Stock Symbol: AEM (NYSE and TSX) TORONTO, Oct. 24
/PRNewswire-FirstCall/ -- Agnico-Eagle Mines Limited
("Agnico-Eagle" or the "Company") today reported third quarter net
income of $11.5 million, or $0.08 per share, which was net of a
non-cash foreign currency translation loss of $25.2 million, or
$0.19 per share. This accounting translation loss arises from the
weakened US dollar and its effect on the US dollar conversion of
our European and Canadian accounts. In the comparable 2006 quarter,
the Company reported net income of $45.2 million, or $0.38 per
share. Earnings for the third quarter 2007 fell by approximately
$10 million, net of the translation loss, period over period. This
was largely due to the impact of a stronger Canadian dollar on
operating costs and lower realized byproduct zinc prices, offset
partly by a higher gold price. Earnings per share were also diluted
by the issuance of approximately 13.8 million common shares upon
the acquisition of Cumberland Resources Ltd. in 2007. Third quarter
cash provided by operating activities decreased to $49.9 million
from $73.9 million in the comparable 2006 quarter, largely due to
normal working capital movements. "Another strong operating quarter
at LaRonde, combined with steady construction progress at our
development projects, keeps us on track to deliver on our plans for
significant gold production growth", said Sean Boyd, Vice-Chairman
and Chief Executive Officer. "Exploration success at many of our
development projects also puts us in a strong position to add to
our already large gold reserve base over the next year", added Mr.
Boyd. Third quarter 2007 highlights include: - Strong Operating
Results - steady metal output and excellent cost control led to
solid operating earnings and strong cashflow - Low Costs - Low
total cash costs per ounce(1) at LaRonde of minus $307 - Gold
Production Growth - first of five new mines, Goldex, ahead of
schedule - Safe Workplace - Record 33 consecutive months without a
lost time accident underground at LaRonde - Significant Exploration
Upside - continued to receive ore-grade intersections over mineable
widths outside of currently known reserve/resource envelope at
Pinos Altos, Kittila, and Meadowbank In the first nine months of
2007, the Company recorded net income of $74.2 million, or $0.57
per share. In the corresponding period in 2006, Agnico-Eagle
recorded net income of $119.5 million, or $1.05 per share. Year to
date earnings were negatively affected by a non-cash foreign
currency translation loss of $32.0 million or $0.25 per share. Net
of the translation loss, earnings fell by approximately $23 million
due to the impact of a stronger Canadian dollar on operating costs,
offset partly by a higher gold price. Year to date earnings per
share were also diluted by the shares issued to acquire Cumberland.
In the first nine months of 2007, the Company recorded cash
provided by operating activities of $185.8 million. This compares
favourably to the prior period when cash provided by operating
activities was $141.8 million. The increase in cash provided by
operating activities was due almost entirely to working capital
movements. The Company's financial position remains strong with
cash and cash equivalents of $427.6 million at September 30, 2007.
The Company's cash position decreased $67.7 million in the third
quarter as $141.7 million was invested in the Company's gold growth
projects. However, Agnico-Eagle's cash position is expected to
increase in the fourth quarter as the expiry of warrants in
November should result in further proceeds of approximately $122
million. Payable gold production(2) in the third quarter of 2007
was 55,830 ounces at total cash costs per ounce of minus $307. This
compares with payable gold production of 59,603 ounces, at total
cash costs per ounce of minus $709, in the third quarter of 2006.
The increase in total cash costs per ounce in the third quarter of
2007 versus the prior period is mainly due to a stronger Canadian
dollar, increased minesite costs and lower byproduct zinc revenues.
Forecast and Dividend Announcement On December 10, 2007, the 2008
production and cost forecast is expected to be announced. At this
time, the Company expects to provide an update on the six
development projects including updated capital expenditure
estimates incorporating more recent exchange rates. The Board of
Directors is expected to make a decision regarding the 2007
dividend at that time. Exploration updates are also expected for
several of the development projects prior to the February reserve
and resource update. Conference Call Tomorrow The Company will host
its quarterly conference call tomorrow, Thursday October 25 at
11:00am E.D.T. Management will review the Company's operating and
financial results for the third quarter of 2007 and provide an
update of its exploration and development activities. Via
Telephone: To listen on the telephone, please dial (416) 644-3415
or 1 (800) 732-9307 toll free, at least five minutes before the
scheduled start of the presentation. Via Webcast: Additionally, a
live audio webcast of the presentation will be available on the
Company's website homepage at http://www.agnico-eagle.com/. The
webcast along with presentation slides will be archived for 180
days on the website. Replay archive: The access phone number for
the archived audio replay is 1 (877) 289-8525, passcode 21248116
followed by the number sign. It will be available from Thursday,
October 25, 2007 at 1:30 pm until Thursday, November 1, 2007 11:59
pm. LaRonde Mine - Strong Production and Cost Control Performance
Continues The LaRonde mill processed an average of 7,250 tonnes of
ore per day in the third quarter of 2007, compared with an average
of 7,270 tonnes per day in the corresponding period of 2006.
