(All amounts expressed in United States dollars unless otherwise noted)
Stock Symbol: AEM (NYSE and TSX)
TORONTO, Feb. 12, 2014 /PRNewswire/ - Agnico Eagle Mines Limited (NYSE:AEM) (TSX:AEM) today reported a quarterly net loss of $453.3 million, or a net loss of $2.61 per share for the fourth quarter of 2013. This result
includes, a non-cash after tax impairment loss of $436.3 million ($2.51
per share), a non-cash deferred tax charge (primarily related to a new
Mexican mining tax law enacted in the fourth quarter of 2013) of $47.2
million ($0.27 per share), a non-cash impairment loss on available for
sale securities of $10.2 million ($0.06 per share), a non-cash stock
option expense of $4.3 million ($0.02 per share), other non-recurring
expenses of $5.7 million ($0.04 per share), and a non-cash foreign
currency translation gain of $6.2 million ($0.04 per share). Excluding
these items would result in adjusted net income of $44.2 million ($0.25
per share) for the fourth quarter of 2013. In the fourth quarter of
2012, the Company reported net income of $82.8 million or $0.48 per
share.
Fourth quarter 2013 cash provided by operating activities was $135.9
million ($144.7 million before changes in non-cash components of
working capital), this compares to cash provided by operating activities of $106.0 million in the fourth quarter
of 2012 ($169.3 million before changes in non-cash components of
working capital). The decline in cash flow before changes in working
capital during the current period was largely due to a lower metal
price environment as the Company's realized gold and silver prices were
down 26% and 35% respectively, period over period.
"Despite a challenging time in the gold market, our employees delivered
record operating and safety performance for 2013. This allowed us to
exceed both our production and cost guidance for the second year in a
row. Over the next three years, we expect further production growth
and stable costs", said
Sean Boyd
, President and Chief Executive
Officer. "Despite the strong operating results, and solid production
growth ahead from our existing assets, we have decided to reduce our
quarterly dividend to enhance our financial flexibility in the current
lower gold price environment ", added Mr. Boyd.
Fourth quarter and full year 2013 highlights include:
-
Continued strong operational performance leads to record annual gold
production - record full year payable gold production1 of 1,099,335 ounces at total cash costs2 of $672 per ounce for the year, compared to guidance of 1,060,000
ounces at $690 per ounce
-
Record fourth quarter production helps drive lower costs - payable gold production of 322,443 ounces at a total cash cost of
$623 per ounce in the fourth quarter of 2013
-
All-in sustaining costs3 for 2013 of $952 per ounce - below third quarter 2013 guidance of $1025 per ounce
-
Record annual gold production at the Meadowbank Mine - 430,613 ounces at a total cash cost of $774 per ounce
-
Forecasting 16% projected production growth through 2016 - production is expected to sequentially increase to approximately
1,275,000 ounces in 2016
-
Year-end 2013 gold reserves, net of production stand at 16.9 million
ounces with 11% improvement in average grade to 3.51 grams per tonne
(g/t) - gold reserves remain strong despite using $1,200 per ounce gold price
rather than averages of $1,350 per ounce and $1,495 per ounce for
year-end 2012
-
Achievement of commercial production at Goldex and commissioning of La
India mines - both projects expected to provide further production growth in 2014
-
Quarterly dividend of $0.08 per share declared - the reduction (was $0.22 per share) in the quarterly dividend
reflects current market conditions as gold is trading approximately
$100 per ounce lower than the Company's realized price in 2013.
_____________________________________
1 Payable production of a mineral means the quantity of mineral produced
during a period contained in products that are or will be sold by the
Company whether such products are shipped during the period or held as
inventory at the end of the period.
2 Total cash costs per ounce is a non-GAAP measure. For a reconciliation
to production costs, see Note 1 to the financial statements contained
herein. See also "Note Regarding Certain Measures of Performance".
3 All-in sustaining cost is a non-GAAP measure. For a reconciliation to
production costs, see "Reconciliation of non-GAAP Financial Performance
Measures" below. See also "Note Regarding Certain Measures of
Financial Performance". The Company's methodology for calculating
all-in sustaining costs may not be similar to methodology used by other
gold producers that disclose all-in sustaining cost. The Company may
change the methodology it uses to calculate all-in sustaining costs in
the future, including in circumstances where the World Gold Council
adopts formal industry guidelines regarding this measure.
For the full year 2013, the Company recorded a net loss of $406.5 million, or a net loss of $2.35 per share. In 2012, Agnico Eagle recorded a net income of
$310.9 million, or $1.82 per share. Compared with the prior year, 2013
earnings were primarily negatively impacted by a non-cash impairment
loss, significantly lower realized metal prices (gold and silver prices
were down 18% and 29% respectively year-over year), non-cash deferred
tax charges (primarily related to the new Mexican mining tax law
enacted in the fourth quarter of 2013) and non-cash impairment losses
on available for sale securities.
For 2013, cash provided by operating activities was $438.3 million
($496.9 million before changes in non-cash components of working
capital). This represents a decrease over 2012, when cash provided by
operating activities totaled $696.0 million ($716.5 million before
changes in non-cash components of working capital). The decrease was
primarily due to significantly lower realized metal prices in 2013.
In the fourth quarter of 2013, strong operational performance continued
at the Company's mines, which led to record quarterly and annual
production. Once again, Meadowbank was a key contributor with increased
throughput, better than expected gold grades, and strong mill
recoveries.
Payable gold production in the fourth quarter of 2013 was a record
322,443 ounces compared to 236,535 ounces in the fourth quarter of
2012. A detailed description of the production and cost performance of
each mine is set out below.
Total cash costs for the fourth quarter of 2013 were $623 per ounce
versus $769 per ounce for the fourth quarter 2012. The decrease in
total cash costs per ounce in the fourth quarter of 2013 is mainly due
to higher production and continued cost control at several of the
operations, in particular the Meadowbank mine, which more than offset
lower byproduct metals revenue.
For a second straight year, Agnico Eagle has reported record annual gold
production. The Company's payable gold production for the full year
2013 was 1,099,335 ounces at total cash costs per ounce of $672. This
compares to the full year 2012 level of 1,043,811 ounces at total cash
costs per ounce of $640. The improvement in gold production in 2013
was a result of strong operating results from all of the mines,
particularly Meadowbank. The increase in total cash costs per ounce in
2013 was primarily due to the impact of lower byproduct revenues when
compared to 2012, which was only partly offset by the positive impact
of higher gold production for 2013.
All-in sustaining costs for 2013 were $952 per ounce, which is below
guidance given in the third quarter 2013 of $1025 per ounce.
Review of Asset Values and Gold Reserves at a Lower Gold Price
Using a $1,300 per ounce gold price to conduct impairment tests has
resulted in a non-cash impairment charge of $537.2 million ($436.3
million after tax). The impairments are comprised of $269.2 million
($194.5 million after tax) at the Meadowbank mine, $200.1 million at
the Meliadine development project (where the impairment was all related
to goodwill), and $67.9 million ($41.7 million after tax) at the Lapa
mine.
Gold reserves were calculated using a $1,200 per ounce gold price. This
resulted in a 0.7 million ounce reduction in reserves before 2013
production. Reserve life remains robust at approximately 15 years
(based on the 2014 production rate) while the average reserve grade has
increased by 11% to 3.51 g/t gold from 3.16 g/t gold. Several key
properties saw meaningful increases in the average reserve grade:
LaRonde from 4.54 g/t to 5.00 g/t, Meadowbank from 2.82 g/t to 3.27
g/t, Pinos Altos from 2.21 g/t to 2.46 g/t and Meliadine from 6.98 g/t
to 7.38 g/t.
Quarterly Dividend Declared
Agnico Eagle's Board of Directors has declared a quarterly cash dividend
of $0.08 per common share, payable on March 17, 2014 to shareholders of
record as of March 3, 2014. The reduction in the quarterly dividend
payment reflects current conditions in the gold market and management's
decision to conserve cash for longer-term development and growth of its
asset base. With the reduction in our dividend payment, cash outflow
will be reduced by approximately $20 million per quarter. Agnico Eagle
has now declared a cash dividend every year since 1983.
Conversion to International Financial Reporting Standards
Agnico Eagle has decided to convert its basis of accounting to
International Financial Reporting Standards ("IFRS") to enhance the
comparability of its financial statements to the Company's peers within
the mining industry. The Company has commenced the process to convert
its basis of accounting from US GAAP to IFRS with a transition date of
January 1, 2013. Agnico Eagle anticipates reporting under IFRS for
interim and annual periods beginning in the third quarter of 2014, with
comparative information restated under IFRS. Additional disclosure
regarding the IFRS conversion is included in the Note Regarding
Conversion to IFRS section of this news release and will be included in
the Company's Management's Discussion and Analysis expected to be filed
in March 2014 in respect of the year ended December 31, 2013.
Conference Call Tomorrow
The Company's senior management will host a conference call on Thursday, February 13, 2014 at 11:00 AM (E.S.T.) to discuss financial and operating results.
Via Webcast:
A live audio webcast of the meeting will be available on the Company's
website www.agnicoeagle.com.
Via Telephone:
For those preferring to listen by telephone, please dial 416-644-3416 or
Toll-free 1-800-814-4860. To ensure your participation, please call
approximately five minutes prior to the scheduled start of the call.
Replay Archive:
Please dial 416-640-1917 or Toll-free 1-877-289-8525, access code
4661689. The conference call replay will expire on Friday, March 13,
2014. The webcast along with presentation slides will be archived for
180 days on www.agnicoeagle.com.
Liquidity - Existing Cash and Credit Facilities Provide Flexibility
Cash and cash equivalents increased to $170.0 million at December 31,
2013, from the September 30, 2013 balance of $141.7 million. During
the fourth quarter of 2013, the Company drew down an additional $50
million on its bank facilities as part of the normal course of fund
flows.
Capital expenditures in the fourth quarter of 2013 were $133.1 million
including $28.9 million at Kittila, $17.2 million at Meliadine, $17.5
million at La India, $17.2 million at Goldex, $16.8 million at LaRonde,
$16.6 million at Pinos Altos, $8.3 million at Meadowbank, $5.5 million
at Lapa, $3.0 million at Creston Mascota, and $2.1 on other Canadian
projects. For the full year 2013, capital expenditures totaled $577.8
million, which was below expected levels of $621 million announced in
the first quarter news release on April 25, 2013. This decrease in
capital spending is a reflection of capital and cost reduction
initiatives that have been ongoing through the second half of 2013.
As of December 31, 2013, the Company had drawn down $200 million on its
credit lines. This results in available lines of approximately $1.0
billion.
With its cash balances, anticipated cash flows and available bank lines,
management believes that Agnico Eagle has adequate funds to advance its
pipeline of mine expansion and gold exploration projects in Canada,
Finland, Mexico and the USA.
Three Year Plan Outlines Continued Production Growth
The Company is announcing its production and cost guidance for the
three-year period of 2014 through 2016. Anticipated production through
2016 is expected to increase by approximately 16% from 2013 levels.
In 2014, payable gold production is expected to be within the range of
1,175,000 ounces to 1,205,000 ounces. Total cash costs per ounce in
2014 are expected to be in the range of $670 to $690. The 2014
guidance reflects anticipated increases in gold production and
reductions in total cash cost per ounce guidance over the 2013 forecast
for 2014 of 1,120,000 ounces at a total cash cost of approximately $700
per ounce.
|
|
|
|
2014 Commodity and currency price
assumptions
|
|
Approximate impact on total cash costs per
ounce
|
Silver ($/oz)
|
20
|
|
$1 / oz change in silver price
|
$3
|
Copper ($/mt)
|
7,100
|
|
10% change in copper price
|
$3
|
Zinc ($/mt)
|
2,000
|
|
10% change in zinc price
|
$1
|
C$/US$
|
1.11
|
|
$0.01 change in US$/C$
|
$5
|
US$/EURO
|
1.36
|
|
$0.01 change in Euro$/US$
|
$1
|
MXP/US$
|
13.25
|
|
1 peso change in US$/MXN
|
$4
|
LaRonde, Goldex, La India and Meadowbank are Key Production Drivers Over
the Next Two Years
At LaRonde, commissioning of the cooling plant is expected to have a
positive impact on operating flexibility and production at the mine.
Furthermore, as LaRonde ramps up production in the deeper portion of
the mine, the Company expects the gold grade at the mine to increase
gradually over the course of the year.
Agnico Eagle also expects to have significant production growth from
Goldex (due to a full year of operation) and La India (expected to
achieve commercial production in the first quarter of 2014).
In 2014, Meadowbank is expected to have strong production in the first
half of the year (about 60% of the yearly forecast) as higher grades
are sequenced in the mine plan at the Portage and Goose deposits.
Strong operational performance is expected to continue in 2015 as well.
In 2015, further production growth is expected from LaRonde and Pinos
Altos (due to anticipated improving grades), Goldex, La India and
Kittila (due to completion of the mill expansion) with aggregate
payable gold production expected to be approximately 1,250,000 ounces.
|
|
|
|
|
Estimated Payable Gold
Production
|
2013 Actual
|
2014 Estimated
Mid-Point
|
2015 Estimated
Mid-Point
|
2016 Estimated
Mid-Point
|
Northern Business
|
|
|
|
|
LaRonde
|
181,781
|
215,000
|
245,000
|
285,000
|
Lapa
|
100,730
|
80,000
|
75,000
|
45,000
|
Goldex
|
20,810
|
80,000
|
100,000
|
90,000
|
Kittila
|
146,421
|
150,000
|
160,000
|
170,000
|
Meadowbank
|
430,613
|
430,000
|
375,000
|
385,000
|
|
880,355
|
955,000
|
955,000
|
975,000
|
Southern Business
|
|
|
|
|
Pinos Altos
|
181,773
|
145,000
|
165,000
|
170,000
|
Creston Mascota
|
34,027
|
40,000
|
40,000
|
40,000
|
La India
|
3,180
|
50,000
|
90,000
|
90,000
|
|
218,980
|
235,000
|
295,000
|
300,000
|
Total Gold Production
|
1,099,335
|
1,190,000
|
1,250,000
|
1,275,000
|
|
|
|
|
|
|
|
|
|
|
|
Total Cash Costs Per Ounce
|
|
2013 Actual
|
|
2014 Estimated
Mid-Point
|
|
Northern Business
|
|
|
|
|
|
LaRonde
|
|
$763
|
|
$671
|
|
Lapa
|
|
678
|
|
850
|
|
Goldex
|
|
782
|
|
799
|
|
Kittila
|
|
601
|
|
759
|
|
Meadowbank
|
|
774
|
|
629
|
|
|
|
732
|
|
692
|
|
Southern Business
|
|
|
|
|
|
Pinos Altos
|
|
412
|
|
532
|
|
Creston Mascota
|
|
485
|
|
754
|
|
La India
|
|
n/a
|
|
743
|
|
|
|
424*
|
|
615
|
|
Total
|
|
$672*
|
|
$678
|
|
|
|
|
|
|
|
|
|
|
*Does not include the cost of non-commercial production from La India
and Goldex in 2013, and costs related to the Creston Mascota shutdown
in Q1 2013 and the Kittila shutdown in Q2 2013.
|
For 2015 and 2016, total cash costs per ounce are expected to be at a
slightly lower level than expected for 2014.
In an effort to provide more transparency, Agnico Eagle is providing
guidance with respect to its all-in sustaining costs. In 2013, the
Company calculated all-in sustaining costs as:
Total cash cost per ounce of gold produced + sustaining capital
expenditures + general and administrative expenses (net of stock
options) + exploration and corporate development expenditures
(excluding greenfield exploration).
To reflect the full cost of gold production from current operations,
development capital for new projects was not included in the
calculation. The all-in sustaining cost is divided by the gold
production to obtain the all-in sustaining cost per ounce.
Based on the recommendations of the World Gold Council in 2013, Agnico
Eagle has modified its calculation of all-in sustaining costs for 2014
to be:
Total cash costs + sustaining capital (including capitalized
exploration) + general and administrative expenses (including stock
option expenses) + reclamation remediation expense.
All-in sustaining costs for 2014 are expected to be approximately $990
per ounce. In 2015 and 2016, the goal is to further reduce the all-in
sustaining cost below the level forecast for 2014.
