Agnico Eagle Reports Second Quarter 2024 Results – Third Consecutive Quarter of Record Free Cash Flow Underpinned by Consistent, Strong Operational and Cost Performance; Upper Beaver Project Study Shows Solid Risk-Adjusted
Stock Symbol: AEM (NYSE and TSX)
For further information: Investor Relations (416) 947-1212
(All amounts expressed in U.S. dollars unless otherwise noted)
AGNICO EAGLE REPORTS SECOND QUARTER 2024 RESULTS – THIRD CONSECUTIVE QUARTER OF RECORD FREE CASH FLOW UNDERPINNED BY CONSISTENT, STRONG OPERATIONAL AND COST PERFORMANCE; UPPER BEAVER PROJECT STUDY SHOWS SOLID RISK-ADJUSTED RETURNS
Toronto (July 31, 2024) – Agnico Eagle Mines Limited (NYSE:AEM, TSX:AEM) ("Agnico Eagle" or the "Company") today reported financial and operating results for the second quarter of 2024.
| " | We continue to deliver strong and reliable operational results which, combined with higher gold prices, |
| drove |
excellent performance of our operations through the first half of 2024, we are highly confident we will achieve our full year production and cost guidance," said Ammar Al-Joundi, Agnico Eagle's President and Chief Executive Officer. "We generated over half of a billion dollars of free cash flow in the second quarter, supporting a significant strengthening of our balance sheet and increased returns to shareholders. We continue to take a measured approach advancing key pipeline projects that show strong risk-adjusted returns, such as the Detour Lake underground and Upper Beaver projects. Our focus remains on capital discipline and cost control to ensure that the benefits of higher gold prices accrue to our shareholders through strengthening our financial position and increasing shareholder returns," added Mr. Al-Joundi.
Second quarter 2024 highlights:
- Strong quarterly gold production – Payable gold production1 was 895,838 ounces at production costs per ounce of $862, total cash costs per ounce2 of $870 and all-in sustaining costs ("AISC") per ounce2 of $1,169. Gold production was led by strong production at Canadian Malartic, LaRonde and Fosterville
1 Payable production of a mineral means the quantity of a mineral produced during a period contained in products that have been or will be sold by the Company whether such products are shipped during the period or held as inventory at the end of the period. 2 Total cash costs per ounce and AISC per ounce are non-GAAP ratios that are not standardized financial measures under IFRS and, in this news release, unless otherwise specified, are reported on (i) a per ounce of gold production basis, and (ii) a by-product basis. For a description of the composition and usefulness of these non-GAAP measures and reconciliations of total cash costs per ounce and AISC per ounce to production costs on both a by-product and a co-product basis, see "Note Regarding Certain Measures of Performance" below.
- Record quarterly adjusted net income3 – The Company reported quarterly net income of $472.0 million or $0.95 per share and adjusted net income of $535.3 million or $1.07 per share
- Record quarterly cash provided by operating activities and free cash flow – The Company generated record cash provided by operating activities of $961.3 million or $1.92 per share ($986.2 million or $1.97 per share before changes in non-cash working capital balances4) and free cash flow4 of $557.2 million or $1.12 per share ($582.2 million or $1.17 per share before changes in noncash working capital balances4)
- Strengthening investment grade balance sheet and financial flexibility – The Company increased its cash position by $397.4 million to $922.0 million and significantly reduced net debt as at June 30, 2024. Subsequent to quarter-end, the Company repaid the $100.0 million 5.02% Series B senior notes at maturity and repaid $150.0 million of the $600.0 million unsecured term loan facility drawn in 2023
- 2024 gold production and cost guidance reiterated – Full year expected payable gold production remains unchanged at approximately 3.35 to 3.55 million ounces in 2024, with total cash costs per ounce and AISC per ounce in 2024 unchanged at $875 to $925 and $1,200 to $1,250, respectively. Total capital expenditures (excluding capitalized exploration) for 2024 are still estimated to be between $1.6 billion to $1.7 billion. Capitalized exploration is now expected to be approximately $187 million for the full year 2024. Further details are set out in the "2024 Guidance" section below
- Update on key value drivers and pipeline projects
