Published: February 15, 2012
Agnico-Eagle Reports Fourth Quarter and Full Year 2011 Results; Record Full Year Operating Cash Flows; Dividend Increased 25% - Declared for 30th Consecutive Year; Provides Three Year Production Guidance; Meadowbank Partially Written Down - Optimized Mine Plan
(All amounts expressed in U.S. dollars unless otherwise noted)
Stock Symbol: AEM (NYSE and TSX)
TORONTO, Feb. 15, 2012 /PRNewswire/ - Agnico-Eagle Mines Limited ("Agnico-Eagle" or the "Company") today reported a quarterly net loss
of $601.4 million, or a loss of $3.53 per share for the fourth quarter
of 2011. This result includes a $644.9 million partial writedown of
the Meadowbank mine ($3.79 per share), a non-cash foreign currency
translation loss of $3.6 million ($0.02 per share), stock option
expense of $8.1 million ($0.05 per share), non-recurring tax audit
expenses of $11.1 million ($0.07 per share), and other non-recurring
expense items of $10.0 million ($0.06 per share). Excluding these
items would result in normalized net income of $76.2 million ($0.45 per
share) in the fourth quarte r of 2011. In the fourth quarter of 2010,
the Company reported net income of $88.0 million ($0.53 per share).
Fourth quarter 2011 cash provided by operating activities was $132.0
million ($171.6 million before changes in non-cash components of
working capital) up from cash provided by operating activities of $90.6 million in the fourth quarter
of 2010 ($179.4 million before changes in non-cash components of
working capital), due primarily to a smaller increase in working
capital in 2011.
"While 2011 was a very difficult year for our company, we look forward
to 2012 as we expect most of our mines to produce more gold. We also
anticipate further growth in gold output in 2013 and 2014 from our
existing mines while we advance our development projects at La India
and Meliadine", said Sean Boyd, President and Chief Executive Officer.
"In 2012, Agnico-Eagle anticipates meeting its targets, increasing
profitability and growing the shareholders' exposure to gold on a per
share basis" added Mr. Boyd.
Fourth quarter and full year 2011 highlights include:
-- Record operating cash flows - cash provided by operating
activities up 46%, year over year
-- Record annual gold production at Pinos Altos- strong quarterly
(52,574 ounces) and record full year gold production (204,380
ounces) at total cash costs1 of $299 per ounce for the year
-- Record annual gold production at Kittila -record gold
production in 2011 of 143,560 ounces at total cash costs of
$739 per ounce
-- LaRonde Extension - achieves commercial production in November
2011
-- Quarterly dividend up 25% to $0.20 per share - Company has
declared a dividend for 30 consecutive years
-- Grayd Resources Acquired- advanced La India property and
Tarachi exploration property in Mexico key assets
-- Meadowbank partially written down, Goldex operations suspended-
Meadowbank value reduced to approximately $762 million. Goldex
investigation and remediation underway
Agnico-Eagle is pleased to announce that its Board of Directors has
approved the payment of a quarterly cash dividend of $0.20 per common
share. The next dividend will be paid on March 15, 2012 to
shareholders of record as of March 1, 2012. Agnico-Eagle has now
declared a cash dividend to its shareholders for 30 consecutive years.
For the full year 2011, the Company recorded a net loss of $568.9
million, or a loss of $3.36 per share. In 2010, Agnico-Eagle recorded
net income of $332.1 million, or $2.05 per share. Compared with the
prior year, 2011 earnings were negatively impacted by the writedowns of
the Goldex (mining operations suspended October 2011) and Meadowbank
mines ($302.9 million and $907.7 million respectively, before taxes).
The Meadowbank mine previously had a property, plant and mine
development book value of approximately $1.7 billion. As a result of
persistently high operating costs, the latest optimized mine plan for
Meadowbank resulted in a shorter mine life and an associated reduction
in the carrying value of the operation was necessary. However, it is
believed that the new life of mine ("LOM") mine plan, while expected to
produce a similar return, is a lower risk option as approximately 73
million tonnes, or 36%, of the previously budgeted ore and waste tonnes
will not be mined under this plan.
For 2011, the Company realized a record amount of cash provided by
operating activities of $663.5 million ($693.7 million before changes
in non-cash components of working capital). This is significantly
higher than 2010, when cash provided by operating activities totaled
$483.5 million ($581.7 million before changes in non-cash components of
working capital). The increase was primarily due to significant
increases in realized prices for gold and silver in 2011 which more
than offset lower realized prices for zinc and copper.
Payable gold production(2) in the fourth quarter of 2011 was 227,792 ounces (Goldex produced
through October only) compared to 256,471 ounces in the fourth quarter
of 2010. A detailed description of the production and cost performance
by mine may be found in the respective sections later in this document.
Total cash costs for the fourth quarter of 2011 were $671 per ounce
(versus $462 per ounce for fourth quarter 2010). The increase in total
cash costs per ounce in the fourth quarter of 2011 is mainly due to
higher costs at LaRonde, Meadowbank and Lapa. The October suspension
of the low cost Goldex mine also negatively impacted total cash costs.
The Company's payable gold production for the full year 2011 was 985,460
ounces at total cash costs per ounce of $580. The full year production
is 13% below the bottom end of the range of guidance provided in
December 2010. The lower than anticipated gold production in the year
is largely due to the October closure of Goldex and lower than expected
grades at Meadowbank and LaRonde. The 2011 production compares to the
full year 2010 level of 987,609 ounces at total cash costs per ounce of
$451. The higher total cash costs per ounce in 2011 were primarily due
to the impact of Meadowbank, the loss of Goldex and general cost
escalation in the industry.
Conference Call Tomorrow
The Company's senior management will host a conference call on Thursday, February 16, 2012 at 11:00 AM (E.S.T.) to discuss financial results and provide an update of the Company's
exploration and development activities.
Via Webcast:
A live audio webcast of the meeting will be available on the Company's
website homepage at www.agnico-eagle.com.
Via Telephone:
For those preferring to listen by telephone, please dial 416-644-3414 or
Toll-free 800-814-4859. To ensure your participation, please call
approximately five minutes prior to the scheduled start of the call.
Replay archive:
Please dial 416-640-1917 or the Toll-free access number 877-289-8525,
passcode 4507250#.
The conference call replay will expire on Friday, March 16, 2012.
The webcast along with presentation slides will be archived for 180 days on the website.
Senior Management Changes
Agnico-Eagle's Board of Directors has approved the following changes to
its senior management structure.
After 26 years with Agnico-Eagle, President and Chief Operating Officer
Eberhard Scherkus will be leaving the Company. Under Ebe's operating
leadership, Agnico-Eagle has grown dramatically over the past several
years.
"All of us at Agnico-Eagle want to thank Ebe for his friendship and
leadership in helping to build, grow and transform the Company from a
single asset producer into a multi-mine international gold company",
said President and CEO, Sean Boyd. "Ebe's achievements have been widely
recognized in the mining industry and Agnico-Eagle will continue to
benefit from his extensive experience as he will act as a consultant to
the Company" added Mr. Boyd.
Agnico-Eagle also announces that Paul-Henri Girard, Vice-President,
Canada will be leaving the Company after 25 years of service.
Paul-Henri was instrumental in the development of the world-class
LaRonde mine and in building the Company's Canadian mining base. He
will also continue to serve the Company as an advisor to senior
management.
Several other additions and changes have been made to Agnico-Eagle's
senior management team.
Jean-Luk Pellerin, Senior Vice-President, Human Resources was added to
the team in January 2012. Mr. Pellerin brings a wealth of senior HR
experience most recently with Transat A.T., Mercer Consulting and
Bombardier.
Yvon Sylvestre has been appointed Senior Vice-President, Operations.
With more than 30 years of mining industry experience, Yvon has held
several senior positions within Agnico-Eagle, including General
Manager, Goldex Division and most recently Vice-President, Technical
Services and Construction.
Daniel Racine will move into a new role as Senior Vice-President,
Mining. Daniel will work with the operating group and will focus on
optimizing mining operations, engineering, maintenance and health and
safety activities. He will also continue to be responsible for the
Information Technology function.
Marc Legault has been promoted to Senior Vice-President, Project
Evaluations. In this role Marc will continue to manage Agnico-Eagle's
project evaluation team. He is leading an expanded effort in this area
and he will work closely with the corporate development and exploration
groups.
Mathew Cook has been promoted to Vice-President, Corporate Controller.
