Agnico-Eagle reports Q2 2009 results; Record quarterly gold production
Posted on: Wednesday, 29 July 2009, 15:15 CDT
Stock Symbol: AEM (NYSE and TSX) (All amounts expressed in U.S. dollars unless otherwise noted)
Cash provided by operating activities in the second quarter of 2009 was
"Agnico-Eagle's production growth continues as second quarter gold production increased 76% over the second quarter of 2008. Both the Kittila and Lapa mines achieved commercial production, while heap leach gold production at the
Second quarter 2009 highlights include: - Record Production - record gold production of 119,053 ounces. First gold poured at Pinos Altos in July - Good Cost Performance - LaRonde, Goldex and Lapa achieve good minesite cost performance - Commercial Production At Lapa And Kittila - commercial production achieved as of May 1 at both mines - Remaining Two New Gold Mines On Schedule - Pinos Altos and Meadowbank remain on schedule for initial production in third quarter 2009 and first quarter 2010, respectively - Growth profile bolstered - expected after-tax internal rate of return ("IRR") of 76% at Goldex expansion and 17% at Pinos Altos expansion at Creston Mascota
Payable gold production(1) in the second quarter of 2009 was a record 119,053 ounces at total cash costs per ounce(2) of
The increase in production, relative to the second quarter of 2008, is attributable to payable production from the Goldex, Lapa and Kittila mines, which were not in commercial production in that quarter. The mill recovery rates at the Kittila mine have been increasing, resulting in commercial production being achieved in May.
For the first six months of 2009, Agnico-Eagle recorded net income of
For the first six months of 2009, Agnico-Eagle generated cash provided by operating activities of
Payable gold production in the first half of 2009 was a record 210,864 ounces, up 78% from 118,649 in the first six months of 2008. The increase was due to the start-up of the new Goldex, Kittila and Lapa mines.
Full year production guidance remains unchanged at 550,000 ounces to 575,000 ounces of gold.
Conference Call Tomorrow
The Company will host its quarterly conference call on
Via Webcast:
A live audio webcast of the call will be available on the Company's website homepage at www.agnico-eagle.com.
Via Telephone:
For those preferring to listen by telephone, please dial 416-644-3418 or Toll Free 1-800-731-6941. To ensure your participation, please call approximately five minutes prior to the scheduled start of the call.
Replay archive:
Please dial the toll-free access number 1-877-289-8525, passcode 21294138 followed by the number sign.
The conference call will be replayed from
The webcast along with presentation slides will be archived for 180 days on the website.
Strong Financial Position Maintained
Cash and cash equivalents decreased to
Capital expenditures in the quarter were
In 2009, full year capital expenditures are expected to total approximately
LaRonde Mine - Continued Cost Control and Production Consistency
The 100% owned LaRonde mine in northwestern
The LaRonde mill processed an average of 7,212 tonnes of ore per day in the second quarter of 2009, compared with an average of 7,281 tonnes per day in the prior-year period. With a steady-state operation of approximately 7,200 tonnes per day for approximately six years, LaRonde continues to be a consistent, reliable world class mine.
Net of byproduct credits, LaRonde's total cash costs per ounce were
For the first six months of 2009, LaRonde's total cash costs per ounce were
Minesite costs per tonne(3) were approximately
LaRonde Extension - Shaft Sinking Nearly Complete
During the second quarter of 2009, approximately 120 metres of shaft sinking was completed on the new internal shaft, leaving approximately 120 metres to the final depth of 2,880 metres. The shaft is expected to be completed during the fourth quarter of 2009 with preproduction development starting thereafter. The project is on schedule to start production in late 2011.
Goldex Mine - Reaches Design Capacity
The 100% owned Goldex mine in northwestern
The Goldex mine has successfully reached the design capacity for the plant in the second quarter of 2009, with an average of 6,875 tonnes of ore milled daily. In the first quarter of 2009, the mill processed an average of 6,770 tonnes per day.
Second quarter 2009 gold production at Goldex was 35,645 ounces at total cash costs per ounce of
For the six month period ending
Cost control was very good at Goldex as minesite costs per tonne were
During the second quarter of 2009, approximately 1.1 million tonnes of ore were blasted at Goldex compared with approximately 677,000 tonnes hoisted. This difference is necessary as the mining method used at Goldex requires some of the broken ore to be temporarily left within the mining block as ground support. As a result, minesite costs per tonne are expected to decrease going forward as all production blasting is expected to be completed in 2012, while the anticipated mine life extends into 2017.
