Q4 2008 Mktg Presentation Feb2009


Published on

Published in: Business, Technology
  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Q4 2008 Mktg Presentation Feb2009

  1. 1. Agnico-Eagle Mines Limited Corporate Update – February 2009
  2. 2. Forward Looking Statements The information in this document has been prepared as at February 18, 2009. 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 forward looking 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 or information. Such statements include without limitation: statements regarding timing and amounts of capital expenditures and other assumptions; estimates of future reserves, resources, mineral production and sales; estimates of mine life; estimates of future mining costs, cash costs, minesite costs and other expenses; estimates of future capital expenditures and other cash needs, and expectations as to the funding thereof; statements and information 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 reserves and resources, and statements and information regarding anticipated future exploration; the anticipated timing of events with respect to the Company's minesites and statements and information regarding the sufficiency of the Company's cash resources. Such statements and information reflect the Company's views as at the date of this document and are subject to certain risks, uncertainties and assumptions, and undue reliance should not be placed on such statements and information. Many factors, known and unknown could cause the actual results to be materially different from those expressed or implied by such forward looking statements and information. 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 other costs; currency fluctuations; financing of additional capital requirements; cost of exploration and development programs; mining risks; risks associated with foreign operations; governmental and environmental regulation; the volatility of the Company's stock price; and risks associated with the Company's byproduct 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 document, see Company's Annual Information Form and Annual Report on Form 20-F for the year ended December 31, 2007, as well as the Company's other filings with the Canadian Securities Administrators and the U.S. Securities and Exchange Commission. The Company does not intend, and does not assume any obligation, to update these forward-looking statements and information. Marc Legault, a Qualified Person and the Company’s Vice-President, Project Development, reviewed the technical information disclosed herein. For a detailed breakdown of the Company’s reserve and resource position see the February 18, 2009 press release on the Company’s website. This press release also lists the Qualified Persons for each project. 2
  3. 3. Notes To Investors Note to Investors Regarding the Use of Non-GAAP Financial Measures This document presents estimates of future quot;total cash cost per ouncequot; and quot;minesite cost per tonnequot; that are not recognized measures under United States generally accepted accounting principles (quot;US GAAPquot;). This data may not be comparable to data presented by other gold producers. These future estimates are based upon the total cash costs per ounce and minesite costs per tonne that the Company expects to incur to mine gold at the applicable projects and 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 GAAP measure. A reconciliation of the Company's total cash cost per ounce and minesite cost per tonne to the most comparable financial measures calculated and presented in accordance with US GAAP for the Company's historical results of operations is set forth in the notes to the financial statements included in the Company's Annual Information Form and Annual Report on Form 20-F, for the year ended December 31, 2007, as well as the Company's other filings with the Canadian Securities Administrators and the SEC. 3