Improvement In the Three Year Gold Production Forecast
Since the prior three-year production guidance of February 13, 2013
("the Previous Guidance"), there have been a number of key operating
developments, resulting in changes to the overall three-year production
profile. Descriptions of the major factors that contributed to these
changes are detailed below.
Northern Business
LaRonde Forecast
|
2013
|
2014
|
2015
|
2016
|
Previous Guidance (oz)
|
177,000
|
215,000
|
250,000
|
n.a.
|
Current Guidance (oz)
|
181,781 (actual)
|
215,000
|
245,000
|
285,000
|
LaRonde
2014
Forecast
|
Ore
Milled
('000
tonnes)
|
Gold (g/t),
Mill
Recovery
|
Silver (g/t),
Mill
Recovery
|
Zinc (%),
Mill Recovery
|
Copper (%),
Mill Recovery
|
Minesite Cost
Per Tonne4
|
|
2,132
|
3.37, 93.2%
|
22.8, 65.8%
|
0.55, 66.8%
|
0.3, 80.1%
|
C$100
|
_____________________________________
4 Minesite costs per tonne is a non-GAAP measure. For reconciliation of
this measure to production costs, as reported in the financial
statements, see "Reconciliation of Non-GAAP Financial Performance
Measures"
At LaRonde, the commissioning of the cooling plant late in the fourth
quarter of 2013 has helped reduce heat and congestion in the lower part
of the mine and has provided additional flexibility in the mining
plan. As a result, production from the deeper areas of the mine is
expected to ramp up substantially through 2016. In 2014, total cash
costs are expected to be slightly lower than last year primarily due to
increased gold grades.
Lapa Forecast
|
2013
|
2014
|
2015
|
2016
|
Previous Guidance (oz)
|
97,000
|
96,000
|
65,000
|
n.a.
|
Current Guidance (oz)
|
100,730 (actual)
|
80,000
|
75,000
|
45,000
|
Lapa 2014
Forecast
|
Ore Milled
('000
tonnes)
|
Gold (g/t)
|
Mill Recovery
|
Minesite Cost
Per Tonne
|
|
555
|
5.82
|
77%
|
C$134
|
At Lapa, 2014 and 2015 are the last two years of full production based
on the current life of mine plan. Production in these two years is
expected to decline due to lower grades. The Company expects that the
Lapa mine will only operate for a portion of 2016. Additional
exploration results from the Zulapa Z8 zone could extend the mine life
through 2016.
Goldex
Forecast
|
2013
|
2014
|
2015
|
2016
|
Previous Guidance (oz)
|
15,000
|
49,000
|
85,000
|
n.a.
|
Current Guidance (oz)
|
20,810 (actual)
|
80,000
|
100,000
|
90,000
|
Goldex 2014
Forecast
|
Ore Milled
('000 tonnes)
|
Gold (g/t)
|
Mill Recovery
|
Minesite Cost
Per Tonne
|
|
1,898
|
1.42
|
92.4%
|
C$37
|
The Goldex mine successfully started operations at the M and E zones in
the fourth quarter of 2013. The increase in production over previous
guidance levels, largely relates to the earlier than expected start-up
of the mine and to an expected increase in throughput from 5,500
tonnes-per-day (tpd) in the fourth quarter of 2014 to 6,000 tpd in
2015. A portion of the additional tonnage is forecast to come from the
proposed development of the MX and E2 satellite zones. Minesite costs
per tonne are expected to remain stable or to slightly decline with the
higher expected throughput rates. Exploration is continuing on several
other satellite zones, including the deeper D zone, which has the
potential to extend the mine's life.
Kittila
Forecast
|
2013
|
2014
|
2015
|
2016
|
Previous Guidance (oz)
|
165,000
|
165,000
|
160,000
|
n.a.
|
Current Guidance (oz)
|
146,421 (actual)
|
150,000
|
160,000
|
170,000
|
Kittila 2014
Forecast
|
Ore Milled
('000 tonnes)
|
Gold (g/t),
|
Mill Recovery
|
Minesite Cost
Per Tonne
|
|
1,067
|
4.9
|
89.3%
|
€78
|
At Kittila, steady production growth is expected over the next three
years. In 2014, there is a gradual return to reserve grade (4.64 g/t
gold) once the remaining higher grade portions of the Suuri pit pillar
are extracted. The 750 tpd mill expansion, which is expected to
increase the throughput capacity at the mine to 3,750 tonnes per day,
is expected to be completed by the middle of 2015. Increased
throughput from the mill expansion is expected to offset the expected
decline to reserve grade.
Minesite costs per tonne in 2014 are expected to increase slightly over
2013 levels, but these costs are expected to be reduced with completion
of the mill expansion. Additional details on the expansion can be found
in the Kittila operating review section of this news release.
Meadowbank
Forecast
|
2013
|
2014
|
2015
|
2016
|
Previous Guidance (oz)
|
360,000
|
367,000
|
350,000
|
n.a.
|
Current Guidance (oz)
|
430,613 (actual)
|
430,000
|
375,000
|
385,000
|
Meadowbank 2014
Forecast
|
Ore Milled
('000 tonnes)
|
Gold (g/t),
|
Mill Recovery
|
Minesite Cost
Per Tonne
|
|
4,156
|
3.45
|
93.3%
|
C$73
|
In the third and fourth quarters of 2013, mining encountered higher than
expected grades in the Portage and Goose pits, which resulted in gold
production being well above expected levels. Initiatives undertaken in
the fourth quarter of 2013 have resulted in a re-interpretation of the
Meadowbank block models, which have largely driven an anticipated 16%
improvement in the reserve grade to 3.27 g/t gold. The Company expects
to continue to encounter higher-grade mineralization in the first half
of 2014, which it believes will be a key driver for production for the
year. In succeeding years, the increased production levels over
previous guidance are being driven by higher expected reserve grades
and the ability to maintain throughput levels in excess of 11,000 tpd.
Southern Business
Pinos Altos
Forecast
|
2013
|
2014
|
2015
|
2016
|
Previous Guidance (oz)
|
159,000
|
136,000
|
161,000
|
n.a.
|
Current Guidance (oz)
|
181,773 (actual)
|
145,000
|
165,000
|
170,000
|
Pinos Altos
2014 Forecast
|
Total Ore
('000 tonnes)
|
Gold (g/t)
Recovery
|
Silver (g/t)
Recovery
|
Minesite Cost
Per Tonne
|
|
1,945
|
2.45, 94.7%
|
73, 44.8%
|
$61
|
At Pinos Altos, the new production forecast for the three year period
2014-2016 is higher than previously estimated, as a result of
expectations that the strong operating performance in 2013 will
continue and support higher mill throughput. Year-over-year variances
in guidance for 2014 and 2015 are attributable to mine sequence and ore
grade, and higher mill throughput.
Creston Mascota
Forecast
|
2013
|
2014
|
2015
|
2016
|
Previous Guidance (oz)
|
32,000
|
52,000
|
55,000
|
n.a.
|
Current Guidance (oz)
|
34,027 (actual)
|
40,000
|
40,000
|
40,000
|
Creston Mascota
2014 Forecast
|
Total Ore
('000 tonnes)
|
Gold (g/t)
Recovery
|
Silver (g/t)
Recovery
|
Minesite Cost
Per Tonne
|
|
1,563
|
1.3, 61.2%
|
13.4, 7.2%
|
$20
|
Operations at Creston Mascota resumed in April 2013 after a temporary
suspension for leach pad modifications. Production since this
resumption has met Company expectations and was in line with guidance.
The lower annual production from 2014 through 2016 is a reflection of
anticipated lower ore grades. Construction on the Phase 3 leach pad at
Creston Mascota is expected to be completed by the end of March 2014.
Minesite costs in 2014 are expected to be higher due to the
commissioning of an agglomerator, higher strip ratios and the startup
of the Phase 3 pad.
La India Forecast
|
2013
|
2014
|
2015
|
2016
|
Previous Guidance (oz)
|
n.a.
|
40,000
|
81,000
|
n.a.
|
Current Guidance (oz)
|
3,180 (actual)
|
50,000
|
90,000
|
90,000
|
La India 2014
Forecast
|
Total Ore
('000 tonnes)
|
Gold (g/t)
Recovery
|
Silver (g/t)
Recovery
|
Minesite Cost
Per Tonne
|
|
3,173
|
0.84, 58.2%
|
3.6, 21.8%
|
$12
|
Pre-commercial production at La India in 2013 was 3,180 ounces of gold.
The Company expects that production will continue to increase at La
India for the next several months as the active leach pad area expands
and solution volumes increase to steady state operating levels.
Crushing plant throughput continues to increase, and stacking rates are
currently averaging approximately 12,000 tpd. Commercial production is
anticipated at La India in the first quarter of 2014. Production
guidance for La India has been increased slightly over last year's
guidance due to the mine's earlier than planned startup. Operating
costs in 2014 are forecast to be higher than in subsequent years due to
the production increase.
Continued Capital Discipline Expected in 2014
At current spot input prices, Agnico Eagle expects to fund this year's
capital expenditures, which are estimated to total approximately $416
million, from operating cash flow. The Company's goal is to continue
to work at reducing capital expenditures in order to generate more free
cash flow.
The estimated capital expenditures for 2014 include approximately $227
million of sustaining capital at the mines and $166 million on new
projects and expansions, as set out in the table below. Additionally,
approximately $23 million is estimated to be spent on capitalized
exploration and approximately $51 million on expensed exploration,
project evaluation and corporate development. Capital expenditures in
2015 are expected to decline slightly from 2014 levels.
|
|
|
|
|
|
|
Estimated 2014 Capital
Expenditures
|
|
|
Sustaining
|
Development
Projects
|
Capitalized
Exploration
|
Expensed
Exploration
|
(millions of $)
|
|
|
|
|
|
|
Northern Business
|
|
|
|
|
|
|
LaRonde
|
|
|
68
|
13
|
1
|
|
Lapa
|
|
|
16
|
|
3
|
1
|
Goldex
|
|
|
16
|
13
|
2
|
|
Kittila
|
|
|
56
|
65
|
4
|
3
|
Meadowbank
|
|
|
34
|
|
|
|
Meliadine
|
|
|
|
42
|
5
|
3
|
|
|
|
190
|
133
|
15
|
7
|
Southern Business
|
|
|
|
|
|
|
Pinos Altos
|
|
|
29
|
29
|
3
|
1
|
La India
|
|
|
2
|
4
|
4
|
3
|
Creston Mascota
|
|
|
6
|
|
1
|
|
|
|
|
37
|
33
|
8
|
4
|
Project Eval/Corp Dev
|
|
|
|
|
|
21
|
Other Exploration
|
|
|
|
|
|
19
|
Total Expenditures
|
|
|
$227
|
166
|
23
|
51
|
Development/Expansion Projects - Future Optionality with Low Capital
Commitment
The current three year plan sets out estimated annual gold production
which increases each year through 2016 to approximately 1,275,000
million ounces. However, these forecasts do not include the expansion
and development projects set out below, which have not yet been
approved for construction.
Kittila - Production Shaft and Rimpi Zone Development
A study is underway to consider the construction of a production shaft
at Kittila. This shaft would provide operating cost savings and
sustain long-term production at higher throughput levels from multiple
zones, especially at depths below 700 metres. A shaft would also
provide access for exploration and infill drilling. In addition, a
study is underway to evaluate the feasibility to develop the Rimpi Zone
as a potential ore source.
Meliadine - Ramp Extension provides Development Flexibility
Located near Rankin Inlet, Nunavut, Canada, the Meliadine project was
acquired in July 2010, and is one of Agnico Eagle's largest gold
projects in terms of resources. The Company owns 100% of the
65,000-hectare property.
Activities in 2013 included infill and step-out diamond drilling, road
construction, ramp development, permitting, camp operation and work on
an updated technical study.
The 2013 exploration program was completed in August with a total of
79,959 metres drilled. Drilling was focused around known deposits
(Tiriganiaq, Wesmeg/Normeg, F zone, Pump and Discovery) and on regional
exploration targets.
Highlights of the program include new deep intercepts that have revealed
potential to expand the Pump, F zone and Discovery deposits. Drilling
has also delineated higher-grade shoots within the Wesmeg deposit,
similar to those in the Tiriganiaq and Normeg deposits. These results
were incorporated into the year-end 2013 reserve and resource statement
(see below). Despite using a lower gold price in 2013, the reserve
grade at Meliadine increased to 7.38 g/t from 6.98 g/t.
Construction of a permanent portal with upgraded infrastructure for the
exploration ramp was completed in the fourth quarter of 2013. A
significant portion of the 2014 Meliadine capital budget (approximately
$42 million) is scheduled to be dedicated to further ramp development.
The ramp would allow for cost-effective exploration and conversion
drilling of the deeper parts of the Tiriganiaq and Wesmeg/Normeg zones,
which should provide a better understanding of the ore zones and help
to optimize potential mining plans. Extension of the ramp would also
keep the development time line on track for a potential late 2018 start
up if the Company determines to build a mine at Meliadine. A portion of
the 2014 budget is allocated to exploration and resource conversion
drilling.
An updated technical study is progressing with completion expected in
late 2014. The timing of estimating or making capital expenditures on
the project beyond 2014 will be subject to Board approval and
prevailing market conditions.
Additional Satellite Potential Being Evaluated at Goldex
At the Goldex mine, studies are continuing on the evaluation of other
satellite zones including the Deep (top of the D Zone) and the P Zone.
These zones could have synergies with the potential development of the
Akasaba West deposit (see below), which could enhance production levels
or extend the current mine life and reduce operating costs.
Akasaba West - Could Provide Future Mill Feed to Agnico's Abitibi
Facilities
In January 2014, Agnico Eagle acquired the Akasaba West gold-copper
deposit from Alexandria Minerals (AZX:TSXV) for C$5.0 million and a 2%
NSR royalty on any gold production exceeding 210,000 ounces. Located
less than 30 km from Goldex, the Akasaba West deposit could potentially
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.
In 2014, $2.3 million is scheduled to be spent on infill drilling to
verify the known mineralization and move the project towards
feasibility and permitting.
Gold Reserves - 16.9M Ounces with 11% Improvement in Grade
With the recent downturn in commodity prices, the Company has used lower
commodity price assumptions to calculate 2013 year-end reserves
($1,200/oz gold and $18/oz silver).
At year-end 2013, the Company's proven and probable gold reserves (net
of 2013 production) totaled 149 million tonnes grading 3.51 g/t gold,
containing 16.9 million ounces of gold, a decrease of 1.8 million
ounces from 2012 levels (including 2013 production of approximately 1.1
million ounces). Despite the decline in overall reserves, the average
reserve grade increased to 3.51 g/t gold, which is a considerable
increase over last year's grade of 3.16 g/t gold.
The Company's year-end 2013 gold reserves, net of the 1,099,335 ounces
of gold production in 2013 are set out below:
|
|
|
|
|
|
|
Gold Reserves
|
Proven & Probable
|
Average Gold Reserve
|
By Mine
|
Reserve (000s ounces)
|
Grade (g/t)
|
|
2013
|
2012
|
Change
|
2013
|
2012
|
Change
|
Northern Business
|
|
|
|
|
|
|
LaRonde
|
3,880
|
4,206
|
-326
|
5.00
|
4.54
|
0.46
|
Lapa
|
281
|
395
|
-114
|
5.97
|
5.95
|
0.02
|
Goldex
|
372
|
349
|
24
|
1.52
|
1.55
|
-0.03
|
Kittila
|
4,714
|
4,783
|
-68
|
4.64
|
4.49
|
0.15
|
Meadowbank
|
1,751
|
2,294
|
-542
|
3.27
|
2.82
|
0.45
|
Meliadine
|
2,841
|
2,987
|
-145
|
7.38
|
6.98
|
0.40
|
Bousquet
|
0
|
178
|
-178
|
-
|
1.88
|
-
|
Total/Average
|
13,840
|
15,192
|
-1,352
|
4.61
|
4.20
|
0.40
|
|
|
|
|
|
|
|
Southern Business
|
|
|
|
|
|
|
Pinos Altos
|
2,266
|
2,714
|
-448
|
2.46
|
2.21
|
0.25
|
La India
|
758
|
776
|
-17
|
0.87
|
0.72
|
0.15
|
Total/Average
|
3,024
|
3,490
|
-18
|
1.69
|
1.52
|
0.17
|
Total Reserves
|
16,865
|
18,681
|
-1,817
|
3.51
|
3.16
|
0.35
|
Amounts presented in the table and in this news release have been
rounded to the nearest thousand. See "Detailed Mineral Reserve and
Resource Data (as at December 31, 2013)" set out at the end of this
news release for more details.