- Approval of measured investments over next three years to further evaluate and de- risk the Detour Lake underground and Upper Beaver projects – Based on internal studies indicating solid risk-adjusted returns for the Detour Lake underground and Upper Beaver projects5, the Company has adopted a measured approach to advance these projects, approving $100.0 million and $200.0 million investments, respectively, over approximately three years. At Detour Lake, a 2.0-kilometre exploration ramp is expected to be developed to a depth of 270 metres to collect a bulk sample and to facilitate infill and expansion drilling of the current underground mineral resource. At Upper Beaver, an exploration ramp and an exploration shaft are expected to be developed to a depth of 250 metres and 760 metres, respectively, to establish underground drilling platforms and collect bulk samples
- Detour Lake – In June 2024, the Company released the results of a technical study reflecting the potential for a concurrent underground operation at Detour Lake that would accelerate access to higher grade ore and increase annual production to approximately one million ounces for 14 years starting in 2030 (see the Company's news release dated June 19, 2024). In the second quarter of 2024, with the replacement of the defective grinding media at the SAG mill and record quarterly mill availability of 93.0%, mill throughput improved to 74,637 tonnes per day ("tpd") and is expected to reach the target rate of 76,700 tpd by the end of 2024
- Approval of measured investments over next three years to further evaluate and de- risk the Detour Lake underground and Upper Beaver projects – Based on internal studies indicating solid risk-adjusted returns for the Detour Lake underground and Upper Beaver projects5, the Company has adopted a measured approach to advance these projects, approving $100.0 million and $200.0 million investments, respectively, over approximately three years. At Detour Lake, a 2.0-kilometre exploration ramp is expected to be developed to a depth of 270 metres to collect a bulk sample and to facilitate infill and expansion drilling of the current underground mineral resource. At Upper Beaver, an exploration ramp and an exploration shaft are expected to be developed to a depth of 250 metres and 760 metres, respectively, to establish underground drilling platforms and collect bulk samples
3 Adjusted net income and adjusted net income per share are non-GAAP measures or ratios that are not standardized financial measures under IFRS. For a description of the composition and usefulness of these non-GAAP measures and a reconciliation to net income see "Note Regarding Certain Measures of Performance" below.
4 Cash provided by operating activities before changes in non-cash working capital balances, free cash flow and free cash flow before changes in non-cash working capital balances and their related per share measures are non-GAAP measures or ratios that are not standardized financial measures under IFRS. For a description of the composition and usefulness of these non-GAAP measures and a reconciliation to cash provided by operating activities see "Note Regarding Certain Measures of Performance" below.
5 The forecast parameters surrounding the technical study for the Detour Lake underground project and the internal evaluation for the Upper Beaver project were based on a preliminary economic assessment, which is preliminary in nature and includes inferred mineral resources. For further detail, refer to the Company's news release dated June 19, 2024 for the Detour Lake underground project and the Update on Key Value Drivers and Pipeline Projects section set our below for the Upper Beaver project.
- Upper Beaver – A positive internal evaluation was completed in June 2024 for a standalone mine and mill scenario at Upper Beaver. Based on this evaluation, the Company believes Upper Beaver has the potential to produce an annual average of approximately 210,000 ounces of gold and 3,600 tonnes of copper, with initial production possible as early as 2030. Over an expected 13-year mine life, total payable gold and copper production is expected to be approximately 2.8 million ounces and 46,300 tonnes, respectively. Estimated total cash costs per ounce on a by-product basis and AISC per ounce on a by-product basis are expected to be approximately $592 and $733, respectively. In addition, the project has the potential to unlock significant exploration potential at depth and within satellite deposits in the Company's Kirkland Lake camp
- Odyssey mine at Canadian Malartic – At Odyssey South, record quarterly mining rates and gold production were achieved at approximately 3,750 tpd and 22,300 ounces of gold, respectively. In the second quarter of 2024, ramp development continued to exceed the Company's target, reaching the third production level at East Gouldie at a depth of 832 metres as at June 30, 2024. Shaft sinking advanced at an average rate of 2.5 metres per day and reached a depth of 680 metres as at June 30, 2024. Surface construction is progressing as planned, with a focus on the main hoist building, phase two of the paste plant and the operations complex
•
| Approval of a supplemental exploration budget of $50.0 million | – The Company's exploration |
