Agnico Eagle reported its second quarter 2013 results. Gold production was in line with expectations at 224,089 ounces, while total cash costs were $785 per ounce. The financial results were impacted by lower commodity prices, a maintenance shutdown at the Kittila mine, and concentrate settlement adjustments. Significant capital and cost reductions of approximately $50 million in 2013 and $200 million in 2014 were announced, while production guidance for 2013 to 2015 was maintained.
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2. FORWARD LOOKING STATEMENTS
The information in this document has been prepared as at July 24, 2013. Certain statements contained in this document constitute “forwardlooking 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, optimization efforts and sales; estimates of mine life; estimates of future internal rates of
return, 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 mine sites 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; community protests; 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 the Company’s Annual Report on Form 20-F for the year ended December 31, 2012, 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. Alain Blackburn, a Qualified Person and the
Company’s Senior Vice-President, Exploration, reviewed the technical information disclosed herein. For a detailed breakdown of the Company’s
reserve and resource position see the February 13, 2013 press release on the Company’s website. That press release also lists the Qualified
Persons for each project.
agnicoeagle.com
2
3. NOTES TO INVESTORS
Note Regarding the Use of Non-GAAP Financial Measures
This document presents estimates of future “total cash cost per ounce” and “minesite cost per tonne” that are not recognized measures under
United States generally accepted accounting principles (“US GAAP”). 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 nonGAAP 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, 2012, as well as the Company’s other filings with the Canadian Securities Administrators and
the SEC.
Note Regarding Production Guidance
The gold production guidance is based on the Company’s mineral reserves but includes contingencies and assumes metal prices and foreign
exchange rates that are different from those used in the reserve estimates. These factors and others mean that the gold production guidance
presented in this disclosure does not reconcile exactly with the production models used to support these mineral reserves.
agnicoeagle.com
3
4. KEY OPERATING HIGHLIGHTS – Q2 2013
• Q2 gold production of 224,089 oz at total cash costs per ounce of $785/oz1 –
in line with expectations
• Financial results impacted by lower commodity prices, maintenance shutdown
at Kittila and concentrate settlement adjustments
• Quarterly cash flows from operations of $75.3 million ($0.44 per share)
• Kittila autoclave now back to steady state levels
• Significant capital and cost reductions announced for 2013 and 2014,
production guidance maintained for 2013 to 2015
1 Expenditures
at Kittila have been excluded from calculations in the second quarter of 2013, given that the mine operated only 14 days during the quarter.
agnicoeagle.com
4
5. INVESTMENT HIGHLIGHTS
Significant reductions in capital and operating costs
2013
•
Approximately $50 million in immediate capital and cost reductions
2014
•
Approximately $200 million in capital cost reductions
•
Exploration budget of approximately $50 million (compared to historical levels
of ~$100 million)
Production to increase in the 2H 2013 due to multiple catalysts:
Expectations:
– Normal production at Kittila
– Better grades at Meadowbank
– Start up production at Goldex
– Continued grade improvement at LaRonde
agnicoeagle.com
5
6. OPERATING RESULTS
Second quarter production and operating costs in line with expectations
Q2 2013
YTD 2013
Production Total Cash Cost
(Gold oz)
($/oz)
Production
(Gold oz)
Total Cash Cost
($/oz)
LaRonde
46,119
$927
85,192
$831
Kittila
Lapa
5,389
23,178
N/A
$720
48,534
50,046
$6241
$699
Pinos Altos2
57,530
$496
103,601
$411
Meadowbank
91,873
$912
173,691
$986
224,089
$785
461,064
$762
Total
Q2 2013 Revenue by Metal
Q2 2013 Total Operating Margin – $110 M
LaRonde
13%
Kittila
0%
Meadowbank
29%
Base
Metals
3%
Silver
6%
Gold
91%
1. Kittila total cash cost excludes results from Q2, 2013 due to shutdown
2. Pinos Altos figures include Creston Mascota.
agnicoeagle.com
Lapa
15%
Pinos Altos
43%
6
7. Q2 2013 FINANCIAL RESULTS
Results impacted by lower commodity prices, Kittila autoclave shut down and
byproduct settlement adjustments
Q2 2013
Q2 2012
YTD 2013
YTD 2012
Revenues (millions)
$336
$460
$757
$932
Earnings (millions)
($24)
$43
($1)
$122
($0.14)
$0.25
($0.00)
$0.71
$75
$194
$221
$391
224,089
265,350
461,064
520,305
Silver (ounces in thousands)
1,066
1,095
2,317
2,310
Zinc (tonnes)
3,455
9,558
11,694
22,536
Copper (tonnes)
1,280
1,004
2,362
2,330
Total cash costs1 (gold, $/oz)
$785
$660
$762
$628
All amounts are in US$,
unless otherwise indicated
Earnings per share (basic)
Cash provided by operating activities
(millions)
Payable Production Gold (ounces)
1 Expenditures
at Kittila have been excluded from calculations in the second quarter of 2013, given that the mine operated only 14 days during the quarter.