In prior years, economic parameters used to model reserves for all
properties were calculated 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 reserve determination, which
the SEC has interpreted to mean historic three-year average prices.
Given the downturn in commodity prices in 2013, and in order to focus
on improving the quality of the reserve base, Agnico Eagle has decided
to use more conservative gold and silver prices of $1,200 per ounce and
$18 per ounce, respectively, for the December 2013 reserve
estimations. These prices are well below the three-year historic gold
and silver price averages of approximately $1,551 per ounce and $30 per
ounce, respectively.
For the December 2013 reserve calculations, the same economic parameters
were used at all of the Company's mines and advanced projects. Details
on the economic parameters used in generating the December 2013
reserves are shown with the detailed reserve and resource tables near
the end of this news release.
The consequence of using substantially lower metals prices for reserve
estimation than last year is a higher cut-off grade for each operation.
This results in reserves that have fewer ounces but higher gold grade
than in 2012. The global reserves gold grade increased year-over-year
by 11% to 3.51 g/t in 2013, as shown in the change in reserves table.
While the reserves at each operating mine had declines greater than
those from depletion resulting from 2013 production, the higher grade
makes the remaining reserves more robust in the short-term uncertainty
of the current gold market.
The Meadowbank mine had the largest decline in reserves due to the 2013
record high 457,000 ounces of in-situ gold mined (431,000 ounces of
gold production) and a higher cut-off grade used in the 2013
estimations. The reserve grade at Meadowbank improved 15% to 3.24 g/t
gold, largely due to the re-interpretation of the Goose and Portage
block models (see the mine discussion below). The decline includes
approximately 246,000 ounces of lower-grade material from the deeper
portion of the Vault pit. A table near the end of this section shows
the 2012-to-2013 reduction of 264,000 ounces of gold in total reserves
at the Vault deposit. Mining is expected to begin in the Vault deposit
in 2014.
Pinos Altos also saw a decline in reserves due to the setting aside of
previous reserves in an underground support pillar. The reserve grade
at Pinos Altos also increased 11% to 2.46 g/t gold.
There were also significant grade increases at LaRonde (5.00 g/t versus
the prior estimate of 4.54 g/t gold) and Meliadine (7.38 g/t versus the
prior estimate of 6.98 g/t gold).
It is the Company's goal to maintain its gold reserves at approximately
15 times its annual gold production rate. The current reserves are
approximately at this level when compared to the Company's projected
annual 2014 production rate.
In addition to proven and probable gold reserves, Agnico Eagle's
byproduct reserves include approximately 75 million ounces of silver at
the Pinos Altos and LaRonde mines (52.8 million tonnes grading 43.89
g/t silver), plus 161,000 tonnes of zinc and 60,000 tonnes of copper at
the LaRonde mine (24.1 million tonnes grading 0.67% zinc and 0.25%
copper).
For a $150 per ounce (13%) increase in the gold price (leaving all other
assumptions unchanged), there would be an estimated 8.3% increase in
proven and probable gold reserves. Conversely for a $150 per ounce
(13%) decrease in the gold price (leaving all other assumptions
unchanged), there would be an estimated 5.4% decrease in proven and
probable gold reserves. It should also be noted that approximately 89%
of the Company's gold reserves have forecast total cash costs below
$950 per ounce, and approximately 64% of the Company's reserves have
forecast total cash costs below $700 per ounce. These are estimates and
are not based on detailed mining plans.
Measured and Indicated Gold Resources Grow by 11%
In 2013, drilling was carried out to increase the confidence level of
the resource base. This work led to a substantial increase and upgrade
to the quality of the resources in 2013.
The Company's measured and indicated resources now total approximately
157 million tonnes grading 1.91 g/t, or 9.7 million ounces of gold.
This represents an increase of about 11% or 1.6 million ounces and a 7%
increase in grade over the December 2012 measured and indicated
resource (see the February 13, 2013 news release for comparison). The
increase in contained gold represents successful conversion drilling
from inferred resources as well as reclassification of some gold
reserves, offset by the effects of a higher cut-off grade.
The main increase to indicated resources came at the Meliadine project,
where the gold grade increased 28% to 5.05 g/t. There was also a large
increase in the measured and indicated resources at the Kittila mine
due to the same factors, and the gold grade increased by 5% to 2.79
g/t.
At Goldex, there was an increase of 285,000 ounces of gold contained in
indicated resources (largely from the D zone), where the grade
increased 11% to 2.03 g/t gold (see the February 13, 2013 news release
for comparison). A table near the end of this section shows the
2012-to-2013 increase of 260,000 ounces of gold in indicated resources
at the D zone. The La India property also increased measured and
indicated resources, largely due to a new geological model at the
Tarachi deposit.
At the Pinos Altos property, the indicated resources declined due to a
more conservative mine plan at the Santo Nino underground deposit and
the proposed Sinter pit.
The Company's inferred resources now total approximately 169 million
tonnes grading 1.86 g/t, or 10.1 million ounces of gold. This
represents a decrease of approximately 2.0 million ounces of gold in
inferred resources (see the February 13, 2013 news release for
comparison). The change is due to the transfer of 1.2 million ounces to
indicated resources and a 1.9-million-ounce reduction from using higher
cut-off grades, partially offset by a 1.1 million ounce addition from
exploration drilling. The successful conversion to indicated resources
was mainly at the Meliadine, Goldex and Kittila mines. The negative
impact of the higher cut-off grades was felt most strongly at Kittila
and Meliadine, a result of this year's program to increase confidence
in the resources. The main exploration success was at the Meliadine and
Kittila properties, with some success at LaRonde's Zone 19 as well.
The distribution of resources by property is set out in the following
table.
December 31, 2013 Resources
|
|
|
|
|
|
|
|
|
|
Measured & Indicated
|
|
|
Inferred
|
|
|
|
Resources*
|
|
|
Resources*
|
|
|
|
(000 oz gold)
|
|
|
(000 oz gold)
|
Northern Business
|
|
|
|
|
|
|
LaRonde
|
|
|
289
|
|
|
1,561
|
Lapa
|
|
|
213
|
|
|
172
|
Goldex
|
|
|
1,896
|
|
|
1,374
|
Kittila
|
|
|
988
|
|
|
996
|
Meadowbank
|
|
|
768
|
|
|
421
|
Meliadine
|
|
|
3,082
|
|
|
2,712
|
Bousquet/Ellison
|
|
|
1,008
|
|
|
778
|
Other
|
|
|
31
|
|
|
420
|
Subtotal
|
|
|
8,276
|
|
|
8,434
|
|
|
|
|
|
|
|
Southern Business
|
|
|
|
|
|
|
Pinos Altos
|
|
|
692
|
|
|
726
|
La India
|
|
|
686
|
|
|
960
|
Subtotal
|
|
|
1,378
|
|
|
1,686
|
Total Resources
|
|
|
9,654
|
|
|
10,121
|
*For full details including tonnages and grade, see the Detailed Mineral
Reserve and Resource Data table in this news release
Changes to reserves or resources of selected zones, Dec. 31, 2012 and
2013
Zone
|
Dec. 31, 2012
|
Dec. 31, 2013
|
|
Gold grade
(g/t)
|
Gold
(000s oz)
|
Tonnes
(000s)
|
Gold grade
(g/t)
|
Gold
(000s oz)
|
Tonnes
(000s)
|
Proven & Probable reserves
|
|
|
|
|
|
|
Vault zone, Meadowbank mine
|
2.59
|
1,119
|
13,453
|
2.79
|
855
|
9,537
|
Indicated resources
|
|
|
|
|
|
|
D zone, Goldex mine
|
2.06
|
338
|
5,070
|
2.39
|
598
|
7,793
|
2014 Exploration Program and Budget - a Significant Reduction Over
Historical Levels
A large component of the 2014 exploration program will be focused on
regional areas such as Nunavut (Meliadine and the IVR property located
50 km northwest of Meadowbank), Quebec (Akasaba), Mexico (Tarachi and
La India) and Finland. These programs are designed to further evaluate
deposits which could ultimately supplement the Company's existing
production profile. In 2014, Agnico Eagle's direct exploration budget
(not including project evaluation and corporate development activities)
is approximately $53 million, of which about $23 million will be spent
on capitalized exploration, mostly at the various mine sites.
Northern Business Operating Review
LaRonde Mine - Cooling Plant Commissioning Complete; Exhaust System
Installation on Schedule
The 100% owned LaRonde mine in northwestern Quebec achieved commercial
production in 1988.
The LaRonde mill processed an average of 6,726 tpd in the fourth quarter
of 2013, compared with an average of 6,379 tpd in the corresponding
period of 2012. Minesite costs per tonne were approximately C$90 in
the fourth quarter of 2013, lower than the C$98 per tonne experienced
in the fourth quarter of 2012. The decrease in costs over the
prior-year period is partly due to higher tonnage, lower labor costs,
and various other cost reduction initiatives.
Milling performance for the full year 2013 was approximately 6,354 tpd
versus 6,444 tpd in 2012. The slightly lower throughput in 2013
relates primarily to 16 days of unplanned shutdown related to the hoist
drive compared to 2012.
Minesite costs per tonne for the full year 2013 were approximately C$99,
slightly higher than C$95 per tonne in 2012. The higher costs were
mainly due to the 16 days of unplanned shutdown as mentioned above.
On a per ounce basis, net of byproduct credits, LaRonde's total cash
costs per ounce were $664 in the fourth quarter of 2013 on payable
production of 51,336 ounces of gold. This compares with the fourth
quarter of 2012 when total cash costs per ounce were $756 on production
of 36,911 ounces of gold. The decrease in total cash costs in the 2013
period was largely due to higher production (due to increased tonnage,
higher gold grades and the improved recoveries from the CIP circuit),
and lower costs, offset somewhat in part by lower by-product production
and revenues.
For the full year 2013, LaRonde's total cash costs per ounce were $763
on gold production of 181,781 ounces. This compares to total cash
costs per ounce of $569 on gold production of 160,875 ounces in 2012.
Higher gold production in 2013 is a result of an improvement in grade,
consistent with more of the ore being mined from the lower mine area
where gold grades are higher. The increase in total cash costs over
2012 is primarily due to lower by-product production (zinc and silver)
and significantly lower byproduct revenues.
In 2013, the LaRonde mine also produced approximately 19,814 tonnes of
zinc (49% less than in 2012), 2.1 million ounces of silver (6% less
than in 2012), and 4,835 tonnes of copper (17% more than in 2012) as
byproducts to the gold production. These totals are consistent with the
change in the metals mix as the mine goes deeper and becomes more gold
/ copper rich as opposed to zinc / silver rich in the upper levels. In
2014, approximately 80% of the production will come from the lower mine
area.
The new cooling plant on the 262 level began operating in December 2013,
and other components of the new ventilation system are currently being
commissioned, with everything expected to be on line in time to handle
higher summer temperatures and reduce the frequency of heat-related
delays from prior years.
In 2014, work will begin on the installation of a coarse ore conveyor
system that will extend from the 293 level to the crusher on the 280
level. The new conveyor, which is expected to be operational in late
2015, should help lower costs and reduce congestion in the deeper
portions of the mine.
A three week shutdown is planned at LaRonde in July 2014 to facilitate
the installation of new hoist drives to replace obsolete production and
service hoist equipment in the Penna shaft.
Lapa - Steady Production and Strong Cost Containment in 2013
The 100% owned Lapa mine in northwestern Quebec achieved commercial
production in May 2009.
The Lapa circuit, located at the LaRonde mill, processed an average of
1,821 tpd in the fourth quarter of 2013. This compares with an average
of 1,746 tpd in the fourth quarter of 2012. The improved throughput in
the 2013 period was largely due to increased ore hoisted during the
quarter compared to the 2012 period.
Minesite costs per tonne were C$108 in the fourth quarter of 2013,
slightly better than the C$113 realized in the fourth quarter of 2012.
The improvement in the 2013 period was largely due to the higher
tonnage processed and strong cost control in all aspects of the
operation, including lower usage of consumables (especially cement),
lower development costs and lower energy consumption due to better
ventilation management.
For the full year 2013, Lapa averaged 1,755 tpd, which is almost
identical to 2012 levels. Full-year minesite costs in 2013 were C$110
per tonne, slightly below the C$115 achieved in 2012. Costs were lower
in 2013 largely due to the factors set out above.
Payable production in the fourth quarter of 2013 was 26,323 ounces of
gold at a total cash cost per ounce of $655. This compares with the
fourth quarter of 2012, when production was 24,621 ounces of gold at
total cash cost per ounce of $742. Slightly higher tonnage and
recoveries and good cost containment resulted in higher production and
lower costs during the fourth quarter of 2013 compared to the 2012
period.
For the full year 2013, payable production was 100,730 ounces of gold at
total cash costs of $678 per ounce. The prior year production was
106,191 ounces of gold at total cash costs of $697 per ounce.
Production in 2013 was lower due to reduced grades, while costs were
lower due to successful cost cutting measures implemented by the
Company.
At Lapa, 2014 and 2015 are the last two years of full production based
on the current life of mine plan. In 2016, production is expected to
exhibit a decline from the current levels. Additional exploration
drilling in the parallel Zulapa Z8 zone could extend the mine life.
Goldex - Commercial Production Achieved in Fourth Quarter 2013
The 100% owned Goldex mine in northwestern Quebec began operation in
2008 but mining operations in the original Goldex Extension Zone (GEZ)
orebody were suspended in October 2011 (see October 19, 2011 news
release). In July 2012, the M and E satellite zones were approved for
development. Mining operations at GEZ remain suspended.
Mining operations resumed on the M and E satellite zones in September
2013. Initial mill testing, late in the third quarter of 2013, yielded
1,505 ounces of pre-commercial gold production. The Goldex mine
achieved commercial production in the fourth quarter of 2013, with the
mill processing an average of 5,343 tpd during the quarter. Throughput
is expected to gradually increase from a level of 5,400 tpd in the
fourth quarter of 2014 to approximately 6,000 tpd in 2015.
Minesite costs per tonne at Goldex were approximately C$32 in the fourth
quarter of 2013, which was well below the September 2013 forecast cost
of approximately C$40 per tonne. Mine site costs per tonne were
significantly lower than forecast primarily due to higher tonnage,
lower drilling and blasting costs and lower backfill costs. However
the life of mine cost per tonne remains forecast to be approximately
C$39.
Payable gold production in the fourth quarter of 2013 was 19,305 ounces
at a total cash cost per ounce of $782. Forecasts in September 2013 had
called for commercial production of approximately 15,000 ounces at a
total cash cost of approximately $900 per ounce. Higher gold production
was primarily due to higher head grade combined with higher tonnage and
slightly higher recovery. Costs were lower due to the reasons outlined
above.
For the full year 2013, the mine produced 20,810 ounces of gold,
including 1,505 pre-production ounces.
In 2014, development activities will begin on the MX and E2 satellite
zones. In addition, exploration is continuing on several other
satellite zones, including the Deep and P zone (top of the D zone),
which have the potential to further extend the mine's life. Economies
of scale may be available if additional zones are developed as the mill
has the ability to operate at over 8,000 tpd.
Meadowbank - Record Production in 2013
The 100% owned Meadowbank mine in Nunavut, northern Canada, achieved
commercial production in March 2010.
The Meadowbank mill processed a record average of 11,398 tpd in the
fourth quarter of 2013, compared to the 11,193 tpd achieved in the
fourth quarter of 2012. The continued improvement in mill throughput
in the fourth quarter of 2013 is due to significant improvements in
equipment availability and maintenance, compared to the 2012 period.
For the full year 2013, the Meadowbank mill processed an average of
11,350 tpd, compared to 10,440 tpd in the full year 2012. The
continued improvement in mill throughput in 2013 compared to 2012 is
due to the same reasons outlined above.
