(All amounts expressed in U.S. dollars unless otherwise noted)
Stock Symbols: AEM (NYSE)
AGE (TSX)
TORONTO, July 30 /PRNewswire-FirstCall/ - Agnico-Eagle Mines Limited
today reported a net loss of $3.8 million, or $0.05 per share in the second
quarter of 2003 compared to net income of $3.4 million, or $0.05 per share
last year. For the year to date, the net loss was $10.0 million, or $0.12 per
share compared to net income of $3.8 million, or $0.06 per share in the first
six months of 2002. Included in the year to date 2003 results is a one-time
net of tax non-cash charge of $1.7 million, or $0.02 per share,
representing the cumulative effect of the adoption of a new US GAAP accounting
standard, FAS 143, relating to future reclamation obligations. Management's
Discussion and Analysis for the second quarter of 2003 is appended to this
press release.
Agnico-Eagle Continues to Add to Dominant Land Position on Cadillac Gold
Belt
The Company today also announced that it has signed an asset purchase
agreement with Barrick Gold Corporation to purchase a 100% interest in
Barrick's Bousquet Property, immediately to the west and south of
Agnico-Eagle's 100% owned LaRonde Mine in northwestern Quebec. Agnico-Eagle is
also acquiring used machinery and equipment from the now closed Bousquet Mines
including underground rolling stock and the headframe at Bousquet 2. In
addition to the Bousquet Mine assets, Agnico-Eagle will increase its interest
in the Bruce Property, located one mile east of LaRonde, to 100%. The purchase
and sale agreement also contemplates the purchase of certain of Barrick's
regional exploration properties including Orion B-1, Orion B-2, Joannes North,
Orion South and Norgold, all located to the south and west of Cambior's Doyon
Property.
The purchase consideration to be paid by Agnico-Eagle on closing is
C$5 million in cash and C$2 million in common shares of Agnico-Eagle, and the
assumption of specified reclamation obligations relating to the Bousquet
Property, excluding certain employment-related liabilities. In addition
Barrick will retain a 2% net smelter return royalty on all the properties
acquired by Agnico-Eagle.
"With this transaction, we now control 100% of over 14 miles of
contiguous favourable geology along the prolific Cadillac-Bousquet Gold Belt
and have the dominant land position on the Cadillac-Larder Lake Break
immediately to the south," said Sean Boyd, President and Chief Executive
Officer. "The first priority will be to integrate the 25 years of Bousquet
geological information into the LaRonde Mine database. This information and
the underground access provided by the Penna and Bousquet 2 Shafts will allow
us to better evaluate our regional exploration and development options," added
Mr. Boyd.
Closing of the acquisition is expected to occur on or before
September 30, 2003 and is conditional upon customary regulatory approvals,
including a Certificate of Liberation from the Quebec Ministry of Natural
Resources releasing Barrick from remediation obligations on the Bousquet
Property.
Chibex South Acquisition Solidifies Hold on Lapa Trend
Earlier in the second quarter, the Company also closed the previously
announced acquisition of Breakwater Resources Ltd.'s 66 2/3% interest in the
Chibex South Property for $75,000 and a 0.66% net smelter royalty. Chibex
South is located south of and adjacent to the Company's Chibex North Property,
which in turn is located immediately south of and adjacent to Agnico-Eagle's
100% owned Lapa Property. Agnico-Eagle now controls properties covering
12 miles of the same geological contact that hosts the Lapa Contact Zone.
Conference Call Time Changed
The Company's senior management will host a conference call on Thursday,
July 31, 2003 at 8:30 a.m. (EST). Please note that the time of the conference
call has been advanced by 2 1/2 hours. The Company will discuss its second
quarter 2003 financial and operating results. The Company will also provide an
update on LaRonde's operating performance and the Company's exploration
activities. To participate in the conference call, please dial (416) 640-4127.
The replay number will be 1-877-289-8525 pass code 233183 followed by the
number sign. A live audio webcast of the call will be available on the
Company's website at www.agnico-eagle.com.
Negative Effects of Rock Fall Now Worked Through as Expected
In the second quarter of 2003, the Company produced 60,157 ounces
compared to 74,617 ounces produced in the second quarter of 2002. Year to
date, the Company has produced 115,162 ounces of gold compared to
134,876 ounces produced in the first six months of 2002. The decline in second
quarter and year to date production is due to the first quarter rock fall at
the Company's LaRonde Mine. This event delayed the extraction of gold/copper
mining blocks in March and caused higher than planned dilution in the mining
blocks affected by the rock fall. As expected, the effects of this rock fall
lingered into the second quarter as the Company continued to take steps to
back-fill the affected area which resulted in a resequencing of production to
the upper, zinc-rich areas of the mine.
