Stock Symbol: AEM (NYSE and TSX)
(All amounts expressed in U.S. dollars ("$" or "US$") unless otherwise
noted)
TORONTO, Feb. 10, 2016 /PRNewswire/ - Agnico Eagle Mines Limited (NYSE:AEM, TSX:AEM) ("Agnico Eagle" or the "Company") today reported a quarterly net loss of $15.5 million, or a net loss of $0.07 per share for the fourth quarter of 2015. This result
includes a non-cash foreign currency translation loss on deferred tax
liabilities of $8.6 million ($0.04 per share), various mark-to-market
adjustment losses of $5.0 million ($0.02 per share), unrealized losses
on financial instruments of $3.3 million ($0.01 per share), non-cash
foreign currency translation losses of $1.3 million ($0.01 per share),
non-cash stock option expense of $3.6 million ($0.02 per share) and
non-recurring gains of $2.4 million($0.01). Excluding these items
would result in adjusted net income of $3.9 million ($0.02 per share)
for the fourth quarter of 2015. In the fourth quarter of 2014, the
Company reported a net loss of $21.3 million or a net loss of $0.10 per share.
Fourth quarter 2015 cash provided by operating activities was $140.7
million ($112.6 million before changes in non-cash components of
working capital), this compares to cashprovided by operating activities of $164.0 million in the fourth quarter
of 2014 ($151.6 million before changes in non-cash components of
working capital). The decrease in cash flow before changes in working
capital during the current period was largely due to a tax adjustment
in the fourth quarter of 2015.
"In 2015, our operations continued to perform well, which allowed us to
do better on both our production and cost guidance for the fourth
consecutive year. Despite a volatile gold price environment, we
doubled our exploration spending, continued to advance our pipeline of
development projects, and reduced our net debt by approximately $190
million," said Sean Boyd, Agnico Eagle's Chief Executive Officer.
"Over the next three years, we are forecasting stable annual production
and costs, which should allow us to continue to invest in our existing
mines, maintain funding levels at our key exploration projects, advance
our development pipeline in Nunavut at a steady and measured pace and
maintain our history of continuous dividend payments to shareholders,"
added Mr. Boyd.
Fourth quarter and full year 2015 highlights include:
- Guidance exceeded for fourth consecutive year - Payable production1 in 2015 was 1,671,340 ounces of gold at total cash costs2 per ounce on a by-product basis of $567, compared to guidance of
1,650,000 ounces at total cash costs per ounce on a by-product basis of
$600. All-in sustaining costs per ounce3 ("AISC") on a by-product basis for 2015 were $810, compared to guidance
of $850 per ounce
- Stable production and costs expected through 2018 - Average annual production from 2016 to 2018 is forecast to be
approximately 1.53 million ounces of gold. Production for 2016 is
forecast to be between 1.525 and 1.565 million ounces of gold with
total cash costs per ounce on a by-product basis of between $590 and
$630 per ounce. AISC for 2016 are forecast to be between $850 and $890
per ounce. Costs were calculated using a US$/C$ exchange rate of 1.30,
EURO$/US$ exchange rate of 1.10 and a US$/MXP exchange rate of 16.00
- Increased gold reserve grades at key mines, significant increase in
year-end 2015 gold resources, slight decline in gold reserves after
mining depletion - Gold reserve grades increased at the LaRonde, Canadian Malartic,
Goldex and La India mines. Measured and indicated mineral resources
were up 1%, while inferred mineral resources increased by 23%. Mineral
reserves declined by only 5% (0.9 million ounces) to 19.1 million
ounces due to mine depletion of approximately 1.8 million ounces
- Gold resources increased by 67% at Amaruq - Inferred mineral resources at Amaruq now total 3.3 million ounces
(16.9 million tonnes grading 6.05 grams per tonne ("g/t") gold). The
2016 Phase 1 drill program (approximately 75,000 metres) is now
underway with a focus on expanding and upgrading mineral resources and
outlining a second open pit deposit
- Initial inferred gold resources declared at El Barqueño and the Sisar
Zone at Kittilla -At El Barqueño, initialinferred mineral resources are estimated to be 0.61 million ounces (19.7
million tonnes grading 0.96 g/t gold), while at Kittila the recently
discovered Sisar Zone contains inferred mineral resources of 0.65
million ounces (3.4 million tonnes grading 5.91 g/t gold)
- Moderate 2016 capital spending preserves production optionality in
Nunavut- Expenditures at Amaruq are designed to expand and upgrade the gold
resources and outline a second source of open pit ore for the project.
Planned spending levels at Meliadine for 2016 are expected to be
sufficient to keep critical path elements moving forward. However,
decreased spending as compared with previous internal forecasts is
expected to delay the potential project start-up by approximately one
year to 2020
- Improved financial flexibility - In 2015, net debt was reduced by $190 million, further strengthening
the Company's investment grade balance sheet
- A quarterly dividend of $0.08 per share declared
_________________________________
|
1 Payable production of a mineral means the quantity of mineral produced
during a period contained in products that are sold by the Company
whether such products are shipped during the period or held as
inventory at the end of the period.
|
2 Total cash costs per ounce is a Non-GAAP measure. For a reconciliation
to production costs, see "Reconciliation of Non-GAAP Financial
Performance Measures " below. Total cash costs per ounce of gold
produced is presented on both a by-product basis (deducting by-product
metal revenues from production costs) and co-product basis (before
by-product metal revenues). Total cash costs per ounce of gold produced
on a by-product basis is calculated by adjusting production costs as
recorded in the consolidated statements of income (loss) for by-product
revenues, unsold concentrate inventory production costs, smelting,
refining and marketing charges and other adjustments, and then dividing
by the number of ounces of gold produced. Total cash costs per ounce
of gold produced on a co-product basis is calculated in the same manner
as total cash costs per ounce of gold produced on a by-product basis
except that no adjustment for by-product metal revenues is made. See
"Note Regarding Certain Measures of Performance". For information
about the Company's total cash costs per ounce on a co-product basis
please see "Reconciliation of Non-GAAP Performance Measures".
|
3All-in-sustaining costs per ounce is a Non-GAAP measure and is used to
show the full cost of gold production from current operations. For a
reconciliation to production costs, see "Reconciliation of Non-GAAP
Financial Performance Measures - Reconciliation of Production Costs to
All-In Sustaining Costs per Ounce of Gold Produced" below. The Company
calculates all-in sustaining costs per ounce of gold produced as the
aggregate of total cash costs per ounce on a by-product basis,
sustaining capital expenditures (including capitalized exploration),
general and administrative expenses (including stock option expense)
and reclamation expenses divided by the amount of gold produced.
All-in sustaining costs per ounce of gold produced on a co-product
basis is calculated in the same manner as all-in sustaining costs per
ounce of gold produced on a by-product basis except that no adjustment
for by-product metal revenues is made. The Company's methodology for
calculating all-in sustaining costs per ounce may not be similar to the
methodology used by other producers that disclose all-in sustaining
costs per ounce. See "Note Regarding Certain Measures of
Performance". The Company may change the methodology it uses to
calculate all-in sustaining costs per ounce in the future, including in
response to the adoption of formal industry guidance regarding this
measure by the World Gold Council.
|
New Three-Year Guidance Plan - Stable Production and Cost Profile
The Company is announcing its production and cost guidance for 2016
through 2018. The Company expects average annual production of
approximately 1.53 million ounces of gold over the next three years
with a stable cost profile.
Highlights from the new production and cost guidance for 2016 through
2018 include:
-
In 2016, payable production is expected to be between 1.525 million and
1.565 million ounces of gold. Total cash costs per ounce on a
by-product basis in 2016 are expected to be between $590 and $630 using
a US$/C$ exchange rate assumption of 1.30. Previous guidance for 2016
(from the February 2015 forecast) was 1.60 million ounces. The change
from previous guidance is primarily due to the expansion of the Vault
pit, which increased overall production from Meadowbank but deferred
ounces from 2016 to 2017 and 2018, thereby extending the mine life
-
Consolidated AISC for 2016 are expected to be between $850 and $890 per
ounce. In 2017 and 2018, the Company's goal is to reduce AISC below
this range
-
The estimated production level in 2017 is currently forecast to be
approximately 1.55 million ounces of gold (up from 1.50 million ounces
in its February 2015 forecast), while production in 2018 is forecast to
be approximately 1.50 million ounces of gold. However, the Company is
evaluating potential optimizations and opportunities (none of which
have yet been approved for construction) at a number of existing
operations to further enhance the production profile in 2018 and
beyond. These include:
-
LaRonde optimization potential
-
Bousquet Zone 5
-
Lapa Zone 8 - Upper mine and Zulapa 7 - Deep 2 Zone
-
Goldex optimization potential
-
Increased throughput from Deep Zone 1
-
Potential for accelerated development of Deep Zone 2
-
Potential development of the Akasaba West satellite deposit
-
Kittila optimization potential
-
Upper Rimpi Zone development
-
Potential development of the new Sisar Zone
-
Mexican optimization potential
-
Satellite zones at Pinos Altos and Creston Mascota
-
Potential to expand reserves at La India
Development Pipeline Expected to Provide Further Production Growth in
2019 and Beyond
The Amaruq and Meliadine projects in Nunavut, the El Barqueño project in
Mexico, the Odyssey Zone and near pit/underground opportunities at
Canadian Malartic (these opportunities are near or below the existing
mining infrastructure) and a possible expansion of the LaRonde mine at
depth have the potential to further add to the Company's production
profile in 2019 and beyond.
Fourth Quarter and Full Year 2015 Financial and Production Highlights
In the fourth quarter of 2015, strong operational performance continued
at the Company's mines. Payable production in the fourth quarter of
2015 was 422,328 ounces of gold compared to 387,535 ounces in the
fourth quarter of 2014. A detailed description of the production and
cost performance of each mine is set out below.
Total cash costs per ounce on a by-product basis for the fourth quarter
of 2015 were $547 compared to $662 per ounce for the fourth quarter
2014. The decrease in total cash costs per ounce on a by-product basis
in the fourth quarter of 2015 is mainly due to higher production levels
at the LaRonde, Canadian Malartic, Meadowbank, Kittila, Pinos Altos and
Creston Mascota mines and favourable foreign exchange rates.
In the fourth quarter of 2015, the average value of the Canadian dollar,
Euro and Mexican Peso were 10%, 7%, and 17% lower, respectively, than
the Company's 2015 currency price assumptions (see February 11, 2015
news release).
For the full year 2015, the Company recorded net income of $24.6
million, or $0.11 per share. In 2014, Agnico Eagle recorded net income
of $83.0 million, or $0.43 per share.
Compared with the prior year, 2015 earnings were affected by lower
realized gold and silver prices (down 8% and 14%, respectively, period
over period) and increased exploration expenses (up 97%, period over
period). In 2015, exploration drilling yielded a significant increase
in inferred mineral resources at the Amaruq project in Nunavut, an
initial inferred mineral resource at the El Barqueño project in Mexico
and a maiden inferred mineral resource at the Sisar Zone at Kittila.
The decrease in realized gold and silver prices and increase in
exploration expenses were partially offset by higher gold production
and favourable foreign exchange rates.
For the full year 2015, cash provided by operating activities was $616.2
million ($660.0 million before changes in non-cash components of
working capital). This represents a decrease over 2014, when cash
provided by operating activities totalled $668.3 million ($624.4
million before changes in non-cash components of working capital). The
decrease was primarily due to increased inventory positions.
For the fourth consecutive year, Agnico Eagle has reported annual gold
production in excess of annual guidance. The Company's payable
production for the full year 2015 was 1,671,340 ounces of gold at total
cash costs per ounce on a by-product basis of $567, compared to
guidance of 1,650,000 ounces at total cash costs per ounce on a
by-product basis of $590 to $610. In 2014, full year production was
1,429,288 ounces at total cash costs per ounce on a by-product basis of
$637.
The improvement in gold production in 2015 was a result of strong
operating results from all of the mines, particularly Canadian Malartic
as a result of the full year inclusion of production, LaRonde as a
result of the higher grades from mining in more gold rich areas of the
lower areas of the mine (below the 215 level), Goldex due to better
productivity, increased throughput at Kittila from the ramp up of the
mill expansion, increased stacking capacity at La India, and higher
grades from Pinos Altos. The decrease in total cash costs per ounce on
a by-product basis in 2015 was primarily due to higher gold production
for 2015, strong cost control initiatives at all of the mines and the
positive effect of foreign exchange rates.
For the full year 2015, the average value of the Canadian dollar, Euro
and Mexican Peso were 5%, 4%, and 18% lower, respectively than the
Company's 2015 currency price assumptions (see February 11, 2015 news
release).
AISC for 2015 on a by-product basis was $810 per ounce, which is below
the previous 2015 guidance between $840 and $860 per ounce. The lower
AISC is primarily due to lower than forecast total cash costs per ounce
on a by-product basis in 2015 and a reduction in sustaining capital
expenditures through a strong emphasis on sustaining capital
expenditure controls.
Quarterly Dividend Declared
Agnico Eagle's Board of Directors has declared a quarterly cash dividend
of $0.08 per common share, payable on March 15, 2016 to shareholders of
record as of March 1, 2016. Agnico Eagle has now declared a cash
dividend every year since 1983.
Expected Dividend Record and Payment Dates for 2016
Record Date | Payment Date |
March 1*
|
March 16*
|
June 1
|
June 15
|
September 1
|
September 15
|
December 1
|
December 15
|
*Declared
Dividend Reinvestment Plan
Please follow the link below for information on the Company's dividend
reinvestment plan. Dividend Reinvestment Plan
Conference Call Tomorrow
The Company's senior management will host a conference call on Thursday, February 11, 2016 at 11:00 AM (E.S.T.) to discuss financial and operating results.
Via Webcast:
A live audio webcast of the conference call will be available on the
Company's website www.agnicoeagle.com.
Via Telephone:
For those preferring to listen by telephone, please dial 416-260-0113 or
toll-free 1-800-524-8950. To ensure your participation, please call
approximately five minutes prior to the scheduled start of the call.
Replay Archive:
Please dial 1-647-436-0148 or toll-free 1-888-203-1112, access code
8252919. The conference call replay will expire on March 15, 2016 at
2:00 PM (E.S.T.). The webcast along with presentation slides will be
archived for 180 dayson www.agnicoeagle.com.
Liquidity - Existing Cash and Credit Facility Provide Flexibility
Cash and cash equivalents and short term investments decreased to $131.6
million at December 31, 2015, from the September 30, 2015 balance of
$208.1 million partly as a result of using cash to repay outstanding
balances on the Company's credit facility.
The outstanding balance on the Company's $1.2 billion credit facility
was reduced from $350 million at September 30, 2015 to $265 million at
December 31, 2015, resulting in availability under its credit lines of
approximately $935 million, not including the $300 million accordion
facility.
Total capital expenditures made by the Company in the fourth quarter of
2015 were $133.0 million, including $22.2 million at Meliadine, $20.0
million at Pinos Altos, $18.0 million at Meadowbank, $18.0 million at
Kittila, $16.7 million at LaRonde, $13.6 million at Canadian Malartic
(50% basis), $13.6 million at Goldex, $7.9 million at La India, $2.6
million at Creston Mascota and $1.0 million at Lapa.
Total capital expenditures for the full year 2015 were $449.8 million
including $67.3 million at LaRonde, $66.7 million at Meliadine, $65.2
million at Meadowbank, $61.8 million at Pinos Altos, $56.4 million at
Kittila, $48.8 million at Goldex, $43.4 million at Canadian Malartic
(50% basis), $23.4 million at La India, $6.5 million at Lapa and $4.2
million at Creston Mascota.
Total sustaining capital expenditures made by the Company in the fourth
quarter of 2015 were $90.4 million, including $18.0 million at
Meadowbank, $16.7 million at LaRonde, $15.1 million at Kittila, $13.6
million at Canadian Malartic (50% basis), $11.4 million at Pinos Altos,
$7.9 million at La India, $4.1 million at Goldex, $2.6 million at
Creston Mascota and $1.0 million at Lapa.
Total sustaining capital expenditures for the full year 2015 were $305.1
million including $67.3 million at LaRonde, $65.2 million at
Meadowbank, $45.7 million at Kittila, $41.6 million at Canadian
Malartic (50% basis), $35.5 million at Pinos Altos, $23.4 million at La
India, $15.7 million at Goldex, $6.5 million at Lapa, and $4.2 million
at Creston Mascota.
Three-Year Guidance Plan Outlines a Stable Production and Cost Profile
The Company is announcing its production and cost guidance for 2016
through 2018. The Company expects average annual production of
approximately 1.53 million ounces over the next three years with a
stable cost profile.
Various internal projects at current operating mines have the potential
to add incremental production in 2018, while Amaruq, Meliadine and El
Barqueño are expected to add significant production starting in 2019 to
2020. However, the Company continues to take a prudent and measured
approach to development while maintaining financial flexibility.
In 2016, payable production is expected to be between 1.525 million and
1.565 million ounces of gold. Total cash costs per ounce on a
by-product basis in 2016 are expected to be in a range from $590 and
$630 using a US$/C$ exchange rate assumption of 1.30. Previous
production guidance for 2016 (from the February 2015 forecast), was
1.60 million ounces.
The change in production compared to the previous 2016 guidance is
primarily due to the decision to proceed with the expansion of the
Vault pit at Meadowbank (thereby extending the mine life). With the
Vault extension, the production forecast at Meadowbank was reduced in
2016, but increased for 2017 and 2018.
Consolidated AISC for 2016 are expected to be between $850 and $890 per
ounce using a US$/C$ exchange rate assumption of 1.30.
Sensitivities to the 2016 guidance are presented in the table below:
2016 commodity and currency price assumptions |
| Approximate impact on total cash costs per ounce on a by-product basis |
Silver ($/oz)
|
|
16.00
|
|
$1 / oz change in silver price
|
$2
|
Copper ($/mt)
|
|
4,700
|
|
10% change in copper price
|
Nil
|
Zinc ($/mt)
|
|
1,750
|
|
10% change in zinc price
|
Nil
|
Diesel (C$/ltr)
US$/C$
|
|
0.77
1.30
|
|
10% change in diesel price
1.0% change in US$/C$
|
$2
$5
|
EURO$/US$
|
|
1.10
|
|
1.0% change in Euro$/US$
|
$1
|
US$/MXP
|
|
16.00
|
|
10% change in US$/MXP
|
$3
|
|
|
|
|
|
|
Estimated Payable Gold Production |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Northern Business |
| 2015 Actual |
|
| 2016 Forecast* |
| 2017 Forecast |
| 2018 Forecast |
LaRonde
|
|
267,921
|
|
|
275,000
|
|
320,000
|
|
375,000
|
Canadian Malartic (50%)
|
|
285,809
|
|
|
280,000
|
|
295,000
|
|
305,000
|
Lapa
|
|
90,967
|
|
|
60,000
|
|
0
|
|
0
|
Goldex
|
|
115,426
|
|
|
105,000
|
|
105,000
|
|
130,000
|
Kittila
|
|
177,374
|
|
|
200,000
|
|
190,000
|
|
200,000
|
Meadowbank
|
| 381,804 |
|
| 305,000 |
| 320,000 |
| 155,000 |
|
|
1,319,301
|
|
|
1,225,000
|
|
1,235,000
|
|
1,165,000
|
Southern Business |
|
|
|
|
|
|
|
|
|
Pinos Altos
|
|
192,974
|
|
|
175,000
|
|
175,000
|
|
180,000
|
Creston Mascota
|
|
54,703
|
|
|
45,000
|
|
40,000
|
|
40,000
|
La India
|
| 104,362 |
|
| 100,000 |
| 105,000 |
| 115,000 |
|
|
352,039
|
|
|
320,000
|
|
320,000
|
|
335,000
|
Total Gold Production |
| 1,671,340 |
|
| 1,545,000 |
| 1,550,000 |
| 1,500,000 |
|
|
|
|
|
|
|
|
|
|
Total Cash Costs Per Ounce |
|
|
|
|
| 2015 Actual |
| 2016 Forecast* |
Northern Business |
|
|
|
|
|
|
|
|
LaRonde
|
|
|
|
|
|
$590
|
|
$592
|
Canadian Malartic
|
|
|
|
|
|
596
|
|
593
|
Lapa
|
|
|
|
|
|
590
|
|
640
|
Goldex
|
|
|
|
|
|
538
|
|
601
|
Kittila
|
|
|
|
|
|
709
|
|
646
|
Meadowbank
|
|
|
|
|
| 613 |
| 750 |
|
|
|
|
|
|
609
|
|
644
|
Southern Business |
|
|
|
|
|
|
|
|
Pinos Altos
|
|
|
|
|
|
387
|
|
443
|
Creston Mascota
|
|
|
|
|
|
430
|
|
604
|
La India
|
|
|
|
|
| 436 |
| 470 |
|
|
|
|
|
|
408
|
|
474
|
Total |
|
|
|
|
| $567 |
| $608
|
*midpoint of expected ranges
In 2017, payable production is expected to be approximately 1.55 million
ounces of gold. Previous guidance for 2017 (from the February 2015
forecast), was 1.50 million ounces. The increase in production
compared to the previous 2017 guidance is primarily due to the Vault
extension at Meadowbank, and increased production expected at Goldex
and La India. The increased production levels at Goldex and La India
are largely due to the forecast of improved operating efficiencies at
the mines.
In 2018, payable production is expected to be approximately 1.50 million
ounces of gold. However, the Company is evaluating potential
optimizations (none of which have yet been approved for construction)
at a number of existing operations to further enhance the Company's
production profile. These potential optimizations are discussed in
more detail below.
Total cash costs per ounce on a by-product basis for 2017 and 2018 are
expected to be similar to the 2016 forecast. In 2017 and 2018, the
Company's goal is to reduce AISC below the level forecast for 2016.
Stable Three-Year Gold Production Forecast
Since the prior three-year production guidance of February 11, 2015
("Previous Guidance"), there have been several operating developments
resulting in changes to the overall three-year production profile.
Descriptions of these changes are detailed below.
Northern Business
LaRonde Forecast |
2015
|
2016
|
2017
|
2018
|
Previous Guidance (oz)
|
245,000
|
300,000
|
330,000
|
n.a.
|
Current Guidance (oz)
|
267,921 (actual)
|
275,000
|
325,000
|
375,000
|
LaRonde 2016 Forecast |
Ore
Milled
('000
tonnes)
|
Gold (g/t),
Mill
Recovery
|
Silver (g/t),
Mill
Recovery
|
Zinc (%),
Mill
Recovery
|
Copper (%),
Mill
Recovery
|
Minesite
Costs
Per Tonne4 |
|
2,106
|
4.28, 94.9%
|
20.0, 76.0%
|
0.35, 56.1%
|
0.3, 80.8%
|
C$114
|
_____________________________ |
4 Minesite costs per tonne is a non-GAAP measure. For a reconciliation of
this measure to production costs as reported in the financial
statements, see "Reconciliation of Non-GAAP Financial Performance
Measures" below. See also "Note Regarding Certain Measures of
Performance".
|
At LaRonde, the new cooling and ventilation infrastructure that was
commissioned in 2015 has helped to enhance the productivity in the
deeper portions of the mine. Connection of the 269 and 293 mining
pyramids and full commissioning of the coarse ore conveyor is planned
for 2016, which should improve mining flexibility. The slightly lower
production guidance for 2016 (as compared to Previous Guidance) is
largely due to a more conservative sequence of merging strategic mining
pyramids. This year, about 89% of the ore will come from the higher
grade lower mine area (below the 248 level). The increased production
forecasts through 2018 largely reflect an increase in grade closer to
that of the average mineral reserves.
Canadian Malartic Forecast(50% basis) |
2015
|
2016
|
2017
|
2018
|
Previous Guidance (oz)
|
280,000
|
290,000
|
290,000
|
n.a.
|
Current Guidance (oz)
|
285,809 (actual)
|
280,000
|
295,000
|
305,000
|
Canadian Malartic 2016 Forecast |
Ore Milled
('000 tonnes)
|
Gold
(g/t)
|
Mill
Recovery
|
Minesite Costs
Per Tonne
|
Strip ratio
|
|
9,505
|
1.03
|
89%
|
C$23*
|
2.4:1.0
|
*includes the 5% NSR
At Canadian Malartic (in which Agnico Eagle has 50% ownership) guidance
for 2016 has been slightly reduced as throughput levels are forecast to
be approximately 53,000 tonnes per day ("tpd"). Any increase in
throughput above this 53,000 tpd level remains contingent upon updating
the existing operating permits. Several opportunities have been
recognized to further optimize productivity, which could provide
additional operational flexibility and result in increased production
at the mine.
Lapa Forecast |
2015
|
2016
|
2017
|
2018
|
Previous Guidance (oz)
|
75,000
|
50,000
|
n.a.
|
n.a.
|
Current Guidance (oz)
|
90,967 (actual)
|
60,000
|
n.a.
|
n.a.
|
Lapa 2016 Forecast |
Ore Milled
('000
tonnes)
|
Gold (g/t)
|
Mill Recovery
|
Minesite Costs
Per Tonne
|
|
406
|
5.3
|
86.8%
|
C$123
|
Under the current life of mine plan, Lapa is only expected to operate
until early into the fourth quarter of 2016. Two targets have been
identified through exploration as areas that could potentially support
future mining activity potentially in 2018, in a restart scenario.
However, additional exploration is required, and any potential
production from these areas are expected to require synergies with
other production opportunities such as the Bousquet Zone 5 or the
Pandora project (in which the Company has 50% ownership).
Goldex Forecast |
2015
|
2016
|
2017
|
2018
|
Previous Guidance (oz)
|
100,000
|
100,000
|
90,000
|
n.a.
|
Current Guidance (oz)
|
115,426 (actual)
|
105,000
|
110,000
|
130,000
|
Goldex 2016 Forecast |
Ore Milled
('000 tonnes)
|
Gold (g/t)
|
Mill Recovery
|
Minesite Costs
Per Tonne
|
|
2,323
|
1.52
|
92.6%
|
C$35
|
At Goldex, production in 2015 was above the Previous Guidance due to a
faster than expected ramp-up in mining rates. Existing mineral
reserves and exploitation of the M3 and M4 zones are expected to keep
production levels and costs relatively constant through 2017. In July
2015, the Company announced approval of the Deep 1 project, which is
expected to begin commissioning in 2018. Production guidance in 2018
reflects the potential to increase mill throughput levels beyond the
current forecast of approximately 6,400 tpd.
