The La India deposit, acquired in late 2011, is currently undergoing drilling with the goal of converting the current resources into reserves. Additionally, the Company is advancing the engineering study and permitting process with the goal of initial production from a low cost open pit, heap leach mine with first production by late 2014.
By year end 2012, it is expected that a study on a 25% throughput expansion at Kittila will be completed. Considering the rapid expansion of the Kittila orebody at depth, and particularly to the north, it is now believed that a smaller initial expansion followed by the possibility of a larger expansion at a later date would be prudent. The initial expansion could be supported by the current reserve at Kittila and the higher throughput could be realized in 2015.
The Meliadine project, acquired in 2010, is currently one of Agnico-Eagle's largest gold deposits in terms of reserves and resources. It is currently in the permitting phase with first production expected in 2017. With the expectation of mining multi-million ounces of gold, Meliadine is considered to be a long-term cornerstone asset for the Company.
As the main deposit at Tiriganiaq continues to develop at depth, the Company believes that more emphasis on underground extraction would be prudent to control dilution, reduce the impact of a harsh environment and optimize the value of this high grade deposit.
As announced in today's separate exploration news release, the proven and probable gold reserves at Meliadine have grown. The deposits remain wide open for further expansion. The property covers 80 km of strike length and multiple favourable targets will be tested in the next two years.
First production is anticipated for 2017 with capital expenditures expected to be distributed over the 2012 to 2016 period.
Additionally, other advanced exploration and development projects may eventually contribute to expansion, or extensions of the lives of the mines. The most significant are presented in the table below.
| |
Project |
Project Status |
Next News |
| Kittila |
Larger Expansion |
Drilling |
2012 Drill Results |
| Pinos Altos |
Various Satellite Zones |
Drilling |
2012 Drill Results |
| Tarachi |
Exploration |
Drilling |
2012 Drill Results |
| Goldex |
M and D Zones |
Drilling |
2012 Drill Results |
While the studies are not yet completed on any of these projects, and in some cases remain early stage, several have a currently defined resource. A brief description of the larger, and most advanced, potential growth projects follows.
Kittila - Larger Expansion
Reflecting the continued growth of the Kittila orebody, a feasibility study is underway regarding an initial 25% expansion, as mentioned above. However, the orebody appears to be significantly richer and thicker beneath the Rimpi zone (as further discussed in today's separate exploration news release). This zone is approximately two kilometres north of the main Suuri deposit, which is currently being mined.
It is anticipated that the Kittila reserves will continue to grow as the deposit is drilled over the next several years (partly via more efficient underground drilling which is expected to begin in 2012). With this expectation of a growing reserve, the Company is considering an even larger expansion. This larger expansion could involve the sinking of a shaft and an appropriate increase in milling capacity, possibly in the form of a new separate mill. A prefeasibility study on the larger expansion would be initiated, pending positive exploration results in the interim.
Pinos Altos - Bravo and Sinter Zones
The Bravo deposit is adjacent to, and southwest of the Creston Mascota mine. In fact, it may be an extension of the same orebody and will be a focus of the exploration activity in 2012.
The Sinter deposit is located approximately two kilometres north of the main Santo Nino zone at Pinos Altos. It is being examined as a possible source of open pit ore for the mill at Pinos Altos. This would effectively extend the mine life of Pinos Altos.
Tarachi - New Zone Showing Large Scale Mineralization
This gold deposit is approximately 10 kilometres to the northwest of the La India deposit in Sonora State, Mexico. Initial drilling and sampling suggest that the mineralized structure extends over several kilometres. The property is expected to be a focus of exploration drilling in 2012 and an initial resource is likely to be announced in 2013.
Goldex - M and E Zones
Although the mining operations at Goldex were suspended indefinitely in October 2011, the Company continues to evaluate production options during the ongoing investigation and remediation phase. While speculative at the moment, these projects are considered to be of interest due to the existing infrastructure and availability of a highly skilled workforce.
The M and E Zones have promise with the viability dependant on the results of the investigation into the stability of the crown pillar at Goldex. Successful production from these zones may provide sufficient cash flow to help fund the exploration of the deeper, but promising D Zone.
Goldex - D Zone Growing
The Company is currently drilling the deeper mineralization at Goldex. The D zone is located approximately 150 metres below the mine workings of the GEZ deposit. Although not yet fully defined and recognizing that it would be a longer term project, the D zone is very similar in geology and style of mineralization as that of the GEZ.
To date, the D zone mineralization (currently in the indicated and inferred categories) has been traced over a length of almost 400 metres, with a vertical height of at least 400 metres and with an estimated thickness of up to 100 metres (which are similar dimensions to the GEZ deposit). The zone has been followed down to a depth of approximately 1300 metres below surface (where it remains open for expansion in all directions).
Operating Review
LaRonde Mine - Sequence Results In Lower Grades Than Expected
The 100% owned LaRonde mine in northwestern Quebec achieved commercial production in 1988.
The LaRonde mill processed an average of 6,767 tonnes per day ("tpd") in the fourth quarter of 2011, compared with an average of 6,918 tpd in the corresponding period of 2010. Milling performance for the full year 2011 was approximately 6,592 tpd versus 7,102 tpd in 2010. The lower throughput was largely due to issues with sequencing and dilution. Additionally, due to a forecast reduction in the specific gravity of the ore in the LaRonde Extension, the tonnage processed through the mill will naturally decrease even though the gold grades are expected to increase as the mine progresses deeper.
Minesite costs per tonne were approximately C$79 in the fourth quarter of 2011. These costs are the same as the C$79 per tonne experienced in the fourth quarter of 2010. The cost control is in spite of the aforementioned issues with throughput, a higher proportion of ore from the lower levels (higher haulage costs) and the November declaration of commercial production at the LaRonde Extension that also meant that many costs began to be expensed.
Minesite costs per tonne for the full year 2011 were approximately C$84, approximately 12% higher than in 2010 (C$75) mainly due to the lower throughput and cost increases as discussed above.
On a per ounce basis, net of byproduct credits, LaRonde's total cash costs per ounce were $375 in the fourth quarter of 2011 on production of 30,686 ounces of gold. This compares with the fourth quarter of 2010 when total cash costs per ounce were minus $250 on production of 38,405 ounces of gold. The increase in total cash costs is largely due to lower ounce production from lower grade, lower byproduct revenue and lower throughput, as discussed above.
