Agnico Eagle Achieves Commercial Production at the Meliadine Mine
1
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 Achieves Commercial Production at the Meliadine Mine
Toronto ( May 30, 2019) – Agnico Eagle Mines Limited (NYSE:AEM, TSX:AEM)
("Agnico Eagle" or the "Company") today reports that commercial production was
achieved at the Company's Meliadine mine on May 14, 2019.
Located near Rankin Inlet, Nunavut, Canada, the Meliadine project was acquired in July
2010 and is Agnico Eagle's largest gold deposit in terms of mineral resources. The
Company owns 100% of the 111,358-hectare property. In February 2017, the Company's
Board of Directors approved the construction of the Meliadine project.
"Congratulations to all of our employees at Meliadine for achieving commercial production
ahead of the original schedule and below the initial capital budget. We would also like to
thank the various government agencies and the local communities for their support of the
project and our efforts in Nunavut," said Sean Boyd, Agnico Eagle's Chief Executive
Officer. "With Meliadine ramping up production over the balance of the year and Amaruq
on schedule to achieve commercial production in the third quarter of 2019, the Company
is well positioned to achieve its gold production target of 1.75 million ounces for 2019" ,
added Mr. Boyd.
Initial ore processing commenced in early February 2019 using low -grade stockpiles.
Pre-commercial payable gold production totaled 47,281 ounces, compared to guidance
of 60,000 ounces, while pre-production gold sales totaled 28,855 ounces. Total project
construction costs (after credit ing pre-commercial gold sales ) are below the 2017
guidance of $900 million. A further update on capital costs will be provided with the
Company's 2019 second quarter results.
Expected production at Meliadine for 2019 remains unchanged at approximately 230,000
ounces of gold (including pre -commercial production) at total cash costs 1 of $612 per
ounce.
1 Total cash costs per ounce is a non-GAAP measure and, unless otherwise specified, is reported on a
by-product basis. See "Note Regarding Certain Measures of Performance".
2
About Agnico Eagle
Agnico Eagle is a senior Canadian gold mining company that has produced precious
metals since 1957. Its operating mines are located in Canada, Finland and Mexico, with
exploration and development activities in each of these countries as well as in the United
States and Sweden. The Company and its shareholders have full exposure to gold prices
due to its long -standing policy of no forward gold sales. Agnico Eagle has declared a
cash dividend every year since 1983.
Further Information
For further information regarding Agnico Eagle, contact Investor Relations at
[email protected] or call (416) 947-1212.
Note Regarding Certain Measures of Performance
This news release discloses certain measures, including "total cash costs per ounce",
that are not standardized measures under IFRS. These data may not be comparable to
data reported by other issuers.
The total cash costs per ounce of gold produced is reported on both a by -product basis
(deducting by -product metal revenues from production costs) and co- product basis
(before deducting by -product metal revenues). The total cash costs per ounce of gold
produced on a by-product basis is calculated by adjusting production costs as recorded
in the consolidated statements of income for by -product revenues, unsold concentrate
inventory production costs, smelting, refining and marketing char ges and other
adjustments, and then dividing by the number of ounces of gold produced. The total cash
costs per ounce of gold produced on a co-product basis is calculated in the same manner
as the total cash costs per ounce of gold produced on a by-product basis, except that no
adjustment is made for by -product metal revenues. Accordingly, the calculation of total
cash costs per ounce of gold produced on a co-product basis does not reflect a reduction
in production costs or smelting, refining and marketing charges associated with the
production and sale of by -product metals. The total cash costs per ounce of gold
produced is intended to provide information about the cash-generating capabilities of the
Company's mining operations. Management also uses thi s measure to monitor the
performance of the Company's mining operations. As market prices for gold are quoted
on a per ounce basis, using the total cash costs per ounce of gold produced on a by -
product basis measure allows management to assess a mine's cash -generating
capabilities at various gold prices.
This news release also contains information as to estimated future total cash costs per
ounce that the Company expects to incur to mine gold at its Meliadine mine and,
consistent with the reconciliation of these actual costs referred to above, does not include
production costs attributable to accretion expense and other asset retirement costs, which
will vary over time as each project is developed and mined. It is therefore not practicable
3
to reconcile these forward-looking non-GAAP financial measures to the most comparable
IFRS measure.