Kittila Forecast |
2015
|
2016
|
2017
|
2018
|
Previous Guidance (oz)
|
185,000
|
185,000
|
190,000
|
n.a.
|
Current Guidance (oz)
|
177,374 (actual)
|
200,000
|
190,000
|
200,000
|
Kittila 2016 Forecast |
Ore Milled
('000 tonnes)
|
Gold (g/t)
|
Mill Recovery
|
Minesite Costs
Per Tonne
|
|
1,567
|
4.7
|
84.5%
|
€75
|
At Kittila, production in 2015 was below Previous Guidance due to
slightly lower grades, recoveries and tonnes milled. A key focus at
Kittila in 2015 was improving mill reliability. Several projects were
carried out in the fourth quarter of 2015 which appear to have improved
maintenance performance. With further optimization, the Company
believes there is potential for improved mill availability, which could
lead to higher throughput levels in the future.
Kittila performed well in the fourth quarter of 2015 resulting in record
average daily throughput of 4,750 tpd in December 2015. The Company is
evaluating the potential to maintain this level of underground
performance as well as the potential to fast track production from the
upper portions of the Rimpi Zone and the newly discovered Sisar Zone.
Meadowbank Forecast |
2015
|
2016
|
2017
|
2018
|
Previous Guidance (oz)
|
400,000
|
310,000*
|
345,000*
|
130,000*
|
Current Guidance (oz)
|
381,804 (actual)
|
305,000
|
320,000
|
155,000
|
*See revised guidance from the Company's news release dated July 29,
2015
Meadowbank 2016 Forecast |
Ore Milled
('000 tonnes)
|
Gold (g/t)
|
Mill Recovery
|
Minesite Costs
Per Tonne
|
|
3,862
|
2.73
|
90.0%
|
C$77
|
In 2015, a decision was made at Meadowbank to extend the Vault pit.
This resulted in decreased forecast production in 2016, but added
approximately another year of production (now through the third quarter
of 2018). This extension helps to partially bridge the production gap
with the potential development of the Amaruq deposit. Production
levels are expected to decline from 2017 to 2018 due to a decline in
grade as the current mineral reserve base is depleted.
A major drill program is again planned at Amaruq in 2016 to expand the
3.3 million ounce inferred mineral resource (see the discussion on
mineral reserves and mineral resources below) and to try to delineate a
second source of open pit ore. The ultimate goal remains to
potentially develop the Amaruq deposit as a satellite operation to
Meadowbank.
Southern Business
Pinos Altos Forecast |
2015
|
2016
|
2017
|
2018
|
Previous Guidance (oz)
|
175,000
|
175,000
|
175,000
|
n.a.
|
Current Guidance (oz)
|
192,974 (actual)
|
175,000
|
175,000
|
180,000
|
Pinos Altos 2016 Forecast |
Total Ore
('000 tonnes)
|
Gold (g/t),
Recovery
|
Silver (g/t),
Recovery
|
Minesite Costs
Per Tonne
|
|
2,054
|
2.77, 95.5%
|
74.1, 43.2%
|
$54
|
At Pinos Altos, production in 2015 significantly beat Previous Guidance,
primarily due to higher grades and slightly better mill throughput and
recovery. Going forward, throughput, grades and recoveries are
expected to remain relatively stable. Commissioning of the Pinos Altos
shaft in 2016 will allow better matching of the future mining capacity
with the mill once the open pit mining operation begins to wind down,
as planned, over the next several years.
Creston Mascota Forecast |
2015
|
2016
|
2017
|
2018
|
Previous Guidance (oz)
|
50,000
|
45,000
|
40,000
|
n.a.
|
Current Guidance (oz)
|
54,703 (actual)
|
45,000
|
40,000
|
40,000
|
Creston Mascota 2016 Forecast |
Total Ore
('000 tonnes)
|
Gold (g/t),
Recovery
|
Silver (g/t),
Recovery
|
Minesite Costs
Per Tonne
|
|
2,000
|
1.17, 60.0%
|
12.5, 13.4%
|
$15
|
At Creston Mascota, production in 2015 was slightly better than Previous
Guidance due to additional ore being encountered outside the block
model, which resulted in more tonnes stacked on the leach pad. Infill
drilling has encountered higher grade mineralization below the CrestonMascota pit. Work is underway to evaluate the impact of this
mineralization on the pit design and production planning. In 2016,
further work is planned on the Bravo deposit to evaluate it as a
potential source of additional production.
La India Forecast |
2015
|
2016
|
2017
|
2018
|
Previous Guidance (oz)
|
90,000
|
90,000
|
95,000
|
n.a.
|
Current Guidance (oz)
|
104,362 (actual)
|
100,000
|
105,000
|
115,000
|
La India 2016 Forecast |
Total Ore
('000 tonnes)
|
Gold (g/t),
Recovery
|
Silver (g/t),
Recovery
|
Minesite Costs
Per Tonne
|
|
5,341
|
0.92, 63.4%
|
6.85, 11.0%
|
$9
|
At La India, production in 2015 was above Previous Guidance primarily
due to favourable block model variances. The 2015 exploration program
resulted in a 28% increase in mineral reserves year-over-year, and a
21% increase in measured and indicated mineral resources. The Company
is evaluating near pit potential with a goal of further expanding the
mineral reserves at the Main and North Zones and will consider
opportunities to increase production at La India based on the success
of that program.
Near-term Mine Optimization Projects Could Potentially Enhance 2018
Production
Over the next three years (2016 through 2018) annual production is
forecast to average approximately 1.53 million ounces. The estimated
production level in 2018 is currently forecast to be approximately 1.50
million ounces. However, the Company is evaluating potential
optimizations and opportunities (none of which have yet been approved
for construction) at a number of existing operations to further enhance
the Company's production profile in 2018 and beyond.
LaRonde Optimization
In 2003, the Company acquired the Bousquet gold property from Barrick
Gold. The property adjoins the LaRonde mining complex to the east and
hosts the Bousquet Zone 5, which previous operators had partly exploited by open pit. The
Company is evaluating the potential to initially mine the Bousquet Zone
5 from a depth of 90 to 330 metres below surface via an underground
ramp. This portion of the deposit contains indicated mineral resources
of approximately 566,000 ounces of gold (9.3 million tonnes grading
1.90 g/t gold) and inferred gold mineral resources of approximately
109,000 ounces of gold (1.47 million tonnes grading 2.31 g/t
gold). The mining method is likely to be similar to that employed at
Goldex, and processing could utilize excess capacity from the Lapa
circuit at LaRonde. Dewatering of the old pit is underway and permit
applications to collect a bulk sample will be submitted shortly. An
internal technical study is expected to be completed by the end of
2016.
At the Lapa mine two areas (Zone 8 East - Upper mine and the Zulapa 7- Deep 2 Zone) have
been identified through exploration (see Lapa mine discussion) as areas
that could potentially support future mining activity. Further
exploration and internal studies are underway to look at synergies with
other production opportunities such as the Bousquet Zone 5.
In addition, Canadian Malartic Corporation ("CMC", owned 50% by Agnico
Eagle and 50% by Yamana Gold Inc. "Yamana") is continuing to explore
the Pandora project, which adjoins the Lapa mine to the west (for additional details see
the Canadian Malartic section of this news release). Should the
exploration efforts be successful, Pandora could potentially have
synergies with the other opportunities currently being evaluated at the
Lapa mine.
Goldex Optimization
At present, the Goldex mill has about 25% excess capacity (rated
capacity is 8,000 tpd, but forecast to process approximately 6,400 tpd
in 2016). As such, the Company is evaluating opportunities to
potentially increase throughput from the Deep 1 Zone, and the potential to mine a portion of the Deep 2 Zone. These opportunities, and the potential development of the Akasaba
West deposit (see below), could enhance production levels or extend the
current mine life and reduce operating costs.
In January 2014, Agnico Eagle acquired the Akasaba West gold-copper deposit from Alexandria Minerals. Located less than 30 km
from Goldex, the Akasaba West deposit could create flexibility and
synergies for the Company's operations in the Abitibi region by
utilizing extra milling capacity at both Goldex and LaRonde, while
reducing overall costs. Akasaba West currently hosts a probable mineral
reserve of 141,000 ounces of gold and 24,557 tonnes of copper (4.76
million tonnes grading 0.92 g/t gold and 0.52% copper). Permitting and
technical studies are ongoing with the goal of moving the project
towards a production decision in late 2016 or early 2017.
Kittila Optimization
Previous drilling on the Rimpi Zone at Kittila has outlined a significant zone of mineralization with
potentially wider widths and better grades than those currently being
mined. The main underground ramp at Kittila is being extended to reach
the Rimpi Zone, and it is also providing further underground drill
access to test for additional depth extensions of the Rimpi, Suuri,
Roura and the newly discovered Sisar mineralized zones.
In addition, a surface ramp is being driven into the Rimpi Zone (now at
a depth of 190 metres below surface) for production purposes and to
provide a second egress for the Suuri ramp system. It will serve as
the main haulage route from the deeper portions of both Rimpi and Suuri
and potentially the Sisar Zone.
In 2015, a new sub-parallel zone of mineralization (Sisar Zone) was
recognized by exploration drilling from the underground ramp being
driven towards the deeper portion of the Rimpi Zone. Additional
drilling through year-end 2015 continued to yield favourable results
(see Kittila mine discussion in this news release) at Sisar, and an
initial inferred mineral resource of approximately 651,000 ounces of
gold (3.4 million tonnes grading 5.91 g/t gold) has been announced (see
"Detailed Mineral Reserve and Mineral Resource Data (as at December 31,
2015)" below). In 2016, additional drilling is planned to infill and
further expand the Sisar mineralization.
Given that the Sisar Zone is located approximately 200 metres directly
east of the exploration ramp (at a depth of approximately 800 metres
below surface), Sisar could potentially provide an additional source of
underground ore to the Kittila mill with relatively little additional
underground development.
With the potential for higher mill capacity (approximately 20%) through
ongoing optimization, development of the Rimpi and Sisar zones could
result in increased future production levels and reduced operating
costs at Kittila.
Mexican Opportunities
At Pinos Altos and Creston Mascota, the Company continues to evaluate the sequencing of additional
satellite zones, which could provide additional ore to the Pinos Altos
complex. This drill data is being incorporated into preliminary
studies along with metallurgical testing and geotechnical data in order
to better optimize the development potential of remaining satellite
resources including Sinter and Bravo.
During 2015, higher grade mineralization was encountered at the bottom
of the Creston Mascota pit. Work is underway to understand the
potential impact of this mineralization on the pit design and
production planning.
At La India, additional drilling was carried out in 2015 with a focus on extending
mineralization in the Main Zone and the La India Zone, and conversion
of sulfide mineralization into mineral reserves and mineral resources.
In addition, drilling was also carried out on a portion of the El
Realito property. The 2015 exploration program and new ore model
resulted in a 28% increase in mineral reserves, and a 21% increase in
measured and indicated mineral resources (see "Detailed Mineral Reserve
and Mineral Resource Data (as at December 31, 2015)" below). The
Company is looking at near pit potential for further mineral reserve
expansion and will consider opportunities to increase production at La
India based on the success of that program.
Development/Expansion Projects in the Abitibi, Nunavut and Mexico
Expected to Provide Longer-term Growth Opportunities beyond 2019
The expansion and development projects set out below, which have not yet
been approved for construction, have the potential to add to the
Company's production profile in 2019 and beyond.
Amaruq - Expanding the Mineral Resource Base and Locating a Second Open
Pit Deposit is the Key Focus in 2016
The 100% owned Amaruq property consists of 114,760 hectares of Inuit and
federal crown land. Agnico Eagle acquired its initial interest in
April 2013 pursuant to a mineral exploration agreement with Nunavut
Tunngavik Incorporated.
In 2015, a $37.7 million exploration program (378 drill holes totalling
approximately 108,000 metres) was carried out at the Amaruq project,
which is located approximately 50 kilometres northwest of the
Meadowbank mine in Nunavut.
A large portion of last year's drill program was focused on the Whale
Tail Zone, where drilling has outlined up to five mineralized lenses
along a strike length of 2.3 kilometres and to a depth of up to 600
metres below surface. Mineralization at Whale Tail remains open in all
directions. Significant mineralization has also been outlined in the
IVR area.
As a result of the 2015 exploration program, the inferred mineral
resource at Amaruq increased by approximately 67% compared to the
inferred mineral resource of 2.0 million ounces of gold (see the
Company's August 19, 2015 news release for comparison) to 3.3 million
ounces of gold (16.9 million tonnes grading 6.05 g/t gold) at December
31, 2015 (for additional details see the mineral reserve and mineral
resource discussion in this news release).
The first phase of a planned 75,000 metre drill program (costing
approximately $19 million) began with two drills in early February
2016. The goals of this program are to infill and expand the known
mineral resource areas and test other favourable targets (for
additional details see the exploration section below). A mineral
resource update is expected in the second half of 2016.
In late 2015, the Company received approvals for the construction of an
all-weather access road linking the Amaruq access site to the
Meadowbank mine. In 2016 the Company expects to carry out additional
engineering and begin road preparation from the Vault pit at
Meadowbank.
The Company expects to ultimately develop Amaruq as a satellite
operation to Meadowbank, with the potential to begin production in
2019. Given that the initial mineral resource grade at Amaruq is well
in excess of the mineral reserve grade at Meadowbank, the Company
believes that there is good potential for Amaruq to have similar annual
output to Meadowbank in its peak production years.
Permitting activities and engineering studies for the construction of an
initial open pit mine and an underground exploration ramp at Amaruq are
ongoing.
Meliadine - Moderate 2016 Capital Expenditures Preserves Production
Optionality
Located near Rankin Inlet, Nunavut, Canada, the Meliadine project was
acquired in July 2010, and is one of Agnico Eagle's largest gold
projects in terms of mineral resources. The Company owns 100% of the
111,757 hectare property.
The updated technical study for Meliadine released last year (see March
12, 2015 news release) forecast average annual production of
approximately 350,000 ounces at a life-of-mine total cash costs per
ounce on a by-product basis of approximately $531 over a nine-year mine
life. The study used a gold price of C$1,495 per ounce (as compared to
a current spot price of approximately C$1,657 per ounce on February 8,
2016).
The technical study was based on extracting only the 3.3 million ounces
of gold in proven and probable mineral reserves at December 31, 2014
(13.9 million tonnes of ore grading 7.44 g/t gold), which is all
contained in the Tiriganiaq and Wesmeg deposits.
At December 31, 2015, the Meliadine property hosted 3.4 million ounces
of proven and probable mineral reserves (14.5 million tonnes of ore
grading 7.32 g/t gold), 3.31 million ounces of measured and indicated
mineral resources (20.8 million tonnes of ore grading 4.95 g/t gold),
and 3.55 million ounces of inferred mineral resources (14.7 million
tonnes of ore grading 7.51 g/t gold). In addition, there are numerous
other known gold occurrences in the 80-kilometre-long greenstone belt
that require further evaluation.
The capital budget for 2016 is $96 million with activities focused on
further underground development (approximately 3,000 metres), detailed
engineering and procurement, construction of essential surface
infrastructure and acquisition of a used camp facility. The goal of
the 2016 capital program is to ensure that the project remains on track
for a potential 2020 production start-up, which is approximately a one
year delay from previous expectations.
Internal studies are ongoing to evaluate the potential to extract
additional ounces of gold from the Tiriganiaq and Wesmeg/Normeg
deposits that could potentially extend the mine life, increase annual
production and improve the project economics and the after-tax internal
rate of return. These studies are expected to be completed in the
third quarter of 2016.
On October 5, 2015, the Nunavut Water Board issued the permit (License
B) for Meliadine pre-development work. License A, which is required
for production activities, is expected to be granted in the second
quarter of 2016.
The timing of future capital expenditures on the Meliadine project
beyond 2016 and the determination of whether to build a mine at
Meliadine are subject to approval by Agnico Eagle's Board of Directors
which will be based on prevailing market conditions and outcomes of the
various potential scenarios being evaluated.
El Barqueño - Initial Mineral Resource Announced, Significant Drilling
Planned in 2016
The El Barqueño property in Jalisco State, Mexico covers a land position
with known strike extent for mineralization larger than both the La
India and Pinos Altos properties combined. Previous property owners
outlined several mineralized zones through surface exploration and
diamond drilling.
In 2015, the Company completed approximately 69,500 metres of drilling
at a cost of $17 million on the El Barqueño property. The primary
focus of the 2015 program was to define the limits of the
Azteca-Zapoteca, Angostura and Peña de Oro prospects, and delineate an
initial mineral resource estimate for these deposits. Several other
prospects were also under evaluation.
Based on the 2015 exploration results and previous work programs, the
Company has estimated initial total inferred in-pit mineral resources
of approximately 0.61 million ounces (19.7 million tonnes grading 0.96
g/t gold) from the Azteca-Zapoteca, Angostura and Peña de Oro areas to
open-pit mineable depths. An additional 11,000 metres of drilling has
been completed since the estimation of the inferred mineral resource.
Further details on the El Barqueño inferred mineral resource can be
found in "Detailed Mineral Reserve and Mineral Resource Data (as at
December 31, 2015)" below.
In 2016, Agnico Eagle plans to carry out a $13 million exploration
program to further expand and infill the known mineral resource areas
and evaluate other prospective targets such as: Olmeca, Zapote,
Mixteca, El Rayo, and Pilarica. At present there are 14 drills
operating on the project.
While it is too early to estimate the full extent of the mineral
resources and the number of deposits with economic potential at El
Barqueño, the Company has the experience of developing cost-efficient
mining operations in Mexico and increasing their size through
successful exploration as well as metallurgical innovation. This body
of knowledge will be applied as El Barqueño continues to be explored
and studied.
Agnico Eagle believes that El Barqueño ultimately has the potential to
be developed into a series of open pits utilizing heap leach
processing, similar to the Creston Mascota and La India mines.
Conceptual design studies and additional metallurgical testing are
underway at El Barqueño with a goal of potentially starting operations
in 2019.
Canadian Malartic - Odyssey Zone and Near Pit Opportunities Could
Provide Future Production Upside
At the Canadian Malartic mine (owned 50% by Agnico Eagle and 50% by
Yamana), exploration programs are planned to evaluate a number of near
pit/underground targets at the mine and further define the extent of
the mineralization at the Odyssey Zone (which is located to the east of
the Canadian Malartic open pit). Both of these opportunities could
provide new potential sources of ore for the Canadian Malartic mill.
In 2016, the Canadian Malartic block model will be reviewed to further
define the potential of a number of near pit/underground targets and a
60,000 metre drill program has been proposed to further evaluate the
extent of the mineralization at Odyssey. For additional details on
these opportunities, see the Canadian Malartic section of this news
release.
LaRonde - Studies Ongoing to Evaluate Potential to Mine Below a Depth of
3.1 Kilometres
Studies are continuing to assess the potential to extend the mineral
reserves and carry out mining activities between the 311 and 371 levels
at LaRonde. At present, the mineral reserves extend to the 311 level,
which is 3.1 kilometres below the surface. Drilling is ongoing to
further expand the known mineral resource between the 311 and 341
levels. Additional holes are also being drilled to evaluate the extent
of the mineralization down to the 371 level (a depth of 3.7 kilometres
below the surface). In 2016, the focus of drilling will be on mineral
resource expansion and mineral resource to mineral reserve conversion
in the western portion of the LaRonde orebody.
Continued Capital Discipline in 2016
Based on the Company's budget assumptions. Agnico Eagle expects to fund
this year's capital expenditures, which are estimated to total
approximately $491 million, from operating cash flow.
The estimated capital expenditures for 2016 include approximately $297
million of sustaining capital at the mines and $179 million on
development projects, as set out in the table below. Additionally,
approximately $15 million is estimated to be spent on capitalized
exploration and approximately $138 million on expensed exploration,
project evaluation and corporate development.
Estimated 2016 Capital Expenditures |
|
| Sustaining |
| Development Projects |
| Capitalized Exploration |
| Expensed Exploration |
(millions of $)
|
|
|
|
|
|
|
|
|
|
Northern Business |
|
|
|
|
|
|
|
|
|
LaRonde
|
|
|
62
|
|
-
|
|
2
|
|
2
|
Lapa
|
|
|
-
|
|
-
|
|
-
|
|
1
|
Goldex
|
|
|
10
|
|
64
|
|
3
|
|
-
|
Kittila
|
|
|
56
|
|
10
|
|
3
|
|
9
|
Meadowbank
|
|
|
41
|
|
-
|
|
-
|
|
-
|
Amaruq
|
|
|
-
|
|
-
|
|
-
|
|
43
|
Meliadine
|
|
|
-
|
|
96
|
|
-
|
|
-
|
Canadian Malartic
|
|
|
59
|
|
2
|
|
-
|
|
8
|
|
|
| 228 |
| 172 |
| 8 |
| 63 |
Southern Business |
|
|
|
|
|
|
|
|
|
Pinos Altos
|
|
|
54
|
|
7
|
|
2
|
|
-
|
La India
|
|
|
8
|
|
-
|
|
2
|
|
2
|
Creston Mascota
|
|
|
7
|
|
-
|
|
1
|
|
-
|
|
|
| 69 |
| 7 |
| 5 |
| 2 |
Project Eval/Corp Dev
|
|
|
|
|
|
|
|
|
36
|
Other Exploration
|
|
|
|
|
|
|
2
|
|
37
|
Total Expenditures |
|
| 297 |
| 179 |
| 15 |
| 138 |
2016 Exploration Program and Budget - Main Focus on Amaruq, El Barqueño
and the Sisar Zone at Kittila
A large component of the 2016 exploration program will be focused on the
Amaruq project near the Meadowbank mine in Nunavut, the El Barqueño
project in Jalisco State, Mexico and the Sisar Zone at the Kittila mine
in Finland. These exploration programs are designed to infill and
expand known deposits and test other favourable target areas. The goal
is to delineate mineral reserves and mineral resources that can
supplement the Company's existing production profile.
The 2016 Amaruq drill program commenced earlier this month with two
drills testing targets in the Mammoth Lake area. Eventually the
Company expects to have eight to ten drills operating with a focus on
infilling and expanding the known mineralized zones, testing other
nearby targets with a focus on developing a second source of open pit
ore and further evaluation of regional target areas. The initial 2016
exploration program contemplates approximately 75,000 metres of
drilling with a budget of approximately $19 million. The 2016 program
also includes engineering studies and permitting activities for the
construction of an initial open pit mine and an underground exploration
ramp.
Exploration expenditures at El Barqueño in 2016 are budgeted at $13
million for mineral resource development, conversion and regional
exploration. There are currently 14 drills on the property working to
define the limits of the known prospects and test new target areas such
as: Olmeca, Zapote, Mixteca, El Rayo, and Pilarica.
El Barqueño's gold-silver deposits could potentially be developed into a
series of open pits utilizing heap leach processing, similar to CrestonMascota and the La India mines.
In 2016, approximately $5 million will be spent on further deep drilling
at Kittila (which includes the Sisar Zone). The goal of this program
is to expand and upgrade the mineral resources and evaluate the
potential to possibly develop the Sisar Zone as a new mining horizon at
Kittila.
Depreciation Guidance
Agnico Eagle expects its 2016 depreciation and amortization expense to
be in the range of $630 to $660 million.
General & Administrative Cost Guidance
Agnico Eagle expects 2016 general and administration expense to be
between $70 and $80 million, excluding share based compensation. In
2016, share based compensation is expected to be between $20 and $25
million including stock option expense (which is a non-cash item) of
between $18 and $22 million, which is consistent with previous years.
Please see the supplemental financial data section of the Financial and
Operating Database on the Company's website for additional historical
financial data.
Tax Guidance for 2016
For 2016, the jurisdictional tax rates are expected to be:
Canada - 40% to 50%
Mexico - 35% to 40%
Finland - 20%
The Company's overall tax rate is expected to be between 40% and 45%.
Gold Reserves Decrease Slightly to Approximately 19.1M Ounces, Reserve
Grade Increased at Key Operations
To estimate the 2015 year-end mineral reserves, the Company continued to
use conservative assumptions: $1,100/ounce gold and $16/ounce silver,
US$/C$, €/US$ and US$/MPX exchange rates of 1.16, 1.20 and 14.00,
respectively for all mines and projects, other than Lapa, Meadowbank,
Creston Mascota and the Santo Niño pit at Pinos Altos. Due to the
shorter mine life of these mining operations, the Company used exchange
rate assumptions for US$/C$ and US$/MXP of 1.30 and 16.00, respectively
(other assumptions unchanged).
At year-end 2015, the Company's proven and probable mineral reserves
(net of 2015 production) totaled 251 million tonnes of ore grading 2.37
g/t gold, containing approximately 19.1 million ounces of gold. This
is a decrease of approximately 0.9 million ounces of gold (5%) compared
with a year earlier. The decrease in the Company's mineral reserves is
largely due to the 1,671,340 ounces of payable gold production in 2015
(1,910,000 ounces of in-situ gold mined), partially offset by
successful conversion of measured and indicated mineral resources to
mineral reserves at several operations.
