Stock Symbol: AEM (NYSE and TSX)
(All
amounts expressed in U.S. dollars unless otherwise noted)
TORONTO, July 26, 2017 /PRNewswire/ - Agnico Eagle
Mines Limited (NYSE:AEM, TSX:AEM) ("Agnico Eagle" or the
"Company") today reported quarterly net income of $61.9 million, or $0.27 per share, for the second quarter of
2017. This result includes non-cash foreign currency
translation gains on deferred tax liabilities of $12.1 million ($0.05 per share), various mark-to-market and
other adjustment losses of $10.3
million ($0.04 per share),
unrealized gains on financial instruments of $7.9 million ($0.03
per share) and non-cash foreign currency translation losses of
$2.7 million ($0.01 per share). Excluding these items
would result in adjusted net income1 of $54.9 million or $0.24 per share for the second quarter of
2017. In the second quarter of 2016, the Company reported net
income of $19.0 million or
$0.09 per share.
Not included in the second quarter of 2017 adjusted net income
above is non-cash stock option expense of $3.8 million ($0.02
per share).
For the first six months of 2017, the Company reported net
income of $137.8 million, or
$0.60 per share. This compares
with the first six months of 2016 when net income was $46.8 million, or $0.21 per share. Financial results in the
2017 period were positively affected by higher gold sales volumes
and realized prices (approximately 6% and 1% higher, respectively)
and lower depreciation expense.
In the second quarter of 2017, cash provided by operating
activities decreased to $184.0
million ($197.2 million before
changes in non-cash components of working capital) compared with
cash provided by operating activities of $229.5 million in the second quarter of 2016
($192.7 million before changes in
non-cash components of working capital). The cash provided by
operating activities before changes in working capital during the
current period were essentially the same.
________________________
|
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".
|
For the first six months of 2017, cash provided by operating
activities was $406.6 million
($421.2 million before changes in
non-cash components of working capital), as compared with the first
six months of 2016 when cash provided by operating activities was
$375.2 million ($360.2 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 first six months of 2017 was mainly due to a combination of
higher gold and by-product metals production and higher realized
gold prices.
"As a result of continued strong production and cost performance
at all of our mines, we have increased our gold production guidance
to 1.62 million ounces from 1.57 million ounces and reduced our
total cash cost guidance from $610
per ounce to $595 per ounce", said
Sean Boyd, Agnico Eagle's Chief
Executive Officer. "In addition to strong operating and
financial results, we continue to make very good progress on the
exploration and development front. Our Nunavut projects are
advancing on schedule and budget, and we are also generating
positive exploration results at many of our minesites, which should
support future growth initiatives", added Mr. Boyd.
Second Quarter 2017 highlights include:
- Operations continue to deliver strong performance
– Payable gold production2 in the second quarter of
2017 was 427,743 ounces of gold at production costs per ounce of
$634, total cash costs3
per ounce of $556 and all-in
sustaining costs per ounce4 ("AISC") of $785
- Full year production guidance increased and unit cost
forecasts reduced – Given the strong first half
operational performance, 2017 production is now expected to be 1.62
million ounces compared to previous guidance of 1.57 million
ounces. Total cash costs per ounce are now expected to be
$580 to $610 (previously $595 to $625) and AISC are expected to be
$830 to $880 per ounce (previously
$850 to $900)
- Meliadine project continues to progress on schedule and
budget – Underground development is ahead of plan and
engineering was 80% complete at the end of June 2017.
Construction activities are progressing well with cranes and
structural steel for the erection of surface buildings being moved
to site from the Rankin Inlet
laydown facility. The first delivery of the shipping season
arrived in Rankin Inlet on
June 30, 2017. Since then,
three deliveries of construction materials have been received at
Rankin Inlet. Four additional deliveries of construction
materials are expected over the next two months
- Amaruq exploration program continues to yield positive
results – At Amaruq, infill drilling has been completed on the
Whale Tail and V Zone deposits, and other target areas are now
being explored. Significant results include: 6.9 grams per
tonne ("g/t") over 6 metres on the western extension of the planned
Whale Tail pit and 20.4 g/t gold over 10.4 metres at the V Zone at
225 metres depth, beneath the planned pit outline
- Infill and exploration drilling expected to result in
mineral resource additions and conversions at multiple properties
– Significant results include: 7.1 g/t gold over 33.5 metres at
the Rimpi deposit at Kittila, 23.7 g/t gold over 10.9 metres at
LaRonde 3 and 1.6 g/t gold over 18.2 metres near surface at the
Bravo deposit at Creston
Mascota
- A quarterly dividend of $0.10
per share was declared
___________________
2 Payable 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.
3 Total 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" below.
4 All-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" below.
|
Second Quarter Financial and Production Highlights – Higher
Gold Production, Lower Production Costs – 2017 Cost Forecasts
Decrease
In the second quarter of 2017, strong operational performance
continued at the Company's mines. Payable gold production was
427,743 ounces, compared to 408,932 ounces in the second quarter of
2016. The higher level of production in the 2017 period was
primarily due to higher grades mined at Meadowbank and Canadian
Malartic. A detailed description of the production of each of
the Company's mines is set out below.
In the first six months of 2017, payable gold production was
845,959 ounces, compared to 820,268 ounces in the 2016
period. The higher level of production in the 2017 period was
primarily due to higher grades mined at Meadowbank.
Production costs per ounce for the second quarter of 2017 were
$634, which was essentially the same
as the $625 in the 2016 period.
Total cash costs per ounce for the second quarter of 2017 were
$556 which was 6% lower compared to
$592 per ounce for the second quarter
2016. Total cash costs per ounce in the second quarter of
2017 were positively affected by higher production of gold at
Meadowbank and Canadian Malartic. A detailed description of
the cost performance of each of the Company's mines is set out
below.
Production costs per ounce for the first six months of 2017 were
$606, which was slightly lower than
the $609 in the 2016 period.
Production costs per ounce were positively affected by higher
grades mined at Meadowbank and Canadian Malartic. Total cash
costs per ounce for the first six months of 2017 were $548 compared with $582 in the prior-year period. Total cash
costs per ounce in the first six months of 2017 were positively
affected by higher production of gold at Meadowbank and Canadian
Malartic. The Company now forecasts a decrease in total cash
costs per ounce for 2017 to $580 to
$610 per ounce, which is down from previous guidance of
$595 to $625 per ounce.
AISC for the second quarter of 2017 were 7% lower at
$785 per ounce compared to
$848 in the second quarter of
2016. The lower AISC is primarily due to lower total cash
costs per ounce and lower sustaining capital expenditures compared
to the second quarter of 2016. AISC in 2017 are now forecast
to be $830 to $880 per ounce, lower
than previous guidance of $850 to
$900 per ounce.
AISC for the first six months of 2017 was $764 per ounce compared to $822 in the prior-year period. The lower
AISC is primarily due to lower total cash costs per ounce and lower
sustaining capital expenditures compared to the prior-year
period.
Cash Position Remains Strong
Cash and cash equivalents and short term investments increased
to $952.4 million at June 30 2017, from the March 31, 2017 balance of $804.3 million.
On April 7, 2017, the Company
repaid the first series of maturing guaranteed senior unsecured
notes totalling $115 million.
On June 29, 2017, the Company issued,
on a private placement basis, an aggregate of $300 million of guaranteed senior unsecured notes
due 2025, 2027, 2029 and 2032 (the "Notes") with a weighted average
maturity of 10.9 years and weighted average coupon of 4.67%.
Net proceeds from the sale of the Notes were used for general
corporate purposes. During the quarter, the Company's
investment grade credit rating was re-confirmed by DBRS with a
stable trend.
The outstanding balance on the Company's credit facility
remained nil at June 30, 2017.
This results in available credit lines of approximately
$1.2 billion, not including the
uncommitted $300 million accordion
feature.
Approximately 35% of the Company's remaining 2017 Canadian dollar exposure is hedged at a
floor price of 1.30 US$/C$. For
remaining 2017 Euro exposure,
approximately 11% is hedged at a floor price of 1.10 EURO$/US$ and
for remaining 2017 Mexican Peso exposure, approximately 34% is
hedged at 18.60 US$/MXP.
Capital Expenditures
Additional expenditures in 2017 for preliminary work on the road
deviation at the Canadian Malartic extension project are expected
to be between $16 to $22 million,
reflecting the Company's 50% interest. These additional
expenditures are expected to be offset by reduced capital
expenditures at other projects such as Goldex and LaRonde Zone
5. The forecast for 2017 capital expenditures remains
unchanged at $859 million. The
following table sets out capital expenditures (including sustaining
capital) in the second quarter and first six months of 2017.
Capital
Expenditures
|
|
|
|
(In thousands of
US dollars)
|
|
|
|
|
|
Three Months
Ended
|
Six Months
Ended
|
|
|
June 30,
2017
|
June 30,
2017
|
Sustaining
Capital
|
|
|
|
LaRonde
mine
|
|
$
|
22,532
|
$
|
36,337
|
Canadian Malartic
mine
|
|
12,628
|
25,070
|
Meadowbank
mine
|
|
3,322
|
5,753
|
Kittila
mine
|
|
12,254
|
21,935
|
Goldex
mine
|
|
5,031
|
8,210
|
Pinos Altos
mine
|
|
8,143
|
16,382
|
Creston Mascota
deposit Pinos Altos
|
|
1,382
|
1,964
|
La India
mine
|
|
2,265
|
3,899
|
|
|
|
|
Development
Capital
|
|
|
|
LaRonde Zone
5
|
|
$
|
4,448
|
$
|
6,871
|
Canadian Malartic
mine
|
|
723
|
1,441
|
Amaruq satellite
deposit
|
|
38,541
|
50,861
|
Kittila
mine
|
|
6,155
|
12,635
|
Goldex
mine
|
|
7,086
|
19,641
|
Pinos Altos
mine
|
|
6,048
|
6,937
|
La India
mine
|
|
2,483
|
2,483
|
Meliadine
project
|
|
93,125
|
141,690
|
Other
|
|
159
|
886
|
|
|
|
|
Total Capital
Expenditures
|
|
$
|
226,325
|
$
|
362,995
|
Revised 2017 Guidance – Production Increased, Costs Lowered,
Depreciation Decreased
Production for 2017 is now forecast to be 1.62 million ounces of
gold (previously 1.57 million ounces) with total cash costs per
ounce expected to be $580 to $610
(previously $595 to $625) and AISC
expected to be approximately $830 to
$880 per ounce (previously $850 to
$900).
The Company expects depreciation and amortization expense to be
approximately $550 million.
Previous guidance was $580 to $610
million.
Dividend Record and Payment Dates for the Third Quarter of
2017
Agnico Eagle's Board of Directors has declared a quarterly cash
dividend of $0.10 per common share,
payable on September 15, 2017, to
shareholders of record as of September
1, 2017. Agnico Eagle has declared a cash dividend
every year since 1983.
Other Expected Dividend and Record Dates for 2017
Record
Date
|
Payment
Date
|
December 1
|
December
15
|
Dividend Reinvestment Plan
Please follow the link below for information on the Company's
dividend reinvestment plan. Dividend Reinvestment Plan
Second Quarter 2017 Results Conference Call and Webcast
Tomorrow
The Company's senior management will host a conference call on
Thursday, July 27, 2017 at
10:00 AM (E.D.T.) to discuss
financial results and provide an update of the Company's operating
activities.
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
1-647-427-7450 or toll-free
1-888-231-8191. To ensure your participation, please call
approximately ten 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 50955626. The conference call replay will expire on
August 27, 2017.
The webcast, along with presentation slides will be archived for
180 days on the Company's website.
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 – Infill Drilling Expected to Upgrade Mineral
Resources with Potential for Higher Gold Grades in Western Portion
of LaRonde 3 Project
The 100% owned LaRonde mine in northwestern Quebec achieved commercial production in
1988.
LaRonde Mine -
Operating Statistics
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
|
June 30,
2017
|
|
June 30,
2016
|
Tonnes of ore milled
(thousands of tonnes)
|
|
520
|
|
569
|
Tonnes of ore milled
per day
|
|
5,708
|
|
6,253
|
Gold grade
(g/t)
|
|
4.51
|
|
4.31
|
Gold production
(ounces)
|
|
72,090
|
|
75,159
|
Production costs per
tonne (C$)
|
|
$
|
118
|
|
$
|
100
|
Minesite costs per
tonne (C$)
|
|
$
|
113
|
|
$
|
106
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
647
|
|
$
|
539
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
482
|
|
$
|
543
|
Production costs per tonne in the second quarter of 2017
increased when compared to the prior-year period due to lower
tonnage as a result of a planned shutdown to perform maintenance on
the ventilation system and the timing of unsold concentrate
inventory. Production costs per ounce in the second quarter
of 2017 increased when compared to the prior-year period due to
lower production and the reasons described above.
Minesite costs per tonne5 in the second quarter of
2017 increased when compared to the prior-year period due to lower
tonnage as a result of a planned shutdown to perform maintenance on
the ventilation system. Total cash costs per ounce in the
second quarter of 2017 decreased when compared to the prior-year
period due to higher by-product metal revenues.
___________________
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" below.
|
|
LaRonde Mine -
Operating Statistics
|
|
|
|
|
|
|
Six Months
Ended
|
|
Six Months
Ended
|
|
|
June 30,
2017
|
|
June 30,
2016
|
Tonnes of ore milled
(thousands of tonnes)
|
|
1,079
|
|
1,147
|
Tonnes of ore milled
per day
|
|
5,960
|
|
6,302
|
Gold grade
(g/t)
|
|
4.56
|
|
4.27
|
Gold production
(ounces)
|
|
151,002
|
|
150,496
|
Production costs per
tonne (C$)
|
|
$
|
112
|
|
$
|
102
|
Minesite costs per
tonne (C$)
|
|
$
|
111
|
|
$
|
104
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
603
|
|
$
|
574
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
473
|
|
$
|
536
|
Production costs per tonne for the first six months of 2017
increased when compared to the prior-year period due to lower
tonnage as a result of a planned shutdown to perform maintenance on
the ventilation system and the timing of unsold concentrate
inventory. Production costs per ounce for the first six
months of 2017 increased due to the reasons described above.
Minesite costs per tonne for the first six months of 2017
increased when compared to the prior-year period due to lower
tonnage as a result of a planned shutdown to perform maintenance on
the ventilation system. Total cash costs per ounce for the
first six months of 2017 decreased when compared to the prior-year
period due to higher gold production from higher gold grades and
higher by-product metal revenues.
At the LaRonde 3 project, studies are ongoing to evaluate the
potential to mine below the currently planned 311 level (a depth of
3.1 kilometres). The current mineral resources in the western
portion of the deposit are all in the inferred mineral resource
category, extending to the 371 level.
Selected recent drill results are set out in the table below;
drill hole collar coordinates are set out in a table in the
Appendix of this news release. Pierce points for all of these
holes are shown on the LaRonde Composite Longitudinal
Section. All intercepts reported for the LaRonde mine show
capped gold grades over estimated true widths.
Recent exploration and infill drill results from LaRonde 3
(below Level 311)
Drill hole
|
From
(metres)
|
To
(metres)
|
Depth of
midpoint
below
surface
(metres)
|
Estimated
true width
(metres)
|
Gold grade
(g/t)
(uncapped)
|
Gold
grade
(g/t)
(capped)
|
Silver
grade (g/t)
(uncapped)
|
Copper
grade
(%)
|
Zinc
grade
(%)
|
LR-290-075A
|
482.1
|
497.5
|
3,240
|
10.9
|
28.8
|
22.1
|
33.6
|
0.35
|
0.10
|
LR-290-076
|
415.7
|
423.0
|
3,137
|
4.3
|
15.1
|
13.0
|
83.7
|
0.56
|
10.07
|
LR-290-077A
|
548.7
|
555.1
|
3,292
|
3.5
|
5.9
|
5.9
|
15.7
|
0.12
|
0.71
|
LR-293-021A
|
345.0
|
361.5
|
3,123
|
11.9
|
12.6
|
12.6
|
16.0
|
0.25
|
0.03
|
LR-293-022
|
378.6
|
396.6
|
3,163
|
10.9
|
25.6
|
23.7
|
15.6
|
0.30
|
0.02
|
* Holes at LaRonde
3 use a capping factor of 80 g/t gold and 1,000 g/t silver.
None of the silver values in this table were capped.
|
An infill drill program is continuing from the 311 to the 371
levels, with a focus on the western portion of the deposit where
recent drilling has continued to encounter higher-grade
mineralization between the 311 and 340 levels. Drilling
highlights from the first half of 2017 include: 23.7 g/t gold over
10.9 metres at 3,163 metres depth in hole LR-293-022 and 22.1 g/t
gold over 10.9 metres at 3,240 metres depth in hole
LR-290-075A.
These new high-grade intersections support the geological model
and are expected to result in conversion of inferred mineral
resources to indicated mineral resources in the western portion of
the LaRonde 3 project, in the year-end 2017 update.
[Laronde Mine Composite Longitudinal Section]
LaRonde Zone 5 – Permitting and Development Activities Remain
on Schedule
In 2003, the Company acquired the LaRonde Zone 5 project.
The project lies adjacent to and west of the LaRonde mining complex
and previous operators mined the deposit by open pit. In
February 2017, the Company approved
LaRonde Zone 5 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
surface construction was received. Construction of the paste
plant is underway with completion expected in the second quarter of
2018. A new underground ramp is being driven with lateral
underground development underway on three levels in preparation for
mining activities. For additional details on the project see
the Company's news release dated February
15, 2017.
Canadian Malartic Mine – Record Quarterly Production and Mill
Throughput
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 the Canadian Malartic
mine in northwestern Quebec and
operates it through a joint management committee. Each of
Agnico Eagle and Yamana has an indirect 50% ownership interest in
the Partnership. All volume measures in this section reflect
the Company's 50% interest in the Canadian Malartic mine except as
noted.
Canadian Malartic
Mine - Operating Statistics
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
|
June 30,
2017
|
|
June 30,
2016
|
Tonnes of ore milled
(thousands of tonnes)
|
|
2,603
|
|
2,524
|
Tonnes of ore milled
per day
|
|
28,612
|
|
27,736
|
Gold grade
(g/t)
|
|
1.11
|
|
1.00
|
Gold production
(ounces)
|
|
82,509
|
|
72,502
|
Production costs per
tonne (C$)
|
|
$
|
27
|
|
$
|
21
|
Minesite costs per
tonne (C$)
|
|
$
|
24
|
|
$
|
24
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
639
|
|
$
|
662
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
540
|
|
$
|
621
|
Production costs per tonne in the second quarter of 2017
increased when compared to the prior-year period due to timing of
unsold inventory. Production costs per ounce in the second
quarter of 2017 decreased when compared to the prior-year period
due to higher production from higher gold grades. The mill
had record throughput levels during the quarter largely due to
increased volumes of softer ore being processed.
Minesite costs per tonne in the second quarter of 2017 were the
same when compared to the prior-year period. Total cash costs
per ounce in the second quarter of 2017 decreased when compared to
the prior-year period due to higher production from higher gold
grades.
