Stock Symbols: AEM (NYSE and TSX) TORONTO, April 26
/PRNewswire-FirstCall/ -- Agnico-Eagle Mines Limited today reported
first quarter earnings of $24.9 million, or $0.21 per share and
first quarter cash provided by operating activities of $56.1
million. This compares to net earnings of $37.2 million, or $0.35
per share, and cash provided by operating activities of $19.7
million, in the first quarter of 2006. Although cash provided by
operating activities saw a significant increase of $36.4 million in
the first quarter of 2007, net earnings were lower than in the
first quarter of 2006, which included an after tax gain of $15.4
million, or $0.15 per share, from the sale of marketable
securities. The first quarter 2007 earnings were also adversely
affected by a non-cash derivative loss of $6.1 million, or $0.05
per share. This loss was due to the derivative position put in
place to effectively extinguish the gold hedge position held by
Cumberland Resources Ltd. With a 184% increase in operating cash
flows in the first quarter of 2007, period over period, the
Company's financial position remains strong with cash and cash
equivalents of $427.6 million at March 31, 2007. The cash position
was drawn down from $458.6 million at December 31, 2006, primarily
to pay the annual dividend and expenditures related to the
Cumberland transaction. Payable gold production in the first
quarter of 2007 was 58,588 ounces at total cash costs per ounce(1)
of minus $332. This compares with payable gold production of 64,235
ounces at total cash costs per ounce of minus $241 in the first
quarter of 2006. Payable gold production for the first quarter of
2007 was slightly lower than the same period in the prior year
largely due to an expected reduction in gold grade (down 9% period
over period) during the quarter. The reduction in total cash costs
per ounce in the first quarter of 2007 is mainly due to higher
byproduct metals prices prevailing during the period. 2007
highlights to date include: - Record gold reserves of 15.4 million
ounces, an increase of 23% over the December 2006 level, as a
result of the successful acquisition of Cumberland - A 184%
increase in cash provided by operating activities to $56.1 million
- Strong earnings of $24.9 million, or $0.21 per share - Low total
cash costs per ounce at LaRonde of minus $332 - A record 26
consecutive months without a lost time accident underground at
LaRonde "With another strong quarter of cash flows and earnings,
and the recent success of our offer for Cumberland, Agnico-Eagle
remains solidly positioned to deliver significant growth in gold
output and gold reserves, while still maintaining our low political
risk profile, strong balance sheet and significant exploration
upside." said Sean Boyd, Vice-Chairman and Chief Executive Officer.
"Over the next 24 months, we anticipate gold reserves at our
existing projects to grow from the current 15.4 million ounces to
18 to 20 million ounces. By 2010, we anticipate our annual gold
production to expand by five times to over 1.2 million ounces, with
five new gold mines in production." added Mr. Boyd. Shareholders'
Meeting Tomorrow The Company will host its Annual and Special
Meeting of Shareholders on Friday, April 27, 2007 at 11:00 a.m.
(E.S.T.) at the King Edward Hotel, 37 King St. E., in Toronto,
Canada. Management will review the Company's financial results for
the first quarter 2007 and provide an update of its exploration and
development activities. Via Telephone: To listen on the telephone,
please dial (416) 644-3414 or 1 (800) 733-7571 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 21225741 followed by the number sign. It
will be available from Friday, April 27, 2007 at 1:00 pm until
Saturday, May 5, 2007 at 11:59pm. Gold Reserves at Record Level At
year end 2006, the Company's gold reserves totaled 12.5 million
ounces, an increase of 19% over 2005 levels. Subsequently,
Agnico-Eagle successfully acquired control of Cumberland adding a
further 2.9 million ounces from its Meadowbank gold project, or
23%, in the process bringing total gold reserves to 15.4 million
ounces, a level amongst the highest in the intermediate gold
sector. In 2007 and 2008, it is expected that the overall gold
reserve figure for Agnico-Eagle will continue to grow as the
Company continues to convert its resource to reserves. The
Company's overall gold reserve target, from its current projects,
is now 18 million to 20 million ounces by the end of 2008.
Additionally, Agnico-Eagle's proven and probable byproduct reserves
currently total approximately 105 million ounces of silver, 730,000
tonnes of zinc and 111,000 tonnes of copper. LaRonde Mine - Strong
Performance Continues The LaRonde mine processed an average of
7,461 tonnes of ore per day in the first quarter of 2007, compared
with an average of 7,350 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 over three years, continuing
to demonstrate the reliability of this world class mine. Minesite
costs per tonne(2) were C$64 in the first quarter, as expected.