In this role, Mathew will continue to lead and oversee all aspects the
Company's corporate accounting function. He has been with the Company
since 2004 and has held several senior positions including Corporate
Controller and Corporate Director, Financial Reporting.
The Company has also added three new Vice-Presidents within
Agnico-Eagle's operating team. Pierre Bureau has been appointed
Vice-President, Construction, Michel Leclerc has been appointed
Vice-President, Project Evaluations and Christian Provencher has been
appointed Vice-President, Canada.
In Pierre's new role, he will be responsible for major project
construction. He has been with Agnico-Eagle since 1997 and has held
several senior positions including General Manager of Construction for
our Pinos Altos mine in Mexico. Most recently, Pierre was Corporate
Director, Construction.
In Michel's new role, he will work closely with Marc Legault to expand
the activities of the project evaluations team. He has been with
Agnico-Eagle since 2001 and has held several senior positions including
Mine Manager at the LaRonde Mine. Most recently Michel was Corporate
Director, Technical Evaluations.
In Christian's new role, he will be responsible for the management of
Agnico-Eagle's Canadian mining operations. Christian has been with
Agnico-Eagle since 2002 and has held many key positions including
General Manager of the LaRonde mine. Most recently he was Corporate
Director, Mining and Performance Standards.
Cash Position Remains Strong
Cash and cash equivalents increased to $221.5 million at December 31,
2011, from the September 30, 2011 balance of $116.7 million, as the
Company drew on its bank facilities during the quarter during the
normal course of inter-Company fund flows. The bank facilities were
also used for the cash portion of the acquisition of Grayd Resource
Corporation during the quarter.
Capital expenditures in the fourth quarter were $107.6 million including
$25.1 million at LaRonde, $21.8 million at Meadowbank, $21.8 million at
Kittila, $7.6 million at Pinos Altos and $4.6 million at Lapa. For the
full year 2011, capital expenditures totaled $482.8 million.
With its cash balances, anticipated cash flows and available bank lines,
management believes that Agnico-Eagle remains fully funded for the
development and exploration of its current pipeline of gold projects in
Canada, Finland, Mexico and the USA.
Available credit lines as of December 31, 2011 were approximately $880
million.
Three Year Plan Outlines Further Production Growth
The Company is announcing its production and cost guidance for the
three-year period of 2012 through 2014.
In 2012, payable gold production is expected to be in the range of
875,000 ounces to 950,000 ounces. Total cash costs per ounce in 2012
are expected to be in the range of $690 to $750.
In 2013, Agnico-Eagle expects to have payable gold production of
approximately 990,000 ounces, growing to 1,055,000 ounces in 2014.
Total cash costs per ounce are expected to be at similar levels to
those now forecast for 2012.
Estimated Payable
GoldProduction
and Total Cash 2011 2012 Estimated 2012 Estimated
Costs per Ounce Actual Range - Low Range - High
Payable Gold Production
LaRonde 124,173 150,000 165,000
Goldex 135,478 - -
Lapa 107,068 95,000 105,000
Kittila 143,560 150,000 160,000
Pinos Altos 204,380 200,000 210,000
Meadowbank 270,801 280,000 310,000
985,460 875,000 950,000
Total cash costs
per ounce 2011 Actual 2012 Estimated
LaRonde $77 $570
Goldex 401 -
Lapa 650 750
Kittila 739 650
Pinos Altos 299 415
Meadowbank 1,000 1,040
$580 $720
At the forecast assumptions (see below), LaRonde's byproduct revenue is
expected to be approximately $80 million lower than that realized in
2011 (about two thirds of this is due to lower byproduct grades and
approximately one third due to lower metals price assumptions). This
byproduct revenue is netted off against the cost of operating. Hence,
in spite of the higher value of the ore expected to be mined in 2012
(higher gold grades), the total cash costs per ounce at LaRonde are
expected to rise, as set out above. The loss of the low cost Goldex
mine (total cash cost of $401 per ounce through October 2011) also
skews the Company average cost higher in 2012.
Total cash costs per ounce for 2012 were calculated using the following
metals prices and exchange rates (royalties included where applicable):
Assumptions 2012
Gold (US$/oz) $1,500
Silver (US$/oz) $30.00
Copper (US$/tonne) $7,000
Zinc (US$/tonne) $1,800
C$/US$ 1.00
US$/Euro 1.35
Changes in the assumptions would be expected to have the following
effects on total cash costs per ounce.
Impact on Total Cash Costs per Ounce 2012
$1/oz change in price of Silver $5
$100/dry metric tonne change in price of Copper $1
$100/ dry metric tonne change in price of Zinc $3
1% change in C$/US$ $7
1% change in US$/Euro $1
Comparison With Prior Gold Production Guidance
There has been considerable change in the production forecast for 2012
through 2014 since the prior guidance of December 15, 2010.
Descriptions of the major factors that contributed to these changes are
detailed below.
________________________________________
|LaRonde Forecast|2012 |2013 |2014 |
|________________|_______|_______|_______|
|Previous (oz) |212,800|280,100|333,100|
|________________|_______|_______|_______|
|Current (oz) |157,500|220,000|280,000|
|________________|_______|_______|_______|
_____________________________________________________________________
|LaRonde|Ore Milled|Gold |Silver |Zinc (%),|Copper (%),|Minesite |
|2012 |('000 |(g/t), |(g/t), |Mill |Mill |Cost |
| |tonnes) |Mill |Mill |Recovery |Recovery |Per Tonne3|
| | |Recovery|Recovery| | | |
|_______|__________|________|________|_________|___________|__________|
| |2,300 |2.3, 91%|31, 88% |1.5, 86% |0.25, 84% |C$90 |
|_______|__________|________|________|_________|___________|__________|
At LaRonde, over the next three years new gold production guidance is
down approximately 21% annually, on average, from the prior guidance.
This is partly due to a 21% higher gold price used in the current LOM
plan versus the 2011 plan (a higher gold price results in lower cut off
grades and lowers the expected grade of ore to the mill). The lower
production forecast is also due to a shift in planning practices and
changes in stope sequencing (which resulted in lower grade stopes in
this three year plan). Additionally, as the mine is transitioning into
the deeper LaRonde Extension over the next several years, a decision
was made to be more conservative through this transition period.
_____________________________________
|Lapa Forecast|2012 |2013 |2014 |
|_____________|_______|_______|_______|
|Previous (oz)|118,700|107,500|125,100|
|_____________|_______|_______|_______|
|Current (oz) |100,000|100,000|105,000|
|_____________|_______|_______|_______|
______________________________________________________________
|Lapa 2012|Ore Milled |Gold (g/t)|Mill Recovery|Minesite Cost|
| |('000 tonnes)| | |Per Tonne |
|_________|_____________|__________|_____________|_____________|
| |600 |6.4 |81% |C$124 |
|_________|_____________|__________|_____________|_____________|
At Lapa, over the next three years new gold production guidance is down
approximately 13% annually, on average. The new forecast considers the
experience to date at the mine, and the location of the stopes expected
to be mined over the next several years, and results in new estimates
of overall ore dilution of 74% in the reserves as compared with the
prior estimates of 54%. This results in the forecast of lower grades
to the mill.
________________________________________
|Kittila Forecast|2012 |2013 |2014 |
|________________|_______|_______|_______|
|Previous (oz) |178,200|176,500|168,200|
|________________|_______|_______|_______|
|Current (oz) |155,000|155,000|170,000|
|________________|_______|_______|_______|
__________________________________________________________________
|Kittila 2012|Ore Milled |Gold (g/t),|Mill Recovery|Minesite Cost|
| |('000 tonnes)| | |Per Tonne |
|____________|_____________|___________|_____________|_____________|
| |1,045 |5.5 |84% |EUR71 |
|____________|_____________|___________|_____________|_____________|
At Kittila, over the next three years new guidance is down approximately
8% annually, on average. This is largely due to the experience to date
with the autoclave. The reliability, and associated availability, to
date has been less than expected with average overall mill availability
of 84% in 2011 versus the budget of 89%.
