Agnico Eagle Reports First Quarter 2023 Results – Strong Operational Results with Record Safety Performance; Optimization Activities Progressing Well IN the Abitibi GOLD Belt; 2022
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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 2023 RESULTS – STRONG
OPERATIONAL RESULTS WITH RECORD SAFETY PERFORMANCE; OPTIMIZATION
ACTIVITIES PROGRESSING WELL IN THE ABITIBI GOLD BELT; 2022
SUSTAINABILITY REPORT RELEASED; YAMANA TRANSACTION AND SAN
NICOLAS JOINT VENTURE TRANSACTION CLOSED
Toronto (April 27, 2023) – Agnico Eagle Mines Limited (NYSE:AEM, TSX:AEM)
("Agnico Eagle" or the "Company") today reported financial and operating results for the
first quarter of 2023.
"The year is off to a good start with strong operational results and the best quarterly safety
performance in the Company's over 65- year history, which positions us well to meet our
full year guidance projections. Costs were better than expected, primarily due to the strong
operating results, favourable currency movements and a slight easing of inflationary
pressures," said Ammar Al-Joundi, Agnico Eagle's President and Chief Executive Officer.
"With the completion of the acquisition of Yamana's Canadian assets on March 31 st, our
focus in 2023 continues to be on the optimization of our strategic positions in the Abitibi
gold belt, with an aim of increasing annual gold production from this region by
approximately 500,000 ounces by the end of the decade. Efforts are ongoing to evaluate
several opportunities to leverage existing infrastructure which has the potential to
significantly increase future gold production at lower capital intensity and with a reduced
environmental footprint. If realized, these opportunities have the potential to deliver
increased returns to our shareholders with reduced execution and operating risk," added
Mr. Al-Joundi.
First quarter 2023 highlights – Solid operational performance and important strategic
consolidations
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• Strong quarterly production and costs with record safety performance –
Payable gold production 1 in the first quarter of 2023 was 812,813 ounces at
production costs per ounce of $804, total cash costs per ounce 2 of $832 and all-in
sustaining costs ("AISC") per ounce 3 of $1,125. These results include only the
Company's 50% of the production from the Canadian Malartic mine up to March 30,
2023, and 100% thereafter
• Solid quarterly financial results – The Company reported quarterly net income of
$3.87 per share in the first quarter of 2023, with adjusted net income 4 of $0.58 per
share. Operating cash flow was $1.30 per share. The quarterly net income of $3.87
per share includes a remeasurement gain of approximately $1.5 billion arising from
the acquisition of 50% of the Canadian Malartic complex not previously owned by
the Company
• Gold production, cost and capital expenditure guidance reiterated for 2023 –
Expected payable gold production in 2023 remains unchanged at approximately
3.24 to 3.44 million ounces with total cash costs per ounce expected to be between
$840 and $890 and AISC per ounce expected to be between $1,140 and $1,190.
Total capital expenditures (excluding capitalized exploration) for 2023 are still
estimated to be approximately $1.42 billion. The Company's 2023 production, costs
and capital expenditure guidance assumes 50% ownership of Canadian Malartic for
the first three months of 2023 and 100% ownership for the last nine months of the
year
• Update on key value drivers and pipeline projects
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 is a non- GAAP ratio that is not a standardized financial measure under IFRS
and, unless otherwise specified, is reported on a by -product basis in this news release. For the detailed
calculation of production costs per ounce, the reconciliation of total cash costs to production costs and
information about total cash costs per once 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 IFRS 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 sustainin g costs on a co- product basis, see "Reconciliation of Non- GAAP
Financial Performance Measures" below. See also "Note Regarding Certain Measures of Performance".
4 Adjusted net income and adjusted net income per share are non-GAAP measures that are not
standardized financial measures under IFRS. For a reconciliation to net income and net income per share
see "Reconciliation of Non-GAAP Financial Performance Measures" below. See also "Note Regarding
Certain Measures of Performance".
