Stock Symbol: AEM (NYSE and TSX) TORONTO, Aug. 1
/PRNewswire-FirstCall/ -- Agnico-Eagle Mines Limited
("Agnico-Eagle" or the "Company") today reported second quarter net
income of $37.8 million, or $0.28 per share, and second quarter
cash provided by operating activities of $79.8 million. Second
quarter 2007 net income included a non-cash foreign currency
translation loss of $8.0 million, or $0.06 per share. In the
comparable 2006 quarter, the Company reported net income of $37.1
million, or $0.32 per share, and cash provided by operating
activities of $48.1 million. Cash provided by operating activities
increased by $31.7 million in the second quarter of 2007 compared
to the second quarter of 2006, largely due to working capital
movements. Net income was essentially unchanged, while earnings per
share were negatively impacted by the issuance of approximately
12.5 million common shares upon the acquisition of Cumberland
Resources Ltd. ("Cumberland") in April 2007. Second quarter 2007
highlights include: - The acquisition of Cumberland and its 100%
owned Meadowbank gold project - A 66% increase in cash provided by
operating activities to $79.8 million versus Q2, 2006 - Strong
earnings of $37.8 million, or $0.28 per share - Low total cash
costs per ounce(1) at LaRonde of minus $699 - A record 30
consecutive months without a lost time accident underground at
LaRonde - LaRonde wins its third consecutive Quebec Mine Rescue
championship In the first half of 2007, the Company recorded net
income of $62.7 million, or $0.49 per share, and cash provided by
operating activities of $135.9 million. In the first half of 2006,
Agnico-Eagle recorded net income of $74.3 million, or $0.67 per
share, and cash provided by operating activities of $67.8 million.
With the increase in operating cash flows and the acquisition of
Cumberland in the second quarter of 2007, the Company's financial
position remains strong. Cash and cash equivalents totaled $495.3
million at June 30, 2007, an increase of $67.7 million during the
second quarter. The Company's financial position continued to
strengthen despite $106.4 million in capital expenditures during
the second quarter of 2007. Payable gold production(1) in the
second quarter of 2007 was 56,392 ounces at total cash costs per
ounce of minus $699. This compares with payable gold production of
55,966 ounces, at total cash costs per ounce of minus $975, in the
second quarter of 2006. The increase in total cash costs per ounce
in the second quarter of 2007 versus the prior period is mainly due
to a stronger Canadian dollar, increased minesite costs and lower
byproduct copper revenues. "With another strong quarter of cash
flows and earnings, Agnico-Eagle remains solidly positioned for
significant gold production and reserve growth. With our next new
gold mines, Goldex and Kittila, expected to begin production within
a year, we are poised to begin a period in which we expect to see
five-fold growth in gold output by 2010, while maintaining our low
political risk profile, strong balance sheet and significant
exploration upside" said Sean Boyd, Vice-Chairman and Chief
Executive Officer. "Additionally, over the next 18 months, we
anticipate gold reserves at our existing projects to grow from the
current 15.4 million ounces to 18 to 20 million ounces. We also
believe that we are in a very good position to potentially exceed
this gold reserve target with additional drilling at our current
projects" added Mr. Boyd. Conference Call Tomorrow The Company will
host its quarterly conference call tomorrow, Thursday August 2 at
11:00am E.D.T. Management will review the Company's operating and
financial results for the second quarter of 2007 and provide an
update of its exploration and development activities. Via
Telephone: To listen on the telephone, please dial (416) 644-3417
or 1 (800) 732-6179 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 21234830
followed by the number sign. It will be available from Thursday,
August 2, 2007 at 1:00 pm until Thursday, August 9, 2007 at 11:59
pm. LaRonde Mine - Strong Performance Continues The LaRonde mill
processed an average of 7,470 tonnes of ore per day in the second
quarter of 2007, compared with an average of 7,220 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
and a half years, continuing to demonstrate the reliability of this
world class mine. Minesite costs per tonne(2) were C$71 in the
second quarter. These costs are higher than the C$61 per tonne
experienced in the second quarter of 2006. The increase in costs
was partly due to the processing of approximately 30,000 tonnes of
ore from the adjacent Bousquet mine (which has minesite costs of
over C$100 per tonne), partly due to accelerated lateral
development and also industry-wide cost escalation for inputs
including fuel, reagents, steel and cement. Minesite costs per
tonne are expected to be approximately C$65 for the full year 2007,
five percent higher than 2006, due to the expected cost escalation
mentioned above, offset somewhat by lower reagent consumption in
the mill due to improvements in the copper-zinc circuit. Second
half 2007 minesite costs per tonne are expected to decrease
somewhat 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 $699 in the
second quarter. This compares with the results of the second
quarter of 2006 when total cash costs per ounce were minus $975.