___________________________________________
|Meadowbank Forecast|2012 |2013 |2014 |
|___________________|_______|_______|_______|
|Previous (oz) |369,500|415,300|470,300|
|___________________|_______|_______|_______|
|Current (oz) |295,000|305,000|310,000|
|___________________|_______|_______|_______|
_____________________________________________________________________
|Meadowbank 2012|Ore Milled |Gold (g/t),|Mill Recovery|Minesite Cost|
| |('000 tonnes)| | |Per Tonne |
|_______________|_____________|___________|_____________|_____________|
| |3,150 |3.2 |92% |C$97 |
|_______________|_____________|___________|_____________|_____________|
At Meadowbank, over the next three years, new guidance is down
approximately 27% annually, on average. The mine has experienced a
number of issues during its startup over the past two years. While the
mill throughput is now exceeding the original design rate, the grades
to the mill continue to be lower than expected (orebody geometry has
been more complex making selective mining difficult and more costly).
This, combined with the unexpected rise in minesite costs (C$98/t in
Q4, 2011 versus the December 15, 2010 LOM forecast of $59/t) has
resulted in a new mine plan which forecasts lower gold production over
a shorter mine life. The mine life now extends to 2017 rather than
2020. Compared with the 2010 LOM plan, the new LOM grade is now
forecast to be down approximately 1%, tonnes milled are down 28% and
ounces are forecast to be reduced by 29%.
____________________________________________
|Pinos Altos Forecast|2012 |2013 |2014 |
|____________________|_______|_______|_______|
|Previous (oz) |236,900|227,500|223,500|
|____________________|_______|_______|_______|
|Current (oz) |205,000|210,000|190,000|
|____________________|_______|_______|_______|
_____________________________________________________________________
|Pinos Altos|Total Ore |Gold (g/t)|Recovery |Minesite Cost|
|2012 |('000 tonnes)| |(incl. heap leach)|Per Tonne |
|___________|_____________|__________|__________________|_____________|
| |4,200 |1.9 |81% |$27 |
|___________|_____________|__________|__________________|_____________|
Over the next three years, new guidance at Pinos Altos is down
approximately 12% annually, on average. This is largely the result of
a lower cut-off due to higher gold and silver prices and increased
dilution estimates.
Capex Fully-Funded - Free Cash Flow Expected To Increase
The Company's balance sheet is well positioned to fund the Company's
growth initiatives. The cash balance at December 31, 2011 was
approximately $221 million. Additionally, the Company had
approximately $880 million available under its credit facilities and
expects to generate significant cash flows from its operations in 2012
and beyond. At current spot prices, Agnico-Eagle expects to generate
free cash flow in 2012, after capital expenditures which are expected
to total approximately $382 million in 2012. It is a goal of the
Company to increase its dividend to shareholders, over time, on a
sustainable basis.
The forecast capital expenditures include approximately $257 million at
the mines and $80 million on new projects, as broken out in the table
below. Additionally, approximately $45 million is expected to be spent
on capitalized exploration.
Capital Expenditure Budget
($, millions) Sustaining New Capitalized
Projects Exploration
LaRonde 74.8 0.7
Lapa 10.2 0.3
Meadowbank 88.5 6.2
Kittila 51.9 12.2
Pinos Altos 31.5 11.4 4.4
La India 3.5
Meliadine 52.0 20.7
Other 0.5 13.5
Total 257.4 80.4 44.5
Grand Total Capital Expenditures 382.3
Several Projects Not Yet Considered in Production and Capital Investment
Plan
The current three year plan shows annual gold production rising each
year through 2014 to almost 1.1 million ounces. However, these
forecasts do not currently include the following expansion and
development projects:
_____________________________________________________________________
| |Project |Project Status|Next News |Potential |
| | | | |Production|
|_________|_____________|______________|___________________|__________|
|La India |New Mine |Permitting, |Construction Permit|2014 |
| | |Feasibility | | |
|_________|_____________|______________|___________________|__________|
|Kittila |25% Expansion|Feasibility |Q4, 2012 Review |2015 |
| | |Underway | | |
|_________|_____________|______________|___________________|__________|
|Meliadine|New Mine |Permitting, |Road Permit |2017 |
| | |Updated | | |
| | |Feasibility | | |
|_________|_____________|______________|___________________|__________|
La India - Next New Mine
The La India deposit, acquired in late 2011, is currently undergoing
drilling with the goal of converting the current resources into
reserves. Additionally, the Company is advancing the engineering study
and permitting process with the goal of initial production from a low
cost open pit, heap leach mine with first production by late 2014.
Kittila - 25% Expansion
By year end 2012, it is expected that a study on a 25% throughput
expansion at Kittila will be completed. Considering the rapid
expansion of the Kittila orebody at depth, and particularly to the
north, it is now believed that a smaller initial expansion followed by
the possibility of a larger expansion at a later date would be
prudent. The initial expansion could be supported by the current
reserve at Kittila and the higher throughput could be realized in 2015.
Meliadine - High Grade Project Continues To Grow
The Meliadine project, acquired in 2010, is currently one of
Agnico-Eagle's largest gold deposits in terms of reserves and
resources. It is currently in the permitting phase with first
production expected in 2017. With the expectation of mining
multi-million ounces of gold, Meliadine is considered to be a long-term
cornerstone asset for the Company.
As the main deposit at Tiriganiaq continues to develop at depth, the
Company believes that more emphasis on underground extraction would be
prudent to control dilution, reduce the impact of a harsh environment
and optimize the value of this high grade deposit.
As announced in today's separate exploration news release, the proven
and probable gold reserves at Meliadine have grown. The deposits
remain wide open for further expansion. The property covers 80 km of
strike length and multiple favourable targets will be tested in the
next two years.
First production is anticipated for 2017 with capital expenditures
expected to be distributed over the 2012 to 2016 period.
Several Longer Term Projects Developing
Additionally, other advanced exploration and development projects may
eventually contribute to expansion, or extensions of the lives of the
mines. The most significant are presented in the table below.
_____________________________________________________________________
| |Project |Project Status|Next News |
|___________|_______________________|______________|__________________|
|Kittila |Larger Expansion |Drilling |2012 Drill Results|
|___________|_______________________|______________|__________________|
|Pinos Altos|Various Satellite Zones|Drilling |2012 Drill Results|
|___________|_______________________|______________|__________________|
|Tarachi |Exploration |Drilling |2012 Drill Results|
|___________|_______________________|______________|__________________|
|Goldex |M and D Zones |Drilling |2012 Drill Results|
|___________|_______________________|______________|__________________|
While the studies are not yet completed on any of these projects, and in
some cases remain early stage, several have a currently defined
resource. A brief description of the larger, and most advanced,
potential growth projects follows.
Kittila - Larger Expansion
Reflecting the continued growth of the Kittila orebody, a feasibility
study is underway regarding an initial 25% expansion, as mentioned
above. However, the orebody appears to be significantly richer and
thicker beneath the Rimpi zone (as further discussed in today's
separate exploration news release). This zone is approximately two
kilometres north of the main Suuri deposit, which is currently being
mined.
It is anticipated that the Kittila reserves will continue to grow as the
deposit is drilled over the next several years (partly via more
efficient underground drilling which is expected to begin in 2012).
With this expectation of a growing reserve, the Company is considering
an even larger expansion. This larger expansion could involve the
sinking of a shaft and an appropriate increase in milling capacity,
possibly in the form of a new separate mill. A prefeasibility study on
the larger expansion would be initiated, pending positive exploration
results in the interim.
Pinos Altos - Bravo and Sinter Zones
The Bravo deposit is adjacent to, and southwest of the Creston Mascota
mine. In fact, it may be an extension of the same orebody and will be
a focus of the exploration activity in 2012.
The Sinter deposit is located approximately two kilometres north of the
main Santo Nino zone at Pinos Altos. It is being examined as a
possible source of open pit ore for the mill at Pinos Altos. This
would effectively extend the mine life of Pinos Altos.
Tarachi - New Zone Showing Large Scale Mineralization
This gold deposit is approximately 10 kilometres to the northwest of the
La India deposit in Sonora State, Mexico. Initial drilling and
sampling suggest that the mineralized structure extends over several
kilometres. The property is expected to be a focus of exploration
drilling in 2012 and an initial resource is likely to be announced in
2013.
Goldex - M and E Zones
Although the mining operations at Goldex were suspended indefinitely in
October 2011, the Company continues to evaluate production options
during the ongoing investigation and remediation phase. While
speculative at the moment, these projects are considered to be of
interest due to the existing infrastructure and availability of a
highly skilled workforce.
The M and E Zones have promise with the viability dependant on the
results of the investigation into the stability of the crown pillar at
Goldex. Successful production from these zones may provide sufficient
cash flow to help fund the exploration of the deeper, but promising D
Zone.
Goldex - D Zone Growing
The Company is currently drilling the deeper mineralization at Goldex.