LaRonde has now been operating at an average of approximately 7,300
tonnes per day for almost four years, continuing to demonstrate the
reliability of this world class mine. Minesite costs per tonne(3)
were C$66 in the third quarter. These costs are higher than the
C$63 per tonne experienced in the third quarter of 2006. The
increase in costs was again partly due to accelerated lateral
development and higher input costs for fuel, labour, chemical
reagents, etc. as seen across the mining industry. Minesite costs
per tonne for the full year 2007 are expected to be on budget at
approximately C$65, five percent higher than 2006. This increase is
partly due to the accelerated development, but also due to industry
cost escalation, offset somewhat by lower reagent consumption in
the mill due to improvements in the copper-zinc circuit. Fourth
quarter 2007 minesite costs per tonne are expected to decrease
somewhat, compared to the third quarter of 2007, as the benefit of
the accelerated development undertaken over the past several
quarters is realized. On a per ounce basis, net of byproduct
credits, LaRonde's total cash costs per ounce remained very low by
industry standards, at minus $307 in the third quarter. This
compares with the results of the third quarter of 2006 when total
cash costs per ounce were minus $709. The increase in total cash
costs is due to a stronger Canadian dollar, increased minesite
costs and lower byproduct revenues. As a result of the historically
high zinc prices, which have prevailed over the past several
quarters, it is now expected that the mine life of LaRonde,
mineable from the existing shaft and infrastructure, will be
extended by a year or more. This is largely due to the mining of
previously sub-economic ore adjacent to the hangingwall of the
orebody. This lower grade zinc ore was not included in the original
mining plan. The effect of mining this ore is to postpone the
mining of gold-rich ore resulting in marginally lower gold and
byproduct production annually, but maximizing the value of the
orebody over its life. Cash Position Remains Strong, Despite Large
Investments in Gold Growth Cash and cash equivalents decreased to
$427.6 million at September 30, 2007 from the June 30, 2007 balance
of $495.3 million. As expected, all of the Company's operating cash
flow and a portion of its existing cash balance were reinvested in
its gold growth projects. During the quarter, Agnico-Eagle added
$49.9 million of cash provided by operating activities. Capital
expenditures in the quarter totaled $141.7 million, including $56.0
million on the construction of Meadowbank, $28.6 million on Goldex,
$16.8 million at Kittila, $15.5 million on the LaRonde Extension,
$9.7 million at Pinos Altos and $6.5 million at Lapa. For the full
year 2007, capital expenditures are expected to be approximately
$450 million. Capital costs are higher than 2006 and higher than
previous guidance due to the acquisition of the Meadowbank project
in April 2007 and the approval of construction of the Pinos Altos
project in August 2007. The cash position is expected to increase
in the fourth quarter as the expiry of warrants in November should
result in further proceeds of approximately $122 million. With a
large cash balance, strong cash flows, no long term debt, and
substantially undrawn bank lines of $300 million, Agnico-Eagle is
fully funded for the development and exploration of its pipeline of
gold projects in Canada, Finland and Mexico. Five New Gold Mines
Under Construction At the 100% owned Goldex mine project in
northwestern Quebec, Agnico-Eagle commenced construction in July
2005. Proven and probable reserves of 1.7 million ounces of gold
(22.9 million tonnes grading 2.3 grams per tonne are estimated to
be sufficient for a ten year mine life with annual production
averaging 170,000 ounces. With a large additional resource, the
deposit remains open for expansion. The Goldex production shaft is
expected to be completed in November 2007. Approximately 35,000
tonnes of ore were extracted and stockpiled on surface during the
third quarter. The total proven reserves in the surface stockpile
now stand at approximately 222,000 tonnes, grading 2.0 grams per
tonne from development ore. Overall, construction is ahead of
schedule and the mine is expected to begin production during the
second quarter of 2008. Construction commenced at the 100% owned
Kittila mine project in northern Finland in the second quarter of
2006. The project is expected to produce an average of 150,000
ounces of gold per year. The mine life is estimated to be 13 years.
Kittila has probable gold reserves of 2.6 million ounces (16.0
million tonnes grading 5.1 grams per tonne). With a large
additional resource, the deposit remains open for expansion.