The increase in total cash costs is due to a stronger Canadian
dollar, increased minesite costs and lower byproduct copper
revenues. LaRonde's full year 2007 production forecast is an
estimated 240,000 ounces of gold, the same as the prior estimate.
Byproduct production is now estimated at 4.9 million ounces of
silver, up 4%, 71,000 tonnes of zinc, down 7%, and 7,800 tonnes of
copper, down 10%. The change in byproduct estimates is largely due
to the mining of lower grade ore which is economic at current
prices. As a result, the mine life of LaRonde could be extended.
Total cash costs per ounce of gold production for the year are
expected to be significantly less than nil, at current byproduct
metal prices. Agnico-Eagle is proud to announce that its LaRonde
Mine Rescue Team won the prestigious Quebec Championship for the
third consecutive year, the first time that any team has
accomplished this feat in the 52 year history of the event. Cash
Position At Record Level, Despite Large Investments in Gold Growth
Cash and cash equivalents increased to $495.3 million at June 30,
2007 from the March 31, 2007 balance of $427.6 million, as the
strong cash generating performance from the LaRonde mine and the
cash acquired in the Cumberland transaction more than offset
capital investments at the Company's development projects. During
the quarter, Agnico-Eagle added $79.8 million of cash provided by
operating activities and an additional $96.0 million upon the
acquisition of Cumberland. Capital expenditures in the quarter
totaled $106.4 million, including $31.4 million on the construction
of Meadowbank, $27.2 million on Goldex, $15.7 million on the
extension at LaRonde, $14.0 million at Kittila and $4.8 million at
Lapa. For the full year 2007, capital expenditures are expected to
total over $400 million. With a large cash balance, strong cash
flows, no long term debt, and substantially undrawn bank lines of
$300 million, 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 Expected In Third Quarter 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 $225 per ounce, assuming C$/US$ of 1.30. With a large
additional resource, the deposit remains open for expansion. The
Goldex production shaft had reached a depth of 641 metres at the
end of June 2007, towards a final planned depth of 865 metres. The
shaft is expected to be completed by year end 2007. Approximately
28,000 tonnes of ore were extracted and stockpiled on surface
during the quarter. The total proven reserves in the surface
stockpile now stand at approximately 181,000 tonnes, grading 1.9
grams per tonne from development ore. 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 at total cash costs of
approximately $250 per ounce, assuming US$/Euro of 1.20. 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. Surface overburden stripping for the
open pits is advanced. Approximately 2.0 million tonnes of waste
rock has been excavated as well. Much of this rock has been used in
road and tailings dam construction. Construction of the underground
decline is on schedule and had advanced approximately 1,000 metres
by the end of June 2007. The mining fleet has been ordered and
mechanical installation in the processing plant is underway. 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 $210, assuming C$/US$ of 1.25. The shaft
at Lapa reached a depth of 1,279 metres below surface as of June
30, 2007 towards the currently planned final depth of 1,375 metres.
The shaft is expected to be completed this quarter. 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. 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 at total cash costs per ounce of
approximately $230, assuming C$/US$ of 1.25. The excavation for the
production hoist room was completed. The focus during the third
quarter continues to be on underground infrastructure construction
and detailed engineering. Shaft sinking for the new internal shaft
is expected to begin in the fourth quarter of 2007. 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 (the same 18.6
million tonnes grading 92.8 grams per tonne). The feasibility study
has been completed and the third party review is nearing
completion. The Board decision regarding production is expected
this month. 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 280 metres, while
construction of a 900 metre light aircraft airstrip is complete.
Exploration drilling is underway on the Mascota zone, and
underground drilling on the main Santo Nino zone is expected to
begin by the end of the year. With a large gold and silver resource
outside of the reserve envelope, the deposit remains open for
expansion. With the recent completion of the acquisition of
Cumberland, Agnico-Eagle now 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. 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. Currently, three drills are in
operation on the property. The all-weather road construction,
detailed engineering and sourcing and acquisition of the major
capital equipment are ongoing. Agnico-Eagle is pleased to announce
the addition of two experienced mine builders to the Meadowbank
team. In July, Mr. Dan Kivari was appointed to the position of
General Manager. He is a graduate metallurgical engineer with
extensive international operating and project development
experience. Most recently, he was the Vice President Operations
having built a 10,000 tonne per day mine and processing plant in
South America for a TSX listed Company. Also Mr. Martin Bergeron
was appointed to the position of Mine Manager. He is a graduate
mining engineer with extensive international operational and design
experience focusing on open pit mining. Most recently, he was the
Mine Manager of a 20,000 tonne per day open pit mining operation
located in South America for a TSX listed Company. Both individuals
have over 30 years of experience and are a welcome addition to
Agnico-Eagle's mine building team. Next Exploration Update In Third
Quarter Agnico-Eagle is undertaking its largest ever exploration
program in 2007 with expenditures expected to total more than $40
million. A comprehensive update on all of the exploration
properties is expected to be released in September 2007. Pinos
Altos Analyst Tour Agnico-Eagle is planning to host a tour of its
Pinos Altos property on August 20 and August 21, 2007. The trip is
open to equity analysts. A charter will be departing from Toronto
early in the morning on August 20, returning late on August 21.