Minesite costs per tonne were a record low C$79 in the fourth quarter
and C$83 for the full year of 2013. These costs were lower than the
C$90 and C$88 per tonne in the fourth quarter and full year 2012,
respectively. The improvement in cost per tonne was primarily driven
by improved productivity, the 2013 cost management program and ongoing
cost controls, compared to the respective 2012 period.
Payable production in the fourth quarter of 2013 was 123,433 ounces of
gold at total cash costs per ounce of gold of $637. This compares with
the fourth quarter of 2012 when 77,238 ounces were produced at total
cash costs per ounce of $1,200. The higher production and lower costs
in the 2013 period compared to the 2012 period are primarily due to a
54% increase in the grade processed and ongoing cost control programs.
Full year 2013 payable gold production was a record 430,613 ounces at
total cash costs per ounce of gold of $774. In 2012, the mine produced
366,030 ounces at total cash costs per ounce of $913. The increase in
year over year production and decline in total cash costs is primarily
due to better tonnage and grade than predicted by the block models,
consistently high crusher throughput levels, slightly better recoveries
and strong cost containment programs.
Initially in the third quarter of 2013, mining encountered higher than
expected grades in the Portage B pit predominantly due to the presence
of more free gold than modeled. Additionally, in the Portage E pit,
there was approximately a 30% increase in tonnes and grade compared to
the block model. This appears to have been due to an underestimation
of the geological complexity (folding) of the mineralization in this
portion of the ore body. At the Goose pit, the assay capping level and
the block model interpretation down played the continuity of
higher-grade areas, which also led to stronger grade reconciliation.
In the fourth quarter of 2013, grades remained high due to accelerated
stripping in the Goose pit (providing additional access to the high
grade ore), and encountering higher grades than expected in the Goose
and Portage pits.
In order to reduce the variance between the block model and the grades
going through the mill, a number of initiatives were undertaken in the
fourth quarter of 2013. At Goose, the main zone was remodeled to
separate the "Super High Grade" ore (greater than 10 g/t gold) from the
run-of mine ore and also remove significant zones of internal waste.
In addition, reserves were re-estimated using adjusted parameters and a
new interpolation method to better match the grade control
estimations. As a result, tonnage declined by 18.5%, but the grade and
contained ounces increased by 34.3% and 9.4% respectively when compared
to the December 2012 model.
At the Portage deposit, 4,400 metres of delineation and infill drilling
were completed in Portage South. Ore wireframes were then updated and
re-interpreted to be more selective. As a result, the block model has
now been estimated using modified parameters. With these
modifications, there has been a 13.4% increase in tonnes, a 7.4%
increase in grade and a 13.3% increase in ounces at the Portage pit
compared to the December 2012 model.
Overall, the reserve grade at Meadowbank improved 16% to 3.24 g/t gold,
largely due to the re-interpretation of the Goose and Portage block
models. With the increased reserve grades and an accelerated stripping
program at the Goose pit, Meadowbank is expected to have strong first
half production in 2014. The Goose pit is expected to be completed in
the second half of 2014.
In 2013, Agnico Eagle returned to its IVR property, located
approximately 50km northwest of Meadowbank, with a small exploration
program. Due to the exploration success with several holes returning
intriguing gold mineralization, a follow-up program of 5,000 metres
will be drilled in 2014.
Kittila - Mill Expansion on Schedule for Mid-2015 Start-up
The 100% owned Kittila mine in northern Finland achieved commercial
production in 2009.
The Kittila mill processed an average of 3,349 tpd in the fourth quarter
of 2013. In the fourth quarter of 2012, the Kittila mill processed
3,030 tpd. Since the completion of the extended maintenance period in
the second quarter of 2013, as expected, mill availability and
efficiency has improved significantly, which has allowed for higher
throughput levels at the mill.
Minesite costs per tonne at Kittila were approximately €70 in the fourth
quarter of 2013, compared to €69 in the fourth quarter of 2012. Costs
remained flat in the fourth quarter of 2013 due to higher tonnages and
good cost control (particularly on explosives and chemicals) when
compared with the 2012 period.
For the full year 2013, the mill processed an average of 2,559 tpd as
compared with 2012 when the mill processed an average of 2,979 tpd.
The decrease in throughput relates to the extended shutdown in the
second quarter of 2013. For the full year 2013, the minesite costs per
tonne were €73, compared to €69 in 2012. The increased minesite costs
per tonne in the 2013 period primarily relate to the lower tonnage and
the shift to higher cost underground mining from open pit mining.
Fourth quarter 2013 payable gold production at Kittila was 41,710 ounces
with a total cash cost per ounce of $687. In the fourth quarter of
2012 the mine produced 45,273 ounces at total cash costs per ounce of
$569. In the 2012 period, mining activities were just being completed
in the Suuri pit, which resulted in higher grades and lower costs
compared to the 2013 period, during which all the ore was sourced from
the relatively higher cost underground.
For the full year 2013, payable gold production from Kittila was 146,421
ounces at total cash costs of $601 per ounce. In 2012, the mine
produced 175,878 ounces of gold at total cash costs of $565 per ounce.
The lower production in 2013 was largely due to the extended
maintenance shutdown in the second quarter of 2013. The higher costs
are largely due to lower production and slightly higher costs
associated with the transition to underground mining compared to the
2012 period.
In 2013, the Kittila mill had annual record recovery of 90.17%.
The 750 tonne per day mill expansion at Kittila is progressing on
schedule and budget with start-up expected to occur in mid-2015. Civil
works are proceeding as planned with all concrete pouring completed and
the erection of steel structures underway. Commissioning of the ore
handling area is on-going and construction of the building to house the
oxygen plant has been completed. In addition, the manufacture of the
ball mill is slightly ahead of schedule. The expansion is expected to
improve unit costs and to offset a gradual reduction in realized grade
towards the average reserve grade over the next several years.
Southern Business Operating Review
Pinos Altos - Continued Higher Mill Throughput
The 100% owned Pinos Altos mine in northern Mexico achieved commercial
production in November 2009. Current mine life is estimated to be
through 2029.
The Pinos Altos mill processed 5,313 tpd in the fourth quarter of 2013,
compared to 5,121 tpd per day processed in the fourth quarter of 2012,
largely attributable to a new mill liner design and higher mechanical
availability. During the fourth quarter of 2013, approximately 184,300
tonnes of ore were stacked on the leach pad at Pinos Altos, compared to
259,200 tonnes in the comparable 2012 period. Minesite cost per tonne
at Pinos Altos was $46 in the fourth quarter of 2013 identical to those
in the fourth quarter of 2012. Costs held steady despite a higher
percentage of lower cost heap leach ore being stacked in the 2012
period due to the ongoing cost containment efforts.
For the full year 2013, the Pinos Altos mill processed an average of
5,262 tpd, compared to 5,020 tpd processed in 2012. In 2013,
approximately 805,200 tonnes of ore were stacked on the leach pad at
Pinos Altos, compared to 1,025,000 tonnes in 2012. Minesite cost per
tonne at Pinos Altos for full year period in 2013 were approximately
$45, compared to $41 in 2012, with the difference largely attributable
to variations in the proportion of heap leach ore to milled ore.
Payable production in the fourth quarter of 2013 was 46,490 ounces of
gold at a cash cost per ounce of $442. This compares with production of
48,932 ounces at a total cash cost of $295 in the fourth quarter of
2012. Lower production in 2013 is largely due to slightly lower grades
processed over the comparable period last year. The increase in the
year over year total cash cost per ounce is largely due to a 34%
decline in realized silver price compared to the prior year period.
For the full year 2013, Pinos Altos produced 181,773 ounces of gold at a
total cash cost per ounce of $412. This is in contrast to 2012 when the
mine produced 183,662 ounces of gold at a total cash cost of $276 per
ounce. The increase in the cash costs per ounce on a year-over-year
basis is largely due to a lower realized silver price.
The $106 million Pinos Altos shaft sinking project remains on schedule
and budget with approximately 58% of the total budget committed to
date. Head frame erection has been completed and the hoist and hoist
house electrical installation has been completed. Shaft sinking is
underway (currently at a depth of approximately 120 metres) and hoist
commissioning is currently in progress. When the shaft is completed
(scheduled to be in 2015), it will allow better matching of the mill
capacity with the future mining capacity at Pinos Altos when the open
pit mining operation begins to wind down as planned over the next
several years.
The Company continues to evaluate a number of regional satellite
opportunities such as Sinter and
Reyna de Plata
in order to better
understand the development potential of these projects.
Creston Mascota - Phase 3 Leach Pad Nearing Completion
The Creston Mascota heap leach has been operating as a satellite
operation to the Pinos Altos mine since late 2010. Operations at
Creston Mascota resumed in April 2013 after a temporary suspension for
leach pad modifications. Production since this resumption has met
Company expectations and is in line with guidance.
Approximately 325,500 tonnes of ore were stacked on the Creston Mascota
leach pad during the fourth quarter of 2013, compared to approximately
78,300 tonnes stacked in the fourth quarter of 2012. Minesite costs per
tonne at Creston Mascota were $15 in the fourth quarter of 2013,
compared to nil in the fourth quarter of 2012. Tonnes stacked and
minesite costs per tonne for the comparable period of 2012 are not
representative given that operations were temporarily suspended for
leach pad modifications.
Payable gold production at Creston Mascota in the fourth quarter of 2013
was 10,666 ounces at a total cash cost per ounce of $431. This compares
to 3,560 ounces during the fourth quarter of 2012. The lower production
in the 2012 period is due to the suspension of operations referred to
above, which resulted in fewer ounces from drain-down of older leach
panels.
For the full year 2013, approximately 1,276,200 tonnes of ore were
stacked on the Creston Mascota leach pad, compared to approximately
1,532,400 tonnes stacked in the full year 2012. Minesite costs per
tonne at Creston Mascota were $16 for the full year 2013, compared to
$12 in 2012. Tonnes stacked and minesite costs per tonne for the
comparable period of 2012 are not representative given that operations
were temporarily suspended for leach pad modifications.
Payable gold production for the full year 2013 totaled 34,027 ounces at
a total cash cost per ounce of $485, compared to 51,175 ounces at a
total cash cost per ounce of $326 in 2012. The lower production and
higher costs per ounce in 2013 are reflective of the temporary shutdown
of the operation from January until April 2013.
Construction on the Phase 3 leach pad at Creston Mascota is expected to
be completed by the end of March 2014. Production at Creston Mascota is
expected to increase in the latter half of 2014 as the new agglomerator
planned for installation in the second quarter of 2014 allows will
increase crushed ore processing capacity.
La India - Commissioning Continues; Commercial Production Expected in Q1
2014
The La India mine in Sonora, Mexico, located approximately 70 kilometres
from the Company's Pinos Altos mine, was acquired in November 2011
through the purchase of Grayd Resources which included a 56,000 hectare
land position in the Mulatos Gold belt. Commissioning of the mine
commenced ahead of schedule in the third quarter of 2013. Design,
permitting, construction and start-up of the La India mine were
completed within 22 months of the acquisition. In 2013, the mine
reported 3,180 ounces of pre-commercial production, and the project was
on target with regard to the budgeted capital cost of $157.6 million.
Throughput continues to ramp up and stacking rates are currently
averaging approximately 12,000 tpd. It is expected that several months
of operation will be required to achieve steady state production.
Commercial production is expected to be declared in the first quarter
of 2014.
While progressing as expected during the commissioning phase, ramp up
challenges have included congestion for leaching and stacking ore at
the bottom of the leach pad due to the "inverted pyramid" geometry of
the pad, debottlenecking of the crushing and stacking system, and
higher than expected ore abrasion.
Further work is also planned at La India to better define the mineral
domains of the known sulfide mineralization.
Depreciation Guidance
Agnico Eagle expects its 2014 amortization expense to be in the range of
$355 to $375 million.
General & Administrative Cost Guidance
Agnico Eagle expects 2014 general and administration expense to be
between $55 to $65 million, excluding share based compensation. This
represents a decline of approximately 15% from 2013 levels. In 2014,
share based compensation is expected to be between $30 to $35 million
including stock option expense (which is a non-cash item) of between
$18 to $22 million (which is lower than in previous years due to lower
stock option valuation).
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 2014
Beginning in 2014, mining companies in Mexico must pay a royalty of
essentially 7.5% of earnings before interest, taxes, depreciation and
amortization (EBITDA). As capital expenditures are not deductible for
purposes of the royalty, a temporary difference arose upon enactment in
the fourth quarter of 2013 with respect to the accounting carrying
value of such expenditures in the consolidated financial statements.
This temporary difference gives rise to an additional deferred tax
liability and must be charged to earnings in the year of enactment. For
the Pinos Altos, Creston Mascota and La India mines, the total charge
in the fourth quarter of 2013 was US$50M.
While Agnico will be paying cash taxes with respect to the Mexican
mining royalty beginning in 2014, the fourth quarter 2013 deferred tax
charge is not a recurring tax expense and arises as a result of the
enactment of the new mining tax in the fourth quarter of 2013.
For 2014, the jurisdictional tax rates are expected to be:
Canada - 40% to 50%
Mexico - 35% to 40%
Finland - 20%
The Company's overall tax rate is expected to be between 40% to 45%.
Significant Mining Expertise Added to the Board of Directors
The Board of Directors is pleased to announce the appointment of
Deborah
McCombe
, P.Geo, to the Board effective today. Ms. McCombe is the
President and CEO of Roscoe Postle Associates, and she has over 30
years of experience in exploration project management, feasibility
studies, reserve estimation, due diligence and evaluation studies. In
addition, Ms. McCombe will also serve on the Health, Safety,
Environment and Sustainable Development Committee.
Annual General Meeting
Friday, May 2, 2014 at 11:00 am (E.D.T.)
Sheraton Centre Toronto Hotel (Dominion Ballroom)
123 Queen Street West
Toronto, ON M5H 2M9
Expected Dividend Record and Payment Dates for the Remainder of 2014
Record Date
|
Payment Date
|
March 3*
|
March 17*
|
June 2
|
June 16
|
September 2
|
September 16
|
December 1
|
December 15
|
*Declared
Dividend Reinvestment Plan
Please follow the link below for information on the Company's dividend
reinvestment program.
Dividend Reinvestment Plan
About Agnico Eagle
Agnico Eagle is a senior Canadian gold mining company that has produced
precious metals since 1957. Its seven mines are located in Canada,
Finland and Mexico, with exploration and development activities in each
of these regions as well as in the United States. The Company and its
shareholders have full exposure to gold prices due to its long-standing
policy of no forward gold sales. Agnico Eagle has declared a cash
dividend every year since 1983.
Note Regarding Conversion to IFRS
The Company has identified several differences between US GAAP and IFRS
that may have an impact on the Company's consolidated financial
statements. These differences should not be regarded as a complete list
of changes that will result from the transition to IFRS, rather they
encompass management's high level evaluation of significant differences
between US GAAP and IFRS and available IFRS accounting policy choices
as they currently exist. At this stage in the IFRS conversion plan, the
Company has not quantified the impact of these differences on our
consolidated financial statements or selected IFRS accounting policies.
Significant identified differences between US GAAP and IFRS include
asset impairment testing and measurement, accounting for production
stripping costs, accounting for exploration and evaluation expenditures
and accounting for property, plant and equipment. The Company
anticipates providing additional information on the expected
quantitative impact of IFRS adoption in its consolidated financial
statements filed in respect of the second quarter of 2014.
Under US GAAP, a two-step approach is used for long-lived asset
impairment testing whereby long-lived assets are first tested for
recoverability based on their expected undiscounted cash flows. If a
long-lived asset's expected undiscounted cash flow exceeds the recorded
carrying amount, no impairment charge is required. If the expected
undiscounted cash flow is lower than the recorded carrying amount, the
long-lived assets are written down to their estimated fair value. US
GAAP does not permit the reversal of impairment losses. IFRS prescribes
a one-step approach for asset impairment testing and measurement
whereby an asset's recoverable amount is compared directly against its
recorded carrying amount. Under IFRS, an asset's recoverable amount is
determined as the higher of the estimated fair value less costs to sell
or value in use (which is measured using discounted cash flows). If an
asset's recoverable amount is less than the recorded carrying amount,
an impairment charge is required. IFRS also requires the reversal of
previously recorded impairment losses where circumstances have changed
such that the impairments have been reduced. The difference in the
approach to asset impairment testing and measurement may result in more
frequent impairment charges under IFRS, where asset carrying values
previously supported under US GAAP on an undiscounted cash flow basis
cannot be supported on a discounted cash flow basis. However, the
impact of any additional asset impairments recorded under IFRS may be
partially offset by the requirement to reverse previously recorded
impairment losses where circumstances have changed.