For the full year 2011, LaRonde's total cash costs per ounce were $77 on gold production of 124,173 ounces. This compares to total cash costs per ounce of minus $7 on gold production of 162,806 in 2010, as lower gold production in 2011 (lower grades and throughput, as mentioned above) was accompanied by weaker byproduct metals prices in 2011.
In 2011, the LaRonde mine also produced approximately 55,000 tonnes of zinc, 3.2 million ounces of silver and 3,200 tonnes of copper, as byproduct to the gold production.
Goldex Mine - Investigation and Remediation Ongoing
The 100% owned Goldex mine in northwestern Quebec achieved commercial production in 2008. However, the mine operations were suspended on October 19, 2011. All proven and probable reserves were transferred into mineral resources pending investigation and remediation of the issues as discussed in the news release of the same day.
Payable gold production in the fourth quarter of 2011 (October only) was 14,756 ounces at total cash costs per ounce of $344. This compares to fourth quarter 2010 gold production of 43,111 ounces at total cash costs per ounce of $370. The decrease in gold production is due to the closure of the mine.
For the full year 2011, Goldex's payable gold production was 135,478 ounces at total cash costs per ounce of $401. This compares to full year 2010 production of 184,386 ounces at total cash costs per ounce of $335. The reduced performance is due to the suspension of mining activities at the mine.
In 2012, a budget of approximately $63 million is anticipated for monitoring, instrumentation, remediation and limited development work at the mine. The majority of this expenditure is anticipated to be spent in the first quarter. An update on this work is expected in the second quarter of 2012.
Kittila Mine - Record Annual Gold Production And Mill Recoveries
The 100% owned Kittila mine in northern Finland achieved commercial production in 2009.
The Kittila mill processed an average of 2,627 tonnes per day in the fourth quarter of 2011, compared with its 3,000 tonne per day design rate. A planned two week maintenance shutdown in early October and several other unplanned shutdowns (totaling 10 days) were largely responsible for the lower than design throughput. In the fourth quarter of 2010, the Kittila mill processed 2,619 tonnes per day.
Minesite costs per tonne at Kittila were approximately €80 in the fourth quarter of 2011, compared to €79 in the fourth quarter of 2010. The steady cost performance compared to the prior period is in spite of the three shutdowns. The mine has, in fact, made improvements in the overall cost structure and is forecasting lower minesite costs for 2012.
For the full year 2011, the mill processed an average of 2,824 tpd as compared with 2010 when the mill processed an average of 2,631 tpd. For the full year 2011, the minesite costs per tonne were €75, compared to €66 in 2010. This increase is largely attributable to the start of commercial production in the underground mine in the fourth quarter of 2010 (costs stopped being capitalized). Additionally, higher costs were realized in 2011 related to unbudgeted tonnes being mined during the remediation of a slip in the Suuri pit east wall and higher costs for energy and chemical reagents.
Fourth quarter 2011 gold production at Kittila was 34,508 ounces with a total cash cost per ounce of $751. In the fourth quarter of 2010 the mine produced 29,721 ounces at total cash costs per ounce of $832. The higher production and lower total cash costs were largely the result of higher grades and mill recoveries during 2011, as these were only partly offset by the higher costs described above.
For the full year 2011, payable gold production from Kittila was a record 143,560 ounces at total cash costs of $739 per ounce. In 2010, the mine produced 126,205 ounces of gold at total cash costs of $657 per ounce. The higher production in 2011 was largely due to much better mill recoveries (12% higher in 2011) and higher mill throughput, somewhat offset by lower grade for the full year. Total cash costs were higher largely due to the factors discussed above.
In 2011, the Kittila mill realized average mill recoveries of 84.5%, an annual record.
Lapa - Steady Performance During 2011
The 100% owned Lapa mine in northwestern Quebec achieved commercial production in May 2009.
The Lapa circuit, at the LaRonde mill, processed an average of 1,598 tpd in the fourth quarter of 2011. This compares with an average of 1,517 tonnes per day in the fourth quarter of 2010 as Lapa continues to exceed its design rate of 1,500 tpd. For the full year 2011, Lapa averaged 1,701 tpd compared with 1,512 tpd in 2010.
Minesite costs per tonne were C$117 in the fourth quarter of 2011, essentially unchanged from the C$115 realized in the fourth quarter of 2010. Considering the general cost pressure in the industry and an incident with the shaft conveyance that resulted in five days without hoisting, this is viewed as a positive result.
Full-year minesite costs in 2011 were C$110 per tonne, slightly below the C$114 achieved in 2010. The improved operating performance is attributable to realized efficiencies as the Company gained valuable experience with the orebody.
Payable production in the fourth quarter of 2011 was 23,721 ounces of gold at total cash costs per ounce of $723. This compares with the fourth quarter of 2010, when production was 29,289 ounces of gold at total cash cost per ounce of $564. During 2011, the mine struggled with grade as dilution remained the main issue underground. For the year, ore dilution totaled approximately 72% as compared with the budget of 54%. Budgeted dilution going forward will be 74%.
For the full year 2011, payable production was 107,068 ounces of gold at total cash costs of $650 per ounce. The prior year production was 117,456 ounces of gold at total cash costs of $529 per ounce. The primary driver of these differences was the aforementioned lower grades due to higher dilution.
Pinos Altos - Record Gold Production at Low Costs
The 100% owned Pinos Altos mine in northern Mexico achieved commercial production in November 2009.
The Pinos Altos mill processed an average of 4,924 tpd in the fourth quarter of 2011. This compares favourably with 4,501 tonnes per day in the fourth quarter of 2010. The mill is now routinely performing at process rates above the initial design capacity of 4,000 tpd.
Minesite costs per tonne were $24 in the fourth quarter of 2011, compared to $35 in the fourth quarter of 2010. In the fourth quarter of 2011, a greater proportion of lower cost heap leach tonnes were processed including the new operation at Creston Mascota.
For the full year 2011, minesite costs per tonne were $27 as compared with the fourth quarter of 2010 when minesite costs per tonne were $35. The minesite costs at Pinos Altos for 2011 were lower than the prior year due to the greater proportion of lower cost heap leach tonnes processed, including the new operation at Creston Mascota .
