Aem march presentation_updated28march2011


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Aem march presentation_updated28march2011

  1. 1. Corporate Update – March 2011
  2. 2. Forward Looking StatementsThe information in this document has been prepared as at March 25, 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. 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, 2009, as well as the Companys other filings with the Canadian Securities Administrators and the SEC. LaRonde Goldex Kittila Lapa Pinos Altos Meadowbank 3
  4. 4. Corporate Strategy Increasing reserves, production and cash flow per share■ Increase gold production ■ Targeting 1.5 million oz by 2014, a 50% increase over 2010 level■ Grow gold reserves ■ Targeting more than 22 million oz at year end 2011 For many years, we have ■ 2011 exploration budget up 30% to record $145 million adhered to a consistent,■ Acquire small, think big low-risk strategy for strengthening our gold ■ Strategic investment portfolio expected to grow mining business and ■ Focus on early-stage M&A with minimal share dilution creating shareholder value.■ Be a low-cost leader ■ Total cash costs expected to remain below industry average■ Maintain a solid financial profile ■ Increasing net free cash flow as production increases and capex decreases ■ Highest dividend among North American gold peers at $0.64 per share, up 256% yoy 4
  5. 5. Increasing Per Share Exposure To Gold AEM generates superior returnsMeasured, Indicated and Inferred Gold Reserves (oz) Payable Gold Production (oz)Resources (oz) Per 1,000 Shares Per 1,000 Shares Per 1,000 Shares Dividends Per Share Share Price vs. Gold Price & Gold Index 350% 300% 250% 200% 150% 100% 50% 0% -50% 05 06 07 08 09 10 AEM Gold XAU 5
  6. 6. Operating Results Growing, diversified multi-asset gold producer 2010 Revenue By MineAll $ amounts are in 11%US$, unless otherwiseindicated 2010 2009 11% 12% 16%Gold 987,609 492,972 22%(ounces) 28%Silver 5,305 4,035(ounces in thousands) LaRonde Goldex Lapa Kittila Pinos Altos MeadowbankZinc 62,544 56,186(tonnes) 2011E Revenue By MineCopper 4,224 6,671(tonnes) 11% 18% 9%Total cash $451 $347costs ($/oz) 13% 24% 25% 6
  7. 7. Financial Results Production growth drives record earnings and cash flowAll amounts arein US$, unless otherwise indicated 2010 2009Revenues (millions) $1,422.5 $613.8Earnings (millions) $332.1 $86.5Earnings per share (basic) $2.05 $0.55Cash provided by operating activities $483.5 $115.1(millions) 77
  8. 8. Strong Financial PositionNet free cash flow expected to further strengthen financial positionAll amounts are in US$, Dec. 31unless otherwise indicated 2010Cash and cash equivalents $104.6(millions)Long term debt $650.0(millions)Available credit facilities $1.1BCommon shares outstanding 168.8(millions)Common shares, fully diluted 184.1(millions) 8 8
  9. 9. Growing Exposure To Gold Shares increased 165% since 2001. Reserves up 545% ■ Gold reserves increased 16% to record 21.3 million ounces ■ Uniquely positioned with potential for up to five deposits with at least 5 million ounces of gold reserves ■ Deposits also contain 6.4 million ounces of indicated gold resources and 9.8 million ounces of inferred resource* Gold reserves* (millions of ounces) 22+ 21.3 18.4 Meliadine 18.1 16.7 Meadowbank 12.5 Pinos Altos 10.4 7.9 7.9 Kittila Lapa 4.0 Goldex 3.3 LaRonde* See attached reserve and resource tables 9
  10. 10. Fully Funded Growth Continues Expect 50% increase in gold production from 2010 to 2014 Payable Gold Production Estimates (ounces) AEM Production (Au oz) 1,600,000 1,500,000 1,400,000 1,300,000 1,200,000 1,100,000 1,000,000 900,000 800,000 2010 2011E 2012E 2013E 2014E AEM Production  (Au oz)Production growth catalysts for 2015 and beyond:Kittila expansion, Meliadine, Pinos Altos mill and satellite zones 10
  11. 11. Capital Expenditure Estimates Meliadine and internal expansions not included in this estimate Approximate Average EBITDA* $1,200,000 $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 2015E 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/€ 11