Gold Production for 2003 on Track for 300,000 Ounces
As previously disclosed, the Company's 2003 gold production estimate is
approximately 300,000 ounces. The previous projection of 2003 full year total
cash costs of $180 per ounce was estimated assuming an average US$/C$ exchange
of 1.47 and $4.60 per ounce silver, $0.75 per pound copper and $0.36 per pound
zinc. Assuming the recent average US$/C$ exchange rate of 1.37 for the balance
of 2003 and the same byproduct prices, cash costs would be approximately $200
per ounce.
LaRonde Operating Performance Steadily Improving
LaRonde continued its steady improvement in operating performance with
the mill processing a quarterly of 648,000 tons of ore, averaging over
7,100 tons per day, as over 643,000 tons of ore was hoisted from underground.
In addition, the lower level crusher and ore handling facility was completed
and placed into operation in June. Tonnage continued to increase from the
lower part of the mine as over 290,000 tons or 43% of the ore was hoisted from
the lower level loading pocket in the quarter. At maximum production, the
lower mine is scheduled to produce a total of 510,000 tons per quarter, a rate
scheduled to be reached in the fourth quarter of this year. Second quarter
onsite operating costs improved to C$48 per ton from C$52 per ton in the same
quarter last year. For the year to date, onsite operating costs improved to
C$50 per ton from C$52 per ton in the first half of 2002.
LaRonde Continues Aggressive Drilling Program
Eight drill rigs were in operation during the quarter, completing nearly
32,000 feet of diamond drilling on the following target areas:
- Delineation drilling on the upper part of the mine and on Levels 194
and 215.
- Testing Zone 7 between Levels 170 and 215.
- Exploration drilling on Zone 20 North at depth from the Level 215
drift.
The focus during the quarter was further definition of Zone 7 in light of
the encouraging results returned the previous quarter. A second drill was also
added to the Level 215 exploration drift as further advances in the drift will
allow both drills to complete the systematic definition of Zone 20 North at
depth.
Definition and delineation drilling started on Zone 7 from Levels 170,
194 and 212. Drilling was started on the upper lens with the results to date
on both the upper and lower lens better than originally expected. Level
development has been completed on Level 215 confirming the recent drilling
results and development in ore on Level 212 has also commenced. Summary
results follow:
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Drill True Gold(oz/ton) Silver Copper
Hole Thickness(ft) From To Cut(1.0 oz) (oz/ton) (%) Zinc(%)
-------------------------------------------------------------------------
3170-42 11.8 309.1 322.8 0.14 1.63 0.24 3.06
-------------------------------------------------------------------------
3170-43 10.2 373.7 394.7 0.19 1.03 0.22 2.65
-------------------------------------------------------------------------
3170-44 14.1 488.2 516.1 0.19 2.19 0.19 1.73
-------------------------------------------------------------------------
3170-46 10.2 401.9 424.2 0.26 1.96 0.42 4.01
-------------------------------------------------------------------------
3212-10 10.2 331.4 342.2 0.15 1.16 1.22 1.20
-------------------------------------------------------------------------
3212-12 12.8 451.4 469.8 0.24 0.99 0.52 4.04
-------------------------------------------------------------------------
3212-13 9.2 511.8 527.6 0.20 1.19 0.48 2.42
-------------------------------------------------------------------------
Delineation drilling also continued on the lower gold-copper rich part of
Zone 20 North. The drilling was focused on the further delineation of
production areas that will be mined in the second half of this year. The most
recent results have been summarized below:
-------------------------------------------------------------------------
Drill True Gold(oz/ton) Silver Copper
Hole Thickness(ft) From To Cut(1.0 oz) (oz/ton) (%) Zinc(%)
-------------------------------------------------------------------------
18520461 15.7 90.2 106.0 0.180 0.214 0.10 0.07
-------------------------------------------------------------------------
18520471 17.1 90.2 107.3 0.158 0.633 0.22 0.97
-------------------------------------------------------------------------
18820401 10.8 115.5 128.9 0.283 0.577 0.73 0.34
-------------------------------------------------------------------------
18820411 11.8 93.5 105.3 0.165 0.264 0.12 0.24
-------------------------------------------------------------------------
18820421 13.1 94.8 107.9 0.138 0.642 0.79 0.63
-------------------------------------------------------------------------
19420381 19.0 101.7 124.3 0.250 1.476 1.37 0.46
-------------------------------------------------------------------------
19420382 11.2 131.6 148.3 0.068 0.439 0.98 0.72
