of minus $184
- Progress On Gold Production Growth - new gold mines, Goldex and
Kittila, on track for 2008 openings - Significant Exploration
Upside - continuing to receive ore-grade intersections over
mineable widths outside of currently known reserve/resource
envelopes at Pinos Altos, Kittila, and Meadowbank - Rewarding
Shareholders - 50% increase to annual dividend announced For the
full year 2007, the Company recorded net income of $139.3 million,
or $1.05 per share. In 2006, Agnico-Eagle recorded net income of
$161.3 million, or $1.40 per share. Full year 2007 earnings were
negatively affected by lower realized prices for zinc and copper,
and lower payable production for gold, silver and zinc. The lower
production rates were largely the result of the mining of
additional tonnes of low-grade zinc ore during the year due to
historically high zinc prices. The resulting deferral of ore has
resulted in an extension of the mine life by at least two years.
Full year 2007 earnings per share were also diluted by the
previously mentioned 13.8 million shares issued to acquire
Cumberland Resources Ltd. and the 6.9 million shares issued in
connection with the warrant exercise. For 2007, the Company
recorded cash provided by operating activities of $229.2 million.
This is substantially the same as 2006 when cash provided by
operating activities totaled $226.3 million. The small increase in
cash provided by operating activities was due to working capital
movements, offset partly by lower realized byproduct metal prices.
The Company's financial position remains strong with cash and cash
equivalents of $396.0 million at December 31, 2007 and a
substantially undrawn, unsecured, $300 million five year credit
facility. The Company's cash position decreased $31.6 million in
the fourth quarter largely due to the $197.6 million invested in
the Company's gold growth projects. Payable gold production(2) in
the fourth quarter of 2007 was 60,183 ounces at total cash costs
per ounce of minus $184. This compares with payable gold production
of 66,022 ounces, at total cash costs per ounce of minus $868, in
the fourth quarter of 2006. The increase in total cash costs per
ounce in the fourth quarter of 2007 versus the prior period is
mainly due to a stronger Canadian dollar, lower byproduct zinc
revenues and increased minesite costs. Conference Call Tomorrow The
Company's senior management will host a conference call on
Thursday, February 21, 2008 at 11:00AM (E.S.T.) to discuss
financial results and provide an update of the Company's
exploration and development activities. Via Webcast: A live audio
webcast of the meeting will be available on the Company's website
homepage at http://www.agnico-eagle.com/. Via Telephone: For those
preferring to listen by telephone, please dial 416-644-3415 or
Toll-free 800-732-9307. To ensure your participation, please call
approximately five minutes prior to the scheduled start of the
call. Replay archive: Please dial the 416-640-1917, passcode
21259713 followed by the number sign or Toll-free access number
877-289-8525, passcode 21259713 followed by the number sign. The
conference call will be replayed from Thursday, February 21, 2008
at 1:30 PM (E.S.T.) to Thursday, February 28, 2008 11:59 PM
(E.S.T.). The webcast along with presentation slides will be
archived for 180 days on the website. LaRonde Mine - Strong
Production and Cost Control Performance Continues The LaRonde mill
processed an average of 7,119 tonnes of ore per day in the fourth
quarter of 2007, compared with an average of 7,452 tonnes per day
in the corresponding period of 2006. Milling performance for the
full year 2007 was 7,325 tonnes per day versus 7,324 tonnes per day
in 2006. LaRonde has now been operating at an average of
approximately 7,300 tonnes per day for more than four years,
continuing to demonstrate the reliability of this world class mine.
Minesite costs per tonne(3) were approximately C$65 in the fourth
quarter. These costs are higher than the C$63 per tonne experienced
in the fourth quarter of 2006. The increase in costs was largely
due to higher input costs for consumables such as fuel and chemical
reagents as seen across the mining industry and also due to
slightly lower ore throughput. Minesite costs per tonne for the
full year 2007 were approximately C$66, six percent higher than
2006. This increase is partly due to accelerated underground
development, but also due to industry cost escalation. On a per
ounce basis, net of byproduct credits, LaRonde's total cash costs
per ounce remained very low by industry standards, at minus $184 in
the fourth quarter. This compares with the results of the fourth
quarter of 2006 when total cash costs per ounce were minus $909.
The increase in total cash costs is due to a stronger Canadian
dollar, increased minesite costs and lower byproduct revenues
resulting from lower realized prices. As a result of the
historically high zinc prices, which have prevailed over the past
several quarters, it is now expected that the mine life of LaRonde,
mineable from the existing shaft and infrastructure, will be
extended by two years. This is largely due to the mining of
previously sub-economic ore adjacent to the hangingwall of the
orebody. This lower grade zinc ore was not included in the original
mining plan. The effect of mining this ore is marginally lower gold
and byproduct production annually, but results in maximizing the
value of the orebody over its life. Cash Position Remains Strong,
Despite Large Investments in Gold Growth Cash and cash equivalents
decreased to $396.0 million at December 31, 2007 from the September
30, 2007 balance of $427.6 million. As expected, all of the
Company's operating cash flow and a portion of its existing cash
balances were reinvested in its gold growth projects. During the
quarter, Agnico-Eagle added $43.3 million of cash provided by
operating activities. Capital expenditures in the quarter totaled
$197.6 million, including $82.3 million on the construction of
Meadowbank, $29.2 million on Goldex, $29.6 million at Kittila,
$10.5 million on the LaRonde Extension, $15.5 million at Pinos
Altos and $13.5 million at Lapa. For the full year 2007, capital
expenditures totaled $508.7 million. Capital costs are higher than
2006 due to the acquisition of the Meadowbank project in April 2007
and the approval of construction of the Pinos Altos project in
August 2007. The Company's cash position is expected to decrease in
2008 as the Company expects to spend more than $550 million on
capital expenditures related to its development projects. However,
with large cash balances, strong cash flows, no long term debt, and
substantially undrawn bank lines of $300 million, Agnico-Eagle is
fully funded for the development and exploration of its pipeline of
gold projects in Canada, Finland and Mexico. Five New Gold Mines
Under Construction At the 100% owned Goldex mine project in
northwestern Quebec, Agnico-Eagle commenced construction in July
2005. Proven and probable reserves of 1.6 million ounces of gold
(23.1 million tonnes grading 2.2 grams per tonne. For each property
all reserve and resource data are presented in the Detailed Mineral
Reserve and Resource Data - December 31, 2007 table in this press
release) are estimated to be sufficient for a ten year mine life
with annual production averaging 175,000 ounces. With a large
additional resource, the deposit remains open for expansion. The
Goldex production shaft was completed in November 2007.
