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2011 04-28 q1-2011 results final
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2011 04-28 q1-2011 results final

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  • 1. Agnico-Eagle Mines Limited First Quarter 2011 Results – April 2011
  • 2. Forward Looking StatementsThe information in this document has been prepared as at April 28, 2011. Certain statements contained in this document constitute“forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and forwardlooking information under the provisions of Canadian provincial securities laws. When used in this document, the words “anticipate”,“expect”, “estimate”, “forecast”, “will”, “planned”, and similar expressions are intended to identify forward-looking statements orinformation.Such statements include without limitation: statements regarding timing and amounts of capital expenditures and other assumptions;estimates of future reserves, resources, mineral production, optimization efforts and sales; estimates of mine life; estimates of futureinternal rates of return, mining costs, cash costs, minesite costs and other expenses; estimates of future capital expenditures andother cash needs, and expectations as to the funding thereof; statements and information as to the projected development of certainore deposits, including estimates of exploration, development and production and other capital costs, and estimates of the timing ofsuch exploration, development and production or decisions with respect to such exploration, development and production; estimates ofreserves and resources, and statements and information regarding anticipated future exploration; the anticipated timing of events withrespect to the Companys minesites and statements and information regarding the sufficiency of the Companys cash resources. Suchstatements and information reflect the Companys views as at the date of this document and are subject to certain risks, uncertaintiesand assumptions, and undue reliance should not be placed on such statements and information. Many factors, known and unknowncould cause the actual results to be materially different from those expressed or implied by such forward looking statements andinformation. 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, capital expenditures, and othercosts; currency fluctuations; financing of additional capital requirements; cost of exploration and development programs; mining risks;community protests; risks associated with foreign operations; governmental and environmental regulation; the volatility of theCompanys stock price; and risks associated with the Companys byproduct metal derivative strategies. For a more detaileddiscussion 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 document, see the Companys Annual Report on Form 20-F for the year ended December 31,2010, as well as the Companys other filings with the Canadian Securities Administrators and the U.S. Securities and ExchangeCommission. The Company does not intend, and does not assume any obligation, to update these forward-looking statements andinformation. Marc Legault, a Qualified Person and the Company’s Vice-President, Project Development, reviewed the technicalinformation disclosed herein. For a detailed breakdown of the Company’s reserve and resource position see the February 16, 2011press release on the Company’s website. That press release also lists the Qualified Persons for each project. 2