Payable production in the fourth quarter of 2011 was 52,574 ounces of gold at total cash costs per ounce of $292. This compares with production of 39,955 ounces at a total cash costs per ounce of $365 in the fourth quarter of 2010. The higher production and lower costs in 2011 were largely due to the contribution of Creston Mascota and higher throughput in the Pinos Altos mill during the year.
Gold production from the satellite Creston Mascota mine was 12,471 ounces at total cash costs of $326 per ounce (included in the Pinos Altos total) in the fourth quarter of 2011. The first gold production occurred at the satellite Creston Mascota project during the fourth quarter of 2010 with 666 ounces of payable gold production. Commercial production at Creston Mascota was achieved in March 2011.
Full year 2011 production at Pinos Altos was 204,380 ounces of gold at total cash costs per ounce of $299, as compared to 2010 production of 131,097 ounces at total cash cost per ounce of gold of $425.
Additionally, the Company produced 1.86 million ounces of silver byproduct at Pinos Altos in 2011.
Meadowbank - New Mine Plan
The 100% owned Meadowbank mine project in Nunavut, northern Canada, achieved commercial production in March 2010.
The Meadowbank mill processed an average of 8,866 tpd in the fourth quarter of 2011. This is significantly up from the 6,659 tpd achieved in the fourth quarter of 2010. Since the June 2011 startup of the permanent secondary crusher, the design rate of 8,500 tpd has been consistently exceeded.
Minesite costs per tonne were C$98 in the fourth quarter and C$91 for the full year of 2011. These costs were higher than the C$82 per tonne which was forecast for 2011. In the fourth quarter of 2010, the minesite costs were C$91 per tonne and for the full year 2010 C$95 per tonne. In spite of improved throughput, the minesite costs per tonne did not decrease significantly, as was expected. Higher costs were realized in nearly all aspects of operating the mine in 2012, specifically, transportation, logistics, labour and maintenance.
Payable production in the fourth quarter of 2011 was 71,547 ounces of gold at total cash cost per ounce of gold of $1,088. This compares with the fourth quarter of 2010 when 75,990 ounces were produced at total cash costs per ounce of $745. The higher cost is 2011 was due to overall cost pressure as noted above.
Full year 2011 production was 270,801 ounces of gold at total cash costs per ounce of gold of $1,000. In 2010 the mine produced 265,659 ounces at total cash costs per ounce of $693. The higher cost in 2011 was due to overall cost pressure, as above.
Depreciation Guidance
Agnico-Eagle expects 2012 amortization on its income statement to amount to $280 to $300 per reserve ounce. This amount was approximately $266 in 2011, $195 in 2010 and $151 in 2009.
Please see the supplemental financial data section of the Financial and Operating Database on the Company's website for additional historical financial data.
Annual General Meeting
Friday April 27, 2012 at 11:00am
The Harbour Ballroom
Westin Harbour Castle
Toronto, ON M5J 1A6
Expected Dividend Record and Payment Dates for the Remainder of 2012
| Record Date |
Payment Date |
| March 1 |
March 15 |
| June 1 |
June 15 |
| September 4 |
September 17 |
| December 3 |
December 17 |
Dividend Reinvestment Program
Please follow the link below for information on the Company's dividend reinvestment program.
DividendReinvestmentPlan
About Agnico-Eagle
Agnico-Eagle is a long established, Canadian headquartered, gold producer with operations located in Canada, Finland and Mexico, and exploration and development activities in Canada, Finland, Mexico and the United States. The Company has full exposure to higher gold prices consistent with its policy of no forward gold sales. It has declared a cash dividend for 30 consecutive years. www.agnico-eagle.com
- 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".
- Payable production of a mineral means the quantity of mineral produced during a period contained in products that are sold by the Company whether such products are shipped during the period or held as inventory at the end of the period.
- Minesite costs per tonne is a non-GAAP measure. For reconciliation of this measure to production costs, as reported in the financial statements, see Note 1 to the financial statements at the end of this news release.
| AGNICO-EAGLE MINES LIMITED |
| SUMMARY OF OPERATIONS KEY PERFORMANCE INDICATORS |
| (thousands of United States dollars, except where noted, US GAAP basis) |
| (Unaudited) |
| |
Three months ended
December 31, |
Year ended
December 31, |
| |
2011 |
2010 |
2011 |
2010 |
Gross mine profit
(exclusive of amortization shown below) (Note 1) |
|
|
|
|
| LaRonde |
$34,581 |
$65,517 |
$188,662 |
$203,240 |
| Goldex |
24,677 |
50,122 |
160,723 |
163,529 |
| Lapa |
23,736 |
25,477 |
98,937 |
84,718 |
| Kittila |
33,619 |
17,467 |
115,135 |
72,400 |
| Pinos Altos (Note 2) |
67,111 |
34,998 |
232,715 |
85,344 |
| Meadowbank |
44,212 |
49,426 |
149,549 |
135,818 |
| Total gross mine profit |
227,936 |
243,007 |
945,721 |
745,049 |
| Amortization |
73,513 |
69,835 |
261,781 |
192,486 |
| Loss on Goldex Mine |
4,710 |
- |
302,893 |
- |
| Impairment loss on Meadowbank Mine |
907,681 |
- |
907,681 |
- |