Approximately 27,000 tonnes of ore were extracted and stockpiled on
surface during the fourth quarter. The total proven reserves in the
surface stockpile now stand at approximately 249,000 tonnes,
grading 2.2 grams per tonne, from this development ore. Overall,
construction is ahead of schedule and the mine is expected to begin
production during April 2008. Construction commenced at the 100%
owned Kittila mine project in northern Finland in the second
quarter of 2006. The project is expected to produce an average of
150,000 ounces of gold per year over its estimated mine life of 13
years. Kittila has probable gold reserves of 3.0 million ounces
(18.2 million tonnes grading 5.1 grams per tonne). With a large
additional resource, the deposit remains open for expansion.
Drilling from surface is ongoing to convert resources to reserves
and to extend the overall envelope. Deeper exploration drilling
from the new decline began in the fourth quarter of 2007, opening
up the entire area below the main Suuri zone with results discussed
in the February 15, 2008 press release. During the fourth quarter
of 2007, underground development exposed the Rouravaara Zone on the
150 Level. Grades are pending, however the location and thicknesses
were as predicted by surface diamond drilling. Surface overburden
stripping for the main open pit was advanced with approximately
181,000 cubic metres moved in the quarter, contributing to
approximately 263,000 cubic metres stripped during the year.
Overall, pit stripping, infrastructure construction and equipment
delivery at Kittila are on schedule for the September 2008 mine
start up. At the 100% owned Lapa mine project in northwestern
Quebec, the final phase of construction commenced in the second
quarter of 2006. Proven and probable gold reserves of 1.1 million
ounces (3.8 million tonnes grading 8.9 grams per tonne) are
expected to support estimated annual production of 125,000 ounces
per year over an estimated mine life of seven years. The shaft at
Lapa has reached its final depth of 1,370 metres. Lateral mine
development began in November 2007 with advance of more than 400
metres by year end. Construction of the surface service facilities
is well underway. Initial production from Lapa is expected to begin
in mid-2009. At the 100% owned LaRonde mine in northwestern Quebec,
construction commenced in the second quarter of 2006 on the
infrastructure extension at depth. Proven and probable reserves of
5.0 million ounces (34.9 million tonnes grading 4.4 grams per
tonne) are expected to support a mine life through 2021. Annual
gold production is anticipated to average 340,000 ounces over the
remaining 14 year mine life. The focus during the fourth quarter
was on underground infrastructure construction and detailed
engineering. Shaft sinking for the new internal shaft began before
year end. The same shaft sinking crews that successfully developed
Lapa and Goldex transitioned to LaRonde for this project. At the
100% owned Pinos Altos mine project in northern Mexico, the
property has probable gold reserves of 2.5 million ounces (24.7
million tonnes grading 3.2 grams per tonne). Additionally, the
property contains a large silver reserve of over 73.1 million
ounces (the same 24.7 million tonnes grading 92.2 grams per tonne).
The project was approved for construction in August 2007. Average
annual production is expected to be approximately 190,000 ounces of
gold over an estimated 12 year mine life. Construction of the
permanent camp is progressing as expected. The construction of a
2,800 metre underground exploration ramp commenced in March 2007
and has advanced approximately 1,000 metres. Additionally, the
development of the production decline is underway as well as site
preparation for the start of construction. Deeper exploration
drilling began from the decline in the fourth quarter of 2007,
targeting the area below the main Santo Nino zone. With a large
gold and silver resource outside of the reserve envelope, the
deposit remains open for expansion. Exploration drilling continues
on the Creston/Mascota area. This region, to the northwest of Santo
Nino, is now being studied on the merits of being a separate mining
operation, based on the assumption of a rapid definition of near
surface gold reserves. The current inferred gold resource is 0.4
million ounces of gold and 4.0 million ounces of silver from 7.7
million tonnes grading 1.4 grams per tonne gold and 16.2 grams per
tonne silver, respectively. The gold could possibly be processed
via heap leach although a milling option is also being
contemplated. An initial scoping study is expected to be completed
in 2008. All the necessary land agreements with the four local
ejidos have been established. Negotiations for additional surface
rights with the underlying royalty holder are ongoing. If these
negotiations are not successful, modifications to the proposed mine
plan contained in the base case feasibility study may be
implemented. Agnico-Eagle's 100% owned Meadowbank project in
Nunavut has probable gold reserves of 3.5 million ounces (29.3
million tonnes grading 3.7 grams per tonne). With a large
additional gold resource, the deposit remains open for expansion.