Highlights from the December 31, 2015 Mineral Reserve Statement include:
-
Increased mineral reserve grades at LaRonde (5.31 g/t gold versus 5.20
g/t gold), Canadian Malartic (1.08 g/t gold versus 1.06 g/t gold),
Goldex (1.61 g/t gold versus 1.49 g/t gold), and La India (0.90 g/t
gold versus 0.85 g/t gold)
-
At Goldex, the mineral reserves almost doubled to 668,000 ounces of gold
with an 8% increase in the mineral reserve grade
-
At the Akasaba project, initial mineral reserves of 141,000 ounces of
gold are reported (4.8 million tonnes grading 0.92 g/t gold and 0.52%
copper)
-
At La India, the mineral reserves increased by 28% (188,000 ounces) to
867,000 ounces of gold (30.0 million tonnes of ore grading 0.90 g/t
gold and 4.23 g/t silver)
The Company's year-end 2015 gold reserves are set out below:
Gold Mineral Reserves |
|
| Proven & Probable |
|
|
| Average Gold |
By Mine |
|
| Mineral Reserve (000s gold ounces) |
|
|
| Mineral Reserve Grade (g/t) |
|
|
| 2015 | 2014 | Change |
|
|
| 2015 |
|
|
| 2014 |
|
| Change |
Northern Business |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LaRonde
|
|
|
3,109
|
3,432
|
-323
|
|
|
|
5.31
|
|
|
|
5.20
|
|
|
0.11
|
Canadian Malartic (50%)
|
|
|
3,863
|
4,329
|
-466
|
|
|
|
1.08
|
|
|
|
1.06
|
|
|
0.02
|
Lapa
|
|
|
78
|
170
|
-92
|
|
|
|
5.49
|
|
|
|
5.84
|
|
|
-0.35
|
Goldex
|
|
|
668
|
340
|
328
|
|
|
|
1.61
|
|
|
|
1.49
|
|
|
0.12
|
Akasaba
|
|
|
141
|
0
|
141
|
|
|
|
0.92
|
|
|
|
-
|
|
|
|
Kittila
|
|
|
4,353
|
4,524
|
-171
|
|
|
|
4.80
|
|
|
|
4.93
|
|
|
-0.13
|
Meadowbank
|
|
|
943
|
1,168
|
-225
|
|
|
|
2.72
|
|
|
|
3.08
|
|
|
-0.36
|
Meliadine
|
|
|
3,417
|
3,335
|
82
|
|
|
|
7.32
|
|
|
|
7.44
|
|
|
-0.12
|
Subtotal/Average
|
|
|
16,572
|
17,299
|
-726
|
|
|
|
2.57
|
|
|
|
2.57
|
|
|
-
|
Southern Business |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pinos Altos
|
|
|
1,459
|
1,763
|
-304
|
|
|
|
2.88
|
|
|
|
3.01
|
|
|
-0.13
|
Creston Mascota
|
|
|
176
|
236
|
-59
|
|
|
|
1.30
|
|
|
|
1.25
|
|
|
0.05
|
La India
|
|
|
867
|
679
|
188
|
|
|
|
0.90
|
|
|
|
0.85
|
|
|
0.05
|
Subtotal/Average
|
|
|
2,502
|
2,678
|
-175
|
|
|
|
1.56
|
|
|
|
1.70
|
|
|
-0.14
|
Total Mineral Reserves |
|
| 19,075 | 19,976 | -902 |
|
|
| 2.37 |
|
|
| 2.40 |
|
| -0.03 |
Amounts presented in the table and in this news release have been
rounded to the nearest thousand. See "Detailed Mineral Reserve and
Mineral Resource Data (as at December 31, 2015)" set out at the end of
this news release for more details.
In prior years, economic parameters used to model mineral reserves for
all properties were calculated using historic three-year average metals
prices and foreign exchange rates in accordance with the U.S.
Securities and Exchange Commission (the "SEC") guidelines. These
guidelines require the use of prices that reflect current economic
conditions at the time of mineral reserve estimation, which the SEC has
interpreted to mean historic three-year average prices. Given the
current lower commodity price environment, Agnico Eagle has decided to
continue to use more conservative gold and silver prices of $1,100 per
ounce and $16 per ounce, respectively, for the December 2015 mineral
reserve estimates. These prices are well below the three-year historic
gold and silver price averages (from January 1, 2013 to December 31,
2015) of approximately $1,279 per ounce and $19.54 per ounce,
respectively.
The assumptions used for the December 2015 mineral reserves and mineral
resources estimate at all mines and advanced projects reported by the
Company (other than the Canadian Malartic mine) were $1,100 per ounce
gold, $16 per ounce silver, $0.90 per pound zinc, $2.50 per pound
copper and exchange rates of C$1.16 per $1.00, 14.00 Mexican pesos per
$1.00 and $1.20 per €1.00 for all mines and projects other than the
Lapa and Meadowbank mines in Canada, and the Creston Mascota mine and
Santo Niño pit at the Pinos Altos mine in Mexico; due to the shorter
mine life for the Lapa and Meadowbank mines in Canada, and the CrestonMascota mine and Santo Niño pit at the Pinos Altos mine in Mexico, the
exchange rates used were C$1.30 per $1.00 and 16.00 Mexican pesos per
$1.00. The Canadian Malartic General Partnership (the "Partnership"),
owned by Agnico Eagle (50%) and Yamana (50%), which owns and operates
the Canadian Malartic mine, has estimated the mine's December 2015
mineral reserves and mineral resources using the following assumptions:
$1,150 per ounce gold, a cut-off grade between 0.30 g/t and 0.33 g/t
gold (depending on the deposit) and an exchange rate of C$1.24 per
$1.00.
Details of the economic parameters used in generating the December 2015
mineral reserves are shown with the "Detailed Mineral Reserve and
Mineral Resource Data (as at December 31, 2015)" tables below.
While the gold price (in U.S. dollars) and currency exchange rates have
changed, the gold price has remained relatively stable over the past 36
months, when reported in the Canadian dollar, Euro or Mexican peso.
The following table shows the changes in gold price (in various
currencies) and exchange rates used in the assumptions over the past
three years, using the exchange rate assumptions of the long-life mines
for the 2015 estimate.
Comparison of assumptions used to estimate mineral reserves and the gold
price in local currencies in 2013, 2014 and 2015
| December 31 |
| 2015 |
| 2014 |
| 2013 |
Currency exchange rate |
|
|
|
|
|
US$/C$
|
1.16
|
|
1.08
|
|
1.03
|
Euro/US$
|
1.20
|
|
1.30
|
|
1.32
|
US$/MXP
|
14.00
|
|
13.00
|
|
12.75
|
Gold price per ounce in local currencies |
|
|
|
|
|
US$
|
US$1,100
|
|
US$1,150
|
|
US$1,200
|
C$
|
C$1,276
|
|
C$1,242
|
|
C$1,236
|
Euros
|
€917
|
|
€885
|
|
€909
|
Mexican pesos
|
MPX15,400
|
|
MPX14,950
|
|
MPX15,300
|
The Company's overall mineral reserve gold grade has decreased slightly
to 2.37 g/t from 2.40 g/t. This is the result of a reduction in the
cut-off grades at each operation because of a slight increase of the
assumed gold price when converted to local currencies (shown in the
table above). Agnico Eagle has one of the highest mineral reserve
grades among its North American peers.
In the Northern Business, gold contained in mineral reserves decreased
by 726,000 ounces (4%) in 2015; during the year this business segment
produced 1,319,301 ounces of gold (1,451,000 ounces of in-situ gold
mined).
The largest mineral reserve increase in the Northern Business was at the
Goldex mine, where the amount contained in mineral reserves increased
by 328,000 ounces of gold (96%), year-over-year, to 668,000 ounces of
gold, with an 8% increase in the mineral reserve grade to 1.61 g/t gold
from 1.49 g/t gold. The increase is largely due to the successful
conversion of mineral resources to mineral reserves, mainly in the D
Zone as well as in the M and E zones. These are the initial D Zone
probable mineral reserves (354,000 ounces of gold in 6.3 million tonnes
of ore grading 1.75 g/t gold), related to the approval of mining the
Deep 1 project announced in the Company's news release dated July 29,
2015. This increase was offset by the 2015 production of 115,426
ounces of gold (123,000 ounces of in-situ gold mined).
At the nearby Akasaba project, initial probable mineral reserves
reported are 141,000 ounces of gold (4.8 million tonnes grading 0.92
g/t gold and 0.52% copper), the result of conversion of indicated
mineral resources to mineral reserves.
Canadian Malartic had the largest decline in mineral reserves; its
mineral reserves decreased by 466,000 ounces of gold, mainly due to
2015 gold production of 285,809 ounces (322,000 ounces of in-situ gold
mined). The remainder of the decline was due to a slight reduction in
the pit shells related to the incorporation of the 5% net smelter
return royalty payable to Osisko Gold Royalties Ltd. and the
termination of the Gouldie open pit. All numbers shown for Canadian
Malartic reflect Agnico Eagle's 50% ownership in the mine.
The decrease in the Meadowbank mine's mineral reserves by mine depletion
was partially offset by the conversion of mineral resources to mineral
reserves for the Vault pit extension, announced in the Company's news
release dated July 29, 2015.
At Kittila, the mining depletion was partially offset by successful
conversion of mineral resources to mineral reserves.
In the Southern Business, the gold contained in mineral reserves
decreased by approximately 175,000 ounces (7%) in 2015. This business
segment had production of 352,039 ounces of gold (459,000 ounces of
in-situ gold mined) in 2015.
There was a large increase at the La India mine where the gold mineral
reserves increased by 28% (188,000 ounces) to 867,000 ounces of gold
(30.0 million tonnes of ore grading 0.90 g/t gold and 4.23 g/t silver)
compared with a year ago. The mine depletion was more than offset by
the addition of new oxide reserves and by conversion of sulphide
mineral resources to mineral reserves in the Main pit, the result of
successful metallurgical investigations in 2015 and field-proven
experience with the North Zone sulphide material.
The 304,000-ounce decline in mineral reserves at Pinos Altos was due to
2015 production of 192,974 ounces of gold (205,000 ounces of in-situ
gold mined) as well as a change to the Cerro Colorado block model based
on information gained from geological mapping and mining development.
It is the Company's goal to maintain its global mineral reserves at
approximately 10 to 15 times its annual gold production rate. The
current mineral reserves are within this range when compared to the
Company's projected annual 2016 production rate.
In addition to gold, Agnico Eagle's proven and probable mineral reserves
include by-product metals of approximately 55 million ounces of silver
at the Pinos Altos, LaRonde, La India and Creston Mascota mines (68.2
million tonnes of ore grading an average of 25.0 g/t silver), plus
147,927 tonnes of zinc and 43,357 tonnes of copper at the LaRonde mine
(18.2 million tonnes of ore grading 0.81% zinc and 0.24% copper) and
24,557 tonnes of copper at the Akasaba project (4.8 million tonnes
grading 0.52% copper).
At a gold price of $1,200 per ounce (leaving all other assumptions
unchanged), there would be an approximate 5.4% increase in the gold
contained in proven and probable mineral reserves. Conversely, using a
gold price of $1,000 (leaving all other assumptions unchanged), there
would be an estimated 5.4% decrease in the gold contained in proven and
probable mineral reserves.
Measured and Indicated Mineral Resources Grow by Approximately 1%, While
Inferred Mineral Resources Increase by Approximately 23%
Highlights from the December 31, 2015 Mineral Resource Statement
include:
-
Measured and indicated mineral resources now total approximately 309
million tonnes of ore grading 1.52 g/t gold, or approximately 15.1
million ounces of gold. This represents an increase of approximately
1% over the 2014 estimate
-
Inferred mineral resources total approximately 230 million tonnes of ore
grading 2.24 g/t gold, or approximately 16.5 million ounces of gold.
This represents an increase of approximately 23% over the 2014 estimate
-
At Amaruq, inferred mineral resources increased by approximately 67% to
3.3 million ounces of gold (16.9 million tonnes grading 6.05 g/t gold)
-
There was a 43% increase (approximately 533,000 ounces of gold) in
inferred mineral resources at Kittila, which includes initial mineral
resources in the Sisar Zone discovered in 2015
-
An initial inferred mineral resource of 608,000 ounces of gold and 3.7
million ounces of silver (19.7 million tonnes grading 0.96 g/t gold and
5.78 g/t silver) was estimated at the El Barqueño project in Mexico
-
At Canadian Malartic, the approach of tripling the cut-off grade of the
out-pit mineral resources had the effect of removing 343,000 ounces
from the measured and indicated mineral resources, leaving 625,000
ounces (12.8 million tonnes of ore grading 1.51 g/t gold) in measured
and indicated mineral resources. The same approach resulted in removing
344,000 ounces from the inferred mineral resource base, leaving 213,000
ounces (4.5 million tonnes of ore grading 1.47 g/t gold) of inferred
mineral resources. The cut-off grade used for the calculation of
mineral resources at Canadian Malartic is now similar to that used at
Goldex
The Company's measured and indicated mineral resources now total
approximately 309 million tonnes of ore grading 1.52 g/t gold, or 15.1
million ounces of gold. This represents approximately a 1% increase in
ounces and a slight increase in grade over the December 2014 measured
and indicated mineral resource (see the April 30, 2015 news release for
comparison). Two of the Kirkland Lake properties of CMC (50% owned by
Agnico Eagle) reported increased indicated mineral resources: the Upper
Beaver project increased by 179,000 ounces of gold to 901,000 ounces
(4.4 million tonnes grading 6.36 g/t gold), while the Amalgamated
Kirkland ("AK") project reported initial indicated mineral resources of
133,000 ounces of gold (0.63 million tonnes grading 6.51 g/t gold)
(these amounts represent Agnico Eagle's 50% interest).
Measured and indicated mineral resources at Kittila increased by 198,000
ounces of gold. La India's measured and indicated mineral resources
increased by 143,000 ounces of gold. These increases were offset by
the successful conversion drilling from inferred mineral resources at
several of the operations, particularly Akasaba and Meadowbank.
At Canadian Malartic, the gold in all mineral resource categories
declined as the result of adjusting the approach to the out-pit
material (adjacent to or below the pit outline) throughout the
property. The approach of tripling the cut-off grade of the out-pit
mineral resources had the effect of removing 343,000 ounces from the
measured and indicated mineral resources, leaving 625,000 ounces (12.8
million tonnes of ore grading 1.51 g/t gold) in measured and indicated
mineral resources. The same approach resulted in removing 344,000
ounces from the inferred mineral resource base, leaving 213,000 ounces
(4.5 million tonnes of ore grading 1.47 g/t gold) of inferred mineral
resources. The cut-off grade used for the calculation of mineral
resources at Canadian Malartic is now similar to that used at Goldex.
All data shown for Canadian Malartic represent Agnico Eagle's 50%
ownership.
The Company's inferred mineral resources now total 230 million tonnes of
ore grading 2.24 g/t, or approximately 16.5 million ounces of gold.
This represents an increase of 23% or approximately 3.1 million ounces
of gold in inferred mineral resources (see the Company's April 30, 2015
news release for comparison).
The largest part of this increase is the significant updated inferred
mineral resource of 16.9 million tonnes grading 6.05 g/t gold
(approximately 3.3 million ounces of gold) at the higher-grade Amaruq
discovery, which is 50 kilometres from the Meadowbank mine in Nunavut.
This is an increase of 1.8 million ounces of gold compared with a year
ago. Approximately 56% of the Amaruq mineral resources are
near-surface.
A portion of the 2015 exploration program at Amaruq involved drill
testing portions of the Whale Tail deposit from the north to the south
to gain a better understanding of the geological controls on the
mineralization. This drilling led to the modelling of thicker, but
slightly lower grade zones of mineralization, which resulted in a
modest decline in the grade of the inferred mineral resources reachable
by open pit.
As at December 31, 2015, an initial inferred mineral resource of 608,000
ounces of gold and 3.7 million ounces of silver (19.7 million tonnes
grading 0.96 g/t gold and 5.78 g/t silver) was estimated at the El
Barqueño project in Mexico. This maiden mineral resource consists of
inferred mineral resources from the Azteca-Zapoteca, Angostura and Peña
de Oro zones based on preliminary open pit designs.
Exploration drilling at depth was responsible for a 43% increase
(approximately 533,000 ounces of gold) in inferred mineral resources at
Kittila, which includes initial mineral resources in the Sisar Zone,
which was discovered in 2015. More details about Sisar can be found in
the Kittila operations section of this news release.
The Upper Beaver and AK properties in the Kirkland Lake area (50% owned
by Agnico Eagle) also reported increased inferred mineral resources,
the result of new drilling programs on these projects. The Upper
Beaver project increased inferred mineral resources by 136,000 ounces
of gold to 659,000 ounces (3.45 million tonnes grading 5.94 g/t gold),
while the AK project reported initial inferred mineral resources of
203,000 ounces of gold (1.19 million tonnes grading 5.32 g/t gold) (in
each case, representing Agnico Eagle's 50% interest).
Successful conversion drilling at depth at the Goldex mine resulted in
approximately 329,000 ounces of gold from the inferred mineral resource
category to mineral reserves.
The distribution of mineral resources by property is set out in the
following table. For full details including tonnage and grade, see the
"Detailed Mineral Reserve and Mineral Resource Data (as at December 31,
2015)" below.
December 31, 2015 Mineral Resources
|
|
|
Measured & Indicated
|
|
|
Inferred
|
|
|
|
Mineral Resources
|
|
|
Mineral Resources
|
|
|
|
(000 oz gold)
|
|
|
(000 oz gold)
|
Northern Business |
|
|
|
|
|
|
LaRonde
|
|
|
767
|
|
|
1,251
|
Canadian Malartic (50%)
|
|
|
625
|
|
|
213
|
Lapa
|
|
|
155
|
|
|
302
|
Goldex
|
|
|
2,075
|
|
|
1,211
|
Kittila
|
|
|
1,548
|
|
|
1,764
|
Meadowbank
|
|
|
720
|
|
|
441
|
Meliadine
|
|
|
3,306
|
|
|
3,552
|
Amaruq
|
|
|
-
|
|
|
3,283
|
Bousquet/Ellison
|
|
|
969
|
|
|
917
|
Hammond Reef (50%)
|
|
|
2,250
|
|
|
6
|
Upper Beaver (Kirkland Lake) (50%)
|
|
|
901
|
|
|
659
|
Akasaba
|
|
|
54
|
|
|
-
|
AK (Kirkland Lake) (50%)
|
|
|
133
|
|
|
203
|
Other
|
|
|
31
|
|
|
420
|
Subtotal
|
|
|
13,535
|
|
|
14,221
|
|
|
|
|
|
|
|
Southern Business |
|
|
|
|
|
|
Creston Mascota
|
|
|
70
|
|
|
145
|
Pinos Altos
|
|
|
655
|
|
|
505
|
La India
|
|
|
828
|
|
|
1,068
|
El Barqueño
|
|
|
-
|
|
|
608
|
Subtotal
|
|
|
1,553
|
|
|
2,325
|
Total Mineral Resources |
|
| 15,089 |
|
| 16,546 |
NORTHERN BUSINESS REVIEW
ABITIBI REGION, QUEBEC
Agnico Eagle is currently Quebec's largest gold producer with a 100%
interest in three mines (LaRonde, Goldex and Lapa) and a 50% interest
in the Canadian Malartic mine. These mines are located within 50
kilometres of each other, which provides operating synergies and allows
for the sharing of technical expertise.
LaRonde Mine - Increased Tonnage From Lower Mine Drives Record Quarterly
Production
The 100% owned LaRonde mine in northwestern Quebec achieved commercial
production in 1988.
The LaRonde mill processed an average of 6,128 tpd in the fourth quarter
of 2015, compared with an average of 5,847 tpd in the corresponding
period of 2014. Minesite costs per tonne were approximately C$94 in
the fourth quarter of 2015, lower than the C$97 per tonne experienced
in the fourth quarter of 2014. Throughput in the 2014 period was lower
and costs were higher due to the ten days of unscheduled shutdown
related to a production hoist drive failure at shaft #4 (the internal
winze) in December 2014.
Milling performance for the full year 2015 was approximately 6,141 tpd,
compared to 5,713 tpd in 2014. Throughput in the 2014 period was lower
due primarily to the planned shutdowns for the installation of new
hoist drives to replace obsolete production and service hoist equipment
in the Penna shaft. Minesite costs per tonne for the full year 2015
were approximately C$99, unchanged from C$99 per tonne in 2014.
LaRonde's total cash costs per ounce on a by-product basis were $510 in
the fourth quarter of 2015 on payable production of 73,161 ounces of
gold. This compares with the fourth quarter of 2014 when total cash
costs per ounce on a by-product basis were $590 on production of 59,316
ounces of gold. The decrease in total cash costs per ounce in the 2015
period was largely due to higher production (due to higher gold grades
from the lower mine area and the improved recoveries from the CIP
circuit) and favourable foreign exchange rates.
For the full year 2015, LaRonde's total cash costs per ounce on a
by-product basis were $590 on gold production of 267,921 ounces. This
compares to total cash costs per ounce on a by-product basis of $668 on
gold production of 204,652 ounces in 2014. The higher production and
lower costs in the 2015 period are primarily due to the reasons
outlined above.
In 2015, the LaRonde mine also produced approximately 3,501 tonnes of
zinc (67% less than in 2014), 0.9 million ounces of silver (28% less
than in 2014), and 4,941 tonnes of copper (1% less than in 2014) as
by-products to the gold production. These totals are consistent with
the change in the metals mix as the mine goes deeper and becomes more
gold rich as opposed to zinc/silver rich in the upper levels. In 2016,
approximately 89% of production is expected to come from the lower mine
area (below the 248 level).
In 2015, work was completed on the installation of the coarse ore
conveyor system that extends from the 293 level to the crusher on the
280 level. The new conveyor was commissioned in the fourth quarter and
a new ore pass and silo designed to feed the conveyor system are
expected to be commissioned in the second quarter of 2016. This new
conveyor should help improve mining flexibility and reduce congestion
in the deeper portions of the mine.
Studies are ongoing to assess the potential to extend the mineral
reserve base and carry out mining activities between the 311 and 371
levels at LaRonde. At present, the mineral reserve base extends to the
311 level, which is 3.1 kilometres below the surface. In 2015,
exploration drilling focused on the eastern portion of the LaRonde
orebody down to the 371 level. As underground development progresses
to the west, a key exploration focus in 2016 will be drill testing the
western portion of the LaRonde orebody from the 311 to the 371 level.
The Company is also evaluating the potential to develop and mine the
Bousquet Zone 5 on the adjoining Bousquet property. Previous property
owners had partly exploited the Bousquet Zone 5 by open pit and
underground, and Agnico Eagle is evaluating the potential to initially
mine the Bousquet Zone 5 from a depth of 90 to 330 metres below surface
via an underground ramp. The mining method is likely to be similar to
that employed at Goldex, and processing could utilize excess capacity
from the Lapa circuit at LaRonde. Dewatering of the old pit is
underway and permit applications to collect a bulk sample will be
submitted shortly. An internal technical study is expected to be
completed by the end of 2016.
Canadian Malartic Mine - Annual Records Set for Ounces Produced and
Tonnes Milled
In June 2014, Agnico Eagle and Yamana acquired all of the issued and
outstanding common shares of Osisko Mining Corporation ("Osisko") and
created the Partnership. The Partnership owns and operates the
Canadian Malartic mine in northwestern Quebec through a joint
management committee. Each of Agnico Eagle and Yamana has an indirect
50% ownership interest in the Partnership.
During the fourth quarter of 2015, the Canadian Malartic mill processed
an average of 52,780 tpd (on a 100% basis) compared with an average of
53,232 tpd in the corresponding period of 2014. Minesite costs per
tonne were approximately C$25 (C$21.76 excluding royalties) compared to
the C$21 (C$19.32 excluding royalties) per tonne experienced in the
fourth quarter of 2014. In the 2015 period, throughput was lower and
costs were higher primarily due to a longer than planned mill shutdown
in December 2015. During this shutdown additional costs were incurred
to repair the eccentric at the crusher and for the alignment of the
ring gear at the #2 ball mill. The average stripping ratio in the
fourth quarter of 2015 was 1.86 to 1.0.
For the full year 2015, the Canadian Malartic mill processed an average
of 52,300 tpd compared with an average of 51,248 tpd in 2014 (on a 100%
basis). Minesite costs per tonne were approximately C$23 (C$20.24
excluding royalties) compared to the C$22 (C$19.76 excluding royalties)
per tonne experienced in 2014. The 2014 tonnage and costs are not
considered to be representative as they only reflect the period from
the acqusition date of June 16 through December 31.
For the fourth quarter of 2015, Agnico Eagle's share of production at
the Canadian Malartic mine was 72,872 ounces of gold at total cash
costs per ounce on a by-product basis of $606. This compares with the
fourth quarter of 2014 when total cash costs per ounce on a by-product
basis were $684 on production of 66,369 ounces of gold. Production was
higher in the 2015 period primarily due to higher grades. Costs in the
2015 period were lower due to lower costs for fuel and explosives,
increased production and favourable foreign exchange rates, partially
offset by higher shutdown costs for the planned mill maintenance.
For the full year 2015, Agnico Eagle's share of production at the
Canadian Malartic mine was 285,809 ounces of gold at total cash costs
per ounce on a by-product basis of $596. This is in contrast with
production from June 16 to December 31, 2014, which only included
143,008 ounces of gold at total cash costs per ounce on a by-product
basis of $701 from Canadian Malartic.
Future Opportunities - Continuing to Look to Further Optimize Operations
Since acquiring the mine in June 2014, the Partnership has been looking
at a variety of ways to optimize the operations. In parallel with the
Barnat permitting (see below), the Partnership is currently working on
the permitting necessary for improving the efficiency and environmental
performance of the existing mobile crusher. At this point, milling
levels are expected to be approximately 53,000 tpd through year-end
2016.
Several other opportunities have been identified to further optimize
productivity, including:
-
Improvements to SAG mill liners in order to reduce the number of major
shutdowns to three from four
- Higher North Zone performance with the purchase of an additional remote
control production back hoe. This should result in higher grade ore
being brought to the mill
-
Cost savings opportunities: primarily on explosives and contractors
-
Ongoing continuous improvement projects
Ounce reconciliation with the block model continues to be positive
(approximately 5% higher) and is an opportunity to provide additional
production flexibility going forward.
Permitting activities for the Barnat extension and deviation of Highway
117 are continuing on schedule. An Environmental Impact Assessment
("EIA") for this project was submitted in February 2015. A second
series of questions from the Quebec government was received by the
Partnership in December 2015, and final responses were submitted in
January 2016.
Public hearings are expected to be held later in 2016. Granting of
final permits is expected to occur after the completion of the public
consultation process. In parallel, the Partnership is currently
working on permitting for improving the efficiency and environmental
performance of the existing mobile crusher.
Odyssey and Near Pit Targets Could Provide Future Production Upside
At the Canadian Malartic mine, exploration programs are planned to
evaluate a number of near pit/underground targets at the mine and
further define the extent of the mineralization at the Odyssey zone
(which is located to the east of the Canadian Malartic open pit). Both
of these opportunities could provide new potential sources of ore for
the Canadian Malartic mill.
At Odyssey, 44 holes (a total of 35,870 metres) were drilled in 2015.
Exploration to date has outlined two mineralized zones: Odyssey North
and Odyssey South. Odyssey North has been traced from a depth of 550
to 1,200 metres below the surface and along approximately 1,500 metres
of strike length. Odyssey South is approximately 200 to 550 metres
below surface with an approximate strike length of 1,500 metres. Gold
occurs along the margins of a porphyry body in both zones. Plan and
three dimensional views of the Odyssey mineralization are shown below.