-------------------------------------------------------------------------
20320441 51.5 104.7 156.2 0.183 0.711 0.41 0.44
-------------------------------------------------------------------------
20320442 49.2 111.5 161.4 0.186 0.775 0.59 0.22
-------------------------------------------------------------------------
20320451 54.5 109.6 164.0 0.180 0.830 0.51 0.66
-------------------------------------------------------------------------
20620497 34.8 120.4 164.0 0.220 4.731 1.84 1.00
-------------------------------------------------------------------------
20620501 28.5 132.5 161.1 0.256 5.964 1.29 1.82
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21520371 49.1 81.4 130.9 0.212 2.529 0.72 1.11
-------------------------------------------------------------------------
Exploration drilling on LaRonde II from the Level 215 exploration drift
is following up the results obtained in the previously announced drill hole
3215-60A which returned 0.29 ounces of gold per tone over 65.6 feet. The
Company is conducting an 87,000 foot diamond drilling program in 2003 on
LaRonde II from the Level 215 exploration drift, designed to convert the
existing mineral resource into mineral reserves and to expand the known
mineral resource envelope. The confirmation of this higher grade core could
have a significant impact on the LaRonde II mining sequence and economics.
Lapa Progressing Towards Pre-feasibility Study by Year End
On the 100% owned Lapa Property, located 7 miles east of LaRonde, five
diamond drills are continuing to drill the Contact Zone with the most recent
results highlighted below:
-------------------------------------------------------------------------
Drill Hole True Gold(oz/ton) Gold(oz/ton)
Thickness(ft) From To Cut(1.5 oz) Uncut
-------------------------------------------------------------------------
118-03-25 13.8 4354.7 4372.7 0.24 0.24
-------------------------------------------------------------------------
118-03-25A 9.5 3857.6 3868.4 0.14 0.14
-------------------------------------------------------------------------
118-03-27 40.4 2291.0 2372.0 0.17 0.17
-------------------------------------------------------------------------
118-03-19B 11.2 2779.5 2799.2 0.05 0.05
------------------------------------------------------------------------
Preliminary results
Drill hole 118-03-25 is located 215 feet east of drill hole 118-03-16
which returned 0.39 oz/t of gold over 12.1 feet. This drill hole, located at a
depth 3,815 feet below surface, is the deepest intersection on the Contact
Zone and confirms that the mineralization remains open to the east. Drill hole
118-03-27, 60 feet west of previously disclosed drill hole 118-02-02B, is
located at a depth of 2,132 feet and confirms the western margin of the
envelope with a similar thickness that was used in the June 2003 resource
estimate.
Over the next three months, three drill rigs will continue to drill both
east and west of drill holes 118-03-25 and previously disclosed 118-03-16 to
confirm the continuity of the mineralization at depth. Two other rigs will
continue to drill in-fill holes and further define the upper block of
mineralization on the extreme eastern margin of the Contact Zone. This
aggressive drilling program will continue until the end of the year in order
to provide results for a pre-feasibility study also expected to be completed
by year-end.
In addition, a sample of over 880 pounds was collected from Lapa drill
core. Sample preparation was initiated in May and has since been completed. A
metallurgical definition test-work program is in progress to both validate
results from the exploratory work carried out last fall and to further define
the actual process and optimize achievable results. The metallurgical
test-work is being conducted at LaRonde and results are expected early in the
fourth quarter of this year.
The longitudinal illustrations that detail the drill results and a map of
the properties discussed in this news release can be viewed and downloaded
from the Company's website www.agnico-eagle.com (Press Release)
Scientific and Technical Data
All Lapa drill core has been logged and the results have been verified by
Dino Lombardi, P.Geo., Senior Geologist for the Company's Exploration Division
and who is fully qualified per the standards outlined in National Instrument
43-101. The drill core is sawed in half with one half sent to a commercial
laboratory and the other half retained for future reference. Upon reception of
the assay results, the pulps and rejects are recovered and submitted to a
second laboratory for check-assay purposes. The gold assaying method uses a
30-gram sample by Fire Assays or Metallic Sieve finish as requested by the
project geologist. The laboratories used are Bourlamaque Assay Laboratories
Ltd., Val d'Or, Quebec, and Expert Laboratories Inc., Rouyn-Noranda, Quebec.