  12. 12. 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 ■ Tracing and potentially defining a gold resource at Ellison (2 km west of LaRonde) Gold reserves (m oz) 4.8 Average gold reserve grade (g/t) 4.3 Indicated resource (m oz) 0.4 Inferred resource (m oz) 1.4 Est. LOM (years) 13 Estimated average LOM production (k oz/yr) 324 2011 exploration budget (LaRonde & regional) $11M 12 12
  13. 13. Bousquet – LaRonde Gold Trend – Ellison TargetEstablished mining camp still has potential to grow 13
  14. 14. 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 life Gold reserves (m oz) 1.6 Average reserve grade (g/t) 1.8 Indicated resource (m oz) 0.5 Inferred resource (m oz) 1.4 Est. LOM (years) 8 Estimated average production (k oz/yr) 164 2011 exploration budget $6M 14 14
  15. 15. Goldex Mine Longitudinal SectionAdded 1.0 million ounces of resource in 2010, mainly new D Zone 15
  16. 16. 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 the East along favourable Cadillac break Gold reserves (m oz) 0.7 Average reserve grade (g/t) 7.4 Indicated resource (m oz) 0.2 Inferred resource (m oz) 0.1 Est. LOM (years) 4 Estimated average production (k oz/yr) 119 2011 exploration budget $6M 16 16
  17. 17. Kittila – Finland Optimization phase improving operating results■ 2011 ■ Estimated production of 150,000oz Au at total cash costs of $548/oz ■ Expansion study to be completed Q3 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 strike Gold reserves (m oz) 4.9 Average reserve grade (g/t) 4.6 Indicated resource (m oz) 1.2 Inferred resource (m oz) 0.7 Est. LOM (years) 22 Estimated average production (k oz/yr) 146 2011 exploration budget $16M 17 17
  18. 18. Kittila Mine - Longitudinal SectionGrowing gold deposit creating expansion opportunities 18
  19. 19. 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 deposits Gold reserves (m oz) 3.3 Average gold reserve grade (g/t) 2.3 Indicated resource (m oz) 0.8 Inferred resource (m oz) 0.9 Est. LOM (years) 16 Estimated average production (k oz/yr) 187 2011 exploration budget $2M 19 19
  20. 20. 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 Portage Gold reserves (m oz) 3.5 Average reserve grade (g/t) 3.2 Measured & Indicated resource (m oz) 1.4 Inferred resource (m oz) 0.7 Est. LOM (years) 10 Estimated average production (k oz/yr) 297 2011 exploration budget $7M 20 20
  21. 21. Meliadine – Canada 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 ■ Expecting third quarter resource update ■ Potential to accelerate underground development to test deposit at depth■ Feasibility study expected in 2013 Gold reserves (m oz) 2.6 Average reserve grade (g/t) 8.5 Indicated resource (m oz) 1.5 Inferred resource (m oz) 2.6 2011 exploration budget $65M 21 21
  22. 22. Meliadine Project - Local Geology MapAEM land package covers 80 km of this prospective greenstone belt 22
  23. 23. Meliadine Project - Tiriganiaq Longitudinal SectionDeposit remains open for expansion 23
  24. 24. 24
  25. 25. Operating MetricsLaRondeSteady state producerGoldex LapaStrong throughput keeps unit costs low Consistently exceeding design throughput 25
  26. 26. Operating MetricsKittilaMill process stabilizingPinos Altos MeadowbankAdditional tailings filters increased mill capacity Design throughput expected by Q3, 2011 26
  27. 27. 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 27
  28. 28. 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 28
  29. 29. A solid financial position, low-cost structure, well-funded growth projects in regions of low political risk, and a focused, consistent strategy put Agnico-Eagle in a strong position to continue creating exceptional per share value. Sean Boyd Executive and Registered Office:Vice Chairman and Chief Executive Officer 145 King Street East, Suite 400 Ebe Scherkus Toronto, Ontario, Canada, M5C 2Y7 President and Chief Operating Officer Tel: 416-947-1212 Toll-Free: 888-822-6714 Ammar Al-Joundi Fax: 416-367-4681 SVP Finance and Chief Financial Officer Trading Symbol: AEM on TSX & NYSE Investor Relations: 416-947-1212