Goldex Expansion - Low Capital, High Return Project
The Board of Directors has approved the expansion of Goldex to 8,000 tonnes per day with the ramp-up to this higher rate expected to be achieved by late-2011.
Capital costs are expected to total approximately
The large majority of the capital is to be spent on a surface crushing plant, with minor amounts for modifications to ore conveyance. Detailed engineering is underway and construction of the project will begin in the fourth quarter of 2009. A certificate of authorization, and all necessary permits, were received to increase the production rate at Goldex from 6,900 tonnes per day up to 8,500 tonnes per day.
In spite of the increased mining rate, Agnico-Eagle expects to extend the mine life of Goldex. There are several nearby zones underground, on the Goldex property, that are likely to be mined. They are currently in the resource category and not included in reserves. For example, it is expected that the nearby "M" zone will contribute approximately 250,000 ounces of gold to the overall reserves at Goldex by year end 2009, thus increasing the mine life in spite of the higher production rate.
Kittila Mine - Commercial Production Achieved at May 1; Ramping Up Production To Design Parameters
The 100% owned Kittila mine in northern
During the second quarter of 2009, the Kittila mill achieved commercial production and processed an average of 1,980 tonnes per day, reflecting the start-up phase of the project. In June the mill processed an average of approximately 2,300 tonnes per day. This compares to the expected full production rate of 3,000 tonnes per day. The current performance improvements are in line with the Company's expectations.
Second quarter 2009 gold production at Kittila was 13,771 ounces at total cash costs per ounce of
During the second quarter, operations at Kittila were focused on improving gold recovery through a metallurgical optimization process aimed to achieve Kittila's design gold recoveries of 83% to 89% in the mill, over the life of the mine. The optimization process has delivered significant results to date, with mill recoveries averaging 49% in the second quarter and 65% in June, both much higher than the average of 28% realized in the first quarter of 2009.
A scoping study is underway examining the possibility of significantly increasing the designed production rate at Kittila. This plan involves sinking a shaft on the property combined with an increase in milling capacity. Results of the study are expected to be released later this year and will incorporate the most recent exploration drilling. Eleven drills, two underground and nine on surface, are currently working on resource to reserve conversion and other exploration around the current reserves. Year to date, over 46,200 metres of diamond drilling has been completed at Kittila while an additional 14,600 metres of drilling has been completed on regional exploration in
Lapa - Commercial Production Achieved at May 1; Production Nearing Design Parameters
The 100% owned Lapa mine in northwestern
On
Second quarter 2009 gold production at Lapa was 11,603 ounces at total cash costs per ounce of
To date, nine of the 750 stopes expected to be extracted over the mine life have been removed. Reconciliation with the mill is expected to be completed during the third quarter once more consistent feed is delivered to it. Dilution has initially been higher than plan, however, improvements are expected as the mine and its operations are optimized.
Pinos Altos Construction Progressing On Schedule - Pours First Gold from Heap Leach
The 100% owned
The first ore was placed on the leach pads during
Construction of the mill at
Underground development productivity remains better than anticipated. Connection of the main production ramp and the exploration ramp is expected sometime during the third quarter, after which time, development of initial mining levels is expected to commence. Project to date development is now nearly seven kilometres in total.
Approximately 37,000 metres of diamond drilling were completed at the
Creston Mascota Approved for Construction - First gold expected early 2011
The Company is about to begin construction of a stand-alone open pit, heap leach operation on the Creston Mascota deposit, approximately 10 kilometres to the northwest of the main
Probable reserves at Creston Mascota total approximately 6.7 million tonnes grading 1.65 g/t gold and 17.1 g/t silver, or approximately 357,000 ounces of gold and 3.7 million ounces of silver.
The recently reviewed feasibility study contemplates a 4,000 tonne per day operation with first production in early 2011. Gold recoveries of 65% and silver recoveries of 16% are assumed for the heap leach operation planned at Creston Mascota. The waste to ore stripping ratio is expected to be approximately 4:1. Minesite costs per tonne are assumed to be approximately
Capital costs are expected to total approximately
Construction on the project will begin in the fourth quarter of 2009 and is expected to take approximately 18 months to complete.
Separately, the Company is studying the possibility of increasing the milled production rate at the main
Meadowbank Project Remains on Schedule for Q1, 2010 Start-Up
The 100% owned Meadowbank mine project in
Construction of the new Meadowbank mine project is well advanced. Highlights include the completion of the semi-autogenous ("SAG") and ball mill foundations and the installation of the SAG mill. Two thickeners and the cyanide destruction tank have been completed. The dewatering of Second Portage Lake Phase One has been finished. The balance will be completed upon the delivery of the water treatment plant expected this summer. Two of the six generators were installed in the power plant.