Initial gold production is anticipated by January 2010. Annual gold
production is estimated to average 360,000 ounces over the nine
year life of the mine. The exploration focus on Meadowbank in 2007
was resource to reserve conversion in the vicinity of the open pit
reserves, and resource exploration around the Goose South, Goose
Island, Portage, Cannu and Vault zones. Further grassroots
exploration, prospecting and diamond drilling will be performed on
the large property position in 2008. The all-weather road from the
deep-water port at Baker Lake will be completed in the first
quarter 2008. Detailed engineering, sourcing and acquisition of the
major capital equipment are ongoing. The first pieces of the major
capital equipment have already been delivered to the site. About
Agnico-Eagle Agnico-Eagle is a long established Canadian gold
producer with operations located in Quebec and exploration and
development activities in Canada, Finland, Mexico and the United
States. Agnico-Eagle's LaRonde Mine is Canada's largest gold
deposit in terms of reserves. The Company has full exposure to
higher gold prices consistent with its policy of no forward gold
sales. It has paid a cash dividend for 26 consecutive years.
AGNICO-EAGLE MINES LIMITED SUMMARIZED QUARTERLY DATA (thousands of
United States dollars except where noted, unaudited) Three months
ended Year ended December 31, December 31, ------------
------------ 2007 2006 2007 2006 ----------- -----------
----------- ----------- Income and cash flows LaRonde Mine Revenues
from mining operations.............. $ 108,728 $ 138,381 $ 432,205
$ 464,632 Production costs......... 42,180 38,543 166,104 143,753
----------- ----------- ----------- ----------- Gross profit
(exclusive of amortization shown below).................. $ 66,548
$ 99,838 $ 266,101 $ 320,879 Amortization............. 6,157 7,031
27,757 25,255 ----------- ----------- ----------- ----------- Gross
profit............. $ 60,391 $ 92,807 $ 238,344 $ 295,624
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- Net income for the
period.................. $ 65,162 $ 41,852 $ 139,345 $ 161,337 Net
income per share (basic)................. $ 0.46 $ 0.35 $ 1.05 $
1.40 Net income per share (diluted)............... $ 0.46 $ 0.34 $
1.04 $ 1.35 Cash provided by operating activities.... $ 43,345 $
84,501 $ 229,189 $ 226,252 Cash provided by (used in) investing
activities.............. $(200,036) $ (63,601) $(449,000)
$(189,508) Cash provided by (used in) financing
activities.............. $ 124,181 $ 4,406 $ 130,732 $ 298,579
Weighted average number of common shares outstanding - basic (in
thousands).......... 140,618 120,987 132,768 115,461 Tonnes of ore
milled..... 654,976 685,624 2,673,463 2,673,080 Head grades: Gold
(grams per tonne)................ 3.14 3.31 2.95 3.13 Silver (grams
per tonne)................ 73.50 75.26 75.40 76.58
Zinc................... 3.59% 4.06% 3.63% 4.13%
Copper................. 0.40% 0.34% 0.36% 0.37% Recovery rates:
Gold................... 91.11% 90.51% 91.21% 91.51%
Silver................. 86.70% 87.30% 87.51% 87.53%
Zinc................... 88.20% 88.50% 86.80% 87.60%
Copper................. 88.40% 83.00% 86.20% 82.40% Payable
production: Gold (ounces).......... 60,183 66,022 230,992 245,826
Silver (ounces in thousands)............ 1,166 1,249 4,920 4,955
Zinc (tonnes).......... 17,563 20,865 71,577 82,183 Copper
(tonnes)........ 2,156 1,762 7,482 7,289 Payable metal sold: Gold
(ounces).......... 58,917 68,993 229,316 256,961 Silver (ounces in
thousands)............ 1,214 1,227 5,171 4,739 Zinc
(tonnes).......... 19,191 22,348 72,905 81,689 Copper
(tonnes)........ 2,157 1,769 7,466 7,302 Realized prices: Gold (per
ounce)....... $ 895 $ 594 $ 748 $ 622 Silver (per ounce)..... $
14.40 $ 13.38 $ 13.63 $ 12.42 Zinc (per tonne)....... $ 2,313 $
4,640 $ 2,941 $ 3,699 Copper (per tonne)..... $ 6,134 $ 6,059 $
6,994 $ 8,186 Total cash costs (per ounce): Production
costs......... $ 701 $ 584 $ 719 $ 585 Less: Net byproduct
revenues................ (850) (1,475) (1,082) (1,240) Inventory
adjustments.. (28) 33 4 (31) Accretion expense and
other............. (7) (10) (6) (4) ----------- -----------
----------- ----------- Total cash costs (per ounce)(x).......... $
(184) $ (868) $ (365) $ (690) ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Minesite costs per tonne milled (C$)(x).... $ 65 $ 63 $ 66 $ 62
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- (x) Total cash costs (per
ounce) and minesite costs per tonne milled are non-GAAP measures.