[Plan View Showing Odyssey Zones and Near Pit/Underground opportunities
at Canadian Malartic]
In 2016, the Canadian Malartic block model will be reviewed to further
define the potential of the near pit targets and a 60,000 metre drill
program has been proposed to further evaluate the extent of the
mineralization at Odyssey.
CMC Exploration Activities - Pandora and Kirkland Lake are focus areas
In addition to joint, indirect ownership of the Canadian Malartic mine,
Agnico Eagle and Yamana are also jointly exploring a portfolio of
properties in the Kirkland Lake area and the Pandora and Wood-Pandora
properties in the Abitibi region of Quebec. Agnico Eagle and Yamana,
indirectly through Canadian Malartic Corporation (CMC) each hold a 50%
interest in the Kirkland Lake and Pandora properties, while the
Wood-Pandora property is a joint venture between Globex Mining
Enterprises Inc. (50%) and CMC.
In 2015, approximately 960 metres of underground drifting was carried
out on the Pandora project from a track drift developed from the Lapa
mine. In addition, 34 surface holes (a total of 19,200 metres) and 13
underground holes (a total of approximately 7,900 metres) were drilled
to test the C Zone and Branch Zone targets. Results have been
encouraging, and additional underground development and 10,400 metres
of drilling is planned in 2016.
The proposed budget for Pandora in 2016 (100% basis) is approximately
C$4.1 million.
In Kirkland Lake, a total of approximately C$7.4 million (100%) was
spent in 2015. This work included 58 drill holes (a total of 15,140
metres) on the AK, Upper Canada, Skead-MacGregor and Northland
properties. In addition, an Airborne Gravity survey was completed.
This new drilling has been incorporated into a new mineral resource
estimate for the AK property which is included in Agnico Eagle's
December 31, 2015 mineral reserve and mineral resource update (see
"Detailed Mineral Reserve and Mineral Resource Data (as at December 31,
2015)" below).
The proposed budget for Kirkland Lake in 2016 (100% basis) is
approximately C$5.2 million. This program will include 3,000 metres of
drilling and further data compilation.
Lapa - Strong 2015 Performance, Limited Mine Life in 2016 but
Exploration Could Provide Additional Upside
The 100% owned Lapa mine in northwestern Quebec achieved commercial
production in May 2009.
The Lapa circuit, located at the LaRonde mill, processed an average of
1,478 tpd in the fourth quarter of 2015. This compares with an average
of 1,760 tpd in the fourth quarter of 2014. The reduced throughput in
the 2015 period was largely due to lower mill availability resulting
from electrical and mechanical issues with the Lapa ball mill.
Minesite costs per tonne were C$111 in the fourth quarter of 2015,
compared to the C$109 realized in the fourth quarter of 2014. Costs in
the 2015 period were higher due to the reasons above.
Milling performance for the full year 2015 was approximately 1,534 tpd
compared to 1,750 tpd in 2014. Throughput in the 2015 period was lower
primarily due to downtime related to repairs carried out on the Lapa
ball mill in the third and fourth quarters. Full-year minesite costs
in 2015 were C$117 per tonne, higher than the C$107 in 2014. Costs
were higher in 2015 largely due to the reasons outlined above.
Payable production in the fourth quarter of 2015 was 19,929 ounces of
gold at total cash costs per ounce on a by-product basis of $620. This
compares with the fourth quarter of 2014, when production was 25,611
ounces of gold at total cash costs per ounce on a by-product basis of
$607. In the 2015 period, production was lower and costs were higher
due to a combination of lower throughput and lower grades compared to
the 2014 period.
For the full year 2015, payable production was 90,967 ounces of gold at
total cash costs per ounce on a by-product basis of $590. The prior
year production was 92,622 ounces of gold at total cash costs per ounce
on a by-product basis of $667. Production in 2015 was lower due to
lower throughput, while costs were lower primarily due to favourable
foreign exchange rates.
Under the current life of mine plan, Lapa is only expected to operate
until early into the fourth quarter of 2016. Two areas (Zone 8 East -
Upper mine and the Zulapa 7 - Deep 2 Zone) have been identified through
exploration as areas that could potentially support future mining
activity post 2017. However, additional exploration is required, and
any potential production from these areas would likely require
synergies with other production opportunities such as the Bousquet Zone
5 or the Pandora project.
The LaRonde mine has now assumed responsibilities for the management and
administration of the Lapa mine and progressive transfers of Agnico
Eagle personnel from Lapa are now underway throughout the Company.
Goldex - Record Underground Ore Hoisting in Q4 2015, Trend Could
Continue into 2016
The 100% owned Goldex mine in northwestern Quebec began operation in
2008 but mining operations in the original orebody, the Goldex
Extension Zone ("GEZ"), were suspended in October 2011. In July 2012,
the M and E satellite zones were approved for development. Mining
operations resumed on the M and E satellite zones in September 2013.
Mining operations at GEZ remain suspended.
During the fourth quarter of 2015, the Goldex mine had record
underground ore hoisting of 7,273 tpd. Although not currently built
into the 2016 production forecast, the Company believes that there is
potential for continued strong underground performance in 2016. Should
this performance be sustainable, the Company will evaluate the
potential to increase mill throughput (current mill capacity is
approximately 8,000 tpd).
The Goldex mill processed an average of 6,213 tpd in the fourth quarter
of 2015 compared to 6,251 tpd in the fourth quarter of 2014, which was
similar to prior-year levels. Minesite costs per tonne were
approximately C$31 in the fourth quarter of 2015, lower than the C$34
per tonne experienced in the fourth quarter of 2014. The 2015 decrease
in costs over the prior-year period is primarily due to the strong
underground performance outlined above.
For the full year 2015, the Goldex mill averaged 6,336 tpd, which
compares to 5,799 tpd in the corresponding period of 2014. The higher
throughput in the 2015 period was largely due to accelerated mining
levels compared to the 2014 period. Full-year minesite costs per tonne
in 2015 were C$33, the same in 2014.
Payable production in the fourth quarter of 2015 was 27,646 ounces of
gold at total cash costs per ounce on a by-product basis of $513. This
compares with the fourth quarter of 2014, when production was 29,463
ounces of gold at total cash costs per ounce on a by-product basis of
$583. Production in the 2014 period was higher due to slightly higher
grades and marginally more ore processed compared to the 2015 period.
Costs were lower in the 2015 period due to lower unit costs and
favourable exchange rates as compared to the same period in 2014.
For the full year 2015, payable production was 115,426 ounces of gold at
total cash costs per ounce on a by-product basis of $538. The prior
year production was 100,433 ounces of gold at total cash costs per
ounce on a by-product basis of $638. Production in 2015 was higher and
costs were lower than in 2014 due to higher tonnage, grade and
recoveries.
Rehabilitation of the surface ramp has been completed which provides
increased operational flexibility. This ramp also provides access to
the M2 and M5 satellite zones for conversion drilling and development
later this year.
The exploration ramp into the DX Zone (the top of the Deep Zone) has
reached the 120 level, which is the proposed bottom of the Deep 1
development phase. Underground development in the Deep 1 Zone will now
shift to excavation of the various sublevels needed for mining
development and excavation of the conveyor ramp.
Studies are underway to evaluate the potential to increase throughput
from the Deep 1 Zone, and the potential to mine a portion of the Deep 2
Zone, both of which could enhance production levels or extend the
current mine life at Goldex and reduce operating costs.
In January 2014, Agnico Eagle acquired the Akasaba West gold-copper
deposit from Alexandria Minerals. Located less than 30 km from Goldex,
the Akasaba West deposit could potentially create flexibility and
synergies for the Company's operations in the Abitibi region by
utilizing extra milling capacity at both Goldex and LaRonde, while
reducing overall costs. Permitting and technical studies are ongoing
with the goal of moving the project towards a production decision in
late 2016 or early 2017.
FINLAND AND SWEDEN
Agnico Eagle's Kittila mine in Finland is the largest primary gold
producer in Europe and hosts the Company's largest mineral reserves.
Exploration activities continue to expand the mineral resources and
studies are underway to evaluate the potential to cost-effectively
increase production.
Kittila - Strong Mining Performance in Q4 2015 and Available Mill
Capacity Provide Potential for Increased Future Production
The 100% owned Kittila mine in northern Finland achieved commercial
production in 2009.
The focus at Kittila in 2015 was on improving mill reliability. Several
projects were carried out in the fourth quarter of 2015 which appear to
have improved maintenance performance. With further optimization, the
Company believes that there is potential for improved mill
availability, which could lead to higher throughput levels (possibly up
to 20% higher) in the future.
The Kittila mill processed an average of 4,100 tpd in the fourth quarter
of 2015 compared to the 3,980 tpd in the fourth quarter of 2014. The
underground performed very well in the fourth quarter resulting in
record average daily throughput of 4,750 tpd in December 2015.
Minesite costs per tonne at Kittila were approximately €80 in the fourth
quarter of 2015, compared to €75 in the fourth quarter of 2014. Costs
increased in the fourth quarter of 2015 due to the increased usage of
consumables, higher contractor costs and increased underground
development costs when compared with the 2014 period.
For the full year 2015, the mill processed an average of 4,011 tpd, as
compared with 2014 when the mill processed an average of 3,168 tpd.
The increase in throughput was a result of the completion of the mill
expansion at the end of September 2014. For the full year 2015, the
minesite costs per tonne were €76, compared to €78 in 2014. The slight
decrease in minesite costs per tonne in the 2015 period are primarily
due to efficiencies related to increased mill capacity.
Fourth quarter 2015 payable production at Kittila was 44,279 ounces of
gold with total cash costs per ounce on a by-product basis of $747. In
the fourth quarter of 2014, the mine produced 43,130 ounces at total
cash costs per ounce on a by-product basis of $809. The higher
production and lower costs in the 2015 period were a result of the
completion of the mill expansion which continues to ramp-up to design
capacity and favourable exchange rates.
For the full year 2015, payable production from Kittila was 177,374
ounces of gold at total cash costs per ounce on a by-product basis of
$709. In 2014, the mine produced 141,742 ounces of gold at total cash
costs per ounce on a by-product basis of $845. The lower production in
2014 was largely due to the planned mill shutdown in September 2014 to
tie-in the expansion. The lower total cash costs per ounce in the 2015
period are largely due to increased production and favourable foreign
exchange rates.
Previous drilling on the Rimpi Zone at Kittila has outlined a
significant zone of mineralization with potentially wider widths and
better grades than those currently being mined. The main underground
ramp at Kittila is being extended to reach the deeper portions of the
Rimpi Zone and it is also providing further underground drill access to
test for additional depth extensions of the Rimpi, Suuri, Roura and the
newly discovered Sisar mineralized zones.
In addition, a surface ramp is being driven into the Rimpi Zone (now at
a depth of 190 metres below surface) for production purposes and to
provide a second egress for the Suuri ramp system. It will serve as
the main haulage route from the deeper portions of both Rimpi and Suuri
and, potentially, the Sisar Zone.
At the Kuotko deposit, located approximately 15 kilometres north of
Kittila, approximately 7,300 metre of drilling was completed in 2015.
New mineralized zones have been identified outside of the known mineral
resource areas. Metallurgical testing is also ongoing and studies are
being carried out to assess the viability of mining the deposit as a
satellite open pit.
In 2015, a new zone of mineralization, known as the Sisar Zone, was
discovered by exploration drilling from the underground ramp being
driven towards the deeper portion of the Rimpi Zone. The Sisar Zone is
located to the east of the main Kittila ore zone, and in close
proximity to existing underground infrastructure. The Sisar Zone could
potentially provide an additional source of underground ore to the
Kittila mill with relatively little additional underground development,
should further drilling outline an economic deposit. This new zone is
discussed in further detail below.
Inferred mineral resources at Kittila as of December 31, 2015 include
the initial inferred mineral resources reported for the Sisar zone. As
the table below sets out, 37% (approximately 651,000 ounces of gold) of
the current inferred resources at Kittila are within the Sisar zone.
Note that all of the inferred resources at Kittila, including Sisar,
are above 1,400 metres depth.
Inferred mineral resources at the Kittila mine as of December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
Category |
|
|
| Gold |
|
| Gold (oz) |
|
| Tonnes |
(g/t) |
|
| (x000) |
|
| (x000) |
Inferred Mineral Resources (Underground) |
|
|
|
|
|
|
|
|
|
|
Sisar Zone
|
|
|
|
5.91
|
|
|
651
|
|
|
3,423
|
Main and all other zones
|
|
|
|
4.12
|
|
|
1,113
|
|
|
8,409
|
Total Inferred Mineral Resources |
|
|
| 4.64 |
|
| 1,764 |
|
| 11,833 |
With the potential for higher mill capacity through ongoing
optimization, development of the Rimpi and Sisar Zones could result in
increased future production levels and reduced operating costs at
Kittila.
New Parallel Sisar Zone Extends Above and Below Previous Intercepts
Recent holes drilled from the exploration ramp have extended the Sisar
Zone upward, downward and to the north, including two intercepts that
are lower than any previous intercepts on the Kittila property. The
table below shows the intercepts of three new holes and two previously
released holes. Pierce points for all these holes are shown on the
Kittila composite longitudinal section and two cross sections (100
metres apart). All intercepts reported for the Kittila mine show
uncapped grades over estimated true widths, based on a current
geological interpretation that is being updated as new information
becomes available with further drilling.
Recent exploration drill results from the Kittila mine
Drill hole
|
Zone
|
From
(metres)
|
To
(metres)
|
Depth of
midpoint
below
surface
(metres)
|
Estimated
true width
(metres)
|
Gold grade
(g/t)
(uncapped)
|
ROD14-004F*
|
Main
|
839.5
|
870.0
|
1,550
|
10.0
|
5.3
|
RIE15-601
|
Sisar
|
190.6
|
201.0
|
811
|
9.6
|
8.0
|
and
|
Sisar
|
223.0
|
227.0
|
811
|
3.7
|
3.6
|
RIE15-605
|
Sisar
|
238.4
|
242.2
|
894
|
3.2
|
4.0
|
and
|
Sisar
|
261.0
|
266.9
|
902
|
5.3
|
4.8
|
and
|
Sisar
|
282.7
|
318.0
|
915
|
27.0
|
4.9
|
ROU15-603**
|
Sisar
|
323.0
|
338.0
|
977
|
13.3
|
5.2
|
ROD15-704D
|
Sisar
|
1,221.8
|
1,279.2
|
1,879
|
27.5
|
6.5
|
including
|
|
1,230.1
|
1,243.2
|
1,870
|
6.2
|
10.1
|
including
|
|
1,250.2
|
1,267.0
|
1,885
|
8.1
|
8.8
|
and
|
Sisar
|
1,294.9
|
1,300.0
|
1,909
|
2.5
|
4.9
|
* Hole ROD14-004F previously reported in Company news release dated
April 30, 2015
** Hole ROU15-603 previously reported in Company news release dated July
29, 2015
[Kittila composite longitudinal section]
[Kittila composite cross sections - 7538600mN and 7538700mN]
Hole RIE15-601 was drilled essentially horizontally from a drill station
on the main exploration ramp toward the east, and intersected
mineralization in two places with midpoints at 811 metres below
surface; the first intercept was 8.0 g/t gold over 9.6 metres and the
second was 3.6 g/t gold over 3.7 metres. These are the shallowest
intercepts to date in the Sisar Zone, almost 140 metres shallower than
any previous intercepts in this lens.
Hole RIE15-605 intersected the Sisar Zone approximately 90 metres deeper
than RIE15-601 and slightly to the north. RIE15-605 had three
mineralized intercepts between 894 and 915 metres depth of which the
best was 4.9 g/t gold over 27.0 metres at 915 metres depth. This
intercept is 150 metres farther north than the previous northernmost
Sisar intercept (hole ROU15-603 which intersected 5.2 g/t gold over
13.3 metres at 977 metres depth, previously reported in Company news
release dated July 29, 2015). The two new intercepts are included in
the year-end 2015 Kittila mineral resources.
From an underground drill station 100 metres to the south, hole
ROD15-704D intersected a deep extension of the Sisar Zone in two
places, approximately 300 metres to the east of the interpreted
location of the main ore zone. The first intercept graded 6.5 g/t gold
over 27.5 metres at 1,879 metres below surface, including 10.1 g/t gold
over 6.2 metres and 8.8 g/t gold over 8.1 metres. The second intercept
graded 4.9 g/t gold over 2.5 metres at 1,909 metres below surface,
which is 650 metres deeper than any previous intercepts in the Sisar
Zone.
These two deep intercepts are interpreted to be within the Sisar Zone
based on their location along the general strike and dip of the lens.
Additional holes have been drilled to investigate the area above these
deep intercepts, and assays are pending. Follow-up drilling to the
north will continue to investigate this deep level, in the first half
of 2016.
In addition, the lowermost intercept of hole ROD15-704D is 360 metres
deeper than the previous lowest intercept in the main Kittila ore zone
(which was hole ROD14-004F, previously reported in the Company's news
release dated April 30, 2015). The two new deep intercepts therefore
point to a virgin area for deep exploration (shown on the Kittila
composite longitudinal secion) that could prove to be significant for
the future of the Kittila mine.
Barsele Project - Depth Extension Confirmed on the Central Zone
On June 11, 2015, Agnico Eagle acquired a 55% interest in the Barsele
project in Sweden. The Company can earn an additional 15% interest in
the project through the completion of a pre-feasibility study.
The Barsele property is known to contain intrusive-hosted gold
mineralization (similar to Goldex) and gold-rich volcanogenic massive
sulphide mineralization (similar to LaRonde). In 2015, the Company
spent approximately $1.57 million on exploration to further evaluate
the mineral potential of the property.
In September 2015, trenching and mapping programs were carried out that
confirmed that the known intrusive-hosted deposits plunge to the
southeast. In the fourth quarter 2015, a 15 hole (8,350 metre) drill
program was completed that successfully tested the depth extension of
the Central Zone to 200 to 300 metres below surface. A $4.3 million
exploration program consisting of 12,000 metres is planned to be
carried out in 2016 to further evaluate the intrusive hosted
mineralization.
NUNAVUT REGION
Agnico Eagle has identified Nunavut as a politically attractive and
stable jurisdiction with enormous geological potential. With the
Company's largest producing mine (Meadowbank) and two significant
development assets (Meliadine and Amaruq) and other exploration
projects, Nunavut has the potential to be a strategic operating
platform with the ability to generate strong production and cash flows
over several decades.
Meadowbank - Improved Mining Rates Could Provide Additional Flexibility
Through 2018
The 100% owned Meadowbank mine in Nunavut, northern Canada, achieved
commercial production in March 2010.
The Meadowbank mill processed an average of 11,168 tpd in the fourth
quarter of 2015, compared to the 11,160 tpd achieved in the fourth
quarter of 2014. For the full year 2015, the Meadowbank mill processed
an average of 11,049 tpd, compared to 11,313 tpd in the full year
2014. Mill throughput for the fourth quarter of 2015 was similar to
the comparable period of 2014. Year-over-year mill throughput levels
were slightly lower due to the hardness profile of the Vault ore
processed.
Minesite costs per tonne were a record low C$62 in the fourth quarter
and C$70 for the full year of 2015. These costs were lower than the
C$72 per tonne in the fourth quarter and C$73 full year 2014,
respectively. The improvement in cost per tonne in the 2015 periods
was primarily driven by improved productivity due to better mine
planning and mechanical availability compared to the previous periods.
Payable production in the fourth quarter of 2015 was 102,580 ounces of
gold at total cash costs per ounce on a by-product basis of $526. This
compares with the fourth quarter of 2014 when 86,715 ounces were
produced at total cash costs per ounce on a by-product basis of $757.
The higher production and lower costs in the 2015 period compared to
the 2014 period are primarily due to higher tonnage, grade and
recoveries, and favourable foreign exchange rates.
Full year 2015 payable production was 381,804 ounces of gold at total
cash costs per ounce on a by-product basis of $613. In 2014, the mine
produced 452,877 ounces of gold at total cash costs per ounce on a
by-product basis of $599. The higher production and lower costs in the
2014 period is primarily due to the mining of higher than expected
grades in the Goose pit in the first half of 2014, higher crusher
throughput levels and slightly better recoveries.
In July 2015, the Company decided to proceed with the expansion of the
Vault pit. This expansion resulted in revised production guidance at
Meadowbank for 2016 to 2018 (see guidance section above). The mine is
now expected to close in the third quarter of 2018, which is
approximately a year longer than previously forecast by Agnico Eagle in
February 2015. Production levels are expected to gradually decline from
2016 to 2018 due to a decline in grade as the current mineral reserve
base is depleted.
The Company is actively exploring the Amaruq deposit (see section below)
with the goal of potentially developing the deposit as a satellite
operation to Meadowbank.
Amaruq Project - Inferred Mineral Resources Expanded 67%; Final 2015
Drilling Extends Whale Tail Deposit at Depth in Two Directions
Agnico Eagle has a 100% interest in the Amaruq project. The large
property consists of 114,761 hectares, approximately 50 kilometres
northwest of the Meadowbank mine.
The Amaruq drill program was completed in mid-October 2015. Total
drilling at Amaruq for the year was 108,000 metres (378 holes), of
which approximately 85,000 metres were in Whale Tail/Mammoth zones,
approximately 17,000 metres in the IVR zone, and approximately 6,000
metres on regional targets and condemnation.
Results from all of the holes have been included in the 2015 inferred
mineral resource estimate, but assays from several holes were received
after the Company last reported drill results in its October 28, 2015
news release. A selection of the late 2015 drill results from several
areas of the Amaruq deposit are discussed below, particularly in the
Whale Tail Ore Shoot and the IVR Zone.
In August 2015, the Company announced an updated inferred mineral
resource estimate as of June 30, 2015 of 2.0 million ounces of gold
(9.7 million tonnes grading 6.47 g/t gold).
The new inferred mineral resource estimate as of December 31, 2015
increased by 67% compared with the June 30, 2015 estimate (119%
compared with the December 31, 2014 estimate) to 3.3 million ounces of
gold (16.9 million tonnes grading 6.05 g/t gold). The Whale Tail
deposit contains 89% of the gold in mineral resources; these mineral
resources have been extended in two directions; along the east-plunging
ore shoot to a depth of approximately 500 metres, and locally as deep
as 600 metres in the central portion of Whale Tail.
Since the June 30, 2015 estimate, the IVR inferred mineral resource has
more than doubled to 208,635 ounces of gold (1.01 million tonnes
grading 6.43 g/t gold), and there are initial resources under Mammoth
Lake and in the former "gap" area between Whale Tail and Mammoth Lake.
Selected late 2015 drill holes are set out in the table below, and their
collars are located on the Amaruq Local Geology Map. The Whale Tail
composite longitudinal section (below) shows the location of the
resources in the Whale Tail as of December 31, 2015 and the pierce
points for Whale Tail and Mammoth drill holes in the table below.
Coordinates of the IVR drill holes are given in a second table. All
intercepts reported for the Amaruq project show capped grades over
estimated true widths, based on a preliminary geological interpretation
that is being updated as new information becomes available with further
drilling.
[Amaruq local geology map]
[Whale Tail Deposit Composite Longitudinal Section]
Whale Tail Ore Shoot
Additional drilling was conducted to continue to expand the high-grade
ore shoot within the Whale Tail deposit. The ore shoot was traced over
an additional 100 metres of strike length, with hole AMQ15-475
representing the eastern-most mineralized interval within the ore
shoot. This hole intersected 8.1 g/t gold over 5.9 metres at 429
metres depth. The high-grade ore shoot remains open to the east. Hole
AMQ15-511 yielded 5.8 g/t gold over 10.7 metres at 415 metres depth in
the central area of the deposit which remains open at depth. The
deepest significant interval came from hole AMQ15-536 and returned 11.8
g/t gold over 4.8 metres at 600 metres depth enhancing the potential
for an underground operation under the open pit in the future.
IVR Zone
The IVR Zone appears to be a different style of mineralization than the
Whale Tail deposit. IVR is dominated by shear-zone-hosted, boudinaged
quartz veins with high gold grades and frequent coarse-grained visible
gold (now referred to as the "V-type shear zones" because they are
typical of the V Zone mineralization).
Recent drilling and mapping has shown that the V zone is a significant
mineralized structure dipping shallowly to the southeast. The
structure has been identified from outcrop on surface to a depth of 155
metres in recent drilling and over a lateral strike length of 570
metres; it remains open at depth and laterally. Recent results include
hole AMQ15-451 that intersected 7.2 g/t gold over 10.4 metres at 136
metres depth, hole AMQ15-544 that intersected 33.6 g/t gold over 3.3
metres at 56 metres depth, and hole AMQ15-549 that intersected 15.4 g/t
gold over 3.0 metres at 62 metres depth.
Whale Tail - Mammoth Target Area
Further drilling completed in the western extension of Whale Tail
allowed the Company to better understand the relationship between
stratigraphic and structural controls in that area. Preliminary
observations suggest that the strongest mineralization on the west side
of Whale Tail is hosted by a different iron formation sequence that is
slightly to the north of the sequence that hosts most of the Whale Tail
mineralization. This area offers potential to further expand the
in-pit resources towards the west. Hole AMQ15-507 intersected 5.4 g/t
gold over 12.4 metres at 79 metres depth. The area requires more
drilling in 2016.
Additional 2015 exploration drill results from the Whale Tail (WT)
deposit and the V Zone area, Amaruq project
Drill hole
|
Location
|
From
(metres)
|
To
(metres)
|
Depth of
midpoint
below
surface
(metres)
|
Estimated
true width
(metres)
|
Gold
grade
(g/t)
(uncapped)
|
Gold
grade (g/t)
(capped)*
|
AMQ15-451
|
V zone
|
159.3
|
171.1
|
136
|
10.4
|
7.9
|
7.2
|
including
|
|
159.3
|
163.0
|
133
|
3.3
|
22.8
|
20.5
|
AMQ15-475
|
WT Shoot
|
521.0
|
529.4
|
429
|
5.9
|
8.1
|
8.1
|
AMQ15-507
|
WT/Mammoth
|
100.8
|
120.1
|
79
|
12.4
|
5.4
|
5.4
|
including
|
|
115.2
|
120.1
|
84
|
3.1
|
8.1
|
8.1
|
AMQ15-511
|
WT Shoot
|
501.9
|
515.0
|
415
|
10.7
|
5.8
|
5.8
|
including
|
|
504.8
|
510.0
|
413
|
4.5
|
9.9
|
9.9
|
AMQ15-536
|
WT deep
|
689.8
|
698.1
|
600
|
4.8
|
11.8
|
11.8
|
including
|
|
693.0
|
698.1
|
602
|
2.9
|
16.7
|
16.7
|
AMQ15-544
|
V zone
|
68.4
|
71.8
|
56
|
3.3
|
71.0
|
33.6
|
AMQ15-549
|
V zone
|
76.5
|
81.2
|
62
|
3.0
|
15.4
|
15.4
|
*Holes at Amaruq use a capping factor of 60 g/t gold.