agnicoeagle.com
7
8. FINANCIAL POSITION
Balance sheet flexibility maintained
ALL AMOUNTS ARE IN US$,
unless otherwise indicated
Jun. 30, 2013
CASH AND CASH EQUIVALENTS (millions)
$136
LONG TERM DEBT (millions)
$850
AVAILABLE CREDIT FACILITIES
$1.15 Billion
COMMON SHARES OUTSTANDING, BASIC (Q2’13 Weighted average, millions)
172.6
COMMON SHARES OUTSTANDING, FULLY DILUTED (Q2’13 Weighted average, millions)
172.6
Long-Term Debt Maturities
2017
Notes Outstanding (millions)
Coupon
agnicoeagle.com
2020
2022
2024
$115
$360
$225
$100
6.13%
6.67%
5.93%
5.02%
8
9. MODERATE, ACHIEVABLE PRODUCTION GROWTH
Low political risk, mining-friendly jurisdictions
Payable Gold Production Profile (oz)
1,300,000
1,100,000
900,000
700,000
500,000
300,000
100,000
2008A
2009A
2010A
Actual
agnicoeagle.com
2011A
2012A
2013E
2014E
2015E
Estimate
9
10. DISCIPLINED CAPITAL ALLOCATION
Capital Expenditures (US$ 000’s)
$1,200,000
$1,000,000
$800,000
$600,000
$400,000
$200,000
$0
2008A
2009A
2010A
Actual
agnicoeagle.com
2011A
2012A
2013E
2014E
Estimate
10
12. LARONDE
Cooling plant infrastructure development progressing well
•
•
•
Additional cooling capacity expected to be
installed in 4Q 2013
• Positive for operating flexibility
and production
Approximately 60% of ore in Q2 2013 sourced
from deeper mine
Value of ore per tonne approximately 50%
higher over life mine versus 2012 (assuming
the same metal prices)
$240M
P&P GOLD RESERVES (million oz)
4.2
AVERAGE GOLD RESERVE GRADE (g/t)
4.5
Indicated resource (million oz)
(5.4 M tonnes @ 1.88 g/t)
0.3
Inferred resource (million oz)
(11.9 M tonnes @ 3.73 g/t)
1.4
Estimated LOM (years)
14
See AEM Feb 13, 2013 press release for detailed breakdown of reserves and resources.
Cash Operating Margin
$160M
$80M
$0M
2010
agnicoeagle.com
2011
2012
12
13. LAPA
Zulapa drilling could have a positive impact on production and grades
•
•
Lower unit costs due to reduced cement
consumption, productivity improvements,
and cost reductions
0.4
AVERAGE GOLD RESERVE GRADE (g/t)
6.0
Indicated resource (million oz)
(1.1 M tonnes @ 4.08 g/t)
Ongoing exploration could extend
the mine life beyond 2016
P&P GOLD RESERVES (million oz)
0.2
Inferred resource (million oz)
(0.9 M tonnes @ 6.69 g/t)
Estimated LOM (years)
$120M
0.2
3
See AEM Feb 13, 2013 press release for detailed breakdown of reserves and resources.
Cash Operating Margin
$80M
$40M
$0M
2010
agnicoeagle.com
2011
2012
13
14. KITTILA
Autoclave successfully restarted after extended maintenance
•
Normal operations restarted at the end of Q2
P&P GOLD RESERVES (million oz)
4.8
•
Throughput and recoveries back to steady state
AVERAGE GOLD RESERVE GRADE (g/t)
4.5
•
750 tpd per day expansion on schedule for
Indicated resource (million oz)
(7.8 M tonnes @ 2.65 g/t)
0.7
completion in 2H 2015
Inferred resource (million oz)
(19.0 M tonnes @ 3.88 g/t)
Estimated LOM (years)
$240M
2.4
25
See AEM Feb 13, 2013 press release for detailed breakdown of reserves and resources.