Under US GAAP, the cost of removing overburden and waste materials to
expose ore and access mineral deposits for extraction during the
production phase of a surface mine ("production stripping costs") are
accounted for as production costs and are included in the cost of the
inventory produced during the period in which the stripping costs are
incurred. IFRS requires that production stripping costs relating to
improved access to ore be capitalized as part of a non-current
stripping activity asset if probable future economic benefits will be
realized, the costs can be reliably measured and the component of an
ore body for which access has been improved can be identified. To the
extent that ore is extracted and inventory is produced in the current
period, IFRS instead prescribes that production stripping costs be
accounted for as part of the cost of the inventory produced. The
difference in approach to accounting for production stripping costs
will result in a decrease in direct production costs and an increase in
amortization expense relating to the recognition of non-current
stripping activity assets under IFRS.
Under US GAAP, the Company accounts for exploration and evaluation
("E&E") expenditures as current period operating expenses until it is
determined that a mining property can be economically developed as a
result of established proven and probable reserves. Once proven and
probable reserves are established based on the results of a final
feasibility study, the costs of drilling and development to further
delineate the ore body are capitalized. IFRS provides guidance related
to expenditures incurred during the E&E phase. IFRS requires entities
to select and consistently apply an accounting policy that specifies
which expenditures are capitalized as E&E assets. However, IFRS
provides no specific guidance as to when E&E expenditures are to be
capitalized. Agnico Eagle is in the process of defining the E&E phase
within the context of IFRS and developing an accounting policy that
outlines the point at which specific types of E&E expenditures will be
capitalized.
IFRS requires the separate identification and measurement of significant
individual components of property, plant and equipment, with individual
components depreciated based on their individual useful lives. The
Company identified significant individual components of property, plant
and equipment under US GAAP in 2013 and will assess whether an
adjustment relating to the retrospective application and depreciation
of these components is required to its opening January 1, 2013 balance
sheet under IFRS.
Note Regarding Production Guidance
The gold production guidance is based on the Company's mineral reserves
but includes contingencies, assumed metal prices and foreign exchange
rates that are different from those used in the reserve estimates.
These factors and others mean that the gold production guidance
presented in this news release may not reconcile exactly with the
production models used to support these mineral reserves.
Note Regarding Certain Measures of Performance
This news release presents financial performance measures, including
"total cash costs per ounce of gold produced," "minesite costs per
tonne" and "all-in sustaining costs", 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 in allowing year-over-year comparisons. However,
each of these non-US GAAP measures should be considered together with
other data prepared in accordance with US GAAP. These measures, taken
by themselves, are not necessarily indicative of operating costs or
cash flow measures prepared in accordance with US GAAP. Reconciliations
of the Company's total cash costs per ounce of gold produced, minesite
costs per tonne and all-in sustaining costs financial performance
measures to comparable financial measures calculated and presented in
accordance with US GAAP are detailed below.
The mineral reserve and resource information of this news release has
been reviewed and approved by
Daniel Doucet
, Corporate Director,
Reserve Development, under the supervision of
Alain Blackburn
, Senior
Vice-President, Exploration. Both Mr. Doucet and Mr. Blackburn are
designated P.Eng. with the Ordre ingenieurs du Quebec and qualified
persons as defined by NI 43-101.
Detailed Mineral Reserve and Resource Data (as at December 31, 2013)
|
Au
|
Ag
|
Cu
|
Zn
|
Pb
|
Au
|
Tonnes
|
Category and Operation
|
(g/t)
|
(g/t)
|
(%)
|
(%)
|
(%)
|
(000s
oz.)
|
(000s)
|
Proven Mineral Reserve
|
Northern Business
|
|
|
|
|
|
|
|
LaRonde (underground)
|
3.48
|
23.27
|
0.31
|
0.60
|
0.07
|
668
|
5,978
|
Lapa (underground)
|
5.99
|
|
|
|
|
195
|
1,011
|
Goldex (underground)
|
1.52
|
|
|
|
|
6
|
119
|
Kittila (open pit)
|
3.50
|
|
|
|
|
25
|
222
|
Kittila (underground)
|
4.46
|
|
|
|
|
126
|
882
|
Kittila Total Proven
|
4.27
|
|
|
|
|
151
|
1,104
|
Meadowbank (open pit)
|
2.88
|
|
|
|
|
104
|
1,128
|
Meliadine (open pit)
|
7.31
|
|
|
|
|
8
|
34
|
Southern Business
|
|
|
|
|
|
|
|
Pinos Altos (open pit)
|
0.97
|
20.59
|
|
|
|
11
|
365
|
Pinos Altos (underground)
|
2.90
|
96.19
|
|
|
|
149
|
1,601
|
Pinos Altos Total Proven
|
2.54
|
82.17
|
|
|
|
161
|
1,966
|
La India (open pit)
|
0.64
|
|
|
|
|
5
|
228
|
Subtotal Proven Mineral Reserve
|
3.49
|
|
|
|
|
1,298
|
11,568
|
|
Probable Mineral Reserve
|
Northern Business
|
|
|
|
|
|
|
|
LaRonde (underground)
|
5.50
|
18.37
|
0.23
|
0.69
|
0.03
|
3,212
|
18,149
|
Lapa (underground)
|
5.92
|
|
|
|
|
87
|
456
|
Goldex (underground)
|
1.52
|
|
|
|
|
367
|
7,485
|
Kittila (open pit)
|
3.45
|
|
|
|
|
16
|
147
|
Kittila (underground)
|
4.66
|
|
|
|
|
4,547
|
30,373
|
Kittila Total Probable
|
4.65
|
|
|
|
|
4,563
|
30,520
|
Meadowbank (open pit)
|
3.26
|
|
|
|
|
1,647
|
15,692
|
Meliadine (open pit)
|
6.03
|
|
|
|
|
963
|
4,965
|
Meliadine (underground)
|
8.34
|
|
|
|
|
1,870
|
6,978
|
Meliadine Total Probable
|
7.38
|
|
|
|
|
2,833
|
11,943
|
Southern Business
|
|
|
|
|
|
|
|
Pinos Altos (open pit)
|
2.09
|
42.84
|
|
|
|
728
|
10,835
|
Pinos Altos (underground)
|
2.69
|
76.74
|
|
|
|
1,377
|
15,903
|
Pinos Altos Total Probable
|
2.45
|
63.00
|
|
|
|
2,105
|
26,738
|
La India projects (open pit)
|
0.87
|
|
|
|
|
753
|
26,868
|
Subtotal Probable Mineral Reserve
|
3.51
|
|
|
|
|
15,567
|
137,850
|
Northern Total Proven and Probable Reserves
|
4.60
|
|
|
|
|
13,841
|
93,618
|
Southern Total Proven and Probable Reserves
|
1.69
|
|
|
|
|
3,024
|
55,800
|
Total Proven and Probable Mineral Reserves
|
3.51
|
|
|
|
|
16,865
|
149,418
|
|
Au
|
Ag
|
Cu
|
Zn
|
Pb
|
Tonnes
|
Category and Operation
|
(g/t)
|
(g/t)
|
(%)
|
(%)
|
(%)
|
(000s)
|
Measured Mineral Resource
|
|
|
|
|
|
|
Northern Business
|
|
|
|
|
|
|
Goldex (underground)
|
1.86
|
|
|
|
|
12,360
|
Kittila (underground)
|
2.69
|
|
|
|
|
511
|
Southern Business
|
|
|
|
|
|
|
La India projects (open pit)
|
0.33
|
|
|
|
|
4,970
|
Total Measured Mineral Resource
|
1.46
|
|
|
|
|
17,841
|
Indicated Mineral Resource
|
|
|
|
|
|
|
Northern Business
|
|
|
|
|
|
|
LaRonde (underground)
|
2.12
|
32.53
|
0.16
|
1.61
|
0.16
|
4,242
|
Lapa (underground)
|
4.28
|
|
|
|
|
1,550
|
Goldex (underground)
|
2.03
|
|
|
|
|
17,744
|
Kittila (underground)
|
2.79
|
|
|
|
|
10,519
|
Meadowbank (open pit)
|
2.54
|
|
|
|
|
4,934
|
Meadowbank (underground)
|
4.85
|
|
|
|
|
2,341
|
Meadowbank Total Indicated
|
3.28
|
|
|
|
|
7,275
|
Meliadine (open pit)
|
4.33
|
|
|
|
|
6,911
|
Meliadine (underground)
|
5.46
|
|
|
|
|
12,075
|
Meliadine Total Indicated
|
5.05
|
|
|
|
|
18,986
|
Bousquet (open pit)
|
1.79
|
|
|
|
|
11,044
|
Bousquet (underground)
|
5.63
|
|
|
|
|
1,704
|
Bousquet Total Indicated
|
2.31
|
|
|
|
|
12,748
|
Ellison (underground)
|
4.54
|
|
|
|
|
429
|
Swanson (open pit)
|
1.93
|
|
|
|
|
504
|
Southern Business
|
|
|
|
|
|
|
Pinos Altos (open pit)
|
0.78
|
9.95
|
|
|
|
3,420
|
Pinos Altos (underground)
|
1.79
|
41.33
|
|
|
|
10,515
|
Pinos Altos Total Indicated
|
1.54
|
33.63
|
|
|
|
13,935
|
La India projects (open pit)
|
0.38
|
|
|
|
|
51,266
|
Total Indicated Mineral Resource
|
1.97
|
|
|
|
|
139,199
|
Northern Total Measured and Indicated Resources
|
2.96
|
|
|
|
|
86,869
|
Southern Total Measured and Indicated Resources
|
0.61
|
|
|
|
|
70,171
|
Total Measured & Indicated Mineral Resources
|
1.91
|
|
|
|
|
157,040
|
|
|
Au
|
Ag
|
Cu
|
Zn
|
Pb
|
Tonnes
|
Category and Operation
|
(g/t)
|
(g/t)
|
(%)
|
(%)
|
(%)
|
(000s)
|
Inferred Mineral Resource
|
|
|
|
|
|
|
Northern Business
|
|
|
|
|
|
|
LaRonde (underground)
|
4.61
|
14.72
|
0.27
|
0.55
|
0.05
|
10,536
|
Lapa (open pit Zulapa)
|
3.14
|
|
|
|
|
391
|
Lapa (underground)
|
7.06
|
|
|
|
|
585
|
Lapa Total Inferred
|
5.49
|
|
|
|
|
976
|
Goldex (underground)
|
1.64
|
|
|
|
|
26,068
|
Kittila (open pit)
|
4.00
|
|
|
|
|
257
|
Kittila (underground)
|
4.12
|
|
|
|
|
7,265
|
Kittila Total Inferred
|
4.12
|
|
|
|
|
7,522
|
Meadowbank (open pit)
|
3.15
|
|
|
|
|
1,100
|
Meadowbank (underground)
|
4.36
|
|
|
|
|
2,213
|
Meadowbank Total Inferred
|
3.96
|
|
|
|
|
3,313
|
Meliadine (open pit)
|
4.87
|
|
|
|
|
1,137
|
Meliadine (underground)
|
7.45
|
|
|
|
|
10,574
|
Meliadine Total Inferred
|
7.20
|
|
|
|
|
11,711
|
Bousquet (open pit)
|
1.16
|
|
|
|
|
679
|
Bousquet (underground)
|
4.54
|
|
|
|
|
3,888
|
Bousquet Total Inferred
|
4.04
|
|
|
|
|
4,567
|
Ellison (underground)
|
4.56
|
|
|
|
|
1,263
|
Kuotko, Finland (open pit)
|
2.89
|
|
|
|
|
1,823
|
Kylmäkangas, Finland (underground)
|
4.11
|
31.11
|
|
|
|
1,896
|
Southern Business
|
|
|
|
|
|
|
Pinos Altos (open pit)
|
1.05
|
21.23
|
|
|
|
15,040
|
Pinos Altos (underground)
|
2.54
|
54.77
|
|
|
|
2,667
|
Pinos Altos Total Inferred
|
1.28
|
26.28
|
|
|
|
17,707
|
La India projects (open pit)
|
0.36
|
|
|
|
|
82,089
|
Northern Total Inferred Resources
|
3.77
|
|
|
|
|
69,674
|
Southern Total Inferred Resources
|
0.53
|
|
|
|
|
99,795
|
Total Inferred Resource
|
1.86
|
|
|
|
|
169,470
|
Tonnage amounts and contained metal amounts presented in this table have
been rounded to the nearest thousand. Reserves are not a sub-set of
resources.
Forward-Looking Statements
The information in this news release has been prepared as at February
12, 2014. 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 document, words such as "anticipate", "expect",
"estimate", "forecast", "planned", "possible", "will", "likely",
"schedule" 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, orebody configurations, metal
production, life of mine estimates, production estimates, total cash
costs per ounce, minesite costs per tonne and all-in sustaining costs
estimates, cash flows, the estimated timing of scoping and other
studies, the methods by which ore will be extracted or processed,
expansion projects, recovery rates, mill throughput, and projected
exploration and capital expenditures, including costs and other
estimates upon which such projections are based and estimates of
depreciation expense, general and administrative expense and tax rates;
the Company's ability to fund its current pipeline of projects; the
impact of maintenance shutdowns; the Company's goal to build a mine at
Meliadine; the Company's ability to bring into commercial production
the mine at La India; and other statements and information 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. 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 and the Company's Annual Report on Form 20-F for the year
ended December 31, 2012 ("Form 20-F") as well as: that there are no
significant disruptions affecting operations, whether due to labour
disruptions, supply disruptions, damage to equipment, natural
occurrences, equipment failures, accidents, political changes, title
issues or otherwise; that permitting, production and expansion at each
of Agnico Eagle's mines and growth projects proceeds on a basis
consistent with current expectations, and that Agnico Eagle does not
change its 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 Agnico
Eagle's expectations; that prices for gold, silver, zinc, copper and
lead will be consistent with Agnico Eagle's expectations; that prices
for key mining and construction supplies, including labour costs,
remain consistent with Agnico Eagle's current expectations; that 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 metal 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; 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 Form 20-F, 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, recoveries, mining methods, capital costs,
total cash costs, minesite costs, and location of surface
infrastructure. Actual results and final decisions may be materially
different from those currently anticipated.
Notes to Investors Regarding the Use of Resources
Cautionary Note to Investors Concerning Estimates of Measured and
Indicated Resources
This news release uses the terms "measured resources" and "indicated
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 reserves.
Cautionary Note to Investors Concerning Estimates of Inferred Resources
This news release also uses the term "inferred resources". Investors
are advised 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. Agnico Eagle uses 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 Agnico Eagle, 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.
In prior periods, 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 reserve determination, which the Staff of the SEC has interpreted to
mean historic three-year average prices. Given the current lower
commodity price environment, Agnico Eagle has decided to use price
assumptions that are below the three-year averages. The assumptions
used for the mineral reserves estimates at all mines and advanced
projects as of December 31, 2013, reported by the Company on February
12, 2014, are $1,200 per ounce gold, $18.00 per ounce silver, $0.82 per
pound zinc, $3.00 per pound copper, $0.91 per pound lead and C$/US$,
US$/Euro and MXP/US$ exchange rates of 1.03, 1.32 and 12.75,
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 mineral resource demonstrated by at least a preliminary
feasibility study. This study must include adequate information on
mining, processing, metallurgical, economic and other relevant factors
that demonstrate, at the time of reporting, that economic extraction
can be justified. A mineral reserve includes diluting materials and
allows for losses that may occur when the material is mined. A proven
mineral reserve is the economically mineable part of a measured mineral
resource demonstrated by at least a preliminary feasibility study. A
probable mineral reserve is the economically mineable part of an
indicated and, in some circumstances, a measured mineral resource
demonstrated by at least a preliminary feasibility study.