Drilling from surface is ongoing to convert resources to reserves
and to extend the overall envelope. Deeper exploration drilling is
expected to begin from the new decline in the fourth quarter of
2007, opening up the entire area below the main Suuri zone for
detailed exploration. Surface overburden stripping for the main
open pit is advanced with approximately 99,000 cubic metres moved
in the quarter. Construction of the underground decline is on
schedule and had advanced approximately 1,800 metres by the end of
September 2007, including some other associated lateral
development. The mining fleet has been ordered and foundation work
in the processing plant is underway. Key components such as the SAG
mill and autoclave are on schedule for delivery. Production is
expected to begin in the third quarter of 2008. At the 100% owned
Lapa mine project in northwestern Quebec, the final phase of
construction commenced in the second quarter of 2006. Probable gold
reserves of 1.2 million ounces (3.9 million tonnes grading 9.1
grams per tonne) are expected to support estimated annual
production of 125,000 ounces per year. The shaft at Lapa has
reached its final depth of 1,370 metres. The project is in
changeover from shaft sinking to the permanent shaft facilities
with lateral mine development scheduled to start within a month.
Construction of the surface service facilities is underway. At the
100% owned LaRonde mine in northwestern Quebec, construction
commenced in the second quarter of 2006 on the infrastructure
extension at depth. Proven and probable reserves of 5.2 million
ounces (35.6 million tonnes grading 4.5 grams per tonne) are
expected to support a mine life through 2021. Annual gold
production post-2011, when the deeper ore is mined, is anticipated
to average 320,000 ounces. Mechanical installation for the internal
hoist is well underway with the service hoist completed and the
production hoist approximately 40% complete. The focus during the
fourth quarter continues to be on underground infrastructure
construction and detailed engineering. Shaft sinking for the new
internal shaft is expected to begin this quarter. The same shaft
sinking crews that successfully developed Lapa and Goldex are
currently transitioning to LaRonde for this project. At the 100%
owned Pinos Altos mine project in northern Mexico, the property has
probable gold reserves of 2.2 million ounces (20.0 million tonnes
grading 3.5 grams per tonne). Additionally, the property contains a
large silver reserve of over 65 million ounces (the same 20.0
million tonnes grading 102 grams per tonne). The project was
approved for construction in August 2007. Average annual production
is expected to be approximately 150,000 ounces of gold and over 2.0
million ounces of silver over an 11 year mine life. Construction of
the permanent camp is progressing as expected. The construction of
a 2,800 metre underground exploration ramp commenced in March 2007
and has advanced 630 metres, while construction of a 900 metre
light aircraft airstrip is complete. Deeper exploration drilling is
expected to begin from the decline in the fourth quarter of 2007,
targeting the area below the main Santo Nino zone. With a large
gold and silver resource outside of the reserve envelope, the
deposit remains open for expansion. Exploration drilling continues
on the Mascota zone. This region, to the northwest of Santo Nino,
is now being studied on the merits of being a separate mining
operation, based on the assumption of a rapid accumulation of near
surface gold reserves. The ore would possibly be processed via heap
leach. All the necessary land agreements with the four local ejidos
have been established. Negotiations for additional surface rights
with the underlying royalty holder are ongoing. If these
negotiations are not successful, modifications to the proposed mine
plan contained in the base case feasibility study will be
implemented. With the completion of the acquisition of Cumberland,
Agnico-Eagle owns 100% of the Meadowbank project in Nunavut.
Meadowbank has proven and probable gold reserves of 2.9 million
ounces (21.3 million tonnes grading 4.2 grams per tonne). With a
large additional gold resource, the deposit remains open for
expansion. Initial gold production is anticipated by 2010. Annual
gold production is estimated to average 400,000 ounces for the
first four years and average 350,000 ounces per year over the life
of the mine. The exploration focus on Meadowbank during 2007 has
been resource to reserve conversion in the vicinity of the open pit
reserves, and resource exploration around the Goose South, Goose
Island, Portage, Cannu and Vault zones. Further grassroots
exploration, prospecting and diamond drilling has been performed on
the large property position, largely to the north of the existing
resource. An update on the most recent results will be disclosed
before the end of the year. The all-weather road construction is
scheduled for completion before the end of this year. Approximately
80 kilometres of the 110 kilometre total have been completed to
date. Detailed engineering and sourcing and acquisition of the
major capital equipment are ongoing. The first pieces of the major
capital equipment have already been delivered to the site.