Cash Operating Margin
$160M
$80M
$0M
2010
agnicoeagle.com
2011
2012
14
15. MEXICO – PINOS ALTOS & CRESTON MASCOTA
Steady production and operating cost control at Pinos Altos
•
•
•
Restart of leaching at Creston Mascota
progressing well
Production expected to increase during the
remainder of 2013
Shaft construction at Pinos Altos in Q2:
• Preparation of the headframe foundation
• Construction of the hoist building
• Galloway assembly
$320M
P&P GOLD RESERVES (million oz)
2.7
AVERAGE GOLD RESERVE GRADE (g/t)
2.2
Indicated resource (million oz)
(17.9 M tonnes @ 1.52 g/t)
0.9
Inferred resource (million oz)
(24.6 M tonnes @ 1.19 g/t)
Estimated LOM (years)
0.9
17
See AEM Feb 13, 2013 press release for detailed breakdown of reserves and resources.
Cash Operating Margin
$240M
$160M
$80M
$0M
2010
agnicoeagle.com
2011
2012
15
16. MEADOWBANK
Production expected to increase further in 2H 2013
•
Production expected to be higher in H2 2013
P&P GOLD RESERVES (million oz)
2.3
AVERAGE GOLD RESERVE GRADE (g/t)
2.8
due to higher anticipated grades
•
Throughput maintained consistently above
11,000 tpd
•
Measured & Indicated resource (million oz)
Excellent cost control due to improved
Inferred resource (million oz)
(10.3 M tonnes @ 2.49 g/t)
(3.6 M tonnes @ 3.81 g/t)
0.8
0.4
productivity and cost reduction initiatives
Estimated LOM (years)
$320M
Cash Operating Margin
6
See AEM Feb 13, 2013 press release for detailed breakdown of reserves and resources.
$240M
$160M
$80M
$0M
2010
agnicoeagle.com
2011
2012
16
18. LA INDIA
On schedule and budget for commissioning in Q4 2013
•
•
•
•
Work advanced on the installation of the ADR
plant, crushing system, and leach pads
Power generators installed and operational
Estimated annual gold production of approx.
90 koz @ average total cash costs of approx.
$500/oz
Open pit, heap leach mine, with stripping ratio
of 1:1
PROBABLE GOLD RESERVES (million oz)
0.8
AVERAGE GOLD RESERVE GRADE (g/t)
0.7
Indicated gold resource (million oz)
(43.2 M tonnes @ 0.4 g/t)
Inferred gold resource (million oz)
(81 M tonnes @ 0.4 g/t)
Estimated LOM (years)
0.6
1.0
8
See AEM Feb 13, 2013 press release for detailed breakdown of reserves and resources.
agnicoeagle.com
18
19. GOLDEX
Commercial production expected in Q4 2013
•
Expected to produce 15,000 oz, in 2013
•
Construction of paste plant and ore pass
systems on target
•
Initial focus on the M & E satellite zones –
GEZ remains suspended
P&P GOLD RESERVES (million oz)
AVERAGE GOLD RESERVE GRADE (g/t)
Measured & Indicated gold resource (million oz)
(27.2 M tonnes @ 1.8 g/t)
Inferred gold resource (million oz)
(34.6 M tonnes @ 1.5 g/t)
0.35
1.6
1.6
1.7
Estimated LOM (years)
•
Technical studies are underway on several
other satellite zones with results expected
by year-end
agnicoeagle.com
4
See AEM Feb 13, 2013 press release for detailed breakdown of reserves and resources.
19
20. MELIADINE
Project size and scope evaluated under current gold price scenarios
• 2013 project expenditures reduced by $10
million
• 2014 capital expenditures reduced by $80
million to $45 million
P&P GOLD RESERVES (million oz)
3.0
AVERAGE GOLD RESERVE GRADE (g/t)
7.0
Indicated gold resource (million oz)
(17.2 M tonnes @ 3.9 g/t)
– Initial production could still be
achievable in 2018 under new
expenditures schedule
– Program will focus on ramp
development and exploration
drilling
Inferred gold resource (million oz)
(14.8 M tonnes @ 6.2 g/t)
2.2
2.9
See AEM Feb 13, 2013 press release for detailed breakdown of reserves and resources.