Canadian Malartic
Mine - Operating Statistics
|
|
|
|
|
|
|
Six Months
Ended
|
|
Six Months
Ended
|
|
|
June 30,
2017
|
|
June 30,
2016
|
Tonnes of ore milled
(thousands of tonnes)
|
|
5,036
|
|
4,905
|
Tonnes of ore milled
per day
|
|
27,825
|
|
26,951
|
Gold grade
(g/t)
|
|
1.07
|
|
1.04
|
Gold production
(ounces)
|
|
153,891
|
|
146,115
|
Production costs per
tonne (C$)
|
|
$
|
23
|
|
$
|
21
|
Minesite costs per
tonne (C$)
|
|
$
|
23
|
|
$
|
24
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
554
|
|
$
|
608
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
548
|
|
$
|
589
|
Production costs per tonne for the first six months of 2017
increased when compared to the prior-year period due to timing of
unsold inventory. Production costs per ounce for the first
six months of 2017 decreased when compared to the prior-year period
due to higher production from higher gold grades.
Minesite costs per tonne for the first six months of 2017
decreased when compared to the prior-year period due to higher
throughput levels during the period. Total cash costs per
ounce for the first six months of 2017 decreased when compared to
the prior-year period due to the reasons described above.
On April 19, 2017, the Government
of Quebec announced the issuance
of two decrees authorizing the Partnership to carry out the
proposed expansion of the Canadian Malartic mine and the deviation
of Highway 117 in Malartic
(collectively, the "Project"), which will allow the Partnership to
access the Barnat deposit. The preparatory work for the
Project will begin after obtaining the certificates of
authorization from the Quebec Ministry of Sustainable Development,
Environment and Climate Change.
Deviation plans include a temporary bridge over Highway 117 to
minimize the impact of the construction work on local
traffic. Tree clearing activities have started for the road
deviation. The final certificate of authorization for the
bridge construction is expected from the Quebec Ministry of
Transport in the third quarter of 2017. Road construction is
expected to take two years.
Additional expenditures in 2017 for preliminary work on the road
deviation at the Canadian Malartic extension Project are expected
to be between $16 to $22 million,
(reflecting the Company's 50% interest in the Canadian Malartic
mine). The Company's production guidance (see news release
dated February 15, 2017) assumes a
modest contribution from Barnat in late 2019.
Drilling at Odyssey Focused on Internal Zones and Infilling the
South Zone
At the Canadian Malartic mine, exploration programs are ongoing
to evaluate a number of near-pit/underground targets and the
potential to mine portions of the East
Malartic deposit, which is located adjacent to the Canadian
Malartic mine. In addition, the Partnership continues to
explore the Odyssey project, which is located approximately 1.5
kilometres east of the current limit of the Canadian Malartic open
pit. These opportunities have the potential to provide new
sources of ore for the Canadian Malartic mill, and studies are
underway to further evaluate these prospects.
During the second quarter of 2017, 35 holes (totaling 25,759
metres) were drilled at Odyssey with a primary focus on further
defining the internal mineralized zones between the Odyssey North
and South Zones and expanding the mineral resources in Odyssey
South. Drilling carried out to date suggests that these
internal zones could increase the mineral resources and enhance the
economics of the project by adding higher grade mineral resources
that would require minimal additional infrastructure to access.
Canadian Malartic Corporation
In addition to the Partnership, each of Agnico Eagle and Yamana
has an indirect 50% interest in Canadian Malartic Corporation ("CMC") which holds a
portfolio of exploration properties that includes properties in the
Kirkland Lake area of Ontario and the Pandora property in the
Abitibi region of Quebec.
At the Pandora property (adjacent to the Lapa mine), seven
diamond drill holes (3,244 metres) have been completed in 2017,
with a focus on the western portion of the property. Given
that these holes have yielded low gold values, and the Lapa
operations are winding down, the decision has been made to cease
exploration activities from underground at Pandora.
In addition, CMC has retained financial advisors to evaluate
strategic alternatives with respect to the Kirkland Lake property portfolio.
Lapa – Production now Expected to Extend to the end of the
Third Quarter of 2017
The 100% owned Lapa mine in northwestern Quebec achieved commercial production in
May 2009.
Lapa Mine -
Operating Statistics
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
|
June 30,
2017
|
|
June 30,
2016
|
Tonnes of ore milled
(thousands of tonnes)
|
|
134
|
|
161
|
Tonnes of ore milled
per day
|
|
1,474
|
|
1,769
|
Gold grade
(g/t)
|
|
4.05
|
|
5.20
|
Gold production
(ounces)
|
|
15,881
|
|
21,914
|
Production costs per
tonne (C$)
|
|
$
|
118
|
|
$
|
119
|
Minesite costs per
tonne (C$)
|
|
$
|
114
|
|
$
|
116
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
741
|
|
$
|
675
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
712
|
|
$
|
658
|
Production costs per tonne in the second quarter of 2017 were
essentially the same when compared to the prior-year period.
Production costs per ounce in the second quarter of 2017 increased
when compared to the prior-year period due to lower production from
lower grades.
Minesite costs per tonne in the second quarter of 2017 were
essentially the same when compared to the prior-year period.
Total cash costs per ounce in the second quarter of 2017 increased
when compared to the prior-year period due to the reasons described
above.
Lapa Mine -
Operating Statistics
|
|
|
|
|
|
|
Six Months
Ended
|
|
Six Months
Ended
|
|
|
June 30,
2017
|
|
June 30,
2016
|
Tonnes of ore milled
(thousands of tonnes)
|
|
264
|
|
322
|
Tonnes of ore milled
per day
|
|
1,456
|
|
1,769
|
Gold grade
(g/t)
|
|
4.15
|
|
5.10
|
Gold production
(ounces)
|
|
31,241
|
|
43,623
|
Production costs per
tonne (C$)
|
|
$
|
125
|
|
$
|
114
|
Minesite costs per
tonne (C$)
|
|
$
|
124
|
|
$
|
118
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
789
|
|
$
|
632
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
781
|
|
$
|
663
|
Production costs per tonne for the first six months of 2017
increased when compared to the prior-year period due to lower
throughput levels as the mine reaches the end of the mine life and
higher costs associated with development work in the new zones that
had been previously excluded from the mine plan. Production
costs per ounce for the first six months of 2017 increased due to
lower production from lower grades and the reasons described
above.
Minesite costs per tonne for the first six months of 2017
increased when compared to the prior-year period due to reasons
described above. Total cash costs per ounce for the first six
months of 2017 increased when compared to the prior-year period due
to the reasons described above.
During the second quarter of 2017, further development was
undertaken to allow for additional mining in the Contact Zone, Zone
7 at depth and Zone 4. Under the current mine plan, Lapa is
expected to operate until the end of the third quarter of
2017. Total gold production for 2017 is now expected to be
approximately 40,000 ounces, an increase from the previous forecast
of 30,000 ounces.
Goldex – Deep 1 Project Achieves Commercial
Production
The 100% owned Goldex mine in northwestern Quebec began operation from the M and E
satellite zones in September 2013. During the second quarter
of 2017, approximately 118,000 tonnes of development ore from the
Deep 1 project was milled and yielded 5,646 ounces of
pre-commercial gold production. The revenue from the
pre-commercial gold production was deducted from the capital
expenditures of the project. As of July 1, 2017, the Deep 1 project was declared to
be in commercial production.
Goldex Mine -
Operating Statistics
|
|
|
|
|
All metrics
exclude pre-production tonnes and ounces
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
|
June 30,
2017
|
|
June 30,
2016
|
Tonnes of ore milled
(thousands of tonnes)
|
|
562
|
|
658
|
Tonnes of ore milled
per day
|
|
6,173
|
|
7,231
|
Gold grade
(g/t)
|
|
1.48
|
|
1.63
|
Gold production
(ounces)
|
|
24,691
|
|
31,452
|
Production costs per
tonne (C$)
|
|
$
|
35
|
|
$
|
32
|
Minesite costs per
tonne (C$)
|
|
$
|
36
|
|
$
|
32
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
596
|
|
$
|
507
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
603
|
|
$
|
513
|
Production costs per tonne in the second quarter of 2017
increased when compared to the prior-year period due to lower
throughput levels (after deducting development ore tonnage).
Production costs per ounce in the second quarter of 2017 increased
when compared to the prior-year period due to lower production from
lower grades (after deducting development ore ounces).
Minesite costs per tonne in the second quarter of 2017 increased
when compared to the prior-year period due to the reasons described
above. Total cash costs per ounce in the second quarter of
2017 increased when compared to the prior-year period due to the
reasons described above.
Goldex Mine -
Operating Statistics
|
|
|
|
|
All metrics
exclude pre-production tonnes and ounces
|
|
Six Months
Ended
|
|
Six Months
Ended
|
|
|
June 30,
2017
|
|
June 30,
2016
|
Tonnes of ore milled
(thousands of tonnes)
|
|
1,146
|
|
1,294
|
Tonnes of ore milled
per day
|
|
6,332
|
|
7,110
|
Gold grade
(g/t)
|
|
1.58
|
|
1.67
|
Gold production
(ounces)
|
|
54,967
|
|
63,792
|
Production costs per
tonne (C$)
|
|
$
|
37
|
|
$
|
33
|
Minesite costs per
tonne (C$)
|
|
$
|
36
|
|
$
|
33
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
574
|
|
$
|
496
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
564
|
|
$
|
509
|
Production costs per tonne for the first six months of 2017
increased when compared to the prior-year period due to lower
throughput levels (after deducting development ore tonnage) and
timing of unsold inventory. Production costs per ounce for
the first six months of 2017 increased when compared to the
prior-year period due to lower production from lower grades (after
deducting development ore ounces).
Minesite costs per tonne for the first six months of 2017
increased when compared to the prior-year period due to lower
throughput levels (after deducting development ore tonnage).
Total cash costs per ounce for the first six months of 2017
increased when compared to the prior-year period due to the reasons
described above.
All excavations for the Deep 1 Project have now been completed,
the first stope has been mined out and backfilled and three
additional stopes are under development. The Rail-Veyor has
been commissioned and all six trains are expected to be operational
in the third quarter of 2017. Mining activities in the Deep 1
area are expected to continue to ramp up through 2018.
The Company is evaluating the potential to mine a portion of the
Deep 2 Zone, which starts below the Deep 1 Zone at 1,200 metres
below surface.
Drilling and development is ongoing on the South Zone, which is
accessible from the Deep 1 Zone infrastructure. The South
Zone consists of quartz veins that have higher grades than those in
the primary mineralized zones at Goldex. The Company is
evaluating the potential for the South Zone to provide incremental
ore feed to the Goldex mill.
At the adjoining Joubi property, exploration activities by
previous operators focused on the evaluation of quartz vein
mineralization within a quartz diorite body. A six-hole drill
program is underway to evaluate the potential for bulk mining
within the Joubi intrusive body.
The Company acquired the Akasaba West gold-copper deposit
in January 2014. Located less than 30 kilometres from Goldex,
the Akasaba West deposit could create flexibility and synergies for
the Company's operations in the Abitibi region by using extra
milling capacity at both Goldex and LaRonde, while reducing overall
unit costs.
The Quebec Bureau des Audiences Publiques sur l'Environnement
report on the Akasaba project was made public on June 2, 2017. The report deemed the Akasaba
West project acceptable under certain conditions. Final
approval by the Quebec Government is under review. At the
federal level, discussions are ongoing on the wildlife habitat
compensation plan submitted for the Akasaba West project.
Mining activities are expected to begin on the project in 2019.
NUNAVUT REGION
Agnico Eagle has identified Nunavut as a politically attractive and stable
jurisdiction with enormous geological potential. With the
Company's largest producing mine (Meadowbank) and two significant
development assets (Meliadine and the Amaruq satellite deposit at
Meadowbank) and other exploration projects, the Company believes
Nunavut has the potential to be a
strategic operating platform with the ability to generate strong
production and cash flows over several decades.
Meadowbank – Strong Production Driven by Higher Grades and
Mining Sequence
The 100% owned Meadowbank mine in Nunavut, northern Canada, achieved commercial production in
March 2010.
Meadowbank Mine -
Operating Statistics
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
|
June 30,
2017
|
|
June 30,
2016
|
Tonnes of ore milled
(thousands of tonnes)
|
|
996
|
|
994
|
Tonnes of ore milled
per day
|
|
10,948
|
|
10,923
|
Gold grade
(g/t)
|
|
3.26
|
|
2.48
|
Gold production
(ounces)
|
|
95,289
|
|
72,402
|
Production costs per
tonne (C$)
|
|
$
|
73
|
|
$
|
71
|
Minesite costs per
tonne (C$)
|
|
$
|
73
|
|
$
|
73
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
571
|
|
$
|
756
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
559
|
|
$
|
789
|
Production costs per tonne in the second quarter of 2017
increased when compared to the prior-year period due to a lower
amount of stripping costs being capitalized and timing of unsold
inventory. Production costs per ounce in the second quarter
of 2017 decreased when compared to the prior-year period due to
higher production resulting from higher grades processed and mining
sequence.
Minesite costs per tonne in the second quarter of 2017 were the
same when compared to the prior-year period. Total cash costs
per ounce in the second quarter of 2017 decreased when compared to
the prior-year period due to the reasons described above.
Meadowbank Mine -
Operating Statistics
|
|
|
|
|
|
|
Six Months
Ended
|
|
Six Months
Ended
|
|
|
June 30,
2017
|
|
June 30,
2016
|
Tonnes of ore milled
(thousands of tonnes)
|
|
1,922
|
|
1,939
|
Tonnes of ore milled
per day
|
|
10,620
|
|
10,654
|
Gold grade
(g/t)
|
|
3.19
|
|
2.53
|
Gold production
(ounces)
|
|
180,659
|
|
144,713
|
Production costs per
tonne (C$)
|
|
$
|
75
|
|
$
|
72
|
Minesite costs per
tonne (C$)
|
|
$
|
73
|
|
$
|
75
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
600
|
|
$
|
739
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
573
|
|
$
|
789
|
Production costs per tonne for the first six months of 2017
increased when compared to the prior-year period due to lower
throughput, a lower amount of stripping costs being capitalized and
timing of unsold inventory. Production costs per ounce for
the first six months of 2017 decreased due to higher production
resulting from higher grades processed and mining sequence.
Minesite costs per tonne for the first six months of 2017
decreased when compared to the prior-year period due to lower
direct production expenses. Total cash costs per ounce for
the first six months of 2017 decreased when compared to the
prior-year period due to the reasons described above.
Given the positive tonnage and grade reconciliation with the
Vault deposit block model, the Company now expects to extend
production activities at Meadowbank through year-end 2018.
Additional opportunities are being evaluated in order to further
extend production into 2019 and bridge any gap between cessation of
mining operations at Meadowbank and commencement of production at
Amaruq. Further information will be provided with the
production guidance in February
2018.
Amaruq Satellite Deposit – Drilling Infills Whale Tail
and V Zone and Suggests Potential Extensions of the V Zone to the
West and at Depth to the Southeast
Agnico Eagle has a 100% interest in the Amaruq satellite
deposit, approximately 50 kilometres northwest of the Meadowbank
mine. Amaruq is situated on a 116,717-hectare property near
the 77,411-hectare Meadowbank property. A significant gold
discovery was made on the Amaruq property in 2013, and activities
since that time have focused on the development of satellite
mineralization to feed the existing 11,000 tonne per day capacity
Meadowbank mill in the future.
At December 31, 2016, the Amaruq
deposit contained an open pit indicated mineral resource of 2.1
million ounces of gold (16.9 million tonnes grading 3.88 g/t gold);
an open pit inferred mineral resource of 763,000 ounces gold (4.9
million tonnes grading 4.81 g/t gold); and an underground inferred
mineral resource of 1.4 million ounces gold (6.8 million tonnes
grading 6.22 g/t gold).
In February 2017, the Company's
Board of Directors approved the project for development pending the
receipt of the required permits.
Agnico Eagle is working closely with the Nunavut Impact Review
Board ("NIRB") and the Nunavut Water Board ("NWB") on the Amaruq
Phase I (Whale Tail pit) joint permitting process. NIRB/NWB
has coordinated the technical review of Amaruq Phase I, which is
underway; technical meetings and a prehearing conference were held
in Baker Lake, from April 27 to May 2. All questions and
concerns from those meetings have been answered, and the final
public hearing is scheduled to take place in September 2017.
The Whale Tail pit permitting is on schedule and permits are
expected by the third quarter of 2018.
The Company expects a conventional open pit mining operation to
begin on the Whale Tail satellite deposit (Phase I) in the third
quarter of 2019 followed by the V Zone pit (Phase II) in
2020. The Whale Tail and V Zone planned pits extend to depths
of approximately 250 metres and 150 metres, respectively, and both
pits are open for expansion.
The Company's plan calls for the production of approximately 2.0
million ounces of gold between 2019 and 2024, with pre-mining
activities starting in 2018 at the Whale Tail deposit. This
represents less than 50 percent of the currently known mineral
resource base. Initial capital costs are estimated to be
approximately $330 million. For
additional details on the project see the Company's news release
dated February 15, 2017.
Approximately $78 million will be
spent on capital costs at Amaruq in 2017, primarily on completion
of the all-weather exploration road, additional technical studies
and the procurement of materials and equipment for the 2018
construction season.
By the end of the second quarter of 2017, 52 kilometres of the
exploration road from Meadowbank to Amaruq had been completed; the
64-kilometre exploration road is expected to be completed on budget
and on schedule in September 2017. Development of the Amaruq
exploration ramp has been permitted and planning is underway;
construction of the ramp will begin when the road is completed and
the necessary underground mining equipment can be brought to
site.
On June 15, 2017, the Company and
the Kivalliq Inuit Association signed an Inuit Impact and Benefit
Agreement ("IIBA") for the Whale Tail Project. The Whale Tail
IIBA addresses protection of Inuit values, culture and language and
provides for enhanced access by Inuit to employment, training and
business opportunities. The IIBA contains implementation and
monitoring measures that will ensure these goals are achieved.
Second Quarter 2017 Amaruq Work Program – Primary Focus on
Infill and Expansion of V Zone and Whale Tail Deposit
The first phase of a planned $22
million, 75,000-metre drill program commenced in early
February 2017. In the second quarter of 2017, 191 holes
(36,000 metres) were drilled. The second quarter 2017 drill
program was focused primarily on infilling the Whale Tail pit and V
Zone pit mineral resources, which was completed near the end of
May. Drilling since the end of May has focused on exploration
to extend the Whale Tail deposit at depth, particularly on the
western side (near Mammoth Lake). Results from both the V
Zone and Whale Tail exploration programs are set out below. A
table of results from infill drilling at Whale Tail and V Zone can
be found in the Appendix of this news release.
Recent intercepts from the project are set out in the table
below and the drill hole collars are located on the Amaruq project
local geology map. The pierce points are shown on the Amaruq
project composite longitudinal section. All intercepts
reported for the Amaruq project show uncapped and capped grades
over estimated true widths, based on a preliminary geological
interpretation that is being updated as new information becomes
available with further drilling.