| program returned positive results in the first half of 2024 at Canadian Malartic, Detour Lake and | |
| Hope Bay, showing excellent potential to identify additional mineral resources. These results | |
| support increased budgets approved by the Company for the second half of 2024. |
◦
| East Gouldie at Odyssey mine | – Recent exploration drilling continued to return good |
| results in the eastern and western extensions of the East Gouldie deposit including 4.5 | |
| grams per tonne ("g/t") gold over 6.5 metres at 1,571 metres depth approximately 770 | |
| metres east of the current mineral reserves and 2.5 g/t gold over 30.0 metres at 1,473 | |
| metres depth and 85 metres west of the current mineral reserves. The results from the | |
| ongoing exploration program are anticipated to have a positive impact on the mineral | |
| resource estimate at year-end 2024 |
◦
| Detour Lake underground | – Infill drilling into the high-grade corridor in the West Pit zone |
| continued to confirm the higher grades and mineralized structure amenable to | |
| underground mining. Highlights include 4.0 g/t gold over 22.3 metres at 413 metres depth | |
| and 4.4 g/t gold over 30.1 metres at 550 metres depth. Near the proposed exploration | |
| ramp, highlights include 20.6 g/t gold over 5.5 metres at 280 metres depth and 4.7 g/t gold | |
| over 15.6 metres at 313 metres depth |
◦
| Madrid at Hope Bay | – Exploration drilling during the second quarter of 2024 totalled |
| 35,400 metres and continued to return strong results from infill drilling north of the Patch 7 | |
| mineral resources, including 17.0 g/t gold over 25.8 metres at 419 metres depth, 7.2 g/t | |
| gold over 8.1 metres at 559 metres depth and 5.3 g/t gold over 18.0 metres at 278 metres | |
| depth, further confirming the greater thicknesses and higher gold grades in this area | |
| compared to the rest of the Madrid deposit |
- Reconciliation Action Plan and 2023 Climate Action Report published – On July 10, 2024, the Company released its first Reconciliation Action Plan, reinforcing its commitment to reconciliation with Indigenous Peoples and communities. In addition, on July 31, 2024, the Company released its 2023 Climate Action Report. In line with the recommendations of the Task Force on Climate-related Financial Disclosures and Towards Sustainable Mining Climate Change protocol, the 2023 Climate Action Report outlines how the Company is addressing climate change risks and opportunities
- Continued focus on shareholder returns – In the second quarter of 2024, the board of directors declared a quarterly dividend of $0.40 per share. In the second quarter of 2024, the Company also
repurchased 763,043 common shares at an average share price of $65.53 for an aggregate of $50.0 million through its normal course issuer bid ("NCIB"), which was renewed in May 2024
Second Quarter 2024 Results Conference Call and Webcast Tomorrow
Agnico Eagle's senior management will host a conference call on Thursday, August 1, 2024 at 11:00 AM (E.D.T.) to discuss the Company's financial and operating results.
Via Webcast:
To listen to the live webcast of the conference call, you may register on the Company website at www.agnicoeagle.com, or directly via the link here.
Via Phone:
To join the conference call by phone, please dial 416.764.8659 or toll-free 1.888.664.6392 to be entered into the call by an operator. To ensure your participation, please call approximately five minutes prior to the scheduled start of the call.
To join the conference call by phone without operator assistance, you may register your phone number here 30 minutes prior to the scheduled start of the call to receive an instant automated call back.
Replay Archive:
Please dial 416.764.8677 or toll-free 1.888.390.0541, access code 576159#. The conference call replay will expire on September 1, 2024.
The webcast, along with presentation slides, will be archived for 180 days on the Company's website.
Second Quarter 2024 Production and Cost Results
Production and Cost Results Summary* Three Months Ended Six Months Ended June 30, June 30,
| 2024 | 2023 | 2024 | 2023 | |
| Gold production (ounces) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 895,838 | 873,204 1,774,490 1,686,017 | ||
| Gold sales (ounces) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 874,230 | 858,848 1,753,293 1,646,406 | ||
| Production costs per ounce . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ | 862 $ | 851 $ | 877 $ | 828 |
| Total cash costs per ounce . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ | 870 $ | 840 $ | 885 $ | 836 |
| AISC per ounce . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ | 1,169 $ | 1,150 $ | 1,179 $ | 1,138 |
- Production and Cost Results Summary reflects Agnico Eagle's 50% interest in Canadian Malartic up to and including March 30, 2023
and 100% thereafter.