• Updated technical study on track for Q2
2014
• Encouraging results from Tiriganiaq,
Normeg, Pump South, and F Zones
agnicoeagle.com
20
21. ADAPTING BUSINESS TO CURRENT GOLD PRICE ENVIRONMENT
Operational review results in significant cost savings going forward
• AEM continues to be among industry leaders in per share reserves, production
and dividends
• Meaningful near-term production growth driven by LaRonde, La India and Goldex,
with manageable capex
• Solid, achievable production and cost guidance
• 22% production growth expected in 2013–2015 at stable costs
• Business generating strong cash flows in regions of low political risk
• Allocated to dividends, exploration and investing in strategic assets
15-Year Indexed Price Performance
AEM-NYSE
XAU
1500%
1000%
Spot Gold
500%
0%
6/30/1998
12/17/2001
6/03/2005
11/17/2008
5/03/2012
Source: FactSet
agnicoeagle.com
21
23. COST EFFECTIVE EXPLORATION REFLECTS SUCCESSFUL M&A STRATEGY
Significant exploration results at acquired properties
9,000
+5644 koz
6,000
+3085 koz
+3161 koz
Mined
Proven &
Probable
Measured &
Indicated
Inferred
+1105 koz
3,000
+1097 koz
$200
$150
$100
$50
$18
La India
'12
La India
'11
Meliadine
'12
Meliadine
'10
Meadow
bank '12
$186
$173
Purchase Cost per Oz
Discovery Cost per Oz
$54
Meadow
bank '07
Pinos
Altos '12
Pinos
Altos '06
Kittila '12
Kittila '05
0
$121
$43
$27
$48
$26
$10
$0
Kittila
Pinos Altos
Meadowbank
Meliadine
La India
Note: The terms “measured resources”, “indicated resources” and “inferred resources” are not recognized under the SEC guidelines. Detailed information can be found in the February 13, 2013 press release.
agnicoeagle.com
23
26. GOLD AND SILVER RESERVES AND RESOURCES
December 31, 2012
Gold
Tonnes
(000’s)
Gold
(g/t)
Gold
(ounces)
(000’s)
Proven
13,836
3.13
1,394
Probable
170,300
3.16
17,286
Total
Reserves
184,136
3.16
18,681
Measured &
Indicated
140,995
1.79
8,104
Inferred
199,503
1.90
12,159
Tonnes
(000’s)
Silver
(g/t)
Silver
(ounces)
(000’s)
9,390
47.30
14,281
Probable
57,536
43.93
81,256
Total
Reserves
66,926
44.40
95,537
Measured &
Indicated
23,379
31.95
24,015
Inferred
36,479
20.66
24,228
Silver
Proven
See AEM Feb 13, 2013 press release for detailed breakdown of reserves and resources. Reserves are not a subset of resources.
agnicoeagle.com
26
27. COPPER, ZINC AND LEAD RESERVES AND RESOURCES
December 31, 2012
Copper
Tonnes Copper Copper
Zinc
Tonnes
Zinc
Zinc
(000’s)
(%)
(tonnes)
6,323
1.06
67,211
Lead
Tonnes
Lead
(%) (tonnes)
6,323
0.30 18,744
Proven
Probable
22,462
0.24 53,835
Probable
22,462
0.68 152,973
Probable
22,462
0.05 10,304
Total
Reserves
28,786
0.25 72,580
Total
Reserves
28,786
0.76 220,184
Total
Reserves
28,786
0.06 18,042
Indicated
5,432
0.12
Indicated
5,432
1.50
81,551
Indicated
5,432
0.15
8,071
11,887
0.58
69,048
Inferred
11,887
0.05
5,375
Proven
Inferred
11,887
6,644
0.25 29,317
Inferred
Proven
(000’s)
Lead
(000’s)
6,323
(%) (tonnes)
0.12
7,738
See AEM Feb 13, 2013 press release for detailed breakdown of reserves and resources. Reserves are not a subset of resources.
agnicoeagle.com
27
28. NOTES TO INVESTORS REGARDING THE USE OF RESOURCES
Cautionary Note to Investors Concerning Estimates of Measured and Indicated Resources
This document uses the terms “measured resources” and “indicated resources”. We advise investors 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 reserves.
Cautionary Note to Investors Concerning Estimates of Inferred Resources
This document also uses the term “inferred resources”. We advise investors that while this term is recognized and required by Canadian regulations, the SEC
does not recognize it. “Inferred 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
part or all of an inferred resource exists, or is economically or legally mineable.
