Guidance presentation _dec_15_2010_final

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Guidance presentation _dec_15_2010_final

  1. 1. Forward Looking StatementsThe information in this document has been prepared as at December 16, 2010. Certain statements contained in this documentconstitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 andforward 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-lookingstatements 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, 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 31,2009, 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 17, 2010press release on the Company’s website. That press release also lists the Qualified Persons for each project. 2
  2. 2. 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. 3
  3. 3. Corporate Strategy Increasing Earnings and Cash Flow Per Share■ Increase gold production ■ Targeting 18% increase in gold production in 2011 to 1.13 million to 1.23 million oz; 1.5 million by 2014■ Grow gold reserves ■ Targeting 20-21 million oz at year end 2010, and 21- 22 million oz at year end 2011 ■ 2011 Exploration budget up 30% to record $145 million■ Acquire small, think big ■ Strategic investment portfolio expected to grow ■ Focus on early-stage M&A with minimal share dilution■ Be a low-cost leader ■ Total cash costs expected to remain below industry average at $420 to $470 per ounce in 2011■ Maintain a solid financial profile ■ Increasing net free cash flow as production increases and capex decreases ■ Increased dividend 256% 4
  4. 4. Fully Funded Growth Continues 50% Increase In Production 2010-2014Payable Gold Production Estimates * Projects Not Included In Production Estimate:(ounces) ► Kittila Expansion ► Meliadine ► Pinos Altos satellites (Cubiro, Sinter) * 5 5
  5. 5. Estimated Production and Cash Costs 2011 2012 2013 2014 2015Estimated Payable Gold ProductionLaRonde 157,200 212,800 280,100 333,100 330,200Goldex 183,500 185,500 183,800 175,100 172,500Lapa 124,800 118,700 107,500 125,100 11,200Kittila 149,700 178,200 176,500 168,200 168,400Pinos Altos 168,400 179,400 170,500 169,000 180,200Creston Mascota 30,600 57,500 57,000 54,500 49,100Meadowbank 361,600 369,500 415,300 470,300 340,300 1,175,800 1,301,500 1,390,800 1,495,300 1,251,800Estimated Total Cash Costs PerOunceLaRonde $54 $316 $385 $393 $406Goldex 349 374 330 339 330Lapa 518 540 588 484 599Kittila 548 467 495 519 523Pinos Altos 400 390 335 306 346Creston Mascota 439 314 291 292 297Meadowbank 597 655 489 431 492 $439 $472 $429 $407 $423 6 6
  6. 6. Capital Expenditure Estimates Meliadine and Internal Expansions not Included in this Estimate1,000,000 900,000 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0 2007A 2008A 2009A 2010E 2011E 2012E 2013E 2014E 2015E Actual Estimate 7
  7. 7. Growing Exposure To Gold Expanding Gold Reserves Per Share ■ Uniquely positioned with potential for up to five deposits with at least 5 million ounces of gold reserves ■ Current reserves do not include 9.6 million ounces of measured and indicated gold resources and 6.8 million ounces of inferred resource (including Meliadine deposit) * 21-22 21- Gold reserves* (millions of ounces) 20-21 20- 18.4 18.1 16.7 Meadowbank 12.5 Pinos Altos 10.4 Kittila 7.9 7.9 Lapa 4.0 Goldex 3.0 3.3 3.3 LaRonde 1.3* See attached reserve and resource tables 8
  8. 8. LaRonde – Canada Increasing Gold Output in 2012■ 2011 ■ Estimated production of 157,000oz Au at cash costs of $54/oz■ 2012-2015 ■ Estimated average annual production of 290,000oz Au at 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 (appr. 2km west of LaRonde) Gold reserves (m oz) 4.8 Average reserve grade (g/t) 4.4 Measured & Indicated resource (m oz) 0.4 Inferred resource (m oz) 1.4 Est. LOM (years) 13 Estimated average production (k oz/yr) 324 2011 exploration budget $4M 9