Gold Production
- Second Quarter of 2024 – Gold production increased when compared to the prior-year period primarily due to higher production from Meadowbank and Macassa, partially offset by lower production at Fosterville
- First Six Months of 2024 – Gold production increased when compared to the prior-year period as a result of the additional production from the acquisition of the remaining 50% of Canadian Malartic, contribution from Odyssey in the current year and increased production from Meadowbank, partially offset by lower production at Fosterville
Production Costs per Ounce
- Second Quarter and First Six Months of 2024 – Total production costs per ounce increased when compared to the prior-year periods primarily due to higher royalties mainly arising from higher gold prices and higher production costs at Canadian Malartic related to underground mining operations, partially offset by higher gold production during the period
Total Cash Costs per Ounce
- Second Quarter and First Six Months of 2024 – Total cash costs per ounce increased when compared to the prior-year periods primarily due to the reasons described above for the increase in production costs per ounce combined with the impact of lower gold grades at Fosterville, partially offset by higher gold production during the period
AISC per Ounce
- Second Quarter of 2024 – AISC per ounce increased when compared to the prior-year period due to the factors causing higher total cash costs per ounce, partially offset by higher production and slightly lower sustaining capital expenditures during the period
- First Six Months of 2024 – AISC per ounce increased when compared to the prior-year period due to the factors causing higher total cash costs per ounce and higher sustaining capital expenditures, partially offset by higher gold production during the period
Second Quarter 2024 Financial Results
Financial Results Summary Three Months Ended Six Months Ended June 30, June 30,
| 2024 | 20236 | 2024 | 20236 | |
| Realized gold price ($/ounce)7 . . . . . . . . . . . . . . . . . . . . . . . . . . . $ | 2,342 $ | 1,975 $ | 2,202 $ | 1,935 |
| Net income ($ millions)8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ | 472.0 $ | 323.7 $ | 819.2 $ 2,140.6 | |
| Adjusted net income ($ millions) . . . . . . . . . . . . . . . . . . . . . . . . . $ | 535.3 $ | 319.3 $ | 912.7 $ | 590.5 |
EBITDA ($ millions)9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,123.1 $ 883.4 $ 2,005.6 $ 3,156.3 Adjusted EBITDA ($ millions)9 . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,176.2 $ 885.2 $ 2,105.5 $ 1,625.6 Cash provided by operating activities ($ millions) . . . . . . . . . . $ 961.3 $ 722.0 $ 1,744.5 $ 1,371.6 Cash provided by operating activities before changes in non- $ 986.2 $ 693.0 $ 1,763.3 $ 1,301.8 cash working capital balances ($ millions) . . . . . . . . . . . . . . . . .
Capital expenditures10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 407.3 $ 416.0 $ 779.3 $ 757.8 Free cash flow ($ millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 557.2 $ 298.4 $ 952.8 $ 563.1 Free cash flow before changes in non-cash working capital $ 582.2 $ 269.4 $ 971.6 $ 493.3 balances ($ millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
| Net income per share (basic) . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ | 0.95 $ | 0.66 $ | 1.64 $ | 4.45 |
| Adjusted net income per share (basic) . . . . . . . . . . . . . . . . . . . . $ | 1.07 $ | 0.65 $ | 1.83 $ | 1.23 |
| Cash provided by operating activities per share (basic) . . . . . $ | 1.92 $ | 1.46 $ | 3.50 $ | 2.85 |
Cash provided by operating activities before changes in non- $ 1.97 $ 1.40 $ 3.54 $ 2.70 cash working capital balances per share (basic) . . . . . . . . . . .
Free cash flow per share (basic) . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.12 $ 0.60 $ 1.91 $ 1.17 Free cash flow before changes in non-cash working capital $ 1.17 $ 0.55 $ 1.95 $ 1.02 balances per share (basic) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net Income
- Second Quarter of 2024
- Net income was $472.0 million ($0.95 per share). This result includes the following items (net of tax): non-recurring tax adjustments and foreign currency translation losses on deferred tax liabilities of $25.7 million ($0.05 per share), derivative losses on financial instruments of $14.4 million ($0.03 per share), net asset disposals losses of $11.5 million ($0.02 per share) and foreign exchange and other losses of $11.7 million ($0.02 per share)
- Excluding the above items results in adjusted net income of $535.3 million or $1.07 per share
- Included in net income and not adjusted above, is a non-cash stock option expense of $2.1 million (less than $0.01 per share)
- Net income of $472.0 million in the second quarter of 2024 increased compared to net income of $323.7 million in the prior-year period primarily due to stronger mine operating
6 Certain previously reported line items have been restated to reflect the final purchase price allocation related to the acquisition of the Canadian assets of Yamana Gold Inc. (the "Yamana Transaction") including the 50% of Canadian Malartic that the Company did not own.
7 Realized gold price is calculated as gold revenues from mining operations divided by the number of ounces sold.
8 For the first quarter of 2023, includes a $1.5 billion revaluation gain on the 50% interest the Company owned in Canadian Malartic prior to the Yamana Transaction on March 31, 2023.