The D zone is located approximately 150 metres below the mine workings
of the GEZ deposit. Although not yet fully defined and recognizing that
it would be a longer term project, the D zone is very similar in
geology and style of mineralization as that of the GEZ.
To date, the D zone mineralization (currently in the indicated and
inferred categories) has been traced over a length of almost 400
metres, with a vertical height of at least 400 metres and with an
estimated thickness of up to 100 metres (which are similar dimensions
to the GEZ deposit). The zone has been followed down to a depth of
approximately 1300 metres below surface (where it remains open for
expansion in all directions).
Operating Review
LaRonde Mine - Sequence Results In Lower Grades Than Expected
The 100% owned LaRonde mine in northwestern Quebec achieved commercial
production in 1988.
The LaRonde mill processed an average of 6,767 tonnes per day ("tpd") in
the fourth quarter of 2011, compared with an average of 6,918 tpd in
the corresponding period of 2010. Milling performance for the full
year 2011 was approximately 6,592 tpd versus 7,102 tpd in 2010. The
lower throughput was largely due to issues with sequencing and
dilution. Additionally, due to a forecast reduction in the specific
gravity of the ore in the LaRonde Extension, the tonnage processed
through the mill will naturally decrease even though the gold grades
are expected to increase as the mine progresses deeper.
Minesite costs per tonne were approximately C$79 in the fourth quarter
of 2011. These costs are the same as the C$79 per tonne experienced in
the fourth quarter of 2010. The cost control is in spite of the
aforementioned issues with throughput, a higher proportion of ore from
the lower levels (higher haulage costs) and the November declaration of
commercial production at the LaRonde Extension that also meant that
many costs began to be expensed.
Minesite costs per tonne for the full year 2011 were approximately C$84,
approximately 12% higher than in 2010 (C$75) mainly due to the lower
throughput and cost increases as discussed above.
On a per ounce basis, net of byproduct credits, LaRonde's total cash
costs per ounce were $375 in the fourth quarter of 2011 on production
of 30,686 ounces of gold. This compares with the fourth quarter of
2010 when total cash costs per ounce were minus $250 on production of 38,405 ounces of gold. The increase in total
cash costs is largely due to lower ounce production from lower grade,
lower byproduct revenue and lower throughput, as discussed above.
For the full year 2011, LaRonde's total cash costs per ounce were $77 on
gold production of 124,173 ounces. This compares to total cash costs
per ounce of minus $7 on gold production of 162,806 in 2010, as lower gold production in
2011 (lower grades and throughput, as mentioned above) was accompanied
by weaker byproduct metals prices in 2011.
In 2011, the LaRonde mine also produced approximately 55,000 tonnes of
zinc, 3.2 million ounces of silver and 3,200 tonnes of copper, as
byproduct to the gold production.
Goldex Mine - Investigation and Remediation Ongoing
The 100% owned Goldex mine in northwestern Quebec achieved commercial
production in 2008. However, the mine operations were suspended on
October 19, 2011. All proven and probable reserves were transferred
into mineral resources pending investigation and remediation of the
issues as discussed in the news release of the same day.
Payable gold production in the fourth quarter of 2011 (October only) was
14,756 ounces at total cash costs per ounce of $344. This compares to
fourth quarter 2010 gold production of 43,111 ounces at total cash
costs per ounce of $370. The decrease in gold production is due to the
closure of the mine.
For the full year 2011, Goldex's payable gold production was 135,478
ounces at total cash costs per ounce of $401. This compares to full
year 2010 production of 184,386 ounces at total cash costs per ounce of
$335. The reduced performance is due to the suspension of mining
activities at the mine.
In 2012, a budget of approximately $63 million is anticipated for
monitoring, instrumentation, remediation and limited development work
at the mine. The majority of this expenditure is anticipated to be
spent in the first quarter. An update on this work is expected in the
second quarter of 2012.
Kittila Mine - Record Annual Gold Production And Mill Recoveries
The 100% owned Kittila mine in northern Finland achieved commercial
production in 2009.
The Kittila mill processed an average of 2,627 tonnes per day in the
fourth quarter of 2011, compared with its 3,000 tonne per day design
rate. A planned two week maintenance shutdown in early October and
several other unplanned shutdowns (totaling 10 days) were largely
responsible for the lower than design throughput. In the fourth
quarter of 2010, the Kittila mill processed 2,619 tonnes per day.
Minesite costs per tonne at Kittila were approximately EUR80 in the fourth
quarter of 2011, compared to EUR79 in the fourth quarter of 2010. The
steady cost performance compared to the prior period is in spite of the
three shutdowns. The mine has, in fact, made improvements in the
overall cost structure and is forecasting lower minesite costs for
2012.
For the full year 2011, the mill processed an average of 2,824 tpd as
compared with 2010 when the mill processed an average of 2,631 tpd.
For the full year 2011, the minesite costs per tonne were EUR75, compared
to EUR66 in 2010. This increase is largely attributable to the start of
commercial production in the underground mine in the fourth quarter of
2010 (costs stopped being capitalized). Additionally, higher costs
were realized in 2011 related to unbudgeted tonnes being mined during
the remediation of a slip in the Suuri pit east wall and higher costs
for energy and chemical reagents.
Fourth quarter 2011 gold production at Kittila was 34,508 ounces with a
total cash cost per ounce of $751. In the fourth quarter of 2010 the
mine produced 29,721 ounces at total cash costs per ounce of $832. The
higher production and lower total cash costs were largely the result of
higher grades and mill recoveries during 2011, as these were only
partly offset by the higher costs described above.
For the full year 2011, payable gold production from Kittila was a
record 143,560 ounces at total cash costs of $739 per ounce. In 2010,
the mine produced 126,205 ounces of gold at total cash costs of $657
per ounce. The higher production in 2011 was largely due to much better
mill recoveries (12% higher in 2011) and higher mill throughput,
somewhat offset by lower grade for the full year. Total cash costs
were higher largely due to the factors discussed above.
In 2011, the Kittila mill realized average mill recoveries of 84.5%, an
annual record.
Lapa - Steady Performance During 2011
The 100% owned Lapa mine in northwestern Quebec achieved commercial
production in May 2009.
The Lapa circuit, at the LaRonde mill, processed an average of 1,598 tpd
in the fourth quarter of 2011. This compares with an average of 1,517
tonnes per day in the fourth quarter of 2010 as Lapa continues to
exceed its design rate of 1,500 tpd. For the full year 2011, Lapa
averaged 1,701 tpd compared with 1,512 tpd in 2010.
Minesite costs per tonne were C$117 in the fourth quarter of 2011,
essentially unchanged from the C$115 realized in the fourth quarter of
2010. Considering the general cost pressure in the industry and an
incident with the shaft conveyance that resulted in five days without
hoisting, this is viewed as a positive result.
Full-year minesite costs in 2011 were C$110 per tonne, slightly below
the C$114 achieved in 2010. The improved operating performance is
attributable to realized efficiencies as the Company gained valuable
experience with the orebody.
Payable production in the fourth quarter of 2011 was 23,721 ounces of
gold at total cash costs per ounce of $723. This compares with the
fourth quarter of 2010, when production was 29,289 ounces of gold at
total cash cost per ounce of $564. During 2011, the mine struggled
with grade as dilution remained the main issue underground. For the
year, ore dilution totaled approximately 72% as compared with the
budget of 54%. Budgeted dilution going forward will be 74%.
For the full year 2011, payable production was 107,068 ounces of gold at
total cash costs of $650 per ounce. The prior year production was
117,456 ounces of gold at total cash costs of $529 per ounce. The
primary driver of these differences was the aforementioned lower grades
due to higher dilution.
Pinos Altos - Record Gold Production at Low Costs
The 100% owned Pinos Altos mine in northern Mexico achieved commercial
production in November 2009.
The Pinos Altos mill processed an average of 4,924 tpd in the fourth
quarter of 2011. This compares favourably with 4,501 tonnes per day in
the fourth quarter of 2010. The mill is now routinely performing at
process rates above the initial design capacity of 4,000 tpd.
Minesite costs per tonne were $24 in the fourth quarter of 2011,
compared to $35 in the fourth quarter of 2010. In the fourth quarter
of 2011, a greater proportion of lower cost heap leach tonnes were
processed including the new operation at Creston Mascota.
For the full year 2011, minesite costs per tonne were $27 as compared
with the fourth quarter of 2010 when minesite costs per tonne were $35.