| Corporate |
92,204 |
51,269 |
251,994 |
117,360 |
| Income (loss) before income and mining taxes |
(850,172) |
121,903 |
(778,628) |
435,203 |
| Income and mining taxes |
(248,742) |
33,940 |
(209,673) |
103,087 |
| Net loss attributed to non-controlling interest |
(60) |
- |
(60) |
- |
| Net income (loss) attributed to common shareholders |
($601,370) |
$87,963 |
($568,895) |
$332,116 |
| Net income (loss) per share - basic |
($3.53) |
$0.53 |
($3.36) |
$2.05 |
| Cash provided by operating activities |
$132,028 |
$90,576 |
$663,462 |
$483,470 |
| Realized price per sales volume (US$): |
|
|
|
|
| |
Gold (per ounce) |
$1,640 |
$1,387 |
$1,573 |
$1,250 |
| |
Silver (per ounce) |
$26.83 |
$31.96 |
$34.39 |
$22.56 |
| |
Zinc (per tonne) |
$2,188 |
$2,391 |
$1,892 |
$2,165 |
| |
Copper (per tonne) |
$8,510 |
$10,311 |
$7,162 |
$8,182 |
| Payable production: |
|
|
|
|
| |
Gold (ounces) |
|
|
|
|
| |
LaRonde |
30,686 |
38,405 |
124,173 |
162,806 |
| |
Goldex |
14,756 |
43,111 |
135,478 |
184,386 |
| |
Lapa |
23,721 |
29,289 |
107,068 |
117,456 |
| |
Kittila |
34,508 |
29,721 |
143,560 |
126,205 |
| |
Pinos Altos (Note 2) |
52,574 |
39,955 |
204,380 |
131,097 |
| |
Meadowbank |
71,547 |
75,990 |
270,801 |
265,659 |
| |
Total gold (ounces) |
227,792 |
256,471 |
985,460 |
987,609 |
| |
Silver (000s ounces) |
|
|
|
|
| |
LaRonde |
785 |
766 |
3,169 |
3,581 |
| |
Pinos Altos (Note 2) |
508 |
427 |
1,851 |
1,185 |
| |
Meadowbank |
18 |
14 |
60 |
46 |
| |
Total silver (000s ounces) |
1,311 |
1,207 |
5,080 |
4,812 |
| |
Zinc (tonnes) |
12,591 |
14,939 |
54,894 |
62,544 |
| |
Copper (tonnes) |
1,002 |
935 |
3,216 |
4,224 |
| Payable metal sold: |
|
|
|
|
| |
Gold (ounces - LaRonde) |
31,342 |
39,896 |
124,119 |
163,781 |
| |
Gold (ounces - Goldex) |
20,863 |
48,067 |
141,702 |
183,357 |
| |
Gold (ounces - Lapa) |
23,854 |
31,177 |
107,334 |
123,136 |
| |
Gold (ounces - Kittila) |
37,769 |
28,722 |
145,006 |
129,639 |
| |
Gold (ounces - Pinos Altos) (Note 2) |
55,611 |
39,156 |
204,239 |
122,514 |
| |
Gold (ounces - Meadowbank) |
78,579 |
79,849 |
273,690 |
250,629 |
| |
Total gold (ounces) |
248,018 |
266,867 |
996,090 |
973,056 |
| |
Silver (000s ounces - LaRonde) |
865 |
828 |
3,171 |
3,539 |
| |
Silver (000s ounces - Pinos Altos) (Note 2) |
546 |
406 |
1,858 |
1,137 |
| |
Silver (000s ounces - Meadowbank) |
18 |
14 |
60 |
46 |
| |
Total silver (ounces) |
1,429 |
1,248 |
5,089 |
4,722 |
| |
Zinc (tonnes) |
11,516 |
15,212 |
54,499 |
59,566 |
| |
Copper (tonnes) |
978 |
941 |
3,194 |
4,223 |
| Total cash costs per ounce of gold (US$) (Note 3): |
|
|
|
|
| LaRonde |
$375 |
$(250) |
$77 |
$(7) |
| Goldex |
$344 |
$370 |
$401 |
$335 |
| Lapa |
$723 |
$564 |
$650 |
$529 |
| Kittila |
$751 |
$832 |
$739 |
$657 |
| Pinos Altos |
$292 |
$365 |
$299 |
$425 |
| Meadowbank |
$1,088 |
$745 |
$1,000 |
$693 |
| Weighted average total cash costs per ounce |
$671 |
$462 |
$580 |
$451 |
Note 1
Gross mine profit is calculated as total revenues from all metals, by mine, minus total production costs, by mine.
Note 2
Creston Mascota achieved commercial production as of March 1, 2011. All payable production ounces are post commercial production as they were sold after March 1, 2011.
Note 3
Total cash costs per ounce of gold is calculated net of silver, copper, zinc and other byproduct credits. The weighted average total cash cost per ounce is based on commercial production ounces. Total cash costs per ounce is a non-GAAP measure. See "reconciliation of production costs to total cash costs per ounce and minesite costs per tonne" contained herein for details.
| AGNICO-EAGLE MINES LIMITED |
| CONSOLIDATED BALANCE SHEETS |
| (thousands of United States dollars, US GAAP basis) |
| (Unaudited) |
| |
As at
December 31,
2011 |
As at
December 31,
2010 |
| ASSETS |
|
|
| Current |
|
|
| |
Cash and cash equivalents |
$ 221,458 |
$ 104,645 |
| |
Trade receivables |
75,899 |
112,949 |
| |
Inventories: |
|
|
| |
Ore stockpiles |
77,478 |
67,764 |
| |
Concentrates |
57,528 |
50,332 |
| |
Supplies |
182,389 |
149,647 |
| |
Income Taxes Recoverable |
371 |
|
| |
Other current assets |
255,780 |
188,885 |
| Total current assets |
870,903 |
674,222 |
| Other assets |
38,725 |
61,502 |
| Goodwill |
229,279 |
200,064 |
| Property, plant and mine development |
3,887,657 |
4,564,563 |
| |
$ 5,026,564 |
$ 5,500,351 |
| |
|
|
| LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
| Current |
|
|
| |
Accounts payable and accrued liabilities |
$ 208,174 |
$ 170,967 |
| |
Environmental remediation liability |
26,069 |
- |
| |
Dividends payable |
- |
108,009 |
| |
Interest payable |
9,356 |
9,743 |
| |
Income taxes payable |
- |
14,450 |
| |
Fair value of derivative financial instruments |
4,404 |
142 |
| Total current liabilities |
248,003 |
303,311 |
| Long term debt |
920,095 |
650,000 |
| Reclamation provision and other liabilities |
144,731 |
145,536 |
| Future income and mining tax liabilities |
498,572 |
736,054 |
| SHAREHOLDERS' EQUITY |
|
|
| Common shares |
|
|
| |
Authorized - unlimited |
|
|
| |
Issued - 170,859,604 (December 31, 2010 - 168,763,496) |
3,181,381 |
3,078,217 |
| Stock options |
117,694 |
78,554 |
| Warrants |
24,858 |
24,858 |
| Contributed surplus |
15,166 |
15,166 |
| Retained earnings (deficit) |
(129,021) |
440,265 |
| Accumulated other comprehensive income (loss) |
