Senior Management Changes; Record Annual GOLD Production, Operating Cash Flow and Mineral Reserves; New Operational and Financial Guidance Provided Post Completion of Kirkland Lake
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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 FOURTH QUARTER AND FULL YEAR 2021 RESULTS –
SENIOR MANAGEMENT CHANGES; RECORD ANNUAL GOLD PRODUCTION,
OPERATING CASH FLOW AND MINERAL RESERVES; NEW OPERATIONAL AND
FINANCIAL GUIDANCE PROVIDED POST COMPLETION OF KIRKLAND LAKE
GOLD MERGER; MINESITE AND PIPELINE PROJECTS CONTINUE TO ADVANCE
Toronto (February 23, 2022) – Agnico Ea gle Mines Limited (NYSE:AEM, TSX:AEM)
("Agnico Eagle" or the "Company") t oday announced senior management changes and
reported fourth quarter and full year 2021 financial and operating results, as well as future
operating guidance.
Ammar Al-Joundi has been appointed President and Chief Executive Officer, effective
immediately. Mr. Al-Joundi is a proven executive with a long history of mining industry
experience who previously served as President of Agnico Eagle. Wi th this appointment,
Mr. Al-Joundi joins the Company's board of di rectors (the "Board"). Anthony Makuch
advised the Board that he has decided to step down as Chief Executive Officer and as a
director of Agnico Eagle.
Mr. Al-Joundi has over 20 years of experience in mining, capital markets and banking, with
specialization in finance and business strategy. He joined Agnico Eagle as President in
2015, after serving as Chief Financial Office r at Agnico Eagle (from September 2010 to
June 2012) and as Chief Financial Officer and Senior Executive Vice President at Barrick
Gold Corporation (from July 2012 to February 2015). Prior to joining Agnico Eagle in 2010,
he spent 11 years at Barrick in various seni or financial roles including Senior Vice-
President of Finance, Senior Vice-President of Business Strategy and Capital Allocation,
and Executive Director and CFO of Barrick South America.
"Ammar has the right mix of skill, experienc e and knowledge to exec ute the new Agnico
Eagle's strategic plan to become the wo rld’s leading and highest quality senior gold
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producer,” said Executive Chair Sean Boyd. "We are confident that Ammar is the right
leader to complete the integration of Agnico Eagle and Kirkland Lake Gold and, working
closely with our combined Board members and executive team and our outstanding
employees, he will help drive the Company’s successes as we continue to work to create
long-term value for the Company’s shareholders and other key stakeholders," added Mr.
Boyd.
The Agnico Eagle Board expresses its thanks to Mr. Makuch for steering Kirkland Lake
Gold Ltd. ("Kirkland Lake Gold") through th is transformative tr ansaction and for his
contributions to Kirkland Lake Gold during his tenure.
Tony Makuch said: "We built Kirkland Lake Gold by acquiring, developing and operating
high-quality assets in good jurisdictions with si gnificant exploration upside. Just as
important, we build a business based on honesty , integrity, respect for all people and
support for communities. We have culminated all this with the merger of equals with Agnico
Eagle and I am very proud to have been involved in creating the third largest global gold
producer in the world. I am leaving Agnico with a strong and dedicated leadership team
and I believe they will continue to be successful. I would like to thank the tremendous team
of people at Kirkland Lake Gold for their years of hard work and support in building a truly
special company."
Jeff Parr, Vice-Chair of Agnico Eagle and former Chair of Kirkland Lake Gold, said, "We
want to thank Tony for his tremendous contribution to the success of Kirkland Lake Gold,
building the company into a 1.4 million ounce per year producer with the industry's lowest
unit costs and significant growth potential. Tony's track record for enhancing the value of
assets through investment in explorat ion, development and t he optimization of
performance is unsurpassed and we know he will continue to have great success in
whatever venture he chooses next."
Agnico Eagle 2021 highlights:
• Record annual gold production – Payable gold production1 in the full year 2021
was 2,030,176 ounces (excluding 56,229 ounces of payable gold production at
Hope Bay, and including 24,057 ounces and 1,956 ounces of pre-commercial gold
production at the Tiriganiaq open pit at Meliadine and the Amaruq underground
project, respectively) at production costs per ounce of $835, total cash costs per
1 Payable production of a mineral means the quantity of a mineral pr oduced 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.
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ounce2 of $761 and all-in sustaining costs ("AISC") per ounce 3 of $1,038.