9 "EBITDA" means earnings before interest, taxes, depreciation, and amortization. EBITDA and adjusted EBITDA are non-GAAP measures or ratios that are not standardized financial measures under IFRS. For a description of the composition and usefulness of these non-GAAP measures and a reconciliation to net income see "Note Regarding Certain Measures of Performance" below.
10 Includes capitalized exploration.
margins11 resulting from higher realized gold prices and higher sales volumes, partially offset by losses on derivative financial instruments in the current period, and higher income and mining tax expenses
- First Six Months of 2024 – Net income of $819.2 million decreased compared to the prior-year period primarily due to a remeasurement gain at Canadian Malartic in the prior period resulting from the application of purchase accounting relating to a business combination attained in stages, which requires the remeasurement of the Company's previously held 50% interest in Canadian Malartic to fair value, partially offset by higher realized gold prices and higher sales volumes
Adjusted EBITDA
- Second Quarter of 2024 – Adjusted EBITDA increased when compared to the prior-year period primarily due to stronger mine operating margins from higher realized gold prices and higher sales volumes
- First Six Months of 2024 – Adjusted EBITDA increased when compared to the prior-year period primarily due to the reasons set out above for net income and as a result of the acquisition of the remaining 50% of Canadian Malartic
Cash Provided by Operating Activities
- Second Quarter and First Six Months of 2024 – Cash provided by operating activities and cash provided by operating activities before changes in non-cash working capital balances increased when compared to the prior-year periods primarily due to the reasons described above related to the increases in adjusted EBITDA
Free Cash Flow Before Changes in Non-cash Working Capital Balances
- Second Quarter and First Six Months of 2024 – Free cash flow before changes in non-cash working capital balances was a record for the third consecutive quarter and increased when compared to the prior-year periods due to the reasons described above related to cash provided by operating activities, as well as lower additions to property, plant and mine development
Capital Expenditures
In the second quarter of 2024, capital expenditures were $362.4 million and capitalized exploration expenditures were $44.9 million, for a total of $407.3 million. Expected capital expenditures (excluding capitalized exploration) remain in line with guidance for the full year 2024. As a result of the supplemental exploration budget approved of $50.0 million and the approval of the exploration ramp construction at Detour Lake and the exploration ramp and exploration shaft construction at Upper Beaver, capitalized exploration is expected to increase to approximately $186.8 million for the full year 2024. Further details are set out in the "2024 Guidance" section below.
The following table sets out a summary of capital expenditures (including sustaining capital expenditures12 and development capital expenditures12) and capitalized exploration in the second quarter of 2024 and the first six months of 2024.
11 Operating margin is a non-GAAP measure that is not a standardized measure under IFRS. For a description of the composition and usefulness of this non-GAAP measure and a reconciliation to net income see “Note Regarding Certain Measures of Performance” below.
12 Sustaining capital expenditures and development capital expenditures are non-GAAP measures that are not standardized financial measures under IFRS. For a discussion of the composition and usefulness of these non-GAAP measures and a reconciliation to additions to property, plant and mine development as set out in the consolidated statements of cash flows, see "Note Regarding Certain Measures of Performance" below.
Summary of Capital Expenditures
($ thousands)
Capital Expenditures* Capitalized Exploration
Three Months Six Months Three Months Six Months Ended Ended Ended Ended Jun 30, 2024 Jun 30, 2024 Jun 30, 2024 Jun 30, 2024 Sustaining Capital Expenditures
| LaRonde . . . . . . . . . . . . . . . . . . . . . . . . . . $ | 20,899 $ | 43,823 $ | 557 | 876 |
| Canadian Malartic . . . . . . . . . . . . . . . . . . | 28,053 | 55,098 | — | — |
| Goldex . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 11,354 | 23,407 | 1,045 | 1,783 |
| Detour Lake . . . . . . . . . . . . . . . . . . . . . . . | 61,971 | 111,609 | — | — |
| Macassa . . . . . . . . . . . . . . . . . . . . . . . . . . | 6,058 | 16,189 | 408 | 808 |
| Meliadine . . . . . . . . . . . . . . . . . . . . . . . . . | 16,083 | 33,948 | 2,490 | 3,827 |