--------------------------------------- (1) Total cash costs per
ounce is a non-GAAP measure. For reconciliation of total cash costs
per ounce to production costs, as reported in the financial
statements, see Note 1 to the financial statements at the end of
this news release. (2) Payable gold production means the quantity
of a mineral produced during a period contained in products that
are sold by the Company, whether such products are sold during the
period or held as inventory at the end of the period. (3) Minesite
costs per tonne is a non-GAAP measure. For reconciliation of this
measure to production costs, as reported in the financial
statements, see Note 1 to the financial statements at the end of
this news release. About Agnico-Eagle Agnico-Eagle is a long
established Canadian gold producer with operations located in
Quebec and exploration and development activities in Canada,
Finland, Mexico and the United States. Agnico-Eagle's LaRonde Mine
is Canada's largest gold deposit in terms of reserves. The Company
has full exposure to higher gold prices consistent with its policy
of no forward gold sales. It has paid a cash dividend for 25
consecutive years. Forward-Looking Statements The information in
this press release has been prepared as at October 24, 2007.
Certain statements contained in this press release constitute
"forward-looking statements" within the meaning of the United
States Private Securities Litigation Reform Act of 1995 and forward
looking information under the provisions of Canadian provincial
securities laws. When used in this document, the words
"anticipate", "expect", "estimate", "forecast", "planned",
"projected" and similar expressions are intended to identify
forward-looking statements or information. Such statements and
information include without limitation: statements regarding timing
and amounts of capital expenditures and other assumptions;
estimates of future reserves, resources, mineral production and
sales; estimates of mine life; estimates of future mining costs,
total cash costs per ounce, minesite costs and other expenses;
estimates of future capital expenditures and other cash needs, and
expectations as to the funding thereof; statements and information
as to the projected development of certain ore deposits, including
estimates of exploration, development and production and other
capital costs, and estimates of the timing of such exploration,
development and production or decisions with respect to such
exploration, development and production; estimates of reserves and
resources, and statements and information regarding anticipated
future exploration and feasibility study results; the anticipated
timing of events with respect to the Company's minesites;
statements and information regarding the sufficiency of the
Company's cash resources; and other statements and information
regarding anticipated trends with respect to the Company's capital
resources and results of operations. Such statements and
information reflect the Company's views as at the date of this
press release and are subject to certain risks, uncertainties and
assumptions, and undue reliance should not be placed on such
statements and information. Without limiting the foregoing, certain
of the foregoing statements, primarily related to projects, are
based on preliminary views of the Company with respect to, among
other things, grade, tonnage, processing, mining methods, capital
costs, and location of surface infrastructure and actual results
and final decisions may be materially different from those
currently anticipated. Many factors, known and unknown, could cause
the actual results to be materially different from those expressed
or implied by such statements and information. Such risks include,
but are not limited to: the Company's dependence on the LaRonde
mine, the volatility of prices of gold and other metals;
uncertainty of mineral reserves, mineral resources, mineral grades
and mineral recovery estimates; uncertainty of future production,
capital expenditures, and other costs; currency fluctuations;
financing of additional capital requirements; cost of exploration
and development programs; mining risks; risks associated with
foreign operations; the completion of successful negotiations with
the royalty holder on certain surface rights and other interests
relating to the Pinos Altos property; 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 that may affect the Company's ability to achieve
the expectations set forth in the forward-looking statements
contained in this document, see Company's Annual Report on Form
20-F for the year ended December 31, 2006, as well as the Company's
other filings with the Canadian Securities Administrators and the
U.S. Securities and Exchange Commission. The Company does not
intend, and does not assume any obligation, to update these
forward-looking statements and information. Note to Investors
Regarding the Use of Non-GAAP Financial Measures This press release
presents certain measures, including "total cash cost per ounce"
and "minesite cost per tonne", that are not recognized measures
under United States generally accepted accounting principals ("US
GAAP"). This data may not be comparable to data presented by other
gold producers. For a reconciliation of these measures to the
figures presented in the consolidated financial statements prepared
in accordance with US GAAP see Note 1 to the financial statements
attached to this press release and "Item 5. Operating and Financial
Review and Prospects - Results of Operations - Production Costs" in
the Company's Annual Report on Form 20-F filed with securities
regulators in Canada and the United States. The Company believes
that these generally accepted industry measures are realistic
indicators of operating performance and useful in allowing year
over year comparisons. However, both of these non-GAAP measures
should be considered together with other data prepared in
accordance with US GAAP, and these measures, taken by themselves,
are not necessarily indicative of operating costs or cash flow
measures prepared in accordance with US GAAP. Detailed Mineral
Reserve and Resource 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. Further information regarding the Company's
mineral reserve and mineral resource estimates (other than in
respect of the Meadowbank mine project and Pinos Altos mine
project) can be found in the Company's Annual Report on Form 20-F
for the year ended December 31, 2006 filed with Canadian securities
regulators and with the United States Securities and Exchange
Commission on March 30, 2007. Further information regarding the
Pinos Altos mine project can be found in the Pinos Altos
Gold-Silver Project, Chihuahua State, Mexico 2007 Technical Report
on the Mineral Resources and Reserves filed with the Canadian
securities regulators on September 24, 2007. Further information
regarding the Meadowbank mine project can be found in the
Meadowbank Gold Project Nunavut Technical Report filed with the
Canadian securities regulators on March 31, 2005 (see
http://www.sedar.com/ under "Cumberland Resources Limited"). Refer
to the Company's press release dated February 21, 2007 for other
information applicable to written disclosure of mineral reserves
and resources. Marc Legault, Agnico-Eagle's Vice President, Project
Development, a qualified person for the purposes of the Canadian
Securities Administrators' National Instrument 43-101, is the
qualified person that supervised the preparation of the material
that forms the basis for the disclosure of scientific and technical
information set out in this press release. Detailed Mineral Reserve
and Resource Data
-------------------------------------------------------------------------
Au Category (000's Tonnes and Zone Au(g/t) Ag(g/t) Cu(%) Zn(%) oz.)