Recent exploration drill results from the Whale Tail (WT)
deposit and V Zone (IVR), Amaruq project
Drill hole
|
Location
|
From
(metres)
|
To
(metres)
|
Depth of
midpoint
below
surface
(metres)
|
Estimated
true width
(metres)
|
Gold grade
(g/t)
(uncapped)
|
Gold
grade (g/t)
(capped)*
|
AMQ17-1142
|
WT
|
21.8
|
27.9
|
18
|
5.9
|
4.5
|
4.5
|
AMQ17-1199
|
IVR
|
260.0
|
272.0
|
225
|
10.4
|
29.8
|
20.4
|
Including
|
|
260.0
|
264.5
|
222
|
3.4
|
59.0
|
38.3
|
Including
|
|
268.8
|
272.0
|
229
|
3.0
|
28.8
|
22.4
|
AMQ17-1216
|
IVR
|
218.7
|
222.5
|
193
|
3.1
|
21.1
|
20.6
|
AMQ17-1266
|
IVR
|
122.0
|
125.4
|
90
|
2.8
|
15.8
|
15.8
|
AMQ17-1281
|
IVR
|
40.0
|
44.0
|
34
|
2.8
|
259.5
|
15.8
|
AMQ17-1303
|
WT
|
15.7
|
24.5
|
15
|
4.4
|
8.6
|
8.6
|
And
|
WT
|
39.7
|
52.3
|
33
|
6.3
|
6.9
|
6.9
|
And
|
WT
Extension
|
146.9
|
153.2
|
107
|
5.5
|
5.8
|
5.8
|
AMQ17-1308
|
WT
|
65.7
|
70.5
|
50
|
4.1
|
4.7
|
4.7
|
AMQ17-1368
|
IVR
|
178.9
|
181.9
|
138
|
3.0
|
483.6
|
30.1
|
AMQ17-1370
|
IVR
|
220.6
|
226.6
|
205
|
5.9
|
6.1
|
6.1
|
AMQ17-1387
|
IVR
|
12.4
|
21.5
|
12
|
9.0
|
4.3
|
4.3
|
AMQ17-1394
|
IVR
|
80.7
|
84.3
|
58
|
3.1
|
21.5
|
8.6
|
* Holes at the
Whale Tail deposit use a capping factor of 80 g/t gold. Holes
at the IVR deposit (including the V Zone) use a capping factor of
60 g/t gold.
|
**Result from hole
AMQ17-1143 was previously reported in the April 27, 2017 news
release.
|
[Amaruq Project Local Geology Map]
[Amaruq Project Composite Longitudinal Section]
V Zone
The V Zone consists of a series of parallel stacked quartz vein
structures striking northeast and dipping shallowly to the
southeast from near surface to locally as deep as 542 metres. The V
Zone remains open at depth.
Several recent drill holes intersected the uppermost V Zone
structure such as hole AMQ17-1281 which intersected a shallow
mineralized zone, returning 15.8 g/t gold over 2.8 metres at 34
metres depth, just below the planned pit's northern margin in an
area outside the current V Zone mineral resources.
Just below the proposed V Zone pit outline there were high-grade
gold intercepts at greater depths. Hole AMQ17-1199 returned
20.4 g/t gold over 10.4 metres at 225 metres depth, representing
the down-dip extension of the same mineralized structure found near
surface approximately 350 metres to the west. Another 100
metres to the northeast, hole AMQ17-1216 returned 20.6 g/t gold
over 3.1 metres at 193 metres depth.
Two holes with significant grades have identified a new area
south of the V Zone pit outline, showing the potential to extend
the V Zone to the southeast at depth. AMQ17-1368 intersected
30.1 g/t gold over 3.0 metres at 138 metres depth in the upper
structure 80 metres northeast of the Whale Tail pit limit, while
AMQ17-1370 intersected the same structure approximatively 175
metres farther east, returning 6.1 g/t gold over 5.9 metres at 205
metres depth.
Approximately 200 metres west of the proposed V Zone pit
outline, exploration has outlined a new mineralized area.
Hole AMQ17-1266 returned 15.8 g/t gold over 2.8 metres at 90
metres depth. Nearby, hole AMQ17-1387 intersected
near-surface mineralization, returning 4.3 g/t gold over 9.0 metres
at 12 metres depth, as did hole AMQ17-1394, with an intersection of
8.6 g/t gold over 3.1 metres at 58 metres depth. This area
requires further investigation.
Whale Tail
Drilling in the western end of the planned Whale Tail pit has
confirmed mineral resources and extended the deposit. Hole
AMQ17-1303 had three intercepts: 8.6 g/t gold over 4.4 metres at 15
metres depth, 6.9 g/t gold over 6.3 metres at 33 metres depth and
5.8 g/t gold over 5.5 metres at 107 metres depth (beneath the
planned pit). Nearby, hole AMQ17-1142 intersected 4.5 g/t
gold over 5.9 metres at 18 metres depth, while hole AMQ17-1308
reported 4.7 g/t gold over 4.2 metres at 50 metres depth.
To date, the Whale Tail deposit has been defined over at least
2.3 kilometres of strike length and extends from surface to 732
metres depth; it remains open at depth and along strike.
Conversion Drilling
The conversion drilling campaign at Amaruq continues to
demonstrate very good continuity of gold mineralization within the
V Zone, affirming high-grade gold values at open-pit depths,
increasing confidence in the current geological model. Infill
drilling also demonstrates good continuity in the Whale Tail
deposit. The results of selected infill drill holes from both
deposits can be found in a table in the Appendix of this news
release.
Future Drilling Activities
Drilling to test regional exploration targets began in June,
including a deep extension of Whale Tail and V Zones, as well as an
eastward extension of the V Zone toward the Buffalo prospect.
This drilling will continue, with results expected later this
year.
Meliadine Project – Boat Sealift Underway, Construction
Activities are on Schedule and on Budget
Located near Rankin Inlet, Nunavut,
Canada, the Meliadine project was acquired in July 2010 and is one of Agnico Eagle's largest
gold projects in terms of mineral resources. The Company owns
100% of the 111,757 hectare property.
In February 2017, the Company's
Board of Directors approved the construction of the Meliadine
project. The mine is expected to begin operations in the
third quarter of 2019, and the current mine plan will be focused on
the Tiriganiaq and nearby Wesmeg-Normeg mineralized zones that will
be accessed from the Tiriganiaq underground infrastructure.
Over an estimated 14 year mine life, approximately 5.3 million
ounces of gold are expected to be produced at Meliadine. This
represents approximately half of the currently known mineral
reserve and mineral resource base.
At December 31, 2016, the
Meliadine property was estimated to hold proven and probable
mineral reserves of 3.4 million ounces (14.5 million tonnes grading
7.32 g/t gold), indicated mineral resources of 3.3 million ounces
(20.8 million tonnes grading 4.95 g/t gold) and inferred mineral
resources of 3.6 million ounces (14.7 million tonnes grading 7.51
g/t gold). In addition, there are numerous other known gold
occurrences along the 80-kilometre-long greenstone belt that
require further evaluation.
For additional details on the project see the Company's news
release dated February 15, 2017.
Update on Meliadine Development Activities
On June 30, 2017 the first
delivery of the shipping season arrived in Rankin Inlet.
Since that time, three other deliveries of construction materials
have been received at Rankin Inlet. An additional four
deliveries of construction materials are expected over the next two
months. Material from the boats has been off loaded at the
Company's Rankin Inlet laydown
area, prior to being transported by road to the project site.
Adjacent to the laydown site, construction is underway on a fuel
storage area. The first 30 million litre fuel tank is
expected to be installed and filled by the end of the 2017 shipping
season..
Construction and development activities at the Meliadine project
remain on schedule and on budget. The estimated capital
budget for 2017 is unchanged at $360
million. Project activities during the second quarter
included:
- Key permits and production lease received
- Mine development is 3% ahead of plan. During the
second quarter, approximately 1,308 metres of underground
development were completed. In the first half of 2017,
approximately 2,524 metres of development have been completed (a
total of approximately 5,600 metres of development are planned for
2017)
- Excavation of the second underground portal is underway, and
the ramp to this portal is being driven from underground
- Installation of underground ventilation and heating continues
and is expected to be completed by the first quarter of 2018
- Approximately 12,500 metres of conversion drilling and 14,000
metres of scheduled underground delineation drilling is
underway
- Detailed engineering is ahead of plan with 80% completed as
compared to a target of 75%
- Procurement and logistical activity is on target, 70% of global
project packages have been awarded
- New camp facilities (seven wings + kitchen) completed
- Site occupancy ramping up (380 people were at site at the end
of June) with good safety performance
- Water containment dykes (DCP-1 and DCP-5) completed
- Sewage treatment plant and water treatment plant completed and
now in operation
- Concrete batch plant production capacity achieved
- Process plant pilings completed and concrete work in
progress
- Multi-service building ahead of schedule with 48% of the
concrete works completed
- Cranes and structural steel for the erection of the surface
buildings are being moved to the site from the Rankin inlet
laydown facility
- Closing in of the process plant, power plant, and multi-service
buildings continued and is expected to be completed by the end of
2017
The Company believes that there are numerous opportunities to
create additional value both at the mine and on the large land
package at Meliadine. Opportunities currently being reviewed
include:
- Optimization of the current mine plan (advance Phase 2 pit
development)
- Minesite exploration upside through mineral resource conversion
and expansion of known ore zones
- Budgets have been approved to test potential extensions of the
mineralization at depth outside the mineral resource model (most
mineralized zones are open below a vertical depth of 450
metres)
- Potential for the discovery of new deposits along the 80
kilometre-long greenstone belt. One drill is currently
testing a number of regional targets on the property.
Approximately 5,000 metres of reconnaissance drilling is
planned for 2017, and regional exploration programs are expected to
ramp up once the mine starts production in 2019
FINLAND AND SWEDEN
Agnico Eagle's Kittila mine in Finland is the largest primary gold producer
in Europe and hosts the Company's
largest mineral reserves. Exploration activities continue to
expand the mineral reserves and mineral resources and studies are
underway to evaluate the potential to cost-effectively increase the
production rate.
Kittila – Conversion of Main Zone in Rimpi Deep area,
Expansion of Sisar Top and Central Zones
The 100% owned Kittila mine in northern Finland achieved commercial production in
2009.
Kittila Mine -
Operating Statistics
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
|
June 30,
2017
|
|
June 30,
2016
|
Tonnes of ore milled
(thousands of tonnes)
|
|
439
|
|
389
|
Tonnes of ore milled
per day
|
|
4,829
|
|
4,275
|
Gold grade
(g/t)
|
|
3.84
|
|
4.29
|
Gold production
(ounces)
|
|
47,156
|
|
46,209
|
Production costs per
tonne (EUR)
|
|
€
|
75
|
|
€
|
79
|
Minesite costs per
tonne (EUR)
|
|
€
|
77
|
|
€
|
81
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
772
|
|
$
|
737
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
802
|
|
$
|
756
|
Production costs per tonne in the second quarter of 2017
decreased when compared to the prior-year period due to higher
throughput levels and timing of unsold inventory. Production
costs per ounce in the second quarter of 2017 increased when
compared to the prior-year period due to higher re-handling
costs.
Minesite costs per tonne in the second quarter of 2017 decreased
when compared to the prior-year period due to higher throughput
levels. Total cash costs per ounce in the second quarter of
2017 increased when compared to the prior-year period due to the
reasons described above.
Kittila Mine -
Operating Statistics
|
|
|
|
|
|
|
Six Months
Ended
|
|
Six Months
Ended
|
|
|
June 30,
2017
|
|
June 30,
2016
|
Tonnes of ore milled
(thousands of tonnes)
|
|
862
|
|
821
|
Tonnes of ore milled
per day
|
|
4,764
|
|
4,511
|
Gold grade
(g/t)
|
|
4.06
|
|
4.20
|
Gold production
(ounces)
|
|
98,777
|
|
94,336
|
Production costs per
tonne (EUR)
|
|
€
|
76
|
|
€
|
77
|
Minesite costs per
tonne (EUR)
|
|
€
|
76
|
|
€
|
76
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
732
|
|
$
|
743
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
732
|
|
$
|
741
|
Production costs per tonne for the first six months of 2017 were
essentially the same when compared to the prior-year period.
Production costs per ounce for the first six months of 2017
decreased when compared to the prior-year period due to higher
production and timing of unsold inventory.
Minesite costs per tonne for the first six months of 2017 were
the same when compared to the prior-year period. Total cash
costs per ounce for the first six months of 2017 decreased when
compared to the prior-year period due to higher production.
The main target of exploration at Kittila continues to be the
Sisar Zone, which is subparallel to and slightly east of the main
Kittila mineralization. Sisar has been located between
approximately 775 metres and 1,910 metres below surface, forming a
roughly triangular shape that remains open at depth and along
strike to the north and south. The initial mineral reserves
in the Sisar Zone was estimated as of December 31, 2016 as part of the total Kittla
mineral reserves estimate. Exploration results for Kittila
were last reported in the Company's news release dated April 27, 2017.
The main exploration ramp to the North is now completed and is
being used for testing the deep extensions of the Roura and Rimpi
Zones. Two internal ramps are being driven southward off the
main exploration ramp for converting Sisar Zone and Rimpi deep
mineral resources. Initial results for conversion drilling
from the ramp into the Rimpi Deep area are set out below.
In the first half of 2017, 28 holes (10,847 metres) were drilled
in the Sisar Top and Central Zones; assays are pending for many of
the holes.
Selected recent drill results are set out in the table below;
drill hole collar coordinates are set out in a table in the
Appendix of this news release. Pierce points for all these
holes are shown on the Kittila Composite Longitudinal
Section. All intercepts reported for the Kittila mine show
uncapped grades over estimated true widths, based on a current
geological interpretation that is being updated as new information
becomes available with further drilling.
Recent exploration drill results from the Sisar Zone (Roura)
and Main Zone and conversion drill results from the Rimpi Deep area
at the Kittila mine
Drill hole
|
Zone
|
From
(metres)
|
To
(metres)
|
Depth of
midpoint
below
surface
(metres)
|
Estimated
true width
(metres)
|
Gold grade
(g/t)
(uncapped)
|
RIE17-601
|
Sisar Top
|
248.4
|
258.0
|
1,027
|
6.4
|
5.0
|
ROD14-003B
|
Sisar
Central
|
638.0
|
664.0
|
1,274
|
11.2
|
4.4
|
ROD14-003D
|
Sisar
Central
|
490.6
|
503.0
|
1,109
|
8.0
|
5.7
|
ROD17-700
|
Main -
Roura
|
528.0
|
540.4
|
1,235
|
5.2
|
6.5
|
ROD17-700B
|
Sisar
Central
|
692.3
|
695.5
|
1,329
|
2.0
|
2.5
|
VUG17-505
|
Main -
Rimpi
|
78.0
|
87.0
|
880
|
8.3
|
5.2
|
And
|
Main -
Rimpi
|
100.0
|
109.0
|
881
|
8.3
|
6.8
|
And
|
Main -
Rimpi
|
117.0
|
123.0
|
881
|
5.6
|
5.9
|
VUG17-506
|
Main -
Rimpi
|
66.0
|
75.0
|
864
|
9.0
|
5.0
|
And
|
Main -
Rimpi
|
92.0
|
96.0
|
860
|
4.0
|
5.3
|
VUG17-508
|
Main -
Rimpi
|
72.0
|
106.0
|
904
|
33.5
|
7.1
|
VUG17-509
|
Main -
Rimpi
|
75.0
|
116.0
|
911
|
35.4
|
4.9
|
VUG17-511
|
Main -
Rimpi
|
52.0
|
57.0
|
873
|
4.7
|
6.8
|
And
|
Main -
Rimpi
|
77.0
|
83.0
|
869
|
5.6
|
7.3
|
[Kittila - Composite Longitudinal Section]
For the purposes of description, the Sisar Zone has been divided
into two depths, referred to as "Sisar Top" (approximately 775 to
1,100 metres below surface) and "Sisar Central" (approximately
1,100 to 1,400 metres below surface). Some of the Sisar
mineralized lenses extend between the Sisar Top and Sisar Central
Zones.
Recent intercepts at approximately 1,000 metres below surface
have confirmed and extended the mineral reserves and mineral
resources in the Sisar Top Zone. The best recent intercepts
in this area were in the area of hole RIE17-601 that intersected
5.0 g/t gold over 6.4 metres at 1,027 metres depth.
The results of the deep exploration drilling campaign
intersected the Sisar Central Zone from 1,000 to 1,350 metres depth
with encouraging results. Three holes extended the Central
Zone mineralizaton to the north by as much as 300 metres.
Hole ROD14-003D intersected 5.7 g/t gold over 8.0 metres at 1,109
metres depth, while hole ROD14-003B intersected 4.4 g/t gold over
11.2 metres at 1,274 metres depth. Approximately 280 metres
farther north, hole ROD17-700B intersected 2.5 g/t gold over 2.0
metres at 1,329 metres depth. Assays are pending for several
other holes in this vicinity.
Deep exploration has confirmed and extended the mineral reserves
and mineral resources at the Main Zone in the Roura area between
1,000 and 1,250 metres depth with several high grade intercepts,
and has extended the Main Zone into an area 230 metres to the north
of, and 70 metres above, the current mineral resources
envelope. Hole ROD17-700 intersected 6.5 g/t gold over 5.2
metres at 1,235 metres depth.
The first conversion drilling campaign of the Main Zone in the
Rimpi Deep area using low-angle (almost horizontal) drilling from
the exploration ramp intersected significant grades and thicknesses
between 850 and 910 metres depth, confirming Rimpi mineral reserves
and mineral resources. In the central part of Rimpi are two
very thick intercepts: hole VUG17-509 reported 4.9 g/t gold over
35.4 metres at 911 metres depth, while 50 metres to the north, hole
VUG17-508 intersected 7.1 g/t gold over 33.5 metres at 904 metres
depth. On the flanks of the zone, the mineralization appears
to divide into multiple horizons. Approximately 25 metres
south of hole VUG17-509, hole VUG17-505 intersected 5.2 g/t gold
over 8.3 metres, 6.8 g/t gold over 8.3 metres and 5.9 g/t gold over
5.6 metres, all at approximately 880 metres depth; the last
intercept is approximately 37 metres to the east of the first
intercept. Another 50 metres south of hole VUG17-505, hole
VUG17-506 intersected 5.0 g/t gold over 9.0 metres at 864 metres
depth and 5.3 g/t gold over 4.0 metres at 860 metres depth.
Approximately 50 metres north of hole VUG17-508, hole VUG17-511
intersected 6.8 g/t gold over 4.7 metres at 873 metres depth and
7.3 g/t gold over 5.6 metres at 869 metres depth.
In 2017, approximately $7.9
million will be spent on deep drilling at Kittila (which
includes the Sisar Zone). The goal of this program is to
expand the mineral resources to the north of the current mine plan
and demonstrate the economic potential of the Sisar Zone as a new
mining horizon at Kittila.
Studies are ongoing to evaluate the economics of increasing
throughput rates at Kittila to 2.0 million tonnes per annum.
The Company expects that this increased mining rate scenario
could be supported by the development of the Rimpi and Sisar
Zones.
Barsele Project – Exploration Ongoing to Extend Known
Mineralized Zones
On June 11, 2015, Agnico Eagle
acquired a 55% interest in the Barsele project in Sweden. The
Company can earn an additional 15% interest in the project through
the completion of a pre-feasibility study. The Barsele
property is known to contain intrusive-hosted gold mineralization
(the Central, Avan and Skiråsen zones), which appears to be similar
to the Goldex deposit. The property also hosts gold-rich
polymetallic volcanogenic massive sulphide (VMS) mineralization
(the Norra Zone).