| Meadowbank . . . . . . . . . . . . . . . . . . . . . . | 21,560 | 41,502 | — | — |
| Fosterville . . . . . . . . . . . . . . . . . . . . . . . . . | 7,306 | 12,789 | — | — |
| Kittila . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 18,212 | 34,276 | 415 | 865 |
| Pinos Altos . . . . . . . . . . . . . . . . . . . . . . . . | 6,102 | 11,091 | 617 | 920 |
| La India . . . . . . . . . . . . . . . . . . . . . . . . . . . | — | 22 | — | — |
| Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,940 | 2,269 | 270 | 845 |
| Total Sustaining Capital Expenditures . . $ | 199,538 $ | 386,023 $ | 5,802 $ | 9,924 |
Development Capital Expenditures
| LaRonde . . . . . . . . . . . . . . . . . . . . . . . . . . $ | 20,637 $ | 44,726 $ | — | — | |
| Canadian Malartic . . . . . . . . . . . . . . . . . . | 43,199 | 79,204 | 874 | 2,192 | |
| Goldex . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,925 | 7,056 | — | — | |
| Detour Lake . . . . . . . . . . . . . . . . . . . . . . . | 31,315 | 69,074 | 9,547 | 17,099 | |
| Macassa . . . . . . . . . . . . . . . . . . . . . . . . . . | 22,312 | 34,458 | 9,386 | 17,704 | |
| Meliadine . . . . . . . . . . . . . . . . . . . . . . . . . | 18,849 | 37,094 | 2,720 | 6,806 | |
| Meadowbank . . . . . . . . . . . . . . . . . . . . . . | — | (27) | — | — | |
| Fosterville . . . . . . . . . . . . . . . . . . . . . . . . . | 9,186 | 18,614 | 3,342 | 6,966 | |
| Kittila . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,288 | 2,196 | 2,428 | 4,559 | |
| Pinos Altos . . . . . . . . . . . . . . . . . . . . . . . . | 806 | 1,452 | — | 4 | |
| San Nicolás project . . . . . . . . . . . . . . . . . | 6,284 | 11,655 | — | — | |
| Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 6,051 | 8,016 | 10,813 | 14,525 | |
| Total Development Capital Expenditures $ | 162,852 $ | 313,518 $ | 39,110 $ | 69,855 | |
| Total Capital Expenditures . . . . . . . . . . $ | 362,390 $ | 699,541 $ | 44,912 $ | 79,779 |
- Excludes capitalized exploration
2024 Guidance
Production and Cost Guidance
Full year guidance remains unchanged at approximately 3.35 to 3.55 million ounces of gold, total cash costs per ounce of $875 to $925 and AISC per ounce of $1,200 to $1,250.
Capital Expenditure Guidance
Total expected capital expenditures (excluding capitalized exploration) for 2024 are still estimated to be between $1.6 billion to $1.7 billion.
Exploration Guidance
The Company's exploration and corporate development expense for 2024 is now expected to be approximately $271.4 million (compared to $230.0 million in the prior guidance). Based on positive exploration results in the first half of 2024 at Canadian Malartic, Detour Lake and Hope Bay, the Company has approved a supplemental budget of $50.0 million ($41.4 million expensed exploration and $8.6 million capitalized exploration). The supplemental exploration budget includes $16.5 million at Canadian Malartic for 84,500 metres of drilling, $10.9 million at Detour Lake for 55,000 metres of drilling (of which $8.6 million will be non-sustaining capitalized exploration expenditures) and $22.6 million at Hope Bay for 62,000 metres of drilling.
The Company's capitalized exploration expenditures are now expected to be approximately $186.8 million (compared to $110.0 million in the prior guidance). To further study and de-risk the Detour Lake underground and Upper Beaver projects, the Company has approved $100.0 million and $200.0 million investments, respectively, over approximately three years. At Detour Lake, approximately $19.6 million is forecast to be spent in 2024 related to the construction of surface facilities and site preparation. At Upper Beaver, approximately $50.0 million is forecast to be spent in 2024 related to the construction of surface facilities, site preparation and the excavation of the shaft collar (of which $15.0 million was spent in the first half of 2024).
The breakdown of the incremental budget approved in exploration expense and capitalized exploration expenditures is set out in the table below.
Estimated 2024 Mid-Point Exploration and Corporate Development Expense and 2024 Capitalized Exploration Expenditures
Exploration and Capitalized Exploration Corporate Sustaining Non-Sustaining ($ thousands) Development Expense Prior Guidance $ 230,000 $ 16,500 $ 92,100 Incremental exploration expenditures:
| Canadian Malartic | 16,500 | — | — | |
| Detour Lake | 2,300 | — | 28,200 | |
| Upper Beaver | — | — | 50,000 | |
| Hope Bay | 22,600 | — | — | |
| Guidance | $ 271,400 $ | 16,500 $ | 170,300 |
Depreciation Guidance
Depreciation and amortization expense in 2024 is now expected to be at the lower end of the guidance range of $1.56 to $1.61 billion.