The 2009 sea-lift season is underway, including the remaining materials and consumables required for project completion. All of the major equipment for the various milling circuits is already in place.
Pre-stripping in the Portage pit is underway with approximately 2.0 million tonnes of waste rock hauled during the first half of 2009.
In the first half of 2009, approximately 27,400 metres of exploration drilling was completed at the Meadowbank minesite in the winter program. Four drills were dedicated to the mining area between Portage and Goose zones and also at depth. An additional 20,500 metres were completed on exploration targets on the surrounding Meadowbank property, using three drills. The targets included the Vault deposit, located approximately 10 kilometres to the north. Results will be presented in an upcoming exploration update.
A scoping study is underway which is considering an increase in the average daily production rate from 8,500 tonnes per day to 10,000 tonnes per day. This would increase the average annual gold production to more than 400,000 ounces. Results of the study are expected in the third quarter of 2009, with review in the fourth quarter.
About Agnico-Eagle
Agnico-Eagle is a long established, Canadian headquartered, gold producer with operations located in
----------------- (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 sold 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 reconciliation of this measure to production costs, as reported in the financial statements, see Note 1 to the financial statements at the end of this news release. (3) Minesite costs per tonne is a non-GAAP measure. For reconciliation of this measure to production costs, as reported in the financial statements, see Note 1 to the financial statements at the end of this news release. AGNICO-EAGLE MINES LIMITED SUMMARY OF OPERATIONS KEY PERFORMANCE INDICATORS (thousands of United States dollars, except where noted, US GAAP basis) (Unaudited) Three months ended Six months ended ------------------ ---------------- June 30, June 30, -------- -------- 2009 2008 2009 2008 ---- ---- ---- ---- Gross profit (exclusive of amortization shown below) LaRonde...................... $ 50,653 $ 39,357 $ 88,299 $ 114,840 Goldex....................... 19,107 - 37,573 - Lapa......................... (834) - (834) - Kittila...................... 3,145 - 3,145 - --------- --------- --------- --------- Operating margin............. 72,071 39,357 128,183 114,840 Amortization................. 15,470 7,516 27,600 14,546 Corporate.................... 38,016 18,488 52,662 35,767 --------- --------- --------- --------- Income before tax............ 18,585 13,353 47,921 64,527 Tax provision................ 17,358 5,006 (7,647) 27,272 --------- --------- --------- --------- Net earnings................. $ 1,227 $ 8,347 $ 55,568 $ 37,255 --------- --------- --------- --------- --------- --------- --------- --------- Net earning per share........ $ 0.01 $ 0.06 $ 0.36 $ 0.26 --------- --------- --------- --------- --------- --------- --------- --------- Operating cash flow.......... $ 26,369 $ 92,792 $ 75,192 $ 146,616 Realized price per sales volume (US$): Gold (per ounce)........... $ 962 $ 804 $ 965 $ 940 Silver (per ounce)......... $ 14.32 $ 16.56 $ 13.93 $ 18.29 Zinc (per tonne)........... $ 1,698 $ 1,728 $ 1,421 $ 2,169 Copper (per tonne)......... $ 5,832 $ 8,534 $ 5,058 $ 9,349 Payable production: Gold (ounces) LaRonde.................... 58,034 59,452 109,372 110,344 Goldex..................... 35,645 8,305 71,604 8,305 Lapa (Note 1).............. 11,603 - 11,603 - Kittila (Note 2)........... 13,771 - 18,285 - --------- --------- --------- --------- Total gold (ounces)........ 119,053 67,757 210,864 118,649 --------- --------- --------- --------- --------- --------- --------- --------- Silver (000's ounces)...... 1,034 956 2,063 1,982 Zinc (tonnes).............. 14,928 13,863 28,219 33,331 Copper (tonnes)............ 2,066 2,165 3,748 3,618 Payable metal sold: Gold (ounces - LaRonde).... 59,608 56,650 110,561 108,245 Gold (ounces - Goldex)..... 33,501 - 66,965 - Gold (ounces - Lapa)....... 3,167 - 3,167 - Gold (ounces - Kittila).... 6,780 - 6,780 - Silver (000's ounces)...... 1,012 955 2,024 1,973 Zinc (tonnes).............. 12,804 15,260 29,861 33,970 Copper (tonnes)............ 2,066 2,108 3,752 3,530 Total cash costs per ounce (Note 3): Gold LaRonde...................... $ 109 $ 113 $ 196 ($ 123) Goldex....................... $ 365 - $ 352 - Lapa (Note 1)................ $ 948 - $ 948 - Kittila (Note 2)............. $ 658 - $ 658 - --------- --------- --------- --------- Weighted average total cash costs per ounce............. $ 326 $ 113 $ 320 ($ 123) --------- --------- --------- --------- --------- --------- --------- --------- Note 1 ------ Lapa achieved commercial production as of May 1, 2009. Payable production includes commercial production ounces of 11,603 since May 1, 2009; non- commercial production ounces were nil. Note 2 ------ Kittila achieved commercial production as of May 1, 2009. Payable production includes commercial production ounces of 12,018 since May 1, 2009. Non-commercial production was 1,753 ounces. Note 3 ------ Total cash costs per ounce is calculated net of copper, zinc and other byproduct credits. The weighted average is based on commercial production ounces. Total cash costs per ounce is a non-GAAP measure. For a reconciliation to the financial statements, see Note 2 to the financial statements. See also "Note Regarding Certain Measures of Performance" AGNICO-EAGLE MINES LIMITED CONSOLIDATED BALANCE SHEETS (thousands of United States dollars, US GAAP basis) (Unaudited) As at As at June 30, December 31, -------- ------------ 2009 2008 ---- ---- ASSETS Current Cash and cash equivalents................... $ 173,905 $ 99,381 Trade receivables........................... 78,151 45,640 Inventories: Ore stockpiles............................ 34,234 24,869 Concentrates.............................. 19,396 5,013 Supplies.................................. 35,475 40,014 Other current assets........................ 136,565 136,377 ----------- ----------- Total current assets.......................... 477,726 351,294 Other assets.................................. 11,429 8,383 Future income and mining tax assets........... 26,883 21,647 Property, plant and mine development.......... 3,296,595 2,997,500 ----------- ----------- $ 3,812,633 $ 3,378,824 ----------- ----------- ----------- ----------- LIABILITIES AND SHAREHOLDERS' EQUITY Current Accounts payable and accrued liabilities.... $ 130,549 $ 139,795 Dividends payable........................... 277 28,304 Interest payable............................ 486 146 Income taxes payable........................ 6,791 4,814 ----------- ----------- Total current liabilities..................... 138,103 173,059 ----------- ----------- Bank debt..................................... 485,000 200,000 Fair value of derivative financial instruments.................................. 349 12,823 Reclamation provision and other liabilities... 80,999 71,770 Future income and mining tax liabilities...... 441,137 403,416 Shareholders' equity Common shares Authorized - unlimited Issued - 155,968,644 (December 31, 2008 - 154,808,918)............................... 2,348,875 2,299,747 Stock options................................. 58,409 41,052 Warrants...................................... 24,858 24,858 Contributed surplus........................... 15,166 15,166 Retained earnings............................. 213,109 157,541 Accumulated other comprehensive income (loss)....................................... 6,628 (20,608) ----------- ----------- Total shareholders' equity.................... 2,667,045 2,517,756 ----------- ----------- $ 3,812,633 $ 3,378,824 ----------- ----------- ----------- ----------- AGNICO-EAGLE MINES LIMITED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (thousands of United States dollars except share and per share amounts, US GAAP basis) (Unaudited) Three months ended Six months ended ------------------ ---------------- June 30, June 30, -------- -------- 2009 2008 2009 2008 ---- ---- ---- ---- REVENUES Revenues from mining operations.................. $ 133,084 $ 85,398 $ 238,915 $ 204,532 Interest and sundry income... 5,103 2,644 9,796 6,759 Gain on sale of available-for-sale securities.................. 341 - 535 406 --------- --------- --------- --------- 138,528 88,042 249,246 211,697 COSTS AND EXPENSES Production................... 61,013 46,041 110,731 89,692 Exploration and corporate development................. 9,735 8,940 15,984 17,838 Amortization................. 15,470 7,516 27,600 14,546 General and administrative... 13,253 9,759 32,053 29,627 Provincial capital tax....... 1,473 1,006 2,582 1,875 Interest..................... 2,335 264 3,204 1,318 Foreign currency loss (gain)...................... 16,664 1,163 9,171 (7,726) --------- --------- --------- --------- Income before income, mining and federal capital taxes... 18,585 13,353 47,921 64,527 Income and mining tax expense (recovery).................. 