(000's)
-------------------------------------------------------------------------
Proven Mineral Reserve
-------------------------------------------------------------------------
LaRonde 2.76 80.96 0.36 4.06 513 5,779
-------------------------------------------------------------------------
Goldex 2.25 7 97
-------------------------------------------------------------------------
Meadowbank 4.8 470 3,020
-------------------------------------------------------------------------
Bousquet 6.30 17 86
-------------------------------------------------------------------------
Subtotal Proven Mineral Reserve 3.49 1,007 8,982
-------------------------------------------------------------------------
Probable Mineral Reserve
-------------------------------------------------------------------------
LaRonde 2.53 63.53 0.29 3.38 814 10,003
-------------------------------------------------------------------------
LaRonde Extension 5.99 21.73 0.31 0.79 3,824 19,860
-------------------------------------------------------------------------
Kittila 5.08 2,616 16,022
-------------------------------------------------------------------------
Pinos Altos 3.47 102.33 2,224 19,957
-------------------------------------------------------------------------
Lapa 9.08 1,152 3,944
-------------------------------------------------------------------------
Goldex 2.29 1,682 22,813
-------------------------------------------------------------------------
Meadowbank 4.11 2,420 18,300
-------------------------------------------------------------------------
Subtotal Probable Mineral Reserve 4.13 14,732 99,962
-------------------------------------------------------------------------
Total Proven and Probable Mineral Reserves 4.08 15,739 115,004
-------------------------------------------------------------------------
Tonnage amounts and contained metal amounts presented in the tables
in this news release have been rounded to the nearest thousand.
Reserves are not a sub-set of resources. The effective dates (with
the exception of Pinos Altos and Meadowbank) is February 21, 2007.
The effective date of the Pinos Altos's reserve is August 9, 2007.
The effective date of the Meadowbank reserve is December, 2005.
AGNICO-EAGLE MINES LIMITED SUMMARIZED QUARTERLY DATA (thousands of
United States dollars, except where noted, unaudited) Three months
ended Nine months ended September 30, September 30, 2007 2006 2007
2006 ----------- ----------- ----------- ----------- Income and
cash flows LaRonde Mine Revenues from mining operations.......
$104,812 $108,798 $323,477 $326,251 Production costs.........
44,936 36,456 123,924 105,210 ----------- ----------- -----------
----------- Gross profit (exclusive of amortization shown
below)............ $59,876 $72,342 $199,553 $221,041
Amortization............. 7,578 6,119 21,600 18,224 -----------
----------- ----------- ----------- Gross profit.............
$52,298 $66,223 $177,953 $202,817 ----------- -----------
----------- ----------- Net income for the period..................
$11,452 $45,203 $74,183 $119,485 Net income per share
(basic)................. $0.08 $0.38 $0.57 $1.05 Net income per
share (diluted)............... $0.08 $0.37 $0.55 $1.02 Cash
provided by operating activities.... $49,946 $73,945 $185,844
$141,751 Cash provided by (used in) investing
activities.............. $(144,428) $(61,531) $(248,964) $(125,907)
Cash provided by (used in) financing activities..............