In 2016, Agnico Eagle completed an initial mineral resource
estimate for the Barsele project that outlined total inferred
mineral resources (on a 100% basis) of 1.2 million ounces (21.7
million tonnes grading 1.72 g/t gold).
In 2017, the $8.8 million
exploration drill program is focused on expanding the mineral
resources along strike and at depth, and testing the gap between
the Central and Avan zones. Drilling at Barsele during the
first half of 2017 totaled 24,777 metres (46 holes).
SOUTHERN BUSINESS REVIEW
Agnico Eagle's Southern Business operations are focused in
Northern Mexico, with two
operations (Pinos Altos and
Creston Mascota) in Chihuahua State and the La India mine in Sonora
State. These operations have been the source of growing
precious metals production (gold and silver), stable operating
costs and strong free cash flow since 2009.
Pinos Altos – New Silver
Flotation Circuit Commissioned
The 100% owned Pinos Altos mine
in northern Mexico achieved
commercial production in November
2009.
Pinos Altos Mine -
Operating Statistics
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
|
June 30,
2017
|
|
June 30,
2016
|
Tonnes of ore
processed (thousands of tonnes)
|
|
620
|
|
605
|
Tonnes of ore
processed per day
|
|
6,811
|
|
6,648
|
Gold grade
(g/t)
|
|
2.65
|
|
2.71
|
Gold production
(ounces)
|
|
48,196
|
|
49,458
|
Production costs per
tonne
|
|
$
|
46
|
|
$
|
48
|
Minesite costs per
tonne
|
|
$
|
46
|
|
$
|
47
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
595
|
|
$
|
582
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
373
|
|
$
|
348
|
Production costs per tonne in the second quarter of 2017
decreased when compared to the prior-year period due to higher
tonnes processed, variations in the proportion of heap leach ore to
milled ore and open pit ore to underground ore, routine
fluctuations in the waste to ore stripping ratio in the open pit
mines and timing of unsold inventory. Production costs per
ounce in the second quarter of 2017 increased when compared to the
prior-year period due to more tonnes being mined but lower gold
production following a planned mill shutdown.
Minesite costs per tonne in the second quarter of 2017 decreased
when compared to the prior-year period due to higher tonnes
processed, variations in the proportion of heap leach ore to milled
ore and open pit ore to underground ore and routine fluctuations in
the waste to ore stripping ratio in the open pit mines. Total
cash costs per ounce in the second quarter of 2017 increased when
compared to the prior-year period due to lower gold production and
lower by-product revenues.
Pinos Altos Mine -
Operating Statistics
|
|
|
|
|
|
|
Six Months
Ended
|
|
Six Months
Ended
|
|
|
June 30,
2017
|
|
June 30,
2016
|
Tonnes of ore
processed (thousands of tonnes)
|
|
1,173
|
|
1,107
|
Tonnes of ore
processed per day
|
|
6,482
|
|
6,082
|
Gold grade
(g/t)
|
|
2.67
|
|
2.87
|
Gold production
(ounces)
|
|
93,556
|
|
97,575
|
Production costs per
tonne
|
|
$
|
45
|
|
$
|
48
|
Minesite costs per
tonne
|
|
$
|
47
|
|
$
|
48
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
560
|
|
$
|
540
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
366
|
|
$
|
346
|
Production costs per tonne for the first six months of 2017
decreased when compared to the prior-year period due to higher
tonnes processed, variations in the proportion of heap leach ore to
milled ore and open pit ore to underground ore, routine
fluctuations in the waste to ore stripping ratio in the open pit
mines and timing of unsold inventory. Production costs per
ounce for the first six months of 2017 increased when compared
to the prior-year period due to higher costs from underground
mining and maintenance and lower gold production.
Minesite costs per tonne for the first six months of 2017
decreased when compared to the prior-year period due to higher
tonnes processed, variations in the proportion of heap leach ore to
milled ore and open pit ore to underground ore and routine
fluctuations in the waste to ore stripping ratio in the open pit
mines. Total cash costs per ounce for the first six months of
2017 increased when compared to the prior-year period due to lower
production.
In late June, a new silver flotation circuit was commissioned at
the Pinos Altos mill
complex. The new circuit is expected to result in
approximately a 10-12% increase in overall silver recovery.
Work on the Phase III heap leach pad was completed in the second
quarter of 2017 and Cell 2 was put into operation in April.
The pad was divided into two individual cells to facilitate faster
stacking.
In 2017, a 2,500 metre drill program has been planned for the
Cerro Colorado Zone. Previous drilling outlined a series of
veins that are sub-parallel to the main Cerro Colorado Structure.
This year's program is planned to confirm the continuity of
the upper level and northwestern extension of Cerro Colorado
Zone.
Creston Mascota – Drilling Continues to Extend High Grade
Zone at Bravo and Madrono
The Creston Mascota heap leach has been operating as a satellite
operation to the Pinos Altos mine
since late 2010.
Creston Mascota
deposit at Pinos Altos - Operating Statistics
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
|
June 30,
2017
|
|
June 30,
2016
|
Tonnes of ore
processed (thousands of tonnes)
|
|
596
|
|
573
|
Tonnes of ore
processed per day
|
|
6,554
|
|
6,297
|
Gold grade
(g/t)
|
|
1.17
|
|
0.95
|
Gold production
(ounces)
|
|
12,074
|
|
12,398
|
Production costs per
tonne
|
|
$
|
12
|
|
$
|
12
|
Minesite costs per
tonne
|
|
$
|
13
|
|
$
|
12
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
610
|
|
$
|
534
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
550
|
|
$
|
469
|
Production costs per tonne in the second quarter of 2017 were
the same when compared to the prior-year period. Production
costs per ounce in the second quarter of 2017 increased when
compared to the prior-year period due to higher ore and waste
haulage costs as a result of longer trucking distances and lower
gold production.
Minesite costs per tonne in the second quarter of 2017 increased
when compared to the prior-year period due to higher ore and waste
haulage costs as a result of longer trucking distances and a lower
amount of stripping costs being capitalized. Total cash costs
per ounce in the second quarter of 2017 increased when compared to
the prior-year period due to slightly lower gold production and the
reasons described above.
Creston Mascota
deposit at Pinos Altos - Operating Statistics
|
|
|
|
|
|
|
Six Months
Ended
|
|
Six Months
Ended
|
|
|
June 30,
2017
|
|
June 30,
2016
|
Tonnes of ore
processed (thousands of tonnes)
|
|
1,120
|
|
1,089
|
Tonnes of ore
processed per day
|
|
6,188
|
|
5,984
|
Gold grade
(g/t)
|
|
1.16
|
|
1.06
|
Gold production
(ounces)
|
|
23,318
|
|
23,949
|
Production costs per
tonne
|
|
$
|
13
|
|
$
|
11
|
Minesite costs per
tonne
|
|
$
|
13
|
|
$
|
12
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
615
|
|
$
|
518
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
538
|
|
$
|
465
|
Production costs per tonne for the first six months of 2017
increased when compared to the prior-year period due to higher ore
and waste haulage costs as a result of longer trucking distances
and a lower amount of stripping costs being capitalized.
Production costs per ounce for the first six months of 2017
increased when compared to the prior-year period due to slightly
lower gold production and the reasons described above.
Minesite costs per tonne for the first six months of 2017
increased when compared to the prior-year period due to reasons
described above. Total cash costs per ounce for the first six
months of 2017 increased when compared to the prior-year period due
to lower gold production and the reasons described above.
During the quarter, waste dumping started at the south end of
the open pit, which reduced haulage distances. The Company
expects the reduced haulage distances to control or improve haulage
costs at Creston Mascota.
Exploration drilling in the second quarter of 2017 focused on
the Bravo and Madrono Zones,
immediately adjacent to the Creston Mascota pit, including 11,024
metres of conversion, step-out and exploration drilling in 72
holes. Bravo is a shallowly
northwest dipping zone of quartz breccia, vein and stockwork with
significant gold and silver grades, while the quartz vein systems
at Madrono appear to be more vertical. Drilling results for
Bravo were last reported in the
Company's news release dated April 27,
2017, and Madrono results were last reported in the
Company's news release dated February 15,
2017.
Selected recent drill results from the Bravo and Madrono Zones are set out in the
table below; the drill hole collar coordinates are set out in a
table in the Appendix of this news release and the collars are
located on the Creston Mascota Area Local Geology Map. All
intercepts reported for the Bravo
and Madrono Zones show uncapped and capped gold and silver grades
over estimated true widths, based on a preliminary geological
interpretation that will be updated as new information becomes
available with further drilling.
Recent exploration drill results from the Bravo and Madrono Zones at the Creston Mascota
mine
Drill Hole
|
Zone
|
From
(metres)
|
To
(metres)
|
Depth of
midpoint
below
surface
(metres)
|
Estimated
true width
(metres)
|
Gold
grade
(g/t)
(uncapped)
|
Gold
grade
(g/t)
(capped)
|
Silver
grade
(g/t)
(uncapped)
|
Silver
grade
(g/t)
(capped)
|
BRV17-156
|
Bravo
|
13.4
|
16.4
|
16
|
3.0
|
1.0
|
1.0
|
10
|
10
|
And
|
Bravo
|
20.1
|
38.3
|
30
|
18.2
|
1.6
|
1.6
|
29
|
29
|
BRV17-168
|
Bravo
|
0.0
|
5.4
|
5
|
5.4
|
10.9
|
10.0
|
12
|
12
|
BRV17-180
|
Bravo
|
45.4
|
57.9
|
52
|
12.3
|
1.7
|
1.7
|
13
|
13
|
BRV17-187
|
Bravo
|
20.2
|
32.2
|
26
|
12.0
|
0.4
|
0.4
|
3
|
3
|
And
|
Bravo
|
39.0
|
46.2
|
40
|
7.2
|
1.0
|
1.0
|
22
|
22
|
BRV17-196
|
Bravo
|
0.0
|
10.1
|
6
|
10.0
|
1.4
|
1.4
|
15
|
15
|
MAD17-050
|
Madrono
|
117.9
|
123.1
|
99
|
4.6
|
1.1
|
1.1
|
28
|
28
|
And
|
Madrono
|
145.0
|
160.7
|
124
|
13.6
|
1.4
|
1.4
|
20
|
20
|
And
|
Madrono
|
222.0
|
237.7
|
202
|
13.6
|
1.9
|
1.9
|
5
|
5
|
And
|
Madrono
|
251.4
|
255.4
|
213
|
3.5
|
4.2
|
4.2
|
4
|
4
|
MAD17-061
|
Madrono
|
160.0
|
169.5
|
188
|
8.2
|
2.5
|
2.5
|
53
|
53
|
MAD17-068
|
Madrono
|
163.0
|
177.0
|
170
|
7.0
|
2.4
|
2.4
|
59
|
59
|
MAD17-070
|
Madrono
|
112.3
|
118.5
|
124
|
5.4
|
3.3
|
3.3
|
69
|
69
|
MAD17-083
|
Madrono
|
129.6
|
148.5
|
142
|
17.8
|
3.5
|
3.5
|
69
|
69
|
Including
|
|
131.9
|
135.2
|
136
|
3.1
|
5.4
|
5.4
|
100
|
100
|
Including
|
|
141.9
|
146.7
|
146
|
4.5
|
8.1
|
8.1
|
103
|
103
|
And
|
Madrono
|
153.4
|
168.3
|
163
|
14.0
|
1.8
|
1.8
|
24
|
24
|
Cut-off value 0.30
g/t gold, maximum 3.0-metres internal dilution
|
Holes at the Bravo
and Madrono Zones use a capping factor of 10 g/t gold and 250 g/t
silver.
|
[Creston Mascota Area Local Geology Map]
Results from 41 drill holes in the Bravo Zone this year have
confirmed down-dip mineralization as well as favourable gold and
silver grades and widths. Examples include hole BRV17-168,
which had a high-grade intercept of 10.0 g/t gold and 12 g/t silver
over 5.4 metres at surface. Approximately 230 metres south of
this, hole BRV17-196 averaged 1.4 g/t gold and 15 g/t silver over
10.0 metres at surface. About 185 metres farther southwest,
hole BRV17-187 reported two intercepts: 0.4 g/t gold and 3 g/t
silver over 12.0 metres at 26 metres depth and 1.0 g/t gold and 22
g/t silver over 7.2 metres at 40 metres depth.
Recent drilling in the central western portion of the Bravo Zone
has opened up new potential growth areas such as Calera.
Drilling in this area included a tight cluster of holes 180 metres
west of the current Bravo mineral
resources. The best results from this location were in hole
BRV17-156 which yielded two intercepts: 1.0 g/t gold and 10
g/t silver over 3.0 metres at 16 metres depth and 1.6 g/t gold and
29 g/t silver over 18.2 metres at 30 metres depth. Also in
this location, hole BRV17-180 intersected 1.7 g/t gold and 13 g/t
silver over 12.3 metres at 52 metres depth.
There have been recent results from two structures in the
Madrono Zone: the Madrono and Santa
Martha veins. In the Madrono Vein, hole MAD17-050 had
four intercepts between 99 and 213 metres depth, including 1.9 g/t
gold and 5 g/t silver over 13.6 metres at 202 metres depth.
Approximately 160 metres to the southeast, hole MAD17-061 reported
2.5 g/t gold and 53 g/t silver over 8.2 metres at 188 metres
depth.
In the Santa Martha Vein, hole MAD17-083 had two intercepts: 3.5
g/t gold and 69 g/t silver over 17.8 metres at 142 metres depth and
1.8 g/t gold and 24 g/t silver over 14.0 metres at 163 metres
depth. Approximately 150 metres to the southeast, hole
MAD17-070 intersected 3.3 g/t gold and 69 g/t silver over 5.4
metres at 124 metres depth. Nearby, hole MAD17-068 was
drilled vertically and intersected 2.4 g/t gold and 59 g/t silver
over 7.0 metres at 170 metres depth.
The recent Madrono results show considerable thickness of
mineralization and down-dip continuity of the vein system to the
south; the zone continues to be open at depth.
The results of the current drill program have the potential to
increase the gold and silver grade of the Bravo and Madrono Zones and consequently
improve the mineral resources at Creston Mascota.
Construction of an access road to the Bravo Zone is underway.
This road could ultimately be used for pre-stripping activities on
the zone.
La India – Exploration
focused on Extending Near-Pit Mineralization and Other Near Mine
Targets
The La India mine in Sonora,
Mexico, located approximately 70 kilometres from the
Company's Pinos Altos mine,
achieved commercial production in February
2014.
La India Mine -
Operating Statistics
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
|
June 30,
2017
|
|
June 30,
2016
|
Tonnes of ore
processed (thousands of tonnes)
|
|
1,329
|
|
1,535
|
Tonnes of ore
processed per day
|
|
14,605
|
|
16,868
|
Gold grade
(g/t)
|
|
0.65
|
|
0.76
|
Gold production
(ounces)
|
|
24,211
|
|
27,438
|
Production costs per
tonne
|
|
$
|
11
|
|
$
|
8
|
Minesite costs per
tonne
|
|
$
|
11
|
|
$
|
8
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
617
|
|
$
|
437
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
552
|
|
$
|
381
|
Production costs per tonne in the second quarter of 2017
increased when compared to the prior-year period due to lower
tonnes processed, higher contractor costs to accelerate open pit
mine development, higher maintenance costs, higher ore and waste
haulage costs as a result of longer trucking distances from the
Main Zone pit and timing of unsold inventory. Production
costs per ounce in the second quarter of 2017 increased when
compared to the prior-year period due to lower gold production and
the reasons described above.
Minesite costs per tonne in the second quarter of 2017 increased
when compared to the prior-year period due to reasons described
above. Total cash costs per ounce in the second quarter of
2017 increased when compared to the prior-year period due to lower
gold production and the reasons described above.
La India Mine -
Operating Statistics
|
|
|
|
|
|
|
Six Months
Ended
|
|
Six Months
Ended
|
|
|
June 30,
2017
|
|
June 30,
2016
|
Tonnes of ore
processed (thousands of tonnes)
|
|
2,731
|
|
2,931
|
Tonnes of ore
processed per day
|
|
15,087
|
|
16,104
|
Gold grade
(g/t)
|
|
0.69
|
|
0.80
|
Gold production
(ounces)
|
|
50,507
|
|
55,669
|
Production costs per
tonne
|
|
$
|
10
|
|
$
|
8
|
Minesite costs per
tonne
|
|
$
|
10
|
|
$
|
8
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
555
|
|
$
|
412
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
493
|
|
$
|
371
|
Production costs per tonne for the first six months of 2017
increased when compared to the prior-year period due to lower
tonnes processed, higher contractor costs to accelerate open pit
mine development, higher maintenance costs, higher ore and waste
haulage costs as a result of longer trucking distances from the
Main Zone pit and timing of unsold inventory. Production
costs per ounce for the first six months of 2017 increased when
compared to the prior-year period due to lower gold production and
the reasons described above.
Minesite costs per tonne for the first six months of 2017
increased when compared to the prior-year period due to the reasons
described above. Total cash costs per ounce for the first six
months of 2017 increased when compared to the prior-year period due
to lower gold production and the reasons described above.
Relocation of the overland conveyor and liner installation for
an additional heap leach area is approximately 78% complete.
The project is expected to be completed in August 2017 and improve processing
efficiency. In addition, installation of a mobile crusher is
underway. This crusher has a capacity of up to 3,000 tonnes
per day, and is expected to be operational shortly and will provide
an opportunity to treat incremental ore that is currently being
stockpiled.
During the quarter, infill drilling was carried out on the Main
Zone to evaluate the potential to extend mineral reserves and
mineral resources below the current pit design. Additional
drilling is planned in the second half of 2017.
Drilling was also carried out at the nearby El Realito, Chipriona, Cerro de Oro and El
Cochi zones during the second quarter, with encouraging
results. These areas are being drilled to evaluate the
potential to increase mineral reserves and mineral resources in
close proximity to the current mining areas. Additional
exploration work is planned in these areas in the second half of
2017.
Given the increases in mineral reserves and mineral resources in
2016 and ongoing exploration that appears to indicate the potential
for further increases, the Company is evaluating location options
to construct additional pad capacity.
El Barqueno – Exploration focus is on Extending the
Azteca-Zapoteca Zones and Testing Other Target Areas
Agnico Eagle acquired its 100% interest in the El Barqueno
project in November 2014. The
63,997-hectare property is in the Guachinango gold-silver mining district of
Jalisco State in west-central Mexico, approximately 150 kilometres west of
the state capital of Guadalajara. Drilling results for El
Barqueno were last reported in the Company's news release dated
February 15, 2017.
The El Barqueno project contains a number of known mineralized
zones and several prospects. The project contains 301,100
ounces of gold in indicated mineral resources (8.4 million tonnes
grading 1.11 g/t gold) and 362,000 ounces of gold in inferred
mineral resources (7.2 million tonnes grading 1.56 g/t gold) as of
December 31, 2016. The
indicated mineral resources are in the Azteca-Zapoteca and
Pena de Oro zones, while the
inferred mineral resources are in these two zones as well as the
Angostura Zone, the Olmeca area (Socorro vein) and the El Rayo prospect.
