Agnico Eagle Reports First Quarter 2017 Results; Strong Operational Performance Continues; Full Year Production Guidance Increased; Canadian Malartic Extension Receives
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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 FIRST QUARTER 2017 RESULTS; STRONG
OPERATIONAL PERFORMANCE CONTINUES; FULL YEAR PRODUCTION
GUIDANCE INCREASED; CANADIAN MALARTIC EXTENSION RECEIVES
GOVERNMENT APPROVAL; EXPLORATION DRILLING YIELDS FAVOURABLE
RESULTS AT AMARUQ
Toronto ( April 2 7, 2017) – Agnico Eagle Mines Limited (NYSE:AEM, TSX:AEM)
("Agnico Eagle" or the “Company”) today reported quarterly net income of $76.0 million,
or $0.33 per share, for the first quarter of 2017. This result includes non-cash foreign
currency translation gains on deferred tax liabilities of $7.9 million ($0.03 per share), non-
recurring gains of $3.5 million ($0.0 2 per share) , unrealized gains on financial
instruments of $2.8 million ($0.01 per share), various mark -to-market and other
adjustment losses of $1.4 milli on ( $0.01 per share) and non -cash foreign currency
translation losses of $0.9 million (nil per share). Excluding these items would result in
adjusted net income 1 of $64.1 million or $0.28 per share for the first quarter of 2017. In
the first quarter of 2 016, the Company reported net income of $27.8 million or $0.13 per
share.
Not included in the first quarter of 2017 adjusted net income above is non- cash stock
option expense of $7.6 million ($0.03 per share).
In the f irst quarter of 2017, cash prov ided by operating activities increased by greater
than 50% to $222.6 million ($ 224.7 million before changes in non- cash components of
working capital) compared with cash provided by operating activities of $145.7 million in
the first quarter of 2016 ($167.5 million before changes in non- cash components of
working capital). The increase in cash provided by operating activities before changes in
working capital during the current period was mainly due to a combination of higher gold
sales volumes and realized prices (approximately 7% and 3%, respectively).
1 Adjusted net income is a Non-GAAP measure. For a discussion regarding the Company’s use of non-
GAAP measures, please see “Note Regarding Certain Measures of Performance”.
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"Operationally, 2017 has started strongly with solid performance on both the production
and cost fronts. Higher gold production at lower costs has resulted in stronger cash flow
generation and has allowed us to increase our production guidance for the year ”, said
Sean Boyd, Agnico Eagle’s Chief Executive Officer. “In the first quarter we also made
very good progress at several of our growth projects with Meliadine progressing as
expected, the Canadian Malartic extension receiving government approval and the
Goldex Deep project ahead of schedule and under budget”, added Mr. Boyd.
First Quarter 2017 highlights include:
• Strong production and cost performance continue – Payable gold production2
in the first quarter of 2017 was 418,216 ounces of gold at production costs per
ounce of $578, total cash costs3 per ounce of $539 and all-in sustaining costs per
ounce 4 (“AISC”) of $741
• Full year production guidance increased – Production is now expected to
exceed 1.57 million ounces compared to previous guidance of 1.55 million ounces.
The increase reflects the extension of the mine life at Lapa to the end of the
second quarter of 2017
• Canadian Malartic Extension project receives Government of Quebec
approval – Production activities at the project are currently forecast to begin in
late 2019, subject to obtaining ancillary certificates of authorization and the
progress of the road diversion
• Goldex Deep 1 production expected to come in ahead of schedule and under
budget – At the end of the first quarter of 2017 c onstruction was 75% complete,
while mine infrastructure development was 100% complete . Deep 1 is now
expected to start ramping up production in the third quarter of 2017, approximately
one quarter ahead of schedule. P roduction guidance at Goldex is unchanged at
this time but will be reviewed next quarter
• Exploration drilling at Amaruq extends and infills Whale Tail Deposit to the
west and infills V Zone – Recent drilling indicates the potential to increase the
depth of the western part of the Whale Tail pit, and expand the Whale Tail pit
2Payable production of a mineral means the quantity of 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.
3Total cash costs per ounce is a Non-GAAP measure and unless otherwise specified is reported on a by -
product basis. For a reconciliation to production costs and for total cash costs on a co- product basis, see
“Reconciliation of Non-GAAP Financial Performance Measures” below. See also “Note Regarding Certain
Measures of Performance”.
4All-in-sustaining costs per ounce is a Non-GAAP measure and unless otherwise specified is reported on a
by-product basis. For a reconciliation to production costs and for all -in sustaining costs on a co- product
basis, see “Reconciliation of Non- GAAP Financial Performance Measures” below. See also "Note
Regarding Certain Measures of Performance".
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farther to the west. An infill drill program in the near -surface portion of the V Zone
has confirmed high gold grades in multiple lenses
• Meliadine project on schedule and budget – Underground development is 5%
above plan and engineering was 67% complete at the end of March 2017.