  4. 4. Q4 and Full Year 2008 Highlights Maintaining focus on per share value creation Increased gold production Record quarterly gold production in Q4 of 89,360 ounces Record annual gold production of 276,762 ounces Grow gold reserves Increased reserves to a record 18.1 million ounces Several deposits likely to exceed 5 million ounces Acquire small, think big Two $50 million equity investments in 2008 Be a low-cost leader In the lowest quartile of total cash cost per ounce at $162 in 2008 Maintain a solid financial profile Doubled credit facility to $600 million Raised $376 million in equity issuances in 2008 Fully funded for 2009 capex, without considering internal cash flow 4
  5. 5. Operating Results Low total cash costs per ounce All $ amounts are in US$, Q4 Full Year 2009 Total Cash Costs unless ($/oz) otherwise 2008 2008 Forecast indicated Gold 89,360* 276,762** 590,000 (ounces) $269 $188 $182 $155 $162 Silver (ounces in 930 4,079 4,500 $56 $43 thousands) Zinc 14,383 65,755 67,500 (tonnes) Copper 1,737 6,922 6,600 -$365 (tonnes) Total cash $463 $162 $325*** costs ($/oz) -$690 * Includes 3,118 ounces of non commercial production from Kittila ** Includes 13,207 ounces of non commercial production from Goldex and Kittila 2000 2001 2002 2003 2004 2005 2006 2007 2008 *** Assumptions for 2009 total cash costs include Ag $10/oz, Zn $1200/t, Cu $3700/t, C$/US$ of 1.22.and US$/Euro of 1.28 5
  6. 6. Financial Results Strong cash flows All amounts are Full Full Q4 Q4 in US$, unless otherwise Year Year indicated 2008 2007 2008 2007 Revenues $73.2 $368.9 $108.7 $432.2 (millions) Earnings $21.9 $73.2 $65.2 $139.3 (millions) Earnings per $0.15 $0.50 $0.46 $1.04 share (fully diluted) Cash provided by operating ($46.4) $118.1 $48.8 $245.5 activities (millions) 6
  7. 7. Strong Financial Position All amounts are in US$, Dec. 31 unless otherwise indicated 2008 Cash and cash equivalents $99.4 (millions) Long term debt $200.0 (millions) Available credit facilities $345.0 (millions) Common shares outstanding 154.8 (millions) Common shares, fully diluted 168.1 (millions) 7
  8. 8. Global Growth Three mines now operating. Three new gold mines under construction AEM’s growth projects 100% owned, with low total acquisition costs Located in mining-friendly regions of low political risk Each project region has long-term mining camp potential 2009 & 2010 capex estimated to total $600 million. 8
  9. 9. Gold Reserves AEM’s gold reserves are significantly larger than its intermediate peers Strong record of growing gold reserves per share Shares outstanding increased only 3.1 times since 1998. Gold reserves up 13.9 times Targeting additional reserve conversion at Kittila, Pinos Altos, Goldex and Meadowbank Uniquely positioned with potential for several 5 million ounce gold deposits (Millions of Ounces) Target: 20-21 18.1 16.7 12.5 10.4 7.9 7.9 3.3 3.3 4.0 3.0 1.3 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2010 LaRonde Goldex Lapa Kittila Pinos Altos Meadowbank 9
  10. 10. Industry Leading1 Gold Production Growth Estimates Payable Gold Production Total Cash Costs (ounces) ($/oz)* 1,600,000 400 1,400,000 1,200,000 300 1,000,000 800,000 200 600,000 400,000 100 200,000 0 0 2008A 2009E 2010E 2011E 2012E 2013-2018 Avg. LaRonde Goldex Lapa Kittila Pinos Altos Meadowbank Total Cash Costs (weighted average) 1 For an intermediate or senior gold producer * Total cash costs per ounce for all years were calculated using the following metal prices and exchange rates (royalties included where applicable): $10.00/oz Ag; $1,200/t Zn; $3,700/t Cu; C$/US$ of 1.22; US$/Euro of 1.28 10
  11. 11. AEM Provides Increasing Leverage To Gold Based on publicly available production guidance, Ounces of Production per Thousand Shares Agnico-Eagle’s share price is 8 backed by the most robust production growth profile 7 among its peers, ranking among the highest in ounces 6 of production per share 5 Combined with some of the 4 lowest cash costs in the industry, this also translates 3 into strong cash flow per share performance 2 1 0 2007A 2008A 2009E 2010E 11
  12. 12. Capital Expenditure Estimates ($000s) 500,000 450,000 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 2009 2010 2011 2012 Sustaining Capital LaRonde Goldex Lapa Kittila Pinos Altos Meadowbank 12
  13. 13. LaRonde – Canada Long Life Gold Reserves Operations: Produced 216,208 oz of gold in 2008, with a total cash cost of $106/oz Gold reserves of 35.8 million tonnes at 4.3 g/t, or 5.0 million oz Life of mine: estimated to average production of 320,000 oz/yr through 2022 Project: Shaft sinking for Extension at 570 metres of 840 metres Start of production from Extension expected in 2011 2009 Exploration: Focus on resource conversion, additional potential at depth 13