(7,106) |
28,390 |
| |
3,202,972 |
3,665,450 |
| Non-controlling interest |
12,191 |
- |
| Total shareholders' equity |
3,215,163 |
3,665,450 |
| |
$ 5,026,564 |
$ 5,500,351 |
| AGNICO-EAGLE MINES LIMITED |
| CONSOLIDATED STATEMENTS OF INCOME |
| (thousands of United States dollars except share and per share amounts, US GAAP basis) |
| (Unaudited) |
| |
Three months ended
December 31, |
Year ended
December 31, |
| |
2011 |
2010 |
2011 |
2010 |
| |
|
|
|
|
| REVENUES |
|
|
|
|
| Revenues from mining operations |
$ 455,503 |
$ 439,004 |
$ 1,821,799 |
$ 1,422,521 |
| Interest and sundry income (expense) |
(2,137) |
1,209 |
(1,505) |
75,392 |
| Gain (loss) on sale and write-down of available-for-sale securities |
(5,074) |
11,302 |
(3,662) |
19,487 |
| |
448,292 |
451,515 |
1,816,632 |
1,517,400 |
| COSTS AND EXPENSES |
|
|
|
|
| Production |
227,567 |
195,998 |
876,078 |
677,472 |
| Impairment loss on Meadowbank Mine |
907,681 |
- |
907,681 |
- |
| Exploration and corporate development |
31,844 |
15,008 |
75,721 |
54,958 |
| Amortization |
73,513 |
69,835 |
261,781 |
192,486 |
| Loss on Goldex Mine |
4,710 |
- |
302,893 |
- |
| General and administrative |
28,242 |
22,732 |
107,926 |
94,327 |
| Provincial capital tax |
9,223 |
704 |
9,223 |
(6,075) |
| Interest |
12,124 |
14,958 |
55,039 |
49,493 |
| Foreign currency (gain) loss |
3,560 |
10,377 |
(1,082) |
19,536 |
| Income (loss) before income and mining taxes |
(850,172) |
121,903 |
(778,628) |
435,203 |
| Income and mining taxes |
(248,742) |
33,940 |
(209,673) |
103,087 |
| Net income (loss) for the period |
$ (601,430) |
$ 87,963 |
$ (568,955) |
$ 332,116 |
| Attributed to non-controlling interest |
$ (60) |
$ - |
$ (60) |
$ - |
| Attributed to common shareholders |
$ (601,370) |
$ 87,963 |
$ (568,895) |
$ 332,116 |
| Net income (loss) per share - basic |
$ (3.53) |
$ 0.53 |
$ (3.36) |
$ 2.05 |
| Net income (loss) per share - diluted |
$ (3.53) |
$ 0.51 |
$ (3.36) |
$ 2.00 |
| |
|
|
|
|
| Weighted average number of shares outstanding (in thousands) |
|
|
|
|
| Basic |
170,276 |
168,342 |
169,353 |
162,386 |
| Diluted |
170,276 |
172,856 |
169,353 |
165,842 |
| 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, |
| |
2011 |
2010 |
2011 |
2010 |
| OPERATING ACTIVITIES |
|
|
|
|
| Net income (loss) for the period attributed to common shareholders |
$ (601,370) |
$ 87,963 |
$ (568,895) |
$ 332,116 |
| Add (deduct) items not affecting cash: |
|
|
|
|
| |
Impairment loss on Meadowbank Mine |
907,681 |
- |
907,681 |
- |
| |
Amortization |
73,513 |
69,835 |
261,781 |
192,486 |
| |
Future income and mining taxes |
(228,339) |
20,226 |
(275,773) |
66,928 |
| |
Gain on available-for-sale securities and derivative financial instruments, net |
(8,493) |
(10,425) |
(8,590) |
(20,007) |
| |
Reversal of mark-to-market gain - Comaplex |
- |
- |
- |
(64,508) |
| |
Loss on Goldex Mine |
4,710 |
- |
302,893 |
- |
| |
Environmental remediation |
(7,616) |
- |
(7,616) |
- |
| |
Amortization of deferred costs and other |
31,479 |
11,814 |
82,252 |
74,706 |
| Changes in non-cash working capital balances |
|
|
|
|
| |
Trade receivables |
7,196 |
(29,135) |
37,050 |
(19,378) |
| |
Income taxes (payable) recoverable |
(24,331) |
9,697 |
(29,867) |
9,949 |
| |
Inventories |
23,827 |
(19,394) |
(43,066) |
(91,306) |
| |
Other current assets |
(1,528) |
(2,765) |
(25,838) |
(28,729) |
| |
Interest payable |
(10,499) |
(9,838) |
(387) |
8,077 |
| |
Accounts payable and accrued liabilities |
(34,202) |
(37,402) |
31,837 |
23,136 |
| Cash provided by operating activities |
132,028 |
90,576 |
663,462 |
483,470 |
| INVESTING ACTIVITIES |
|
|
|
|
| Additions to property, plant and mine development |
(107,577) |
(114,985) |
(482,831) |
(511,641) |
| Acquisitions, investments and other |
(163,239) |
(6,207) |
(244,727) |
(5,893) |
| Cash used in investing activities |
(270,816) |
(121,192) |
(727,558) |
(517,534) |
| FINANCING ACTIVITIES |
|
|
|
|
| Dividends paid |
(25,650) |
- |
(98,354) |
(26,830) |
| Repayment of capital lease and other |
(3,289) |
(3,243) |
(13,092) |
(16,019) |
| Proceeds from long-term debt |
270,000 |
40,000 |
475,000 |
1,311,000 |
| Repayment of long-term debt |
- |
(105,000) |
(205,000) |
(1,376,000) |
| Sale-leaseback financing |
- |
7,156 |
- |
14,017 |
| Credit facility financing costs |
(51) |
(97) |
(2,545) |
(12,772) |
| Proceeds from common shares issued |
3,451 |
50,776 |
26,536 |
84,659 |
| Cash provided by (used in) financing activities |
244,461 |
(10,408) |
182,545 |
(21,945) |
| Effect of exchange rate changes on cash and cash equivalents |
(885) |
(2,447) |
(1,636) |
(2,939) |
| Net increase (decrease) in cash and cash equivalents during the period |
104,788 |
(43,471) |
116,813 |
(58,948) |
| Cash and cash equivalents, beginning of period |
116,670 |
148,116 |
104,645 |
163,593 |
| Cash and cash equivalents, end of period |
$ 221,458 |
$ 104,645 |
$ 221,458 |
$ 104,645 |
| Other operating cash flow information: |
|
|
|
|
| Interest paid during the period |
$ 21,360 |
$ 24,465 |
$ 52,833 |
$ 41,429 |
| Income, mining and capital taxes paid during the period |
$ 25,486 |
$ 7,674 |
$ 114,962 |
$ 25,199 |
| AGNICO-EAGLE MINES LIMITED |
| RECONCILIATION OF PRODUCTION COSTS TO |
| TOTAL CASH COSTS PER OUNCE AND MINESITE COSTS PER TONNE |