In the second quarter of 2017, approximately 18,200 metres of
drilling (55 holes) was completed with a focus on the extension of
the Azteca-Zapoteca Zone, as well as at the Tecolote and
San Diego prospects and the
Mortero vein in the Olmeca
prospect.
About Agnico Eagle
Agnico Eagle is a senior Canadian gold mining company that has
produced precious metals since 1957. Its eight 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 info@agnicoeagle.com or call (416) 947-1212.
Note Regarding Certain Measures of Performance
This news release discloses certain measures, including "total
cash costs per ounce", "all-in sustaining costs per ounce",
"minesite costs per tonne" and "adjusted net income" that are not
standardized measures under IFRS. These data may not be
comparable to data reported by other issuers. For a
reconciliation of these measures to the most directly comparable
financial information reported in the consolidated financial
statements prepared in accordance with IFRS, other than adjusted
net income, see "Reconciliation of Non-GAAP Financial Performance
Measures" below.
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 (without 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 charges 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 these measures 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.
The Company calculates all-in sustaining costs per ounce of gold
produced on a by-product basis as the aggregate of total cash costs
per ounce on a by-product basis, sustaining capital expenditures
(including capitalized exploration), general and administrative
expenses (including stock options) and non-cash reclamation
provision expense per ounce of gold produced. All-in
sustaining costs per ounce of gold produced on a co-product basis
is calculated in the same manner as all-in sustaining costs per
ounce of gold produced on a by-product basis, except that the total
cash costs per ounce on a co-product basis are used, meaning no
adjustment is made for by-product metal revenues. All-in
sustaining costs per ounce is used to show the full cost of gold
production from current operations. Management is aware that
these per ounce measures of performance can be affected by
fluctuations in foreign exchange rates and, in the case of total
cash costs per ounce of gold produced on a by-product basis and
all-in sustaining costs per ounce of gold produced on a by-product,
by-product metal prices. Management compensates for these
inherent limitations by using these measures in conjunction with
minesite costs per tonne (discussed below) as well as other data
prepared in accordance with IFRS.
Minesite costs per tonne are calculated by adjusting production
costs as recorded in the consolidated statements of income for
unsold concentrate inventory production costs, and then dividing by
tonnes of ore processed. As the total cash costs per ounce of
gold produced can be affected by fluctuations in by‑product metal
prices and foreign exchange rates, management believes that
minesite costs per tonne provides additional information regarding
the performance of mining operations, eliminating the impact of
varying production levels. Management also uses this measure
to determine the economic viability of mining blocks. As each
mining block is evaluated based on the net realizable value of each
tonne mined, in order to be economically viable the estimated
revenue on a per tonne basis must be in excess of the minesite
costs per tonne. Management is aware that this per tonne
measure of performance can be affected by fluctuations in
processing levels and compensates for this inherent limitation by
using this measure in conjunction with production costs prepared in
accordance with IFRS.
Adjusted net income is calculated by adjusting the basic net
income per share as recorded in the consolidated statements of
income for foreign currency translation gains and losses,
mark-to-market adjustments, non-recurring gains and losses and
unrealized gains and losses on financial instruments.
Management uses adjusted net income to evaluate the underlying
operating performance of the Company and to assist with the
planning and forecasting of future operating results.
Management believes that adjusted net income is a useful
measure of performance because foreign currency translation gains
and losses, mark-to-market adjustments, non-recurring gains and
losses and unrealized gains and losses on financial instruments do
not reflect the underlying operating performance of the Company and
may not be indicative of future operating results.
Management also performs sensitivity analyses in order to
quantify the effects of fluctuating foreign exchange rates and
metal prices. This news release also contains information as
to estimated future total cash costs per ounce and all-in
sustaining costs per ounce. The estimates are based upon the
total cash costs per ounce and all-in sustaining costs per ounce
that the Company expects to incur to mine gold at its mines and
projects and, consistent with the reconciliation of these actual
costs referred to above, do 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 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
July 26, 2017. 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", "indicate", "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 estimated
ore grades, project timelines, drilling results, metal production,
life of mine estimates, total cash costs per ounce, all-in
sustaining costs per ounce, other expenses and cash flows; the
estimated timing and conclusions of technical reports and other
studies; the methods by which ore will be extracted or processed;
statements concerning the Company's plans to build operations at
Meliadine, Amaruq and LaRonde Zone 5, including the timing and
funding thereof; statements concerning other expansion projects,
recovery rates, mill throughput, optimization and projected
exploration expenditures, including costs and other estimates upon
which such projections are based; statements regarding timing and
amounts of capital expenditures and other assumptions; estimates of
future mineral reserves, mineral resources, mineral production,
optimization efforts and sales; estimates of mine life; estimates
of future capital expenditures and other cash needs, and
expectations as to the funding thereof; statements as to the
projected development of certain ore deposits, including estimates
of exploration, development and production and other capital costs
and estimates of the timing of such exploration, development and
production or decisions with respect to such exploration,
development and production; estimates of mineral reserves and
mineral resources; statements regarding the Company's ability to
obtain the necessary permits and authorizations in connection with
its exploration, development and mining operations and the
anticipated timing thereof; statements regarding anticipated future
exploration; the anticipated timing of events with respect to the
Company's mine sites and statements regarding the sufficiency of
the Company's cash resources and other statements regarding
anticipated trends with respect to the Company's operations,
exploration and the funding thereof. 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 assumptions 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,
2016 filed with Canadian securities regulators and that are
included in its Annual Report on Form 40-F for the year ended
December 31, 2016 ("Form 40-F") filed
with the U.S. Securities and Exchange Commission (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 requirements; cost of exploration
and development programs; mining risks; community protests; risks
associated with foreign operations; the unfavorable outcome 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 Form 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 be 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 Quebec
operations has been approved by Christian Provencher, Eng.,
Vice-President, Canada; relating
to Nunavut operations has been
approved by Dominique Girard, Eng., Vice-President, Nunavut
Operations; relating to the Finland operations has been approved by
Francis Brunet, Eng., Corporate Director Mining; relating to
Southern Business operations has been approved by Carol Plummer,
Eng., Vice-President, Project Development, Southern Business; and
relating to exploration has been approved by Alain Blackburn, Eng., Senior Vice-President,
Exploration and Guy Gosselin, Eng. and P.Geo., Vice-President,
Exploration. Each of them is a "Qualified Person" for the
purposes of National Instrument 43-101 Standards of Disclosure
for Mineral Projects ("NI 43-101").
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 requirements to designate
mineral reserves under Industry 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.
SEC 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 has decided to use price assumptions that
are below the three-year averages for its estimates of mineral
reserves and mineral resources.
The assumptions used for the December
2016 mineral reserves estimate at all longer life mines and
advanced projects reported by the Company (other than the Meliadine
project, the Canadian Malartic mine and the Upper Beaver project)
were $1,150 per ounce gold,
$16.50 per ounce silver, $0.95 per pound zinc, $2.15 per pound copper and foreign exchange rates
of C$1.20 per $1.00, 16.00 Mexican pesos per $1.00 and $1.15 per
€1.00 for all mines and projects other than the Lapa and Meadowbank
mines in Canada, and the Creston
Mascota mine and Santo Niño pit at the Pinos Altos mine in Mexico. Due to the
shorter remaining mine life for the Lapa and Meadowbank mines, and
the Creston Mascota mine and Santo Niño pit at the Pinos Altos mine, the foreign exchange rates
used were C$1.30 per $1.00 and 16.00 Mexican pesos per $1.00 (other assumptions unchanged). At the
Meliadine project, the same assumptions at December 2015 were used to estimate the
December 2016 mineral reserves, which
were $1,100 per ounce gold and a
foreign exchange rate of C$1.16 per
$1.00.
The Partnership, owned by Agnico Eagle (50%) and Yamana (50%),
which owns and operates the Canadian Malartic mine, and CMC, owned
by Agnico Eagle (50%) and Yamana (50%), which owns and manages the
Upper Beaver project in Kirkland
Lake, have estimated the December
2016 mineral reserves of the Canadian Malartic mine and the
Upper Beaver project using the following assumptions: $1,200 per ounce gold; a cut-off grade at the
Canadian Malartic mine between 0.33 g/t and 0.37 g/t gold
(depending on the deposit); a C$125/tonne net smelter return for the Upper
Beaver project; and a foreign exchange rate of C$1.25 per $1.00.
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.
Modifying factors are considerations used to convert mineral
resources to mineral reserves. These include, but are 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 knowledge,
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 assume 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. Geological 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 factors 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 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
|
LaRonde, LaRonde 5
&
Ellison, Quebec, Canada
|
March 23,
2005
|
Canadian Malartic,
Quebec, Canada
|
June 16,
2014
|
Kittila, Kuotko
and
Kylmakangas, Finland
|
March 4,
2010
|
Meadowbank,
Nunavut,
Canada
|
February 15,
2012
|
Goldex, Quebec,
Canada
|
October 14,
2012
|
Lapa, Quebec,
Canada
|
June 8,
2006
|
Meliadine,
Nunavut,
Canada
|
February 11,
2015
|
Hammond Reef,
Ontario, Canada
|
July 2,
2013
|
Upper Beaver
(Kirkland Lake property), Ontario, Canada
|
November 5,
2012
|
Pinos Altos and
Creston Mascota, Mexico
|
March 25,
2009
|
La India,
Mexico
|
August 31,
2012
|
Appendix: Infill drill intercepts from the Amaruq
project
Recent infill drilling intercepts from the Amaruq project are
set out in the table below and the drill hole collars are located
on the Amaruq project local geology map. The pierce points
are shown on the Amaruq project composite longitudinal
section. All intercepts reported for the Amaruq project show
uncapped and capped grades over estimated true widths, based on a
preliminary geological interpretation that is being updated as new
information becomes available with further drilling.
Recent exploration drill results from the Whale Tail (WT)
deposit and V Zone (IVR), Amaruq project
Drill hole
|
Location
|
From
(metres)
|
To
(metres)
|
Depth of midpoint
below surface (metres)
|
Estimated true width
(metres)
|
Gold grade (g/t)
(uncapped)
|
Gold grade (g/t)
(capped)*
|
AMQ17-1172
|
WT
|
166.5
|
172.0
|
125
|
4.5
|
5.4
|
5.4
|
AMQ17-1187
|
WT
|
246.4
|
266.0
|
184
|
17.0
|
4.1
|
4.1
|
AMQ17-1191
|
IVR
|
91.0
|
96.9
|
77
|
5.8
|
6.7
|
6.7
|
AMQ17-1193
|
IVR
|
93.0
|
96.0
|
78
|
2.9
|
7.1
|
7.1
|
And
|
IVR
|
101.3
|
105.0
|
85
|
3.6
|
4.1
|
4.1
|
AMQ17-1198
|
IVR
|
88.0
|
94.0
|
75
|
5.8
|
4.2
|
4.2
|
And
|
IVR
|
109.5
|
114.8
|
92
|
5.1
|
4.3
|
4.3
|
AMQ17-1199
|
IVR
|
102.7
|
108.0
|
88
|
5.1
|
4.1
|
4.1
|
AMQ17-1208
|
WT
|
185.7
|
196.3
|
142
|
8.1
|
5.1
|
5.1
|
AMQ17-1243
|
WT
|
11.3
|
22.7
|
12
|
10.3
|
4.3
|
4.3
|
AMQ17-1278
|
IVR
|
29.4
|
42.5
|
28
|
11.3
|
3.2
|
3.2
|
* Holes at the
Whale Tail deposit use a capping factor of 80 g/t gold. Holes
at the IVR deposit (including the V Zone) use a capping factor of
60 g/t gold.
|
Appendix: Selected drill collar coordinates
LaRonde 3 exploration drill collar coordinates
|
Drill collar
coordinates*
|
Drill hole
ID
|
UTM
North
|
UTM
East
|
Elevation
(metres
above sea
level)
|
Azimuth
(degrees)
|
Dip
(degrees)
|
Length
(metres)
|
LR-290-075A
|
5346891
|
689508
|
2,536
|
198
|
-56
|
530
|
LR-290-076
|
5346892
|
689508
|
2,536
|
209
|
-48
|
470
|
LR-290-077A
|
5346909
|
689414
|
2,532
|
194
|
-60
|
638
|
LR-293-021A
|
5346881
|
689576
|
2,556
|
184
|
-55
|
395
|
LR-293-022
|
5346881
|
689576
|
2,556
|
182
|
-54
|
431
|
* Coordinate
System UTM Nad 83 Zone 17
|
Kittila mine exploration drill collar coordinates of selected
holes
|
Drill collar
coordinates*
|
Drill hole
ID
|
UTM
North
|
UTM
East
|
Elevation
(metres
above sea
level)
|
Azimuth
(degrees)
|
Dip
(degrees)
|
Length
(metres)
|
RIE17-601
|
7538805
|
2558701
|
-655
|
079
|
-41
|
360
|
ROD14-003B
|
7538199
|
2558630
|
-515
|
091
|
-58
|
799
|
ROD14-003D
|
7538199
|
2558630
|
-515
|
091
|
-58
|
616
|
ROD17-700
|
7538498
|
2558632
|
-557
|
090
|
-70
|
879
|
ROD17-700B
|
7538498
|
2558632
|
-557
|
090
|
-70
|
885
|
VUG17-505
|
7539202
|
2558636
|
-656
|
067
|
-3
|
209
|
VUG17-506
|
7539200
|
2558637
|
-656
|
090
|
10
|
162
|
VUG17-508
|
7539301
|
2558641
|
-671
|
075
|
-9
|
171
|
VUG17-509
|
7539298
|
2558641
|
-670
|
108
|
-13
|
191
|
VUG17-511
|
7539403
|
2558657
|
-663
|
110
|
10
|
170
|
* Finnish
Coordinate System KKJ Zone 2
|
Bravo and Madrono zones at
Creston Mascota mine exploration drill collar