Record Cash Flow Generation Continues to Enhance Investment Grade Balance Sheet Alongside Continued Commitment to Shareholder Returns
Cash and cash equivalents increased by $397.4 million when compared to the prior quarter primarily due to higher cash provided by operating activities as a result of higher revenues from higher realized gold prices and higher sales volumes.
As at June 30, 2024, the Company's long-term debt was $1,841.7 million, consistent with the prior quarter. No amounts were outstanding under the Company's unsecured revolving bank credit facility as at June 30, 2024, and available liquidity remained at approximately $2.0 billion, not including the uncommitted $1.0 billion accordion feature.
The following table sets out the calculation of net debt13, which decreased by $396.7 million when compared to the prior quarter primarily as a result of higher cash and cash equivalents.
Net Debt Summary
($ millions)
As at As at Jun 30, 2024 Mar 31, 2024
| Current portion of long-term debt . . . . . . . . . . . . . . . . . $ | 740.0 $ | 100.0 |
| Non-current portion of long-term debt . . . . . . . . . . . . . | 1,101.7 | 1,741.0 |
| Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ | 1,841.7 $ | 1,841.0 |
| Less: cash and cash equivalents . . . . . . . . . . . . . . . . . | (922.0) | (524.6) |
| Net debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ | 919.7 $ | 1,316.4 |
Subsequent to June 30, 2024, the Company completed two debt repayments. On July 24, 2024, $100.0 million was repaid with cash on hand on the 2012 Series B 5.02% Senior Notes on maturity and on July 31, 2024, $150.0 million was repaid with cash on hand of the $600.0 million outstanding on the term loan facility. The remaining $450.0 million of indebtedness under the term loan facility is due and payable by April 21, 2025.
In order to maintain financial flexibility, and consistent with past practice, the Company filed a new base shelf prospectus in the second quarter of 2024. The Company has no present intention to offer securities pursuant to the base shelf prospectus and the notice set out in this paragraph does not constitute an offer of any securities for sale or an offer to sell or the solicitation of an offer to buy any securities.
Hedges
Approximately 73% of the Company's remaining estimated Canadian dollar exposure for 2024 is hedged at an average floor price providing protection above 1.34 C$/US$. Approximately 27% of the Company's remaining estimated Euro exposure for 2024 is hedged at an average floor price providing protection below 1.10 US$/EUR. Approximately 62% of the Company's remaining Australian dollar exposure for 2024 is hedged at an average floor price providing protection above 1.46 A$/US$. Approximately 21% of the Company's remaining estimated Mexican peso exposure for 2024 is hedged at an average floor price providing protection above 18.00 MXP/US$. The Company's full year 2024 cost guidance is based on assumed exchange rates of 1.34 C$/US$, 1.10 US$/EUR, 1.45 A$/US$ and 16.50 MXP/US$.
With the 2024 sealift underway at the Company’s Nunavut operations, approximately 66% of the total diesel purchases have been completed, with initial deliveries in progress. Factoring in these purchases and anticipated deliveries, approximately 40% of the Company's remaining estimated diesel exposure for 2024 is hedged at an average price of $0.76 per litre (excluding transportation and taxes), which is expected to reduce the Company's exposure to diesel price volatility in 2024. The Company's full year 2024 cost guidance is based on an assumed diesel price of $0.80 per litre (excluding transportation and taxes).
13 Net debt is a non-GAAP measure that is not a standardized financial measure under IFRS. For a description of the composition and usefulness of this non-GAAP measure and a reconciliation to long-term debt, see "Note Regarding Certain Measures of Performance" below.
The Company will continue to monitor market conditions and anticipates continuing to opportunistically add to its operating currency and diesel hedges to strategically support its key input costs. Hedging positions are not factored into 2024 or future guidance.
Shareholder Returns
Dividend Record and Payment Dates for the Third Quarter of 2024
Agnico Eagle's Board of Directors has declared a quarterly cash dividend of $0.40 per common share, payable on September 16, 2024 to shareholders of record as of August 30, 2024. Agnico Eagle has declared a cash dividend every year since 1983.