Amaruq project exploration drill collar coordinates of selected holes
from the IVR Zone
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Drill collar coordinates*
|
Drill hole ID
|
|
UTM North
|
|
UTM East
|
|
Elevation
(metres above
sea level)
|
|
|
Azimuth
|
|
|
Dip
(degrees)
|
|
|
Length
(metres)
|
AMQ15-451
|
|
7256248
|
|
607070
|
|
155
|
|
|
321
|
|
|
-54
|
|
|
249
|
AMQ15-544
|
|
7256355
|
|
607151
|
|
156
|
|
|
322
|
|
|
-53
|
|
|
201
|
AMQ15-549
|
|
7256446
|
|
607272
|
|
156
|
|
|
324
|
|
|
-54
|
|
|
240
|
* Coordinate System UTM Nad 83 zone 14
The first phase of a planned 75,000-metre drill program (costing
approximately $19 million) began with two drills in early February
2016. The goals of this program are to infill and expand the known
mineral resource areas, test other favourable targets and potentially
outline a second source of open pit ore for the project.
In late 2015, the Company received approvals for the construction of an
all-weather access road linking the Amaruq site to the Meadowbank
mine. In 2016 the Company expects to carry out additional engineering
and begin road preparation from the Vault pit at Meadowbank.
Engineering and environmental baseline studies are underway to support
the permitting process for the Amaruq project as a potential satellite
open pit operation to the Meadowbank mine. The most recent drilling at
depth in Whale Tail also indicates that this deposit hosts high-grade
intercepts below the preliminary ultimate pit shell, suggesting that
Whale Tail has underground potential. As such, permit applications for
an underground exploration ramp will also be submitted in 2016.
Meliadine - Moderate 2016 Capital Expenditures Preserves Production
Optionality
Located near Rankin Inlet, Nunavut, Canada, the Meliadine project was
acquired in July 2010, and is one of Agnico Eagle's largest gold
projects in terms of mineral resources. The Company owns 100% of the
111,757 hectare property.
In 2015, capital expenditures at Meliadine were approximately $67
million with a focus on additional ramp development, permitting, camp
operation and completion of an updated National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101") technical study (see news release dated March 12, 2015).
In 2015, approximately 2,084 metres of underground development were
completed, with the ramp now extending to a vertical depth of
approximately 300 metres below the surface.
The technical study was based on extracting only the 3.3 million ounces
of gold in proven and probable mineral reserves at December 31, 2014
(13.9 million tonnes of ore grading 7.44 g/t gold), which is all
contained in the Tiriganiaq and Wesmeg deposits.
At December 31, 2015, the Meliadine property hosted 3.4 million ounces
of proven and probable mineral reserves (14.5 million tonnes of ore
grading 7.32 g/t gold), 3.31 million ounces of measured and indicated
mineral resources (20.78 million tonnes of ore grading 4.95 g/t gold),
and 3.55 million ounces of inferred mineral resources (14.71 million
tonnes of ore grading 7.51 g/t gold). In addition, there are numerous
other known gold occurrences in the 80-kilometre-long greenstone belt
that require further evaluation.
The updated technical study forecast average annual production of
approximately 350,000 ounces at a life-of-mine total cash costs per
ounce on a by-product basis of approximately $531 over a nine year mine
life. The study used a gold price of C$1,495 per ounce (as compared to
a current spot price of approximately C$1,657 per ounce on February 8,
2016).
The capital budget for 2016 is $96 million with activities focused on
further underground development (approximately 3,000 metres), detailed
engineering and procurement, construction of essential surface
infrastructure, and acquisition of a used camp facility. The goal of
the 2016 capital program is to ensure that the project remains on track
for a potential 2020 production start-up, which is approximately a one
year delay from previous expectations.
Internal studies are ongoing to evaluate the potential to extract
additional ounces of gold from the Tiriganiaq and Wesmeg/Normeg
deposits, which could potentially extend the mine life, increase annual
production, and improve the project economics and the after-tax
internal rate of return. These studies are expected to be completed in
the third quarter of 2016.
In July 2015, the Kivalliq Inuit Association and Agnico Eagle signed the
Inuit Impact Benefit Agreement ("IIBA") for the Meliadine gold
project. The IIBA addresses protection of Inuit values, culture and
language, protection of the land, water and wildlife, provides
financial compensation to Inuit over the mine life and contains
provision for training, employment and contracting.
On October 5, 2015, the Nunavut Water Board issued the permit (License
B) for Meliadine pre-development work. License A, which is required
for production activities, is expected to be granted in the second
quarter of 2016.
The timing of future capital expenditures on the Meliadine project
beyond 2016 and the determination of whether to build a mine at
Meliadine are subject to approval by Agnico Eagle's Board of Directors,
which will be based on prevailing market conditions and outcomes of the
various potential scenarios being evaluated.
Acquisition of New Properties in Nunavut
Agnico Eagle is currently studying options and alternatives in Nunavut
to capitalize on the large and growing mineral resource in the region.
As part of this initiative, the Company has staked in 2015 new claims
totaling 68,012 hectares on properties to the west-northwest of the
project, on the continuation of the greenstone belt that hosts the
Meliadine deposits.
In summer 2015, an airborne VTEM magnetic and electromagnetic survey was
flown over the new properties. A field crew initiated prospecting and
sampling of areas with geophysical signatures typical of iron
formation-hosted Archean/Proto-Proterozoic deposits, similar to those
recognized at Meadowbank, Amaruq and Meliadine projects. Close to 800
rock samples have been collected from the properties. Initial results
have identified a 2-kilometre-long structure from which 21 rock samples
returned values above 1.0 g/t gold including seven values in excess of
10.0 g/t gold, with a maximum value of 42.0 g/t gold.
The new properties appear to be geologically similar to the Meadowbank,
Meliadine and Amaruq projects where the Company's exploration team has
demonstrated the effectiveness of a systematic exploration approach and
the strong mineral potential of this part of Nunavut. Assembling and
analyzing the data collected this summer will assist in preparing a
drill program for 2016 to further investigate the higher potential
areas on the new properties.
SOUTHERN BUSINESS REVIEW
Agnico Eagle's Southern Business operations are focused in Mexico. These
operations have been the source of growing precious metals production
(gold and silver), stable operating costs and strong free cash flow
since 2009. In the fourth quarter of 2015, the Mexican operations had
record quarterly silver production of approximately 745,000 ounces.
Pinos Altos - Shaft Commissioning Scheduled for H1 2016
The 100% owned Pinos Altos mine in northern Mexico achieved commercial
production in November 2009.
The Pinos Altos mill processed 4,940 tpd in the fourth quarter of 2015
compared to 5,466 tpd per day processed in the fourth quarter of 2014.
During the fourth quarter of 2015, approximately 146,200 tonnes of ore
were stacked on the leach pad at Pinos Altos, compared to 131,000
tonnes in the comparable 2014 period. Mill throughput in the 2015
period was negatively impacted by cold weather conditions and a higher
percentage of clay in the ore.
Minesite costs per tonne at Pinos Altos were $44 in the fourth quarter
of 2015, lower than the $48 in the fourth quarter of 2014. The
difference in minesite costs per tonne was largely attributable to
variations in the proportion of heap leach ore to milled ore and open
pit ore to underground ore and routine fluctuations in the waste to ore
stripping ratio in the open pit mines. In addition, the 2015 costs
were favourably impacted by lower energy and fuel costs.
For the full year 2015, the Pinos Altos mill processed an average of
5,462 tpd, compared to 5,350 tpd processed in 2014. In 2015,
approximately 384,700 tonnes of ore were stacked on the leach pad at
Pinos Altos, compared to approximately 567,800 tonnes in 2014. Minesite
costs per tonne at Pinos Altos for the full year period in 2015 were
approximately $45 compared to approximately $48 in 2014, with the
difference due to the reasons mentioned above.
Payable production in the fourth quarter of 2015 was 44,496 ounces of
gold at total cash costs per ounce on a by-product basis of $417. This
compares with production of 40,669 ounces at total cash costs per ounce
on a by-product basis of $597 in the fourth quarter of 2014. Higher
production in 2015 is largely due to higher grades processed compared
to the same period last year. The decrease in the year over year total
cash costs per ounce is largely due to higher silver production and
favourable foreign exchange rates compared to the prior year period.
For the full year 2015, Pinos Altos produced 192,974 ounces of gold at
total cash costs per ounce on a by-product basis of $387. This is in
contrast to 2014 when the mine produced 171,019 ounces of gold at total
cash costs per ounce on a by-product basis of $533. The higher ounces
produced and decrease in the cash costs per ounce on a year-over-year
basis is largely due to the reasons mentioned above.
The $106 millionPinos Altos shaft sinking project remains on schedule
for completion in early 2016, with full commissioning expected during
the first half of 2016. When the shaft is completed, it will allow
better matching of the future mining capacity with the mill capacity at
Pinos Altos once the open pit mining operation begins to wind down as
planned over the next several years.
Creston Mascota - Record Annual Tonnes Stacked
The Creston Mascota heap leach has been operating as a satellite
operation to the Pinos Altos mine since late 2010.
Approximately 529,000 tonnes of ore were stacked on the Creston Mascota
leach pad during the fourth quarter of 2015, compared to approximately
550,800 tonnes stacked in the fourth quarter of 2014. In the 2015
period, crusher throughput was slightly lower due to cold weather
conditions which created minor ore handling issues. Minesite costs per
tonne at Creston Mascota were $13 in the fourth quarter of 2015
compared to $14 in the fourth quarter of 2014. Costs were slightly
lower in the 2015 period due to lower fuel consumption, favourable fuel
price variance and lower equipment rental charges.
For the full year 2015, approximately 2,098,800 tonnes of ore were
stacked on the Creston Mascota leach pad, compared to approximately
1,793,800 tonnes stacked in the full year 2014. In the 2015 period,
additional ore was encountered outside the block model, which resulted
in more tonnes being stacked in the first half of the year compared to
the 2014 period. Minesite costs per tonne at Creston Mascota were $12
for the full year 2015, compared to $16 in 2014. The increase in tonnes
stacked in the 2015 period resulted in lower costs compared to the 2014
period.
Payable production at Creston Mascota in the fourth quarter of 2015 was
13,933 ounces of gold at total cash costs per ounce on a by-product
basis of $445. This compares to 12,989 ounces of gold at total cash
costs per ounce on a by-product basis of $556 during the fourth quarter
of 2014. Production was higher in the 2015 period due to higher grades.
Costs in the 2015 period were lower primarily due to increased
production and favourable exchange rates.
Payable production for the full year 2015 totaled 54,703 ounces of gold
at total cash costs per ounce on a by-product basis of $430, compared
to 47,842 ounces of gold at total cash costs per ounce on a by-product
basis of $578 in 2014. The higher production in 2015 is primarily due
to more tonnes stacked at slightly higher grades. Costs were lower in
the 2015 period primarily due to more ounces produced and favourable
exchange rates.
In fourth quarter of 2015, work on the Phase 4 leach pad advanced with
construction activities focused on earthworks, drainages, peripheral
roads and water diversion channels. Overall, the project is 50%
constructed with full completion expected later in 2016.
As reported in the Company's July 29, 2015 news release, infill drilling
has encountered higher grade mineralization at the Creston Mascota
deposit. In the fourth quarter of 2015, five holes totaling
approximately 600 metres were completed which showed structural
continuity of the mineralization down dip. Work is underway to
evaluate the impact of these results on the pit design and production
planning.
La India - Increased Mineral Reserves and Mineral Resources at Year-End
2015
The La India mine in Sonora, Mexico, located approximately 70 kilometres
from the Company's Pinos Altos mine, was acquired in November 2011
through the purchase of Grayd Resources Inc., which held a 56,000
hectare land position in the Mulatos gold belt. Commissioning of the
mine commenced ahead of schedule in the third quarter of 2014. Design,
permitting, construction and start-up of the La India mine were
completed within 22 months of the acquisition. In 2014, the mine
reported 3,180 ounces of pre-commercial production, and commercial
production was declared as at February 1, 2014.
Approximately 1,439,500 tonnes of ore were stacked on the La India leach
pad during the fourth quarter of 2015, compared to approximately
1,426,700 tonnes stacked in the fourth quarter of 2014. Minesite costs
per tonne at La India were $8 in the fourth quarter of 2015, compared
to $9 in the fourth quarter of 2014. The slightly lower costs in the
2015 period are primarily due to lower costs for fuel, consumables and
labour.
For the full year 2015, approximately 5,371,400 tonnes of ore were
stacked on the La India leach pad compared to approximately 4,773,200
tonnes stacked in the full year 2014. Minesite costs per tonne at La
India were $9 for the full year 2015, compared to $8 in 2014. The
increase in tonnes stacked in the 2015 period reflects a full year of
stacking versus 11 months (the commercial production period) in 2014.
Costs were slightly higher due to higher maintenance and contractor
costs.
Payable production at La India in the fourth quarter of 2015 was 23,432
ounces of gold at total cash costs per ounce on a by-product basis of
$485. This compares to 23,273 ounces at total cash costs per ounce on
a by-product basis of $496 during the fourth quarter of 2014. Costs
were slightly better in the 2015 period due to favourable foreign
exchange rates.
Payable production for the full year 2015 totaled 104,362 ounces of gold
at total cash costs per ounce on a by-product basis of $436, compared
to 75,093 ounces of gold at total cash costs per ounce on a by-product
basis of $487 in 2014. The higher production in 2015 is primarily due
to more ore tonnes stacked compared to the 2014 period. Costs were
lower in the 2015 period due to more ounces produced and favourable
foreign exchange rates.
In the fourth quarter of 2015, construction for the leach pad expansion
(earthworks and liner installation) was finished within budget and haul
road construction and preparation activities for the start-up of mining
at the Main Zone pit were also completed.
Additional drilling was carried out at La India in 2015, with a focus on
extending mineralization in the Main Zone and the La India Zone and
conversion of sulfide mineralization into mineral reserves and mineral
resources. In addition, drilling was also carried out on a portion of
the El Realito property.
The 2015 exploration program resulted in a 28% increase in mineral
reserves, and a 21% increase in measured and indicated mineral
resources (see "Detailed Mineral Reserve and Mineral Resource Data (as
at December 31, 2015)" below). With the increased mineral reserves and
mineral resources, the Company is undertaking studies consider the
potential for expanding production at the mine.
El Barqueño - Drilling Continues with a Focus on Mineral Resource
Delineation and Defining New Target Areas
Agnico Eagle has a 100% interest in the El Barqueño project. The
32,840-hectare property is in the Guachinango gold-silver mining
district, Jalisco State, Mexico, approximately 150 kilometres west of
the state capital of Guadalajara. It consists of three blocks of land:
the original El Barqueño package (El Barqueño I, II and III) acquired
from Cayden Resources in November 2014, and two adjacent blocks
acquired from Soltoro Limited in June 2015 (El Rayo and El Tecolote).
The Company last reported on this project in a news release dated
October 28, 2015.
The El Barqueño project contains a number of known mineralized zones and
several prospects that require further evaluation. The project was a
major exploration focus for the Company in 2015, with a total of 279
holes (a total of 69,522 metres) drilled in the $17 million exploration
program. Using these results, an initial inferred mineral resource at
El Barqueño is being reported in this news release: 19.7 million tonnes
grading 0.96 g/t gold and 5.78 g/t silver (containing 608,000 ounces of
gold and 3.7 million ounces of silver) at the Azteca-Zapoteca,
Angostura and Peña de Oro zones.
Exploration expenditures at El Barqueño in 2016 are budgeted at $13
million for mineral resource development, conversion and regional
exploration. There are currently 14 drills working to define the
limits of the known prospects and test new target areas such as:
Olmeca, Zapote, Mixteca, El Rayo and Pilarica.
The project's gold-silver deposits could potentially be developed into a
series of open pits utilizing heap leach processing, similar to CrestonMascota and the La India mine.
Annual General Meeting
Friday, April 29, 2016 at 11:00 am (E.D.T.)
Sheraton Centre Toronto Hotel (Dominion Ballroom)
123 Queen Street West
Toronto, ON M5H 2M9
About Agnico Eagle
Agnico Eagle is a senior Canadian gold mining company that has produced
precious metals since 1957. Its eight mines are located in Canada,
Finland and Mexico, with exploration and development activities in each
of these countries as well as in the United States and Sweden. The
Company and its shareholders have full exposure to gold prices due to
its long-standing policy of no forward gold sales. Agnico Eagle has
declared a cash dividend every year since 1983.
Note Regarding Certain Measures of Performance
This news release discloses certain measures, including ''total cash
costs per ounce'' and ''minesite costs per tonne'', "all-in sustaining
costs per ounce" and "adjusted net income" that are not recognized
measures under IFRS. These data may not be comparable to data
presented by other gold producers. For a reconciliation of these
measures to the most directly comparable financial information
presented in the consolidated financial statements prepared in
accordance with IFRS and for an explanation of how management uses
these measures, other than adjusted net income, see "Reconciliation of
Non-GAAP Financial Performance Measures" below. The total cash costs
per ounce of gold produced is reported on both a by-product basis
(deducting by-product metal revenues from production costs) and
co-product basis (before by-product metal revenues). The total cash
costs per ounce of gold produced on a by-product basis is calculated by
adjusting production costs as recorded in the consolidated statements
of income (loss) for by-product revenues, unsold concentrate inventory
production costs, smelting, refining and marketing charges and other
adjustments, and then dividing by the number of ounces of gold
produced. The total cash costs per ounce of gold produced on a
co-product basis is calculated in the same manner as the total cash
costs per ounce of gold produced on a by-product basis except that no
adjustment is made for by-product metal revenues. Accordingly, the
calculation of total cash costs per ounce of gold produced on a
co-product basis does not reflect a reduction in production costs or
smelting, refining and marketing charges associated with the production
and sale of by-product metals. The total cash costs per ounce of gold
produced is intended to provide information about the cash-generating
capabilities of the Company's mining operations. Management also uses
these measures to monitor the performance of the Company's mining
operations. As market prices for gold are quoted on a per ounce basis,
using the total cash costs per ounce of gold produced on a by-product
basis measure allows management to assess a mine's cash-generating
capabilities at various gold prices. All-in sustaining costs per ounce
is used to show the full cost of gold production from current
operations. The Company calculates all-in sustaining costs per ounce
of gold produced on a by-product as the aggregate of total cash costs
per ounce on a by-product basis, sustaining capital expenditures
(including capitalized exploration), general and administrative
expenses (including stock options) and reclamation expenses divided by
the amount of gold produced. The all-in sustaining costs per ounce of
gold produced on a co-product basis is calculated in the same manner as
the all-in sustaining costs per ounce of gold produced on a by-product
basis except that the total cash costs per ounce on a co-product basis
is used, meaning no adjustment is made for by-product metal revenues.
The Company's methodology for calculating all-in sustaining costs per
ounce may differ from to the methodology used by other producers that
disclose all-in sustaining costs per ounce. The Company may change the
methodology it uses to calculate all-in sustaining costs per ounce in
the future, including in response to the adoption of formal industry
guidance regarding this measure by the World Gold Council. Management
is aware that these per ounce measures of performance can be affected
by fluctuations in exchange rates and, in the case of total cash costs
per ounce of gold produced on a by-product basis, by-product metal
prices. Management compensates for these inherent limitations by using
these measures in conjunction with minesite costs per tonne (discussed
below) as well as other data prepared in accordance with IFRS.
Management also performs sensitivity analyses in order to quantify the
effects of fluctuating exchange rates and metal prices. This news
release also contains information as to estimated future total cash
costs per ounce, all-in sustaining costs per ounce and minesite costs
per tonne. The estimates are based upon the total cash costs per
ounce, all-in sustaining costs per ounce and minesite costs per tonne
that the Company expects to incur to mine gold at its mines and
projects and, consistent with the reconciliation of these actual costs
referred to above, 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 IFRS measure.
Forward-Looking Statements
The information in this news release has been prepared as at February
10, 2016. 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 and are referred to herein as "forward-looking statements". When
used in this document, the words "anticipate", "estimate", "expect",
"forecast", "planned", "will", "could", "potential" and similar
expressions are intended to identify forward-looking statements. Such
statements include without limitation: the Company's forward-looking
production guidance, including estimated ore grades, project timelines,
drilling results, metal production, life of mine estimates, production,
total cash costs per ounce, minesite costs per tonne, all-in sustaining
costs per ounce and cash flows; the estimated timing and conclusions of
technical reports and other studies; the methods by which ore will be
extracted or processed; statements concerning expansion projects,
recovery rates, mill throughput, optimization, and projected
exploration expenditures, including costs and other estimates upon
which such projections are based; estimates of depreciation expense,
general and administrative expense and tax rates; the impact of
maintenance shutdowns; statements regarding timing and amounts of
capital expenditures and other assumptions; estimates of future mineral
reserves, mineral resources, mineral production, optimization efforts
and sales; estimates of mine life; estimates of future mining costs,
total cash costs per ounce, minesite costs per tonne, all-in sustaining
costs per ounce and other expenses; estimates of future capital
expenditures and other cash needs, and expectations as to the funding
thereof; statements 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 mineral
reserves and mineral 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
and other statements and information regarding anticipated trends with
respect to the Company's operations, exploration and the funding
thereof. 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. Forward-looking statements are
necessarily based upon a number of factors and assumptions that, while
considered reasonable by Agnico Eagle as of the date of such
statements, are inherently subject to significant business, economic
and competitive uncertainties and contingencies. The material factors
and assumptions used in the preparation of the forward looking
statements contained herein, which may prove to be incorrect, include,
but are not limited to, the assumptions set forth herein and in
management's discussion and analysis ("MD&A") and the Company's Annual
Information Form ("AIF") for the year ended December 31, 2014 filed
with Canadian securities regulators and that are included in its Annual
Report on Form 40-F for the year ended December 31, 2014 ("Form 40-F")
filed with the SEC as well as: that there are no significant
disruptions affecting operations; that production, permitting and
expansion at each of Agnico Eagle's properties proceeds on a basis
consistent with current expectations and plans; that the relevant metal
prices, exchange rates and prices for key mining and construction
supplies will be consistent with Agnico Eagle's expectations; that
Agnico Eagle's current estimates of mineral reserves, mineral
resources, mineral grades and metal recovery are accurate; that there
are no material delays in the timing for completion of ongoing growth
projects; that the Company's current plans to optimize production are
successful; and that there are no material variations in the current
tax and regulatory environment. 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, project expenditures,
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 currency, fuel and by-product 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 AIF
and MD&A filed on SEDAR at www.sedar.com and included in the Form 40-F filed on EDGAR at www.sec.gov, as well as the Company's other filings with the Canadian securities
regulators and the SEC. Other than as required by law, the Company
does not intend, and does not assume any obligation, to update these
forward-looking statements and information.
Notes to Investors Regarding the Use of Mineral Resources
Cautionary Note to Investors Concerning Estimates of Measured and
Indicated Mineral Resources
This document uses the terms "measured mineral resources" and "indicated
mineral resources". Investors are advised 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 mineral
reserves.
Cautionary Note to Investors Concerning Estimates of Inferred Mineral
Resources
This document also uses the term "inferred mineral resources".
Investors are advised that while this term is recognized and required
by Canadian regulations, the SEC does not recognize it. "Inferred
mineral 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
mineral resource exists, or is economically or legally mineable.
Scientific and Technical Data
The scientific and technical information contained in this news release
relating to Quebec operations has been approved by Christian
Provencher, Eng., Vice-President, Canada; relating to operations in
Nunavut has been approved by Dominique Girard, Eng., Vice-President
Technical Services and Nunavut Operations; relating to the Kittila
operations has been approved by Francis Brunet, Eng., Corporate
Director Mining; relating to Southern Business operations has been
approved by Tim Haldane, P.Eng., Senior Vice-President, Operations -
USA and Latin America; and relating to exploration has been approved by
Alain Blackburn, Eng., Senior Vice-President, Exploration and Guy
Gosselin, Eng., Vice-President, Exploration. Each of them is a
"Qualified Person" for the purposes of NI 43-101.
The scientific and technical information relating to Agnico Eagle's
mineral reserves and mineral resources contained herein (other than the
Canadian Malartic mine) has been approved by Daniel Doucet, Eng.,
Senior Corporate Director, Reserve Development; and relating to mineral
reserves and mineral resources at the Canadian Malartic mine contained
herein has been approved by Donald Gervais, P.Geo., Director of
Technical Services at CMC. Each of them is a "Qualified Person" for
the purposes of NI 43-101.