For a reconciliation of these measures to the financial statements,
see note 1 to these financial statements. AGNICO-EAGLE MINES
LIMITED COMPARATIVE CONDENSED FINANCIAL INFORMATON (thousands of
United States dollars, unaudited) As at As at December 31, December
31, 2007 2006 ---- ---- ASSETS Current Cash, cash equivalents and
short term investments.......................... $ 396,019 $
458,617 Trade receivables.......................... 79,419 84,987
Inventories: Ore stockpiles........................... 5,647 2,330
Concentrates............................. 1,913 3,794
Supplies................................. 15,637 11,152 Other
current assets....................... 107,459 61,953 -------------
------------- Total current assets......................... 606,094
622,833 Other assets................................. 16,436 7,737
Future income and mining tax assets.......... 17,805 31,059
Property, plant and mine development......... 2,107,063 859,859
------------- ------------- $ 2,747,398 $ 1,521,488 -------------
------------- ------------- ------------- LIABILITIES AND
SHAREHOLDERS' EQUITY Current Accounts payable and accrued
liabilities............................... $ 108,227 $ 42,538
Dividends payable.......................... 26,280 15,166 Income
taxes payable....................... - 14,231 -------------
------------- Total current liabilities.................... 134,507
71,935 ------------- ------------- Reclamation provision and other
liabilities................................. 57,941 27,457
------------- ------------- Future income and mining tax
liabilities..... 496,016 169,691 ------------- -------------
Shareholders' equity Common shares Authorized - unlimited Issued -
142,403,379 (December 31, 2006 -
121,025,635)............................ 1,931,667 1,230,654 Stock
options................................ 23,573 5,884
Warrants..................................... - 15,723 Contributed
surplus.......................... 15,166 15,128 Retained
earnings............................ 112,240 3,015 Accumulated
other comprehensive loss......... (23,712) (17,999) -------------
------------- Total shareholders' equity...................
2,058,934 1,252,405 ------------- ------------- $ 2,747,398 $
1,521,488 ------------- ------------- ------------- -------------
AGNICO-EAGLE MINES LIMITED COMPARATIVE CONDENSED FINANCIAL
INFORMATION (thousands of United States dollars, except share and
per share amounts, unaudited) Three months ended Year ended
December 31, December 31, ------------ ------------ 2007 2006 2007
2006 ----------- ----------- ----------- ----------- REVENUES
Revenues from mining operations.............. $ 108,728 $ 138,381 $
432,205 $ 464,632 Interest and sundry income..................
6,349 5,153 25,142 21,797 Gain on sale of available-for-sale
securities.............. - 1,143 4,088 24,118 -----------
----------- ----------- ----------- 115,077 144,677 461,435 510,547
COSTS AND EXPENSES Production............... 42,180 38,543 166,104
143,753 Loss on derivative financial instruments... - 2,136 5,829
15,148 Exploration and corporate development............. 6,849
10,271 25,507 31,077 Amortization............. 6,157 7,031 27,757
25,255 General and administrative.......... 13,747 9,503 38,167
25,884 Provincial capital tax... (1,306) 2,132 3,202 3,758
Interest................. 632 688 3,294 2,902 Foreign currency
translation loss (gain).................. 276 (7,428) 32,297 2,127
----------- ----------- ----------- ----------- Income before
income, mining and federal capital taxes........... 46,542 81,801
159,278 260,643 Income and mining tax expense (recovery)......
(18,620) 39,949 19,933 99,306 ----------- ----------- -----------
----------- Net income for the period.................. $ 65,162 $
41,852 $ 139,345 $ 161,337 ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- Net
income per share - basic................. $ 0.46 $ 0.35 $ 1.05 $
1.40 ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- Net income per share -
diluted............... $ 0.46 $ 0.34 $ 1.04 $ 1.35 -----------
----------- ----------- ----------- ----------- -----------
----------- ----------- Weighted average number of shares
outstanding (in thousands) Basic.................. 140,618 120,897
132,768 115,461 Diluted................ 141,808 124,578 133,958
119,142 AGNICO-EAGLE MINES LIMITED COMPARATIVE CONDENSED FINANCIAL
INFORMATION (thousands of United States dollars, unaudited) Three
months ended Year ended December 31, December 31, ------------
------------ 2007 2006 2007 2006 ----------- -----------
----------- ----------- Operating activities Net income for the
period.................. $ 65,162 $ 41,852 $ 139,345 $ 161,337 Add
(deduct) items not affecting cash: Amortization........... 6,157
7,031 27,757 25,255 Future income and mining taxes.................
(13,841) 36,884 16,380 81,993 Unrealized loss on derivative
contracts.. - 3,545 5,018 - Gain on sale of available-for-sale
securities............ - (1,143) (4,088) (24,118) Gain on sale of
Contact Diamond Corporation - - - (7,361) Amortization of deferred
costs and other....... 4,945 (14,416) 54,355 288 Changes in
non-cash working capital balances Trade receivables...... (4,800)
(4,905) 5,568 (28,683) Income taxes payable/recoverable... - 3,342
(14,231) 22,171 Inventories............ 862 767 (1,187) (2,493)
Other current assets... (30,771) (422) (55,389) (4,639) Accounts
payable and accrued liabilities... 15,631 11,966 55,661 4,745
Interest payable....... - - - (2,243) ----------- -----------
----------- ----------- Cash provided by operating activities...
43,345 84,501 229,189 226,252 ----------- ----------- -----------
----------- Investing activities Additions to property, plant and
mine development............. (197,590) (53,282) (508,701)
(149,185) Acquisition of Cumberland Resources Ltd., net of cash
acquired of $96,043.............. - - 84,207 - Acquisitions,
investments and other............... (2,446) (10,319) (24,506)
(40,323) ----------- ----------- ----------- ----------- Cash
provided by (used) in investing activities.............. (200,036)
(63,601) (449,000) (189,508) ----------- ----------- -----------
----------- Financing activities Dividends paid........... - -
(13,406) (3,166) Proceeds from common shares issued...........