These costs are higher than the C$57 per tonne experienced in the
first quarter of 2006. The increase in costs were primarily a
result of accelerated lateral development and industry-wide cost
escalation for inputs including fuel, reagents, steel, and cement.
Minesite costs per tonne are expected to be approximately C$63 for
the full year 2007, two percent higher than 2006 due to expected
cost escalation as mentioned above, offset somewhat by lower
reagent consumption in the mill due to improvements in the
copper-zinc circuit. Second half 2007 minesite costs are expected
to decrease somewhat as the benefit of the accelerated development
achieved 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 $332 in the
first quarter. This compares favourably with the results of the
first quarter of 2006 when total cash costs per ounce were minus
$241. The main reason for the decrease in total cash costs per
ounce is the significantly higher byproduct metal prices realized
in 2007. As previously disclosed, LaRonde's full year 2007
production forecast remains at an estimated 240,000 ounces of gold,
4.7 million ounces of silver, 76,000 tonnes of zinc, and 8,700
tonnes of copper. Total cash costs per ounce of gold production for
the year are expected to be significantly less than nil, at current
byproduct metal prices. Cash Position Remains Strong, Despite Large
Investments in Gold Growth Cash and cash equivalents declined to
$427.6 million at March 31, 2007 from the December 31, 2006 balance
of $458.6 million, as the strong cash generating performance from
the LaRonde mine largely funded capital investments of $63.0
million at the Company's development projects. The Company incurred
approximately $18 million in transaction costs related to the
Cumberland acquisition and paid $13.4 million in dividends as well.
The Company was proud to pay a cash dividend for the 25th
consecutive year. Acquiring control of Cumberland has added
approximately $100 million to the cash and equivalents balance of
Agnico-Eagle bringing the current balance to approximately $525
million. The Company maintains substantially undrawn bank lines of
$300 million. During the quarter, Agnico-Eagle added $56.1 million
of cash provided by operating activities. Major capital
expenditures in the quarter included $20.0 million on the
construction of Goldex, $19.1 million at Kittila, $11.0 million on
the extension at LaRonde and $4.5 million at Lapa. For the full
year 2007, capital expenditures are expected to total over $400
million as the Company takes control of the construction program at
Meadowbank. Additionally, a construction decision is anticipated to
be made on the Pinos Altos project mid-year, which would increase
the expected 2007 capital expenditures. With a large cash balance,
strong cash flows, no long term debt, and excellent financial
flexibility, Agnico-Eagle is well funded for the development and
exploration of its pipeline of gold projects in Canada, Finland and
Mexico. Four New Gold Mines Under Construction, Board Decision on
Pinos Altos Mid-Year A detailed review of the Company's exploration
activities and recent exploration results is scheduled for early
May 2007. Agnico-Eagle is undertaking its largest ever exploration
program in 2007 with expenditures expected to total approximately
$40 million. 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 at total cash costs of approximately $225 per ounce. First
gold production is expected in the second quarter of 2008. The
construction of the surface facilities is advancing well with the
mechanical installation of the production hoist completed. The
production shaft had reached a depth of 435 metres at the end of
March 2007, towards a final planned depth of 857 metres.
Approximately 55,000 tonnes of ore were extracted and stockpiled on
surface in the quarter. The total proven reserves in the surface
stockpile now stand at approximately 156,000 tonnes, grading 1.9
grams per tonne. Construction commenced at the 100% owned Kittila
mine project in northern Finland in the second quarter of 2006 with
first production expected in the second half of 2008. The project
is expected to produce an average of 150,000 ounces of gold per
year at total cash costs of approximately $250 per ounce, over an
estimated 13 year mine life. Kittila has probable gold reserves of
2.6 million ounces (16.0 million tonnes grading 5.1 grams per
tonne). Surface overburden stripping for the open pits is well
advanced with approximately 230,000 cubic metres removed to date.