  14. 14. Goldex – Canada Ramping Up to Design Rates Operations: Produced 57,436 oz in 2008, total cash cost per ounce of $419 Gold reserves of 1.6 million ounces from 23.8 million tonnes grading 2.1 g/t Estimated average annual production of 160,000 oz/yr through 2017 Project: Examining options to increase production rate from 6900 tpd to at least 8000 tpd. Results expected Q2 2009 2009 Exploration: Exploration focus on resource conversion, mineralization to west 14
  15. 15. Kittila – Finland Mining and Processing Underway Operations: Produced 3,118 ounces of gold in 2008 – non-commercial production 125,000 ounces expected for 2009 Gold reserves of 3.2 million oz; 21.4 million tonnes at 4.7 g/t Average production expected at 150,000 oz/yr through 2023 Project: Examining options to significantly increase production rate of growing deposit. Results expected Q4 2009 2009 Exploration: Focus on resource conversion, expanding resource below Suuri and Roura, and along strike $16 million expected to be spent on exploration 15
  16. 16. Lapa – Canada Start-up of production expected mid-year 2009 Project: Gold reserves of 1.1 million oz; 3.8 million tonnes at 8.8 g/t Anticipating average production of 115,000 oz/yr through 2015 Lateral level development underway Initial production blocks exposed; first stope extracted Ore stockpile 31,000 tonnes grading 8.9 g/t Mill addition at LaRonde nearing completion 2009 Exploration: Focus on resource conversion, further exploration upside at depth and to the East 16
  17. 17. Pinos Altos – Mexico Growing Gold and Silver Reserve Operations: Reserves of 3.6 million ounces of gold, 100 million ounces of silver from 41.8 million tonnes at 2.7 g/t gold and 74.6 g/t silver Estimated annual gold production of 175,000 ounces and 2.6 million ounces of silver through 2022 Initial production expected in Q3, 2009. Pre-stripping 40,000 tonnes per day Project: Feasibility study to be released soon on stand-alone operation at Creston Mascota Initial reserve at Creston Mascota of 0.4 million ounces of gold and 3.7 million ounces of silver 2009 Exploration: Focus on resource conversion, expansion of Pinos Altos zones, Reyna de Plata, Creston Mascota $11 million exploration program in progress. Drilling from underground decline underway 17
  18. 18. Meadowbank – Canada Underground potential being investigated Project: Gold reserves of 3.6 million oz; 32.8 million tonnes at 3.5 g/t Estimated average life of mine production expected at 350,000 oz/yr through 2019 Start-up expected Q1, 2010. Mill, powerhouse, and service buildings enclosed Scoping study underway on potential of expansion. Could increase production rate from 8,500 tpd to 10,000 tpd. Results expected Q3 2009 2009 Exploration: Focus on resource conversion and expansion of Vault, Goose South and Portage $11 million exploration program in progress 18
  19. 19. Investment Highlights Industry Leading Production and Reserve Growth Story1 Long operating history and strong management team Gold production expected to double to 590,000 ounces in 2009, double again to 1.2 million ounces in 2010 Existing projects provide potential to increase gold reserves to 20-21 million ounces by year end 2010 Potential for several five million ounce gold deposits is driving additional internal growth opportunities Four internal growth opportunities expected to add to production rate post-2010 1 For an intermediate gold producer 19
  20. 20. Upcoming News 2009 Internal Expansion Studies Scoping study on Goldex and feasibility study on Creston Mascota – Q2 Scoping study on Meadowbank – Q3 Scoping study on Kittila – Q4 20
  21. 21. Sean Boyd Vice Chairman and Chief Executive Officer Ebe Scherkus President and Chief Operating Officer David Garofalo Sr. Vice President, Finance and Chief Financial Officer Trading Symbol: AEM on TSX & NYSE Executive and Registered Office: 145 King Street East, Suite 400 Toronto, Ontario, Canada, M5C 2Y7 Tel: 416-947-1212 Toll-Free: 888-822-6714 Fax: 416-367-4681 Email: info@agnico-eagle.com Web: www.agnico-eagle.com Investor Relations Contact: David Smith – Vice President, Investor Relations 21