Forward-Looking Statements
The information in this news release has been prepared as at May 30, 2019. 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 news
release, the words "anticipate", "could", "estimate", "expect", "forecast", "future", "plan",
"possible", "potential", "will" and similar expressions are intended to identify forward-
looking statements. Such statements include, without limitation: the Company's forward-
looking production guidance, including project timelines, metal production, life of mine
estimates and total cash costs per ounce; statements concerning the Company's ongoing
construction activities at Amaruq, including the timing, funding, completion and
commissioning thereof; statements regarding timing and amounts of capital expenditures
and other expenditures; estimates of future mineral production; and estimates of future
capital expenditures. Such statements reflect the Company's views as at the date of this
news release and are subject to certain risks, uncertainties and assumptions, and undue
reliance should not be placed on such statements. 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
material factors and as sumptions used in the preparation of the forward looking
statements contained herein, which may prove to be incorrect, include, but are not limited
to, the assumptions set forth herein and in management's discussion and analysis
("MD&A") and the Company's Annual Information Form ("AIF") for the year ended
December 31, 2018 filed with Canadian securities regulators and that are included in its
Annual Report on Form 40-F for the year ended December 31, 2018 ("Form 40- F") filed
with the SEC as well as: that there are no significant disruptions affecting operations; that
production, permitting, development and expansion at each of Agnico Eagle's properties
proceeds on a basis consistent with current expectations and plans; that the relevant
metal prices, foreign exchange rates and prices for key mining and construction supplies
will be consistent with Agnico Eagle's 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 mineral recovery estimates; uncertainty of future
production, project development, capital expenditures and other costs; foreign exchange
rate fluctuations; financing of additional capital requireme nts; cost of exploration and
development programs; seismic activity at the Company's operations, including the
4
LaRonde mine; mining risks; community protests, including by First Nations groups; risks
associated with foreign operations; the unfavorable outc ome of litigation involving the
Partnership; governmental and environmental regulation; the volatility of the Company's
stock price; and risks associated with the Company's currency, fuel and by-product metal
derivative strategies. For a more detailed discussion of such risks and other factors that
may affect the Company's ability to achieve the expectations set forth in the forward-
looking statements contained in this news release, see the AIF and MD&A filed on SEDAR
at www.sedar.com and included in the F orm 40-F filed on EDGAR at www.sec.gov, as
well as the Company's other filings with the Canadian securities regulators and the SEC.
Other than as required by law, the Company does not intend, and does not assume any
obligation, to update these forward-looking statements.
Notes to Investors Regarding the Use of Mineral Resources
Cautionary Note to Investors Concerning Estimates of Measured and Indicated
Mineral Resources
This news release uses the terms "measured mineral resources" and "indicated mineral
resources". Investors are advised that while those terms are recognized and required by
Canadian regulations, the SEC does not recognize them. Investors are cautioned not
to assume that any part or all of mineral deposits in these categories will ever b e
converted into mineral reserves.
Cautionary Note to Investors Concerning Estimates of Inferred Mineral Resources
This news release also uses the term "inferred mineral resources". Investors are advised
that while this term is recognized and required by Canadian regulations, the SEC does
not recognize it. "Inferred mineral resources" have a great amount of uncertainty as to
their existence, and great uncertainty as to their economic and legal feasibility. It cannot
be assumed that all or any part of an inferred mineral resource will ever be upgraded to
a higher category. Under Canadian rules, estimates of inferred mineral resources may
not form the basis of feasibility or pre-feasibility studies, except in rare cases. Investors
are cautioned not to assume that any part or all of an inferred mineral resource
exists, or is economically or legally mineable.
Scientific and Technical Data
The scientific and technical information contained in this news release relating to Nunavut
operations has been approved by Dominique Girard, Eng., Vice -President, Nunavut
Operations, who is a "Qualified Person" for the purposes of National Instrument 43- 101
Standards of Disclosure for Mineral Projects ("NI 43-101"). The scientific and technical
information relating to Agnico Eagle's mineral reserves and mineral resources contained
herein has been approved by Daniel Doucet, Eng., Senior Corporate Director, Reserve
Development, who is a "Qualified Person" for the purposes of NI 43-101.
5
Cautionary Note to U.S. Investors – The SEC permits U.S. mining companies, in their
filings with the SEC, to disclose only those mineral deposits that a company can
economically and legally extract or produce. Agnico Eagle reports mineral reserve and
mineral resource estimates in accordance with the Canadian Institute of Mining,
Metallurgy and Petroleum Best Practice Guidelines for Exploration and Best Practice
Guidelines for Estimation of Mineral Resources and Mineral Reserves, in accordance with
NI 43-101. These standards are similar to those used by the SEC's Industry Guide No.