Approximately 1.3 million tonnes of waste rock has been excavated
as well. Much of this rock will be used in road and tailings dam
construction. The underground decline had advanced approximately
600 metres by the end of March 2007. 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 at total cash costs per ounce of approximately
$210. Gold production at Lapa is expected to begin in the late
fourth quarter of 2008. The shaft at Lapa reached a depth of 1,148
metres below surface at March 31, 2007, towards the currently
planned depth of 1,370 metres, expected to be completed by the
third quarter of 2007. The development of the underground shaft
stations continues as planned, and lateral development is
anticipated to begin in the fourth quarter of 2007. Construction of
the surface service facilities is underway and the ordering of the
major capital equipment is well advanced. At the 100% owned LaRonde
mine in northwestern Quebec, construction commenced in the second
quarter of 2006 on the infrastructure extension at depth
(previously referred to as the LaRonde II project). 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 2020. Annual gold production post-2011, when the deeper ore
is mined, is anticipated to average 320,000 ounces at total cash
costs per ounce of approximately $230. The focus during the quarter
continues to be on underground infrastructure construction and
detailed engineering. Excavations and foundations for the winze
sinking hoist are complete and mechanical installation has begun.
At the 100% owned Pinos Altos mine project in northern Mexico, the
property has probable gold reserves of 1.8 million ounces (18.6
million tonnes grading 3.1 grams per tonne). Additionally, the
property contains a large silver reserve of over 55 million ounces
(18.6 million tonnes grading 92.8 grams per tonne). The feasibility
study has been completed, and a Board decision regarding production
is expected by the middle of this year. Gold and silver production
at Pinos Altos could begin in the first half of 2009. Construction
of the permanent camp is progressing as expected. The construction
of a 2,800 metre underground exploration ramp commenced in March
2007, while construction of a 900 metre airstrip is nearing
completion. With the recent increase in the share ownership in
Cumberland (now 81.1%), and the acquisition of the remainder
expected in the near term, Agnico-Eagle is advancing on
Cumberland's 100% owned Meadowbank project immediately. 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.
First gold production is expected at Meadowbank in early 2010. The
exploration focus on Meadowbank during 2007 will be resource to
reserve conversion in the vicinity of the open pit reserves, and
resource exploration around the Goose South and Goose Island zones.
Further grassroots exploration and diamond drilling will be
performed on the large property position, largely to the north of
the existing resource. Hiring of senior staff, road construction,
detailed engineering and sourcing and acquisition of major capital
equipment are ongoing. ------------------------------ (1) Total
cash costs per ounce is a non-GAAP measure. For a 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 (2) Minesite costs per tonne is a non-GAAP
measure. For a reconciliation of this measure to production costs
as reported in the financial statements, see Note 1 to the
financial statements 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 April 26, 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; statements and information relating to
the Company's bid for Cumberland; other statements and information
regarding anticipated trends with respect to the Company's capital
resources and results of operations; and statements regarding the
benefits of the Company's acquisition of Cumberland. 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. 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; governmental and
environmental regulation; the volatility of the Company's stock
price; and risks associated with the Company's byproduct metal
derivative strategies. Moreover the acquisition of Cumberland
involves risks and uncertainties relating to acquisitions,
including, without limitation: problems may arise with the ability
to successfully integrate the businesses of Agnico-Eagle and
Cumberland; Agnico-Eagle may not be able to achieve the benefits
from the acquisition or it may take longer than expected to achieve
those benefits; and the acquisition may involve unexpected costs or
unexpected liabilities. 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. 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. Note to Investors Regarding the Use of
Non-GAAP Financial Measures This press release presents estimates
of future "total cash cost per ounce" and "minesite cost per tonne"
that are not recognized measures under United States generally
accepted accounting principles ("US GAAP"). This data may not be
comparable to data presented by other gold producers. These future
estimates are based upon the total cash costs per ounce and
minesite costs per tonne that the Company expects to incur to mine
gold at the applicable projects and do not include production costs
attributable to accretion expense and other asset retirement costs,
which will vary over time as each project is developed and mined.
It is therefore not practicable to reconcile these forward-looking
non-GAAP financial measures to the most comparable GAAP measure. A
reconciliation of the Company's total cash cost per ounce and
minesite cost per tonne to the most comparable financial measures
calculated and presented in accordance with US GAAP for the
Company's historical results of operations is set forth in the
notes to the financial statements attached hereto and in the
Company's Annual Report on Form 20-F for the year ended December
31, 2006 filed with the Canadian Securities Administrators and the
United States Securities and Exchange Commission. 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) 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.
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.