Interested parties should contact Hazel Winchester at (416)
847-3717 or as soon as possible as spaces are limited.
--------------------------------------- (1) Payable gold production
and total cash costs per ounce are non-GAAP measures. 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) 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 August 1, 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. 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. 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. The effective date of the Company's
mineral reserves (with the exception of Meadowbank project) is
February 21, 2007. The effective date of the Meadowbank project
reserves is December 2005. AGNICO-EAGLE MINES LIMITED SUMMARIZED
QUARTERLY DATA (thousands of United States dollars, except where
noted - Unaudited) Three months ended Six months ended
------------------- ----------------- June 30, June 30, --------
-------- 2007 2006 2007 2006 ---------- ---------- ----------
---------- Income and cash flows LaRonde Division Revenues from
mining operations................. $ 117,935 $ 126,872 $ 218,665 $
217,453 Production costs 42,810 35,567 78,988 68,754 ----------
---------- ---------- ---------- Gross profit (exclusive of
amortization shown below)............... $ 75,125 $ 91,305 $
139,677 $ 148,699 Amortization................ 7,094 6,108 14,022
12,105 ---------- ---------- ---------- ---------- Gross
profit................ $ 68,031 $ 85,197 $ 125,655 $ 136,594
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- Net income for the
period..................... $ 37,809 $ 37,092 $ 62,731 $ 74,282 Net
income per share (basic).................... $ 0.28 $ 0.32 $ 0.49 $
0.67 Net income per share (diluted).................. $ 0.27 $ 0.31
$ 0.48 $ 0.65 Cash provided by operating activities....... $ 79,832
$ 48,095 $ 135,898 $ 67,806 Cash used in investing
activities................. $ (25,242) $ (33,170) $(104,536) $
(64,376) Cash provided by (used in) financing
activities................. $ 1,853 $ 246,449 $ (8,810) $ 291,905
Weighted average number of common shares outstanding - basic (in
thousands)............. 133,788 114,434 127,473 110,281 Tonnes of
ore milled........ 679,765 656,902 1,351,249 1,318,430 Head grades:
Gold (grams per tonne).... 2.82 2.89 2.91 3.10 Silver (grams per
tonne)................... 68.60 78.20 76.40 77.60
Zinc...................... 3.44% 4.27% 3.57% 4.03%
Copper.................... 0.32% 0.33% 0.35% 0.37% Recovery rates:
Gold...................... 91.54% 91.35% 91.09% 91.65%
Silver.................... 87.40% 87.70% 87.41% 87.10%
Zinc...................... 87.60% 87.20% 86.40% 87.00%
Copper.................... 86.40% 81.10% 85.50% 82.60% Payable
production: Gold (ounces)............. 56,392 55,966 114,980
120,201 Silver (ounces in thousands)............... 1,135 1,247
2,532 2,474 Zinc (tonnes)............. 17,462 20,787 35,406 39,250
Copper (tonnes)........... 1,689 1,590 3,680 3,643 Payable metal
sold: Gold (ounces)............. 57,366 60,966 114,124 130,643
Silver (ounces in thousands)............... 1,153 1,185 2,777 2,375
Zinc (tonnes)............. 16,460 20,621 34,227 38,799 Copper
(tonnes)........... 1,988 1,616 3,966 3,654 Realized prices: Gold
(per ounce).......... $ 683 $ 687 $ 676 $ 646 Silver (per
ounce)........ $ 13.28 $ 13.06 $ 13.60 $ 11.94 Zinc (per
tonne).......... $ 3,950 $ 3,786 $ 3,352 $ 3,249 Copper (per
tonne)........ $ 7,008 $ 14,901 $ 6,549 $ 9,833 Total cash costs
(per ounce): Production costs............ $ 759 $ 636 $ 687 $ 572
Less: Net byproduct revenues................... (1,396) (1,523)
(1,230) (1,109) Inventory adjustments..... (57) (86) 58 (44)
Accretion expense and other................ (5) (2) (5) (2)
---------- ---------- ---------- ---------- Total cash costs (per
ounce)(3)............. $ (699) $ (975) $ (490) $ (583) ----------
---------- ---------- ---------- ---------- ---------- ----------
---------- Minesite costs per tonne milled (C$)(3)....... $ 71 $ 61
$ 67 $ 60 ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- (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 June 30, December 31, 2007
2006 ------------ ------------ ASSETS Current Cash and cash
equivalents................... $ 495,334 $ 458,617 Metals awaiting
settlement.................. 76,511 84,987 Inventories: Ore
stockpiles............................. 5,142 2,330
Concentrates............................... 6,841 3,794
Supplies................................... 15,311 11,152 Other
current assets......................... 66,305 61,953 ------------
------------ Total current assets...........................