124,181 4,406 144,138 301,745 ----------- ----------- -----------
----------- Cash provided by financing activities.... 124,181 4,406
130,732 298,579 ----------- ----------- ----------- -----------
Effect of exchange rate changes on cash and cash
equivalents............. 935 2,428 26,481 2,312 -----------
----------- ----------- ----------- Net increase in cash and cash
equivalents during the period.............. (31,575) 27,734
(62,598) 337,635 Cash and cash equivalents, beginning of
period............... 427,594 430,883 458,617 120,982 -----------
----------- ----------- ----------- Cash and cash equivalents, end
of period.................. $ 396,019 $ 458,617 $ 396,019 $ 458,617
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- Other operating cash flow
information: Interest paid during the period.............. $ 768 $
487 $ 2,406 $ 4,214 ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- Income, mining and
capital taxes paid during the period....... $ (1,406) $ 173 $
22,138 $ 1,405 ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- Note 1:
Reconciliation of Total Cash Costs Per Ounce and Minesite Costs Per
Tonne Three months Three months Year Year ended ended ended ended
(thousands of dollars, December December December December except
where noted) 31, 2007 31, 2006 31, 2007 31, 2006 -----------
----------- ----------- ----------- Production costs per
Consolidated Statements of Income............... $ 42,180 $ 38,543
$ 166,104 $ 143,753 Adjustments: Byproduct revenues..... (56,022)
(97,399) (260,668) (304,817) Inventory adjustment(i)......... 3,194
2,161 11,528 (7,607) Non-cash reclamation provision.............
(427) (603) (1,264) (936) ----------- ----------- -----------
----------- Cash operating costs..... $ (11,075) $ (57,298) $
(84,300) $(169,607) ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- Gold production
(ounces)................ 60,183 66,022 230,992 245,826 -----------
----------- ----------- ----------- ----------- -----------
----------- ----------- Total cash costs (per ounce)(ii)......... $
(184) $ (868) $ (365) $ (690) ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- Three
months Three months Year Year ended ended ended ended (thousands of
dollars, December December December December except where noted)
31, 2007 31, 2006 31, 2007 31, 2006 ----------- -----------
----------- ----------- Production costs per Consolidated
Statements of Income............... $ 42,180 $ 38,543 $ 166,104 $
143,753 Adjustments: Inventory adjustment(iii)....... (1,660) (318)
916 2,494 Non-cash reclamation provision............. (427) (603)
(1,264) (936) ----------- ----------- ----------- -----------
Minesite operating costs (US$)............. 40,093 $ 37,622 165,756
$ 145,311 ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- Minesite operating
costs (C$).............. 42,878 $ 42,868 177,735 $ 164,459
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- Tonnes of ore milled (000's
tonnes).......... 655 686 2,673 2,673 ----------- -----------
----------- ----------- ----------- ----------- -----------
----------- Minesite costs per tonne (C$)(iv).......... $ 65 $ 63 $
66 $ 62 ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ---------- Notes: (i) Under the
Company's revenue recognition policy, revenue is recognized on
concentrates when legal title passes. Since total cash costs are
calculated on a production basis, this inventory adjustment
reflects the sales margin on the portion of concentrate production
for which revenue has not been recognized in the period. (ii) Total
cash costs is not a recognized measure under US GAAP and this data
may not be comparable to data presented by other gold producers.
The Company believes that this generally accepted industry measure
is a realistic indication of operating performance and is useful in
allowing year over year comparisons. As illustrated in the table
above, this measure is calculated by adjusting Production Costs as
shown in the Consolidated Statements of Income and Comprehensive
Income for net byproduct revenues, royalties, inventory adjustments
and asset retirement provisions. This measure is intended to
provide investors with information about the cash generating
capabilities of the Company's mining operations. Management uses
this measure to monitor the performance of the Company's mining
operations. Since market prices for gold are quoted on a per ounce
basis, using this per ounce measure allows management to assess the
mine's cash generating capabilities at various gold prices.
Management is aware that this per ounce measure of performance can
be impacted by fluctuations in byproduct metal prices and exchange
rates. Management compensates for the limitation inherent with this
measure by using it in conjunction with the minesite costs per
tonne measure (discussed below) as well as other data prepared in
accordance with US GAAP. Management also performs sensitivity
analyses in order to quantify the effects of fluctuating metal
prices and exchange rates. (iii) This inventory adjustment reflects
production costs associated with unsold concentrates. (iv) Minesite
costs per tonne is not a recognized measure under US GAAP and this
data may not be comparable to data presented by other gold
producers. As illustrated in the table above, this measure is
calculated by adjusting Production Costs as shown in the
Consolidated Statements of Income and Comprehensive Income for
inventory and hedging adjustments and asset retirement provisions
and then dividing by tonnes processed through the mill. Since total
cash costs data can be affected by fluctuations in byproduct metal
prices and exchange rates, management believes minesite costs per
tonne provides additional information regarding the performance of
mining operations and allows management to monitor operating costs
on a more consistent basis as the per tonne measure eliminates the
cost variability associated with 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 is impacted by fluctuations in
production levels and thus uses this evaluation tool in conjunction
with production costs prepared in accordance with US GAAP. This
measure supplements production cost information prepared in
accordance with US GAAP and allows investors to distinguish between
changes in production costs resulting from changes in production
versus changes in operating performance. (v) Payable gold
production means the quantity of gold produced during a period
contained in products that are or will be sold by the Company,
whether such products are sold during the period or held as
inventory at the end of the period. Detailed Mineral Reserve and
Resource Data - December 31, 2007
-------------------------------------------------------------------------
Au Category (000's Tonnes and Zone Au(g/t) Ag(g/t) Cu(%) Zn(%) oz.)