-------------------------------------------------------------------------
Category and Zone Au Ag Cu Zn Au Tonnes (g/t) (g/t) (%) (%) (000's
oz.) (000's)
-------------------------------------------------------------------------
Proven Mineral Reserve
-------------------------------------------------------------------------
LaRonde 2.76 80.96 0.36 4.06 513 5,779
-------------------------------------------------------------------------
Goldex 2.25 7 97
-------------------------------------------------------------------------
Bousquet 6.30 17 86
-------------------------------------------------------------------------
Subtotal Proven Mineral Reserve 2.80 537 5,962
-------------------------------------------------------------------------
Probable Mineral Reserve
-------------------------------------------------------------------------
LaRonde 4.83 35.73 0.30 1.66 4,638 29,863
-------------------------------------------------------------------------
Kittila 5.08 2,616 16,022
-------------------------------------------------------------------------
Pinos Altos 3.07 92.77 1,837 18,608
-------------------------------------------------------------------------
Lapa 9.08 1,152 3,944
-------------------------------------------------------------------------
Goldex 2.29 1,682 22,813
-------------------------------------------------------------------------
Subtotal Probable Mineral Reserve 4.06 11,924 91,250
-------------------------------------------------------------------------
Total Proven and Probable Mineral Reserves 3.99 12,462 97,213
-------------------------------------------------------------------------
Meadowbank Project - Reserves Open Pit Mineral Reserve (Proven
& Probable) (Fourth Quarter 2005)
-------------------------------------------------------------------------
Category Tonnes Grade (g/t) Ounces
-------------------------------------------------------------------------
Proven 3,020,000 4.8 470,000
-------------------------------------------------------------------------
Probable 18,300,000 4.1 2,420,000
-------------------------------------------------------------------------
Proven & Probable 21,320,000 4.2 2,890,000
-------------------------------------------------------------------------
Notes: Meadowbank open pit mineral reserves (Q4/2005) have been
prepared in accordance with NI 43-101. Dr. Mike Armitage, Managing
Director of SRK Consulting (UK) Limited, is the independent
Qualified Person responsible for preparation of stated reserves. To
the best of Agnico-Eagle's knowledge, the Cumberland estimate is
relevant and reliable. A 95% mining recovery and contact dilution
has been applied. Reserves are a subset of Measured and Indicated
Resources. Grade rounded to nearest 0.1 g/t. Numbers may not add
due to rounding. Further information regarding the mineral reserve
and mineral resource estimates regarding the Meadowbank mine
project can be found in Cumberland's Annual Information Form for
the year ended December 31, 2006 filed with Canadian securities
regulators on March 30, 2007. AGNICO-EAGLE MINES LIMITED SUMMARIZED
QUARTERLY DATA (thousands of United States dollars, except where
noted, unaudited) Three months ended ------------------ March 31,
--------- 2007 2006 ------------ ------------ Income and cash flows
LaRonde Division Revenues from mining operations................ $
100,730 $ 90,581 Production costs...............................
36,178 33,187 ------------ ------------ Gross profit (exclusive of
amortization shown below).................................. $
64,552 $ 57,394 Amortization...................................
6,928 5,997 ------------ ------------ Gross
profit................................... $ 57,624 $ 51,397
------------ ------------ ------------ ------------ Net income for
the period...................... $ 24,922 $ 37,190 Net income per
share (basic)................... $ 0.21 $ 0.35 Net income per share
(diluted)................. $ 0.20 $ 0.34 Cash provided by operating
activities.......... $ 56,066 $ 19,711 Cash used in investing
activities.............. $ (79,294) $ (31,206) Cash provided by
(used in) financing activities....................................