| (Unaudited) |
Total Cash Costs per Ounce of Gold Produced
(thousands of United States dollars, except where noted) |
| |
Three months ended |
Three months ended |
Year ended |
Year ended |
| |
December 31, 2011
|
December 31, 2010 |
December 31, 2011 |
December 31, 2010 |
| Total Production costs per Consolidated Statements of Income |
$227,567 |
$195,998 |
$876,078 |
$677,472 |
| Attributable to LaRonde |
52,480 |
49,739 |
209,947 |
189,146 |
| Attributable to Goldex |
7,679 |
16,774 |
56,939 |
61,561 |
| Attributable to Lapa |
16,834 |
17,692 |
68,599 |
66,199 |
| Attributable to Kittila |
28,602 |
22,235 |
110,477 |
87,740 |
| Attributable to Pinos Altos |
36,541 |
29,206 |
145,614 |
90,293 |
| Attributable to Meadowbank |
85,431 |
60,352 |
284,502 |
182,533 |
| Total |
$227,567 |
$195,998 |
$876,078 |
$677,472 |
| LaRonde |
|
|
|
|
| |
Three months ended |
Three months ended |
Year ended |
Year ended |
| |
December 31, 2011 |
December 31, 2010 |
December 31, 2011 |
December 31, 2010 |
| Production costs |
$52,480 |
$49,739 |
$209,947 |
$189,146 |
| Adjustments: |
|
|
|
|
| |
Byproduct revenues |
(34,299) |
(59,376) |
(194,000) |
(192,155) |
| |
Inventory adjustment and other adjustments(i) |
(5,125) |
372 |
(2,309) |
3,287 |
| |
Non-cash reclamation provision |
(1,546) |
(337) |
(4,062) |
(1,344) |
| Cash operating costs |
$11,510 |
($9,602) |
$9,576 |
($1,066) |
| Gold production (ounces) |
30,686 |
38,405 |
124,173 |
162,806 |
| Total cash costs (per ounce)(iii) |
$375 |
($250) |
$77 |
($7) |
| Goldex |
|
|
|
|
| |
Three months ended |
Three months ended |
Year ended |
Year ended |
| |
December 31, 2011 |
December 31, 2010 |
December 31, 2011 |
December 31, 2010 |
| Production costs |
$7,679 |
$16,774 |
$56,939 |
$61,561 |
| Adjustments: |
|
|
|
|
| |
Byproduct revenues |
269 |
748 |
395 |
727 |
| |
Inventory adjustment and other adjustments(i) |
(2,836) |
(1,519) |
(2,778) |
(253) |
| |
Non-cash reclamation provision |
(36) |
(54) |
(173) |
(216) |
| Cash operating costs |
$5,076 |
$15,949 |
$54,383 |
$61,819 |
| Gold production (ounces) |
14,756 |
43,110 |
135,478 |
184,386 |
| Total cash costs (per ounce)(iii) |
$344 |
$370 |
$401 |
$335 |
| Lapa |
|
|
|
|
| |
Three months ended |
Three months ended |
Year ended |
Year ended |
| |
December 31, 2011 |
December 31, 2010 |
December 31, 2011 |
December 31, 2010 |
| Production costs |
$16,834 |
$17,692 |
$68,599 |
$66,199 |
| Adjustments: |
|
|
|
|
| |
Byproduct revenues |
349 |
682 |
663 |
644 |
| |
Inventory adjustment and other adjustments(i) |
283 |
(1,830) |
631 |
(4,683) |
| |
Non-cash reclamation provision |
(312) |
(14) |
(348) |
(57) |
| Cash operating costs |
$17,154 |
$16,530 |
$69,545 |
$62,103 |
| Gold production (ounces) |
23,721 |
29,288 |
107,068 |
117,456 |
| Total cash costs (per ounce)(iii) |
$723 |
$564 |
$650 |
$529 |
| Kittila |
|
|
|
|
| |
Three months ended |
Three months ended |
Year ended |
Year ended |
| |
December 31, 2011 |
December 31, 2010 |
December 31, 2011 |
December 31, 2010 |
| Production costs |
$28,602 |
$22,235 |
$110,477 |
$87,740 |
| Adjustments: |
|
|
|
|
| |
Byproduct revenues |
38 |
332 |
152 |
252 |
| |
Inventory adjustment and other adjustments(i) |
(2,648) |
2,252 |
(1,267) |
(4,774) |
| |
Non-cash reclamation provision |
(66) |
(78) |
(206) |
(334) |
| |
Stripping (capitalized vs expensed)(ii) |
- |
- |
(3,018) |
- |
| Cash operating costs |
$25,926 |
$24,741 |
$106,138 |
$82,884 |
| Gold production (ounces) |
34,508 |
29,721 |
143,560 |
126,205 |
| Total cash costs (per ounce)(iii) |
$751 |
$832 |
$739 |
$657 |
| Pinos Altos (includes Creston Mascota) |
|
|
| |
Three months ended |
Three months ended |
Year ended |
Year ended |
| |
December 31, 2011 |
December 31, 2010 |
December 31, 2011 |
December 31, 2010 |
| Production costs |
$36,541 |
$29,206 |
$145,614 |
$90,293 |
| Adjustments: |
|
|
|
|
| |
Byproduct revenues |
(13,559) |
(10,054) |
(60,653) |
(25,052) |
| |
Inventory adjustment and other adjustments(i) |
(1,779) |
296 |
1,871 |
2,925 |
| |
Non-cash reclamation provision |
(386) |
(214) |
(1,372) |
(858) |
| |
Stripping (capitalized vs expensed)(ii) |
(5,472) |
(4,921) |
(24,260) |
(11,857) |
| Cash operating costs |
$15,345 |
$14,313 |
$61,200 |
$55,451 |
| Gold production (ounces) |
52,574 |
39,289 |
204,380 |
130,431 |
| Total cash costs (per ounce)(iii) |
$292 |
$365 |
$299 |
$425 |
| Meadowbank |
|
|
|
|
| |
Three months ended |
Three months ended |
Year ended |
Year ended |
| |
December 31, 2011 |
December 31, 2010 |
December 31, 2011 |
December 31, 2010 |
| Production costs |
$85,431 |
$60,352 |
$284,502 |
$182,533 |
| Adjustments: |
|
|
|
|
| |
Byproduct revenues |
718 |
8 |
(546) |
(584) |
| |
Inventory adjustment and other adjustments(i) |
(7,261) |
(2,432) |
(1,670) |
6,911 |
| |
Non-cash reclamation provision |
(414) |
(437) |
(1,679) |
(1,315) |
| |
Stripping (capitalized vs expensed)(ii) |
(606) |
(842) |
(9,746) |
(4,321) |
| Cash operating costs |
$77,868 |
$56,649 |
$270,861 |
$183,224 |
| Gold production (ounces) |
71,547 |
75,990 |
270,801 |
264,576 |
| Total cash costs (per ounce)(iii) |
$1,088 |
$745 |
$1,000 |
$693 |
Minesite Cost per Tonne
(thousands of United States dollars, except where noted) |
| LaRonde |
|
|
|
|
| |
Three months ended |
Three months ended |
Year ended |