665,444 622,833 Other assets...................................
15,317 7,737 Future income and mining tax assets............ 15,957
31,059 Property, plant and mine development........... 1,714,628
859,859 ------------ ------------ $ 2,411,346 $ 1,521,488
------------ ------------ ------------ ------------ LIABILITIES AND
SHAREHOLDERS' EQUITY Current Accounts payable and accrued
liabilities.... $ 71,961 $ 42,538 Dividends
payable........................... 647 15,166 Income taxes
payable........................ 17,121 14,231 ------------
------------ Total current liabilities..................... 89,729
71,935 ------------ ------------ Reclamation provision and other
liabilities... 32,392 27,457 ------------ ------------ Future
income and mining tax liabilities...... 458,789 169,691
------------ ------------ Minority
Interest............................. 10,195 - ------------
------------ Shareholders' equity Common shares Authorized -
unlimited Issued - 133,834,169 (December 31, 2006 -
121,025,635).......... 1,724,496 1,230,654 Stock
options................................. 21,348 5,884
Warrants...................................... 15,715 15,723
Contributed surplus........................... 15,128 15,128
Retained earnings............................. 61,259 3,015
Accumulated other comprehensive loss.......... (17,705) (17,999)
------------ ------------ Total shareholders'
equity.................... 1,820,241 1,252,405 ------------
------------ $ 2,411,346 $ 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
Six months ended ------------------ ---------------- June 30, June
30, -------- -------- 2007 2006 2007 2006 ---------- ----------
---------- ---------- REVENUES Revenues from mining
operations.......... $ 117,935 $ 126,872 $ 218,665 $ 217,453
Interest and sundry income.. 4,206 3,125 9,480 4,605 Gain on sale
of available-for-sale securities 3,202 339 5,067 21,913 ----------
---------- ---------- ---------- 125,343 130,336 233,212 243,971
COSTS AND EXPENSES Production.................. 42,810 35,567
78,988 68,754 Loss (gain) on derivative financial instruments......
(299) 4,614 5,829 12,045 Exploration and corporate
development................ 9,037 7,051 14,866 12,652
Amortization................ 7,094 6,108 14,022 12,105 General and
administrative.. 7,623 5,275 16,676 10,819 Provincial capital
tax...... 1,438 344 2,500 897 Interest.................... 970 217
1,721 1,574 Foreign currency translation loss........... 8,045
6,650 6,778 8,518 ---------- ---------- ---------- ----------
Income before income, mining and federal capital taxes.. 48,625
64,510 91,832 116,607 Income and mining tax
expense.................... 10,816 27,418 29,101 42,325 ----------
---------- ---------- ---------- Net income for the period... $
37,809 $ 37,092 $ 62,731 $ 74,282 ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- Net income
per share - basic...................... $ 0.28 $ 0.32 $ 0.49 $ 0.67
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- Net income per share -
diluted.................... $ 0.27 $ 0.31 $ 0.48 $ 0.65 ----------
---------- ---------- ---------- ---------- ---------- ----------
---------- Weighted average number of shares outstanding (in
thousands) Basic..................... 133,788 114,434 127,473
110,281 Diluted................... 138,056 117,817 131,741 113,664
AGNICO-EAGLE MINES LIMITED COMPARATIVE CONDENSED FINANCIAL
INFORMATION (thousands of United States dollars, unaudtied) Three
months ended Six months ended ------------------- -----------------
June 30, June 30, -------- -------- 2007 2006 2007 2006 ----------
---------- ---------- ---------- Operating activities Net income
for the period... $ 37,809 $ 37,092 $ 62,731 $ 74,282 Add (deduct)
items not affecting cash: Amortization.............. 7,094 6,108
14,022 12,105 Future income and mining taxes....................