Detailed Mineral Reserve and Mineral Resource Data (as at December 31,
2015)
| Au | Ag | Cu | Zn | Pb | Au | Tonnes |
Category and Operation | (g/t) | (g/t) | (%) | (%) | (%) | (000s oz) | (000s) |
Proven Mineral Reserve |
Northern Business |
|
|
|
|
|
|
|
LaRonde (underground)
|
4.09
|
21.19
|
0.27
|
0.44
|
0.05
|
454
|
3,455
|
Canadian Malartic (open pit) (50%)
|
0.97
|
|
|
|
|
860
|
27,446
|
Lapa (underground)
|
5.49
|
|
|
|
|
78
|
444
|
Goldex (underground)
|
1.54
|
|
|
|
|
15
|
300
|
Kittila (open pit)
|
3.52
|
|
|
|
|
20
|
176
|
Kittila (underground)
|
4.43
|
|
|
|
|
126
|
883
|
Kittila Total Proven |
4.28
|
|
|
|
|
146
|
1,059
|
Meadowbank (open pit)
|
1.51
|
|
|
|
|
58
|
1,203
|
Meliadine (open pit)
|
7.31
|
|
|
|
|
8
|
34
|
Southern Business |
|
|
|
|
|
|
|
Pinos Altos (open pit)
|
2.07
|
67.48
|
|
|
|
11
|
164
|
Pinos Altos (underground)
|
3.14
|
83.46
|
|
|
|
263
|
2,605
|
Pinos Altos Total Proven |
3.08
|
82.51
|
|
|
|
274
|
2,769
|
Creston Mascota (open pit)
|
0.68
|
8.05
|
|
|
|
4
|
187
|
La India (open pit)
|
0.68
|
12.69
|
|
|
|
5
|
244
|
Subtotal Proven Mineral Reserve | 1.59 |
|
|
|
|
1,903 |
37,141 |
|
Probable Mineral Reserve |
Northern Business |
|
|
|
|
|
|
|
LaRonde (underground)
|
5.59
|
19.39
|
0.23
|
0.90
|
0.04
|
2,654
|
14,765
|
Canadian Malartic (open pit) (50%)
|
1.12
|
|
|
|
|
3,002
|
83,320
|
Lapa (underground)
|
|
|
|
|
|
-
|
-
|
Goldex (underground)
|
1.61
|
|
|
|
|
653
|
12,644
|
Akasaba (open pit)
|
0.92
|
|
0.52
|
|
|
141
|
4,759
|
Kittila (open pit)
|
3.64
|
|
|
|
|
18
|
157
|
Kittila (underground)
|
4.83
|
|
|
|
|
4,189
|
26,979
|
Kittila Total Probable |
4.82
|
|
|
|
|
4,208
|
27,136
|
Meadowbank (open pit)
|
2.87
|
|
|
|
|
885
|
9,586
|
Meliadine (open pit)
|
5.00
|
|
|
|
|
644
|
4,001
|
Meliadine (underground)
|
8.20
|
|
|
|
|
2,766
|
10,494
|
Meliadine Total Probable |
7.32
|
|
|
|
|
3,410
|
14,495
|
Southern Business |
|
|
|
|
|
|
|
Pinos Altos (open pit)
|
2.54
|
71.21
|
|
|
|
281
|
3,440
|
Pinos Altos (underground)
|
2.95
|
72.83
|
|
|
|
904
|
9,527
|
Pinos Altos Total Probable |
2.84
|
72.40
|
|
|
|
1,185
|
12,967
|
Creston Mascota (open pit)
|
1.33
|
12.21
|
|
|
|
172
|
4,026
|
La India (open pit)
|
0.90
|
4.16
|
|
|
|
862
|
29,743
|
Subtotal Probable Mineral Reserve | 2.50 |
|
|
|
|
17,172 |
213,442 |
Northern Total Proven and Probable Mineral Reserves | 2.57 |
|
|
|
|
16,572 |
200,646 |
Southern Total Proven and Probable Mineral Reserves | 1.56 |
|
|
|
|
2,502 |
49,937 |
Total Proven and Probable Mineral Reserves | 2.37 |
|
|
|
|
19,075 |
250,583 |
| Au | Ag | Cu | Zn | Pb | Tonnes |
Category and Operation | (g/t) | (g/t) | (%) | (%) | (%) | (000s) |
Measured Mineral Resource |
|
|
|
|
|
|
Northern Business |
|
|
|
|
|
|
Canadian Malartic (open pit) (50%)
|
1.32
|
|
|
|
|
1,752
|
Lapa (underground)
|
5.33
|
|
|
|
|
49
|
Goldex (underground)
|
1.86
|
|
|
|
|
12,360
|
Kittila (underground)
|
2.58
|
|
|
|
|
991
|
Meadowbank (open pit)
|
1.01
|
|
|
|
|
738
|
Hammond Reef (open pit) (50%)
|
0.70
|
|
|
|
|
82,831
|
Southern Business |
|
|
|
|
|
|
La India (open pit)
|
0.25
|
2.48
|
|
|
|
8,339
|
Subtotal Measured Mineral Resource | 0.83 |
|
|
|
|
107,059 |
Indicated Mineral Resource |
|
|
|
|
|
|
Northern Business |
|
|
|
|
|
|
LaRonde (underground)
|
3.49
|
18.25
|
0.24
|
0.82
|
0.07
|
6,842
|
Canadian Malartic (open pit) (50%)
|
1.55
|
|
|
|
|
11,079
|
Lapa (underground)
|
4.21
|
|
|
|
|
1,086
|
Goldex (underground)
|
1.88
|
|
|
|
|
22,069
|
Akasaba
|
0.60
|
|
0.33
|
|
|
2,828
|
Kittila (open pit)
|
2.90
|
|
|
|
|
72
|
Kittila (underground)
|
3.05
|
|
|
|
|
14,863
|
Kittila Total Indicated |
3.05
|
|
|
|
|
14,935
|
Meadowbank (open pit)
|
2.65
|
|
|
|
|
3,891
|
Meadowbank (underground)
|
4.85
|
|
|
|
|
2,341
|
Meadowbank Total Indicated |
3.48
|
|
|
|
|
6,232
|
Meliadine (open pit)
|
4.24
|
|
|
|
|
7,867
|
Meliadine (underground)
|
5.38
|
|
|
|
|
12,911
|
Meliadine Total Indicated |
4.95
|
|
|
|
|
20,778
|
Bousquet (underground)
|
2.47
|
|
|
|
|
11,380
|
Ellison (underground)
|
3.25
|
|
|
|
|
646
|
Hammond Reef (open pit) (50%)
|
0.57
|
|
|
|
|
21,377
|
AK (underground) (50%)
|
6.51
|
|
|
|
|
634
|
Upper Beaver (underground) (50%)
|
6.36
|
|
0.36
|
|
|
4,404
|
Swanson (open pit)
|
1.93
|
|
|
|
|
504
|
Southern Business |
|
|
|
|
|
|
Pinos Altos (open pit)
|
1.04
|
20.78
|
|
|
|
224
|
Pinos Altos (underground)
|
1.85
|
42.87
|
|
|
|
10,916
|
Pinos Altos Total Indicated |
1.83
|
42.43
|
|
|
|
11,141
|
Creston Mascota (open pit)
|
0.51
|
5.14
|
|
|
|
4,264
|
La India (open pit)
|
0.38
|
0.55
|
|
|
|
61,950
|
Subtotal Indicated Mineral Resource | 1.88 |
|
|
|
|
202,147 |
Northern Total Measured and Indicated Mineral Resources | 1.88 |
|
|
|
|
223,513 |
Southern Total Measured and Indicated Mineral Resources | 0.56 |
|
|
|
|
85,693 |
Total Measured & Indicated Mineral Resources | 1.52 |
|
|
|
|
309,206 |
|
| Au | Ag | Cu | Zn | Pb | Tonnes |
Category and Operation | (g/t) | (g/t) | (%) | (%) | (%) | (000s) |
Inferred Mineral Resource |
|
|
|
|
|
|
Northern Business |
|
|
|
|
|
|
LaRonde (underground)
|
4.26
|
15.07
|
0.23
|
0.90
|
0.06
|
9,142
|
Canadian Malartic (open pit) (50%)
|
1.47
|
|
|
|
|
4,494
|
Lapa (open pit Zulapa)
|
3.14
|
|
|
|
|
391
|
Lapa (underground)
|
7.78
|
|
|
|
|
1,049
|
Lapa Total Inferred |
6.52
|
|
|
|
|
1,440
|
Goldex (underground)
|
1.53
|
|
|
|
|
24,630
|
Akasaba (open pit)
|
|
|
|
|
|
-
|
Kittila (open pit)
|
3.89
|
|
|
|
|
373
|
Kittila (underground)
|
4.66
|
|
|
|
|
11,460
|
Kittila Total Inferred |
4.64
|
|
|
|
|
11,833
|
Meadowbank (open pit)
|
3.33
|
|
|
|
|
1,228
|
Meadowbank (underground)
|
4.36
|
|
|
|
|
2,213
|
Meadowbank Total Inferred |
3.99
|
|
|
|
|
3,441
|
Amaruq (open pit)
|
5.48
|
|
|
|
|
10,365
|
Amaruq (underground)
|
6.96
|
|
|
|
|
6,515
|
Amaruq Total Inferred |
6.05
|
|
|
|
|
16,880
|
Meliadine (open pit)
|
5.35
|
|
|
|
|
1,054
|
Meliadine (underground)
|
7.68
|
|
|
|
|
13,656
|
Meliadine Total Inferred |
7.51
|
|
|
|
|
14,710
|
Bousquet (underground)
|
4.00
|
|
|
|
|
5,373
|
Ellison (underground)
|
4.03
|
|
|
|
|
1,746
|
Hammond Reef (open pit) (50%)
|
0.74
|
|
|
|
|
251
|
AK (underground) (50%)
|
5.32
|
|
|
|
|
1,187
|
Upper Beaver (underground) (50%)
|
5.94
|
|
0.42
|
|
|
3,451
|
Kuotko, Finland (open pit)
|
2.89
|
|
|
|
|
1,823
|
Kylmakangas, Finland (underground)
|
4.11
|
31.11
|
|
|
|
1,896
|
Southern Business |
|
|
|
|
|
|
Pinos Altos (open pit)
|
0.95
|
22.38
|
|
|
|
10,703
|
Pinos Altos (underground)
|
2.96
|
68.95
|
|
|
|
1,877
|
Pinos Altos Total Inferred |
1.25
|
29.33
|
|
|
|
12,580
|
Creston Mascota (open pit)
|
1.06
|
14.16
|
|
|
|
4,263
|
La India (open pit)
|
0.37
|
|
|
|
|
90,868
|
El Barqueño (open pit)
|
0.96
|
5.78
|
0.19
|
|
|
19,658
|
Northern Total Inferred Mineral Resource |
4.32
|
|
|
|
|
102,294
|
Southern Total Inferred Mineral Resource |
0.57
|
|
|
|
|
127,368
|
Total Inferred Mineral Resource | 2.24 |
|
|
|
|
229,662 |
Tonnage amounts and contained metal amounts presented in this table have
been rounded to the nearest thousand. Amounts presented in this table
may not add up due to rounding. Mineral reserves are not a sub-set of
mineral resources.
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 reports mineral resource
and reserve mineral estimates in accordance with the Canadian Institute
of Mining, Metallurgy and Petroleum Best Practice Guidelines for Exploration and for Estimation of Mineral Resources and Mineral Reserves, in accordance with NI 43-101. These standards are similar to those
used by the SEC's Industry Guide No. 7, as interpreted by Staff at the
SEC ("Guide 7"). However, the definitions in NI 43-101 differ in
certain respects from those under Guide 7. Accordingly, mineral
reserve information contained herein may not be comparable to similar
information disclosed by U.S. companies. Under the requirements of the
SEC, mineralization may not be classified as a "reserve" unless the
determination has been made that the mineralization could be
economically and legally produced or extracted at the time the mineral
reserve determination is made. A "final" or "bankable" feasibility
study is required to meet the requirements to designate mineral
reserves under Industry Guide 7. Agnico Eagle uses certain terms in
this news 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.
In prior periods, mineral reserves for all properties were typically
estimated using historic three-year average metals prices and foreign
exchange rates in accordance with the SEC guidelines. These guidelines
require the use of prices that reflect current economic conditions at
the time of mineral reserve determination, which the Staff of the SEC
has interpreted to mean historic three-year average prices. Given the
current lower commodity price environment, Agnico Eagle has decided to
use price assumptions that are below the three-year averages. The
assumptions used for the mineral reserve estimates at all mines and
advanced projects as of December 31, 2015 (other than the Canadian
Malartic mine), reported by the Company on February 10, 2016, are
$1,100 per ounce gold, $16.00 per ounce silver, $0.90 per pound zinc,
$2.50 per pound copper, and US$/C$, Euro/US$ and US$/MXP exchange rates
for all mines and projects other than the Lapa, Meadowbank and CrestonMascota mines and Santo Niño open pit at Pinos Altos of 1.16, 1.20 and
14.00, respectively. Due to shorter mine life the assumptions used for
the mineral reserve estimates at the short-life mines (the Lapa,
Meadowbank and Creston Mascota mines and Santo Niño open pit) as of
December 31, 2015, reported by the Company on February 10, 2016,
include the same metal price assumptions, and US$/C$ and US$/MXP
exchange rates of 1.30 and 16.00, respectively.
The assumptions used for the mineral reserves estimate at the Canadian
Malartic mine as of December 31, 2015, reported by the Company on
February 10, 2016, are $1,150 per ounce gold, a cut-off grade between
0.30 g/t and 0.33 g/t gold (depending on the deposit) and a US$/C$
exchange rate of 1.24.
NI 43-101 requires mining companies to disclose mineral reserves and
mineral resources using the subcategories of "proven mineral reserves",
"probable mineral reserves", "measured mineral resources", "indicated
mineral resources" and "inferred mineral resources". Mineral resources
that are not mineral reserves do not have demonstrated economic
viability.
A mineral reserve is the economically mineable part of a measured and/or
indicated mineral resource. It includes diluting materials and
allowances for losses, which may occur when the material is mined or
extracted and is defined by studies at pre-feasibility or feasibility
level as appropriate that include application of modifying factors.
Such studies demonstrate that, at the time of reporting, extraction
could reasonably be justified.
Modifying factors are considerations used to convert mineral resources
to mineral reserves. These include, but are not restricted to, mining,
processing, metallurgical, infrastructure, economic, marketing, legal,
environmental, social and governmental factors.
A proven mineral reserve is the economically mineable part of a measured
mineral resource. A proven mineral reserve implies a high degree of
confidence in the modifying factors. A probable mineral reserve is the
economically mineable part of an indicated and, in some circumstances,
a measured mineral resource. The confidence in the modifying factors
applying to a probable mineral reserve is lower than that applying to a
proven mineral reserve.
A mineral resource is a concentration or occurrence of solid material of
economic interest in or on the Earth's crust in such form, grade or
quality and quantity that there are reasonable prospects for eventual
economic extraction. The location, quantity, grade or quality,
continuity and other geological characteristics of a mineral resource
are known, estimated or interpreted from specific geological evidence
and knowledge, including sampling.
A measured mineral resource is that part of a mineral resource for which
quantity, grade or quality, densities, shape and physical
characteristics are estimated with confidence sufficient to allow the
application of modifying factors to support detailed mine planning and
final evaluation of the economic viability of the deposit. Geological
evidence is derived from detailed and reliable exploration, sampling
and testing and is sufficient to confirm geological and grade or
quality continuity between points of observation. An indicated mineral
resource is that part of a mineral resource for which quantity, grade
or quality, densities, shape and physical characteristics are estimated
with sufficient confidence to allow the application of modifying
factors in sufficient detail to support mine planning and evaluation of
the economic viability of the deposit. Geological evidence is derived
from adequately detailed and reliable exploration, sampling and testing
and is sufficient to assume geological and grade or quality continuity
between points of observation. An inferred mineral resource is that
part of a mineral resource for which quantity and grade or quality are
estimated on the basis of limited geological evidence and sampling.
Geological evidence is sufficient to imply but not verify geological
and grade or quality continuity.
Investors are cautioned not to assume that part or all of an inferred
mineral 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 applicable modifying factors
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 mineral reserves presented in this news release are separate from
and not a portion of the mineral resources.
Property/Project nameand location | Date of most recent Technical Report (NI 43-101) filed on SEDAR |
LaRonde, Bousquet & Ellison, Quebec, Canada
|
March 23, 2005
|
Canadian Malartic, Quebec, Canada
|
June 16, 2014
|
Kittila, Kuotko and Kylmakangas, Finland
|
March 4, 2010
|
Meadowbank, Nunavut, Canada
|
February 15, 2012
|
Goldex, Quebec, Canada
|
October 14, 2012
|
Lapa, Quebec, Canada
|
June 8, 2006
|
Meliadine, Nunavut, Canada
|
February 11, 2015
|
Hammond Reef, Ontario, Canada
|
July 2, 2013
|
Upper Beaver (Kirkland Lake project), Ontario, Canada
|
November 5, 2012
|
Pinos Altos and Creston Mascota, Mexico
|
March 25, 2009
|
La India, Mexico
|
August 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 Technical Reports, which may be found at www.sedar.com. Other important operating information can be found in the Company's
AIF and Form 40-F.
AGNICO EAGLE MINES LIMITED
SUMMARY OF OPERATIONS KEY PERFORMANCE INDICATORS
(thousands of United States dollars, except where noted)
(Unaudited) |
|
|
|
|
|
|
|
|
|
| Three Months Ended December 31, |
| Year Ended December 31,
|
|
|
| 2015 |
|
| 2014 |
|
| 2015 |
|
| 2014
|
Operating margin(i) by mine: |
|
|
|
|
|
|
|
|
|
|
Northern Business
|
|
|
|
|
|
|
|
|
|
|
|
|
LaRonde mine
|
$
|
50,667
|
|
$
|
33,535
|
|
$
|
145,924
|
|
$
|
120,058
|
|
Lapa mine
|
|
12,363
|
|
|
16,060
|
|
|
52,214
|
|
|
54,198
|
|
Goldex mine
|
|
17,108
|
|
|
20,693
|
|
|
72,567
|
|
|
60,738
|
|
Meadowbank mine
|
|
64,664
|
|
|
39,839
|
|
|
216,334
|
|
|
305,032
|
|
Canadian Malartic mine(ii) |
|
38,059
|
|
|
39,092
|
|
|
161,807
|
|
|
75,984
|
|
Kittila mine
|
|
15,174
|
|
|
14,312
|
|
|
80,262
|
|
|
59,627
|
Southern Business
|
|
|
|
|
|
|
|
|
|
|
|
|
Pinos Altos mine
|
|
29,327
|
|
|
27,123
|
|
|
145,734
|
|
|
128,441
|
|
Creston Mascota deposit at Pinos Altos
|
|
9,919
|
|
|
8,392
|
|
|
40,194
|
|
|
31,566
|
|
La India mine(iii) |
|
15,832
|
|
|
16,727
|
|
|
75,101
|
|
|
56,563
|
Total operating margin(i) |
|
253,113
|
|
|
215,773
|
|
|
990,137
|
|
|
892,207
|
Amortization of property, plant and mine development
|
|
157,129
|
|
|
139,095
|
|
|
608,609
|
|
|
433,628
|
Exploration, corporate and other
|
|
76,963
|
|
|
74,390
|
|
|
298,900
|
|
|
269,441
|
Income before income and mining taxes
|
|
19,021
|
|
|
2,288
|
|
|
82,628
|
|
|
189,138
|
Income and mining taxes expense
|
|
34,558
|
|
|
23,571
|
|
|
58,045
|
|
|
106,168
|
Net income (loss) for the period
|
$
|
(15,537)
|
|
$
|
(21,283)
|
|
$
|
24,583
|
|
$
|
82,970
|
Net income (loss) per share — basic (US$)
|
$
|
(0.07)
|
|
|
(0.10)
|
|
|
$ 0.11
|
|
|
0.43
|
Net income (loss) per share — diluted (US$)
|
$
|
(0.07)
|
|
|
(0.12)
|
|
|
$ 0.11
|
|
|
0.39
|
Cash flows:
|
|
|
|
|
|
|
|
|
|
|
Cash provided by operating activities
|
$
|
140,747
|
|
$
|
163,956
|
|
$
|
616,238
|
|
$
|
668,324
|
Cash used in investing activities
|
$
|
(115,786)
|
|
$
|
(123,126)
|
|
$
|
(374,519)
|
|
$
|
(851,619)
|
Cash provided by (used in) financing activities
|
$
|
(100,460)
|
|
$
|
(18,685)
|
|
$
|
(280,760)
|
|
|
229,236
|
Realized prices (US$): |
|
|
|
|
|
|
|
|
|
|
|
Gold (per ounce)
|
$
|
1,094
|
|
$
|
1,202
|
|
$
|
1,156
|
|
$
|
1,261
|
Silver (per ounce)
|
$
|
14.56
|
|
$
|
15.60
|
|
$
|
15.63
|
|
$
|
18.27
|
Zinc (per tonne)
|
$
|
1,602
|
|
$
|
2,216
|
|
$
|
1,875
|
|
$
|
2,224
|
Copper (per tonne)
|
$
|
4,568
|
|
$
|
5,961
|
|
$
|
5,023
|
|
$
|
6,596
|
Payable production(iv): |
|
|
|
|
|
|
|
|
|
|
|
Gold (ounces):
|
|
|
|
|
|
|
|
|
|
|
|
|
Northern Business
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LaRonde mine
|
|
73,161
|
|
|
59,316
|
|
|
267,921
|
|
|
204,652
|
|
|
Lapa mine
|
|
19,929
|
|
|
25,611
|
|
|
90,967
|
|
|
92,622
|
|
|
Goldex mine
|
|
27,646
|
|
|
29,463
|
|
|
115,426
|
|
|
100,433
|
|
|
Meadowbank mine
|
|
102,580
|
|
|
86,715
|
|
|
381,804
|
|
|
452,877
|
|
|
Canadian Malartic mine(ii) |
|
72,872
|
|
|
66,369
|
|
|
285,809
|
|
|
143,008
|
|
|
Kittila mine
|
|
44,279
|
|
|
43,130
|
|
|
177,374
|
|
|
141,742
|
|
Southern Business
|
|
|
|
|
|
|
|
|
|
|
|
|
Pinos Altos mine
|
|
44,496
|
|
|
40,669
|
|
|
192,974
|
|
|
171,019
|
|
Creston Mascota deposit at Pinos Altos
|
|
13,933
|
|
|
12,989
|
|
|
54,703
|
|
|
47,842
|
|
La India mine(iii) |
|
23,432
|
|
|
23,273
|
|
|
104,362
|
|
|
75,093
|
Total gold (ounces)
|
|
422,328
|
|
|
387,535
|
|
|
1,671,340
|
|
|
1,429,288
|
Silver (thousands of ounces):
|
|
|
|
|
|
|
|
|
|
|
|
|
Northern Business
|
|
|
|
|
|
|
|
|
|
|
|
|
LaRonde mine
|
|
296
|
|
|
357
|
|
|
916
|
|
|
1,275
|
|
Lapa mine
|
|
1
|
|
|
-
|
|
|
4
|
|
|
-
|
|
Meadowbank mine
|
|
29
|
|
|
49
|
|
|
221
|
|
|
134
|
|
Canadian Malartic mine(ii) |
|
83
|
|
|
75
|
|
|
300
|
|
|
151
|
|
Kittila mine
|
|
4
|
|
|
3
|
|
|
11
|
|
|
7
|
|
Southern Business
|
|
|
|
|
|
|
|
|
|
|
|
|
Pinos Altos mine
|
|
640
|
|
|
424
|
|
|
2,384
|
|
|
1,731
|
|
Creston Mascota deposit at Pinos Altos
|
|
50
|
|
|
28
|
|
|
159
|
|
|
88
|
|
La India mine(iii) |
|
55
|
|
|
67
|
|
|
263
|
|
|
178
|
Total Silver (thousands of ounces)
|
|
1,158
|
|
|
1,003
|
|
|
4,258
|
|
|
3,564
|
Zinc (tonnes)
|
|
999
|
|
|
2,432
|
|
|
3,501
|
|
|
10,515
|
Copper (tonnes)
|
|
1,335
|
|
|
1,396
|
|
|
4,941
|
|
|
4,997
|
|
|
|
|
|
|
|
|
|
|
|
|
Payable metal sold: |
|
|
|
|
|
|
|
|
|
|
Gold (ounces):
|
|
|
|
|
|
|
|
|
|
|
|
|
Northern Business
|
|
|
|
|
|
|
|
|
|
|
|
|
LaRonde mine
|
|
65,067
|
|
|
56,844
|
|
|
254,529
|
|
|
202,338
|
|
Lapa mine
|
|
23,278
|
|
|
28,054
|
|
|
90,877
|
|
|
92,089
|
|
Goldex mine
|
|
27,875
|
|
|
31,702
|
|
|
116,092
|
|
|
100,326
|
|
Meadowbank mine
|
|
103,667
|
|
|
87,741
|
|
|
385,757
|
|
|
452,023
|
|
Canadian Malartic mine(ii)(v) |
|
71,982
|
|
|
66,219
|
|
|
271,416
|
|
|
142,689
|
|
Kittila mine
|
|
43,499
|
|
|
42,609
|
|
|
178,936
|
|
|
139,766
|
|
Southern Business
|
|
|
|
|
|
|
|
|
|
|
|
|
Pinos Altos mine
|
|
41,418
|
|
|
45,457
|
|
|
186,580
|
|
|
176,468
|
|
Creston Mascota deposit at Pinos Altos
|
|
14,997
|
|
|
12,940
|
|
|
55,844
|
|
|
46,698
|
|
La India mine(iii) |
|
25,366
|
|
|
24,019
|
|
|
105,050
|
|
|
72,941
|
Total gold (ounces)
|
|
417,149
|
|
|
395,585
|
|
|
1,645,081
|
|
|
1,425,338
|
Silver (thousands of ounces):
|
|
|
|
|
|
|
|
|
|
|
|
|
Northern Business
|
|
|
|
|
|
|
|
|
|
|
|
|
LaRonde mine
|
|
308
|
|
|
367
|
|
|
958
|
|
|
1,278
|
|
Meadowbank mine
|
|
32
|
|
|
49
|
|
|
225
|
|
|
133
|
|
Canadian Malartic mine(ii)(v) |
|
98
|
|
|
68
|
|
|
285
|
|
|
140
|
|
Kittila mine
|
|
3
|
|
|
2
|
|
|
10
|
|
|
6
|
|
Southern Business
|
|
|
|
|
|
|
|
|
|
|
|
|
Pinos Altos mine
|
|
607
|
|
|
456
|
|
|
2,289
|
|
|
1,823
|
|
Creston Mascota deposit at Pinos Altos
|
|
49
|
|
|
34
|
|
|
156
|
|
|
84
|
|
La India mine(iii) |
|
56
|
|
|
67
|
|
|
261
|
|
|
169
|
Total Silver (thousands of ounces):
|
|
1,153
|
|
|
1,043
|
|
|
4,184
|
|
|
3,633
|
Zinc (tonnes)
|
|
949
|
|
|
2,468
|
|
|
3,596
|
|
|
10,535
|
Copper (tonnes)
|
|
1,354
|
|
|
1,399
|
|
|
4,947
|
|
|
5,003
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cash costs per ounce of gold produced - co-product basis (US$)(vi): |
|
|
|
|
|
|
|
|
|
|
|
Northern Business
|
|
|
|
|
|
|
|
|
|
|
|
|
LaRonde mine
|
$
|
668
|
|
$
|
898
|
|
$
|
760
|
|
$
|
1,055
|
|
Lapa mine
|
|
622
|
|
|
609
|
|
|
591
|
|
|
667
|
|
Goldex mine
|
|
513
|
|
|
583
|
|
|
538
|
|
|
638
|
|
Meadowbank mine
|
|
530
|
|
|
766
|
|
|
623
|
|
|
604
|
|
Canadian Malartic mine(ii) |
|
623
|
|
|
702
|
|
|
613
|
|
|
721
|
|
Kittila mine
|
|
748
|
|
|
810
|
|
|
710
|
|
|
846
|
Southern Business
|
|
|
|
|
|
|
|
|
|
|
|
|
Pinos Altos mine
|
|
623
|
|
|
755
|
|
|
578
|
|
|
718
|
|
Creston Mascota deposit at Pinos Altos
|
|
496
|
|
|
589
|
|
|
474
|
|
|
611
|
|
La India mine(iii) |
|
518
|
|
|
541
|
|
|
475
|
|
|
532
|
Weighted average total cash costs per ounce of gold produced
|
$
|
604
|
|
$
|
735
|
|
$
|
626
|
|
$
|
721
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cash costs per ounce of gold produced - by-product basis (US$)(vi): |
|
|
|
|
|
|
|
|
|
|
Northern Business
|
|
|
|
|
|
|
|
|
|
|
|
|
LaRonde mine
|
$
|
510
|
|
$
|
590
|
|
$
|
590
|
|
$
|
668
|
|
Lapa mine
|
|
620
|
|
|
607
|
|
|
590
|
|
|
667
|
|
Goldex mine
|
|
513
|
|
|
583
|
|
|
538
|
|
|
638
|
|
Meadowbank mine
|
|
526
|
|
|
757
|
|
|
613
|
|
|
599
|
|
Canadian Malartic mine(ii) |
|
606
|
|
|
684
|
|
|
596
|
|
|
701
|
|
Kittila mine
|
|
747
|
|
|
809
|
|
|
709
|
|
|
845
|
Southern Business
|
|
|
|
|
|
|
|
|
|
|
|
|
Pinos Altos mine
|
|
417
|
|
|
597
|
|
|
387
|
|
|
533
|
|
Creston Mascota deposit at Pinos Altos
|
|
445
|
|
|
556
|
|
|
430
|
|
|
578
|
|
La India mine(iii) |
|
485
|
|
|
496
|
|
|
436
|
|
|
487
|
Weighted average total cash costs per ounce of gold produced
|
$
|
547
|
|
$
|
662
|
|
$
|
567
|
|
$
|
637
|
Notes:
(i)
|
Operating margin is calculated as revenues from mining operations less
production costs.
|
|
|
(ii)
|
On June 16, 2014, Agnico Eagle and Yamana jointly acquired 100.0% of
Osisko by way of a statutory plan of arrangement (the "Arrangement").