Construction activities are progressing well with the concrete batch plant being
commissioned and pile installation restarted in March. Full camp facilities are
expected to be completed in May ahead of the barge season
• A quarterly dividend of $0.10 per share was declared
First Quarter Financial and Production Highlights – Higher Gold Production, Lower
Production Costs
In the first quarter of 2017, strong operational performance continued at the Company's
mines, which led to payable gold production of 418,216 ounces compared to 411,336
ounces in the first quarter of 2016. The higher level of production in the 2017 period was
primarily due to higher grades at LaRonde and Meadowbank. A detailed description of
the production of each mine is set out below.
Production costs per ounce for the first quarter of 2017 were $578, which was lower than
the $593 in the 2016 period. Production costs per ounce were positively affected by
higher gold production levels at LaRonde and Meadowbank. Total cash costs per ounce
for the first quarter of 2017 were 6% lower at $539 compared to $573 per ounce for the
first quarter 2016. Total cash costs per ounce in the first quarter of 2017 were positively
affected by a combination of higher production of gold and by-product metals at LaRonde
and higher production levels at Meadowbank compared to the first quarter of 2016. A
detailed description of the cost performance of each mine is set out below.
AISC for the first quarter of 2017 were 7% lower at $741 per ounce compared to $797 in
the first quarter of 2016 . The lower AISC is primarily due to lower total cash costs per
ounce and lower sustaining capital expenditures compared to the first quarter of 2016.
AISC in 2017 remain forecast to be between $850 and $900 per ounce, but will be
reviewed on an ongoing basis through 2017.
Cash Position Remains Strong
Cash and cash equivalents and short term investments in creased to $804.3 million at
March 31, 2017, from the December 31, 2016 balance of $548.4 million. The increase in
cash and cash equivalents was largely as a result of the issuance of common shares
announced in the Company's news release of March 27, 2017, but also due to strong
cash generation at the mines.
The outstanding balance on the Company’s credit facility remained nil at March 31, 2017.
This results in available credit lines of approximately $1.2 billion, not including the
uncommitted $300 million accordion feature.
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Capital Expenditures
Total capital expenditures (including sustaining capital) in 201 7 remain forecast to be
approximately $850 million. The following table sets out capital expenditures (including
sustaining capital) in the first quarter of 2017.
Revised 2017 Guidance – Production Increased
Production for 2017 is now forecast to exceed 1.57 million ounces of gold as a result of
the Lapa mine life extension to the end of the second quarter of 2017 (previously 1.555
million ounces). Total cash costs per ounce in 2017 remain forecast to be between $595
and $625 per ounce. Production and total cash costs will be reviewed on an ongoing
basis through 2017.
Dividend Record and Payment Dates for the Second Quarter of 2017
Agnico Eagle's Board of Directors has declared a quarterly cas h dividend of $0.10 per
common share, payable on June 15, 2017 to shareholders of record as of June 1,
2017. Agnico Eagle has declared a cash dividend every year since 1983.
Capital Expenditures
(In thousands of US dollars)
Three Months Ended
March 31, 2017
Sustaining Capital
LaRonde mine 13,805$
Canadian Malartic mine 12,442
Goldex mine 3,179
Meadowbank mine 2,431
Kittila mine 9,681
Pinos Altos 8,239
Creston Mascota deposit Pinos Altos 582
La India mine 1,634
Development Capital
Canadian Malartic mine 718$
Goldex mine 12,555
Meadowbank mine 12,320
Meliadine project 48,565
Kittila mine 6,480
Pinos Altos 889
Other 3,150
Total Capital Expenditures 136,670$
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Other Expected Dividend and Record Dates for 2017
Record Date Payment Date
September 1 September 15
December 1 December 15
Dividend Reinvestment Plan
Please see the following link for information on the Company's dividend reinvestment
plan: Dividend Reinvestment Plan
First Quarter 2017 Results Conference Call and Webcast Tomorrow
Agnico Eagle’s senior management will host a conference call on Friday, April 28, 2017
at 8:30 AM (E.D.T.) to discuss the Company’s financial and operating results.
Via Webcast:
A live audio webcast of the conference call will be available on the Company’s website at
www.agnicoeagle.com.
Via Telephone:
For those preferring to listen by telephone, please dial 1- 647-427-7450 or toll-free 1-888-
231-8191. To ensure your participation, please call approximately five minutes prior to
the scheduled start of the call.
Replay archive:
Please dial 1-416-849-0833 or toll -free 1- 855-859-2056, access code 50920688. The
conference call replay will expire on May 28, 2017.
The webcast, along with presentation slides, will be archived for 180 days on the
Company’s website.
Annual Meeting
The Company's Annual Meeting of Shareholders (the "AGM") will begin on Friday, April
28, 2017 at 11:00 am (E.D.T) . The AGM will be held at the Sheraton Centre Toronto
Hotel (Grand Ballroom) - 123 Queen Street West, Toronto, ON.
During the AGM management will provide an overview of the Company’s activities. For
those unable to attend in person, the alternatives to participate are listed below.
Via Webcast:
A live audio webcast of the AGM will be available on the Company’s website at
www.agnicoeagle.com.
Via Telephone:
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For those preferring to listen by telephone, please dial 1- 647-427-7450 or toll-free 1-888-
231-8191. To ensure your participation, please call approximately five minutes prior to
the scheduled start of the AGM.