Production costs per ounce, total cash costs per ounce and AISC per ounce exclude
the Hope Bay mine and the pre-commercia l production ounces from Amaruq and
Tiriganiaq
• Strong quarterly production in spite of COVID-19 impacts – Payable gold
production in the fourth quarter of 2021 was 501,227 ounces (excluding 705 ounces
of payable gold production at Hope Bay, and including 1,608 ounces of pre-
commercial gold production at the Amaruq underground project) at production costs
per ounce of $892, total cash costs per ounce of $812 and AISC per ounce of
$1,126. Production costs per ounce, total cash costs per ounce and AISC per ounce
exclude the pre-commercial production ounces from Amaruq. Production and costs
in the fourth quarter of 2021 were negativ ely affected by a reduction in operating
activities in Nunavut largely due to a COVID-19 outbreak in mid-December 2021
• Several operational milestones achieved in the fourth quarter of 2021 and full
year 2021 – In December 2021, new monthly records for gold production were set
at Kittila and Canadian Malartic. In 2021, new annual records for gold production
were set at Meliadine, Kittila and Canadi an Malartic, while the LaRonde Complex
had its best year ever in terms of tonnage milled. Several production milestones
were also reached in the fourth quarter of 2021, with the LaRonde Complex pouring
its seven millionth ounce of gold, Goldex reached one million ounces of gold
produced (since the 2013 restart) and Canadian Malartic reached six million ounces
of gold produced (100% basis)
• COVID-19 still a concern, but risks appear manageable at this time – The
Company has increased its efforts to monitor and manage risks associated with the
Omicron variant of COVID-19. At this time, case counts appear to be dropping and
the Company expects that it will be able to maintain budgeted production levels.
The Company expects that its efforts to help protect the northern communities from
2 Production costs per ounce and total cash costs per ounce are non-GAAP ratios that are not standardized
financial measures under the financial reporting fr amework used to prepare the Company's financial
statements and, unless otherwise specified, is reported on a by-product basis in this news release. For the
detailed calculation of production costs per ounce and the 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".
3 AISC per ounce is a non-GAAP ratio that is not a standardized financial measure under the financial
reporting framework used to prepare the Company's financial statements and, unless otherwise specified, is
reported on a by-product basis in this news release. 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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this COVID-19 variant will have a slightly negative effect on production in the first
quarter of 2022 as the Nunavut-based workfo rce ("Nunavummiut") were sent back
to their communities in December 2021. Plans are being reviewed to re-integrate
the local workforce as soon as possible
"The fourth quarter of 2021 was Agnico Eagle' s fifth consecutive quarter of over 500,000
ounces of gold production, which is particularly impressive given the impacts of COVID-19
during the latter part of the quarter. On a full year basis, in 2021 the Company achieved
records in gold production, oper ating cashflow and mineral reserves, all while delivering
the best safety performance in the Company' s 64-year history", said Ammar Al-Joundi,
Agnico Eagle's President and Chief Executive Of ficer. "Looking forward, all of our mines,
both those contributed by Agnico Eagle and Kirkland Lake Gold, are well positioned for
another strong year in 2022, and well into t he future. Furthermore, the Company is
investing more than ever before at our mines and in exploration to build an even stronger
business, in what we believe are the best places in the world to mine for gold", added Mr.
Al-Joundi.
The New Agnico Eagle – A best-in-class gold mining company with the largest gold
production from Canada and well positioned internationally with profitable and prospective
assets in Australia, Finland and Mexico.
• Merger with Kirkland Lake Gold Ltd. (the "Merger") – On February 8, 2022, the
Merger with Kirkland Lake Gold Ltd. ("Kirkland Lake Gold") was completed
• New three-year operational guidance – Payable gold production for 2022 is
forecast to be approximatel y 3.2 to 3.4 million ounces with total cash costs per
ounce expected to be between $725 and $775 and AISC per ounce expected to be
between $1,000 and $1,050. Gold production for 2023 and 2024 is expected to be
in a similar range to 2022 at approximately 3.2 to 3.4 million ounces of gold with
relatively stable total cash costs per ounce and AISC per ounce compared to 2022.
As the expected Merger synergies are rea lized, both cost metr ics are expected to
then decline in 2023 and 2024. Estimat ed capital expenditures for 2022 total
approximately $1.4 billion, which includes approximately $703 million of sustaining
capital4 at the Company's operating mines and $710 million on gr owth projects5.