A qualified person, Guy Gosselin, P.Eng., P.Geo., LaRonde Division's
Chief Geologist, has verified the LaRonde data disclosed in this news release.
The verification procedures, the quality assurance program, quality control
procedures may be found in the 2003 Ore Reserve Report, Agnico-Eagle Mines
Limited, LaRonde Division, dated May 12, 2003, filed on SEDAR.
Forward Looking Statements
This news release contains certain "forward-looking statements" (within
the meaning of the United States Private Securities Litigation Reform Act of
1995) that involve a number of risks and uncertainties. There can be no
assurance that such statements will prove to be accurate; actual results and
future events could differ materially from those anticipated in such
statements. Risks and uncertainties are disclosed under the heading "Risk
Factors" in the Company's Annual Information Form (AIF) filed with certain
Canadian securities regulators (including the Ontario and Quebec Securities
Commissions) and with the United States Securities and Exchange Commission (as
Form 20-F).
About Agnico-Eagle
Agnico-Eagle is a long established Canadian gold producer with operations
located in northwestern Quebec and exploration and development activities in
eastern Canada and the southwestern United States. Agnico-Eagle's operating
history includes over three decades of continuous gold production, primarily
from underground mining operations. Agnico-Eagle's LaRonde Mine in Quebec is
Canada's largest gold deposit. The Company has full exposure to higher gold
prices consistent with its policy of no forward gold sales. It has paid a cash
dividend for 23 consecutive years.
Schedules Attached:
Management's Discussion and Analysis
Summarized Quarterly Data
Consolidated Financial Statements (excluding notes)
QUARTERLY MANAGEMENT DISCUSSION AND ANALYSIS - UNITED STATES GAAP
(all figures are expressed in US dollars unless otherwise noted)
Results of Operations
Agnico-Eagle reported a second quarter net loss of $3.8 million, or
$0.05 cents per share, compared to net income of $3.4 million, or $0.05 cents
per share, in the second quarter of 2002. For the year to date, Agnico-Eagle
reported a net loss of $10.0 million, or $0.12 cents per share, compared to
net income of $3.8 million, or $0.06 cents per share, in the first six months
of 2002. The year to date figures include a non-cash charge of $1.7 million
(net of tax), or $0.02 per share, representing the cumulative effect of
adopting Financial Accounting Standards Board Statement No. 143, "Accounting
for Asset Retirement Obligations" ("FAS 143"). For a full description of the
accounting change, please see the Company's 2002 Management Discussion and
Analysis of Operations and Financial Condition under the caption "Critical
Accounting Policies - Reclamation Costs."
In the second quarter of 2003, the Company produced 60,157 ounces
compared to 74,617 ounces produced in the second quarter of 2002. Year to
date, the Company has produced 115,162 ounces of gold compared to 134,876
ounces produced in the first six months of 2002. The decline in second quarter
and year to date production is due to the first quarter rock fall at the
Company's LaRonde Mine. This event delayed the extraction of gold/copper
mining blocks in March and caused higher than planned dilution in the mining
blocks affected by the rock fall. As expected, the effects of this rock fall
lingered into the second quarter as the Company continued to take steps to
back-fill the affected area which resulted in a resequencing of production to
the upper, zinc-rich areas of the mine. The production outlook for 2003
remains at 300,000 ounces of gold as the affected area has been back-filled
and production from the affected areas of the mine is meeting the Company's
expectations.
The table below summarizes the key variances in net loss for the first
quarter of 2003 from the net income reported for the same period in 2002.
(millions of dollars) Second Quarter Year to Date
-------------------------------------------------------------------------
Increase in gold price $2.3 $4.6
Increase in copper production 2.0 4.2
Increase in silver production and price 1.5 3.0
Increase in operating costs (3.8) (7.8)
Decrease in gold production (4.4) (6.2)
Stronger Canadian dollar (2.0) (2.8)
Increase in El Coco royalty - (2.2)
Cumulative effect of adopting FAS 143 - (1.7)
Increase in depreciation & amortization (1.1) (2.4)
Increase (decrease) in zinc production 0.5 (2.0)
Other (2.2) (0.5)
------ -------
Net negative variance $(7.2) $(13.8)
------ -------
------ -------
The increase in operating costs was attributable to the LaRonde Mine
operating at 7,000 tons of ore treated per day compared to the 5,000 ton per
day rate in 2002. Operating at the expanded rate, the mill processed 282,000
more tons of ore in the first half of 2003 achieving onsite operating costs of
C$50 per ton compared to C$52 per ton in the first half of 2002. In the second
quarter of 2003, onsite operating costs per ton improved C$4 per ton to
C$48 per ton from C$52 per ton in the second quarter of 2002.