The minesite costs at Pinos Altos for 2011 were lower than the prior
year due to the greater proportion of lower cost heap leach tonnes
processed, including the new operation at Creston Mascota .
Payable production in the fourth quarter of 2011 was 52,574 ounces of
gold at total cash costs per ounce of $292. This compares with
production of 39,955 ounces at a total cash costs per ounce of $365 in
the fourth quarter of 2010. The higher production and lower costs in
2011 were largely due to the contribution of Creston Mascota and higher
throughput in the Pinos Altos mill during the year.
Gold production from the satellite Creston Mascota mine was 12,471
ounces at total cash costs of $326 per ounce (included in the Pinos
Altos total) in the fourth quarter of 2011. The first gold production
occurred at the satellite Creston Mascota project during the fourth
quarter of 2010 with 666 ounces of payable gold production. Commercial
production at Creston Mascota was achieved in March 2011.
Full year 2011 production at Pinos Altos was 204,380 ounces of gold at
total cash costs per ounce of $299, as compared to 2010 production of
131,097 ounces at total cash cost per ounce of gold of $425.
Additionally, the Company produced 1.86 million ounces of silver
byproduct at Pinos Altos in 2011.
Meadowbank - New Mine Plan
The 100% owned Meadowbank mine project in Nunavut, northern Canada,
achieved commercial production in March 2010.
The Meadowbank mill processed an average of 8,866 tpd in the fourth
quarter of 2011. This is significantly up from the 6,659 tpd achieved
in the fourth quarter of 2010. Since the June 2011 startup of the
permanent secondary crusher, the design rate of 8,500 tpd has been
consistently exceeded.
Minesite costs per tonne were C$98 in the fourth quarter and C$91 for
the full year of 2011. These costs were higher than the C$82 per tonne
which was forecast for 2011. In the fourth quarter of 2010, the
minesite costs were C$91 per tonne and for the full year 2010 C$95 per
tonne. In spite of improved throughput, the minesite costs per tonne
did not decrease significantly, as was expected. Higher costs were
realized in nearly all aspects of operating the mine in 2012,
specifically, transportation, logistics, labour and maintenance.
Payable production in the fourth quarter of 2011 was 71,547 ounces of
gold at total cash cost per ounce of gold of $1,088. This compares
with the fourth quarter of 2010 when 75,990 ounces were produced at
total cash costs per ounce of $745. The higher cost is 2011 was due to
overall cost pressure as noted above.
Full year 2011 production was 270,801 ounces of gold at total cash costs
per ounce of gold of $1,000. In 2010 the mine produced 265,659 ounces
at total cash costs per ounce of $693. The higher cost in 2011 was due
to overall cost pressure, as above.
Depreciation Guidance
Agnico-Eagle expects 2012 amortization on its income statement to amount
to $280 to $300 per reserve ounce. This amount was approximately $266
in 2011, $195 in 2010 and $151 in 2009.
Please see the supplemental financial data section of the Financial and
Operating Database on the Company's website for additional historical
financial data.
Annual General Meeting
Friday April 27, 2012 at 11:00am
The Harbour Ballroom
Westin Harbour Castle
Toronto, ON M5J 1A6
Expected Dividend Record and Payment Dates for the Remainder of 2012
________________________
|Record Date|Payment Date|
|___________|____________|
|March 1 |March 15 |
|___________|____________|
|June 1 |June 15 |
|___________|____________|
|September 4|September 17|
|___________|____________|
|December 3 |December 17 |
|___________|____________|
Dividend Reinvestment Program
Please follow the link below for information on the Company's dividend
reinvestment program.
DividendReinvestmentPlan
About Agnico-Eagle
Agnico-Eagle is a long established, Canadian headquartered, gold
producer with operations located in Canada, Finland and Mexico, and
exploration and development activities in Canada, Finland, Mexico and
the United States. The Company has full exposure to higher gold prices
consistent with its policy of no forward gold sales. It has declared a
cash dividend for 30 consecutive years. www.agnico-eagle.com
------------------------------
1. Total cash costs per ounce is a non-GAAP measure. For a
reconciliation to production costs, see Note 1 to the financial
statements contained herein. See also "Note Regarding Certain
Measures of Performance".
2. Payable production of a mineral means the quantity of mineral
produced during a period contained in products that are sold by
the Company whether such products are shipped during the period or
held as inventory at the end of the period.
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.
AGNICO-EAGLE MINES LIMITED
SUMMARY OF OPERATIONS KEY PERFORMANCE INDICATORS
(thousands of United States dollars, except where noted, US GAAP basis)
(Unaudited)
Three months ended Yearended
December 31, December 31,
2011 2010 2011 2010
Gross mine
profit
(exclusive of
amortization
shown below)
(Note 1)
LaRonde $34,581 $65,517 $188,662 $203,240
Goldex 24,677 50,122 160,723 163,529
Lapa 23,736 25,477 98,937 84,718
Kittila 33,619 17,467 115,135 72,400
Pinos Altos
(Note 2) 67,111 34,998 232,715 85,344
Meadowbank 44,212 49,426 149,549 135,818
Total gross mine
profit 227,936 243,007 945,721 745,049
Amortization 73,513 69,835 261,781 192,486
Loss on Goldex
Mine 4,710 - 302,893 -
Impairment loss
on Meadowbank
Mine 907,681 - 907,681 -
Corporate 92,204 51,269 251,994 117,360
Income (loss)
before income
and mining
taxes (850,172) 121,903 (778,628) 435,203
Income and
mining taxes (248,742) 33,940 (209,673) 103,087
Net loss
attributed to
non-controlling
interest (60) - (60) -
Net income
(loss)
attributed to
common
shareholders ($601,370) $87,963 ($568,895) $332,116
Net income
(loss) per share
- basic ($3.53) $0.53 ($3.36) $2.05
Cash provided by
operating
activities $132,028 $90,576 $663,462 $483,470
Realized price
per sales volume
(US$):
Gold (per
ounce) $1,640 $1,387 $1,573 $1,250
Silver (per
ounce) $26.83 $31.96 $34.39 $22.56
Zinc (per
tonne) $2,188 $2,391 $1,892 $2,165
Copper (per
tonne) $8,510 $10,311 $7,162 $8,182
Payable
production:
Gold (ounces)
LaRonde 30,686 38,405 124,173 162,806
Goldex 14,756 43,111 135,478 184,386
Lapa 23,721 29,289 107,068 117,456
Kittila 34,508 29,721 143,560 126,205
Pinos Altos
(Note 2) 52,574 39,955 204,380 131,097
Meadowbank 71,547 75,990 270,801 265,659
Total gold
(ounces) 227,792 256,471 985,460 987,609
Silver (000s
ounces)
LaRonde 785 766 3,169 3,581
Pinos Altos
(Note 2) 508 427 1,851 1,185
Meadowbank 18 14 60 46
Total silver
(000s ounces) 1,311 1,207 5,080 4,812
Zinc (tonnes) 12,591 14,939 54,894 62,544
Copper
(tonnes) 1,002 935 3,216 4,224
Payable metal
sold:
Gold (ounces -
LaRonde) 31,342 39,896 124,119 163,781
Gold (ounces -
Goldex) 20,863 48,067 141,702 183,357
Gold (ounces -
Lapa) 23,854 31,177 107,334 123,136
Gold (ounces -
Kittila) 37,769 28,722 145,006 129,639
Gold (ounces -
Pinos Altos)
(Note 2) 55,611 39,156 204,239 122,514
Gold (ounces -
Meadowbank) 78,579 79,849 273,690 250,629
Total gold
(ounces) 248,018 266,867 996,090 973,056
Silver (000s
ounces -
LaRonde) 865 828 3,171 3,539
Silver (000s
ounces - Pinos
Altos) (Note
2) 546 406 1,858 1,137
Silver (000s
ounces -
Meadowbank) 18 14 60 46
Total silver
(ounces) 1,429 1,248 5,089 4,722
Zinc (tonnes) 11,516 15,212 54,499 59,566
Copper
(tonnes) 978 941 3,194 4,223
Total cash costs
per ounce of
gold (US$) (Note
3):
LaRonde $375 $(250) $77 $(7)
Goldex $344 $370 $401 $335
Lapa $723 $564 $650 $529
Kittila $751 $832 $739 $657
Pinos Altos $292 $365 $299 $425
Meadowbank $1,088 $745 $1,000 $693
Weighted average
total cash costs
per ounce $671 $462 $580 $451
Note 1
Gross mine profit is calculated as total revenues from all metals, by
mine, minus total production costs, by mine.