coordinates
|
Drill collar
coordinates*
|
Drill Hole
ID
|
UTM
North
|
UTM
East
|
Elevation
(metres
above sea
level)
|
Azimuth
(degrees)
|
Dip
(degrees)
|
Length
(metres)
|
BRV17-156
|
3135599
|
760014
|
1,609
|
090
|
-60
|
141
|
BRV17-168
|
3135672
|
760454
|
1,831
|
090
|
-45
|
99
|
BRV17-180
|
3135628
|
759974
|
1,616
|
090
|
-60
|
135
|
BRV17-187
|
3135304
|
760316
|
1,723
|
090
|
-45
|
93
|
BRV17-196
|
3135455
|
760410
|
1,776
|
090
|
-45
|
60
|
MAD17-050
|
3134915
|
761541
|
2,079
|
000
|
-45
|
333
|
MAD17-061
|
3134823
|
761659
|
2,079
|
050
|
-45
|
180
|
MAD17-068
|
3134580
|
761907
|
2,126
|
000
|
-90
|
201
|
MAD17-070
|
3134620
|
761856
|
2,114
|
050
|
-45
|
156
|
MAD17-083
|
3134725
|
761742
|
2,115
|
050
|
-45
|
240
|
*Coordinate System
UTM Nad 27 Zone
|
AGNICO EAGLE MINES
LIMITED
|
SUMMARY OF
OPERATIONS KEY PERFORMANCE INDICATORS
|
(thousands of
United States dollars, except where noted)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
Operating
margin(i)by mine:
|
|
|
|
|
|
|
|
Northern
Business
|
|
|
|
|
|
|
|
|
LaRonde
mine
|
$
|
54,062
|
|
$
|
54,985
|
|
$
|
124,764
|
|
$
|
103,039
|
|
Lapa mine
|
8,189
|
|
14,437
|
|
14,394
|
|
25,243
|
|
Goldex
mine
|
15,990
|
|
22,896
|
|
36,844
|
|
45,080
|
|
Meadowbank
mine
|
62,668
|
|
34,733
|
|
120,141
|
|
68,062
|
|
Canadian Malartic
mine(ii)
|
51,237
|
|
50,133
|
|
102,823
|
|
91,874
|
|
Kittila
mine
|
21,741
|
|
22,079
|
|
51,582
|
|
46,165
|
Southern
Business
|
|
|
|
|
|
|
|
|
Pinos Altos
mine
|
41,138
|
|
48,392
|
|
83,171
|
|
84,212
|
|
Creston Mascota
deposit at Pinos Altos
|
8,114
|
|
9,719
|
|
16,171
|
|
18,708
|
|
La India
mine
|
19,103
|
|
24,818
|
|
39,472
|
|
46,367
|
Total operating
margin(i)
|
282,242
|
|
282,192
|
|
589,362
|
|
528,750
|
Amortization of
property, plant and mine
|
|
|
|
|
|
|
|
development
|
128,440
|
|
154,658
|
|
260,949
|
|
300,289
|
Exploration,
corporate and other
|
82,044
|
|
89,624
|
|
154,008
|
|
163,354
|
Income before income
and mining taxes
|
71,758
|
|
37,910
|
|
174,405
|
|
65,107
|
Income and mining
taxes expense
|
9,874
|
|
18,920
|
|
36,571
|
|
18,329
|
Net income for the
period
|
$
|
61,884
|
|
$
|
18,990
|
|
$
|
137,834
|
|
$
|
46,778
|
Net income per
share — basic (US$)
|
$
|
0.27
|
|
$
|
0.09
|
|
$
|
0.60
|
|
$
|
0.21
|
Net income per
share — diluted (US$)
|
$
|
0.26
|
|
$
|
0.08
|
|
$
|
0.60
|
|
$
|
0.21
|
|
|
|
|
|
|
|
|
Cash
flows:
|
|
|
|
|
|
|
|
Cash provided by
operating activities
|
$
|
183,950
|
|
$
|
229,456
|
|
$
|
406,561
|
|
$
|
375,160
|
Cash used in
investing activities
|
$
|
(203,444)
|
|
$
|
(122,651)
|
|
$
|
(357,131)
|
|
$
|
(230,246)
|
Cash provided by
financing activities
|
$
|
169,836
|
|
$
|
199,494
|
|
$
|
351,407
|
|
$
|
197,906
|
|
|
|
|
|
|
|
|
Realized prices
(US$):
|
|
|
|
|
|
|
|
Gold
(per ounce)
|
$
|
1,260
|
|
$
|
1,268
|
|
$
|
1,241
|
|
$
|
1,230
|
Silver
(per ounce)
|
$
|
17.03
|
|
$
|
17.21
|
|
$
|
17.33
|
|
$
|
16.25
|
Zinc
(per tonne)
|
$
|
2,642
|
|
$
|
1,852
|
|
$
|
2,721
|
|
$
|
1,704
|
Copper
(per tonne)
|
$
|
5,660
|
|
$
|
4,714
|
|
$
|
6,018
|
|
$
|
4,506
|
|
|
|
|
|
|
|
|
Payable
production(iii):
|
|
|
|
|
|
|
|
Gold
(ounces):
|
|
|
|
|
|
|
|
|
Northern
Business
|
|
|
|
|
|
|
|
|
|
LaRonde
mine
|
72,090
|
|
75,159
|
|
151,002
|
|
150,496
|
|
|
Lapa mine
|
15,881
|
|
21,914
|
|
31,241
|
|
43,623
|
|
|
Goldex
mine
|
30,337
|
|
31,452
|
|
63,008
|
|
63,792
|
|
|
Meadowbank
mine
|
95,289
|
|
72,402
|
|
180,659
|
|
144,713
|
|
|
Canadian Malartic
mine(ii)
|
82,509
|
|
72,502
|
|
153,891
|
|
146,115
|
|
|
Kittila
mine
|
47,156
|
|
46,209
|
|
98,777
|
|
94,336
|
|
Southern
Business
|
|
|
|
|
|
|
|
|
|
Pinos Altos
mine
|
48,196
|
|
49,458
|
|
93,556
|
|
97,575
|
|
|
Creston Mascota
deposit at Pinos Altos
|
12,074
|
|
12,398
|
|
23,318
|
|
23,949
|
|
|
La India
mine
|
24,211
|
|
27,438
|
|
50,507
|
|
55,669
|
Total gold
(ounces)
|
427,743
|
|
408,932
|
|
845,959
|
|
820,268
|
|
|
|
|
|
|
|
|
Silver (thousands of
ounces):
|
|
|
|
|
|
|
|
|
Northern
Business
|
|
|
|
|
|
|
|
|
|
LaRonde
mine
|
337
|
|
266
|
|
609
|
|
512
|
|
|
Lapa mine
|
1
|
|
1
|
|
2
|
|
4
|
|
|
Goldex
mine
|
1
|
|
1
|
|
1
|
|
1
|
|
|
Meadowbank
mine
|
65
|
|
66
|
|
136
|
|
109
|
|
|
Canadian Malartic
mine(ii)
|
89
|
|
86
|
|
173
|
|
164
|
|
|
Kittila
mine
|
3
|
|
2
|
|
6
|
|
5
|
|
Southern
Business
|
|
|
|
|
|
|
|
|
|
Pinos Altos
mine
|
645
|
|
633
|
|
1,228
|
|
1,220
|
|
|
Creston Mascota
deposit at Pinos Altos
|
70
|
|
50
|
|
126
|
|
98
|
|
|
La India
mine
|
74
|
|
105
|
|
202
|
|
222
|
Total silver
(thousands of ounces)
|
1,285
|
|
1,210
|
|
2,483
|
|
2,335
|
|
|
|
|
|
|
|
|
Zinc
(tonnes)
|
1,724
|
|
1,318
|
|
2,729
|
|
1,932
|
Copper
(tonnes)
|
907
|
|
1,141
|
|
2,179
|
|
2,295
|
|
|
|
|
|
|
|
|
Payable metal
sold:
|
|
|
|
|
|
|
|
Gold
(ounces):
|
|
|
|
|
|
|
|
|
Northern
Business
|
|
|
|
|
|
|
|
|
|
LaRonde
mine
|
72,706
|
|
72,005
|
|
158,162
|
|
147,262
|
|
|
Lapa mine
|
15,870
|
|
22,911
|
|
31,277
|
|
42,747
|
|
|
Goldex
mine
|
30,165
|
|
30,605
|
|
63,377
|
|
62,560
|
|
|
Meadowbank
mine
|
92,038
|
|
70,021
|
|
182,593
|
|
141,610
|
|
|
Canadian Malartic
mine(ii)(iv)
|
77,380
|
|
72,259
|
|
141,240
|
|
137,344
|
|
|
Kittila
mine
|
46,210
|
|
44,580
|
|
100,110
|
|
95,305
|
|
Southern
Business
|
|
|
|
|
|
|
|
|
|
Pinos Altos
mine
|
47,839
|
|
52,287
|
|
92,972
|
|
95,511
|
|
|
Creston Mascota
deposit at Pinos Altos
|
11,414
|
|
12,117
|
|
23,040
|
|
23,962
|
|
|
La India
mine
|
26,251
|
|
27,748
|
|
51,931
|
|
53,913
|
Total gold
(ounces)
|
419,873
|
|
404,533
|
|
844,702
|
|
800,214
|
|
|
|
|
|
|
|
|
Silver (thousands of
ounces):
|
|
|
|
|
|
|
|
|
Northern
Business
|
|
|
|
|
|
|
|
|
|
LaRonde
mine
|
319
|
|
267
|
|
607
|
|
499
|
|
|
Lapa mine
|
6
|
|
—
|
|
6
|
|
1
|
|
|
Goldex
mine
|
1
|
|
1
|
|
1
|
|
1
|
|
|
Meadowbank
mine
|
73
|
|
66
|
|
136
|
|
109
|
|
|
Canadian Malartic
mine(ii)(iv)
|
75
|
|
76
|
|
154
|
|
149
|
|
|
Kittila
mine
|
3
|
|
2
|
|
5
|
|
5
|
|
Southern
Business
|
|
|
|
|
|
|
|
|
|
Pinos Altos
mine
|
586
|
|
647
|
|
1,192
|
|
1,177
|
|
|
Creston Mascota
deposit at Pinos Altos
|
70
|
|
49
|
|
120
|
|
96
|
|
|
La India
mine
|
86
|
|
123
|
|
215
|
|
210
|
Total silver
(thousands of ounces):
|
1,219
|
|
1,231
|
|
2,436
|
|
2,247
|
|
|
|
|
|
|
|
|
Zinc
(tonnes)
|
1,645
|
|
673
|
|
3,781
|
|
1,278
|
Copper
(tonnes)
|
885
|
|
1,164
|
|
2,114
|
|
2,320
|
|
|
|
|
|
|
|
|
Total cash costs
per ounce of gold produced
|
|
|
|
|
|
|
|
— co-product
basis (US$)(v):
|
|
|
|
|
|
|
|
Northern
Business
|
|
|
|
|
|
|
|
|
LaRonde
mine
|
$
|
686
|
|
$
|
707
|
|
$
|
673
|
|
$
|
689
|
|
Lapa mine
|
717
|
|
658
|
|
785
|
|
663
|
|
Goldex
mine(vi)
|
603
|
|
513
|
|
564
|
|
510
|
|
Meadowbank
mine
|
572
|
|
804
|
|
586
|
|
801
|
|
Canadian Malartic
mine(ii)
|
558
|
|
641
|
|
566
|
|
606
|
|
Kittila
mine
|
803
|
|
757
|
|
733
|
|
742
|
Southern
Business
|
|
|
|
|
|
|
|
|
Pinos Altos
mine
|
594
|
|
583
|
|
594
|
|
557
|
|
Creston Mascota
deposit at Pinos Altos
|
648
|
|
542
|
|
634
|
|
535
|
|
La India
mine
|
604
|
|
451
|
|
563
|
|
437
|
Weighted average
total cash costs per ounce
|
|
|
|
|
|
|
|
of gold
produced
|
$
|
628
|
|
$
|
663
|
|
$
|
622
|
|
$
|
647
|
|
|
|
|
|
|
|
|
Total cash costs
per ounce of gold produced
|
|
|
|
|
|
|
|
— by-product
basis (US$)(v):
|
|
|
|
|
|
|
|
Northern
Business
|
|
|
|
|
|
|
|
|
LaRonde
mine
|
$
|
482
|
|
$
|
543
|
|
$
|
473
|
|
$
|
536
|
|
Lapa mine
|
712
|
|
658
|
|
781
|
|
663
|
|
Goldex
mine(vi)
|
603
|
|
513
|
|
564
|
|
509
|
|
Meadowbank
mine
|
559
|
|
789
|
|
573
|
|
789
|
|
Canadian Malartic
mine(ii)
|
540
|
|
621
|
|
548
|
|
589
|
|
Kittila
mine
|
802
|
|
756
|
|
732
|
|
741
|
Southern
Business
|
|
|
|
|
|
|
|
|
Pinos Altos
mine
|
373
|
|
348
|
|
366
|
|
346
|
|
Creston Mascota
deposit at Pinos Altos
|
550
|
|
469
|
|
538
|
|
465
|
|
La India
mine
|
552
|
|
381
|
|
493
|
|
371
|
Weighted average
total cash costs per ounce
|
|
|
|
|
|
|
|
of gold
produced
|
$
|
556
|
|
$
|
592
|
|
$
|
548
|
|
$
|
582
|
Notes:
|
(i) Operating margin
is calculated as revenues from mining operations less production
costs.
|
(ii) On June 16,
2014, Agnico Eagle and Yamana jointly acquired 100% of Osisko by
way of the Osisko Arrangement. As a result of the Osisko
Arrangement, Agnico Eagle and Yamana each indirectly own 50% of
Osisko (now Canadian Malartic Corporation) and Canadian Malartic
GP, which now holds the Canadian Malartic mine. The
information set out in this table reflects the Company's 50%
interest in the Canadian Malartic mine since the date of
acquisition.
|
(iii) Payable
production (a non-GAAP non-financial performance measure) is
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 sold during the period or held as inventories at
the end of the period.
|
(iv) The Canadian
Malartic mine's payable metal sold excludes the 5.0% net smelter
royalty in favour of Osisko Gold Royalties Ltd..
|
(v) Total cash costs
per ounce of gold produced is not a recognized measure under IFRS
and this data may not be comparable to data reported by other gold
producers. 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 (without deducting
by-product metal revenues). Total cash costs per ounce of gold
produced on a by-product basis is calculated by adjusting
production costs as recorded in the condensed interim consolidated
statement of income for by-product metal revenues, unsold
concentrate inventory production costs, smelting, refining and
marketing charges and other adjustments, and then dividing by the
number of ounces of gold produced. Total cash costs per ounce of
gold produced on a co-product basis is calculated in the same
manner as total cash costs per ounce of gold produced on a
by-product basis except that no adjustment for by-product metal
revenues is made. 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 Company believes that these generally accepted industry
measures provide a realistic indication of operating performance
and provide useful comparison points between periods. 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 these measures 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. Management is aware that these per ounce
measures of performance can be affected by fluctuations in exchange
rates and, in the case of total cash costs of gold produced on a
by-product basis, by-product metal prices. Management compensates
for these inherent limitations by using these measures in
conjunction with minesite costs per tonne as well as other data
prepared in accordance with IFRS. Management also performs
sensitivity analyses in order to quantify the effects of
fluctuating metal prices and exchange rates.
|
(vi) The Goldex
mine's per ounce of gold produced calculations exclude 5,646 and
8,041 ounces for the three and six months ended June 30, 2017 of
payable gold production and the associated costs related to the
Deep 1 Zone which were produced prior to the achievement of
commercial production.
|
AGNICO EAGLE MINES
LIMITED
|
CONSOLIDATED
BALANCE SHEETS
|
(thousands of
United States dollars, except share amounts, IFRS
basis)
|
(Unaudited)
|
|
|
|
|
|
|
|
As at June 30,
2017
|
|
As at December
31,
2016
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
943,936
|
|
$
|
539,974
|
|
Short-term
investments
|
|
8,419
|
|
8,424
|
|
Restricted
cash
|
|
395
|
|
398
|
|
Trade
receivables
|
|
8,395
|
|
8,185
|
|
Inventories
|
|
432,090
|
|
443,714
|
|
Income taxes
recoverable
|
|
433
|
|
—
|
|
Available-for-sale
securities
|
|
128,100
|
|
92,310
|
|
Fair value of
derivative financial instruments
|
|
15,219
|
|
364
|
|
Other current
assets
|
|
149,762
|
|
136,810
|
Total current
assets
|
|
1,686,749
|
|
1,230,179
|
Non-current
assets:
|
|
|
|
|
|
Restricted
cash
|
|
790
|
|
764
|
|
Goodwill
|
|
696,809
|
|
696,809
|
|
Property, plant and
mine development
|
|
5,224,272
|
|
5,106,036
|
|
Other
assets
|
|
86,422
|
|
74,163
|
Total
assets
|
|
$
|
7,695,042
|
|
$
|
7,107,951
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
|
$
|
304,892
|
|
$
|
228,566
|
|
Reclamation
provision
|
|
7,895
|
|
9,193
|
|
Interest
payable
|
|
12,491
|
|
14,242
|
|
Income taxes
payable
|
|
16,893
|
|
35,070
|
|
Finance lease
obligations
|
|
4,856
|
|
5,535
|
|
Current portion of
long-term debt
|
|
—
|
|
129,896
|
|
Fair value of
derivative financial instruments
|
|
679
|
|
1,120
|
Total current
liabilities
|
|
347,706
|
|
423,622
|
Non-current
liabilities:
|
|
|
|
|
|
Long-term
debt
|
|
1,371,948
|
|
1,072,790
|
|
Reclamation
provision
|
|
282,663
|
|
265,308
|
|
Deferred income and
mining tax liabilities
|
|
810,429
|
|
819,562
|
|
Other
liabilities
|
|
31,870
|
|
34,195
|
Total
liabilities
|
|
2,844,616
|
|
2,615,477
|
EQUITY
|
|
|
|
|
Common
shares:
|
|
|
|
|
|
Outstanding —
231,980,778 common shares issued,
|
|
|
|
|
|
less 755,094 shares
held in trust
|
|
5,244,150
|
|
4,987,694
|
|
Stock
options
|
|
182,419
|
|
179,852
|
|
Contributed
surplus
|
|
37,254
|
|
37,254
|
|
Deficit
|
|
(652,094)
|
|
(744,453)
|
|
Accumulated other
comprehensive income
|
|
38,697
|
|
32,127
|
Total
equity
|
|
4,850,426
|
|
4,492,474
|
Total liabilities and
equity
|
|
$
|
7,695,042
|
|
$
|
7,107,951
|
AGNICO EAGLE MINES
LIMITED
|
CONSOLIDATED
STATEMENTS OF INCOME
|
(thousands of
United States dollars, except per share amounts, IFRS
basis)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES
|
|
|
|
|
|
|
|
Revenues from mining
operations
|
$
|
549,883
|
|
$
|
537,628
|
|
$
|
1,097,342
|
|
$
|
1,028,159
|
|
|
|
|
|
|
|
|
COSTS, EXPENSES
AND OTHER INCOME
|
|
|
|
|
|
|
|
Production(i)
|
267,641
|
|
255,436
|
|
507,980
|
|
499,409
|
Exploration and
corporate development
|
34,323
|
|
38,100
|
|
59,636
|
|
66,485
|
Amortization of
property, plant and mine development
|
128,440
|
|
154,658
|
|
260,949
|
|
300,289
|
General and
administrative
|
27,754
|
|
24,337
|
|
58,508
|
|
49,160
|
Impairment loss on
available-for-sale securities
|
5,814
|
|
—
|
|
5,814
|
|
—
|
Finance
costs
|
17,835
|
|
17,391
|
|
37,541
|
|
35,192
|
Gain on derivative
financial instruments
|
(10,655)
|
|
(670)
|
|
(14,455)
|
|
(10,291)
|
Gain on sale of
available-for-sale securities
|
(3)
|
|
(1,799)
|
|
(79)
|
|
(1,918)
|
Environmental
remediation
|
(190)
|
|
840
|
|
138
|
|
5,933
|
Foreign currency
translation loss
|
2,647
|
|
5,517
|
|
3,499
|
|
12,287
|
Other
expenses
|
4,519
|
|
5,908
|
|
3,406
|
|
6,506
|
Income before income
and mining taxes
|
71,758
|
|
37,910
|
|
174,405
|
|
65,107
|
Income and mining
taxes expense
|
9,874
|
|
18,920
|
|
36,571
|
|
18,329
|
Net income for the
period
|
$
|
61,884
|
|
$
|
18,990
|
|
$
|
137,834
|
|
$
|
46,778
|
|
|
|
|
|
|
|
|
Net income per share
- basic
|
$
|
0.27
|
|
$
|
0.09
|
|
$
|
0.60
|
|
$
|
0.21
|
Net income per share
- diluted
|
$
|
0.26
|
|
$
|
0.08
|
|
$
|
0.60
|
|
$
|
0.21
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares
|
|
|
|
|
|
|
|
outstanding
(in thousands):
|
|
|
|
|
|
|
|
Basic
|
230,798
|
|
222,165
|
|
228,842
|
|
220,925
|
Diluted
|
233,531
|
|
225,169
|
|
231,234
|
|
223,568
|
Note:
|
(i)Exclusive of amortization, which is
shown separately.