In the second quarter of 2003 cash operating costs per ounce, excluding
the El Coco royalty, increased to $208 per ounce from $124 per ounce in 2002.
In the second quarter of 2003, total cash operating costs to produce an ounce
of gold were $258 compared to $164 in the same quarter of 2002. For the year
to date 2003, cash operating costs increased to $190 from $126 excluding the
El Coco royalty and total cash operating costs increased to $251 from $162 in
the first six months of 2002. Despite the improvement in onsite operating
costs, total cash operating costs increased over 2002 due to lower gold
production, a higher El Coco royalty, lower byproduct zinc production and a
stronger Canadian dollar. As illustrated by the table above, these negative
impacts on total cash operating costs were only partially offset by increases
in byproduct copper and silver production.
The following table provides a reconciliation of the total cash operating
costs per ounce of gold produced to the financial statements:
(thousands of dollars,
except where noted) Q2 2003 Q2 2002 YTD 2003 YTD 2002
-------------------------------------------------------------------------
Cost of production per
Consolidated
Statements of Income (Loss) $24,581 $19,613 $48,928 $37,216
Adjustments:
Byproduct revenues (9,488) (6,813) (20,867) (14,248)
El-Coco royalty (3,000) (3,050) (7,074) (4,959)
Revenue recognition
adjustment (i) 531 (117) 1,111 (339)
Non cash reclamation provision (112) (375) (217) (675)
-------- --------- --------- ---------
Cash operating costs $12,512 $9,258 $21,881 $16,995
Gold production (ounces) 60,157 74,617 115,162 134,876
-------- --------- --------- ---------
Cash operating cost (per ounce) $208 $124 $190 $126
El-Coco royalty (per ounce) 50 40 61 36
-------- --------- --------- ---------
Total cash operating costs
(per ounce) (ii) $258 $164 $251 $162
-------- --------- --------- ---------
-------- --------- --------- ---------
Notes:
(i) Under the Company's revenue recognition policy, revenue is
recognized on concentrates when legal title passes. Since cash costs
are calculated on a production basis, this adjustment reflects the
portion of concentrate production for which revenue has not been
recognized in the year.
(ii) Total cash operating cost data is prepared in accordance with The
Gold Institute Production Cost Standard and is not a recognized
measure under US GAAP. Adoption of the standard is voluntary and
this data may not be comparable to data presented by other gold
producers. Management uses this generally accepted industry measure
in evaluating operating performance and believes it to be a
realistic indication of such performance. The data also indicates
the Company's ability to generate cash flow and operating earnings
at various gold prices. This additional information should be
considered together with other data prepared in accordance with US
GAAP.
Amortization expense increased 30% to $4.8 million in the second quarter
of 2003 from $3.7 million in the second quarter of 2002 and increased 35% to
$9.3 million in the first half of 2003 from $6.9 million in the first half of
2002. The increase in amortization is attributable to the increased mill
throughput of approximately 30% and an increased capital base resulting from
the Company's expansion of the LaRonde Mine to 7,000 tons of ore treated per
day.
Income and mining taxes increased to $0.4 million and $1.0 million
respectively in the second quarter and six months ended June 30, 2003 compared
to nil in both comparable periods in 2002. The Company does not expect to pay
cash income and mining taxes in 2003 however accrues deferred income and
mining taxes to reflect the drawdown of tax pools.
Liquidity and Capital Resources
At June 30, 2003, Agnico-Eagle's consolidated cash and cash equivalents
were $121 million while working capital was $156 million. At
December 31, 2002, the Company had $153 million in cash and cash equivalents
and $185 million in working capital. Including the undrawn portion of its bank
credit facility, the Company had $221 million of available cash resources at
June 30, 2003 compared to $253 million at December 31, 2002. The Company
currently has $100 million in undrawn credit and expects to have an additional
$25 million available in the fourth quarter of 2003 once certain completion
tests are satisfied in connection with the LaRonde expansion to 7,000 tons per
day.
Cash flow from operating activities, before working capital changes, was
$0.6 million and $0.1 million, respectively in the quarter and six months
ended June 30, 2003 compared to $7.6 million and $12.6 million, respectively
in the quarter and six months ended June 30, 2002. Operating cash flow was
impacted by lower gold production, a higher El Coco royalty, lower byproduct
zinc production and a stronger Canadian dollar offset partially by higher
byproduct copper and silver production.