$ (10,663) $ 45,456 Weighted average number of common shares
outstanding - basic (in thousands)..... 121,159 106,127 Tonnes of
ore milled........................... 671,484 661,528 Head grades:
Gold (grams per tonne)....................... 3.00 3.30 Silver
(grams per tonne)..................... 84.40 77.00
Zinc......................................... 3.71% 3.79%
Copper....................................... 0.39% 0.41% Recovery
rates: Gold......................................... 90.66% 91.91%
Silver....................................... 87.40% 86.50%
Zinc......................................... 85.30% 86.70%
Copper....................................... 84.80% 83.80% Payable
production: Gold (ounces)................................ 58,588
64,235 Silver (ounces in thousands)................. 1,397 1,227
Zinc (tonnes)................................ 17,944 18,462 Copper
(tonnes).............................. 1,990 2,053 Payable metal
sold: Gold (ounces)................................ 56,758 69,677
Silver (ounces in thousands)................. 1,624 1,190 Zinc
(tonnes)................................ 17,767 18,179 Copper
(tonnes).............................. 1,978 2,038 Realized prices:
Gold (per ounce)............................. $ 669 $ 611 Silver
(per ounce)........................... $ 13.82 $ 10.83 Zinc (per
tonne)............................. $ 2,798 $ 2,640 Copper (per
tonne)........................... $ 6,090 $ 5,812 Total cash costs
(per ounce): Production costs............................... $ 617
$ 517 Less: Net byproduct revenues................... (1,071) (748)
Inventory adjustments........................ 126 (8) Accretion
expense and other.................. (4) (2) ------------
------------ Total cash costs per ounce(3).................. $
(332) $ (241) ------------ ------------ ------------ ------------
Minesite costs per tonne milled C$(3) C$64 C$57 ------------
------------ ------------ ------------ (3) 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 INFORMATION (thousands of
United States dollars, unaudited) As at As at March 31, December
31, ------------ ------------ 2007 2006 ------------ ------------
ASSETS Current Cash and cash equivalents.................... $
427,615 $ 458,617 Metals awaiting settlement...................
75,180 84,987 Inventories: Ore
stockpiles............................. 3,932 2,330
Concentrates............................... 4,855 3,794
Supplies................................... 10,970 11,152 Fair
value of derivative financial
instruments................................. 10,152 - Other current
assets......................... 67,314 61,953 ------------
------------ Total current assets...........................
600,018 622,833 Other assets...................................
14,561 7,737 Future income and mining tax assets............ 6,141
31,059 Property, plant and mine development........... 914,737
859,859 ------------ ------------ $1,535,457 $1,521,488
------------ ------------ ------------ ------------ LIABILITIES AND
SHAREHOLDERS' EQUITY Current Accounts payable and accrued
liabilities..... $ 35,594 $ 42,538 Dividends
payable............................ 647 15,166 Income taxes
payable......................... 17,422 14,231 ------------
------------ Total current liabilities...................... 53,663
71,935 ------------ ------------ Reclamation provision and other
liabilities.... 26,922 27,457 ------------ ------------ Future
income and mining tax liabilities....... 167,356 169,691
------------ ------------ Shareholders' equity Common shares
Authorized - unlimited Issued - 121,209,748 (December 31, 2006 -
121,025,635)......................... 1,235,422 1,230,654 Stock
options.................................. 10,255 5,884
Warrants....................................... 15,717 15,723
Contributed surplus............................ 15,128 15,128
Retained earnings.............................. 23,450 3,015
Accumulated other comprehensive loss........... (12,456) (17,999)
------------ ------------ Total shareholders'
equity..................... 1,287,516 1,252,405 ------------
------------ $1,535,457 $1,521,488 ------------ ------------
------------ ------------ AGNICO-EAGLE MINES LIMITED COMPARATIVE
CONDENSED FINANCIAL INFORMATION (thousands of United States dollars
except share and per share amounts, unaudited) Three months ended
------------------ March 31, --------- 2007 2006 ------------
------------ REVENUES Revenues from mining
operations................ $ 100,730 $ 90,581 Interest and sundry
income..................... 5,274 1,480 Gain on sale of
available-for-sale securities.. 1,865 21,574 ------------
------------ 107,869 113,635 COSTS AND EXPENSES
Production..................................... 36,178 33,187 Loss
on derivative financial instruments....... 6,128 7,431 Exploration
and corporate development.......... 5,829 5,517 Equity loss in
junior exploration companies.... - 84
Amortization................................... 6,928 5,997 General
and administrative..................... 9,053 5,544 Provincial
capital tax......................... 1,062 553
Interest....................................... 751 1,357 Foreign
currency loss (gain)................... (1,267) 1,868 ------------
------------ Income before income, mining and federal capital
taxes......................... 43,207 52,097 Federal capital
tax............................ - 204 Income and mining tax
expense.................. 18,285 14,703 ------------ ------------
Net income for the period...................... $ 24,922 $ 37,190
------------ ------------ ------------ ------------ Net income per
share - basic................... $ 0.21 $ 0.35 ------------
------------ ------------ ------------ Net income per share -
diluted................. $ 0.20 $ 0.34 ------------ ------------
------------ ------------ Weighted average number of shares
outstanding (in thousands)
Basic........................................ 121,159 106,127
Diluted...................................... 125,649 108,598
AGNICO-EAGLE MINES LIMITED COMPARATIVE CONDENSED FINANCIAL
INFORMATION (thousands of United States dollars, unaudited) Three
months ended ------------------ March 31, --------- 2007 2006
------------ ------------ Operating activities Net income for the
period...................... $ 24,922 $ 37,190 Add (deduct) items
not affecting cash: Amortization.................................