|
AGNICO EAGLE MINES
LIMITED
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(thousands of
United States dollars, IFRS basis)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
OPERATING
ACTIVITIES
|
|
|
|
|
|
|
|
Net income for the
period
|
$
|
61,884
|
|
$
|
18,990
|
|
$
|
137,834
|
|
$
|
46,778
|
Add (deduct) items
not affecting cash:
|
|
|
|
|
|
|
|
|
Amortization of
property, plant and mine development
|
128,440
|
|
154,658
|
|
260,949
|
|
300,289
|
|
Deferred income and
mining taxes
|
(8,671)
|
|
3,665
|
|
(8,140)
|
|
(13,321)
|
|
Gain on sale of
available-for-sale securities
|
(3)
|
|
(1,799)
|
|
(79)
|
|
(1,918)
|
|
Stock-based
compensation
|
9,530
|
|
7,860
|
|
24,920
|
|
17,646
|
|
Impairment loss on
available-for-sale securities
|
5,814
|
|
—
|
|
5,814
|
|
—
|
|
Foreign currency
translation loss
|
2,647
|
|
5,517
|
|
3,499
|
|
12,287
|
|
Other
|
(414)
|
|
4,227
|
|
(525)
|
|
68
|
Adjustment for
settlement of reclamation provision
|
(1,989)
|
|
(402)
|
|
(2,295)
|
|
(1,634)
|
Changes in non-cash
working capital balances:
|
|
|
|
|
|
|
|
|
Trade
receivables
|
1,218
|
|
198
|
|
(210)
|
|
2,271
|
|
Income
taxes
|
(14,807)
|
|
3,915
|
|
(18,610)
|
|
(9,809)
|
|
Inventories
|
(16,725)
|
|
6,894
|
|
(8,789)
|
|
31,505
|
|
Other current
assets
|
(20,676)
|
|
6,124
|
|
(15,457)
|
|
10,144
|
|
Accounts payable and
accrued liabilities
|
52,533
|
|
28,539
|
|
31,374
|
|
(17,797)
|
|
Interest
payable
|
(14,831)
|
|
(8,930)
|
|
(3,724)
|
|
(1,349)
|
Cash provided by
operating activities
|
183,950
|
|
229,456
|
|
406,561
|
|
375,160
|
|
|
|
|
|
|
|
|
INVESTING
ACTIVITIES
|
|
|
|
|
|
|
|
Additions to
property, plant and mine development
|
(192,272)
|
|
(123,263)
|
|
(320,911)
|
|
(223,957)
|
Acquisitions, net of
cash and cash equivalents acquired
|
—
|
|
(5,499)
|
|
—
|
|
(5,499)
|
Net sales (purchases)
of short-term investments
|
2,726
|
|
(540)
|
|
5
|
|
1,695
|
Net proceeds from
sale of available-for-sale securities
|
|
|
|
|
|
|
|
and other
investments
|
6
|
|
6,979
|
|
197
|
|
7,278
|
Purchases of
available-for-sale securities and other
|
|
|
|
|
|
|
|
investments
|
(13,888)
|
|
(327)
|
|
(36,425)
|
|
(9,772)
|
(Increase) decrease
in restricted cash
|
(16)
|
|
(1)
|
|
3
|
|
9
|
Cash used in
investing activities
|
(203,444)
|
|
(122,651)
|
|
(357,131)
|
|
(230,246)
|
|
|
|
|
|
|
|
|
FINANCING
ACTIVITIES
|
|
|
|
|
|
|
|
Dividends
paid
|
(18,769)
|
|
(15,352)
|
|
(38,227)
|
|
(30,198)
|
Repayment of finance
lease obligations
|
(1,466)
|
|
(2,570)
|
|
(3,148)
|
|
(5,084)
|
Proceeds from
long-term debt
|
280,000
|
|
50,000
|
|
280,000
|
|
125,000
|
Repayment of
long-term debt
|
(410,412)
|
|
(275,374)
|
|
(410,412)
|
|
(405,374)
|
Notes
issuance
|
300,000
|
|
350,000
|
|
300,000
|
|
350,000
|
Long-term debt
financing
|
(2,129)
|
|
(2,169)
|
|
(2,129)
|
|
(2,169)
|
Repurchase of common
shares for stock-based
|
|
|
|
|
|
|
|
compensation
plans
|
(302)
|
|
(632)
|
|
(24,540)
|
|
(15,527)
|
Proceeds on exercise
of stock options
|
19,969
|
|
93,003
|
|
30,882
|
|
157,427
|
Common shares
issued
|
2,945
|
|
2,588
|
|
218,981
|
|
23,831
|
Cash provided by
financing activities
|
169,836
|
|
199,494
|
|
351,407
|
|
197,906
|
Effect of exchange
rate changes on cash and
|
|
|
|
|
|
|
|
cash
equivalents
|
407
|
|
(1,143)
|
|
3,125
|
|
932
|
Net increase in
cash and cash equivalents
|
|
|
|
|
|
|
|
during the
period
|
150,749
|
|
305,156
|
|
403,962
|
|
343,752
|
Cash and cash
equivalents, beginning of period
|
793,187
|
|
162,746
|
|
539,974
|
|
124,150
|
Cash and cash
equivalents, end of period
|
$
|
943,936
|
|
$
|
467,902
|
|
$
|
943,936
|
|
$
|
467,902
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL CASH
FLOW INFORMATION
|
|
|
|
|
|
|
|
Interest
paid
|
$
|
31,433
|
|
$
|
24,540
|
|
$
|
38,300
|
|
$
|
33,420
|
Income and mining
taxes paid
|
$
|
38,792
|
|
$
|
13,448
|
|
$
|
69,155
|
|
$
|
66,765
|
AGNICO EAGLE MINES
LIMITED
|
RECONCILIATION OF
NON-GAAP FINANCIAL PERFORMANCE MEASURES
|
(thousands of
United States dollars, except where noted)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Total Production
Costs by Mine
|
|
Three Months
Ended
June 30, 2017
|
|
Three Months
Ended
June 30, 2016
|
|
Six Months
Ended
June 30, 2017
|
|
Six Months
Ended
June 30, 2016
|
(thousands of
United States dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
LaRonde
mine
|
|
$
|
46,641
|
|
$
|
40,500
|
|
$
|
91,006
|
|
$
|
86,354
|
Lapa mine
|
|
11,762
|
|
14,791
|
|
24,649
|
|
27,575
|
Goldex
mine
|
|
14,706
|
|
15,937
|
|
31,571
|
|
31,669
|
Meadowbank
mine
|
|
54,397
|
|
54,761
|
|
108,375
|
|
106,971
|
Canadian Malartic
mine(i)
|
|
52,752
|
|
47,974
|
|
85,253
|
|
88,788
|
Kittila
mine
|
|
36,420
|
|
34,055
|
|
72,339
|
|
70,082
|
Pinos Altos
mine
|
|
28,660
|
|
28,794
|
|
52,392
|
|
52,650
|
Creston Mascota
deposit at Pinos Altos
|
|
7,361
|
|
6,623
|
|
14,339
|
|
12,404
|
La India
mine
|
|
14,942
|
|
12,001
|
|
28,056
|
|
22,916
|
Production costs per
the condensed interim consolidated statement of income
|
|
$
|
267,641
|
|
$
|
255,436
|
|
$
|
507,980
|
|
$
|
499,409
|
|
Reconciliation of
Production Costs to Total Cash Costs per Ounce of Gold Produced
(ii)by Mine and Reconciliation of Production Costs to
Minesite Costs per Tonne(iii) by
Mine
|
(thousands of
United States dollars, except as noted)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LaRonde
Mine
|
|
Three Months
Ended
June 30,
2017
|
|
Three Months
Ended
June 30,
2016
|
|
Six Months
Ended
June 30,
2017
|
|
Six Months
Ended
June 30,
2016
|
Per Ounce of Gold
Produced(ii)
|
|
|
|
|
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
Gold production
(ounces)
|
|
|
|
72,090
|
|
|
|
75,159
|
|
|
|
151,002
|
|
|
|
150,496
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
46,641
|
|
$
|
647
|
|
$
|
40,500
|
|
$
|
539
|
|
$
|
91,006
|
|
$
|
603
|
|
$
|
86,354
|
|
$
|
574
|
|
Inventory and other
adjustments(iv)
|
|
2,839
|
|
39
|
|
12,658
|
|
168
|
|
10,679
|
|
70
|
|
17,277
|
|
115
|
Cash operating costs
(co-product basis)
|
|
$
|
49,480
|
|
$
|
686
|
|
$
|
53,158
|
|
$
|
707
|
|
$
|
101,685
|
|
$
|
673
|
|
$
|
103,631
|
|
$
|
689
|
|
By-product metal
revenues
|
|
(14,727)
|
|
(204)
|
|
(12,369)
|
|
(164)
|
|
(30,312)
|
|
(200)
|
|
(23,015)
|
|
(153)
|
Cash operating costs
(by-product basis)
|
|
$
|
34,753
|
|
$
|
482
|
|
$
|
40,789
|
|
$
|
543
|
|
$
|
71,373
|
|
$
|
473
|
|
$
|
80,616
|
|
$
|
536
|
|
|
|
|
|
|
|
|
|
LaRonde
Mine
|
|
Three Months
Ended
June 30,
2017
|
|
Three Months
Ended
June 30,
2016
|
|
Six Months
Ended
June 30,
2017
|
|
Six Months
Ended
June 30,
2016
|
Per
Tonne(iii)
|
|
|
|
|
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
Tonnes of ore milled
(thousands of tonnes)
|
|
|
|
520
|
|
|
|
569
|
|
|
|
1,079
|
|
|
|
1,147
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
46,641
|
|
$
|
90
|
|
$
|
40,500
|
|
$
|
71
|
|
$
|
91,006
|
|
$
|
84
|
|
$
|
86,354
|
|
$
|
75
|
Production costs
(C$)
|
|
C$
|
61,574
|
|
C$
|
118
|
|
C$
|
56,723
|
|
C$
|
100
|
|
C$
|
120,798
|
|
C$
|
112
|
|
C$
|
117,455
|
|
C$
|
102
|
Inventory and other
adjustments (C$)(v)
|
|
(3,055)
|
|
(5)
|
|
3,565
|
|
6
|
|
(1,559)
|
|
(1)
|
|
2,061
|
|
2
|
Minesite operating
costs (C$)
|
|
C$
|
58,519
|
|
C$
|
113
|
|
C$
|
60,288
|
|
C$
|
106
|
|
C$
|
119,239
|
|
C$
|
111
|
|
C$
|
119,516
|
|
C$
|
104
|
|
|
|
|
|
|
|
|
|
Lapa
Mine
|
|
Three Months
Ended
June 30,
2017
|
|
Three Months
Ended
June 30,
2016
|
|
Six Months
Ended
June 30,
2017
|
|
Six Months
Ended
June 30,
2016
|
Per Ounce of Gold
Produced(ii)
|
|
|
|
|
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
Gold production
(ounces)
|
|
|
|
15,881
|
|
|
|
21,914
|
|
|
|
31,241
|
|
|
|
43,623
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
11,762
|
|
$
|
741
|
|
$
|
14,791
|
|
$
|
675
|
|
$
|
24,649
|
|
$
|
789
|
|
$
|
27,575
|
|
$
|
632
|
|
Inventory and other
adjustments(iv)
|
|
(382)
|
|
(24)
|
|
(375)
|
|
(17)
|
|
(140)
|
|
(4)
|
|
1,352
|
|
31
|
Cash operating costs
(co-product basis)
|
|
$
|
11,380
|
|
$
|
717
|
|
$
|
14,416
|
|
$
|
658
|
|
$
|
24,509
|
|
$
|
785
|
|
$
|
28,927
|
|
$
|
663
|
|
By-product metal
revenues
|
|
(80)
|
|
(5)
|
|
(4)
|
|
—
|
|
(94)
|
|
(4)
|
|
(17)
|
|
—
|
Cash operating costs
(by-product basis)
|
|
$
|
11,300
|
|
$
|
712
|
|
$
|
14,412
|
|
$
|
658
|
|
$
|
24,415
|
|
$
|
781
|
|
$
|
28,910
|
|
$
|
663
|
|
|
|
|
|
|
|
|
|
Lapa
Mine
|
|
Three Months
Ended
June 30,
2017
|
|
Three Months
Ended
June 30,
2016
|
|
Six Months
Ended
June 30,
2017
|
|
Six Months
Ended
June 30,
2016
|
Per
Tonne(iii)
|
|
|
|
|
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
Tonnes of ore milled
(thousands of tonnes)
|
|
|
|
134
|
|
|
|
161
|
|
|
|
264
|
|
|
|
322
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
11,762
|
|
$
|
88
|
|
$
|
14,791
|
|
$
|
92
|
|
$
|
24,649
|
|
$
|
93
|
|
$
|
27,575
|
|
$
|
86
|
Production costs
(C$)
|
|
C$
|
15,790
|
|
C$
|
118
|
|
C$
|
19,206
|
|
C$
|
119
|
|
C$
|
33,049
|
|
C$
|
125
|
|
C$
|
36,722
|
|
C$
|
114
|
Inventory and other
adjustments (C$)(v)
|
|
(537)
|
|
(4)
|
|
(579)
|
|
(3)
|
|
(476)
|
|
(1)
|
|
1,386
|
|
4
|
Minesite operating
costs (C$)
|
|
C$
|
15,253
|
|
C$
|
114
|
|
C$
|
18,627
|
|
C$
|
116
|
|
C$
|
32,573
|
|
C$
|
124
|
|
C$
|
38,108
|
|
C$
|
118
|
|
|
|
|
|
|
|
|
|
Goldex
Mine
|
|
Three Months
Ended
June 30,
2017
|
|
Three Months
Ended
June 30,
2016
|
|
Six Months
Ended
June 30,
2017
|
|
Six Months
Ended
June 30,
2016
|
Per Ounce of Gold
Produced(ii)(vi)
|
|
|
|
|
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
Gold production
(ounces)
|
|
|
|
24,691
|
|
|
|
31,452
|
|
|
|
54,967
|
|
|
|
63,792
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
14,706
|
|
$
|
596
|
|
$
|
15,937
|
|
$
|
507
|
|
$
|
31,571
|
|
$
|
574
|
|
$
|
31,669
|
|
$
|
496
|
|
Inventory and other
adjustments(iv)
|
|
193
|
|
7
|
|
211
|
|
6
|
|
(559)
|
|
(10)
|
|
835
|
|
14
|
Cash operating costs
(co-product basis)
|
|
$
|
14,899
|
|
$
|
603
|
|
$
|
16,148
|
|
$
|
513
|
|
$
|
31,012
|
|
$
|
564
|
|
$
|
32,504
|
|
$
|
510
|
|
By-product metal
revenues
|
|
(7)
|
|
—
|
|
(2)
|
|
—
|
|
(15)
|
|
—
|
|
(8)
|
|
(1)
|
Cash operating costs
(by-product basis)
|
|
$
|
14,892
|
|
$
|
603
|
|
$
|
16,146
|
|
$
|
513
|
|
$
|
30,997
|
|
$
|
564
|
|
$
|
32,496
|
|
$
|
509
|
|
|
|
|
|
|
|
|
|
Goldex
Mine
|
|
Three Months
Ended
June 30,
2017
|
|
Three Months
Ended
June 30,
2016
|
|
Six Months
Ended
June 30,
2017
|
|
Six Months
Ended
June 30,
2016
|
Per
Tonne(iii)(vii)
|
|
|
|
|
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
Tonnes of ore milled
(thousands of tonnes)
|
|
|
|
562
|
|
|
|
658
|
|
|
|
1,146
|
|
|
|
1,294
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
14,706
|
|
$
|
26
|
|
$
|
15,937
|
|
$
|
24
|
|
$
|
31,571
|
|
$
|
28
|
|
$
|
31,669
|
|
$
|
24
|
Production costs
(C$)
|
|
C$
|
19,822
|
|
C$
|
35
|
|
C$
|
20,782
|
|
C$
|
32
|
|
C$
|
42,125
|
|
C$
|
37
|
|
C$
|
42,081
|
|
C$
|
33
|
Inventory and other
adjustments (C$)(v)
|
|
289
|
|
1
|
|
326
|
|
—
|
|
(684)
|
|
(1)
|
|
733
|
|
—
|
Minesite operating
costs (C$)
|
|
C$
|
20,111
|
|
C$
|
36
|
|
C$
|
21,108
|
|
C$
|
32
|
|
C$
|
41,441
|
|
C$
|
36
|
|
C$
|
42,814
|
|
C$
|
33
|
|
|
|
|
|
|
|
|
|
Meadowbank
Mine
|
|
Three Months
Ended
June 30,
2017
|
|
Three Months
Ended
June 30,
2016
|
|
Six Months
Ended
June 30,
2017
|
|
Six Months
Ended
June 30,
2016
|
Per Ounce of Gold
Produced(ii)
|
|
|
|
|
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
Gold production
(ounces)
|
|
|
|
95,289
|
|
|
|
72,402
|
|
|
|
180,659
|
|
|
|
144,713
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
54,397
|
|
$
|
571
|
|
$
|
54,761
|
|
$
|
756
|
|
$
|
108,375
|
|
$
|
600
|
|
$
|
106,971
|
|
$
|
739
|
|
Inventory and other
adjustments(iv)
|
|
92
|
|
1
|
|
3,474
|
|
48
|
|
(2,423)
|
|
(14)
|
|
8,920
|
|
62
|
Cash operating costs
(co-product basis)
|
|
$
|
54,489
|
|
$
|
572
|
|
$
|
58,235
|
|
$
|
804
|
|
$
|
105,952
|
|
$
|
586
|
|
$
|
115,891
|
|
$
|
801
|
|
By-product metal
revenues
|
|
(1,258)
|
|
(13)
|
|
(1,115)
|
|
(15)
|
|
(2,365)
|
|
(13)
|
|
(1,774)
|
|
(12)
|
Cash operating costs
(by-product basis)
|
|
$
|
53,231
|
|
$
|
559
|
|
$
|
57,120
|
|
$
|
789
|
|
$
|
103,587
|
|
$
|
573
|
|
$
|
114,117
|
|
$
|
789
|
|
|
|
|
|
|
|
|
|
Meadowbank
Mine
|
|
Three Months
Ended
June 30,
2017
|
|
Three Months
Ended
June 30,
2016
|
|
Six Months
Ended
June 30,
2017
|
|
Six Months
Ended
June 30,
2016
|
Per
Tonne(iii)
|
|
|
|
|
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
Tonnes of ore milled
(thousands of tonnes)
|
|
|
|
996
|
|
|
|
994
|
|
|
|
1,922
|
|
|
|
1,939
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
54,397
|
|
$
|
55
|
|
$
|
54,761
|
|
$
|
55
|
|
$
|
108,375
|
|
$
|
56
|
|
$
|
106,971
|
|
$
|
55
|
Production costs
(C$)
|
|
C$
|
72,521
|
|
C$
|
73
|
|
C$
|
70,547
|
|
C$
|
71
|
|
C$
|
143,935
|
|
C$
|
75
|
|
C$
|
139,667
|
|
C$
|
72
|
Inventory and other
adjustments (C$)(v)
|
|
247
|
|
—
|
|
1,907
|
|
2
|
|
(2,894)
|
|
(2)
|
|
5,845
|
|
3
|
Minesite operating
costs (C$)
|
|
C$
|
72,768
|
|
C$
|
73
|
|
C$
|
72,454
|
|
C$
|
73
|
|
C$
|
141,041
|
|
C$
|
73
|
|
C$
|
145,512
|
|
C$
|
75
|
|
|
|
|
|
|
|
|
|
Canadian Malartic
Mine(i)
|
|
Three Months
Ended
June 30,
2017
|
|
Three Months
Ended
June 30,
2016
|
|
Six Months
Ended
June 30,
2017
|
|
Six Months
Ended
June 30,
2016
|
Per Ounce of Gold
Produced(ii)
|
|
|
|
|
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
Gold production
(ounces)
|
|
|
|
82,509
|
|
|
|
72,502
|
|
|
|
153,891
|
|
|
|
146,115
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
52,752
|
|
$
|
639
|
|
$
|
47,974
|
|
$
|
662
|
|
$
|
85,253
|
|
$
|
554
|
|
$
|
88,788
|
|
$
|
608
|
|
Inventory and other
adjustments(iv)
|
|
(6,674)
|
|
(81)
|
|
(1,502)
|
|
(21)
|
|
1,889
|
|
12
|
|
(193)
|
|
(2)
|
Cash operating costs
(co-product basis)
|
|
$
|
46,078
|
|
$
|
558
|
|
$
|
46,472
|
|
$
|
641
|
|
$
|
87,142
|
|
$
|
566
|
|
$
|
88,595
|
|
$
|
606
|
|
By-product metal
revenues
|
|
(1,513)
|
|
(18)
|
|
(1,442)
|
|
(20)
|
|
(2,866)
|
|
(18)
|
|
(2,537)
|
|
(17)
|
Cash operating costs
(by-product basis)
|
|
$
|
44,565
|
|
$
|
540
|
|
$
|
45,030
|
|
$
|
621
|
|
$
|
84,276
|
|
$
|
548
|
|
$
|
86,058
|
|
$
|
589
|
|
|
|
|
|
|
|
|
|
Canadian Malartic
Mine(i)
|
|
Three Months
Ended
June 30,
2017
|
|
Three Months
Ended
June 30,
2016
|
|
Six Months
Ended
June 30,
2017
|
|
Six Months
Ended
June 30,
2016
|
Per
Tonne(iii)
|
|
|
|
|
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
Tonnes of ore milled
(thousands of tonnes)
|
|
|
|
2,603
|
|
|
|
2,524
|
|
|
|
5,036
|
|
|
|
4,905
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
52,752
|
|
$
|
20
|
|
$
|
47,974
|
|
$
|
19
|
|
$
|
85,253
|
|
$
|
17
|
|
$
|
88,788
|
|
$
|
18
|
Production costs
(C$)
|
|
C$
|
70,868
|
|
C$
|
27
|
|
C$
|
51,749
|
|
C$
|
21
|
|
C$
|
113,864
|
|
C$
|
23
|
|
C$
|
102,343
|
|
C$
|
21
|
Inventory and other
adjustments (C$)(v)
|
|
(9,261)
|
|
(3)
|
|
7,792
|
|
3
|
|
1,871
|
|
—
|
|
14,743
|
|
3
|
Minesite operating
costs (C$)
|
|
C$
|
61,607
|
|
C$
|
24
|
|
C$
|
59,541
|
|
C$
|
24
|
|
C$
|
115,735
|
|
C$
|
23
|
|
C$
|
117,086
|
|
C$
|
24
|
|
|
|
|
|
|
|
|
|
Kittila
Mine
|
|
Three Months
Ended
June 30,
2017
|
|
Three Months
Ended
June 30,
2016
|
|
Six Months
Ended
June 30,
2017
|
|
Six Months
Ended
June 30,
2016
|
Per Ounce of Gold
Produced(ii)
|
|
|
|
|
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
Gold production
(ounces)
|
|
|
|
47,156
|
|
|
|
46,209
|
|
|
|
98,777
|
|
|
|
94,336
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
36,420
|
|
$
|
772
|
|
$
|
34,055
|
|
$
|
737
|
|
$
|
72,339
|
|
$
|
732
|
|
$
|
70,082
|
|
$
|
743
|
|
Inventory and other