For the three and six months ended June 30, 2003, capital expenditures
and investments were $18.4 million and $29.4 million respectively compared to
$15.5 million and $29.8 million in the three and six months ended
June 30, 2002. Capital expenditures at the Company's LaRonde mine decreased to
$10.7 million and $21.5 million in the three and six months ended
June 30, 2003 from $15.2 million and $29.5 million in the three and six months
ended June 30, 2002. The decrease is due to the Company having substantially
completed the expansion of the LaRonde Mine to 7,000 tons per day. In the
second quarter of 2003, the Company invested approximately $9.0 million to
acquire Breakwater Resources Ltd.'s interest in the Lapa property. This cash
outflow is netted in "Acquisitions, investments and other" in the Company's
Consolidated Statements of Cash Flows.
Summarized Quarterly Data (Unaudited) Agnico-Eagle Mines Limited
-------------------------------------------------------------------------
(thousands of United States Three months Six months
dollars, except where noted, ended June 30, ended June 30,
US GAAP basis) 2003 2002 2003 2002
-------------------------------------------------------------------------
Consolidated Financial Data
Income and cash flow
LaRonde Division
Revenues from mining
operations $ 30,014 $ 30,616 $ 60,126 $ 56,163
Mine operating costs 24,581 19,613 48,928 37,216
-------------------------------------------------------------------------
Mine operating profit $ 5,433 $ 11,003 $ 11,198 $ 18,947
-------------------------------------------
-------------------------------------------------------------------------
Net income (loss) for period $ (3,779) $ 3,360 $ (10,016) $ 3,837
Net income (loss) per share $ (0.05) $ 0.05 $ (0.12) $ 0.06
Operating cash flow (before
non-cash working capital) $ 632 $ 7,633 $ 55 $ 12,605
Weighted average number
of shares - basic
(in thousands) 83,636 69,050 83,781 68,524
Tons of ore milled 648,292 491,083 1,250,925 968,416
Head grades:
Gold 0.10 0.17 0.10 0.16
Silver 2.24 2.28 2.34 2.39
Zinc 3.14% 3.64% 3.34% 4.43%
Copper 0.52% 0.30% 0.48% 0.26%
Recovery rates:
Gold 90.62% 92.92% 91.11% 93.73%
Silver 80.80% 80.10% 82.65% 81.92%
Zinc 77.80% 81.40% 78.00% 83.35%
Copper 79.20% 74.40% 79.20% 65.23%
Payable production:
Gold (ounces) 60,157 74,617 115,162 134,876
Silver (ounces in thousands) 1,049 709 2,085 1,433
Zinc (pounds in thousands) 27,080 24,740 55,044 60,737
Copper (pounds in thousands) 5,015 2,084 8,971 3,215
Realized prices per
unit of production:
Gold (per ounce) $ 349 $ 310 $ 350 $ 306
Silver (per ounce) $ 4.57 $ 4.67 $ 4.61 $ 4.59
Zinc (per pound) $ 0.35 $ 0.36 $ 0.35 $ 0.35
Copper (per pound) $ 0.73 $ 0.78 $ 0.74 $ 0.77
Onsite operating costs
per ton milled
(Canadian dollars) $ 48 $ 52 $ 50 $ 52
------------------------------------------
-------------------------------------------------------------------------
Operating costs per
gold ounce produced:
Onsite operating costs
(including asset
retirement expenses) $ 371 $ 219 $ 373 $ 237
Less: Non-cash asset
retirement expenses (2) (5) (2) (5)
Net byproduct revenues (161) (90) (181) (106)
-------------------------------------------------------------------------
Cash operating costs $ 208 $ 124 190 $ 126
Accrued El Coco royalties 50 40 61 36
-------------------------------------------------------------------------
Total cash costs $ 258 $ 164 $ 251 $ 162
Non-cash costs:
Asset retirement expenses 2 5 2 5
Amortization 80 49 81 51
-------------------------------------------------------------------------
Total operating costs $ 340 $ 218 $ 334 $ 218
------------------------------------------
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Consolidated Balance Sheets Agnico-Eagle Mines Limited
-------------------------------------------------------------------------
(thousands of United States dollars,
US GAAP basis) June 30, December 31,
2003 2002
-------------------------------------------------------------------------
(Unaudited)
ASSETS
Current
Cash and cash equivalents $ 121,078 $ 152,934
Metals awaiting settlement 29,236 29,749
Income taxes recoverable 2,817 2,900
Inventories:
Ore stockpiles 5,599 4,604
In-process concentrates 2,272 1,008
Supplies 5,105 5,008
Prepaid expenses and other 6,599 10,025
-------------------------------------------------------------------------
Total current assets 172,706 206,228
Fair value of derivative financial instruments 6,908 1,835
Investments and other assets 9,147 8,795
Future income and mining tax assets 23,759 23,890
Mining properties 376,204 353,059
-------------------------------------------------------------------------
$ 588,724 $ 593,807