  • 3. Note To Investors Regarding the use of non-GAAP financial measuresThis document presents estimates of future "total cash cost per ounce" and "minesite cost per tonne" that are not recognizedmeasures under United States generally accepted accounting principles ("US GAAP"). This data may not be comparable to datapresented by other gold producers. These future estimates are based upon the total cash costs per ounce and minesite costs pertonne that the Company expects to incur to mine gold at the applicable projects and do not include production costs attributable toaccretion expense and other asset retirement costs, which will vary over time as each project is developed and mined. It is thereforenot practicable to reconcile these forward-looking non-GAAP financial measures to the most comparable GAAP measure. Areconciliation of the Companys total cash cost per ounce and minesite cost per tonne to the most comparable financial measurescalculated and presented in accordance with US GAAP for the Companys historical results of operations is set forth in the notes to thefinancial statements included in the Companys Annual Information Form and Annual Report on Form 20-F, for the year endedDecember 31, 2010, as well as the Companys other filings with the Canadian Securities Administrators and the SEC. LaRonde Goldex Kittila Lapa Pinos Altos Meadowbank 3
  • 4. Corporate Strategy Build shareholder value by increasing PER SHARE metrics■ Grow gold reserves■ Increase gold production■ Acquire small, think big■ Be a low-cost leader■ Maintain a solid financial profileFor many years, we have adhered to a consistent, low-riskstrategy for strengthening our gold mining business andcreating shareholder value. 4
  • 5. The Investment Case For AEM Uniquely positioned to outperform the competition■ AEM uniquely offers gold investors exposure to important investment objectives Junior Senior Investment Gold Explorers / Gold Objectives ETF Developers Operators AEM Yield × ×   Stable, De-risked Leverage To Gold Price  ×    Meaningful Exploration & Expansion Upside on a PER SHARE basis ×  × 5
  • 6. Investment Highlights Increasing leverage to gold Measured, Indicated and Inferred Gold Reserves (oz) Payable Gold Production (oz) Resources (oz) Per 1,000 Shares Per 1,000 Shares Per 1,000 Shares120 130 8100 6 80 60 110 4 40 2 20 0 90 0 06 07 08 09 10 06 07 08 09 10 06 07 08 09 10 Dividends Per Share Share Price vs. Gold Price & Gold Index$0.7 350% 0.64$0.6 300% 250%$0.5 200%$0.4 150%$0.3 100% 0.18 0.18 0.18$0.2 0.12 50%$0.1 0.03 0%$0.0 -50% 06 07 08 09 10 11 05 06 07 08 09 10 AEM Gold XAU 6
  • 7. Strong Financial Position Production growth drives strong earnings and cash flows 2011 2010 Q1 Q1 2010Revenues frommining operations $412.1 $237.6 $1,422.5(millions)Earnings $45.3 $22.3 $332.1(millions)Earnings per share $0.27 $0.14 $2.05(basic)Cash provided byoperating activities $171.0 $74.5 $483.5(millions) 7
  • 8. Operating Results Growing, diversified multi-asset gold producerAll $ amounts are in US$, 2011 2010unless otherwise indicated 2011E 2010 2011E Revenue by Mine Q1 Q1Gold 252 188 1,080 – 1,150 988(ounces in thousands)Silver 1,099 1,099 6,140 5,305(ounces in thousands) Meadow LaRonde bank 25% 24%Zinc 11,941 14,224 71,800 62,544(tonnes) Pinos Goldex Altos 13% 18%Copper 817 1,052 4,386 4,224(tonnes) Lapa Kittila 9% 11%Total cash $531 $441 $445 – $495 $451costs ($/oz) 8
  • 9. Strong Financial Position Next phase of growth fully fundedAll amounts are in US$, Mar. 31unless otherwise indicated 2011Cash and cash equivalents $114.8(millions)Long term debt $600.0(millions)Available credit facilities $1.2BCommon shares outstanding 169.0(millions)Common shares, fully diluted 186.7(millions) 9
  • 10. Grow Gold Reserves Reserves increased 545% since 2001. Shares outstanding up 148%. ■ Targeting more than 22 million oz at year end 2011 ■ 2011 exploration budget up 30% to record $145 million ■ Deposits also contain an additional 6.4 million ounces of indicated gold resources and 9.8 million ounces of inferred resource* Gold reserves* (millions of ounces) 21.3 22.0+ 22 20 18.4 18.1 18 16.7 16 14 12.4 12 10.4 10 7.9 7.9 8 6 4.0 4 3.3 2 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011E* See attached reserve and resource tables 10
  • 11. Grow Gold Reserves Per Share AEM is among the top 3 gold equities in reserves per share Proven and Probable Reserves per 1,000 Shares250200 NEM150 ABX AEM 126100 117 117 117 106 103 93 9250 48 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 11