As a result of the Arrangement, Agnico Eagle and Yamana each indirectly
own 50.0% of Osisko (now Canadian Malartic Corporation) and Canadian
Malartic GP, which now holds the Canadian Malartic mine. The
information set out in this table reflects the Company's 50.0% interest
in the Canadian Malartic mine since the date of acquisition.
|
|
|
(iii)
|
The La India mine achieved commercial production on February 1, 2014.
3,492 ounces of payable gold production were excluded from the
calculation of total cash costs per ounce produced in the year ended
December 31, 2014 as they were produced prior to the achievement of
commercial production.
|
|
|
(iv)
|
Payable production (a non-GAAP non-financial performance measure) is the
quantity of mineral produced during a period contained in products that
are or will be sold by the Company, whether such products are sold
during the period or held as inventories at the end of the period.
|
|
|
(v)
|
The Canadian Malartic mine's payable metal sold excludes the 5.0% net
smelter royalty held by Osisko Gold Royalties Ltd.
|
|
|
(vi)
|
Total cash costs per ounce of gold produced is not a recognized measure
under IFRS and this data may not be comparable to data presented by
other gold producers. Total cash costs per ounce of gold produced is
reported on both a by-product basis (deducting by-product metal
revenues from production costs) and co-product basis (before by-product
metal revenues). Total cash costs per ounce of gold produced on a
by-product basis is calculated by adjusting production costs as
recorded in the consolidated statements of income (loss) for by-product
metal revenues, unsold concentrate inventory production costs,
smelting, refining and marketing charges and other adjustments, and
then dividing by the number of ounces of gold produced. Total cash
costs per ounce of gold produced on a co-product basis is calculated in
the same manner as total cash costs per ounce of gold produced on a
by-product basis except that no adjustment for by-product metal
revenues is made. The calculation of total cash costs per ounce of gold
produced on a co-product basis does not reflect a reduction in
production costs or smelting, refining and marketing charges associated
with the production and sale of by-product metals. The Company believes
that these generally accepted industry measures provide a realistic
indication of operating performance and provide useful comparison
points between periods. Total cash costs per ounce of gold produced is
intended to provide information about the cash generating capabilities
of the Company's mining operations. Management also uses these measures
to monitor the performance of the Company's mining operations. As
market prices for gold are quoted on a per ounce basis, using the total
cash costs per ounce of gold produced on a by-product basis measure
allows management to assess a mine's cash generating capabilities at
various gold prices. Management is aware that these per ounce measures
of performance can be affected by fluctuations in exchange rates and,
in the case of total cash costs of gold produced on a by-product basis,
by-product metal prices. Management compensates for these inherent
limitations by using these measures in conjunction with minesite costs
per tonne as well as other data prepared in accordance with IFRS.
Management also performs sensitivity analyses in order to quantify the
effects of fluctuating metal prices and exchange rates.
|
AGNICO EAGLE MINES LIMITED |
CONSOLIDATED BALANCE SHEETS |
(thousands of United States dollars, except share amounts, IFRS basis) |
(Unaudited) |
|
|
| As at |
|
|
As at |
|
|
| December 31, | |
| December 31, |
|
|
| 2015 | |
| 2014 |
|
|
|
|
|
|
|
ASSETS |
|
| |
|
|
|
Current assets:
|
|
| |
|
|
|
|
Cash and cash equivalents
|
|
$
|
124,150
| |
$
|
177,537
|
|
Short-term investments
|
|
|
7,444
| |
|
4,621
|
|
Restricted cash
|
|
|
685
| |
|
33,122
|
|
Trade receivables
|
|
|
7,714
| |
|
59,716
|
|
Inventories
|
|
|
461,976
|
|
|
446,660
|
|
Income taxes recoverable
|
|
|
817
| |
|
1,658
|
|
Available-for-sale securities
|
|
|
31,863
| |
|
56,468
|
|
Fair value of derivative financial instruments
|
|
|
87
| |
|
4,877
|
|
Other current assets
|
|
|
194,689
| |
|
123,401
|
Total current assets
|
|
|
829,425
| |
|
908,060
|
Non-current assets:
|
|
|
| |
|
|
|
Restricted cash
|
|
|
741
| |
|
20,899
|
|
Goodwill
|
|
|
696,809
| |
|
696,809
|
|
Property, plant and mine development
|
|
|
5,088,967
| |
|
5,155,865
|
|
Other assets
|
|
|
67,238
| |
|
27,622
|
Total assets
|
|
$
|
6,683,180
| |
$
|
6,809,255
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
$
|
243,786
| |
$
|
209,906
|
|
Reclamation provision
|
|
|
6,245
| |
|
6,769
|
|
Interest payable
|
|
|
14,526
| |
|
13,816
|
|
Income taxes payable
|
|
|
14,852
| |
|
19,328
|
|
Finance lease obligations
|
|
|
9,589
| |
|
22,142
|
|
Current portion of long-term debt
|
|
|
14,451
|
|
|
52,182
|
|
Fair value of derivative financial instruments
|
|
|
8,073
| |
|
8,249
|
Total current liabilities
|
|
|
311,522
| |
|
332,392
|
Non-current liabilities:
|
|
|
| |
|
|
|
Long-term debt
|
|
|
1,118,187
| |
|
1,322,461
|
|
Reclamation provision
|
|
|
276,299
| |
|
249,917
|
|
Deferred income and mining tax liabilities
|
|
|
802,114
| |
|
797,192
|
|
Other liabilities
|
|
|
34,038
| |
|
38,803
|
Total liabilities
|
|
|
2,542,160
| |
|
2,740,765
|
EQUITY |
|
|
| |
|
|
|
Common shares:
|
|
|
| |
|
|
|
|
Outstanding - 218,028,368 common shares issued, less
377,573 shares held in trust
|
|
|
4,707,940
| |
|
4,599,788
|
|
Stock options
|
|
|
216,232
| |
|
200,830
|
|
Contributed surplus
|
|
|
37,254
| |
|
37,254
|
|
Deficit
|
|
|
(823,734)
| |
|
(779,382)
|
|
Accumulated other comprehensive income
|
|
|
3,328
| |
|
10,000
|
Total equity
|
|
|
4,141,020
| |
|
4,068,490
|
Total liabilities and equity
|
|
$
|
6,683,180
| |
$
|
6,809,255
|
|
|
|
| |
|
|
AGNICO EAGLE MINES LIMITED |
CONSOLIDATED STATEMENTS OF INCOME (LOSS) |
(thousands of United States dollars, except share amounts, IFRS basis) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three Months Ended December 31, | | Year Ended December 31, |
|
|
|
|
| 2015 | |
| 2014 | |
| 2015 | |
| 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues from mining operations
|
$
|
482,932
|
|
$
|
503,090
|
|
$
|
1,985,432
|
|
$
|
1,896,766
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COSTS, EXPENSES AND OTHER INCOME |
|
|
|
|
|
|
|
|
|
|
|
Production (i) |
|
|
|
229,819
|
|
|
287,317
|
|
|
995,295
|
|
|
1,004,559
|
Exploration and corporate development
|
|
26,001
|
|
|
14,436
|
|
|
110,353
|
|
|
56,002
|
Amortization of property, plant and mine development
|
|
157,129
|
|
|
139,095
|
|
|
608,609
|
|
|
433,628
|
General and administrative
|
|
|
22,505
|
|
|
25,995
|
|
|
96,973
|
|
|
118,771
|
Impairment loss on available-for-sale securities
|
|
3,929
|
|
|
12,882
|
|
|
12,035
|
|
|
15,763
|
Finance costs
|
|
|
|
17,887
|
|
|
18,144
|
|
|
75,228
|
|
|
73,393
|
Loss on derivative financial instruments
|
|
3,318
|
|
|
2,512
|
|
|
19,608
|
|
|
6,156
|
Gain on sale of available-for-sale securities
|
|
(1)
|
|
|
(263)
|
|
|
(24,600)
|
|
|
(5,635)
|
Environmental remediation
|
|
|
1,666
|
|
|
(949)
|
|
|
2,003
|
|
|
8,214
|
Foreign currency translation loss (gain)
|
|
1,281
|
|
|
6,951
|
|
|
(4,728)
|
|
|
3,781
|
Other expenses (income)
|
|
|
377
|
|
|
(5,318)
|
|
|
12,028
|
|
|
(7,004)
|
Income before income and mining taxes
|
|
19,021
|
|
|
2,288
|
|
|
82,628
|
|
|
189,138
|
Income and mining taxes expense
|
|
34,558
|
|
|
23,571
|
|
|
58,045
|
|
|
106,168
|
Net income (loss) for the period
|
$
|
(15,537)
|
|
$
|
(21,283)
|
|
$
|
24,583
|
|
$
|
82,970
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share - basic
|
$
|
(0.07)
|
|
$
|
(0.10)
|
|
$
|
0.11
|
|
$
|
0.43
|
Net income (loss) per share - diluted
|
$
|
(0.07)
|
|
$
|
(0.12)
|
|
$
|
0.11
|
|
$
|
0.39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
217,484
|
|
|
212,401
|
|
|
216,168
|
|
|
195,223
|
Diluted
|
|
|
|
217,484
|
|
|
213,273
|
|
|
217,101
|
|
|
196,202
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(i) Exclusive of amortization, which is shown separately.
|
AGNICO EAGLE MINES LIMITED |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
(thousands of United States dollars, IFRS basis) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three Months Ended December 31, |
| Year Ended December 31, |
|
|
|
|
|
|
|
| 2015 | |
| 2014 | |
| 2015 | |
| 2014 |
|
|
|
|
|
|
|
|
| | |
| | |
| |
OPERATING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) for the period
|
|
|
|
$
|
(15,537)
|
|
$
|
(21,283)
|
|
$
|
24,583
|
|
$
|
82,970
|
Add (deduct) items not affecting cash:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of property, plant and mine development
|
|
157,129
|
|
|
139,095
|
|
|
608,609
|
|
|
433,628
|
|
Deferred income and mining taxes
|
|
|
|
(36,853)
|
|
|
10,869
|
|
|
6,550
|
|
|
37,058
|
|
Gain on sale of available-for-sale securities
|
|
(1)
|
|
|
(263)
|
|
|
(24,600)
|
|
|
(5,635)
|
|
Stock-based compensation
|
|
|
|
|
7,045
|
|
|
7,533
|
|
|
35,822
|
|
|
37,565
|
|
Impairment loss on available-for-sale securities
|
|
|
3,929
|
|
|
12,882
|
|
|
12,035
|
|
|
15,763
|
|
Foreign currency translation loss (gain)
|
|
|
|
1,281
|
|
|
6,951
|
|
|
(4,728)
|
|
|
3,781
|
|
Other
|
|
|
|
|
|
|
(3,862)
|
|
|
(3,541)
|
|
|
3,145
|
|
|
23,430
|
Adjustment for settlement of reclamation provision
|
|
|
|
(533)
|
|
|
(669)
|
|
|
(1,385)
|
|
|
(4,160)
|
Changes in non-cash working capital balances:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade receivables
|
|
|
|
|
|
(1,815)
|
|
|
2,012
|
|
|
52,019
|
|
|
17,237
|
|
Income taxes
|
|
|
|
|
|
64,315
|
|
|
5,783
|
|
|
(2,333)
|
|
|
30,771
|
|
Inventories
|
|
|
|
|
|
8,928
|
|
|
23,705
|
|
|
(40,547)
|
|
|
(1,354)
|
|
Other current assets
|
|
|
|
|
|
(25,322)
|
|
|
1,102
|
|
|
(74,106)
|
|
|
787
|
|
Accounts payable and accrued liabilities
|
|
|
|
(11,348)
|
|
|
(13,101)
|
|
|
20,464
|
|
|
(3,391)
|
|
Interest payable
|
|
|
|
|
|
(6,609)
|
|
|
(7,119)
|
|
|
710
|
|
|
(126)
|
Cash provided by operating activities
|
|
|
|
|
140,747
|
|
|
163,956
|
|
|
616,238
|
|
|
668,324
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions to property, plant and mine development
|
|
|
|
(132,958)
|
|
|
(133,353)
|
|
|
(449,758)
|
|
|
(475,412)
|
Acquisitions, net of cash and cash equivalents acquired
|
|
|
-
|
|
|
3,477
|
|
|
(12,983)
|
|
|
(400,032)
|
Net (purchases) sales of short-term investments
|
|
|
|
(1,300)
|
|
|
2,200
|
|
|
(2,823)
|
|
|
(2,404)
|
Net proceeds from sale of available-for-sale securities and warrants
|
|
40
|
|
|
4,057
|
|
|
61,075
|
|
|
44,692
|
Purchase of available-for-sale securities and warrants
|
|
|
(382)
|
|
|
-
|
|
|
(19,815)
|
|
|
(27,246)
|
Decrease in restricted cash
|
|
|
|
|
|
18,814
|
|
|
493
|
|
|
49,785
|
|
|
8,783
|
Cash used in investing activities
|
|
|
|
|
(115,786)
|
|
|
(123,126)
|
|
|
(374,519)
|
|
|
(851,619)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends paid
|
|
|
|
|
|
|
(14,940)
|
|
|
(14,606)
|
|
|
(59,512)
|
|
|
(54,065)
|
Repayment of finance lease obligations
|
|
|
|
|
(6,122)
|
|
|
(7,087)
|
|
|
(23,657)
|
|
|
(21,453)
|
Sale-leaseback financing
|
|
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
1,027
|
Proceeds from long-term debt
|
|
|
|
|
111,000
|
|
|
50,000
|
|
|
436,000
|
|
|
1,010,000
|
Repayment of long-term debt
|
|
|
|
|
(196,000)
|
|
|
(49,410)
|
|
|
(697,086)
|
|
|
(724,050)
|
Note issuance
|
|
|
|
|
|
|
-
|
|
|
-
|
|
|
50,000
|
|
|
-
|
Long-term debt financing
|
|
|
|
|
|
(196)
|
|
|
-
|
|
|
(1,689)
|
|
|
(2,127)
|
Repurchase of common shares for restricted share unit plan
|
|
|
-
|
|
|
-
|
|
|
(11,899)
|
|
|
(7,518)
|
Proceeds on exercise of stock options
|
|
|
|
|
3,662
|
|
|
-
|
|
|
17,672
|
|
|
16,994
|
Common shares issued
|
|
|
|
|
|
2,136
|
|
|
2,418
|
|
|
9,411
|
|
|
10,428
|
Cash (used in) provided by financing activities
| | |
|
(100,460)
|
|
|
(18,685)
|
|
|
(280,760)
|
|
|
229,236
|
Effect of exchange rate changes on cash and cash equivalents |
|
(2,315)
|
|
|
(3,431)
|
|
|
(14,346)
|
|
|
(7,505)
|
Net (decrease) increase in cash and cash equivalents during the period |
|
(77,814)
|
|
|
18,714
|
|
|
(53,387)
|
|
|
38,436
|
Cash and cash equivalents, beginning of period | |
|
201,964
|
|
|
158,823
|
|
|
177,537
|
|
|
139,101
|
Cash and cash equivalents, end of period | | |
$
|
124,150
|
|
$
|
177,537
|
|
$
|
124,150
|
|
$
|
177,537
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL CASH FLOW INFORMATION |
|
|
|
|
|
|
|
|
|
|
|
|
Interest paid
|
|
|
|
|
|
$
|
23,158
|
|
$
|
23,663
|
|
$
|
69,414
|
|
$
|
67,632
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income and mining taxes paid
|
|
|
|
$
|
33,756
|
|
$
|
13,070
|
|
$
|
81,112
|
|
$
|
51,302
|
AGNICO EAGLE MINES LIMITED
RECONCILIATION OF NON-GAAP FINANCIAL PERFORMANCE MEASURES
(thousands of United States dollars, except where noted)
(Unaudited)
Total Production Costs by Mine |
| | |
|
| |
| | |
| |
|
| |
| Three Months Ended |
|
| Three Months Ended |
| | Year Ended |
| | Year Ended |
| |
| December 31, 2015 |
|
| December 31, 2014 |
| | December 31, 2015 |
| | December 31, 2014 |
(thousands of United States dollars) |
|
| |
|
| |
| | |
| | |
LaRonde mine
|
|
$
|
32,041
|
|
$
|
47,629
|
|
$
|
172,283
|
|
$
|
188,736
|
Lapa mine
|
|
|
12,652
|
|
|
17,463
|
|
|
52,571
|
|
|
61,056
|
Goldex mine
|
|
|
13,378
|
|
|
17,350
|
|
|
61,278
|
|
|
64,836
|
Meadowbank mine
|
|
|
49,177
|
|
|
67,099
|
|
|
230,564
|
|
|
270,824
|
Canadian Malartic mine(i) |
|
|
46,093
|
|
|
47,701
|
|
|
171,473
|
|
|
113,916
|
Kittila mine
|
|
|
32,203
|
|
|
36,546
|
|
|
126,095
|
|
|
116,893
|
Pinos Altos mine
|
|
|
24,351
|
|
|
32,690
|
|
|
105,175
|
|
|
123,342
|
Creston Mascota deposit at Pinos Altos
|
|
|
7,070
|
|
|
7,729
|
|
|
26,278
|
|
|
28,007
|
La India mine(ii) |
|
|
12,854
|
|
|
13,110
|
|
|
49,578
|
|
|
36,949
|
Production costs per the consolidated statements of income (loss)
|
|
$
|
229,819
|
|
$
|
287,317
|
|
$
|
995,295
|
|
$
|
1,004,559
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Production Costs to Total Cash Costs per Ounce of Gold
Produced(iii) by Mine and Reconciliation of Production Costs to Minesite Costs per
Tonne(iv) by Mine |
|
|
|
|
|
|
|
|
|
|
|
|
|
LaRonde Mine - Total Cash Costs per Ounce of Gold Produced(iii) |
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Three Months Ended |
|
| Three Months Ended |
| | Year Ended |
| | Year Ended |
(thousands of United States dollars, except as noted) | |
| December 31, 2015 |
|
| December 31, 2014 |
| | December 31, 2015 |
| | December 31, 2014 |
Production costs
|
|
$
|
32,041
|
|
$
|
47,629
|
|
$
|
172,283
|
|
$
|
188,736
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory and other adjustments(v) |
|
|
16,847
|
|
|
5,633
|
|
|
31,417
|
|
|
27,070
|
Cash operating costs (co-product basis)
|
|
$
|
48,888
|
|
$
|
53,262
|
|
$
|
203,700
|
|
$
|
215,806
|
|
By-product metal revenues
|
|
|
(11,553)
|
|
|
(18,293)
|
|
|
(45,678)
|
|
|
(79,015)
|
Cash operating costs (by-product basis)
|
|
$
|
37,335
|
|
$
|
34,969
|
|
$
|
158,022
|
|
$
|
136,791
|
Gold production (ounces)
|
|
|
73,161
|
|
|
59,316
|
|
|
267,921
|
|
|
204,652
|
Total cash costs per ounce of gold produced ($ per ounce)(iii):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Co-product basis
|
|
$
|
668
|
|
$
|
898
|
|
$
|
760
|
|
$
|
1,055
|
|
By-product basis
|
|
$
|
510
|
|
$
|
590
|
|
$
|
590
|
|
$
|
668
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LaRonde Mine - Minesite Costs per Tonne(iv) |
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Three Months Ended |
|
| Three Months Ended |
| | Year Ended |
| | Year Ended |
(thousands of United States dollars, except as noted) | |
| December 31, 2015 |
|
| December 31, 2014 |
| | December 31, 2015 |
| | December 31, 2014 |
Production costs
|
|
$
|
32,041
|
|
$
|
47,629
|
|
$
|
172,283
|
|
$
|
188,736
|
Inventory and other adjustments(vi) |
|
|
2,316
|
|
|
(1,837)
|
|
|
2,582
|
|
|
(1,511)
|
Minesite operating costs
|
|
$
|
34,357
|
|
$
|
45,792
|
|
$
|
174,865
|
|
$
|
187,225
|
Minesite operating costs (thousands of C$)
|
|
C$
|
53,119
|
|
C$
|
52,073
|
|
C$
|
222,799
|
|
C$
|
206,858
|
Tonnes of ore milled (thousands of tonnes)
|
|
|
563
|
|
|
538
|
|
|
2,241
|
|
|
2,085
|
Minesite costs per tonne (C$)(iv) |
|
C$
|
94
|
|
C$
|
97
|
|
C$
|
99
|
|
C$
|
99
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lapa Mine - Total Cash Costs per Ounce of Gold Produced(iii) | |
|
|
|
|
|
|
|
|
|
|
|
| |
| Three Months Ended |
|
| Three Months Ended |
| | Year Ended |
| | Year Ended |
(thousands of United States dollars, except as noted) | |
| December 31, 2015 |
|
| December 31, 2014 |
| | December 31, 2015 |
| | December 31, 2014 |
Production costs
|
|
$
|
12,652
|
|
$
|
17,463
|
|
$
|
$ 52,571
|
|
$
|
61,056
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory and other adjustments(v) |
|
|
(247)
|
|
|
(1,858)
|
|
|
1,161
|
|
|
750
|
Cash operating costs (co-product basis)
|
|
$
|
12,405
|
|
$
|
15,605
|
|
$
|
53,732
|
|
$
|
61,806
|
|
By-product metal revenues
|
|
|
(42)
|
|
|
(55)
|
|
|
(62)
|
|
|
(61)
|
Cash operating costs (by-product basis)
|
|
$
|
12,363
|
|
$
|
15,550
|
|
$
|
53,670
|
|
$
|
61,745
|
Gold production (ounces)
|
|
|
19,929
|
|
|
25,611
|
|
|
90,967
|
|
|
92,622
|
Total cash costs per ounce of gold produced ($ per ounce)(iii):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Co-product basis
|
|
$
|
622
|
|
$
|
609
|
|
$
|
591
|
|
$
|
667
|
|
By-product basis
|
|
$
|
620
|
|
$
|
607
|
|
$
|
590
|
|
$
|
667
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lapa Mine - Minesite Costs per Tonne(iv) |
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Three Months Ended |
|
| Three Months Ended |
| | Year Ended |
| | Year Ended |
(thousands of United States dollars, except as noted) | |
| December 31, 2015 |
|
| December 31, 2014 |
| | December 31, 2015 |
| | December 31, 2014 |
Production costs
|
|
$
|
12,652
|
|
$
|
17,463
|
|
$
|
52,571
|
|
$
|
61,056
|
Inventory and other adjustments(vi) |
|
|
(1,297)
|
|
|
(1,999)
|
|
|
(1,000)
|
|
|
545
|
Minesite operating costs
|
|
$
|
11,355
|
|
$
|
15,464
|
|
$
|
51,571
|
|
$
|
61,601
|
Minesite operating costs (thousands of C$)
|
|
C$
|
15,076
|
|
C$
|
17,636
|
|
C$
|
65,686
|
|
C$
|
68,128
|
Tonnes of ore milled (thousands of tonnes)
|
|
|
136
|
|
|
162
|
|
|
560
|
|
|
639
|
Minesite costs per tonne (C$)(iv) |
|
C$
|
111
|
|
C$
|
109
|
|
C$
|
117
|
|
C$
|
107
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goldex Mine - Total Cash Costs per Ounce of Gold Produced(iii) |
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Three Months Ended |
|
| Three Months Ended |
| | Year Ended |
| | Year Ended |
(thousands of United States dollars, except as noted) | |
| December 31, 2015 |
|
| December 31, 2014 |
| | December 31, 2015 |
| | December 31, 2014 |
Production costs
|
|
$
|
13,378
|
|
$
|
17,350
|
|
$
|
61,278
|
|
$
|
64,836
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory and other adjustments(v) |
|
|
812
|
|
|
(161)
|
|
|
878
|
|
|
(720)
|
Cash operating costs (co-product basis)
|
|
$
|
14,190
|
|
$
|
17,189
|
|
$
|
62,156
|
|
$
|
64,116
|
|
By-product metal revenues
|
|
|
(8)
|
|
|
(4)
|
|
|
(23)
|
|
|
(20)
|
Cash operating costs (by-product basis)
|
|
$
|
14,182
|
|
$
|
17,185
|
|
$
|
62,133
|
|
$
|
64,096
|
Gold production (ounces)
|
|
|
27,646
|
|
|
29,463
|
|
|
115,426
|
|
|
100,433
|
Total cash costs per ounce of gold produced ($ per ounce)(iii):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Co-product basis
|
|
$
|
513
|
|
$
|
583
|
|
$
|
538
|
|
$
|
638
|
|
By-product basis
|
|
$
|
513
|
|
$
|
583
|
|
$
|
538
|
|
$
|
638
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goldex Mine - Minesite Costs per Tonne(iv) |
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Three Months Ended |
|
| Three Months Ended |
| | Year Ended |
| | Year Ended |
(thousands of United States dollars, except as noted) | |
| December 31, 2015 |
|
| December 31, 2014 |
| | December 31, 2015 |
| | December 31, 2014 |
Production costs
|
|
$
|
13,378
|
|
$
|
17,350
|
|
$
|
61,278
|
|
$
|
64,836
|
Inventory and other adjustments(vi) |
|
|
(189)
|
|
|
(290)
|
|
|
(1,253)
|
|
|
(797)
|
Minesite operating costs
|
|
$
|
13,189
|
|
$
|
17,060
|
|
$
|
60,025
|
|
$
|
64,039
|
Minesite operating costs (thousands of C$)
|
|
C$
|
17,605
|
|
C$
|
19,314
|
|
C$
|
76,408
|
|
C$
|
70,728
|
Tonnes of ore milled (thousands of tonnes)
|
|
|
572
|
|
|
575
|
|
|
2,313
|
|
|
2,117
|
Minesite costs per tonne (C$)(iv) |
|
C$
|
31
|
|
C$
|
34
|
|
C$
|
33
|
|
C$
|
33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Meadowbank Mine - Total Cash Costs per Ounce of Gold Produced(iii) |
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Three Months Ended |
|
| Three Months Ended |
| | Year Ended |
| | Year Ended |
(thousands of United States dollars, except as noted) | |
| December 31, 2015 |
|
| December 31, 2014 |
| | December 31, 2015 |
| | December 31, 2014 |
Production costs
|
|
$
|
49,177
|
|
$
|
67,099
|
|
$
|
230,564
|
|
$
|
270,824
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory and other adjustments(v) |
|
|
5,194
|
|
|
(656)
|
|
|
7,282
|
|
|
2,688
|
Cash operating costs (co-product basis)
|
|
$
|
54,371
|
|
$
|
66,443
|
|
$
|
237,846
|
|
$
|
273,512
|
By-product metal revenues
|
|
|
(455)
|
|
|
(805)
|
|
|
(3,665)
|
|
|
(2,420)
|
Cash operating costs (by-product basis)
|
|
$
|
53,916
|
|
$
|
65,638
|
|
$
|
234,181
|
|
$
|
271,092
|
Gold production (ounces)
|
|
|
102,580
|
|
$
|
86,715
|
|
$
|
381,804
|
|
$
|
452,877
|
Total cash costs per ounce of gold produced ($ per ounce)(iii):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Co-product basis