A mineral resource is a concentration or occurrence of natural, solid,
inorganic material, or natural, solid fossilized organic material
including base and precious metals 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 and
physical characteristics are so well established that they can be
estimated with confidence sufficient to allow the appropriate
application of technical and economic parameters, to support production
planning and evaluation of the economic viability of the deposit. The
estimate is based on detailed and reliable exploration, sampling and
testing information gathered through appropriate techniques from
locations such as outcrops, trenches, pits, workings and drill holes
that are spaced closely enough to confirm both geological and grade
continuity. 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 reasonably 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 technical and economic study of
the selected development option for a mineral project that includes
appropriately detailed assessments of realistically assumed mining,
processing, metallurgical, economic, marketing, legal, environmental,
social and governmental considerations together with any other relevant
operational factors and 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.
The mineral reserves presented in this disclosure are separate from and
not a portion of the mineral resources.
Property/Project name
and location
|
Qualified Person
responsible for the
current Mineral
Resource and Reserve
Estimate and
relationship to Agnico
Eagle
|
Date of most recent
Technical Report (NI
43-101) filed on
SEDAR
|
LaRonde, Bousquet &
Ellison, Quebec, Canada
|
François Blanchet Ing.,
LaRonde Division
Superintendent of
geology
|
March 23, 2005
|
Kittila, Kuotko and
Kylmakangas, Finland
|
Daniel Doucet, Ing.,
Corporate Director of
Reserve Development
|
March 4, 2010
|
Pinos Altos, Mexico
|
Daniel Doucet, Ing.,
Corporate Director of
Reserve Development
|
March 25, 2009
|
Swanson, Quebec,
Canada
|
Daniel Doucet, Ing.,
Corporate Director of
Reserve Development
|
|
La India, Mexico
|
Daniel Doucet, Ing.,
Corporate Director of
Reserve Development
|
August 31, 2012
|
Meadowbank, Nunavut,
Canada
|
Alex Proulx, Ing.,
Meadowbank Division
Mine Operations
Manager
|
February 15, 2012
|
Goldex, Quebec, Canada
|
Robert Crépeau,
P.Geo., Independent
Consultant
|
October 14, 2012
|
Lapa, Quebec, Canada
|
Richard Dubuc, P.Geo.,
Lapa Division
Superintendent of
geology
|
June 8, 2006
|
Meliadine, Nunavut,
Canada
|
Julie Larouche, P.Geo.,
Project Geologist,
Technical Services
Group
|
March 8, 2011
|
The effective date for all of the Company's mineral resource and reserve
estimates in this press release is December 31, 2013. 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 the Technical Reports referred to above, which may be found at
www.sedar.com. Other important operating information can be found in the Company's
Form 20-F.
|
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,
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
Operating margin(i) by mine:
|
|
|
|
|
|
|
|
|
LaRonde mine
|
$26,186
|
|
$35,363
|
|
$99,989
|
|
$173,596
|
|
Goldex mine
|
8,246
|
|
-
|
|
8,246
|
|
-
|
|
Lapa mine
|
17,345
|
|
20,755
|
|
71,635
|
|
100,377
|
|
Kittila mine
|
27,414
|
|
53,199
|
|
111,277
|
|
186,392
|
|
Pinos Altos mine
|
36,864
|
|
61,092
|
|
173,074
|
|
234,495
|
|
Creston Mascota deposit at Pinos Altos
|
8,009
|
|
441
|
|
21,679
|
|
63,227
|
|
Meadowbank mine
|
75,788
|
|
36,170
|
|
227,579
|
|
261,915
|
Total operating margin
|
199,852
|
|
207,020
|
|
713,479
|
|
1,020,002
|
Amortization of property, plant and mine development
|
79,825
|
|
72,680
|
|
296,078
|
|
271,861
|
Impairment loss
|
537,227
|
|
-
|
|
537,227
|
|
-
|
Exploration, corporate and other
|
57,421
|
|
36,232
|
|
250,856
|
|
313,000
|
Income (loss) before income and mining taxes
|
(474,621)
|
|
98,108
|
|
(370,682)
|
|
435,141
|
Income and mining taxes expense (recovery)
|
(21,305)
|
|
15,338
|
|
35,844
|
|
124,225
|
Net income (loss) for the period
|
($453,316)
|
|
$82,770
|
|
($406,526)
|
|
$310,916
|
Net income (loss) per share - basic (US$)
|
($2.61)
|
|
$0.48
|
|
($2.35)
|
|
$1.82
|
|
|
|
|
|
|
|
|
Cash provided by operating activities
|
$135,944
|
|
$105,964
|
|
$438,296
|
|
$696,007
|
|
|
|
|
|
|
|
|
Realized prices (US$):
|
|
|
|
|
|
|
|
Gold (per ounce)
|
$1,244
|
|
$1,684
|
|
$1,366
|
|
$1,667
|
Silver (per ounce)
|
$20.20
|
|
$31.25
|
|
$22.42
|
|
$31.66
|
Zinc (per tonne)
|
$1,958
|
|
$1,906
|
|
$1,907
|
|
$1,955
|
Copper (per tonne)
|
$7,275
|
|
$7,668
|
|
$7,160
|
|
$8,083
|
|
|
|
|
|
|
|
|
Payable production(ii):
|
|
|
|
|
|
|
|
|
Gold (ounces):
|
|
|
|
|
|
|
|
|
|
LaRonde mine
|
51,336
|
|
36,911
|
|
181,781
|
|
160,875
|
|
|
Goldex mine
|
19,305
|
|
-
|
|
20,810
|
|
-
|
|
|
Lapa mine
|
26,323
|
|
24,621
|
|
100,730
|
|
106,191
|
|
|
Kittila mine
|
41,710
|
|
45,273
|
|
146,421
|
|
175,878
|
|
|
Pinos Altos mine
|
46,490
|
|
48,932
|
|
181,773
|
|
183,662
|
|
|
Creston Mascota deposit at Pinos Altos
|
10,666
|
|
3,560
|
|
34,027
|
|
51,175
|
|
|
La India project
|
3,180
|
|
-
|
|
3,180
|
|
-
|
|
|
Meadowbank mine
|
123,433
|
|
77,238
|
|
430,613
|
|
366,030
|
|
Total gold (ounces)
|
322,443
|
|
236,535
|
|
1,099,335
|
|
1,043,811
|
|
Silver (thousands of ounces):
|
|
|
|
|
|
|
|
|
|
LaRonde mine
|
496
|
|
547
|
|
2,102
|
|
2,244
|
|
|
Kittila mine
|
2
|
|
-
|
|
6
|
|
-
|
|
|
Pinos Altos mine
|
548
|
|
622
|
|
2,366
|
|
2,237
|
|
|
Creston Mascota deposit at Pinos Altos
|
15
|
|
6
|
|
46
|
|
74
|
|
|
La India project
|
3
|
|
-
|
|
3
|
|
-
|
|
|
Meadowbank mine
|
29
|
|
21
|
|
100
|
|
91
|
|
Total silver (thousands of ounces)
|
1,093
|
|
1,196
|
|
4,623
|
|
4,646
|
|
Zinc (tonnes)
|
4,472
|
|
8,722
|
|
19,814
|
|
38,637
|
|
Copper (tonnes)
|
1,232
|
|
814
|
|
4,835
|
|
4,126
|
|
|
|
|
|
|
|
|
Payable metal sold:
|
|
|
|
|
|
|
|
|
Gold (ounces):
|
|
|
|
|
|
|
|
|
|
LaRonde mine
|
50,763
|
|
37,726
|
|
184,489
|
|
158,823
|
|
|
Goldex mine
|
16,991
|
|
-
|
|
16,991
|
|
-
|
|
|
Lapa mine
|
28,784
|
|
24,309
|
|
102,673
|
|
104,771
|
|
|
Kittila mine
|
43,442
|
|
46,620
|
|
148,561
|
|
170,478
|
|
|
Pinos Altos mine
|
45,117
|
|
46,149
|
|
182,964
|
|
178,334
|
|
|
Creston Mascota deposit at Pinos Altos
|
10,496
|
|
4,052
|
|
31,956
|
|
51,650
|
|
|
Meadowbank mine
|
130,928
|
|
79,752
|
|
430,748
|
|
364,006
|
|
Total gold (ounces)
|
326,521
|
|
238,608
|
|
1,098,382
|
|
1,028,062
|
|
Silver (thousands of ounces):
|
|
|
|
|
|
|
|
|
|
LaRonde mine
|
525
|
|
566
|
|
2,179
|
|
2,233
|
|
|
Kittila mine
|
1
|
|
-
|
|
5
|
|
-
|
|
|
Pinos Altos mine
|
553
|
|
575
|
|
2,367
|
|
2,162
|
|
|
Creston Mascota deposit at Pinos Altos
|
14
|
|
7
|
|
44
|
|
73
|
|
|
Meadowbank mine
|
28
|
|
19
|
|
99
|
|
87
|
|
Total silver (thousands of ounces)
|
1,121
|
|
1,167
|
|
4,694
|
|
4,555
|
|
Zinc (tonnes)
|
5,123
|
|
9,073
|
|
20,432
|
|
42,604
|
|
Copper (tonnes)
|
1,227
|
|
800
|
|
4,838
|
|
4,115
|
|
|
|
|
|
|
|
|
Total cash costs per ounce of gold produced (US$)(iii):
|
|
|
|
|
|
|
|
|
LaRonde mine
|
$664
|
|
$756
|
|
$763
|
|
$569
|
|
Goldex mine(iv)
|
782
|
|
-
|
|
782
|
|
-
|
|
Lapa mine
|
655
|
|
742
|
|
678
|
|
697
|
|
Kittila mine (v)
|
687
|
|
569
|
|
601
|
|
565
|
|
Pinos Altos mine
|
442
|
|
295
|
|
412
|
|
276
|
|
Creston Mascota deposit at Pinos Altos(vi)
|
431
|
|
-
|
|
485
|
|
326
|
|
Meadowbank mine
|
637
|
|
1,200
|
|
774
|
|
913
|
|
Weighted average total cash costs per ounce of gold produced
|
$623
|
|
$769
|
|
$672
|
|
$640
|
|
|
|
|
|
|
|
|
(i)
|
|
Operating margin is calculated as revenues from mining operations less
production costs.
|
|
|
|
(ii)
|
|
Payable production is the quantity of mineral produced during a period
contained in products that are or will be sold by the Company, whether
such products are sold during the period or held as inventory at the
end of the period.
|
|
|
|
(iii)
|
|
Total cash costs per ounce of gold produced is calculated net of silver,
copper, zinc and other byproduct revenue credits. The weighted average
total cash costs per ounce of gold produced is based on commercial
production ounces. Total cash costs per ounce of gold produced is a
non-GAAP measure that the Company uses to monitor the performance of
its operations. See "Reconciliation of Production Costs to Total Cash
Costs per Ounce of Gold Produced by Mine" contained herein for details.
|
|
|
|
(iv)
|
|
Excludes the Goldex mine's results for the third quarter of 2013.
Initial non-commercial payable gold production of 1,505 ounces was
achieved at the Goldex mine during the third quarter of 2013.
|
|
|
|
(v)
|
|
Excludes the Kittila mine's results for the second quarter of 2013. Due
to scheduled maintenance, the Kittila mine only operated for 14 days
during the second quarter of 2013. The Kittila mine incurred $18,159 in
production costs during the second quarter of 2013, which were excluded
from total cash costs per ounce of gold produced.
|
|
|
|
(vi)
|
|
Excludes the Creston Mascota deposit at Pinos Altos' results for the
first quarter of 2013 and the fourth quarter of 2012 due to the
temporary suspension of active leaching between October 1, 2012 and
March 13, 2013. The Creston Mascota deposit at Pinos Altos incurred
$3,117 and $6,439 in production costs during the first quarter of 2013
and the fourth quarter of 2012, respectively, which were excluded from
total cash costs per ounce of gold produced.
|
AGNICO EAGLE MINES LIMITED
CONSOLIDATED BALANCE SHEETS
(thousands of United States dollars, US GAAP basis)
(Unaudited)
|
|
|
As at
December 31, 2013
|
|
As at
December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
Current
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
170,041
|
|
$
|
332,008
|
|
Trade receivables
|
|
67,300
|
|
67,750
|
|
Inventories:
|
|
|
|
|
|
|
Ore stockpiles
|
|
39,941
|
|
52,342
|
|
|
Concentrates and dore bars
|
|
58,543
|
|
69,695
|
|
|
Supplies
|
|
253,160
|
|
222,630
|
|
Income taxes recoverable
|
|
18,682
|
|
19,313
|
|
Available-for-sale securities
|
|
74,581
|
|
44,719
|
|
Fair value of derivative financial instruments
|
|
5,590
|
|
2,112
|
|
Other current assets
|
|
116,993
|
|
92,977
|
Total current assets
|
|
804,831
|
|
903,546
|
Other assets
|
|
66,394
|
|
55,838
|
Goodwill
|
|
39,017
|
|
229,279
|
Property, plant and mine development
|
|
4,049,117
|
|
4,067,456
|
|
|
$
|
4,959,359
|
|
$
|
5,256,119
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
Current
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
$
|
173,374
|
|
$
|
185,329
|
|
Reclamation provision
|
|
3,452
|
|
16,816
|
|
Dividends payable
|
|
-
|
|
37,905
|
|
Interest payable
|
|
13,803
|
|
13,602
|
|
Income taxes payable
|
|
7,523
|
|
10,061
|
|
Capital lease obligations
|
|
12,035
|
|
12,955
|
|
Fair value of derivative financial instruments
|
|
467
|
|
277
|
Total current liabilities
|
|
210,654
|
|
276,945
|
Long-term debt
|
|
1,000,000
|
|
830,000
|
Reclamation provision and other liabilities
|
|
178,236
|
|
127,735
|
Deferred income and mining tax liabilities
|
|
593,320
|
|
611,227
|
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
Common shares:
|
|
|
|
|
|
|
Authorized - unlimited
|
|
|
|
|
|
|
Issued - 174,181,163 (December 31, 2012 - 172,296,610)
|
|
3,294,007
|
|
3,241,922
|
|
Stock options
|
|
174,470
|
|
148,032
|
|
Warrants
|
|
-
|
|
24,858
|
|
Contributed surplus
|
|
37,254
|
|
15,665
|
|
Retained earnings (deficit)
|
|
(513,441)
|
|
7,046
|
|
Accumulated other comprehensive loss
|
|
(15,141)
|
|
(27,311)
|
Total shareholders' equity
|
|
2,977,149
|
|
3,410,212
|
|
|
$
|
4,959,359
|
|
$
|
5,256,119
|
AGNICO EAGLE MINES LIMITED
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(thousands of United States dollars, except share and per share amounts,
US GAAP basis)
(Unaudited)
|
|
|
Three months ended
December 31,
|
|
Year ended
December 31,
|
|
|
|
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
|
|
|
|
|
|
|
|
REVENUES
|
|
|
|
|
|
|
|
|
Revenues from mining operations
|
|
$
|
437,240
|
|
$
|
449,383
|
|
$
|
1,638,406
|
|
$
|
1,917,714
|
|
|
|
|
|
|
|
|
|
COSTS, EXPENSES AND OTHER INCOME
|
|
|
|
|
|
|
|
|
Production (i)
|
|
237,388
|
|
242,363
|
|
924,927
|
|
897,712
|
Exploration and corporate development
|
|
8,789
|
|
16,083
|
|
44,236
|
|
109,500
|
Amortization of property, plant and mine development
|
|
79,825
|
|
72,680
|
|
296,078
|
|
271,861
|
General and administrative
|
|
25,890
|
|
27,726
|
|
115,800
|
|
119,085
|
Impairment loss on available-for-sale securities
|
|
5,665
|
|
551
|
|
34,272
|
|
12,732
|
Provincial capital tax
|
|
-
|
|
-
|
|
(1,504)
|
|
4,001
|
Interest expense
|
|
15,424
|
|
14,287
|
|
57,999
|
|
57,887
|
Interest and sundry expense (income)
|
|
5,019
|
|
(565)
|
|
8,824
|
|
2,389
|
Loss (gain) on derivative financial instruments
|
|
2,941
|
|
(933)
|
|
(1,509)
|
|
819
|
Gain on sale of available-for-sale securities
|
|
(74)
|
|
(16,464)
|
|
(74)
|
|
(9,733)
|
Impairment loss (ii)
|
|
537,227
|
|
-
|
|
537,227
|
|
-
|
Foreign currency translation (gain) loss
|
|
(6,233)
|
|
(4,453)
|
|
(7,188)
|
|
16,320
|
Income (loss) before income and mining taxes
|
|
(474,621)
|
|
98,108
|
|
(370,682)
|
|
435,141
|
Income and mining taxes expense (recovery)
|
|
(21,305)
|
|
15,338
|
|
35,844
|
|
124,225
|
Net income (loss) for the period
|
|
$
|
(453,316)
|
|
$
|
82,770
|
|
$
|
(406,526)
|
|
$
|
310,916
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share - basic
|
|
$
|
(2.61)
|
|
$
|
0.48
|
|
$
|
(2.35)
|
|
$
|
1.82
|
Net income (loss) per share - diluted
|
|
$
|
(2.61)
|
|
$
|
0.48
|
|
$
|
(2.35)
|
|
$
|
1.81
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding (in thousands):
|
|
|
|
|
|
|
|
|
Basic
|
|
173,616
|
|
171,837
|
|
172,893
|
|
171,250
|
Diluted
|
|
173,616
|
|
173,432
|
|
172,893
|
|
171,486
|
(i)
|
Exclusive of amortization, which is shown separately.