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• Odyssey project – Good progress was made on underground development
and surface construction activities in the first quarter of 2023. Underground
development via ramp access has now passed the bottom of the Odyssey
South deposit and has reached the level of the first shaft access point. Shaft
sinking activities have also commenced. The first production blast occurred
at the Odyssey South deposit in late March 2023. Drilling activities were
focused on infilling the internal zones at the Odyssey South deposit and
mineral resource expansion of the East Gouldie deposit to the east and west
• Detour Lake – In the first quarter of 2023, the mill set a record for first quarter
throughput and activities continued to focus on mill process optimization and
improving availability with the goal of achieving and potentially exceeding
throughput of 28.0 million to nnes per annum ("Mtpa"). Step out drilling
continued to the west of the resource pit shells and the Company is
integrating additional drill data into a revised mineral resource model that will
be used to evaluate potential underground mining scenarios
• Optimization of assets and capital infrastructure in the Abitibi region –
With the Company now owning of 100% of Canadian Malartic complex, the
Company expects to have up to 40,000 tonnes per day ("tpd") of excess mill
capacity at Canadian Malartic Complex starting in 2028. By maximizing the
mill throughput in the region, the Company believes there is potential to
increase future gold production at lower capital costs and with a reduced
environmental footprint. Internal evaluations are underway to assess
potential production opportunities at the Macassa near surface deposits and
the Amalgamated Kirkland ("AK") deposit, Upper Beaver and the Wasamac
project. These evaluations are expected to be completed by year-end 2023
• Continued exploration success at Meli adine, Kittila, LaRonde Zone 5 ("LZ5")
and Goldex expected to drive future mineral reserve and mineral resource
additions
• Meliadine – Drilling has targeted the vertical extensions of the mineralized
zones in the central part of the Tiriganiaq and Wesmeg deposits. At
Tiriganiaq, a recent intercept yielded 17.2 grams per tonne ("g/t") gold over
4.9 metres at 770 metres depth. At Wesmeg, drilling in the eastern part of
the deposit continues to return wide, high- grade intersections, with recent
results including 8.9 g/t gold over 7.0 metres at 532 metres depth
• Kittila – Drilling has extended the Rimpi Main Zone to the north, outside of
the current mineral resources, with highlights of up to 5.0 g/t gold over 9.2
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metres at 1,141 metres depth. In addition, drilling has extended the Rimpi
Zone mineralization down- plunge from the Roura area within the Parallel /
Sisar zones, with intercepts of up to 5.0 g/t gold over 4.9 metres at 1,199
metres depth
• LZ5 – Drilling continues to expand the mineral resource envelope which now
extends to a depth of 950 metres, with highlights including 3.0 g/t gold over
30.0 metres at 671 metres depth and 3.7 g/t gold over 10.1 metres at 840
metres depth. Inferred mineral resources are expected to be added at depths
between 770 and 950 metres by year-end 2023
• Goldex – Infill drilling in the South Zone Sector 3 has returned high- grade
results, including 9.8 g/t gold over 15.5 metres at 1,246 metres depth and 6.0
g/t gold over 12.0 metres at 1,274 metres depth. Initial drilling in the W Zone
(approximately 200 metres west of the main Goldex deposit) has returned
1.8 g/t gold over 35.0 metres at 480 metres depth in an area with historical
mineralized inventory
• Acquisition of Yamana's Canadian assets and 50/50 San Nicolás copper -zinc
joint venture with Teck completed
• Yamana Transaction – The previously announced transaction to acquire the
Canadian assets of Yamana Gold Inc. ("Yamana") closed on March 31, 2023
(the "Yamana Transaction" ), and the Company now owns 100% of the
Canadian Malartic Complex, the Wasamac project located in the Abitibi
region of Quebec and several other exploration properties located in Ontario
and Manitoba. The closing of the Yamana Transaction further solidifi es the
Company's presence in the Abitibi gold belt, a region of low political risk and
high geological potential, where the Company has a strong competitive
advantage from having operated in the region for over 50 years
• San Nicolás – The previously announced 50/50 joint venture agreement
between Teck Resources Limited ("Teck") and Agnico Eagle in respect of the
San Nicolás copper-zinc development project located in Zacatecas, Mexico
was entered into on April 6, 2023. Minera San Nicolás S.A.P .I de C.V., th e
joint venture company that holds the project, is now working to advance
permitting and development of the project and is planning to submit an
Environmental Impact Assessment and permit application for San Nicolás in
2023 and is targeting completion of a feasibility study in 2024
• 2022 sustainability report published, illustrating continued commitment to
strong ESG performance and implementation of a climate strategy action plan
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– In 2022, Agnico Eagle maintained or improved performance across many key ESG
indicators, including safety performance, efficient management of water resources
and increased Indigenous employment. In addition, efforts were accelerated in
2022 to maintain a climate resilient business by setting an interim reduction target
of 30% of absolute Scope 1 and 2 emissions by 2030, and publication of the
Company's first Climate Action Report
• A quarterly dividend of $0.40 per share has been declared
First Quarter 2023 Results Conference Call and Webcast Tomorrow
Agnico Eagle's senior management will host a conference call on Friday, April 28, 2023 at
8:30 AM (E.D.T.) to discuss the Company's first quarter 2023 financial and operating
results.