$15,361 $2,268 $6,551 $294,173 Weighted average number of common
shares outstanding - basic (in thousands).......... 135,509 120,386
130,151 113,649 Tonnes of ore milled..... 667,238 669,026 2,018,487
1,987,456 Head grades: Gold (grams per tonne)................ 2.85
3.01 2.89 3.07 Silver (grams per tonne)................ 75.00 75.90
76.00 77.00 Zinc................... 3.80% 4.43% 3.65% 4.16%
Copper................. 0.32% 0.39% 0.34% 0.37% Recovery rates:
Gold................... 91.58% 92.34% 91.25% 91.88%
Silver................. 88.10% 88.30% 87.65% 87.50%
Zinc................... 86.20% 87.70% 86.30% 87.30%
Copper................. 84.90% 81.70% 85.30% 82.30% Payable
production: Gold (ounces).......... 55,830 59,603 170,810 179,804
Silver (ounces in thousands)......... 1,222 1,233 3,754 3,707 Zinc
(tonnes).......... 18,609 22,068 54,015 61,318 Copper
(tonnes)........ 1,647 1,884 5,327 5,527 Payable metal sold: Gold
(ounces).......... 55,797 57,326 170,400 187,969 Silver (ounces in
thousands)......... 1,192 1,137 3,957 3,512 Zinc (tonnes)..........
19,487 20,541 53,714 59,340 Copper (tonnes)........ 1,644 1,880
5,310 5,534 Realized prices: Gold (per ounce)....... $748 $600 $697
$632 Silver (per ounce)..... $12.79 $12.39 $13.39 $12.09 Zinc (per
tonne)....... $2,838 $3,525 $3,165 $3,345 Copper (per tonne).....
$7,910 $6,843 $7,342 $8,818 Total cash costs (per ounce):
Production costs......... $804 $612 $726 $585 Less: Net byproduct
revenues................ (1,131) (1,340) (1,198) (1,224) Inventory
adjustments........... 25 21 47 16 Accretion expense and
other............. (5) (2) (5) (2) ----------- -----------
----------- ----------- Total cash costs (per ounce).............
$(307) $(709) $(430) $(625) ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Minesite costs per tonne milled (C$)....... $66 $63 $67 $61
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- Total cash costs (per ounce)
and minesite costs per tonne milled are non-GAAP measures. For a
reconciliation of these measures to the financial statements, see
note 1 to these financial statements. AGNICO-EAGLE MINES LIMITED
COMPARATIVE CONDENSED FINANCIAL INFORMATON (thousands of United
States dollars, unaudited) As at As at September December 30, 2007
31, 2006 ----------- ----------- ASSETS Current Cash, cash
equivalents and short term
investments.............................. $427,594 $458,617 Trade
receivable............................... 74,619 84,987
Inventories: Ore stockpiles............................... 5,023
2,330 Concentrates................................. 3,727 3,794
Supplies..................................... 15,010 11,152 Other
current assets........................... 77,322 61,953 -----------
----------- Total current assets.............................
603,295 622,833 Other assets.....................................
15,494 7,737 Future income and mining tax assets..............
19,131 31,059 Property, plant and mine development.............
1,893,634 859,859 ----------- ----------- $2,531,554 $1,521,488
----------- ----------- ----------- ----------- LIABILITIES AND
SHAREHOLDERS' EQUITY Current Accounts payable and accrued
liabilities....... $92,596 $42,538 Dividends
payable.............................. 647 15,166 Income taxes
payable........................... - 14,231 ----------- -----------
Total current liabilities........................ 93,243 71,935
----------- ----------- Reclamation provision and other
liabilities...... 36,727 27,457 ----------- ----------- Future
income and mining tax liabilities......... 507,660 169,691
----------- ----------- Shareholders' equity Common shares
Authorized - unlimited Issued - 135,893,339 (December 31, 2006 -
121,025,635)................................ 1,791,777 1,230,654
Stock options.................................... 22,374 5,884
Warrants......................................... 14,653 15,723
Contributed surplus.............................. 15,128 15,128
Retained earnings................................ 72,711 3,015
Accumulated other comprehensive loss............. (22,719) (17,999)
----------- ----------- Total shareholders'
equity....................... 1,893,924 1,252,405 -----------
----------- $2,531,554 $1,521,488 ----------- -----------
----------- ----------- AGNICO-EAGLE MINES LIMITED COMPARATIVE
CONDENSED FINANCIAL INFORMATON (thousands of United States dollars,
except share and per share amounts, unaudited) Three months ended
Nine months ended September 30, September 30, 2007 2006 2007 2006
----------- ----------- ----------- ----------- REVENUES Revenues
from mining operations.............. $104,812 $108,798 $323,477
$326,251 Interest and sundry income.................. 7,448 12,039
18,793 16,644 Gain on sale of available-for-sale
securities.............. 886 1,062 4,088 22,975 -----------
----------- ----------- ----------- 113,146 121,899 346,358 365,870
COSTS AND EXPENSES Production............... 44,936 36,456 123,924
105,210 Loss on derivative financial instruments... - 967 5,829
13,012 Exploration and corporate development... 3,792 8,154 18,658
20,806 Amortization............. 7,578 6,119 21,600 18,224 General
and administrative.......... 7,744 5,853 24,420 16,672 Provincial
capital tax... 2,008 729 4,508 1,626 Interest................. 941
349 2,662 1,923 Foreign currency translation loss........ 25,243
1,037 32,021 9,555 ----------- ----------- ----------- -----------
Income before income, mining and federal capital taxes...........