(000's)
-------------------------------------------------------------------------
Proven Mineral Reserve
-------------------------------------------------------------------------
Goldex 2.23 18 250
-------------------------------------------------------------------------
Lapa 10.65 1 2.8
-------------------------------------------------------------------------
LaRonde 2.77 73.80 0.33 3.81 416 4,672
-------------------------------------------------------------------------
Subtotal Proven Mineral Reserve 2.75 435 4,924
-------------------------------------------------------------------------
Probable Mineral Reserve
-------------------------------------------------------------------------
Goldex 2.20 1,616 22,849
-------------------------------------------------------------------------
Kittila 5.12 2,996 18,205
-------------------------------------------------------------------------
Lapa 8.86 1,070 3,756
-------------------------------------------------------------------------
LaRonde 4.67 34.61 0.30 1.67 4,542 30,225
-------------------------------------------------------------------------
Meadowbank 3.67 3,453 29,261
-------------------------------------------------------------------------
Pinos Altos 3.21 92.21 2,547 24,657
-------------------------------------------------------------------------
Subtotal Probable Mineral Reserve 3.91 16,224 128,952
-------------------------------------------------------------------------
Total Proven and Probable Mineral Reserves 3.87 16,659 133,877
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Au Category (000's Tonnes and Zone Au(g/t) Ag(g/t) Cu(%) Zn(%) oz.)
(000's)
-------------------------------------------------------------------------
Indicated Mineral Resource
-------------------------------------------------------------------------
Bousquet 5.63 309 1,704
-------------------------------------------------------------------------
Ellison 5.68 76 415
-------------------------------------------------------------------------
Goldex 2.75 27 304
-------------------------------------------------------------------------
Kittila 3.03 527 5,416
-------------------------------------------------------------------------
Lapa 4.48 124 865
-------------------------------------------------------------------------
LaRonde 2.14 25.33 0.14 1.70 388 5,643
-------------------------------------------------------------------------
Meadowbank 2.30 1,078 14,582
-------------------------------------------------------------------------
Pinos Altos 1.36 49.88 270 6,182
-------------------------------------------------------------------------
Total Indicated Resource 2.48 2,799 35,111
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Au Category (000's Tonnes and Zone Au(g/t) Ag(g/t) Cu(%) Zn(%) oz.)
(000's)
-------------------------------------------------------------------------
Inferred Mineral Resource
-------------------------------------------------------------------------
Bousquet 7.45 399 1,667
-------------------------------------------------------------------------
Ellison 5.81 147 786
-------------------------------------------------------------------------
Goldex 2.35 897 11,889
-------------------------------------------------------------------------
Kittila 3.39 1,181 10,832
-------------------------------------------------------------------------
Lapa 8.96 219 759
-------------------------------------------------------------------------
LaRonde 6.26 22.65 0.47 1.07 950 4,723
-------------------------------------------------------------------------
Meadowbank 3.49 385 3,434
-------------------------------------------------------------------------
Pinos Altos 1.44 24.08 568 12,237
-------------------------------------------------------------------------
Total Inferred Resource 3.19 4,747 46,326
-------------------------------------------------------------------------
Tonnage amounts and contained metal amounts presented in the tables
in this news release have been rounded to the nearest thousand.
Reserves are not a sub-set of resources. Forward-Looking Statements
The information in this press release has been prepared as at
February 20, 2008. Certain statements contained in this press
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. When used in this document,
words such as "anticipate", "expect", "estimate," "forecast,"
"planned", "will", "likely" and similar expressions are intended to
identify forward-looking statements or information. Such statements
include without limitation: the Company's forward looking
production guidance, including estimated ore grades, metal
production, life of mine horizons, and projected exploration and
capital expenditures, including costs and other estimates upon
which such projections are based; the Company's goal to increase
its mineral reserves and resources; and other statements and
information regarding anticipated trends with respect to the
Company's operations and exploration. Such statements reflect the
Company's views as at the date of this press release and are
subject to certain risks, uncertainties and assumptions.
Forward-looking statements are necessarily based upon a number of
factors and assumptions that, while considered reasonable by
Agnico-Eagle as of the date of such statements, are inherently
subject to significant business, economic and competitive
uncertainties and contingencies. The factors and assumptions of
Agnico-Eagle contained in this news release, which may prove to be
incorrect, include, but are not limited to, the assumptions set
forth herein and in management's discussion and analysis as well
as: that there are no significant disruptions affecting operations,
whether due to labour disruptions, supply disruptions, damage to
equipment, natural occurrences, political changes, title issues or
otherwise; that permitting, development and expansion at each of
Agnico-Eagle's development projects proceeds on a basis consistent
with current expectations, and that Agnico-Eagle does not change
its development plans relating to such projects; that the exchange
rate between the Canadian dollar, European Union Euro Mexican peso
and the United States dollar will be approximately consistent with
current levels or as set out in this news release; prices for gold,
silver, zinc and copper will be consistent with Agnico-Eagle's
expectations; that prices for key mining and construction supplies,
including labour costs, remain consistent with Agnico-Eagle's
current expectations; that production meets expectations; that
Agnico-Eagle's current estimates of mineral reserves, mineral
resources, mineral grades and mineral recovery are accurate; that
there are no material delays in the timing for completion of
ongoing development projects; 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, capital
expenditures, and other costs; currency fluctuations; financing of
additional capital requirements; cost of exploration and
development programs; mining risks; risks associated with foreign
operations; risks related to title issues at the Pinos Altos
project; governmental and environmental regulation; the volatility
of the Company's stock price; and risks associated with the
Company's byproduct metal derivative strategies. For a more
detailed discussion of such risks and other factors, see the
Company's Annual Information Form and Annual Report on Form 20-F
for the year ended December 31, 2006, as well as the Company's
other filings with the Canadian Securities Administrators and the
U.S. Securities and Exchange Commission (the "SEC"). The Company
does not intend, and does not assume any obligation, to update
these forward-looking statements and information, except as
required by law. Accordingly, readers are advised not to place
undue reliance on forward-looking statements. Certain of the
foregoing statements, primarily related to projects, are based on
preliminary views of the Company with respect to, among other
things, grade, tonnage, processing, mining methods, capital costs,
total cash costs, minesite costs, and location of surface
infrastructure and actual results and final decisions may be
materially different from those current anticipated. Notes To
Investors Regarding The Use Of Resources Cautionary Note To
Investors Concerning Estimates Of Measured And Indicated Resources.