Note 2
Creston Mascota achieved commercial production as of March 1, 2011. All
payable production ounces are post commercial production as they were
sold after March 1, 2011.
Note 3
Total cash costs per ounce of gold is calculated net of silver, copper,
zinc and other byproduct credits. The weighted average total cash cost
per ounce is based on commercial production ounces. Total cash costs
per ounce is a non-GAAP measure. See "reconciliation of production
costs to total cash costs per ounce and minesite costs per tonne"
contained herein for details.
AGNICO-EAGLE MINES LIMITED
CONSOLIDATED BALANCE SHEETS
(thousands of United States dollars, US GAAP basis)
(Unaudited)
Asat Asat
December 31, December31,
2011 2010
ASSETS
Current
Cash and cash equivalents $ 221,458 $ 104,645
Trade receivables 75,899 112,949
Inventories:
Ore stockpiles 77,478 67,764
Concentrates 57,528 50,332
Supplies 182,389 149,647
Income Taxes Recoverable 371
Other current assets 255,780 188,885
Total current assets 870,903 674,222
Other assets 38,725 61,502
Goodwill 229,279 200,064
Property, plant and mine
development 3,887,657 4,564,563
$ 5,026,564 $ 5,500,351
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current
Accounts payable and accrued 208,174
liabilities $ $ 170,967
Environmental remediation 26,069
liability -
Dividends payable - 108,009
Interest payable 9,356 9,743
Income taxes payable - 14,450
Fair value of derivative 4,404
financial instruments 142
Total current liabilities 248,003 303,311
Long term debt 920,095 650,000
Reclamation provision and other
liabilities 144,731 145,536
Future income and mining tax
liabilities 498,572 736,054
SHAREHOLDERS' EQUITY
Common shares
Authorized - unlimited
Issued - 170,859,604 (December
31, 2010 - 168,763,496) 3,181,381 3,078,217
Stock options 117,694 78,554
Warrants 24,858 24,858
Contributed surplus 15,166 15,166
Retained earnings (deficit) (129,021) 440,265
Accumulated other comprehensive
income (loss) (7,106) 28,390
3,202,972 3,665,450
Non-controlling interest 12,191 -
Total shareholders' equity 3,215,163 3,665,450
$ 5,026,564 $ 5,500,351
AGNICO-EAGLE MINES LIMITED
CONSOLIDATED STATEMENTS OF INCOME
(thousands of United States dollars except share and per share amounts, US GAAP
basis)
(Unaudited)
Three monthsended Yearended
December 31, December 31,
2011 2010 2011 2010
REVENUES
Revenues from
mining operations $ 455,503 $ 439,004 $ 1,821,799 $ 1,422,521
Interest and
sundry income
(expense) (2,137) 1,209 (1,505) 75,392
Gain (loss) on
sale and
write-down of
available-for-sale
securities (5,074) 11,302 (3,662) 19,487
448,292 451,515 1,816,632 1,517,400
COSTS AND EXPENSES
Production 227,567 195,998 876,078 677,472
Impairment loss on
Meadowbank Mine 907,681 - 907,681 -
Exploration and
corporate
development 31,844 15,008 75,721 54,958
Amortization 73,513 69,835 261,781 192,486
Loss on Goldex
Mine 4,710 - 302,893 -
General and
administrative 28,242 22,732 107,926 94,327
Provincial capital
tax 9,223 704 9,223 (6,075)
Interest 12,124 14,958 55,039 49,493
Foreign currency
(gain) loss 3,560 10,377 (1,082) 19,536
Income (loss)
before income and
mining taxes (850,172) 121,903 (778,628) 435,203
Income and mining
taxes (248,742) 33,940 (209,673) 103,087
Net income (loss)
for the period $ (601,430) $ 87,963 $ (568,955) $ 332,116
Attributed to
non-controlling
interest $ (60) $ - $ (60) $ -
Attributed to
common
shareholders $ (601,370) $ 87,963 $ (568,895) $ 332,116
Net income (loss)
per share - basic $ (3.53) $ 0.53 $ (3.36) $ 2.05
Net income (loss)
per share -
diluted $ (3.53) $ 0.51 $ (3.36) $ 2.00
Weighted average
number of shares
outstanding
(in thousands)
Basic 170,276 168,342 169,353 162,386
Diluted 170,276 172,856 169,353 165,842
AGNICO-EAGLE MINES LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(thousands of United States dollars, US GAAP basis)
(Unaudited)
Three monthsended Yearended
December 31, December 31,
2011 2010 2011 2010
OPERATING ACTIVITIES
Net income (loss) for the
period attributed to common
shareholders $ (601,370) $ 87,963 $ (568,895) $ 332,116
Add (deduct) items not
affecting cash:
Impairment loss on
Meadowbank Mine 907,681 - 907,681 -
Amortization 73,513 69,835 261,781 192,486
Future income and
mining taxes (228,339) 20,226 (275,773) 66,928
Gain on
available-for-sale
securities and
derivative
financial
instruments, net (8,493) (10,425) (8,590) (20,007)
Reversal of
mark-to-market
gain - Comaplex - - - (64,508)
Loss on Goldex
Mine 4,710 - 302,893 -
Environmental
remediation (7,616) - (7,616) -
Amortization of
deferred costs and
other 31,479 11,814 82,252 74,706
Changes in non-cash working
capital balances
Trade receivables 7,196 (29,135) 37,050 (19,378)
Income taxes
(payable)
recoverable (24,331) 9,697 (29,867) 9,949
Inventories 23,827 (19,394) (43,066) (91,306)
Other current
assets (1,528) (2,765) (25,838) (28,729)
Interest payable (10,499) (9,838) (387) 8,077
Accounts payable
and accrued
liabilities (34,202) (37,402) 31,837 23,136
Cash provided by operating
activities 132,028 90,576 663,462 483,470
INVESTING ACTIVITIES
Additions to property, plant
and mine development (107,577) (114,985) (482,831) (511,641)
Acquisitions, investments
and other (163,239) (6,207) (244,727) (5,893)
Cash used in investing
activities (270,816) (121,192) (727,558) (517,534)
FINANCING ACTIVITIES
Dividends paid (25,650) - (98,354) (26,830)
Repayment of capital lease
and other (3,289) (3,243) (13,092) (16,019)
Proceeds from long-term debt 270,000 40,000 475,000 1,311,000
Repayment of long-term debt
- (105,000) (205,000) (1,376,000)
Sale-leaseback financing - 7,156 - 14,017
Credit facility financing
costs (51) (97) (2,545) (12,772)
Proceeds from common shares
issued 3,451 50,776 26,536 84,659
Cash provided by (used in)
financing activities 244,461 (10,408) 182,545 (21,945)
Effect of exchange rate
changes on cash and cash
equivalents (885) (2,447) (1,636) (2,939)
Net increase (decrease) in
cash and cash equivalents
during the period 104,788 (43,471) 116,813 (58,948)
Cash and cash equivalents,
beginning of period 116,670 148,116 104,645 163,593
Cash and cash equivalents,
end of period $ 221,458 $ 104,645 $ 221,458 $ 104,645
Other operating cash flow
information:
Interest paid during the
period $ 21,360 $ 24,465 $ 52,833 $ 41,429
Income, mining and capital
taxes paid during the period $ 25,486 $ 7,674 $ 114,962 $ 25,199
AGNICO-EAGLE MINES LIMITED
RECONCILIATION OF PRODUCTION COSTS TO
TOTAL CASH COSTS PER OUNCE AND MINESITE COSTS PER TONNE
(Unaudited)
Total Cash Costs per Ounceof GoldProduced
(thousands of United Statesdollars, except
where noted)
Three
months Threemonths
ended ended Year ended Yearended
December December December December 31,
31, 2011 31, 2010 31, 2011 2010
Total
Production
costs per
Consolidated
Statements of
Income $227,567 $195,998 $876,078 $677,472
Attributable
to LaRonde 52,480 49,739 209,947 189,146
Attributable
to Goldex 7,679 16,774 56,939 61,561
Attributable
to Lapa 16,834 17,692 68,599 66,199
Attributable
to Kittila 28,602 22,235 110,477 87,740
Attributable
to Pinos Altos 36,541 29,206 145,614 90,293
Attributable
to Meadowbank 85,431 60,352 284,502 182,533
Total $227,567 $195,998 $876,078 $677,472
LaRonde
Three Three