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.
Via URL Entry:
To join the conference call without operator assistance, you may register and enter your
phone number at https://bit.ly/3VJ2EKh to receive an instant automated call back.
Replay Archive:
Please dial 1- 416-764-8677 or toll -free 1- 888-390-0541, access code 175235#. The
conference call replay will expire on May 28, 2023.
The webcast, along with presentation slides, will be archived for 180 days on the
Company's website.
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Annual Meeting
The Company will host its Annual and Special Meeting of Shareholders (the "AGM") on
Friday, April 28, 2023 at 11:00 am (E.D.T). During the AGM, management will provide an
overview of the Company's activities.
Hybrid Format
The AGM will be held in person at the Arcadian Court, 401 Bay Street, Simpson Tower, 8th
Floor, Toronto, Ontario, M5H 2Y4 and online at: https://meetnow.global/M5UPTSH.
The Company is conducting a hybrid meeting that will allow registered shareholders and
duly appointed proxyholders to participate both online and in person. The Company is
providing the virtual format in order to provide shareholders with an equal opportunity to
attend and participate at the AGM.
For details explaining how to attend, communicate and vote virtually at the AGM please
see the Company's Management Information Circular dated March 21, 2023 filed under
the Company's profile on SEDAR at www.sedar.com and on EDGAR at www.sec.gov .
Shareholders who have questions about voting their shares or attending the AGM may
contact Investor Relations by telephone at 416.947.1212, by toll -free telephone at
1.888.822.6714 or by email at [email protected] or the Company's strategic
shareholder advisor and proxy solicitation agent, Laurel Hill Advisory Group, at
1.877.452.7184 (toll free in North America), at 1.416.304.0211 (for collect calls outside of
North America) or by e-mail at [email protected].
First Quarter 2023 Financial and Production Results
In the first quarter of 2023, net income was $1,816.9 million ($3.87 per share). This result
includes the following items (net of tax): a remeasurement gain arising from the acquisition
of the remaining 50% of the Canadian Malartic complex of $1,543.4 million ( $3.29 per
share), transaction costs relating to the acquisition of the Canadian assets of Yamana of
$12.5 million ($0.03 per share), foreign currency translation gains on deferred tax liabilities
of $10.6 million ($0.02 per share), and mark-to-market gains on the Company's investment
portfolio of $4.1 million ($0.01 per share).
Excluding the above items results in adjusted net income of $271.3 million or $0.58 per
share for the first quarter of 2023. For the first quarter of 2022, the Company reported net
income of $119.1 million ($0.31 per share).
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Included in the first quarter of 2023 net income, and not adjusted above, is a non- cash
stock option expense of $4.7 million ($0.01 per share).
The increase in net income in the first quarter of 2023 compared to the prior-year period is
primarily due to the remeasurement gain. This gain is a result of the application of
purchase accounting relating to a business combination attained in stages, which requires
the remeasurement on the subsequent acquisition of the Company's previously held 50%
interest in the Canadian Malartic complex to fair value.