-----------------------
-------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities $ 13,753 $ 15,246
Dividends payable 756 3,013
Income and mining taxes payable - 954
Interest payable 1,946 1,873
-------------------------------------------------------------------------
Total current liabilities 16,455 21,086
-------------------------------------------------------------------------
Long-term debt 143,750 143,750
-------------------------------------------------------------------------
Fair value of derivative financial instruments - 5,346
-------------------------------------------------------------------------
Asset retirement obligation and other liabilities 9,018 5,043
-------------------------------------------------------------------------
Future income and mining tax liabilities 22,953 20,889
-------------------------------------------------------------------------
Shareholders' Equity
Common shares
Authorized - unlimited
Issued - 83,767,794 (2002 - 83,636,861) 594,341 591,969
Warrants 15,732 15,732
Contributed surplus 7,181 7,181
Deficit (206,039) (196,023)
Accumulated other comprehensive loss (14,667) (21,166)
-------------------------------------------------------------------------
Total shareholders' equity 396,548 397,693
-------------------------------------------------------------------------
$ 588,724 $ 593,807
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Note: Certain items have been reclassified from financial statements
previously presented to conform to the current presentation.
Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)
(Unaudited) Agnico-Eagle Mines Limited
-------------------------------------------------------------------------
(thousands of United States Three months ended Six months ended
dollars, except per share June 30, June 30,
amounts, US GAAP basis) 2003 2002 2003 2002
-------------------------------------------------------------------------
REVENUES
Revenues from mining
operations $ 30,014 $ 30,616 $60,126 $ 56,163
Interest and sundry income 2,122 577 2,763 613
-------------------------------------------------------------------------
32,136 31,193 62,889 56,776
COSTS AND EXPENSES
Production 24,581 19,613 48,928 37,216
Exploration and
corporate development 966 894 2,438 1,643
Amortization 4,787 3,678 9,304 6,929
General and administrative 2,240 1,498 3,707 2,499
Provincial capital tax 285 612 774 992
Interest 2,241 1,737 4,458 3,653
Foreign currency (gain) loss 193 (501) (24) (501)
-------------------------------------------------------------------------
Income (loss) before income,
mining and federal
capital taxes (3,157) 3,662 (6,696) 4,345
Federal capital tax 264 302 589 508
Income and mining tax expense 358 - 988 -
-------------------------------------------------------------------------
Income (loss) before cumulative
catch-up adjustment (3,779) 3,360 (8,273) 3,837
Cumulative catch-up adjustment
relating to FAS 143 - - (1,743) -
-------------------------------------------------------------------------
Net income (loss)
for the period $ (3,779) $ 3,360 $ (10,016) $ 3,837
-------------------------------------------------------------------------
Net income (loss) before
cumulative catch-up
adjustment per share -
basic and diluted $ (0.05) $ 0.05 $ (0.10) $ 0.06
Cumulative catch-up
adjustment per share -
basic and diluted - - (0.02) -
-------------------------------------------------------------------------
Net income (loss) per share -
basic and diluted $ (0.05) $ 0.05 $ (0.12) $ 0.06
-------------------------------------------------------------------------
Weighted average number of
shares (in thousands) (note 3)
basic 83,636 69,050 83,781 68,524
diluted 83,636 80,546 83,781 80,021
-------------------------------------------------------------------------
Comprehensive income (loss):
Net Income (loss)
for the period $ (3,779) $ 3,360 $ (10,016) $ 3,837
Other comprehensive
income (loss):
Unrealized gain (loss)
on hedging activities,
net of tax 4,773 (1,455) 8,000 (3,288)
Unrealized gain (loss) on
available for sale
securities, net of tax (151) - (16) -
Realized gain on available
for sale securities,
net of tax (1,485) - (1,485) -
-------------------------------------------------------------------------
Other comprehensive
income (loss) $ 3,137 $ (1,455) $ 6,499 $ (3,288)
-------------------------------------------------------------------------
Comprehensive income (loss)
for the period $ (642) $ 1,905 $ (3,517) $ 549
-------------------------------------------------------------------------
Note: Certain items have been reclassified from financial statements
previously presented to conform to the current presentation.