Scientific and Technical Data
Agnico Eagle Mines Limited is reporting mineral resource and reserve estimates in accordance with the CIM guidelines for the estimation, classification and
reporting of resources and reserves.
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 uses certain terms in this press release, such as “measured”, “indicated”, and
“inferred”, and “resources” that the SEC guidelines strictly prohibit U.S. registered companies from including in their filings with the SEC. U.S. investors are
urged to consider closely the disclosure in our Form 20-F, which may be obtained from us, or from the SEC’s website at: http://sec.gov/edgar.shtml. A “final” or
“bankable” feasibility study is required to meet the requirements to designate reserves under Industry Guide 7.
Estimates for all properties were calculated using historic three-year average metals prices and foreign exchange rates in accordance with the SEC Industry
Guide 7. Industry Guide 7 requires the use of prices that reflect current economic conditions at the time of reserve determination, which the Staff of the SEC
has interpreted to mean historic three-year average prices. The assumptions used for the mineral reserves and resources estimates at the Lapa, Meadowbank
and Creston Mascota mines and the Goldex and Meliadine projects reported by the Company on February 13, 2013 are based on three-year average prices for
the period ending December 31, 2012 of $1,490 per ounce gold, $29.00 per ounce silver, $0.95 per pound zinc, $3.67 per pound copper, $1.00 per pound lead
and C$/US$, US$/Euro and MXP/US$ exchange rates of 1.00, 1.34 and 12.75, respectively. The assumptions used for the mineral reserves and resources
estimates at the LaRonde, Pinos Altos and Kittila mines and the La India and Tarachi projects reported by the Company on February 13, 2013 were based on
three-year average prices for the period ending June 30, 2012 of $1,345 per ounce gold, $25.00 per ounce silver, $0.95 per pound zinc, $3.49 per pound
copper, $0.99 per pound lead and C$/US$, US$/Euro and MXP/US$ exchange rates of 1.00, 1.30 and 13.00, respectively.
The Canadian Securities Administrators’ National Instrument 43-101 (“NI 43-101”) requires mining companies to disclose reserves and resources using the
subcategories of “proven” reserves, “probable” reserves, “measured” resources, “indicated” resources and “inferred” resources. Mineral resources that are not
mineral reserves do not have demonstrated economic viability.
agnicoeagle.com
agnicoeagle.com
28
29. NOTES TO INVESTORS REGARDING THE USE OF RESOURCES
A mineral reserve is the economically mineable part of a measured or indicated mineral resource demonstrated by at least a preliminary feasibility study. This
study must include adequate information on mining, processing, metallurgical, economic and other relevant factors that demonstrate, at the time of reporting,
that economic extraction can be justified. A mineral reserve includes diluting materials and allows for losses that may occur when the material is mined. A
proven mineral reserve is the economically mineable part of a measured mineral resource demonstrated by at least a preliminary feasibility study. A probable
mineral reserve is the economically mineable part of an indicated, and in some circumstances, a measured mineral resource demonstrated by at least a
preliminary feasibility study.
A mineral resource is a concentration or occurrence of natural, solid, inorganic material, or natural solid fossilized organic material including base and precious
metals in or on the Earth’s crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction. The location,
quantity, grade, geological characteristics and continuity of a mineral resource are known, estimated or interpreted from specific geological evidence and
knowledge. A measured mineral resource is that part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristics
are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters, to
support production planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration, sampling and
testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely
enough to confirm both geological and grade continuity. An indicated mineral resource is that part of a mineral resource for which quantity, grade or quality,
densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and
economic parameters, to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable
exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are
spaced closely enough for geological and grade continuity to be reasonably assumed. An inferred mineral resource is that part of a mineral resource for which
quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological
and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops,
trenches, pits, workings and drill holes. Mineral resources which are not mineral reserves do not have demonstrated economic viability.
Investors are cautioned not to assume that part or all of an inferred 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 realistically assumed mining, processing, metallurgical, economic, marketing, legal, environmental, social and governmental
considerations 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.
The effective date for all of the Company’s mineral resource and reserve estimates in this press release is December 31, 2012. 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 the Technical Reports
referred to above, which may be found at www.sedar.com. Other important operating information can be found in the Company’s Form 20-F and this news
release dated February 13, 2013.
Alain Blackburn, a Qualified Person and the Company’s Senior Vice-President, Exploration, reviewed the technical information disclosed herein.
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