  9. 9. Bousquet – LaRonde Gold Trend – Ellison Target Established Mining Camp Still Has Potential To Grow114-10-16J8.0 g/t Au / 13.3 mincl. 14.1 g/t Au / 7.0m 1 10
  10. 10. Goldex – Canada Strong Free Cash Flow Generator■ 2011 ■ Estimated production of 185,000oz Au at cash costs of $349/oz■ 2012-2015 ■ Estimated average annual production of 179,000oz Au at cash costs of $344/oz■ Exploration Focus ■ Resource definition and expansion at D zone at depth, exploration to west, east and at depth Gold reserves (m oz) 1.6 Average reserve grade (g/t) 2.1 Measured & Indicated resource (m oz) 0.0 Inferred resource (m oz) 0.8 Est. LOM (years) 7 Estimated average production (k oz/yr) 168 2011 exploration budget $6M 11
  11. 11. Goldex Mine Longitudinal SectionDeposit Remains Open For Expansion Under Development 76-003 1.27 g/t Au / 60.0 m 73-406 2.07 g/t Au / 105.0 m 73-403 1.23 g/t Au / 151.5 m incl. 3.30 g/t Au / 31.5 m 150m 76-008 1.88 g/t Au / 181.5 m 84-050 1.51 g/t Au / 121.5 m 76-006 incl. 2.10 g/t Au / 30.0 m 1.69 g/t Au / 216.0 m incl. 2.68 g/t Au / 12.0 m incl. 2.06 g/t Au / 90.0 m 73-402 Similar geology & 1.34 g/t Au / 96.0 m grades to GEZ zone incl. 2.28 g/t Au / 51.0 m 76-007 0.92 g/t Au / 159.0 m incl. 2.21 g/t Au / 19.5 m 1 12
  12. 12. Lapa – Canada Steady State Mine – Good Tonnage and Cost Performance■ 2011 ■ Estimated production of 125,000oz Au at cash costs of $518/oz■ 2012-2014 ■ Estimated average annual production of 117,000oz Au at cash costs of $535/oz■ Exploration Focus ■ Extension of underground exploration drift to provide access to Zulapa Corridor and Lapa contact zone to the East Gold reserves (m oz) 0.8 Average reserve grade (g/t) 8.2 Measured & Indicated resource (m oz) 0.2 Inferred resource (m oz) 0.1 Est. LOM (years) 4 Estimated average production (k oz/yr) 115 2011 exploration budget $6M 13
  13. 13. Kittila – Finland Optimization Phase Bearing Significant Results■ 2011 ■ Estimated production of 150,000oz Au at cash costs of $548/oz ■ Expansion study to be reviewed Q3 2011■ 2012-2015 ■ Estimated average annual production of 173,000oz Au at cash costs of $501/oz■ Exploration Focus ■ Resource conversion, expansion below Suuri and Roura, and along strike Gold reserves (m oz) 4.0 Average reserve grade (g/t) 4.8 Measured & Indicated resource (m oz) 1.4 Inferred resource (m oz) 0.6 Est. LOM (years) 22 Estimated average production (k oz/yr) 150 2011 exploration budget $16M 14
  14. 14. Kittila Mine - Longitudinal SectionGrowing Gold Deposit Creating Expansion Opportunities ROU-10-024B ROU-10-026B 3.85 g/t Au / 10.1 m 7.25 g/t Au / 10.0 m 6.46 g/t Au / 12.8 m ROU-10029 ROU-10-026 1.76 g/t Au / 2.1 m 3.98 g/t Au / 17.2 m ROU-10029 ROU-10-024 2.68 g/t / 2.3 m 6.42 g/t Au / 4.9 m 15
  15. 15. Pinos Altos – Mexico Exploration Success Adding to Growth Opportunities■ 2011 ■ Estimated production of 168,000oz Au at cash costs of $400/oz ■ Mascota: 31,000oz Au at cash costs of $439/oz■ 2012-2015 ■ Estimated average annual production of 175,000oz Au at cash costs of $345/oz ■ Underground to account for majority of production ■ Mascota: 55,000oz Au at cash costs of $299/oz■ Exploration Focus ■ Potential to develop satellite deposits (Cubiro, Sinter, San Eligio) ■ Focus on resource conversion, expansion of Pinos Altos zones, Reyna de Plata, Creston Mascota Gold reserves (m oz) 3.4 Average reserve grade (g/t) 2.5 Measured & Indicated resource (m oz) 0.5 Inferred resource (m oz) 0.7 Est. LOM (years) 18 Estimated average production (k oz/yr) 170 2011 exploration budget $2M 16
  16. 16. Pinos Altos Mine - Property Geology Map Evaluating Potential Of Several Satellite Deposits Creston MascotaCubiro de Plata Fault Reyna Sinter San San Eligio to El Apache Niñ oF ault Cerro Colorado Oberon de Weber Santo Niño Niñ Mine Site 17