adjustments(iv)
|
|
1,450
|
|
31
|
|
922
|
|
20
|
|
58
|
|
1
|
|
(102)
|
|
(1)
|
Cash operating costs
(co-product basis)
|
|
$
|
37,870
|
|
$
|
803
|
|
$
|
34,977
|
|
$
|
757
|
|
$
|
72,397
|
|
$
|
733
|
|
$
|
69,980
|
|
$
|
742
|
|
By-product metal
revenues
|
|
(40)
|
|
(1)
|
|
(32)
|
|
(1)
|
|
(84)
|
|
(1)
|
|
(79)
|
|
(1)
|
Cash operating costs
(by-product basis)
|
|
$
|
37,830
|
|
$
|
802
|
|
$
|
34,945
|
|
$
|
756
|
|
$
|
72,313
|
|
$
|
732
|
|
$
|
69,901
|
|
$
|
741
|
|
|
|
|
|
|
|
|
|
Kittila
Mine
|
|
Three Months
Ended
June 30,
2017
|
|
Three Months
Ended
June 30,
2016
|
|
Six Months
Ended
June 30,
2017
|
|
Six Months
Ended
June 30,
2016
|
Per
Tonne(iii)
|
|
|
|
|
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
Tonnes of ore milled
(thousands of tonnes)
|
|
|
|
439
|
|
|
|
389
|
|
|
|
862
|
|
|
|
821
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
36,420
|
|
$
|
83
|
|
$
|
34,055
|
|
$
|
88
|
|
$
|
72,339
|
|
$
|
84
|
|
$
|
70,082
|
|
$
|
85
|
Production costs
(€)
|
|
€
|
32,748
|
|
€
|
75
|
|
€
|
30,761
|
|
€
|
79
|
|
€
|
65,852
|
|
€
|
76
|
|
€
|
62,964
|
|
€
|
77
|
Inventory and other
adjustments (€)(v)
|
|
1,118
|
|
2
|
|
620
|
|
2
|
|
(222)
|
|
—
|
|
(474)
|
|
(1)
|
Minesite operating
costs (€)
|
|
€
|
33,866
|
|
€
|
77
|
|
€
|
31,381
|
|
€
|
81
|
|
€
|
65,630
|
|
€
|
76
|
|
€
|
62,490
|
|
€
|
76
|
|
|
|
|
|
|
|
|
|
Pinos Altos
Mine
|
|
Three Months
Ended
June 30,
2017
|
|
Three Months
Ended
June 30,
2016
|
|
Six Months
Ended
June 30,
2017
|
|
Six Months
Ended
June 30,
2016
|
Per Ounce of Gold
Produced(ii)
|
|
|
|
|
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
Gold production
(ounces)
|
|
|
|
48,196
|
|
|
|
49,458
|
|
|
|
93,556
|
|
|
|
97,575
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
28,660
|
|
$
|
595
|
|
$
|
28,794
|
|
$
|
582
|
|
$
|
52,392
|
|
$
|
560
|
|
$
|
52,650
|
|
$
|
540
|
|
Inventory and other
adjustments(iv)
|
|
(8)
|
|
(1)
|
|
16
|
|
1
|
|
3,203
|
|
34
|
|
1,651
|
|
17
|
Cash operating costs
(co-product basis)
|
|
$
|
28,652
|
|
$
|
594
|
|
$
|
28,810
|
|
$
|
583
|
|
$
|
55,595
|
|
$
|
594
|
|
$
|
54,301
|
|
$
|
557
|
|
By-product metal
revenues
|
|
(10,663)
|
|
(221)
|
|
(11,577)
|
|
(235)
|
|
(21,358)
|
|
(228)
|
|
(20,549)
|
|
(211)
|
Cash operating costs
(by-product basis)
|
|
$
|
17,989
|
|
$
|
373
|
|
$
|
17,233
|
|
$
|
348
|
|
$
|
34,237
|
|
$
|
366
|
|
$
|
33,752
|
|
$
|
346
|
|
|
|
|
|
|
|
|
|
Pinos Altos
Mine
|
|
Three Months
Ended
June 30,
2017
|
|
Three Months
Ended
June 30,
2016
|
|
Six Months
Ended
June 30,
2017
|
|
Six Months
Ended
June 30,
2016
|
Per
Tonne(iii)
|
|
|
|
|
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
Tonnes of ore
processed (thousands of tonnes)
|
|
|
|
620
|
|
|
|
605
|
|
|
|
1,173
|
|
|
|
1,107
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
28,660
|
|
$
|
46
|
|
$
|
28,794
|
|
$
|
48
|
|
$
|
52,392
|
|
$
|
45
|
|
$
|
52,650
|
|
$
|
48
|
Inventory and other
adjustments(v)
|
|
(70)
|
|
—
|
|
(416)
|
|
(1)
|
|
2,771
|
|
2
|
|
880
|
|
—
|
Minesite operating
costs
|
|
$
|
28,590
|
|
$
|
46
|
|
$
|
28,378
|
|
$
|
47
|
|
$
|
55,163
|
|
$
|
47
|
|
$
|
53,530
|
|
$
|
48
|
|
|
|
|
|
|
|
|
|
Creston Mascota
deposit at Pinos Altos
|
|
Three Months
Ended
June 30,
2017
|
|
Three Months
Ended
June 30,
2016
|
|
Six Months
Ended
June 30,
2017
|
|
Six Months
Ended
June 30,
2016
|
Per Ounce of Gold
Produced(ii)
|
|
|
|
|
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
Gold production
(ounces)
|
|
|
|
12,074
|
|
|
|
12,398
|
|
|
|
23,318
|
|
|
|
23,949
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
7,361
|
|
$
|
610
|
|
$
|
6,623
|
|
$
|
534
|
|
$
|
14,339
|
|
$
|
615
|
|
$
|
12,404
|
|
$
|
518
|
|
Inventory and other
adjustments(iv)
|
|
466
|
|
38
|
|
92
|
|
8
|
|
435
|
|
19
|
|
402
|
|
17
|
Cash operating costs
(co-product basis)
|
|
$
|
7,827
|
|
$
|
648
|
|
$
|
6,715
|
|
$
|
542
|
|
$
|
14,774
|
|
$
|
634
|
|
$
|
12,806
|
|
$
|
535
|
|
By-product metal
revenues
|
|
(1,186)
|
|
(98)
|
|
(898)
|
|
(73)
|
|
(2,230)
|
|
(96)
|
|
(1,680)
|
|
(70)
|
Cash operating costs
(by-product basis)
|
|
$
|
6,641
|
|
$
|
550
|
|
$
|
5,817
|
|
$
|
469
|
|
$
|
12,544
|
|
$
|
538
|
|
$
|
11,126
|
|
$
|
465
|
|
|
|
|
|
|
|
|
|
Creston Mascota
deposit at Pinos Altos
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
Six Months
Ended
|
Per
Tonne(iii)
|
|
June 30,
2017
|
|
June 30,
2016
|
|
June 30,
2017
|
|
June 30,
2016
|
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
Tonnes of ore
processed (thousands of tonnes)
|
|
|
|
596
|
|
|
|
573
|
|
|
|
1,120
|
|
|
|
1,089
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
7,361
|
|
$
|
12
|
|
$
|
6,623
|
|
$
|
12
|
|
$
|
14,339
|
|
$
|
13
|
|
$
|
12,404
|
|
$
|
11
|
Inventory and other
adjustments(v)
|
|
378
|
|
1
|
|
31
|
|
—
|
|
283
|
|
—
|
|
226
|
|
1
|
Minesite operating
costs
|
|
$
|
7,739
|
|
$
|
13
|
|
$
|
6,654
|
|
$
|
12
|
|
$
|
14,622
|
|
$
|
13
|
|
$
|
12,630
|
|
$
|
12
|
|
|
|
|
|
|
|
|
|
La India
Mine
|
|
Three Months
Ended
June 30,
2017
|
|
Three Months
Ended
June 30,
2016
|
|
Six Months
Ended
June 30,
2017
|
|
Six Months
Ended
June 30,
2016
|
Per Ounce of Gold
Produced(ii)
|
|
|
|
|
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
Gold production
(ounces)
|
|
|
|
24,211
|
|
|
|
27,438
|
|
|
|
50,507
|
|
|
|
55,669
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
14,942
|
|
$
|
617
|
|
$
|
12,001
|
|
$
|
437
|
|
$
|
28,056
|
|
$
|
555
|
|
$
|
22,916
|
|
$
|
412
|
|
Inventory and other
adjustments(iv)
|
|
(313)
|
|
(13)
|
|
361
|
|
14
|
|
373
|
|
8
|
|
1,415
|
|
25
|
Cash operating costs
(co-product basis)
|
|
$
|
14,629
|
|
$
|
604
|
|
$
|
12,362
|
|
$
|
451
|
|
$
|
28,429
|
|
$
|
563
|
|
$
|
24,331
|
|
$
|
437
|
|
By-product metal
revenues
|
|
(1,268)
|
|
(52)
|
|
(1,907)
|
|
(70)
|
|
(3,547)
|
|
(70)
|
|
(3,703)
|
|
(66)
|
Cash operating costs
(by-product basis)
|
|
$
|
13,361
|
|
$
|
552
|
|
$
|
10,455
|
|
$
|
381
|
|
$
|
24,882
|
|
$
|
493
|
|
$
|
20,628
|
|
$
|
371
|
|
|
|
|
|
|
|
|
|
La India
Mine
|
|
Three Months
Ended
June 30,
2017
|
|
Three Months
Ended
June 30,
2016
|
|
Six Months
Ended
June 30,
2017
|
|
Six Months
Ended
June 30,
2016
|
Per
Tonne(iii)
|
|
|
|
|
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
Tonnes of ore
processed (thousands of tonnes)
|
|
|
|
1,329
|
|
|
|
1,535
|
|
|
|
2,731
|
|
|
|
2,931
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
14,942
|
|
$
|
11
|
|
$
|
12,001
|
|
$
|
8
|
|
$
|
28,056
|
|
$
|
10
|
|
$
|
22,916
|
|
$
|
8
|
Inventory and other
adjustments(v)
|
|
(687)
|
|
—
|
|
(1)
|
|
—
|
|
(318)
|
|
—
|
|
818
|
|
—
|
Minesite operating
costs
|
|
$
|
14,255
|
|
$
|
11
|
|
$
|
12,000
|
|
$
|
8
|
|
$
|
27,738
|
|
$
|
10
|
|
$
|
23,734
|
|
$
|
8
|
Notes:
|
(i) On June 16, 2014,
Agnico Eagle and Yamana jointly acquired 100% of Osisko by way of
the Osisko Arrangement. As a result of the Osisko
Arrangement, Agnico Eagle and Yamana each indirectly own 50% of
Osisko (now Canadian Malartic Corporation) and Canadian Malartic
GP, which now holds the Canadian Malartic mine. The
information set out in this table reflects the Company's 50%
interest in the Canadian Malartic mine since the date of
acquisition.
|
(ii) Total cash costs
per ounce of gold produced is not a recognized measure under IFRS
and this data may not be comparable to data reported by other gold
producers. 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 (without deducting
by-product metal revenues). Total cash costs per ounce of gold
produced on a by-product basis is calculated by adjusting
production costs as recorded in the condensed interim consolidated
statement of income for by-product metal revenues, inventory
production costs, smelting, refining and marketing charges and
other adjustments, and then dividing by the number of ounces of
gold produced. Total cash costs per ounce of gold produced on a
co-product basis is calculated in the same manner as total cash
costs per ounce of gold produced on a by-product basis except that
no adjustment for by-product metal revenues is made. 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 Company believes that
these generally accepted industry measures provide a realistic
indication of operating performance and provide useful comparison
points between periods. 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 these measures 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. Management is
aware that these per ounce measures of performance can be affected
by fluctuations in exchange rates and, in the case of total cash
costs of gold produced on a by-product basis, by-product metal
prices. Management compensates for these inherent limitations by
using these measures in conjunction with minesite costs per tonne
as well as other data prepared in accordance with IFRS. Management
also performs sensitivity analyses in order to quantify the effects
of fluctuating metal prices and exchange rates.
|
(iii) Minesite costs
per tonne is not a recognized measure under IFRS and this data may
not be comparable to data reported by other gold producers. This
measure is calculated by adjusting production costs as shown in the
condensed interim consolidated statement of income for inventory
production costs, and then dividing by tonnes of ore milled. As the
total cash costs per ounce of gold produced measure can be affected
by fluctuations in by-product metal prices and exchange rates,
management believes that the minesite costs per tonne measure
provides additional information regarding the performance of mining
operations, eliminating the impact of varying production levels.
Management also uses this measure to determine the economic
viability of mining blocks. As each mining block is evaluated based
on the net realizable value of each tonne mined, in order to be
economically viable the estimated revenue on a per tonne basis must
be in excess of the minesite costs per tonne. Management is aware
that this per tonne measure of performance can be impacted by
fluctuations in processing levels and compensates for this inherent
limitation by using this measure in conjunction with production
costs prepared in accordance with IFRS.
|
(iv) Under the
Company's revenue recognition policy, revenue is recognized when
legal title and risk is transferred. As total cash costs per ounce
of gold produced are calculated on a production basis, an inventory
adjustment is made to reflect the portion of production not yet
recognized as revenue. Other adjustments include the addition of
smelting, refining and marketing charges to production
costs.
|
(v) This inventory
and other adjustment reflects production costs associated with the
portion of production still in inventory.
|
(vi) The Goldex
mine's per ounce of gold produced calculations exclude 5,646 and
8,041 ounces for the three and six months ended June 30, 2017 of
payable gold production and the associated costs related to the
Deep 1 Zone which were produced prior to the achievement of
commercial production.
|
(vii) The Goldex
mine's per tonne calculations exclude 117,784 and 175,514 tonnes
for the three and six months ended June 30, 2017 and the associated
costs related to the Deep 1 Zone which were processed prior to the
achievement of commercial production.
|
Reconciliation of
Production Costs to All-in Sustaining Costs per Ounce of
Gold Produced
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(United States dollars per ounce of gold
produced, except where noted)
|
|
Three Months
Ended
June 30, 2017
|
|
Three Months
Ended
June 30, 2016
|
|
Six Months
Ended
June 30, 2017
|
|
Six Months
Ended
June 30, 2016
|
Production costs per
the condensed interim
|
|
|
|
|
|
|
|
|
|
|
|
|
|
consolidated
statement of income
(thousands of United States dollars)
|
|
$
|
267,641
|
|
$
|
255,436
|
|
$
|
507,980
|
|
$
|
499,409
|
Adjusted gold
production (ounces)(i)
|
|
422,097
|
|
408,932
|
|
837,918
|
|
820,268
|
Production costs per
ounce of adjusted gold production(i)
|
|
$
|
634
|
|
$
|
625
|
|
$
|
606
|
|
$
|
609
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory and other
adjustments(ii)
|
|
(6)
|
|
(38)
|
|
16
|
|
38
|
Total cash costs per
ounce of gold produced (co-product
basis)(iii)
|
|
$
|
628
|
|
$
|
663
|
|
$
|
622
|
|
$
|
647
|
By-product metal
revenues
|
|
(72)
|
|
(71)
|
|
(74)
|
|
(65)
|
Total cash costs per
ounce of gold produced (by-product
basis)(iii)
|
|
$
|
556
|
|
$
|
592
|
|
$
|
548
|
|
$
|
582
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sustaining capital
expenditures (including capitalized exploration)
|
|
160
|
|
193
|
|
143
|
|
177
|
General and
administrative expenses (including stock options)
|
|
66
|
|
60
|
|
70
|
|
60
|
Non-cash reclamation
provision and other
|
|
3
|
|
3
|
|
3
|
|
3
|
All-in sustaining
costs per ounce of gold produced (by-product basis)
|
|
$
|
785
|
|
$
|
848
|
|
$
|
764
|
|
$
|
822
|
By-product metal
revenues
|
|
72
|
|
71
|
|
74
|
|
65
|
All-in sustaining
costs per ounce of gold produced (co-product basis)
|
|
$
|
857
|
|
$
|
919
|
|
$
|
838
|
|
$
|
887
|
Notes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(i) The Goldex mine's
per ounce of gold produced calculations exclude 5,646 and 8,041
ounces for the three and six months ended June 30, 2017 of payable
gold production and the associated costs related to the Deep 1 Zone
which were produced prior to the achievement of commercial
production.
|
(ii) Under the
Company's revenue recognition policy, revenue is recognized when
legal title and risk is transferred. As total cash costs per ounce
of gold produced are calculated on a production basis, this
inventory adjustment reflects the sales margin on the portion of
production not yet recognized as revenue.
|
(iii) Total cash
costs per ounce of gold produced is not a recognized measure under
IFRS and this data may not be comparable to data presented by other
gold producers. Total cash costs per ounce of gold produced is
presented on both a by-product basis (deducting by-product metal
revenues from production costs) and co-product basis (without
deducting by-product metal revenues). Total cash costs per ounce of
gold produced on a by-product basis is calculated by adjusting
production costs as recorded in the condensed interim consolidated
statement of income for by-product metal revenues, inventory
production costs, smelting, refining and marketing charges and
other adjustments, and then dividing by the number of ounces of
gold produced. Total cash costs per ounce of gold produced on a
co-product basis is calculated in the same manner as total cash
costs per ounce of gold produced on a by-product basis except that
no adjustment for by-product metal revenues is made. 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 Company believes that
these generally accepted industry measures provide a realistic
indication of operating performance and provide useful comparison
points between periods. 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 these measures 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. Management is
aware that these per ounce measures of performance can be affected
by fluctuations in exchange rates and, in the case of total cash
costs of gold produced on a by-product basis, by-product metal
prices. Management compensates for these inherent limitations by
using these measures in conjunction with minesite costs per tonne
as well as other data prepared in accordance with IFRS. Management
also performs sensitivity analyses in order to quantify the effects
of fluctuating metal prices and exchange rates.
|
SOURCE Agnico Eagle Mines Limited