|
|
(ii)
|
Includes impairment losses on the Meadowbank mine ($269,269), Meliadine
project ($200,064) and Lapa mine ($67,894). Total impairment loss
amounts to $436,262, net of tax.
|
AGNICO EAGLE MINES LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(thousands of United States dollars, US GAAP basis)
(Unaudited)
|
|
|
Three months ended
December 31,
|
|
Year ended
December 31,
|
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
OPERATING ACTIVITIES
|
Net income (loss) for the period
|
|
$
|
(453,316)
|
|
$
|
82,770
|
|
$
|
(406,526)
|
|
$
|
310,916
|
Add (deduct) items not affecting cash:
|
|
|
|
|
|
|
|
|
|
Amortization of property, plant and mine development
|
|
79,825
|
|
72,680
|
|
296,078
|
|
271,861
|
|
Deferred income and mining taxes
|
|
(39,246)
|
|
25,358
|
|
(16,550)
|
|
72,145
|
|
Stock-based compensation
|
|
9,074
|
|
9,934
|
|
44,904
|
|
47,632
|
|
Gain on sale of available-for-sale securities
|
|
(74)
|
|
(16,464)
|
|
(74)
|
|
(9,733)
|
|
Impairment loss on available-for-sale securities
|
|
5,665
|
|
551
|
|
34,272
|
|
12,732
|
|
Impairment loss
|
|
537,227
|
|
-
|
|
537,227
|
|
-
|
|
Foreign currency translation (gain) loss
|
|
(6,233)
|
|
(4,453)
|
|
(7,188)
|
|
16,320
|
|
Other
|
|
12,506
|
|
4,626
|
|
23,817
|
|
16,048
|
Adjustment for settlement of environmental remediation
|
|
(694)
|
|
(5,682)
|
|
(9,081)
|
|
(21,449)
|
Changes in non-cash working capital balances:
|
|
|
|
|
|
|
|
|
|
Trade receivables
|
|
(3,129)
|
|
9,294
|
|
450
|
|
8,149
|
|
Income taxes
|
|
2,687
|
|
(29,687)
|
|
717
|
|
13,304
|
|
Inventories
|
|
21,706
|
|
6,811
|
|
(23,232)
|
|
(44,145)
|
|
Other current assets
|
|
26,490
|
|
7,156
|
|
(23,447)
|
|
18,909
|
|
Accounts payable and accrued liabilities
|
|
(50,340)
|
|
(49,550)
|
|
(12,695)
|
|
(20,928)
|
|
Interest payable
|
|
(6,204)
|
|
(7,380)
|
|
(376)
|
|
4,246
|
Cash provided by operating activities
|
|
135,944
|
|
105,964
|
|
438,296
|
|
696,007
|
|
INVESTING ACTIVITIES
|
Additions to property, plant and mine development
|
|
(133,095)
|
|
(151,843)
|
|
(577,789)
|
|
(445,550)
|
Acquisitions and investments
|
|
(4,776)
|
|
-
|
|
(69,855)
|
|
(12,035)
|
Net proceeds from sale of available-for-sale securities
|
|
171
|
|
42,626
|
|
171
|
|
73,358
|
Cash used in investing activities
|
|
(137,700)
|
|
(109,217)
|
|
(647,473)
|
|
(384,227)
|
|
FINANCING ACTIVITIES
|
Dividends paid
|
|
(31,999)
|
|
(29,331)
|
|
(126,266)
|
|
(118,121)
|
Repayment of capital lease obligations
|
|
(1,961)
|
|
(3,274)
|
|
(10,605)
|
|
(12,063)
|
Sale-leaseback financing
|
|
10,928
|
|
-
|
|
10,928
|
|
-
|
Proceeds from long-term debt
|
|
50,000
|
|
60,000
|
|
290,000
|
|
315,000
|
Repayment of long-term debt
|
|
-
|
|
(30,000)
|
|
(120,000)
|
|
(605,000)
|
Notes issuance
|
|
-
|
|
-
|
|
-
|
|
200,000
|
Long-term debt financing costs
|
|
-
|
|
-
|
|
-
|
|
(3,133)
|
Repurchase of common shares for restricted share unit plan
|
|
-
|
|
-
|
|
(19,000)
|
|
(12,031)
|
Common shares issued
|
|
3,843
|
|
16,741
|
|
23,672
|
|
32,742
|
Cash provided by (used in) financing activities
|
|
30,811
|
|
14,136
|
|
48,729
|
|
(202,606)
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
(682)
|
|
318
|
|
(1,519)
|
|
1,376
|
|
Net increase (decrease) in cash and cash equivalents during the period
|
|
28,373
|
|
11,201
|
|
(161,967)
|
|
110,550
|
Cash and cash equivalents, beginning of period
|
|
141,668
|
|
320,807
|
|
332,008
|
|
221,458
|
Cash and cash equivalents, end of period
|
|
$
|
170,041
|
|
$
|
332,008
|
|
$
|
170,041
|
|
$
|
332,008
|
|
SUPPLEMENTAL CASH FLOW INFORMATION:
|
Interest paid
|
|
$
|
22,261
|
|
$
|
21,889
|
|
$
|
58,152
|
|
$
|
52,213
|
Income and mining taxes paid
|
|
$
|
16,495
|
|
$
|
29,973
|
|
$
|
56,478
|
|
$
|
56,962
|
AGNICO EAGLE MINES LIMITED
RECONCILIATION OF NON-GAAP FINANCIAL PERFORMANCE MEASURES
(Unaudited)
|
Total Production Costs by Mine
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Three Months Ended
|
|
Year Ended
|
|
Year Ended
|
|
December 31, 2013
|
|
December 31, 2012
|
|
December 31, 2013
|
|
December 31, 2012
|
(thousands of United States dollars)
|
|
|
|
|
|
|
|
|
Production costs per the consolidated statements of
|
|
|
|
|
|
|
|
|
|
income (loss)
|
|
$
|
237,388
|
|
$
|
242,363
|
|
$
|
924,927
|
|
$
|
897,712
|
|
|
|
|
|
|
|
|
|
LaRonde mine
|
|
54,120
|
|
58,106
|
|
229,911
|
|
225,647
|
Goldex mine
|
|
13,172
|
|
-
|
|
13,172
|
|
-
|
Lapa mine
|
|
18,165
|
|
19,482
|
|
69,532
|
|
73,376
|
Kittila mine(i)
|
|
27,691
|
|
25,406
|
|
80,287
|
|
98,037
|
Pinos Altos mine
|
|
31,402
|
|
33,606
|
|
130,129
|
|
128,618
|
Creston Mascota deposit at Pinos Altos(ii)
|
|
5,279
|
|
-
|
|
16,726
|
|
17,885
|
Meadowbank mine
|
|
87,559
|
|
99,324
|
|
363,894
|
|
347,710
|
Total
|
|
$
|
237,388
|
|
$
|
235,924
|
|
$
|
903,651
|
|
$
|
891,273
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Production Costs to Total Cash Costs per Ounce of Gold
Produced(iii) by Mine
|
|
LaRonde Mine - Total Cash Costs per Ounce of Gold Produced(iii)
|
|
|
Three Months Ended
|
|
Three Months Ended
|
|
Year Ended
|
|
Year Ended
|
(thousands of United States dollars, except as noted)
|
|
December 31, 2013
|
|
December 31, 2012
|
|
December 31, 2013
|
|
December 31, 2012
|
Production costs
|
|
$
|
54,120
|
|
$
|
58,106
|
|
$
|
229,911
|
|
$
|
225,647
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Byproduct metal revenues, net of smelting, refining and marketing
charges
|
|
(18,845)
|
|
(29,214)
|
|
(82,057)
|
|
(131,750)
|
|
Inventory and other adjustments(iv)
|
|
(688)
|
|
(367)
|
|
(7,123)
|
|
107
|
Non-cash reclamation provision
|
|
(520)
|
|
(611)
|
|
(2,122)
|
|
(2,422)
|
Cash operating costs
|
|
$
|
34,067
|
|
$
|
27,914
|
|
$
|
138,609
|
|
$
|
91,582
|
Gold production (ounces)
|
|
51,336
|
|
36,911
|
|
181,781
|
|
160,875
|
Total cash costs per ounce of gold produced ($ per ounce)(iii)
|
|
$
|
664
|
|
$
|
756
|
|
$
|
763
|
|
$
|
569
|
|
|
Goldex Mine - Total Cash Costs per Ounce of Gold Produced(iii)(v)
|
|
|
Three Months Ended
|
|
Three Months Ended
|
|
Year Ended
|
|
Year Ended
|
(thousands of United States dollars, except as noted)
|
|
December 31, 2013
|
|
December 31, 2012
|
|
December 31, 2013
|
|
December 31, 2012
|
Production costs
|
|
$
|
13,172
|
|
$
|
-
|
|
$
|
13,172
|
|
$
|
-
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Byproduct metal revenues, net of smelting, refining and marketing
charges
|
|
26
|
|
-
|
|
26
|
|
-
|
|
Inventory and other adjustments(iv)
|
|
1,896
|
|
-
|
|
1,896
|
|
-
|
Cash operating costs
|
|
$
|
15,094
|
|
$
|
-
|
|
$
|
15,094
|
|
$
|
-
|
Gold production (ounces)
|
|
19,305
|
|
-
|
|
19,305
|
|
-
|
Total cash costs per ounce of gold produced ($ per ounce)(iii)
|
|
$
|
782
|
|
$
|
-
|
|
$
|
782
|
|
$
|
-
|
|
|
Lapa Mine - Total Cash Costs per Ounce of Gold Produced(iii)
|
|
|
Three Months Ended
|
|
Three Months Ended
|
|
Year Ended
|
|
Year Ended
|
(thousands of United States dollars, except as noted)
|
|
December 31, 2013
|
|
December 31, 2012
|
|
December 31, 2013
|
|
December 31, 2012
|
Production costs
|
|
$
|
18,165
|
|
$
|
19,482
|
|
$
|
69,532
|
|
$
|
73,376
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Byproduct metal revenues, net of smelting, refining and marketing
charges
|
|
78
|
|
167
|
|
376
|
|
513
|
|
Inventory and other adjustments(iv)
|
|
(978)
|
|
(1,365)
|
|
(1,504)
|
|
(71)
|
|
Non-cash reclamation provision
|
|
(16)
|
|
(15)
|
|
(67)
|
|
191
|
Cash operating costs
|
|
$
|
17,249
|
|
$
|
18,269
|
|
$
|
68,337
|
|
$
|
74,009
|
Gold production (ounces)
|
|
26,323
|
|
24,621
|
|
100,730
|
|
106,191
|
Total cash costs per ounce of gold produced ($ per ounce)(iii)
|
|
$
|
655
|
|
$
|
742
|
|
$
|
678
|
|
$
|
697
|
|
|
|
|
|
|
|
|
|
Kittila Mine - Total Cash Costs per Ounce of Gold Produced(i)(iii)
|
|
|
Three Months Ended
|
|
Three Months Ended
|
|
Year Ended
|
|
Year Ended
|
(thousands of United States dollars, except as noted)
|
|
December 31, 2013
|
|
December 31, 2012
|
|
December 31, 2013
|
|
December 31, 2012
|
Production costs
|
|
$
|
27,691
|
|
$
|
25,406
|
|
$
|
80,287
|
|
$
|
98,037
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Byproduct metal revenues, net of smelting, refining and marketing
charges
|
|
60
|
|
65
|
|
281
|
|
391
|
|
Inventory and other adjustments(iv)
|
|
1,096
|
|
432
|
|
4,561
|
|
1,564
|
|
Non-cash reclamation provision
|
|
(185)
|
|
(148)
|
|
(435)
|
|
(551)
|
Cash operating costs
|
|
$
|
28,662
|
|
$
|
25,755
|
|
$
|
84,694
|
|
$
|
99,441
|
Gold production (ounces)
|
|
41,710
|
|
45,273
|
|
141,032
|
|
175,878
|
Total cash costs per ounce of gold produced ($ per ounce)(iii)
|
|
$
|
687
|
|
$
|
569
|
|
$
|
601
|
|
$
|
565
|
|
|
|
|
|
|
|
|
|
Pinos Altos Mine - Total Cash Costs per Ounce of Gold Produced(iii)
|
|
|
Three Months Ended
|
|
Three Months Ended
|
|
Year Ended
|
|
Year Ended
|
(thousands of United States dollars, except as noted)
|
|
December 31, 2013
|
|
December 31, 2012
|
|
December 31, 2013
|
|
December 31, 2012
|
Production costs
|
|
$
|
31,402
|
|
$
|
33,606
|
|
$
|
130,129
|
|
$
|
128,618
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Byproduct metal revenues, net of smelting, refining and marketing
charges
|
|
(10,079)
|
|
(19,006)
|
|
(48,417)
|
|
(67,720)
|
|
Inventory and other adjustments(iv)
|
|
614
|
|
2,192
|
|
(884)
|
|
2,718
|
|
Non-cash reclamation provision
|
|
(75)
|
|
(51)
|
|
(297)
|
|
(205)
|
|
Stripping costs(vi)
|
|
(1,327)
|
|
(2,291)
|
|
(5,581)
|
|
(12,762)
|
Cash operating costs
|
|
$
|
20,535
|
|
$
|
14,450
|
|
$
|
74,950
|
|
$
|
50,649
|
Gold production (ounces)
|
|
46,490
|
|
48,932
|
|
181,773
|
|
183,662
|
Total cash costs per ounce of gold produced ($ per ounce)(iii)
|
|
$
|
442
|
|
$
|
295
|
|
$
|
412
|
|
$
|
276
|
|
|
|
|
|
|
|
|
|
|
|
Creston Mascota deposit at Pinos Altos - Total Cash Costs per Ounce of
Gold Produced(ii)(iii)
|
|
|
Three Months Ended
|
|
Three Months Ended
|
|
Year Ended
|
|
Year Ended
|
(thousands of United States dollars, except as noted)
|
|
December 31, 2013
|
|
December 31, 2012
|
|
December 31, 2013
|
|
December 31, 2012
|
Production costs
|
|
$
|
5,279
|
|
$
|
-
|
|
$
|
16,726
|
|
$
|
17,885
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Byproduct metal revenues, net of smelting, refining and marketing
charges
|
|
(171)
|
|
-
|
|
(520)
|
|
(1,758)
|
|
Inventory and other adjustments(iv)
|
|
(5)
|
|
-
|
|
517
|
|
(60)
|
|
Non-cash reclamation provision
|
|
(35)
|
|
-
|
|
(108)
|
|
(559)
|
|
Stripping costs(vi)
|
|
(471)
|
|
-
|
|
(1,052)
|
|
-
|
Cash operating costs
|
|
$
|
4,597
|
|
$
|
-
|
|
$
|
15,563
|
|
$
|
15,508
|
Gold production (ounces)
|
|
10,666
|
|
-
|
|
32,120
|
|
47,615
|
Total cash costs per ounce of gold produced ($ per ounce)(iii)
|
|
$
|
431
|
|
$
|
-
|
|
$
|
485
|
|
$
|
326
|
|
|
|
|
|
|
|
|
|
Meadowbank Mine - Total Cash Costs per Ounce of Gold Produced(iii)
|
|
|
Three Months Ended
|
|
Three Months Ended
|
|
Year Ended
|
|
Year Ended
|
(thousands of United States dollars, except as noted)
|
|
December 31, 2013
|
|
December 31, 2012
|
|
December 31, 2013
|
|
December 31, 2012
|
Production costs
|
|
$
|
87,559
|
|
$
|
99,324
|
|
$
|
363,894
|
|
$
|
347,710
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Byproduct metal revenues, net of smelting, refining and marketing
charges
|
|
(298)
|
|
(6)
|
|
(1,471)
|
|
(1,651)
|
|
Inventory and other adjustments(iv)
|
|
(4,628)
|
|
2,084
|
|
(5,471)
|
|
4,582
|
|
Non-cash reclamation provision
|
|
(377)
|
|
(406)
|
|
(1,538)
|
|
(1,611)
|
|
Stripping costs(vi)
|
|
(3,593)
|
|
(8,341)
|
|
(22,305)
|
|
(14,806)
|
Cash operating costs
|
|
$
|
78,663
|
|
$
|
92,655
|
|
$
|
333,109
|
|
$
|
334,224
|
Gold production (ounces)
|
|
123,433
|
|
77,238
|
|
430,613
|
|
366,030
|
Total cash costs per ounce of gold produced ($ per ounce)(iii)
|
|
$
|
637
|
|
$
|
1,200
|
|
$
|
774
|
|
$
|
913
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Production Costs to Minesite Costs per Tonne(vii) by Mine
|
|
|
|
|
|
|
|
|
|
LaRonde Mine - Minesite Costs per Tonne(vii)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Three Months Ended
|
|
Year Ended
|
|
Year Ended
|
(thousands of United States dollars, except as noted)
|
|
December 31, 2013
|
|
December 31, 2012
|
|
December 31, 2013
|
|
December 31, 2012
|
Production costs
|
|
$
|
54,120
|