  • 12. Targeting 1.5 million oz by 2014, a 50% increase over 2010 Growth fully funded from operating cash flows Payable Gold Production Estimates (ounces)1,600,0001,500,0001,400,0001,300,0001,200,0001,100,0001,000,000 900,000 800,000 2010 2011E 2012E 2013E 2014E Production growth for 2015 and beyond expected to include: Kittila expansion, Meliadine, Pinos Altos mill and satellite zones 12
  • 13. Growing Production Per Share AEM is among the top 3 gold equities in production per share Gold Production (Oz per 1,000 Shares)1412 NEM10 8 ABX 6 AEM 5.9 4 2 3.1 2.0 1.8 1.6 0 2006 2007 2008 2009 2010 13
  • 14. Acquire Small, Think Big Established track record of adding value via quality acquisitions and explorationTransaction Date Purchase Reserve Resource Purchase Oz Added Total Exploration Time to Price (Net Then Then Cost per Since Exploration Cost per oz Drill, Permit of Cash) oz Acquisition Investment & BuildComaplex – Apr +1.7 Moz $668 M nil 5.0 Moz $134 $9.9 M ~$6/oz tbdMeliadine 10 (+34%)Cumberland – Feb +1.9 Moz $480 M 2.9 Moz 1.1 Moz $120 $44.3 M ~$23/oz 3 yrsMeadowbank 07 (+48%) Mar +3.0 MozPinos Altos $67 M nil 2.1 Moz $32 $77.8 M ~$26/oz 3.5 yrs 06 (+143%)Riddarhyttan – May +4.2 Moz $145 M nil 2.8 Moz $52 $83.4 M ~20/oz 4 yrsKittila 05 (150%) 10.8 MozTotal $1.4B 2.9 Moz 11 Moz $98 $215 M ~$20/oz (78%) 14
  • 15. Kittila – Focused Exploration Builds Long Term Value 15
  • 16. Be A Low-Cost Leader Optimization expected to drive unit costs down 2011E Global Cash Cost and Production Curve $1,000/oz $800/oz Meadowbank, $700/oz 2010 World Cash Cost Avg - $557/oz $600/oz Kittila, $548/oz Lapa, $518/oz $400/oz Goldex, $349/oz Pinos Altos, $406/oz $200/oz $0/oz LaRonde, $54/oz -$200/oz -$400/oz 0% 25% 50% 75% 100%Source: GFMS, TD Newcrest 16
  • 17. Capital Expenditure Estimates Increasing net free cash flow as production increases and capex decreases $1,200,000 Approximate Average EBITDA* $1,000,000 $800,000 USD $000s $600,000 Illustrative Ongoing Re-Investment $400,000 $200,000 $0 2007A 2008A 2009A 2010A 2011E 2012E 2013E 2014E Actual Estimate* Approximate EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) estimate of average for illustrative purposes using $1350/oz gold, $35/oz silver, $2350/t zinc, C$0.99/USD, 1.40USD/€ 17
  • 18. Among Industry Leaders in Cash Generation Per Share Cash Flow Per Share $10 2009 2010E 2011E 2012E $9 $8 $7 $6 $5 $4 $3 $2 $1 2011E 2012E 2009 2010 $0 Newmont Barrick Agnico-Eagle Goldcorp IAMGold Kinross Yamana EldoradoCommodity assumptions: Au – (2011: $1423/oz, 2012: 1463/oz); Ag – (2011: $32.78/oz, 2012: 35.58/oz)Source: Merrill Lynch, April18/2011 18
  • 19. Upcoming EventsQ2 – 2011■ Investor tours of Kittila, Pinos Altos, Meadowbank and Meliadine■ Exploration updateQ3 – 2011■ Production ramp up with additional crushing capacity at Meadowbank■ Exploration update and new Meliadine resourceQ4 – 2011■ Complete Kittila expansion study■ Dividend Announcement■ Exploration update 19
  • 20. Operations &Exploration Update
  • 21. LaRonde – Canada Increasing gold output in 2012■ 2011 ■ Estimated production of 157,000oz Au at total cash costs of $54/oz■ 2012-2015 ■ Estimated average annual production of 290,000 oz Au at total cash costs of $381/oz■ Exploration Focus ■ Additional potential at depth, to the East and to the West ■ Expand and convert resource on Zone 5 ■ Defining a gold resource at Ellison (2 km west of LaRonde)Gold reserves (m oz) 4.8Average gold reserve grade (g/t) 4.3Indicated resource (m oz) 0.4Inferred resource (m oz) 1.4Est. LOM (years) 13Estimated average LOM production (k oz/yr) 3242011 exploration budget (LaRonde & regional) $11M 21 21
  • 22. Bousquet – LaRonde Gold Trend – Ellison TargetEstablished mining camp still has potential to grow 22
  • 23. Goldex – Canada Strong free cash flow generator■ 2011 ■ Estimated production of 184,000oz Au at total cash costs of $349/oz■ 2012-2015 ■ Estimated average annual production of 179,000oz Au at total cash costs of $344/oz■ Exploration Focus ■ Resource definition and expansion at D zone at depth, exploration to west, east and at depth ■ Potential to add reserves and increase mine lifeGold reserves (m oz) 1.6Average reserve grade (g/t) 1.8Indicated resource (m oz) 0.5Inferred resource (m oz) 1.4Est. LOM (years) 8Estimated average production (k oz/yr) 1642011 exploration budget $6M 23 23