This press release may use the terms "measured resources" and
"indicated resources". We advise investors 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 reserves. Cautionary Note To Investors Concerning
Estimates Of Inferred Resources. This press release may also use
the term "inferred resources". We advise investors that while this
term is recognized and required by Canadian regulations, the SEC
does not recognize it. "Inferred 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 part or all of an inferred resource
exists, or is economically or legally mineable. Scientific And
Technical Data Agnico-Eagle Mines Limited is reporting mineral
resource and reserve estimates in accordance with the CIM
guidelines for the estimation, classification and reporting of
resources and reserves. 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. We use certain terms
in this press release, such as "measured", "indicated", and
"inferred", and "resources" that the SEC guidelines strictly
prohibit U.S. registered companies from including in their filings
with the SEC. U.S. Investors are urged to consider closely the
disclosure in our Form 20-F, which may be obtained from us, or from
the SEC's website at: http://sec.gov/edgar.shtml. A "final" or
"bankable" feasibility study is required to meet the requirements
to designate reserves under Industry Guide 7. Estimates were
calculated using historic three-year average metals prices and
foreign exchange rates in accordance with the SEC Industry Guide 7.
Industry Guide 7 requires the use of prices that reflect current
economic conditions at the time of reserve determination which
Staff of the SEC has interpreted to mean historic three-year
average prices. The assumptions used for the mineral reserves and
resources estimate reported by the Company on February 15, 2008
were based on three-year average prices for the period ending
December 31, 2007 of $583 per ounce gold, $10.77 per ounce silver,
$1.19 per pound zinc, $2.65 per pound copper and C$/US$, US$/Euro,
and MXP/US$ exchange rates of 1.14, 1.29 and 10.91, respectively.
The Canadian Securities Administrators' National Instrument 43-101
("NI 43-101") requires mining companies to disclose reserves and
resources using the subcategories of "proven" reserves, "probable"
reserves, "measured" resources, "indicated" resources and
"inferred" 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 or
indicated resource demonstrated by at least a preliminary
feasibility study. This study must include adequate information on
mining, processing, metallurgical, economic and other relevant
factors that demonstrate, at the time of reporting, that economic
extraction can be justified. A mineral reserve includes diluting
materials and allows for losses that may occur when the material is
mined. A proven mineral reserve is the economically mineable part
of a measured resource for which quantity, grade or quality,
densities, shape and physical characteristics are so well
established that they can be estimated with confidence sufficient
to allow the appropriate application of technical and economic
parameters, to support production planning and evaluation of the
economic viability of the deposit. A probable mineral reserve is
the economically mineable part of an indicated mineral resource for
which quantity, grade or quality, densities, shape and physical
characteristics can be estimated with a level of confidence
sufficient to allow the appropriate application of technical and
economic parameters, to support mine planning and evaluation of the
economic viability of the deposit. A mineral resource is a
concentration or occurrence of natural, solid, inorganic or
fossilized organic material in or on the earth's crust in such form
and quantity and of such a grade or quality that it has reasonable
prospects for economic extraction. The location, quantity, grade,
geological characteristics and continuity of a mineral resource are
known, estimated or interpreted from specific geological evidence
and knowledge. A measured mineral resource is that part of a
mineral resource for which quantity, grade or quality, densities,
shape, physical characteristics, can be estimated with a level of
confidence sufficient to allow the appropriate application of
technical and economic parameters, to support mine planning and
evaluation of the economic viability of the deposit. The estimate
is based on detailed and reliable exploration, sampling and testing
information gathered through appropriate techniques from locations
such as outcrops, trenches, pits, workings and drill holes that are
spaced closely enough to confirm both geological and grade
continuity. An indicated mineral resource is that part of a mineral
resource for which quantity, grade or quality, densities, shape and
physical characteristics can be estimated with a level of
confidence sufficient to allow the appropriate application of
technical and economic parameters, to support mine planning and
evaluation of the economic viability of the deposit. The estimate
is based on detailed and reliable exploration and testing
information gathered through appropriate techniques from locations
such as outcrops, trenches, pits, workings and drill holes that are
spaced closely enough for geological and grade continuity to be
reasonable assumed. An inferred mineral resource is that part of a
mineral resource for which quantity and grade or quality can be
estimated on the basis of geological evidence and limited sampling
and reasonably assumed, but not verified, geological and grade
continuity. The estimate is based on limited information and
sampling gathered through appropriate techniques from locations
such as outcrops, trenches, pits, workings and drill holes. Mineral
resources which are not mineral reserves do not have demonstrated
economic viability. Investors are cautioned not to assume that part
or all of an inferred resource exists, or is economically or
legally mineable. A feasibility study is a comprehensive study of a
mineral deposit in which all geological, engineering, legal,