6,928 5,997 Future income and mining taxes............... 16,329
11,702 Unrealized loss on derivative contracts...... 5,723 6,683
Gain on sale of available-for-sale
securities.................................. (1,864) (21,574)
Amortization of deferred costs and other..... 4,449 1,854 Changes
in non-cash working capital balances Metals awaiting
settlement................... 9,807 (8,908) Income taxes
payable......................... 3,191 3,289 Other taxes
recoverable...................... 3,169 3,986
Inventories.................................. (2,591) (2,151) Other
current assets......................... (7,053) (2,905) Accounts
payable and accrued liabilities..... (6,944) (13,209) Interest
payable............................. - (2,243) ------------
------------ Cash provided by operating activities.......... 56,066
19,711 ------------ ------------ Investing activities Additions to
property, plant and mine development..............................
(62,974) (20,975) Acquisition, investments and other.............
(16,320) (10,231) ------------ ------------ Cash used in investing
activities.............. (79,294) (31,206) ------------
------------ Financing activities Dividends
paid................................. (13,406) (3,166) Short-term
debt................................ - 3,264 Proceeds from common
shares issued............. 2,743 45,358 ------------ ------------
Cash provided by (used in) financing
activities.......................... (10,663) 45,456 ------------
------------ Effect of exchange rate changes on cash and cash
equivalents..................... 2,889 (34) ------------
------------ Net increase in cash and cash equivalents during the
period............................. (31,002) 33,927 Cash and cash
equivalents, beginning of
period..................................... 458,617 120,982
------------ ------------ Cash and cash equivalents, end of
period....... $ 427,615 $ 154,909 ------------ ------------
------------ ------------ Other operating cash flow information:
Interest paid during the period................ $ 589 $ 4,681
------------ ------------ ------------ ------------ Income, mining
and capital taxes paid during the
period............................. $ 25 $ 484 ------------
------------ ------------ ------------ Note 1: Reconciliation of
Total Cash Costs Per Ounce and Minesite Costs Per Tonne Three
months ended ------------------ March 31, --------- (thousands of
US dollars, except where noted) 2007 2006 ------------ ------------
Cost of production per Consolidated Statements of Income $ 36,178 $
33,187 Adjustments: Byproduct revenues (62,744) (48,039) Inventory
adjustment(i) 7,400 (504) Non-cash reclamation provision (263)
(105) ------------ ------------ Cash operating costs $ (19,429) $
(15,461) ------------ ------------ ------------ ------------ Gold
production (ounces) 58,588 64,235 ------------ ------------
------------ ------------ Total cash costs per ounce(ii) $ (332) $
(241) ------------ ------------ ------------ ------------ Three
months ended ------------------ March 31, --------- (thousands of
dollars, except where noted) 2007 2006 ------------ ------------
Cost of production per Consolidated Statements of Income $ 36,178 $
33,187 Adjustments: Inventory adjustments(iii) 1,001 110 Non-cash
reclamation provision (263) (105) ------------ ------------
Minesite operating costs (US$) $ 36,916 $ 33,192 ------------
------------ ------------ ------------ Minesite operating costs
(C$) $ 42,682 $ 38,005 ------------ ------------ ------------
------------ Tonnes of ore milled (000's tonnes) 672 662
------------ ------------ ------------ ------------ Minesite costs
per tonne (C$)(iv) C$64 C$57 ------------ ------------ ------------
------------ ----------------- 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 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 table
above, this measure is calculated by adjusting costs of production
as shown in the Consolidated Statements of Income and Comprehensive
Income for net byproduct revenues, royalties, inventory adjustments
and non-cash reclamation 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 cost of production as shown in the
Consolidated Statements of Income and Comprehensive Income for
inventory and hedging adjustments and non-cash reclamation
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 this
measure 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. DATASOURCE: Agnico-Eagle
Mines Limited CONTACT: David Smith, VP, Investor Relations, (416)
947-1212
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