The fair value of the Company's previously held 50% interest and the resulting gain on
remeasurement, along with the fair values allocated to assets acquired and liabilities
assumed are preliminary, and are subject to adjustment based on further analysis and
evaluation over the course of the measurement period which may not exceed twelve
months from the acquisition date.
Additionally, higher mine operating margins 5 from higher sales volumes (see discussion
below) and lower other expenses from lower transacti on costs were partially offset by
higher amortization and higher income and mining taxes.
In the first quarter of 2023, cash provided by operating activities was $649.6 million ($608.8
million before changes in non-cash components of working capital), com pared to the first
quarter of 2022 when cash provided by operating activities was $507.4 million
($366.0 million before changes in non-cash components of working capital).
Cash provided by operating activities (before changes in non-cash components of working
capital) increased in the first quarter of 2023 when compared to the prior -year period
primarily due to higher sales volumes following the merger (the "Merger") between Agnico
Eagle and Kirkland Lake Gold Ltd. ("Kirkland Lake Gold") as opposed to the 58 days of
production that followed the Merger in 2022.
In the first quarter of 2023, the Company's payable gold production was 812,813 ounces.
This compares to quarterly payable gold production of 660,604 ounces in the prior -year
period. Including the entire quarter's production from the pre- Merger Kirkland Lake Gold
mines, pro forma total gold production in the first quarter of 2022 was 806,329 ounces.
5 Operating margin is a non-GAAP measure that is not a standardized measure under IFRS. For a
reconciliation to net income see "Reconciliation of Non-GAAP Financial Performance Measures" below. See
also "Note Regarding Certain Measures of Performance".
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Payable gold production increased in the first quarter of 2023 when compared to the prior-
year period, primarily due to the inclusion of additional days of production in the 2023
period as described above at the Detour Lake, Fosterville and Macassa mines.
In the first quarter of 2023, production costs per ounce were $804, compared to $1,002 in
the prior-year period. In the first quarter of 2023, total cash costs per ounce were $832,
compared to $811 in the prior-year period.
Production costs per ounce decreased in the first quarter of 2023 when compared to the
prior-year period primarily as a result of the revaluation of gold inventory held by Kirkland
Lake Gold on February 8, 2022. A detailed description of the minesite costs per tonne at
each mine is s et out below. Total cash costs per ounce increased in the first quarter of
2023 when compared to the prior year period primarily due to higher inventory adjustments
and lower by-product revenues from the LaRonde mine and Pinos Altos mine.
In the first quarter of 2023, AISC per ounce were $1,125, compared to $1,079 in the prior-
year period. AISC per ounce increased in the first quarter of 2023 when compared to the
prior-year period primarily due to higher total cash costs per ounce and higher sustaining
capital expenditures, partially offset by lower general and administrative expenses.
Financial Flexibility Remains Strong After Acquisition of Yamana's Canadian Assets
Cash and cash equivalents increased to $744.6 million at March 31, 2023, from the
December 31, 2022 balance of $658.6 million , primarily due to improved operating
margins. On March 30, 2023 the Company drew down $1.0 billion from its unsecured
revolving bank credit facility and funded the approximately $1.0 billion of cash
consideration payable in connection with the Yamana Transaction.
In addition to the quarterly dividend, the Company contributed to shareholder returns
through its normal course issuer bid ("NCIB"). In the first quarter of 2023, under the NCIB,
the Company repurchased 100,000 common shares for $4.8 million. From the
commencement of the NCIB on May 4, 2022 until March 31, 2023, under the NCIB, the
Company repurchased 1,669,620 common shares for an aggregate of $74.6 million. The
NCIB permits the Company to purchase up to $500.0 million of its common shares (up 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 of May 4, 2022.
The Company intends to seek approval from the TSX to renew the NCIB, pursuant to which
the Company would be permitted to purchase up to the lessor of (i) 5% of its issued and