20,904 62,235 112,736 178,842 Income and mining tax
expense............. 9,452 17,032 38,553 59,357 -----------
----------- ----------- ----------- Net income for the
period.................. $11,452 $45,203 $74,183 $119,485
----------- ----------- ----------- ----------- Net income per
share - basic................. $0.08 $0.38 $0.57 $1.05 -----------
----------- ----------- ----------- Net income per share -
diluted............... $0.08 $0.37 $0.55 $1.02 -----------
----------- ----------- ----------- Weighted average number of
shares outstanding (in thousands) Basic.................. 135,509
120,386 130,151 113,649 Diluted................ 140,280 123,822
134,922 117,086 AGNICO-EAGLE MINES LIMITED COMPARATIVE CONDENSED
FINANCIAL INFORMATION (thousands of United States dollars,
unaudited) Three months ended Nine months ended September 30,
September 30, 2007 2006 2007 2006 ----------- -----------
----------- ----------- Operating activities Net income for the
period.................. $11,452 $45,203 $74,183 $119,485 Add
(deduct) items not affecting cash: Amortization........... 7,578
6,119 21,600 18,224 Future income and mining taxes.......... 7,960
13,275 30,221 45,109 Unrealized loss on derivative
contracts............. - (3,545) 5,018 4,571 Gain on sale of
available-for-sale securities............ (886) (1,062) (4,088)
(22,975) Gain on Contact Diamond Corporation... - (7,361) - (7,361)
Amortization of deferred costs and other................. 25,888
5,150 49,410 24,706 Changes in non-cash working capital balances
Trade receivables...... 1,892 16,782 10,368 (23,778) Income taxes
payable............... (17,121) 4,216 (14,231) 14,474 Other taxes
recoverable........... (5,524) 415 (8,731) 4,355
Inventories............ 3,959 (871) (2,049) (3,260) Other current
assets................ (7,061) (6,344) (15,887) (22,335) Accounts
payable and accrued liabilities... 21,809 1,968 40,030 (7,221)
Interest payable....... - - - (2,243) ----------- -----------
----------- ----------- Cash provided by operating activities....
49,946 73,945 185,844 141,751 ----------- ----------- -----------
----------- Investing activities Additions to property, plant and
mine development............. (141,721) (41,395) (311,111) (95,903)
Acquisition of Cumberland Resources Ltd., net of cash acquired of
$96,043 (note 9)................ - - 84,207 - Acquisitions,
investments and other... (2,707) (20,136) (22,060) (30,004)
----------- ----------- ----------- ----------- Cash provided by
(used) in investing activities.............. (144,428) (61,531)
(248,964) (125,907) ----------- ----------- ----------- -----------
Financing activities Dividends paid........... - - (13,406) (3,166)
Short-term debt.......... - (7,232) - Proceeds from common shares
issued........... 15,361 9,649 19,957 312,105 Share issue
costs........ - (149) - (14,766) ----------- -----------
----------- ----------- Cash provided by (used in) financing
activities.............. 15,361 2,268 6,551 294,173 -----------
----------- ----------- ----------- Effect of exchange rate changes
on cash and cash equivalents............. 11,381 730 25,546 (116)
----------- ----------- ----------- ----------- Net increase in
cash and cash equivalents during the period....... (67,740) 15,412
(31,023) 309,901 Cash and cash equivalents, beginning of
period..... 495,334 415,471 458,617 120,982 ----------- -----------
----------- ----------- Cash and cash equivalents, end of
period........... $427,594 $430,883 $427,594 $430,883 -----------
----------- ----------- ----------- ----------- -----------
----------- ----------- Other operating cash flow information:
Interest paid during the period.............. $509 $117 $1,638
$3,436 ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- Income, mining and capital
taxes paid during the period....... $20,407 $264 $23,544 $1,232
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- Note 1: Reconciliation of Total
Cash Costs Per Ounce and Minesite Costs Per Tonne Total Cash Costs
Per Ounce Three Three Nine Nine months months months months ended
ended ended ended (thousands of dollars, September September
September September except where noted) 30, 2007 30, 2006 30, 2007
30, 2006 ------------------------- ----------- -----------
----------- ----------- Production costs per Consolidated
Statements of Income.... $44,936 $36,456 $123,924 $105,210
Adjustments: Byproduct revenues..... (63,165) (74,192) (204,653)
(207,419) Inventory adjustment(i)......... 1,396 (4,430) 8,078
(9,767) Non-cash reclamation provision............. (293) (116)
(837) (333) ----------- ----------- ----------- ----------- Cash
operating costs..... $(17,126) $(42,282) $(73,488) $(112,309)
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- Gold production
(ounces)................ 55,830 59,603 170,810 179,804 -----------
----------- ----------- ----------- ----------- -----------
----------- ----------- Total cash costs (per ounce)(ii).........