  • 24. Goldex - Composite Longitudinal Section 76-011 1.64 g/t Au / 165.0 m 73-414 1.77 g/t Au / 108 m 76-012 1.70 g/t Au / 192.0 m 76-013 76-014 2.47 g/t Au / 240.0 m 2.17 g/t Au / 192.00 m 24
  • 25. Lapa – Canada Steady state mine with good tonnage and cost performance■ 2011 ■ Estimated production of 125,000oz Au at total cash costs of $518/oz■ 2012-2014 ■ Estimated average annual production of 117,000oz Au at total cash costs of $535/oz■ Exploration Focus ■ Extension of underground exploration drift to provide access to drill targets to extend mine lifeGold reserves (m oz) 0.7Average reserve grade (g/t) 7.4Indicated resource (m oz) 0.2Inferred resource (m oz) 0.1Est. LOM (years) 4Estimated average production (k oz/yr) 1192011 exploration budget $6M 25 25
  • 26. Lapa – Composite Longitudinal Section LA11-98-28 8.9 g/t Au / 2.8 m LA11-98-25 15.5 g/t Au / 2.8 m LA11-98-23 23.5 g/t Au / 2.8 m LA10-98-19 LA11-98-40 12.8 g/t Au / 2.8 m 13.5 g/t Au / 2.8 m 26
  • 27. Kittila – Finland Record production in Q1/11; Focus on cost reduction■ 2011 ■ Estimated production of 150,000oz Au at total cash costs of $548/oz ■ Expansion study expected to be completed Q4 2011; Targeting 50% increase in production rate■ 2012-2015 ■ Estimated average annual production of 173,000oz Au at total cash costs of $501/oz■ Exploration Focus ■ Resource conversion, expansion below Suuri and Roura, and along strikeGold reserves (m oz) 4.9Average reserve grade (g/t) 4.6Indicated resource (m oz) 1.2Inferred resource (m oz) 0.7Est. LOM (years) 22Estimated average production (k oz/yr) 1462011 exploration budget $16M 27 27
  • 28. Kittila – Composite Longitudinal SectionDeposit remains open at depth and along strike ROU10035 4.78 g/t Au / 3.8 m ROU10036C 4.10 g/t Au / 6.8 m 5.08 g/t Au / 4.2 m ROU10036B 5.97 g/t Au / 5.9 m ROU10037 9.50 g/t Au / 6.0 m 28
  • 29. Pinos Altos – Mexico Operating costs declining as start-up phase complete■ 2011 ■ Estimated production of 199,000oz Au at total cash costs of $406/oz■ 2012-2015 ■ Estimated average annual production of 230,000oz Au at total cash costs of $334/oz ■ Studying underground expansion■ Exploration Focus ■ Potential to develop satellite depositsGold reserves (m oz) 3.3Average gold reserve grade (g/t) 2.3Indicated resource (m oz) 0.8Inferred resource (m oz) 0.9Est. LOM (years) 16Estimated average production (k oz/yr) 1872011 exploration budget $2M 29 29
  • 30. Pinos Altos Composite Longitudinal Section 30
  • 31. Meadowbank – Canada Newest mine – largest gold producer■ 2011 ■ Estimated production of 310,000oz Au at total cash costs of approximately $700/oz ■ Secondary crushing plant expected to be commissioned in Q3■ 2012-2015 ■ Estimated average annual production of 399,000oz Au at total cash costs of $511/oz■ Exploration Focus ■ Focus on resource conversion and expansion of Vault, Goose South and PortageGold reserves (m oz) 3.5Average reserve grade (g/t) 3.2Measured & Indicated resource (m oz) 1.4Inferred resource (m oz) 0.7Est. LOM (years) 10Estimated average production (k oz/yr) 2972011 exploration budget $7M 31 31
  • 32. Meadowbank Regional Geology MapFocus on resource conversion and expansion of Vault deposit PDF Vault Portage Goose Island Goose South 32
  • 33. Meliadine – Canada Fast growing gold reserve and resource■ Initial Gold Reserve ■ 2.6 million ounces from 9.5 million tonnes @ 8.5 g/t■ 2011 Exploration budget ■ $65 million to be spent, including 90,000m of drilling ■ Potential to accelerate underground development to test deposit at depth■ Production decision expected in 2013Gold reserves (m oz) 2.6Average reserve grade (g/t) 8.5Indicated resource (m oz) 1.5Inferred resource (m oz) 2.62011 exploration budget $65M 33 33
  • 34. Meliadine Project - Local Geology Map100% ownership of 80km greenstone belt North trend 34