Year ended |
| |
December 31, 2011 |
December 31, 2010 |
December 31, 2011 |
December 31, 2010 |
| |
Production costs |
$52,480 |
$49,739 |
$209,947 |
$189,146 |
| |
Adjustments: |
|
|
|
|
| |
Inventory adjustments(iv) |
(2,195) |
372 |
(22) |
3,287 |
| |
Non-cash reclamation provision |
(1,546) |
(337) |
(4,062) |
(1,344) |
| |
Minesite operating costs |
$48,739 |
$49,774 |
$205,863 |
$191,089 |
| |
Minesite operating costs (C$) |
$49,372 |
$50,416 |
$202,957 |
$194,993 |
| |
Tonnes of ore milled (000s) |
622 |
637 |
2,406 |
2,592 |
| |
Minesite cost per tonne (C$)(v) |
$79 |
$79 |
$84 |
$75 |
| Goldex |
|
|
|
|
| |
Three months ended |
Three months ended |
Year ended |
Year ended |
| |
December 31, 2011 |
December 31, 2010 |
December 31, 2011 |
December 31, 2010 |
| |
Production costs |
$7,679 |
$16,774 |
$56,939 |
$61,561 |
| |
Adjustments: |
|
|
|
|
| |
Inventory adjustments(iv) |
(2,836) |
(1,519) |
(2,407) |
(253) |
| |
Non-cash reclamation provision |
(36) |
(54) |
(173) |
(216) |
| |
Minesite operating costs |
$4,807 |
$15,201 |
$54,359 |
$61,092 |
| |
Minesite operating costs (C$) |
$4,903 |
$15,397 |
$53,208 |
$62,545 |
| |
Tonnes of ore milled (000s) |
237 |
722 |
2,477 |
2,782 |
| |
Minesite cost per tonne (C$)(v) |
$21 |
$21 |
$21 |
$22 |
| Lapa |
|
|
|
|
| |
Three months ended |
Three months ended |
Year ended |
Year ended |
| |
December 31, 2011 |
December 31, 2010 |
December 31, 2011 |
December 31, 2010 |
| |
Production costs |
$16,834 |
$17,692 |
$68,599 |
$66,199 |
| |
Adjustments: |
|
|
|
|
| |
Inventory adjustments(iv) |
394 |
(1,830) |
1,071 |
(4,683) |
| |
Non-cash reclamation provision |
(312) |
(14) |
(348) |
(57) |
| |
Minesite operating costs |
$16,916 |
$15,848 |
$69,322 |
$61,459 |
| |
Minesite operating costs (C$) |
$17,152 |
$16,053 |
$68,403 |
$62,771 |
| |
Tonnes of ore milled (000s) |
148 |
140 |
621 |
552 |
| |
Minesite cost per tonne (C$)(v) |
$117 |
$115 |
$110 |
$114 |
| Kittila |
|
|
|
|
| |
Three months ended |
Three months ended |
Year ended |
Year ended |
| |
December 31, 2011 |
December 31, 2010 |
December 31, 2011 |
December 31, 2010 |
| |
Production costs |
$28,602 |
$22,235 |
$110,477 |
$87,740 |
| |
Adjustments: |
|
|
|
|
| |
Inventory adjustments(iv) |
(2,705) |
2,252 |
(1,324) |
(4,774) |
| |
Non-cash reclamation provision |
(66) |
(78) |
(206) |
(334) |
| |
Stripping (capitalized vs expensed)(ii) |
- |
- |
(3,018) |
- |
| |
Minesite operating costs |
$25,831 |
$24,409 |
$105,929 |
$82,632 |
| |
Minesite operating costs (EUR) |
€ 19,383 |
€ 19,035 |
€ 76,817 |
€ 63,464 |
| |
Tonnes of ore milled (000s) |
242 |
241 |
1,031 |
960 |
| |
Minesite cost per tonne (EUR)(v) |
€ 80 |
€ 79 |
€ 75 |
€ 66 |
| Pinos Altos (includes Creston Mascota) |
|
|
| |
Three months ended |
Three months ended |
Year ended |
Year ended |
| |
December 31, 2011 |
December 31, 2010 |
December 31, 2011 |
December 31, 2010 |
| |
Production costs |
$36,541 |
$29,206 |
$145,614 |
$90,293 |
| |
Adjustments: |
|
|
|
|
| |
Inventory adjustments(iv) |
(1,704) |
296 |
(169) |
2,925 |
| |
Non-cash reclamation provision |
(386) |
(214) |
(1,372) |
(858) |
| |
Stripping (capitalized vs expensed)(ii) |
(5,472) |
(4,921) |
(24,260) |
(11,857) |
| |
Minesite operating costs |
$28,979 |
$24,367 |
$119,813 |
$80,503 |
| |
Tonnes of ore milled (000s) |
1,203 |
699 |
4,509 |
2,318 |
| |
Minesite cost per tonne (US$)(v) |
$24 |
$35 |
$27 |
$35 |
| Meadowbank |
|
|
|
|
| |
Three months ended |
Three months ended |
Year ended |
Year ended |
| |
December 31, 2011 |
December 31, 2010 |
December 31, 2011 |
December 31, 2010 |
| |
Production costs |
$85,431 |
$60,352 |
$284,502 |
$182,533 |
| |
Adjustments: |
|
|
|
|
| |
Inventory adjustments(iv) |
(6,773) |
(2,432) |
253 |
6,911 |
| |
Non-cash reclamation provision |
(414) |
(437) |
(1,679) |
(1,315) |
| |
Stripping (capitalized vs expensed)(ii) |
(606) |
(842) |
(9,746) |
(4,321) |
| |
Minesite operating costs |
$77,638 |
$56,641 |
$273,330 |
$183,808 |
| |
Minesite operating costs (C$) |
$79,643 |
$57,373 |
$272,157 |
$190,980 |
| |
Tonnes of ore milled (000s) |
816 |
631 |
2,978 |
2,001 |
| |
Minesite cost per tonne (C$)(v) |
$98 |
$91 |
$91 |
$95 |
| (i) |
Under the Company's revenue recognition policy, revenue is recognized on concentrates when legal title passes. Since total cash costs are calculated on a production basis, this inventory adjustment reflects the sales margin on the portion of concentrate production for which revenue has not been recognized in the period. |
| (ii) |
The Company has decided to report total cash costs using the more common industry practice of deferring certain stripping costs that can be attributed to future production. The methodology is in line with the Gold Institute Production Cost Standard. The purpose of adjusting for these stripping costs is to enhance the comparability of cash costs to the majority of the Company's peers within the mining industry. |
| (iii) |