Consolidated Statements of Deficit and Accumulated Other Comprehensive
Loss (Unaudited) Agnico-Eagle Mines Limited
-------------------------------------------------------------------------
(thousands of United States
dollars, except Three months Six Months
per share amounts, ended June 30, ended June 30,
US GAAP basis) 2003 2002 2003 2002
-------------------------------------------------------------------------
Deficit
Balance, beginning
of period $ (202,260) $ (196,743) $ (196,023) $ (197,220)
Net income (loss)
for the period (3,779) 3,360 (10,016) 3,837
-------------------------------------------------------------------------
Balance, end
of period $ (206,039) $ (193,383) $ (206,039) $ (193,383)
-------------------------------------------------------------------------
Accumulated other
comprehensive loss
Balance, beginning
of period $ (17,804) $ (17,409) $ (21,166) $ (15,576)
Other comprehensive
income (loss) for
the period 3,137 (1,455) 6,499 (3,288)
-------------------------------------------------------------------------
Balance, end of period $ (14,667) $ (18,864) $ (14,667) $ (18,864)
-------------------------------------------------------------------------
Note: Certain items have been reclassified from financial statements
previously presented to conform to the current presentation.
Consolidated Statements of Cash Flows (Unaudited)
Agnico-Eagle Mines Limited
-------------------------------------------------------------------------
(thousands of United Three months ended Six months ended
States dollars, June 30, June 30,
US GAAP basis) 2003 2002 2003 2002
-------------------------------------------------------------------------
Operating activities
Net income (loss)
for the period $ (3,779) $ 3,360 $ (10,016) $ 3,837
Add (deduct) items
not affecting cash
from operating
activities:
Amortization 4,787 3,678 9,304 6,929
Provision for future
income and
mining taxes 738 - 2,064 -
Unrealized (gain) loss
on derivative contracts (236) - (2,506) -
Cumulative catch-up
adjustment relating
to FAS 143 - - 1,743 -
Amortization of deferred
costs and other (878) 595 (534) 1,839
-------------------------------------------------------------------------
Cash flow from operations,
before working
capital changes 632 7,633 55 12,605
Change in non-cash
working capital balances
Metals awaiting
settlement (3,606) (334) 513 (9,487)
Income taxes
recoverable (476) 54 (871) (540)
Inventories (1,533) (52) (2,356) 177
Prepaid expenses
and other 1,122 2,487 1,693 313
Accounts payable
and accrued
liabilities (648) 4,398 (1,318) 5,728
Interest payable 1,686 1,681 73 14
-------------------------------------------------------------------------
Cash flows from (used in)
operating activities (2,823) 15,867 (2,211) 8,810
-------------------------------------------------------------------------
Investing activities
Additions to
mining properties (10,671) (15,202) (21,508) (29,454)
Acquisitions,
investments and other (7,699) (295) (7,887) (304)
-------------------------------------------------------------------------
Cash flows used in
investing activities (18,370) (15,497) (29,395) (29,758)
-------------------------------------------------------------------------
Financing activities
Dividends paid - (30) (2,431) (1,319)
Common shares issued 1,125 7,338 2,320 12,564
Proceeds from
long-term debt - - - 143,750
Financing costs - - - (5,266)
Repayment of the
Company's senior
convertible notes - (198) - (122,169)
-------------------------------------------------------------------------
Cash flows from (used in)
financing activities 1,125 7,110 (111) 27,560
-------------------------------------------------------------------------
Effect of exchange rate
changes on cash
and cash equivalents (92) 536 (139) 519
Net increase (decrease)
in cash and
cash equivalents (20,160) 8,016 (31,856) 7,131
Cash and cash
equivalents, beginning
of period 141,238 20,295 152,934 21,180
-------------------------------------------------------------------------
Cash and cash
equivalents, end
of period $ 121,078 $ 28,311 $ 121,078 $ 28,311
-------------------------------------------------
-------------------------------------------------------------------------
Other operating cash
flow information:
Interest paid
during the period $ 322 $ 530 $ 3,924 $ 19,242
-------------------------------------------------
-------------------------------------------------------------------------
Taxes paid (recovered)
during the period $ 1,169 $ (690) $ 1,169 $ 2,639
-------------------------------------------------
-------------------------------------------------------------------------
Note: Certain items have been reclassified from financial statements
previously presented to conform to the current presentation.