$(307) $(709) $(430) $(625) ----------- ----------- -----------
----------- Minesite Costs Per Tonne Three Three Nine Nine months
months months months ended ended ended ended (thousands of dollars,
September September September September except where noted) 30,
2007 30, 2006 30, 2007 30, 2006 -------------------------
----------- ----------- ----------- ----------- Production costs
per Consolidated Statements of Income.... $44,936 $36,456 $123,924
$105,210 Adjustments: Inventory adjustments(iii)...... (2,576)
1,250 2,319 2,812 Non-cash reclamation provision............. (293)
(116) (837) (333) ----------- ----------- ----------- -----------
Minesite operating costs (US$)............. 42,067 $37,590 125,406
$107,689 ----------- ----------- ----------- ----------- Minesite
operating costs (C$).............. 44,138 $42,153 134,857 $121,591
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- Tonnes of ore milled (000's
tonnes).......... 667 669 2,018 1,987 ----------- -----------
----------- ----------- ----------- ----------- -----------
----------- Minesite costs per tonne (C$)(iv).......... $66 $63 $67
$61 ----------- ----------- ----------- ----------- ---------
Notes: (i) Under the Company's revenue recognition policy, revenue
is recognized on concentrates when legal title passes. Since total
cash costs are calculated on a production basis, this inventory
adjustment reflects the sales margin on the portion of concentrate
production for which revenue has not been recognized in the period.
(ii) Total cash costs is not a recognized measure under US GAAP and
this data may not be comparable to data presented by other gold
producers. The Company believes that this generally accepted
industry measure is a realistic indicator of operating performance
and is useful in allowing year over year comparisons. As
illustrated in the table above, this measure is calculated by
adjusting Production Costs as shown in the Consolidated Statements
of Income and Comprehensive Income for net byproduct revenues,
royalties, inventory adjustments and asset retirement provisions.
This measure is intended to provide investors with information
about the cash generating capabilities of the Company's mining
operations. Management uses this measure to monitor the performance
of the Company's mining operations. Since market prices for gold
are quoted on a per ounce basis, using this per ounce measure
allows management to assess the mine's cash generating capabilities
at various gold prices. Management is aware that this per ounce
measure of performance can be impacted by fluctuations in byproduct
metal prices and exchange rates. Management compensates for the
limitation inherent with this measure by using it in conjunction
with the minesite costs per tonne measure (discussed below) as well
as other data prepared in accordance with US GAAP. Management also
performs sensitivity analyses in order to quantify the effects of
fluctuating metal prices and exchange rates. (iii) This inventory
adjustment reflects production costs associated with unsold
concentrates. (iv) Minesite costs per tonne is not a recognized
measure under US GAAP and this data may not be comparable to data
presented by other gold producers. As illustrated in the table
above, this measure is calculated by adjusting Production Costs as
shown in the Consolidated Statements of Income and Comprehensive
Income for inventory and hedging adjustments and asset retirement
provisions and then dividing by tonnes processed through the mill.
Since total cash costs data can be affected by fluctuations in
byproduct metal prices and exchange rates, management believes
minesite costs per tonne provides additional information regarding
the performance of mining operations and allows management to
monitor operating costs on a more consistent basis as the per tonne
measure eliminates the cost variability associated with varying
production levels. Management also uses this measure to determine
the economic viability of mining blocks. As each mining block is
evaluated based on the net realizable value of each tonne mined, in
order to be economically viable the estimated revenue on a per
tonne basis must be in excess of the minesite costs per tonne.
Management is aware that this per tonne measure is impacted by
fluctuations in production levels and thus uses this evaluation
tool in conjunction with production costs prepared in accordance
with US GAAP. This measure supplements production cost information
prepared in accordance with US GAAP and allows investors to
distinguish between changes in production costs resulting from
changes in production versus changes in operating performance. (v)
Payable gold production means the quantity of gold produced during
a period contained in products that are sold by the Company,
whether such products are sold during the period or held as
inventory at the end of the period. DATASOURCE: Agnico-Eagle Mines
Limited CONTACT: David Smith, VP, Investor Relations, (416)
947-1212
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