months months
ended ended Year ended Year ended
December December31, December December31,
31,2011 2010 31, 2011 2010
Production
costs $52,480 $49,739 $209,947 $189,146
Adjustments:
Byproduct
revenues (34,299) (59,376) (194,000) (192,155)
Inventory
adjustment
and other
adjustments
(i) (5,125) 372 (2,309) 3,287
Non-cash
reclamation
provision (1,546) (337) (4,062) (1,344)
Cash operating
costs $11,510 ($9,602) $9,576 ($1,066)
Gold
production
(ounces) 30,686 38,405 124,173 162,806
Total cash
costs
(per ounce)
(iii) $375 ($250) $77 ($7)
Goldex
Three Threemonths
monthsended ended Year ended Year ended
December December December December 31,
31, 2011 31, 2010 31, 2011 2010
Production
costs $7,679 $16,774 $56,939 $61,561
Adjustments:
Byproduct
revenues 269 748 395 727
Inventory
adjustment
and other
adjustments
(i) (2,836) (1,519) (2,778) (253)
Non-cash
reclamation
provision (36) (54) (173) (216)
Cash operating
costs $5,076 $15,949 $54,383 $61,819
Gold
production
(ounces) 14,756 43,110 135,478 184,386
Total cash
costs
(per ounce)
(iii) $344 $370 $401 $335
Lapa
Three Three
months months
ended ended Year ended Year ended
December December December December 31,
31, 2011 31, 2010 31, 2011 2010
Production
costs $16,834 $17,692 $68,599 $66,199
Adjustments:
Byproduct
revenues 349 682 663 644
Inventory
adjustment
and other
adjustments
(i) 283 (1,830) 631 (4,683)
Non-cash
reclamation
provision (312) (14) (348) (57)
Cash operating
costs $17,154 $16,530 $69,545 $62,103
Gold
production
(ounces) 23,721 29,288 107,068 117,456
Total cash
costs
(per ounce)
(iii) $723 $564 $650 $529
Kittila
Three Threemonths
monthsended ended Year ended Yearended
December December December31, December 31,
31, 2011 31, 2010 2011 2010
Production
costs $28,602 $22,235 $110,477 $87,740
Adjustments:
Byproduct
revenues 38 332 152 252
Inventory
adjustment
and other
adjustments
(i) (2,648) 2,252 (1,267) (4,774)
Non-cash
reclamation
provision (66) (78) (206) (334)
Stripping
(capitalized
vs expensed)
(ii) - - (3,018) -
Cash operating
costs $25,926 $24,741 $106,138 $82,884
Gold
production
(ounces) 34,508 29,721 143,560 126,205
Total cash
costs
(per ounce)
(iii) $751 $832 $739 $657
Pinos Altos (includes Creston Mascota)
Three Three
months months
ended ended Year ended Yearended
December December December December 31,
31, 2011 31, 2010 31, 2011 2010
Production
costs $36,541 $29,206 $145,614 $90,293
Adjustments:
Byproduct
revenues (13,559) (10,054) (60,653) (25,052)
Inventory
adjustment
and other
adjustments
(i) (1,779) 296 1,871 2,925
Non-cash
reclamation
provision (386) (214) (1,372) (858)
Stripping
(capitalized
vs expensed)
(ii) (5,472) (4,921) (24,260) (11,857)
Cash operating
costs $15,345 $14,313 $61,200 $55,451
Gold
production
(ounces) 52,574 39,289 204,380 130,431
Total cash
costs
(per ounce)
(iii) $292 $365 $299 $425
Meadowbank
Three Three
months months
ended ended Year ended Year ended
December December December31,
31,2011 31, 2010 2011 December31,2010
Production
costs $85,431 $60,352 $284,502 $182,533
Adjustments:
Byproduct
revenues 718 8 (546) (584)
Inventory
adjustment
and other
adjustments
(i) (7,261) (2,432) (1,670) 6,911
Non-cash
reclamation
provision (414) (437) (1,679) (1,315)
Stripping
(capitalized
vs expensed)
(ii) (606) (842) (9,746) (4,321)
Cash operating
costs $77,868 $56,649 $270,861 $183,224
Gold
production
(ounces) 71,547 75,990 270,801 264,576
Total cash
costs
(per ounce)
(iii) $1,088 $745 $1,000 $693
Minesite Cost per Tonne
(thousands of United Statesdollars, except
where noted)
LaRonde
Three
Three months
monthsended ended Yearended Year ended
December December December December 31,
31, 2011 31, 2010 31, 2011 2010
Production
costs $52,480 $49,739 $209,947 $189,146
Adjustments:
Inventory
adjustments
(iv) (2,195) 372 (22) 3,287
Non-cash
reclamation
provision (1,546) (337) (4,062) (1,344)
Minesite
operating
costs $48,739 $49,774 $205,863 $191,089
Minesite
operating
costs (C$) $49,372 $50,416 $202,957 $194,993
Tonnes of
ore milled
(000s) 622 637 2,406 2,592
Minesite
cost per
tonne (C$)
(v) $79 $79 $84 $75
Goldex
Three Three
months months
ended ended Year ended Yearended
December December December December
31, 2011 31, 2010 31, 2011 31,2010
Production
costs $7,679 $16,774 $56,939 $61,561
Adjustments:
Inventory
adjustments
(iv) (2,836) (1,519) (2,407) (253)
Non-cash
reclamation
provision (36) (54) (173) (216)
Minesite
operating
costs $4,807 $15,201 $54,359 $61,092
Minesite
operating
costs (C$) $4,903 $15,397 $53,208 $62,545
Tonnes of
ore milled
(000s) 237 722 2,477 2,782
Minesite
cost per
tonne (C$)
(v) $21 $21 $21 $22
Lapa
Three Three
months months
ended ended Yearended Yearended
December December31, December December 31,
31,2011 2010 31, 2011 2010
Production
costs $16,834 $17,692 $68,599 $66,199
Adjustments:
Inventory
adjustments
(iv) 394 (1,830) 1,071 (4,683)
Non-cash
reclamation
provision (312) (14) (348) (57)
Minesite
operating
costs $16,916 $15,848 $69,322 $61,459
Minesite
operating
costs (C$) $17,152 $16,053 $68,403 $62,771
Tonnes of
ore milled
(000s) 148 140 621 552
Minesite
cost per
tonne (C$)
(v) $117 $115 $110 $114
Kittila
Three Three
monthsended monthsended Yearended Year ended
December December31, December December
31, 2011 2010 31, 2011 31,2010
Production
costs $28,602 $22,235 $110,477 $87,740
Adjustments:
Inventory
adjustments
(iv) (2,705) 2,252 (1,324) (4,774)
Non-cash
reclamation
provision (66) (78) (206) (334)
Stripping
(capitalized
vs expensed)
(ii) - - (3,018) -
Minesite
operating
costs $25,831 $24,409 $105,929 $82,632
Minesite
operating EUR EUR EUR
costs (EUR) 19,383 19,035 76,817 EUR 63,464
Tonnes of
ore milled
(000s) 242 241 1,031 960
Minesite
cost per
tonne (EUR)
(v) EUR 80 EUR 79 EUR 75 EUR 66
Pinos Altos (includes Creston Mascota)
Three Three
months months
ended ended Year ended Year ended
December31, December December December31,
2011 31, 2010 31, 2011 2010
Production
costs $36,541 $29,206 $145,614 $90,293
Adjustments:
Inventory
adjustments
(iv) (1,704) 296 (169) 2,925
Non-cash
reclamation
provision (386) (214) (1,372) (858)
Stripping
(capitalized
vs expensed)
(ii) (5,472) (4,921) (24,260) (11,857)
Minesite
operating
costs $28,979 $24,367 $119,813 $80,503
Tonnes of
ore milled
(000s) 1,203 699 4,509 2,318
Minesite
cost per
tonne (US$)
(v) $24 $35 $27 $35
Meadowbank
Three Three
months months
ended ended Year ended Year ended
December December December December31,
31, 2011 31, 2010 31, 2011 2010
Production
costs $85,431 $60,352 $284,502 $182,533
Adjustments:
Inventory
adjustments
(iv) (6,773) (2,432) 253 6,911
Non-cash
reclamation
provision (414) (437) (1,679) (1,315)
Stripping
(capitalized
vs expensed)
(ii) (606) (842) (9,746) (4,321)
Minesite
operating
costs $77,638 $56,641 $273,330 $183,808
Minesite
operating
costs (C$) $79,643 $57,373 $272,157 $190,980
Tonnes of
ore milled
(000s) 816 631 2,978 2,001
Minesite
cost per
tonne (C$)
(v) $98 $91 $91 $95
(i) Under the Company's revenue recognition policy, revenue is
recognized on concentrates when legal title passes. Since
total cash costs are calculated on a production basis, this
inventory adjustment reflects the sales margin on the portion
of concentrate production for which revenue has not been
recognized in the period.