  17. 17. Meadowbank – Canada Newest Mine - Largest Gold Producer Already■ 2011 ■ Estimated production of 362,000oz Au at cash costs of $597/oz■ 2012-2015 ■ Estimated average annual production of 399,000oz Au at cash costs of $511/oz■ Exploration Focus ■ Focus on resource conversion and expansion of Vault, Goose South and Portage Gold reserves (m oz) 3.7 Average reserve grade (g/t) 3.5 Measured & Indicated resource (m oz) 3.3 Inferred resource (m oz) 0.8 Est. LOM (years) 10 Estimated average production (k oz/yr) 350 2011 exploration budget $7M 18
  18. 18. Meliadine Project, Rankin Inlet, Nunavut $129M – Three year exploration & development program underway Tonnes Grade (g/t) Contained gold ounces Measured Resource 0.3 million 10.6 101,000 oz Au* Indicated Resource 13 million 7.9 3,191,000 oz Au* Inferred Resource 8 million 6.4 1,731,000 oz Au** As per Jan 12, 2010 technical report by Snowden Mineral Industry Consultants 19
  19. 19. Meliadine Project - Local Geology Map 20
  20. 20. Meliadine Project - Tiriganiaq Longitudinal Section Deposit Remains Open For Expansion M10-1001 8.62 g/t Au / 19.3 m incl.15.01 g/t Au / 8.2 m M10-920 7.98 g/t Au / 39.3 mM10-9822.69 g/t Au / 19.5 m M10-940incl.5.33 g/t Au / 4.2 m 10.94 g/t Au / 7.0 m M10-989 M10-916A 9.12 g/t Au / 17.9 m 15.14 g/t Au / 5.8 m incl. 16.64 g/t Au / 7.4m 2 21
  21. 21. LaRonde Operations Forecast (Revised) 2011 2012 2013 2014 2015Ore milled (000s tonnes) 2,583 2,580 2,446 2,300 2,190Grade: Gold (g/tonne) 2.10 2.82 3.82 4.79 5.06 Silver (g/tonne) 62.96 49.30 30.71 20.78 18.11 Zinc (%) 3.64% 2.21% 0.78% 0.17% 0.38% Copper (%) 0.23% 0.28% 0.37% 0.37% 0.28%Mill recovery: Gold (%) 90% 91% 93% 94% 94% Silver (%) 88% 86% 85% 78% 75% Zinc (%) 90% 88% 83% 0% 66% Copper (%) 84% 85% 85% 85% 85%Payable metal produced: Gold (ozs) 157,200 212,800 280,100 333,100 330,200 Silver (000 oz) 3,900 3,100 1,800 1,200 900 Zinc (tonnes) 71,800 42,600 13,500 0 5,500 Copper (tonnes) 4,400 5,700 7,200 6,700 4,900 Lead (tonnes) 3,200 1,300 0 0 0Mining/Milling Costs (C$/tonne) $80 $81 $81 $81 $82Total Cash Costs per ounce $54 $316 $385 $393 $406 2 23
  22. 22. Gold and Silver Reserves and Resources (December 31, 2009 Including Meliadine Resources as at January 2010) Tonnes Gold Gold Tonnes Silver Silver (000’s) (g/t) (ounces) (000’s) (g/t)* (ounces) (000’s) (000’s) Proven 12,605 2.71 1,098 Proven 5,635 56.39 10,216 Probable 149,852 3.59 17,300 Probable 70,706 52.54 119,432 Total Total 162,458 3.52 18,398 76,341 52.82 129,648 Reserves Reserves Measured & 102,531 2.90 9,573 Indicated 22,151 26.28 18,720 Indicated Inferred 64,845 3.29 6,849 Inferred 26,616 17.93 15,341*Calculated grades 24
  23. 23. Copper, Zinc and Lead Reserves and Resources (December 31, 2009) Tonnes Copper Copper Tonnes Zinc Zinc Tonnes Lead Lead (000’s) (%) (tonnes) (000’s) (%) (tonnes) (000’s) (%) (tonnes)Proven 4,755 0.26 12,301 Proven 4,755 3.31 157,540 Proven 4,755 0.39 18,499Probable 29,625 0.29 84,956 Probable 29,625 1.16 344,732 Probable 29,625 0.09 26,615Total Total Total 34,380 0.28 97,258 34,380 1.46 502,272 34,380 0.13 45,114Reserves Reserves ReservesIndicated 6,482 0.13 8,736 Indicated 6,482 1.52 98,321 Indicated 6,482 0.15 9,724Inferred 10,942 0.27 29,036 Inferred 10,942 0.43 46,973 Inferred 10,942 0.04 4,335 25
  24. 24. A solid financial position, low-cost structure, well-funded growthprojects in regions of low political risk, and a focused, consistentstrategy put Agnico-Eagle in a strong position to continue creatingexceptional per share value.Sean Boyd Executive and Registered Office:Vice Chairman and Chief Executive Officer 145 King Street East, Suite 400Ebe Scherkus Toronto, Ontario, Canada, M5C 2Y7President and Chief Operating Officer Tel: 416-947-1212 Toll-Free: 888-822-6714Ammar Al-Joundi Fax: 416-367-4681SVP Finance and Chief Financial Officer www.agnico-eagle.comTrading Symbol: AEM on TSX & NYSEInvestor Relations:416-947-1212info@agnico-eagle.com

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