4 Sustaining capital is a non-GAAP measure that is not a standardized financial measure under the financial
reporting framework used to prepare the Company's financial statements. S ee "Note Regarding Certain
Measures of Performance".
5 Growth projects or development capital is a non-G AAP measure that is not a standardized financial
measure under the financial reporting framework used to prepare the Company's financial statements. See
"Note Regarding Certain Measures of Performance".
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Not included in the 2022 estimated capi tal expenditures is approximately $131
million relating to capitalized exploration
• Strong combined mineral reserve base totaling 44.6 million ounces of gold –
At December 31, 2021, Agnico Eagle's proven and probable mineral reserves were
a record 25.7 million ounces of gold (337 million tonnes gradi ng 2.37 grams per
tonne ("g/t") gold); measured and indicated mineral resources were 17.2 million
ounces (353 million tonnes grading 1.52 g/t gold); and inferred mineral resources
were 23.7 million ounces (272 million tonnes grading 2.72 g/t gold). At December
31, 2021, Kirkland Lake Gold's proven and probable mineral reserves were 18.9
million ounces of gold (584 million tonnes gr ading 1.01 g/t gold); measured and
indicated mineral resources were 22.4 million ounces ( 647 million tonnes grading
1.08 g/t gold); and inferred mineral resources were 6.9 million ounces (94.0 million
tonnes grading 2.28 g/t gold)
• Large exploration program planned for 2022 with a focus on minesite and
pipeline opportunities – The exploration budget in 2022 is approximately $324
million ($193 million of expensed expl oration and $131 million of capitalized
exploration), with a primary focus on the expansion of mineral reserves and mineral
resources at operating mines (Detour, Ma cassa, Fosterville and Meliadine) and
pipeline projects (the Odyssey and Hope Bay projects)
• Future Value Drivers
• Synergies and optimization opportunities expected to drive over $2B in
value creation over the next 10 years – In 2022, the Company expects to
realize Merger-related corporate and operational synergies of approximately
$40 million to $60 million, of which $12 million have already been realized at
the time of this news release. In subsequent years, the Company expects to
ramp up these synergies to approximat ely $165 million per year. A further
$590 million over 10 year s are expected to be r ealized through strategic
optimizations which incl ude the development of the Amalgamated Kirkland
("AK") deposit at the Kirkland Lake camp with initial gold production
potentially as early as 2024
• Detour Lake mine – Successful exploration programs in 2020 and 2021 led
to a significant increase in open-pit mineral resources in 2021. These new
mineral resources and ongoing busines s improvement initiatives will be
incorporated into a new technical repor t expected to be filed in the second
quarter of 2022. This report is expected to show growth in mineral reserves
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and provide additional opportunities to enhance the future production profile
of the mine
• Macassa mine – Sinking of the #4 Shaft was completed in January 2022,
over a year earlier than initially pl anned. Completion of other #4 Shaft
development activities are expected in la te 2022. The #4 Shaft is expected
to provide numerous benefits, incl uding increased hoisting capacity,
improved unit costs, better ventilati on, and enhanced capabilities to pursue
exploration potential across the Kirkl and Lake camp. Gold production at
Macassa is forecast to increase fr om 170,000 to 190,000 ounces in 2022
with a target to approximately 330,000 to 350,000 ounces in 2024.