Expected Dividend Record and Payment Dates for the 2024 Fiscal Year
| Record Date | Payment Date |
| March 1, 2024* | March 15, 2024* |
| May 31, 2024* | June 14, 2024* |
| August 30, 2024** | September 16, 2024** |
| November 29, 2024 | December 16, 2024 |
*Paid **Declared
Dividend Reinvestment Plan
Subsequent to the end of the second quarter of 2024, the Company's board of directors approved an amendment to the terms of its dividend reinvestment plan (the "DRIP") to provide the Company with the flexibility to adjust the discount provided under the DRIP to between no discount (0%) and 5%. The changes remain subject to pre-clearance by the Toronto Stock Exchange (the "TSX"). For the dividend payable on September 16, 2024 to shareholders of record as of August 30, 2024, provided the Company has received TSX pre-clearance for the amendment, the Company has determined that the discount provided for under the DRIP will be 1%. If the discount is altered or eliminated by the Company in the future, the Company will include information regarding the change in discount from such level in a news release prior to the effectiveness of the change.
For a copy of the amended and restated DRIP, which will be posted on receipt of TSX pre-clearance of the amendment, and for additional information on the Company's DRIP see: Dividend Reinvestment Plan
International Dividend Currency Exchange
For information on the Company's international dividend currency exchange program, please contact Computershare Trust Company of Canada by phone at 1.800.564.6253 or online at www.investorcentre.com or www.computershare.com/investor.
Normal Course Issuer Bid
In addition to the quarterly dividend, the Company believes that its NCIB is a flexible and complementary tool that is part of the Company's overall capital allocation program and that generates value for shareholders. The Company received approval from the TSX to renew its NCIB in May 2024, allowing the Company to purchase up to $500.0 million of its common shares, subject to a maximum of 5% of its issued and outstanding common shares. Purchases under the NCIB may continue for up to one year from the commencement day on May 4, 2024. In the second quarter of 2024, the Company repurchased 763,043 common shares for an aggregate of $50.0 million through the NCIB, totalling 1,138,043 common shares repurchased for an aggregate of $69.9 million in the first six months of 2024.
Environment, Social and Governance Highlights
Reconciliation Action Plan
On July 10, 2024, the Company released its first Reconciliation Action Plan, reinforcing its commitment to reconciliation with Indigenous Peoples and communities. To the Company's knowledge, it is the first mining company in Canada to publish a reconciliation action plan.
The Company's reconciliation efforts, which began in Canada, have now expanded globally with many of its operations and offices situated on the traditional territories of different Indigenous Peoples. Agnico Eagleʹs commitment to reconciliation with Indigenous communities is built on three fundamental principles that have shaped the Company for over 65 years: (i) doing what's right, (ii) respecting the rights of all individuals and groups, and (iii) creating value for stakeholders. These principles are reflected in the Reconciliation Action Plan, which was developed in collaboration with Indigenous communities and following consultations with over 250 employees, stakeholders and rights holders.
Organized into seven pillars that form the basis for the Company's actions, the Reconciliation Action Plan aligns with the United Nations Declaration on the Rights of Indigenous People and integrates the Company's existing Indigenous programs and initiatives into a central and comprehensive strategy aimed at delivering tangible benefits for Indigenous Peoples. It complements and strengthens the Company's ongoing efforts aimed at contributing to the economic, social and emotional well-being of Indigenous Peoples and communities.
Agnico Eagle's Reconciliation Action Plan with Indigenous Peoples is available on the Company's website at www.agnicoeagle.com or can be downloaded directly by clicking here.
Dja Dja Wurrung Agreement Signed for Fosterville
On May 13, 2024, Agnico Eagle and leaders of the Dja Dja Wurrung People ("Djaara") celebrated the signing of a historic agreement at Fosterville to develop and maintain a long-term relationship based on trust, mutual respect and collaboration. The agreement is called bakaru wayaparrangu, which means "in the middle, we all meet" in the Dja Dja Wurrung language. The agreement is the first to be established in the state of Victoria, Australia between traditional owners and a Company with an active mining operation. The agreement includes measures to increase the Djaara's involvement in activities at Fosterville including training and employment opportunities, fostering business growth and safeguarding the environment, and is complemented by annual financial contributions.
2023 Climate Action Report
On July 31, 2024, the Company released its 2023 Climate Action Report, which provides an update regarding the Company's 2023 greenhouse gas ("GHG") emissions performance, climate strategy and progress achieved towards climate goals. The report is aligned with the recommendations of the Task Force on Climate-related Financial Disclosures and Towards Sustainable Mining Climate Change protocol, and supplements the Company's 2023 Sustainability Report released in April 2024.
Highlights of the 2023 Climate Action Report include:
- GHG Emissions Targets – Agnico Eagle remains committed to achieving Net-Zero in absolute Scope 1 and Scope 2 carbon emissions by 2050 and maintains its interim carbon reduction target of 30% by 2030 (based on a 2021 baseline)