|
$
|
58,106
|
|
$
|
229,911
|
|
$
|
225,647
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Inventory adjustment(viii)
|
|
(487)
|
|
(282)
|
|
(6,259)
|
|
984
|
|
Non-cash reclamation provision
|
|
(520)
|
|
(610)
|
|
(2,122)
|
|
(2,421)
|
Minesite operating costs
|
|
$
|
53,113
|
|
$
|
57,214
|
|
$
|
221,530
|
|
$
|
224,210
|
Minesite operating costs (thousands of C$)
|
|
C$
|
55,812
|
|
C$
|
57,280
|
|
C$
|
228,654
|
|
C$
|
225,159
|
Tonnes of ore milled (thousands of tonnes)
|
|
619
|
|
587
|
|
2,319
|
|
2,359
|
Minesite costs per tonne (C$)(vii)
|
|
C$
|
90
|
|
C$
|
98
|
|
C$
|
99
|
|
C$
|
95
|
|
|
|
|
|
|
|
|
|
Goldex Mine - Minesite Costs per Tonne(vii)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Three Months Ended
|
|
Year Ended
|
|
Year Ended
|
(thousands of United States dollars, except as noted)
|
|
December 31, 2013
|
|
December 31, 2012
|
|
December 31, 2013
|
|
December 31, 2012
|
Production costs
|
|
$
|
13,172
|
|
$
|
-
|
|
$
|
13,172
|
|
$
|
-
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Inventory adjustment(viii)
|
|
1,896
|
|
-
|
|
1,896
|
|
-
|
|
Non-cash reclamation provision
|
|
-
|
|
-
|
|
-
|
|
-
|
Minesite operating costs
|
|
$
|
15,068
|
|
$
|
-
|
|
$
|
15,068
|
|
$
|
-
|
Minesite operating costs (thousands of C$)
|
|
C$
|
15,798
|
|
C$
|
-
|
|
C$
|
15,798
|
|
C$
|
-
|
Tonnes of ore milled (thousands of tonnes)
|
|
492
|
|
-
|
|
492
|
|
-
|
Minesite costs per tonne (C$)(vii)
|
|
C$
|
32
|
|
C$
|
-
|
|
C$
|
32
|
|
C$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lapa Mine - Minesite Costs per Tonne(vii)
|
|
|
Three Months Ended
|
|
Three Months Ended
|
|
Year Ended
|
|
Year Ended
|
(thousands of United States dollars, except as noted)
|
|
December 31, 2013
|
|
December 31, 2012
|
|
December 31, 2013
|
|
December 31, 2012
|
Production costs
|
|
$
|
18,165
|
|
$
|
19,482
|
|
$
|
69,532
|
|
$
|
73,376
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Inventory adjustment(viii)
|
|
(907)
|
|
(1,343)
|
|
(1,217)
|
|
54
|
|
Non-cash reclamation provision
|
|
(16)
|
|
(15)
|
|
(67)
|
|
191
|
Minesite operating costs
|
|
$
|
17,242
|
|
$
|
18,124
|
|
$
|
68,248
|
|
$
|
73,621
|
Minesite operating costs (thousands of C$)
|
|
C$
|
18,106
|
|
C$
|
18,142
|
|
C$
|
70,621
|
|
C$
|
73,813
|
Tonnes of ore milled (thousands of tonnes)
|
|
168
|
|
161
|
|
641
|
|
641
|
Minesite costs per tonne (C$)(vii)
|
|
C$
|
108
|
|
C$
|
113
|
|
C$
|
110
|
|
C$
|
115
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kittila Mine - Minesite Costs per Tonne(i)(vii)
|
|
|
Three Months Ended
|
|
Three Months Ended
|
|
Year Ended
|
|
Year Ended
|
(thousands of United States dollars, except as noted)
|
|
December 31, 2013
|
|
December 31, 2012
|
|
December 31, 2013
|
|
December 31, 2012
|
Production costs
|
|
$
|
27,691
|
|
$
|
25,406
|
|
$
|
80,287
|
|
$
|
98,037
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Inventory adjustment(viii)
|
|
1,096
|
|
432
|
|
4,561
|
|
1,569
|
|
Non-cash reclamation provision
|
|
(185)
|
|
(148)
|
|
(435)
|
|
(551)
|
Minesite operating costs
|
|
$
|
28,602
|
|
$
|
25,690
|
|
$
|
84,413
|
|
$
|
99,055
|
Minesite operating costs (thousands of €)
|
|
€
|
21,629
|
|
€
|
19,148
|
|
€
|
64,102
|
|
€
|
75,305
|
Tonnes of ore milled (thousands of tonnes)
|
|
308
|
|
279
|
|
882
|
|
1,090
|
Minesite costs per tonne (€)(vii)
|
|
€
|
70
|
|
€
|
69
|
|
€
|
73
|
|
€
|
69
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pinos Altos Mine - Minesite Costs per Tonne(vii)
|
|
|
Three Months Ended
|
|
Three Months Ended
|
|
Year Ended
|
|
Year Ended
|
(thousands of United States dollars, except as noted)
|
|
December 31, 2013
|
|
December 31, 2012
|
|
December 31, 2013
|
|
December 31, 2012
|
Production costs
|
|
$
|
31,402
|
|
$
|
33,606
|
|
$
|
130,129
|
|
$
|
128,618
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Inventory adjustment(viii)
|
|
671
|
|
2,248
|
|
(821)
|
|
2,815
|
|
Non-cash reclamation provision
|
|
(75)
|
|
(51)
|
|
(297)
|
|
(205)
|
|
Stripping costs(vi)
|
|
(1,327)
|
|
(2,291)
|
|
(5,581)
|
|
(12,762)
|
Minesite operating costs
|
|
$
|
30,671
|
|
$
|
33,512
|
|
$
|
123,430
|
|
$
|
118,466
|
Tonnes of ore processed (thousands of tonnes)
|
|
673
|
|
730
|
|
2,725
|
|
2,862
|
Minesite costs per tonne (US$)(vii)
|
|
$
|
46
|
|
$
|
46
|
|
$
|
45
|
|
$
|
41
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Creston Mascota deposit at Pinos Altos - Minesite Costs per Tonne(ii)(vii)
|
|
|
Three Months Ended
|
|
Three Months Ended
|
|
Year Ended
|
|
Year Ended
|
(thousands of United States dollars, except as noted)
|
|
December 31, 2013
|
|
December 31, 2012
|
|
December 31, 2013
|
|
December 31, 2012
|
Production costs
|
|
$
|
5,279
|
|
$
|
-
|
|
$
|
16,726
|
|
$
|
17,885
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Inventory adjustment(viii)
|
|
(5)
|
|
-
|
|
515
|
|
(60)
|
|
Non-cash reclamation provision
|
|
(35)
|
|
-
|
|
(108)
|
|
(559)
|
|
Stripping costs(vi)
|
|
(471)
|
|
-
|
|
(1,052)
|
|
-
|
Minesite operating costs
|
|
$
|
4,768
|
|
$
|
-
|
|
$
|
16,081
|
|
$
|
17,266
|
Tonnes of ore processed (thousands of tonnes)
|
|
326
|
|
-
|
|
1,024
|
|
1,454
|
Minesite costs per tonne (US$)(vii)
|
|
$
|
15
|
|
$
|
-
|
|
$
|
16
|
|
$
|
12
|
|
|
|
|
|
|
|
|
|
Meadowbank Mine - Minesite Costs per Tonne(vii)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Three Months Ended
|
|
Year Ended
|
|
Year Ended
|
(thousands of United States dollars, except as noted)
|
|
December 31, 2013
|
|
December 31, 2012
|
|
December 31, 2013
|
|
December 31, 2012
|
Production costs
|
|
$
|
87,559
|
|
$
|
99,324
|
|
$
|
363,894
|
|
$
|
347,710
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Inventory adjustment(viii)
|
|
(4,229)
|
|
1,806
|
|
(5,220)
|
|
4,407
|
|
Non-cash reclamation provision
|
|
(377)
|
|
(406)
|
|
(1,538)
|
|
(1,610)
|
|
Stripping costs(vi)
|
|
(3,593)
|
|
(8,341)
|
|
(22,305)
|
|
(14,806)
|
Minesite operating costs
|
|
$
|
79,360
|
|
$
|
92,383
|
|
$
|
334,831
|
|
$
|
335,701
|
Minesite operating costs (thousands of C$)
|
|
C$
|
82,703
|
|
C$
|
92,471
|
|
C$
|
343,147
|
|
C$
|
336,431
|
Tonnes of ore milled (thousands of tonnes)
|
|
1,048
|
|
1,030
|
|
4,143
|
|
3,821
|
Minesite costs per tonne (C$)(vii)
|
|
C$
|
79
|
|
C$
|
90
|
|
C$
|
83
|
|
C$
|
88
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Weighted Average Total Cash Costs per Ounce of Gold
Produced(iii) to All-In Sustaining Costs per Ounce of Gold Produced(ix)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
|
|
|
(United States dollars per ounce of gold produced)
|
|
|
|
|
|
December 31, 2013
|
|
|
Weighted average total cash costs per ounce of gold produced(i)(ii)(iii)
|
|
|
|
|
|
$
|
672
|
|
|
Sustaining capital expenditures
|
|
|
|
|
|
184
|
|
|
Exploration and corporate development expenses (excluding greenfield
exploration)
|
|
|
|
|
|
14
|
|
|
General and administrative expenses (net of stock options)
|
|
|
|
|
|
82
|
|
|
All-in sustaining costs per ounce of gold produced(ix)
|
|
|
|
|
|
$
|
952
|
|
|
(i)
|
|
Excludes the Kittila mine's results for the second quarter of 2013. Due
to scheduled maintenance, the Kittila mine only operated for 14 days
during the second quarter of 2013. The Kittila mine incurred $18,159
in production costs during the second quarter of 2013, which were
excluded from total cash costs per ounce of gold produced.
|
|
(ii)
|
|
Excludes the Creston Mascota deposit at Pinos Altos' results for the
first quarter of 2013 and the fourth quarter of 2012 due to the
temporary suspension of active leaching between October 1, 2012 and
March 13, 2013. The Creston Mascota deposit at Pinos Altos incurred
$3,117 and $6,439 in production costs during the first quarter of 2013
and the fourth quarter of 2012, respectively, which were excluded from
total cash costs per ounce of gold produced.
|
|
(iii)
|
|
Total cash costs per ounce of gold produced is not a recognized measure
under US GAAP and this data may not be comparable to data presented by
other gold producers. This measure is calculated by adjusting
production costs as recorded in the consolidated statements of income
(loss) for byproduct revenues, unsold concentrate inventory production
costs, non-cash reclamation provisions, deferred stripping costs and
other adjustments, and then dividing by the number of ounces of gold
produced. The Company believes that this generally accepted industry
measure is a realistic indication of operating performance and is a
useful comparison point between periods. Total cash costs per ounce of
gold produced is intended to provide investors with information about
the cash generating capabilities of the Company's mining operations.
Management also uses this measure to monitor the performance of the
Company's mining operations. As market prices for gold are quoted on a
per ounce basis, using this per ounce measure allows management to
assess a 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 these inherent limitations by using this
measure in conjunction with minesite costs per tonne (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.
|
|
(iv)
|
|
Under the Company's revenue recognition policy, revenue is recognized on
concentrates when legal title passes. As total cash costs per ounce of
gold produced are calculated on a production basis, this inventory
adjustment reflects the sales margin on the portion of concentrate
production not yet recognized as revenue.
|
|
(v)
|
|
Excludes the Goldex mine's results for the third quarter of 2013.
Initial non-commercial payable gold production of 1,505 ounces was
achieved at the Goldex mine during the third quarter of 2013.
|
|
(vi)
|
|
The Company reports total cash costs per ounce of gold produced and
minesite costs per tonne using a common industry practice of deferring
certain stripping costs that can be attributed to future production.
The purpose of adjusting for these stripping costs is to enhance the
comparability of total cash costs per ounce of gold produced and
minesite costs per tonne to the Company's peers within the mining
industry.
|
|
(vii)
|
|
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. This measure is calculated by adjusting production costs as
shown in the consolidated statements of income (loss) for unsold
concentrate inventory production costs, non-cash reclamation
provisions, deferred stripping costs and other adjustments, and then
dividing by tonnes of ore milled. As the total cash costs per ounce of
gold produced measure can be impacted by fluctuations in byproduct
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 US GAAP.
|
|
(viii)
|
|
This inventory adjustment reflects production costs associated with
unsold concentrates.
|
|
(ix)
|
|
All-in sustaining costs per ounce of gold produced, calculated beginning
in 2013, 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 measure provides a realistic indicator of
operating performance. However, this non-US GAAP measure should be
considered together with other data prepared in accordance with US GAAP
as it is not necessarily indicative of operating costs or cash flow
measures prepared in accordance with US GAAP.
|
Note Regarding Certain Measures of Performance
This press release presents financial performance measures, including
"total cash costs per ounce of gold produced", "minesite costs per
tonne" and "all-in sustaining costs per ounce of gold produced" 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 in allowing
year-over-year comparisons. However, each of these non-US GAAP measures
should be considered together with other data prepared in accordance
with US GAAP. These measures, taken by themselves, are not necessarily
indicative of operating costs or cash flow measures prepared in
accordance with US GAAP. Reconciliations of the Company's total cash
costs per ounce of gold produced, minesite costs per tonne and all-in
sustaining costs per ounce of gold produced financial performance
measures to comparable financial measures are calculated and presented
in accordance with US GAAP are detailed above.
The contents of this press release have been prepared under the
supervision of, and reviewed by,
Alain Blackburn
, Ing., Senior
Vice-President Exploration and a "Qualified Person" for the purposes of
NI 43-101.
SOURCE Agnico Eagle Mines Limited