operating, economic, social, environmental and other relevant
factors are considered in sufficient detail that it could
reasonably serve as the basis for a final decision by a financial
institution to finance the development of the deposit for mineral
production. The mineral reserves presented in this disclosure are
exclusive of mineral resources. A Qualified Person, Dyane Duquette
P.Geo., Assistant Superintendent of Technical Services for the
Goldex project, was responsible for the mineral reserve and mineral
resource estimate at the Goldex project. Required information for
the Goldex mineral resource and mineral reserve that is set out in
Canadian Securities Administrators' National Instrument 43-101
Sections 3.2 and 3.4 (a), (c) and (d) can be found in the Company's
Technical Report for the Goldex Project that was disclosed on SEDAR
on October 27, 2005 and in the Company's press release dated
February 15, 2008. The Kittila mine project mineral resource and
mineral reserve estimate was prepared by Jyrki Korteniemi, the
Superintendent of Geology for the Kittila Project under the
supervision of a Qualified Person, Marc Legault P.Eng., the
Company's Vice-President, Project Development. Required information
for the Kittila mineral resource and mineral reserve that is set
out in Canadian Securities Administrators' National Instrument
43-101 Sections 3.2 and 3.4 (a), (c) and (d) can be found in the
Company's Technical Report for the Kittila Project that was
disclosed on SEDAR on March 14, 2006 and in the Company's press
release dated February 15, 2008. The Qualified Person responsible
for the Lapa mineral reserve and mineral resource estimate is
Normand Bedard P.Geo., the Superintendent of Geology for the Lapa
mine project. Required information for the Lapa mineral resource
and mineral reserve that is set out in Canadian Securities
Administrators' National Instrument 43-101 Sections 3.2 and 3.4
(a), (c) and (d) can be found in the Company's Technical Report for
the Lapa Project that was disclosed on SEDAR on June 8, 2006 and in
the Company's press release dated February 15, 2008. The Qualified
Person responsible for the LaRonde mineral reserve and resource
estimate is Francois Blanchet Ing., Superintendent of Geology for
the LaRonde Division. The effective date of the estimate is
December 31, 2007. Required information for the LaRonde mineral
resource and mineral reserve that is set out in Canadian Securities
Administrators' National Instrument 43-101 Sections 3.2 and 3.4
(a), (c) and (d) can be found in the Company's Technical Report for
the LaRonde Mine that was disclosed on SEDAR on March 23, 2005 and
in the Company's press release dated February 15, 2008. The
Qualified Person responsible for the Meadowbank mineral resource
estimate is Daniel Doucet Ing., Principal Engineer Geology for the
Company's Technical Services Group, Abitibi Regional Office.
Required information for the Meadowbank mineral resource and
mineral reserve that is set out in Canadian Securities
Administrators' National Instrument 43-101 Sections 3.2 and 3.4
(a), (c) and (d) can be found in the Technical Report for the
Meadowbank Project that was disclosed by Cumberland Resources Ltd.
on SEDAR on March 31, 2005 and in the Company's press release dated
February 15, 2008. The Qualified Person responsible for the Pinos
Altos mineral resource and reserve estimate is Daniel Doucet, Ing.,
Principal Engineer Geology for the Company's Technical Services
Group, Abitibi Regional Office. Required information for the Pinos
Altos mineral resource and mineral reserve that is set out in
Canadian Securities Administrators' National Instrument 43-101
Sections 3.2 and 3.4 (a), (c) and (d) can be found in the Company's
Technical Report for the Pinos Altos Project that was disclosed on
SEDAR on September 24, 2007 and in the Company's press release
dated February 15, 2008. The contents of this press release have
been prepared under the supervision of, and reviewed by, Marc
Legault, the "Qualified Person" for the purposes of NI 43-101. Note
Regarding Certain Measures Of Performance This press release
presents measures including "total cash costs per ounce" and
"minesite cost per tonne" that are not recognized measures under US
GAAP. This data may not be comparable to data presented by other
gold producers. The Company believes that these generally accepted
industry measures are realistic indicators of operating performance
and useful for year over year comparisons. However, both of these
non-GAAP measures should be considered together with other data
prepared in accordance with US GAAP, and these measures, taken by
themselves, are not necessarily indicative of operating costs or
cash flow measures prepared in accordance with US GAAP. The Company
provides a reconciliation of realized total cash costs per ounce
and minesite costs per tonne to the most comparable US GAAP
measures in its annual and interim filings with securities
regulators in Canada and the United States. A reconciliation of the
Company's total cash cost per ounce and minesite cost per tonne to
the most comparable financial measures calculated and presented in
accordance with US GAAP for the Company's historical results of
operations is set out in Note 1 to the financial statements
included herein. -------------------- (1) Total cash costs per
ounce is a non-GAAP measure. For reconciliation of total cash costs
per ounce to production costs, as reported in the financial
statements, see Note 1 to the financial statements at the end of
this news release. (2) Payable gold production means the quantity
of a mineral produced during a period contained in products that
are sold by the Company, whether such products are sold during the
period or held as inventory at the end of the period. (3) Minesite
costs per tonne is a non-GAAP measure. For reconciliation of this
measure to production costs, as reported in the financial
statements, see Note 1 to the financial statements at the end of
this news release. DATASOURCE: Agnico-Eagle Mines Limited CONTACT:
David Smith, VP, Investor Relations, (416) 947-1212
Copyright