7, as interpreted by Staff at the SEC ("Guide 7"). However, the definitions in NI 43- 101
differ in certain respects from those under Guide 7. Accordingly, mineral reserve
information contained herein may not be comparable to similar information disclosed by
U.S. companies. Under the requirements of the SEC, mineralization may not be classified
as a "reserve" unless the determination has been made that the mineralization could be
economically and legally produced or extracted at the time the reserve determination is
made. A "final" or "bankable" feasibility study is required to meet the requirement s to
designate mineral reserves under Guide 7. Agnico Eagle uses certain terms in this news
release, such as "measured", "indicated", "inferred" and "resources" that the SEC
guidelines strictly prohibit U.S. registered companies from including in their filings with the
SEC. However, in October 2018, the SEC approved final rules requiring comprehensive
and detailed disclosure requirements for issuers with material mining operations. The
new SEC rules will replace Guide 7 and are intended to align the SEC' s disclosure
requirements more closely with NI 43- 101. Under the new SEC rules, SEC registrants
will be permitted to disclose "mineral resources" even though they reflect a lower level of
certainty than mineral reserves.
In prior periods, mineral reserves for all properties were typically estimated using historic
three-year average metals prices and foreign exchange rates in accordance with the SEC
guidelines. These guidelines require the use of prices that reflect current economic
conditions at the time of mineral reserve determination, which the Staff of the SEC has
interpreted to mean historic three- year average prices. Given the current commodity
price environment, Agnico Eagle uses price assumptions that are below the three- year
averages.
NI 43-101 requires mining companies to disclose mineral reserves and mineral resources
using the subcategories of "proven mineral reserves", "probable mineral reserves",
"measured mineral resources", "indicated mineral resources" and "inferred mineral
resources". Mineral resources that are not mineral reserves do not have demonstrated
economic viability.
A mineral reserve is the economically mineable part of a measured and/or indicated
mineral resource. It includes diluting materials and allowances for losses, which may
occur when the material is mined or extracted and is defined by studies at pre- feasibility
or feasibility level as appropriate that include application of modifying factors. Such
studies demonstrate that, at the time of reporting, extraction could reasonably be justified.
The mineral reserves presented in this news release are separate from and not a portion
of the mineral resources.
6
Modifying factors are considerations used to convert mineral resources to mineral
reserves. These include, but ar e not restricted to, mining, processing, metallurgical,
infrastructure, economic, marketing, legal, environmental, social and governmental
factors.
A proven mineral reserve is the economically mineable part of a measured mineral
resource. A proven mineral reserve implies a high degree of confidence in the modifying
factors. A probable mineral reserve is the economically mineable part of an indicated
and, in some circumstances, a measured mineral resource. The confidence in the
modifying factors applying to a probable mineral reserve is lower than that applying to a
proven mineral reserve.
A mineral resource is a concentration or occurrence of solid material of economic interest
in or on the Earth's crust in such form, grade or quality and quantity that there are
reasonable prospects for eventual economic extraction. The location, quantity, grade or
quality, continuity and other geological characteristics of a mineral resource are known,
estimated or interpreted from specific geological evidence and know ledge, including
sampling.
A measured mineral resource is that part of a mineral resource for which quantity, grade
or quality, densities, shape and physical characteristics are estimated with confidence
sufficient to allow the application of modifying factors to support detailed mine planning
and final evaluation of the economic viability of the deposit. Geological evidence is
derived from detailed and reliable exploration, sampling and testing and is sufficient to
confirm geological and grade or quality continuity between points of observation. An
indicated mineral resource is that part of a mineral resource for which quantity, grade or
quality, densities, shape and physical characteristics are estimated with sufficient
confidence to allow the application of modifying factors in sufficient detail to support mine
planning and evaluation of the economic viability of the deposit. Geological evidence is
derived from adequately detailed and reliable exploration, sampling and testing and is
sufficient to assu me geological and grade or quality continuity between points of
observation. An inferred mineral resource is that part of a mineral resource for which
quantity and grade or quality are estimated on the basis of limited geological evidence
and sampling. G eological evidence is sufficient to imply but not verify geological and
grade or quality continuity.
Investors are cautioned not to assume that part or all of an inferred mineral
resource exists, or is economically or legally mineable.
A feasibility study is a comprehensive technical and economic study of the selected
development option for a mineral project that includes appropriately detailed assessments
of applicable modifying factors, together with any other relevant operational fact ors and
detailed financial analysis that are necessary to demonstrate, at the time of reporting, that
extraction is reasonably justified (economically mineable). The results of the study may
reasonably serve as the basis for a final decision by a proponent or financial institution to
7
proceed with, or finance, the development of the project. The confidence level of the
study will be higher than that of a pre-feasibility study.
Additional Information
Additional information about each of the mineral projects that is required by NI 43- 101,
sections 3.2 and 3.3 and paragraphs 3.4(a), (c) and (d) can be found in Technical Reports,
which may be found at www.sedar.com. Other important operating information can be
found in the Company's AIF, MD&A and Form 40-F.
Property/Project name and location
Date of most recent
Technical Report (NI 43-101)
filed on SEDAR
Meadowbank Gold Complex including the
Amaruq Satellite Mine Development, Nunavut,
Canada February 14, 2018
Meliadine, Nunavut, Canada February 11, 2015