  • 35. Meliadine Project – Wesmeg Composite Longitudinal Section Growing, near-surface gold deposit M11-1004 M11-10084.78g/t Au / 13.5 m 2.2 g/t Au / 3.0 m M11-10213.79 g/t Au / 4.0 m5.84 g/t Au / 4.2 m M11-1014 M11-1010 M11-1013 8.17 g/t Au / 5.4 m 5.89 g/t Au / 3.9 m 3.1 g/t Au / 6.7 m 35
  • 36. Meliadine Project - Tiriganiaq Longitudinal SectionHigh grade gold deposit remains open for expansion 36
  • 37. Appendix 37
  • 38. Operating Metrics LaRonde LaRonde - Ore milled (000 tonnes) Steady state producer LaRonde - Minesite costs per tonne (C$)8,000tpd $120/t7,500tpd $100/t7,000tpd $80/t6,500tpd6,000tpd $60/t5,500tpd $40/t5,000tpd $20/t4,500tpd4,000tpd $0/t Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Goldex Lapa Strong throughput keeps unit costs low Consistently exceeding design throughput9,000tpd $35/t 1,800tpd $160/t8,000tpd 1,600tpd $140/t $30/t7,000tpd 1,400tpd $120/t $25/t6,000tpd 1,200tpd $100/t5,000tpd $20/t 1,000tpd $80/t4,000tpd $15/t 800tpd $60/t3,000tpd 600tpd $10/t 400tpd $40/t2,000tpd $5/t 200tpd $20/t1,000tpd 0tpd $0/t 0tpd $0/t Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Goldex - Ore milled (000 tonnes) Lapa - Ore milled (000 tonnes) Goldex - Minesite costs per tonne (C$) Lapa - Minesite costs per tonne (C$) 38
  • 39. Operating Metrics Kittila Kittila - Ore milled(000 tonnes) Mill process stabilizing Kittila - Minesite costs per tonne (EUR)3,500tpd €90/t3,000tpd €80/t €70/t2,500tpd €60/t2,000tpd €50/t1,500tpd €40/t €30/t1,000tpd €20/t 500tpd €10/t 0tpd €0/t Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Pinos Altos Meadowbank Additional tailings filters increased mill capacity Design throughput expected by Q3, 20115,000tpd $60/t 8,000tpd $180/t4,500tpd $160/t 7,000tpd $50/t4,000tpd 6,000tpd $140/t3,500tpd $40/t $120/t3,000tpd 5,000tpd $100/t2,500tpd $30/t 4,000tpd $80/t2,000tpd 3,000tpd $20/t $60/t1,500tpd 2,000tpd $40/t1,000tpd $10/t 500tpd 1,000tpd $20/t 0tpd $0/t 0tpd $0/t Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Pinos Altos - Ore milled (000 tonnes) Meadowbank - Ore milled (000 tonnes) Pinos Altos - Minesite costs per tonne (USD$) Meadowbank - Minesite costs per tonne (C$) 39
  • 40. Gold and Silver Reserves and Resources December 31, 2010 Tonnes Gold Gold Tonnes Silver Silver (000’s) (g/t) (ounces) (000’s) (g/t)* (ounces) (000’s) (000’s) Proven 24,869 2.29 1,832 Proven 7,702 54.75 13,558 Probable 160,944 3.76 19,467 Probable 71,190 48.09 110,061 Total Total 185,813 3.57 21,299 78,892 48.74 123,620 Reserves Reserves Indicated 95,135 2.10 6,437 Indicated 32,554 21.90 22,918 Inferred 118,111 2.59 9,839 Inferred 37,183 19.98 23,883*Calculated grades 40
  • 41. Copper, Zinc and Lead Reserves and Resources (December 31, 2010) Tonnes Copper Copper Tonnes Zinc Zinc Tonnes Lead Lead (000’s) (%) (tonnes) (000’s) (%) (tonnes) (000’s) (%) (tonnes) Proven 4,838 0.26 12,433 Proven 4,838 2.78 134,651 Proven 4,838 0.32 15,572 Probable 29,892 0.28 82,360 Probable 29,892 0.90 269,581 Probable 29,892 0.07 19,463 Total Total Total 34,730 0.27 94,793 34,730 1.16 404,232 34,730 0.10 35,035 Reserves Reserves Reserves Indicated 6,933 0.12 8,462 Indicated 6,933 1.36 94,457 Indicated 6,933 0.13 8,942 Inferred 11,526 0.27 30,820 Inferred 11,526 0.48 55,556 Inferred 11,526 0.05 5,463*Calculated grades 41
  • 42. A solid financial position, low-cost structure, well-funded growth projects in regions of low political risk, and a focused, consistent strategyput Agnico-Eagle in a strong position to continue creating exceptional per share value. Sean Boyd Executive and Registered Office: Vice-Chairman and 145 King Street East, Suite 400 Chief Executive Officer Toronto, Ontario, Canada, M5C 2Y7 Ebe Scherkus Tel: 416-947-1212 President and Toll-Free: 888-822-6714 Chief Operating Officer Fax: 416-367-4681 Ammar Al-Joundi SVP Finance and Chief Financial Officer David Smith SVP Investor Relations Trading Symbol: AEM on TSX & NYSE Investor Relations: 416-947-1212 info@agnico-eagle.com agnico-eagle.com