5,932 20,133 22,261 31,835 Unrealized loss on derivative
contracts..... (705) 1,433 5,018 8,116 Gain on sale of
available-for-sale securities............... (1,338) (339) (3,202)
(21,913) Amortization of deferred costs and other.......... 19,073
5,970 23,522 7,824 Changes in non-cash working capital balances
Metals awaiting settlement............... (1,331) (31,652) 8,476
(40,560) Income taxes payable...... (301) 6,969 2,890 10,258 Other
taxes recoverable... (6,376) (46) (3,207) 3,940
Inventories............... (3,417) (238) (6,008) (2,389) Other
current assets...... (1,773) (1,355) (8,826) (4,260) Accounts
payable and accrued liabilities...... 25,165 4,020 18,221 (9,189)
Interest payable.......... - - - (2,243) ---------- ----------
---------- ---------- Cash provided by operating
activities................. 79,832 48,095 135,898 67,806 ----------
---------- ---------- ---------- Investing activities Additions to
property, plant and mine development....... (106,416) (33,533)
(169,390) (54,508) Acquisitions, investments and
other.................. (14,869) 363 (31,189) (9,868) Cash acquired
upon acquisition of Cumberland Resources Ltd.............. 96,043 -
96,043 - ---------- ---------- ---------- ---------- Cash used in
investing activities................. (25,242) (33,170) (104,536)
(64,376) ---------- ---------- ---------- ---------- Financing
activities Dividends paid.............. - - (13,406) (3,166)
Short-term debt............. - 3,968 - 7,232 Proceeds from common
shares issued.............. 1,853 254,769 4,596 302,456 Share issue
costs........... - (12,288) - (14,617) ---------- ----------
---------- ---------- Cash provided by (used in) financing
activities....... 1,853 246,449 (8,810) 291,905 ----------
---------- ---------- ---------- Effect of exchange rate changes on
cash and cash equivalents........... 11,276 (812) 14,165 (846)
---------- ---------- ---------- ---------- Net increase in cash
and cash equivalents during the period................. 67,719
260,562 36,717 294,489 Cash and cash equivalents, beginning of
period........ 427,615 154,909 458,617 120,982 ----------
---------- ---------- ---------- Cash and cash equivalents, end of
period.............. $ 495,334 $ 415,471 $ 495,334 $ 415,471
---------- ---------- ---------- ---------- Other operating cash
flow information: Interest paid during the period.................
$ 540 $ 45 $ 1,129 $ 3,319 ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- Income,
mining and capital taxes paid during the period................. $
3,112 $ 484 $ 3,137 $ 968 ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- Note 1:
Reconciliation of Total Cash Costs Per Ounce and Minesite Costs Per
Tonne Three Three Six Six months months months months ended ended
ended ended (thousands of dollars, June 30, June 30, June 30, June
30, except where noted) 2007 2006 2007 2006 ----------------------
---------- ---------- ---------- ---------- Cost of production per
Consolidated Statements of Income.................. $ 42,810 $
35,567 $ 78,988 $ 68,754 Adjustments: Byproduct revenues........
(78,745) (85,188) (141,489) (133,227) Inventory adjustment(i)...
(3,210) (4,833) 6,683 (5,337) Non-cash reclamation
provision................ (280) (112) (544) (217) ----------
---------- ---------- ---------- Cash operating costs........ $
(39,425) $ (54,566) $ (56,362) $ (70,027) ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------
Payable gold production (ounces)(v)................ 56,392 55,966
114,980 120,201 ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- Total cash costs (per
ounce)(ii)............ $ (699) $ (975) $ (490) $ (583) ----------
---------- ---------- ---------- ---------- ---------- ----------
---------- Three Three Six Six months months months months ended
ended ended ended (thousands of dollars, June 30, June 30, June 30,
June 30, except where noted) 2007 2006 2007 2006
---------------------- ---------- ---------- ---------- ----------
Cost of production per Consolidated Statements of
Income.................. $ 42,810 $ 35,567 $ 78,988 $ 68,754
Adjustments: Inventory adjustments (iii).................... 1,401
153 4,895 1,562 Non-cash reclamation provision................
(280) (112) (544) (217) ---------- ---------- ---------- ----------
Minesite operating costs (US$)...................... 43,931 $
35,608 83,339 $ 70,099 ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- Minesite operating
costs (C$)....................... 48,037 $ 39,973 90,719 $ 79,438
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- Tonnes of ore milled (000's
tonnes)............. 679 657 1,351 1,318 ---------- ----------
---------- ---------- Minesite costs per tonne
(C$)(iv)................... $ 71 $ 61 $ 67 $ 60 ----------
---------- ---------- ---------- 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 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 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 (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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