Replay archive:
Please dial 1-416-849-0833 or toll -free 1- 855-859-2056, access code 50915952. The
conference call replay will expire on May 28, 2017.
The webcast, along with presentation slides, will be archived for 180 days on the
Company’s website.
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NORTHERN BUSINESS REVIEW
ABITIBI REGION, QUEBEC
Agnico Eagle is currently Quebec’s largest gold producer with a 100% interest in three
mines (LaRonde, Goldex and Lapa) and a 50% interest in the Canadian Malartic mine.
These mines are located within 50 kilometres of each other, which provides operating
synergies and allows for the sharing of technical expertise.
LaRonde Mine – Higher Grades From Lower Mine Drive Strong First Quarter
Performance
The 100% owned LaRonde mine in northwestern Quebec achieved commercial
production in 1988. The LaRonde mine produced its five millionth ounce in 2016.
Production costs per tonne in the first quarter of 2017 were essentially the same when
compared to the prior-year period. Production costs per ounce in the first quarter of 2017
decreased when compared to the prior-year period due to higher production.
Minesite costs per tonne 5 in the first quarter of 2017 increased when compared to the
prior-year period due to lower throughput levels and higher costs in the mill. Total cash
costs per ou nce in the first quarter of 2017 decreased when compared to the prior -year
period due to higher gold production from the lower mine and higher by-product metal
revenues.
At the LaRonde 3 project, studies are continuing to assess the potential to extend the
mineral reserve base and carry out phased mining activities between a depth of 3.1
kilometres and 3.7 kilometres.
In 2016, the first mineral reserves were declared in t he eastern portion of LaRonde 3 and
additional inferred mineral resources were declared in the western portion of LaRonde 3.
Further drilling is being carried out to assess the vertical extent of the mineralization.
5 Minesite costs per tonne is a Non-GAAP measure. For a reconciliation of this measure to production
costs as reported in the financial statements, see “Reconciliation of Non-GAAP Financial Performance
Measures” below. See also “Note Regarding Certain Measures of Performance”.
LaRonde Mine - Operating Statistics
Three Months E nded Three Months E nded
March 31, 2017 March 31, 2016
Tonnes of ore milled (thousands of tonnes) 559 577
Tonnes of ore milled per day 6,215 6,341
Gold grade (g/t) 4.61 4.24
Gold production (ounces) 78,912 75,337
Production costs per tonne (C$) 106$ 105$
Minesite costs per tonne (C$) 109$ 103$
Production costs per ounce of gold produced ($ per ounce): 562$ 609$
Total cash costs per ounce of gold produced ($ per ounce): 464$ 529$
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LaRonde Zone 5 – Permit Received for Surface Construction
In 2003, the Company acquired the LaRonde Zone 5 project from Barrick Gold
Corporation. The property lies adjacent to and west of the LaRonde mining complex and
previous operators exploited the deposit by open pit. In February 2017 LaRonde Zone 5
was approved by Agnico Eagle’s Board of Directors for development (subject to
permitting approval). Permits are expected to be received by mid-2018 with underground
mining expected to commence shortly thereafter.
In the first quarter of 2017, the certificate of authorization for sur face construction was
received and mobilization is currently underway. For additional details on the project see
the Company’s news release dated February 15, 2017.
Canadian Malartic Mine – Canadian Malartic Extension Project R eceives
Government of Quebec Approval
In June 2014, Agnico Eagle and Yamana Gold Inc. (“Yamana”) acquired all of the issued
and outstanding common shares of Osisko Mining Corporation and created the Canadian
Malartic General Partnership (the “Partnership”). The Partnership owns and operates the
Canadian Malartic mine in northwestern Quebec through a joint management committee.
Each of Agnico Eagle and Yamana has an indirect 50% owners hip interest in the
Partnership. All volume numbers in this section reflect the Company’s 50% interest in
the Canadian Malartic mine except as noted.
Production costs per tonne in the first quarter of 2017 decreased when compared to the
prior-year period due to a higher amount of stripping costs being capitalized and timing of
unsold inventory. The average stripping ratio in the first quarter of 2017 was 1.95 to 1.0.
Production costs per ounce in the first quarter of 2017 decreased when compared to the
prior-year period due to the reasons described above.
Minesite costs per tonne in the first quarter of 2017 were lower when compared to the
prior-year period due to a higher amount of stripping costs being capitalized. Total cash
costs per ounce in the first quarter of 2017 were essentially the same when compared to
the prior-year period.
Canadian Malartic Mine - Operating Statistics
Three Months E nded Three Months E nded
March 31, 2017 March 31, 2016
Tonnes of ore milled (thousands of tonnes) 2,433 2,380
Tonnes of ore milled per day 27,029 26,157
Gold grade (g/t) 1.03 1.07
Gold production (ounces) 71,382 73,613
Production costs per tonne (C$) 18$ 21$
Minesite costs per tonne (C$) 22$ 24$
Production costs per ounce of gold produced ($ per ounce): 455$ 554$
Total cash costs per ounce of gold produced ($ per ounce): 556$ 557$