Production levels could potentially incr ease once the full benefit of the #4
Shaft is realized
• Fosterville mine – Based on current explorat ion results, the Company's
long-term goal for Fosterville is to es tablish the mine as a long-life asset
through success in replacing mineral reserves. The Company believes there
is potential to discover additional hi gh-grade zones that could potentially
support higher production levels and improvements in unit costs
• Odyssey project – U nderground development and surface construction
activities remain on schedule and on budget as of the date hereof. In 2022,
approximately 136,835 metres of surface and underground drilling is planned
to infill and expand mineral reserves. From 2023 to 2028, gold production is
forecast to be approximately 932,000 ounces at total cash costs of
approximately $800 per ounce (all numbers on a 100% basis). Average
annual payable production is expected to be approximately 545,400 ounces
of gold from 2029 to 2039, with total cash costs per ounce of approximately
$630
• Kittila expansion project – The mill expansion was completed ahead of
schedule in late 2020 and shaft sinking is expected to be completed in the
second half of 2022, with commissioning of the production hoist expected in
late 2022 or early 2023. Completion of the shaft is expected to result in lower
operating costs and provide additional dr illing access to increase mineral
reserves and mineral resources at depth. Estimated total expansion project
costs remain within the previously disclosed range of €190 to €200 million
• Optimization and consolidation of mining assets and infrastructure in
the Kirkland Lake gold camp – There are several development assets in
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the Kirkland Lake area with significant mineral reserves and mineral
resources. Studies are underway to evaluate the potential to advance some
of these assets into production (AK, Upper Beaver, Upper Canada) either as
standalone projects or by leveraging existing infrastructure at Macassa or the
Holt processing complex
• Strong balance sheet allows for asset development and r obust returns to
shareholders, including a new share buyback program – With over $2.2 billion
in liquidity, the Company is well positioned to fund its existing capital requirements
and increase returns to shareholders. Wi th this strong financial position, the
Company announced today that , subject to the approval of the Toronto Stock
Exchange (the "TSX"), it intends to launch a normal course issuer bid to repurchase
for cancellation up to 9 million of its common shares, for up to an aggregate amount
of $500 million, representing approximately 2% of its 454.8 million common shares
issued and outstanding as at February 23, 2022.
• Quarterly dividend increased by 14% – A quarterly dividend of $0.40 per share
has been declared (previous quarterly dividend was $0.35)
Fourth Quarter 2021 Results Conference Call and Webcast Tomorrow
Agnico Eagle's senior management will host a conference call on Thursday, February 24,
2022 at 11:00 AM (E.S.T.) to discuss the Company's fourth quarter and full year financial
and operating results, as well as operating plans following completion of the Merger.
Via Webcast:
A live audio webcast of the conference call will be available on the Company's website
www.agnicoeagle.com.
Via Telephone:
For those preferring to listen by telephone, please dial 1-416-764-8659 or toll-free 1-888-
664-6392. To ensure your participation, please call approximately five minutes prior to the
scheduled start of the call.
Replay Archive:
Please dial 1-416-764-8677 or toll-free 1-888-390-0541, access code 093746#. The
conference call replay will expire on Friday, March 25, 2022.
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The webcast and presentation slides will be archived for 180 days on the Company's
website.
Fourth Quarter 2021 Financial and Production Results
In the fourth quarter of 2021, net income was $101.1 million ($0.41 per share). This result
includes non-cash mark-to-market gains on warrants of $12.8 milli on ($0.05 per share),
non-cash foreign currency translation losses of $12.8 million ($0.05 per share), derivative
gains on financial instruments of $7.1 million ($0.03 per share), transaction costs relating
to the Merger with Kirkland Lake Gold of $7. 0 million ($0.03 per share), foreign currency
translation losses on deferred tax liabilities and non-recurring tax adjustments of $6.5
million ($0.03 per share) and various other adjustment losses of $3.8 million ($0.02 per
share). Excluding these items woul d result in adjusted net income 6 of $111.3 million or
$0.46 per share for the fourth quarter of 2021. For the fourth quarter of 2020, the Company
reported net income of $205.2 million or net income of $0.85 per share.
Included in the fourth quarter of 2021 net income, and not adjus ted above, is a non-cash
stock option expense of $3.6 m illion ($0.01 per share) and work force costs of employees
affected by the COVID-19 pandemic (primarily Nunavut-based) of $2.2 million ($0.01 per
share).
For the full year 2021, the Company reported net income of $543.0 million, or net income
of $2.23 per share. This co mpares with the full year 2020, when net income was $511.6
million, or net income of $2.12 per share.
The decrease in net income in the fourth quarter of 2021 compared to the prior-year period
is primarily due to lo wer operating margins 7 (lower average realized metal prices and
higher production costs, partia lly offset by higher sales vo lumes), lower unrealized gains
for non-cash items related to mark-to-market adjustments on financial instruments, higher
amortization of property, plant and mine deve lopment resulting from higher production
6 Adjusted net income and adjusted net income per share are non-GAAP measures that are not standardized
financial measures under the financial reporting fr amework used to prepare the Company's financial
statements. For a reconciliation to net income and ne t income per share see "Reconciliation of Non-GAAP
Financial Performance Measures" below. See also "Note Regarding Certain Measures of Performance".
7 Operating margin is a non-GAAP measure. For a reconciliation to net income see "Reconciliation of Non-
GAAP Financial Performance Measures" below. S ee also "Note Regarding Certain Measures of
Performance".