Total cash cost per ounce is not a recognized measure under US GAAP and this data may not be comparable to data presented by other gold producers. The Company believes that this generally accepted industry measure is a realistic indication of operating performance and is useful in allowing year over year comparisons. As illustrated in the tables above, this measure is calculated by adjusting production costs as shown in the Consolidated Statements of Income and Comprehensive Income for net byproduct revenues, royalties, inventory adjustments and asset retirement provisions. This measure is intended to provide investors with information about the cash generating capabilities of the Company's mining operations. Management uses this measure to monitor the performance of the Company's mining operations. Since market prices for gold are quoted on a per ounce basis, using this per ounce measure allows management to assess the mine's cash generating capabilities at various gold prices. Management is aware that this per ounce measure of performance can be impacted by fluctuations in byproduct metal prices and exchange rates. Management compensates for the limitation inherent with this measure by using it in conjunction with the minesite costs per tonne measure (discussed below) as well as other data prepared in accordance with US GAAP. Management also performs sensitivity analyses in order to quantify the effects of fluctuating metal prices and exchange rates. |
| (iv) |
This inventory adjustment reflects production costs associated with unsold concentrates. |
| (v) |
Minesite costs per tonne is not a recognized measure under US GAAP and this data may not be comparable to data presented by other gold producers. As illustrated in the tables above, this measure is calculated by adjusting production costs as shown in the Consolidated Statements of Income and Comprehensive Income for inventory, asset retirement provisions and deferred stripping costs, and then dividing by tonnes processed through the mill. Since total cash costs data can be affected by fluctuations in byproduct metal prices and exchange rates, management believes minesite costs per tonne provides additional information regarding the performance of mining operations and allows management to monitor operating costs on a more consistent basis as the per tonne measure eliminates the cost variability associated with varying production levels. Management also uses this measure to determine the economic viability of mining blocks. As each mining block is evaluated based on the net realizable value of each tonne mined, in order to be economically viable the estimated revenue on a per tonne basis must be in excess of the minesite costs per tonne. Management is aware that this per tonne measure is impacted by fluctuations in production levels and thus uses this evaluation tool in conjunction with production costs prepared in accordance with US GAAP. This measure supplements production cost information prepared in accordance with US GAAP and allows investors to distinguish between changes in production costs resulting from changes in production versus changes in operating performance. |
Note Regarding Production Guidance
The gold production guidance is based on the Company's mineral reserves but includes contingencies, assumes 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 disclosure does not reconcile exactly with the production models used to support these mineral reserves.
Note Regarding Certain Measures of Performance
This news release presents measures including "total cash costs per ounce" and "minesite costs per tonne" that are not recognized measures under US GAAP. This data may not be comparable to data presented by other gold producers. The Company believes that these generally accepted industry measures are realistic indicators of operating performance and useful for year-over-year comparisons. However, both of these non-GAAP measures should be considered together with other data prepared in accordance with US GAAP. These measures, taken by themselves, are not necessarily indicative of operating costs or cash flow measures prepared in accordance with US GAAP. A reconciliation of the Company's total cash costs per ounce and minesite costs per tonne to the most comparable financial measures calculated and presented in accordance with US GAAP for the Company's historical results of operations is set out above.
The contents of this news release have been prepared under the supervision of, and reviewed by, Marc Legault P.Eng., Senior Vice-President, Project Evaluations and a "Qualified Person" for the purposes of NI 43-101.
Forward-Looking Statements
The information in this news release has been prepared as at February 15, 2012. 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", "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 trends, production estimates, cash flows, the estimated timing of scoping and other studies, the methods by which ore will be extracted or processed, recovery rates, mill throughput, and projected exploration and capital expenditures, including costs and other estimates upon which such projections are based; the Company's goal to increase its mineral reserves and resources; the Company's goal to increase its dividends; the Company's goal to build a mine at La India and Meliadine; the Company's ability to produce at Goldex; 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, 2010 ("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 current levels or as set out in this news release; 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.
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