(ii) The Company has decided to report total cash costs using the
more common industry practice of deferring certain stripping
costs that can be attributed to future production. The
methodology is in line with the Gold Institute Production Cost
Standard. The purpose of adjusting for these stripping costs
is to enhance the comparability of cash costs to the majority
of the Company's peers within the mining industry.
(iii) Total cash cost per ounce is not a recognized measure under US
GAAP and this data may not be comparable to data presented by
other gold producers. The Company believes that this generally
accepted industry measure is a realistic indication of
operating performance and is useful in allowing year over year
comparisons. As illustrated in the tables above, this measure
is calculated by adjusting production costs as shown in the
Consolidated Statements of Income and Comprehensive Income for
net byproduct revenues, royalties, inventory adjustments and
asset retirement provisions. This measure is intended to
provide investors with information about the cash generating
capabilities of the Company's mining operations. Management
uses this measure to monitor the performance of the Company's
mining operations. Since market prices for gold are quoted on
a per ounce basis, using this per ounce measure allows
management to assess the mine's cash generating capabilities
at various gold prices. Management is aware that this per
ounce measure of performance can be impacted by fluctuations
in byproduct metal prices and exchange rates. Management
compensates for the limitation inherent with this measure by
using it in conjunction with the minesite costs per tonne
measure (discussed below) as well as other data prepared in
accordance with US GAAP. Management also performs sensitivity
analyses in order to quantify the effects of fluctuating metal
prices and exchange rates.
(iv) This inventory adjustment reflects production costs associated
with unsold concentrates.
(v) Minesite costs per tonne is not a recognized measure under US
GAAP and this data may not be comparable to data presented by
other gold producers. As illustrated in the tables above, this
measure is calculated by adjusting production costs as shown
in the Consolidated Statements of Income and Comprehensive
Income for inventory, asset retirement provisions and deferred
stripping costs, and then dividing by tonnes processed through
the mill. Since total cash costs data can be affected by
fluctuations in byproduct metal prices and exchange rates,
management believes minesite costs per tonne provides
additional information regarding the performance of mining
operations and allows management to monitor operating costs on
a more consistent basis as the per tonne measure eliminates
the cost variability associated with varying production
levels. Management also uses this measure to determine the
economic viability of mining blocks. As each mining block is
evaluated based on the net realizable value of each tonne
mined, in order to be economically viable the estimated
revenue on a per tonne basis must be in excess of the minesite
costs per tonne. Management is aware that this per tonne
measure is impacted by fluctuations in production levels and
thus uses this evaluation tool in conjunction with production
costs prepared in accordance with US GAAP. This measure
supplements production cost information prepared in accordance
with US GAAP and allows investors to distinguish between
changes in production costs resulting from changes in
production versus changes in operating performance.
Note Regarding Production Guidance
The gold production guidance is based on the Company's mineral reserves
but includes contingencies, assumes metal prices and foreign exchange
rates that are different from those used in the reserve estimates.
These factors and others mean that the gold production guidance
presented in this disclosure does not reconcile exactly with the
production models used to support these mineral reserves.
Note Regarding Certain Measures of Performance
This news release presents measures including "total cash costs per
ounce" and "minesite costs per tonne" that are not recognized measures
under US GAAP. This data may not be comparable to data presented by
other gold producers. The Company believes that these generally
accepted industry measures are realistic indicators of operating
performance and useful for year-over-year comparisons. However, both of
these non-GAAP measures should be considered together with other data
prepared in accordance with US GAAP. These measures, taken by
themselves, are not necessarily indicative of operating costs or cash
flow measures prepared in accordance with US GAAP. A reconciliation of
the Company's total cash costs per ounce and minesite costs per tonne
to the most comparable financial measures calculated and presented in
accordance with US GAAP for the Company's historical results of
operations is set out above.
The contents of this news release have been prepared under the
supervision of, and reviewed by, Marc Legault P.Eng., Senior
Vice-President, Project Evaluations and a "Qualified Person" for the
purposes of NI 43-101.
Forward-Looking Statements
The information in this news release has been prepared as at February
15, 2012. Certain statements contained in this news release constitute
"forward-looking statements" within the meaning of the United States
Private Securities Litigation Reform Act of 1995 and "forward looking
information" under the provisions of Canadian provincial securities
laws and are referred to herein as "forward-looking statements". When
used in this document, words such as "anticipate", "expect",
"estimate", "forecast", "planned", "will", "likely", "schedule" and
similar expressions are intended to identify forward-looking
statements.
Such statements include without limitation: the Company's
forward-looking production guidance, including estimated ore grades,
project timelines, drilling results, orebody configurations, metal
production, life of mine trends, production estimates, cash flows, the
estimated timing of scoping and other studies, the methods by which ore
will be extracted or processed, recovery rates, mill throughput, and
projected exploration and capital expenditures, including costs and
other estimates upon which such projections are based; the Company's
goal to increase its mineral reserves and resources; the Company's goal
to increase its dividends; the Company's goal to build a mine at La
India and Meliadine; the Company's ability to produce at Goldex; and
other statements and information regarding anticipated trends with
respect to the Company's operations, exploration and the funding
thereof. Such statements reflect the Company's views as at the date of
this news release and are subject to certain risks, uncertainties and
assumptions. Forward-looking statements are necessarily based upon a
number of factors and assumptions that, while considered reasonable by
Agnico-Eagle as of the date of such statements, are inherently subject
to significant business, economic and competitive uncertainties and
contingencies. The factors and assumptions of Agnico-Eagle contained in
this news release, which may prove to be incorrect, include, but are
not limited to, the assumptions set forth herein and in management's
discussion and analysis and the Company's Annual Report on Form 20-F
for the year ended December 31, 2010 ("Form 20-F") as well as: that
there are no significant disruptions affecting operations, whether due
to labour disruptions, supply disruptions, damage to equipment, natural
occurrences, equipment failures, accidents, political changes, title
issues or otherwise; that permitting, production and expansion at each
of Agnico-Eagle's mines and growth projects proceeds on a basis
consistent with current expectations, and that Agnico-Eagle does not
change its plans relating to such projects; that the exchange rate
between the Canadian dollar, European Union euro, Mexican peso and the
United States dollar will be approximately consistent with current
levels or as set out in this news release; that prices for gold,
silver, zinc, copper and lead will be consistent with Agnico-Eagle's
expectations; that prices for key mining and construction supplies,
including labour costs, remain consistent with Agnico-Eagle's current
expectations; that Agnico-Eagle's current estimates of mineral
reserves, mineral resources, mineral grades and metal recovery are
accurate; that there are no material delays in the timing for
completion of ongoing growth projects; that the Company's current plans
to optimize production are successful; and that there are no material
variations in the current tax and regulatory environment. Many
factors, known and unknown, could cause the actual results to be
materially different from those expressed or implied by such
forward-looking statements. Such risks include, but are not limited to:
the volatility of prices of gold and other metals; uncertainty of
mineral reserves, mineral resources, mineral grades and metal recovery
estimates; uncertainty of future production, capital expenditures, and
other costs; currency fluctuations; financing of additional capital
requirements; cost of exploration and development programs; mining
risks; risks associated with foreign operations; governmental and
environmental regulation; the volatility of the Company's stock price;
and risks associated with the Company's byproduct metal derivative
strategies. For a more detailed discussion of such risks and other
factors, see the Form 20-F, as well as the Company's other filings with
the Canadian Securities Administrators and the U.S. Securities and
Exchange Commission (the "SEC"). The Company does not intend, and does
not assume any obligation, to update these forward-looking statements
and information, except as required by law. Accordingly, readers are
advised not to place undue reliance on forward-looking statements.
Certain of the foregoing statements, primarily related to projects, are
based on preliminary views of the Company with respect to, among other
things, grade, tonnage, processing, recoveries, mining methods, capital
costs, total cash costs, minesite costs, and location of surface
infrastructure. Actual results and final decisions may be materially
different from those currently anticipated.
SOURCE Agnico-Eagle Mines Limited
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