|
|
$
|
530
|
|
$
|
766
|
|
$
|
623
|
|
$
|
604
|
|
By-product basis
|
|
$
|
526
|
|
$
|
757
|
|
$
|
613
|
|
$
|
599
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Meadowbank Mine - Minesite Costs per Tonne(iv) |
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Three Months Ended |
|
| Three Months Ended |
| | Year Ended |
| | Year Ended |
(thousands of United States dollars, except as noted) | |
| December 31, 2015 |
|
| December 31, 2014 |
| | December 31, 2015 |
| | December 31, 2014 |
Production costs
|
|
$
|
49,177
|
|
$
|
67,099
|
|
$
|
230,564
|
|
$
|
270,824
|
Inventory and other adjustments(vi) |
|
|
(724)
|
|
|
(1,177)
|
|
|
(4,441)
|
|
|
2,539
|
Minesite operating costs
|
|
$
|
48,453
|
|
$
|
65,922
|
|
$
|
226,123
|
|
$
|
273,363
|
Minesite operating costs (thousands of C$)
|
|
C$
|
63,514
|
|
C$
|
73,612
|
|
C$
|
280,950
|
|
C$
|
300,635
|
Tonnes of ore milled (thousands of tonnes)
|
|
|
1,028
|
|
|
1,027
|
|
|
4,033
|
|
|
4,129
|
Minesite costs per tonne (C$)(iv) |
|
C$
|
62
|
|
C$
|
72
|
|
C$
|
70
|
|
C$
|
73
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Canadian Malartic Mine - Total Cash Costs per Ounce of Gold Produced(i)(iii) |
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Three Months Ended |
|
| Three Months Ended |
| | Year Ended |
| | Year Ended |
(thousands of United States dollars, except as noted) | |
| December 31, 2015 |
|
| December 31, 2014 |
| | December 31, 2015 |
| | December 31, 2014 |
Production costs
|
|
$
|
46,093
|
|
$
|
47,701
|
|
$
|
171,473
|
|
$
|
113,916
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory and other adjustments(v) |
|
|
(705)
|
|
|
(1,100)
|
|
|
3,630
|
|
|
(10,862)
|
Cash operating costs (co-product basis)
|
|
$
|
45,388
|
|
$
|
46,601
|
|
$
|
175,103
|
|
$
|
103,054
|
|
By-product metal revenues
|
|
|
(1,236)
|
|
|
(1,230)
|
|
|
(4,689)
|
|
|
(2,771)
|
Cash operating costs (by-product basis)
|
|
$
|
44,152
|
|
$
|
45,371
|
|
$
|
170,414
|
|
$
|
100,283
|
Gold production (ounces)
|
|
|
72,872
|
|
|
66,369
|
|
|
285,809
|
|
|
143,008
|
Total cash costs per ounce of gold produced ($ per ounce)(iii):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Co-product basis
|
|
$
|
623
|
|
$
|
702
|
|
$
|
613
|
|
$
|
721
|
|
By-product basis
|
|
$
|
606
|
|
$
|
684
|
|
$
|
596
|
|
$
|
701
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Canadian Malartic Mine - Minesite Costs per Tonne(i)(iv) |
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Three Months Ended |
|
| Three Months Ended |
| | Year Ended |
| | Year Ended |
(thousands of United States dollars, except as noted) | |
| December 31, 2015 |
|
| December 31, 2014 |
| | December 31, 2015 |
| | December 31, 2014 |
Production costs
|
|
$
|
46,093
|
|
$
|
47,701
|
|
$
|
171,473
|
|
$
|
113,916
|
Inventory and other adjustments(vi) |
|
|
(1,504)
|
|
|
(1,627)
|
|
|
280
|
|
|
(11,656)
|
Minesite operating costs
|
|
$
|
44,589
|
|
$
|
46,074
|
|
$
|
171,753
|
|
$
|
102,260
|
Minesite operating costs (thousands of C$)
|
|
C$
|
59,578
|
|
C$
|
52,327
|
|
C$
|
219,714
|
|
C$
|
113,818
|
Tonnes of ore milled (thousands of tonnes)
|
|
|
2,428
|
|
|
2,449
|
|
|
9,545
|
|
|
5,263
|
Minesite costs per tonne (C$)(iv) |
|
C$
|
25
|
|
C$
|
21
|
|
C$
|
23
|
|
C$
|
22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kittila Mine - Total Cash Costs per Ounce of Gold Produced(iii) |
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Three Months Ended |
|
| Three Months Ended |
| | Year Ended |
| | Year Ended |
(thousands of United States dollars, except as noted) | |
| December 31, 2015 |
|
| December 31, 2014 |
| | December 31, 2015 |
| | December 31, 2014 |
Production costs
|
|
$
|
32,203
|
|
$
|
36,546
|
|
$
|
126,095
|
|
$
|
116,893
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory and other adjustments(v) |
|
|
901
|
|
|
(1,625)
|
|
|
(187)
|
|
|
3,051
|
Cash operating costs (co-product basis)
|
|
$
|
33,104
|
|
$
|
34,921
|
|
$
|
125,908
|
|
$
|
119,944
|
|
By-product metal revenues
|
|
|
(39)
|
|
|
(37)
|
|
|
(155)
|
|
|
(124)
|
Cash operating costs (by-product basis)
|
|
$
|
33,065
|
|
$
|
34,884
|
|
$
|
125,753
|
|
$
|
119,820
|
Gold production (ounces)
|
|
|
44,279
|
|
|
43,130
|
|
|
177,374
|
|
|
141,742
|
Total cash costs per ounce of gold produced ($ per ounce)(iii):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Co-product basis
|
|
$
|
748
|
|
$
|
810
|
|
$
|
710
|
|
$
|
846
|
|
By-product basis
|
|
$
|
747
|
|
$
|
809
|
|
$
|
709
|
|
$
|
845
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kittila Mine - Minesite Costs per Tonne(iv) |
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Three Months Ended |
|
| Three Months Ended |
| | Year Ended |
| | Year Ended |
(thousands of United States dollars, except as noted) | |
| December 31, 2015 |
|
| December 31, 2014 |
| | December 31, 2015 |
| | December 31, 2014 |
Production costs
|
|
$
|
32,203
|
|
$
|
36,546
|
|
$
|
126,095
|
|
$
|
116,893
|
Inventory and other adjustments(vi) |
|
|
869
|
|
|
(1,753)
|
|
|
(374)
|
|
|
2,560
|
Minesite operating costs
|
|
$
|
33,072
|
|
$
|
34,793
|
|
$
|
125,721
|
|
$
|
119,453
|
Minesite operating costs (thousands of €)
|
|
€
|
30,160
|
|
€
|
27,500
|
|
€
|
111,329
|
|
€
|
89,987
|
Tonnes of ore milled (thousands of tonnes)
|
|
|
377
|
|
|
366
|
|
|
1,464
|
|
|
1,156
|
Minesite costs per tonne (€)(iv) |
|
€
|
80
|
|
€
|
75
|
|
€
|
76
|
|
€
|
78
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pinos Altos Mine - Total Cash Costs per Ounce of Gold Produced(iii) |
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Three Months Ended |
|
| Three Months Ended |
| | Year Ended |
| | Year Ended |
(thousands of United States dollars, except as noted) | |
| December 31, 2015 |
|
| December 31, 2014 |
| | December 31, 2015 |
| | December 31, 2014 |
Production costs
|
|
$
|
24,351
|
|
$
|
32,690
|
|
$
|
105,175
|
|
$
|
123,342
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory and other adjustments(v) |
|
|
3,374
|
|
|
(1,976)
|
|
|
6,458
|
|
|
(581)
|
Cash operating costs (co-product basis)
|
|
$
|
27,725
|
|
$
|
30,714
|
|
$
|
111,633
|
|
$
|
122,761
|
|
By-product metal revenues
|
|
|
(9,188)
|
|
|
(6,414)
|
|
|
(37,030)
|
|
|
(31,643)
|
Cash operating costs (by-product basis)
|
|
$
|
18,537
|
|
$
|
24,300
|
|
$
|
74,603
|
|
$
|
91,118
|
Gold production (ounces)
|
|
|
44,496
|
|
|
40,669
|
|
|
192,974
|
|
|
171,019
|
Total cash costs per ounce of gold produced ($ per ounce)(iii):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Co-product basis
|
|
$
|
623
|
|
$
|
755
|
|
$
|
578
|
|
$
|
718
|
|
By-product basis
|
|
$
|
417
|
|
$
|
597
|
|
$
|
387
|
|
$
|
533
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pinos Altos Mine - Minesite Costs per Tonne(iv) |
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Three Months Ended |
|
| Three Months Ended |
| | Year Ended |
| | Year Ended |
(thousands of United States dollars, except as noted) | |
| December 31, 2015 |
|
| December 31, 2014 |
| | December 31, 2015 |
| | December 31, 2014 |
Production costs
|
|
$
|
24,351
|
|
$
|
32,690
|
|
$
|
105,175
|
|
$
|
123,342
|
Inventory and other adjustments(vi) |
|
|
2,031
|
|
|
(2,375)
|
|
|
2,481
|
|
|
(2,376)
|
Minesite operating costs
|
|
$
|
26,382
|
|
$
|
30,315
|
|
$
|
107,656
|
|
$
|
120,966
|
Tonnes of ore processed (thousands of tonnes)
|
|
|
600
|
|
|
634
|
|
|
2,378
|
|
|
2,520
|
Minesite costs per tonne (US$)(iv) |
|
$
|
44
|
|
$
|
48
|
|
$
|
45
|
|
$
|
48
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Creston Mascota deposit at Pinos Altos - Total Cash Costs per Ounce of
Gold Produced(iii)
|
|
|
|
|
|
|
|
| |
| Three Months Ended |
|
| Three Months Ended |
| | Year Ended |
| | Year Ended |
(thousands of United States dollars, except as noted) | |
| December 31, 2015 |
|
| December 31, 2014 |
| | December 31, 2015 |
| | December 31, 2014 |
Production costs
|
|
$
|
7,070
|
|
$
|
7,729
|
|
$
|
26,278
|
|
$
|
28,007
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory and other adjustments(v) |
|
|
(156)
|
|
|
(84)
|
|
|
(328)
|
|
|
1,232
|
Cash operating costs (co-product basis)
|
|
$
|
6,914
|
|
$
|
7,645
|
|
$
|
25,950
|
|
$
|
29,239
|
|
By-product metal revenues
|
|
|
(720)
|
|
|
(423)
|
|
|
(2,412)
|
|
|
(1,574)
|
Cash operating costs (by-product basis)
|
|
$
|
6,194
|
|
$
|
7,222
|
|
$
|
23,538
|
|
$
|
27,665
|
Gold production (ounces)
|
|
|
13,933
|
|
|
12,989
|
|
|
54,703
|
|
|
47,842
|
Total cash costs per ounce of gold produced ($ per ounce)(iii):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Co-product basis
|
|
$
|
496
|
|
$
|
589
|
|
$
|
474
|
|
$
|
611
|
|
By-product basis
|
|
$
|
445
|
|
$
|
556
|
|
$
|
430
|
|
$
|
578
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Creston Mascota deposit at Pinos Altos - Minesite Costs per Tonne(iv) |
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Three Months Ended |
|
| Three Months Ended |
| | Year Ended |
| | Year Ended |
(thousands of United States dollars, except as noted) | |
| December 31, 2015 |
|
| December 31, 2014 |
| | December 31, 2015 |
| | December 31, 2014 |
Production costs
|
|
$
|
7,070
|
|
$
|
7,729
|
|
$
|
26,278
|
|
$
|
28,007
|
Inventory and other adjustments(vi) |
|
|
(328)
|
|
|
(163)
|
|
|
(757)
|
|
|
870
|
Minesite operating costs
|
|
$
|
6,742
|
|
$
|
7,566
|
|
$
|
25,521
|
|
$
|
28,877
|
Tonnes of ore processed (thousands of tonnes)
|
|
|
529
|
|
|
551
|
|
|
2,099
|
|
|
1,794
|
Minesite costs per tonne (US$)(iv) |
|
$
|
13
|
|
$
|
14
|
|
$
|
12
|
|
$
|
16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
La India Mine - Total Cash Costs per Ounce of Gold Produced(ii)(iii) |
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Three Months Ended |
|
| Three Months Ended |
| | Year Ended |
| | Year Ended |
(thousands of United States dollars, except as noted) | |
| December 31, 2015 |
|
| December 31, 2014 |
| | December 31, 2015 |
| | December 31, 2014 |
Production costs
|
|
$
|
12,854
|
|
$
|
13,110
|
|
$
|
49,578
|
|
$
|
36,949
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory and other adjustments(v) |
|
|
(725)
|
|
|
(514)
|
|
|
(28)
|
|
|
1,172
|
Cash operating costs (co-product basis)
|
|
$
|
12,129
|
|
$
|
12,596
|
|
$
|
49,550
|
|
$
|
38,121
|
|
By-product metal revenues
|
|
|
(772)
|
|
|
(1,055)
|
|
|
(4,058)
|
|
|
(3,230)
|
Cash operating costs (by-product basis)
|
|
$
|
11,357
|
|
$
|
11,541
|
|
$
|
45,492
|
|
$
|
34,891
|
Gold production (ounces)
|
|
|
23,432
|
|
|
23,273
|
|
|
104,362
|
|
|
71,601
|
Total cash costs per ounce of gold produced ($ per ounce)(iii):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Co-product basis
|
|
$
|
518
|
|
$
|
541
|
|
$
|
475
|
|
$
|
532
|
|
By-product basis
|
|
$
|
485
|
|
$
|
496
|
|
$
|
436
|
|
$
|
487
|
|
|
|
|
|
|
|
|
|
|
|
|
|
La India Mine - Minesite Costs per Tonne(ii)(iv) |
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Three Months Ended |
|
| Three Months Ended |
| | Year Ended |
| | Year Ended |
(thousands of United States dollars, except as noted) | |
| December 31, 2015 |
|
| December 31, 2014 |
| | December 31, 2015 |
| | December 31, 2014 |
Production costs
|
|
$
|
12,854
|
|
$
|
13,110
|
|
$
|
49,578
|
|
$
|
36,949
|
Inventory and other adjustments(vi) |
|
|
(859)
|
|
|
(652)
|
|
|
(657)
|
|
|
778
|
Minesite operating costs
|
|
$
|
11,995
|
|
$
|
12,458
|
|
$
|
48,921
|
|
$
|
37,727
|
Tonnes of ore processed (thousands of tonnes)
|
|
|
1,439
|
|
|
1,427
|
|
|
5,371
|
|
|
4,442
|
Minesite costs per tonne (US$)(iv) |
|
$
|
8
|
|
$
|
9
|
|
$
|
9
|
|
$
|
8
|
Notes:
(i) On June 16, 2014, Agnico Eagle and Yamana jointly acquired 100%
of Osisko by way of the Arrangement. As a result of the Arrangement,
Agnico Eagle and Yamana each indirectly own 50.0% of Osisko (now
Canadian Malartic Corporation) and Canadian Malartic GP, which now
holds the Canadian Malartic mine. The information set out in this
table reflects the Company's 50.0% interest in the Canadian Malartic
mine since the date of acquisition.
(ii) The La India mine achieved commercial production on February 1,
2014. 3,492 ounces of payable gold production were excluded from the
calculation of total cash costs per ounce of gold produced in the year
ended December 31, 2014 as they were produced prior to the achievement
of commercial production.
(iii) Total cash costs per ounce of gold produced is not a
recognized measure under IFRS and this data may not be comparable to
data presented by other gold producers. Total cash costs per ounce of
gold produced is reported on both a by-product basis (deducting
by-product metal revenues from production costs) and co-product basis
(before by-product metal revenues). Total cash costs per ounce of gold
produced on a by-product basis is calculated by adjusting production
costs as recorded in the consolidated statements of income (loss) for
by-product metal revenues, unsold concentrate inventory production
costs, smelting, refining and marketing charges and other adjustments,
and then dividing by the number of ounces of gold produced. Total cash
costs per ounce of gold produced on a co-product basis is calculated in
the same manner as total cash costs per ounce of gold produced on a
by-product basis except that no adjustment for by-product metal
revenues is made. The calculation of total cash costs per ounce of gold
produced on a co-product basis does not reflect a reduction in
production costs or smelting, refining and marketing charges associated
with the production and sale of by-product metals. The Company believes
that these generally accepted industry measures provide a realistic
indication of operating performance and provide useful comparison
points between periods. Total cash costs per ounce of gold produced is
intended to provide information about the cash generating capabilities
of the Company's mining operations. Management also uses these measures
to monitor the performance of the Company's mining operations. As
market prices for gold are quoted on a per ounce basis, using the total
cash costs per ounce of gold produced on a by-product basis measure
allows management to assess a mine's cash generating capabilities at
various gold prices. Management is aware that these per ounce measures
of performance can be affected by fluctuations in exchange rates and,
in the case of total cash costs of gold produced on a by-product basis,
by-product metal prices. Management compensates for these inherent
limitations by using these measures in conjunction with minesite costs
per tonne (discussed below) as well as other data prepared in
accordance with IFRS. Management also performs sensitivity analyses in
order to quantify the effects of fluctuating metal prices and
exchange rates.
(iv) Minesite costs per tonne is not a recognized measure under IFRS
and this data may not be comparable to data reported by other gold
producers. This measure is calculated by adjusting production costs as
shown in the consolidated statements of income (loss) for unsold
concentrate inventory production costs, and then dividing by tonnes of
ore milled. As the total cash costs per ounce of gold produced measure
can be impacted by fluctuations in by-product metal prices and exchange
rates, management believes that the minesite costs per tonne measure
provides additional information regarding the performance of mining
operations, eliminating the impact of varying production levels.
Management also uses this measure to determine the economic viability
of mining blocks. As each mining block is evaluated based on the net
realizable value of each tonne mined, in order to be economically
viable the estimated revenue on a per tonne basis must be in excess of
the minesite costs per tonne. Management is aware that this per tonne
measure of performance can be impacted by fluctuations in processing
levels and compensates for this inherent limitation by using this
measure in conjunction with production costs prepared in accordance
with IFRS.
(v) Under the Company's revenue recognition policy, revenue is
recognized on concentrates when legal title and risk is transferred. As
total cash costs per ounce of gold produced are calculated on a
production basis, an inventory adjustment is made to reflect the sales
margin on the portion of concentrate production not yet recognized as
revenue. Other adjustments include the addition of smelting, refining
and marketing charges to production costs.
(vi) This inventory and other adjustment reflects production costs
associated with unsold concentrates.
Reconciliation of Production Costs to All-in Sustaining Costs per Ounce
of Gold Produced
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three Months Ended | |
| Three Months Ended | |
| Year Ended | |
| Year Ended |
(United States dollars per ounce of gold produced, except where noted) | |
| December 31, 2015 | |
| December 31, 2014 | |
| December 31, 2015 | |
| December 31, 2014 |
|
|
| | |
| | |
| | |
| |
Production costs per the consolidated statements of income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
(thousands of United States dollars)
|
|
$
|
229,819
|
|
$
|
287,317
|
|
$
|
995,295
|
|
$
|
1,004,559
|
Adjusted gold production (ounces)(i) |
|
|
422,328
|
|
|
387,535
|
|
|
1,671,340
|
|
|
1,425,796
|
Production costs per ounce of adjusted gold production(i) |
|
$
|
544
|
|
$
|
741
|
|
$
|
596
|
|
$
|
705
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory and other adjustments(ii) |
|
|
60
|
|
|
(6)
|
|
|
30
|
|
|
16
|
Total cash costs per ounce of gold produced (co-product basis)(iii) |
|
$
|
604
|
|
$
|
735
|
|
$
|
626
|
|
$
|
721
|
|
By-product metal revenues
|
|
|
(57)
|
|
|
(73)
|
|
|
(59)
|
|
|
(84)
|
Total cash costs per ounce of gold produced (by-product basis)(iii) |
|
$
|
547
|
|
$
|
662
|
|
$
|
567
|
|
$
|
637
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sustaining capital expenditures (including capitalized exploration)
|
|
|
214
|
|
|
240
|
|
|
183
|
|
|
230
|
|
General and administrative expenses (including stock options)
|
|
|
53
|
|
|
67
|
|
|
58
|
|
|
83
|
|
Non-cash reclamation provision and other
|
|
|
3
|
|
|
4
|
|
|
2
|
|
|
4
|
All-in sustaining costs per ounce of gold produced (by-product basis)
|
|
$
|
817
|
|
$
|
973
|
|
$
|
810
|
|
$
|
954
|
|
By-product metal revenues
|
|
|
57
|
|
|
73
|
|
|
59
|
|
|
84
|
All-in sustaining costs per ounce of gold produced (co-product basis)
|
|
$
|
874
|
|
$
|
1,046
|
|
$
|
869
|
|
$
|
1,038
|
Notes:
|
|
|
(i)
|
The La India mine achieved commercial production on February 1, 2014.
3,492 ounces of payable gold production were excluded from the
calculation of total cash costs per ounce of gold produced for the year
ended December 31, 2014 as they were produced prior to the achievement
of commercial production.
|
|
|
(ii)
|
Under the Company's revenue recognition policy, revenue is recognized on
concentrates when legal title and risk is transferred. As total cash
costs per ounce of gold produced are calculated on a production basis,
an inventory adjustment is made to reflect the sales margin on the
portion of concentrate production not yet recognized as revenue. Other
adjustments include the addition of smelting, refining and marketing
charges to production costs.
|
|
|
(iii)
|
Total cash costs per ounce of gold produced is not a recognized measure
under IFRS and this data may not be comparable to data reported by
other gold producers. Total cash costs per ounce of gold produced is
reported on both a by-product basis (deducting by-product metal
revenues from production costs) and co-product basis (before by-product
metal revenues). Total cash costs per ounce of gold produced on a
by-product basis is calculated by adjusting production costs as
recorded in the consolidated statements of income (loss) for by-product
metal revenues, unsold concentrate inventory production costs,
smelting, refining and marketing charges and other adjustments, and
then dividing by the number of ounces of gold produced. Total cash
costs per ounce of gold produced on a co-product basis is calculated in
the same manner as total cash costs per ounce of gold produced on a
by-product basis except that no adjustment for by-product metal
revenues is made. Accordingly, the calculation of total cash costs per
ounce of gold produced on a co-product basis does not reflect a
reduction in production costs or smelting, refining and marketing
charges associated with the production and sale of by-product metals.
The Company believes that these generally accepted industry measures
provide a realistic indication of operating performance and provide
useful comparison points between periods. Total cash costs per ounce of
gold produced is intended to provide information about the cash
generating capabilities of the Company's mining operations. Management
also uses these measures to monitor the performance of the Company's
mining operations. As market prices for gold are quoted on a per ounce
basis, using the total cash costs per ounce of gold produced on a
by-product basis measure allows management to assess a mine's cash
generating capabilities at various gold prices. Management is aware
that these per ounce measures of performance can be affected by
fluctuations in exchange rates and, in the case of total cash costs of
gold produced on a by-product basis, by-product metal prices.
Management compensates for these inherent limitations by using these
measures in conjunction with minesite costs per tonne as well as other
data prepared in accordance with IFRS. Management also performs
sensitivity analyses in order to quantify the effects of fluctuating
metal prices and exchange rates.
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SOURCE Agnico Eagle Mines Limited