17,358 5,006 (7,647) 27,272 --------- --------- --------- --------- Net income for the period.... $ 1,227 $ 8,347 $ 55,568 $ 37,255 --------- --------- --------- --------- --------- --------- --------- --------- Net income per share - basic....................... $ 0.01 $ 0.06 $ 0.36 $ 0.26 --------- --------- --------- --------- --------- --------- --------- --------- Net income per share - diluted..................... $ 0.01 $ 0.06 $ 0.35 $ 0.26 --------- --------- --------- --------- --------- --------- --------- --------- Weighted average number of shares outstanding (in thousands) Basic...................... 155,805 143,720 155,498 143,546 Diluted.................... 157,763 144,851 157,432 144,682 AGNICO-EAGLE MINES LIMITED CONSOLIDATED STATEMENTS OF CASH FLOWS (thousands of United States dollars, US GAAP basis) (Unaudited) Three months ended Six months ended ------------------ ---------------- June 30, June 30, -------- -------- 2009 2008 2009 2008 ---- ---- ---- ---- Operating activities Net income for the period.... $ 1,227 $ 8,347 $ 55,568 $ 37,255 Add (deduct) items not affecting cash: Amortization............... 15,470 7,516 27,600 14,546 Future income and mining taxes..................... 17,209 11,175 (7,929) 26,874 Gain on sale of available-for-sale securities................ (341) - (535) (406) Amortization of deferred costs and other........... 20,194 4,980 20,230 8,589 Changes in non-cash working capital balances Trade receivables.......... (17,314) 12,261 (32,511) (1,845) Income taxes payable....... 2,570 (4,648) 1,977 - Inventories................ (13,928) (3,510) (12,005) (3,363) Other current assets....... (8,496) 21,760 21,424 12,766 Interest payable........... (62) - 340 - Accounts payable and accrued liabilities....... 9,840 34,911 1,033 52,200 --------- --------- --------- --------- Cash provided by operating activities.................. 26,369 92,792 75,192 146,616 --------- --------- --------- --------- Investing activities Additions to property, plant and mine development........ (155,002) (266,593) (310,349) (424,623) Acquisition, investments and other................... 2,926 (49,473) 3,416 (52,214) --------- --------- --------- --------- Cash used in investing activities.................. (152,076) (316,066) (306,933) (476,837) --------- --------- --------- --------- Financing activities Dividends paid............... - - (27,132) (23,779) Repayment of capital lease and other................... (6,520) - (6,882) - Bank debt.................... 70,000 75,000 285,000 75,000 Sales-leaseback financing.... 10,888 - 10,888 - Credit facility financing cost........................ (4,572) - (4,572) - Proceeds from common shares issued...................... 18,451 3,493 47,392 33,756 --------- --------- --------- --------- Cash provided by financing activities.................. 88,247 78,493 304,694 84,977 --------- --------- --------- --------- Effect of exchange rate changes on cash and cash equivalents................. 2,990 315 1,571 (822) --------- --------- --------- --------- Net increase (decrease) in cash and cash equivalents during the period........... (34,470) (144,466) 74,524 (246,066) Cash and cash equivalents, beginning of period......... 208,375 294,419 99,381 396,019 --------- --------- --------- --------- Cash and cash equivalents, end of period............... $ 173,905 $ 149,953 $ 173,905 $ 149,953 --------- --------- --------- --------- --------- --------- --------- --------- Other operating cash flow information: Interest paid during the period...................... $ 1,987 $ 18 $ 3,509 $ 702 --------- --------- --------- --------- --------- --------- --------- --------- Income, mining and capital taxes paid during the period...................... $ 1,112 $ - $ 2,859 $ - --------- --------- --------- --------- Note 4 The following tables provide a reconciliation of the total cash costs per ounce of gold produced and minesite costs per tonne to production costs as set out the interim consolidated financial statements: Total Cash Costs per Ounce of Gold By Mine ----------------------------- Three Three Six Six months months months months ended ended ended ended (thousands of dollars, except June 30, June 30, June 30, June 30, where noted) 2009 2008 2009 2008 ----------------------------- ---------- ---------- ---------- ---------- Total Production costs per Consolidated Statements of Income.................... $61,013 $46,041 $110,731 $89,692 Attributable to LaRonde 41,526 46,041 79,773 89,692 Attributable to Goldex 12,479 - 23,950 - Attributable to Lapa 3,818 - 3,818 - Attributable to Kittila 3,190 - 3,190 - ----- ----- -- Total...................... $61,013 $46,041 $110,731 $89,692 ------------------------------------------- LaRonde Cash Costs per Ounce ---------------------------- Production costs............. $41,526 $46,041 $79,773 $89,692 Adjustments: Byproduct revenues (37,031) (39,862) (58,857) (102,804) Inventory adjustment(i) 2,138 864 1,109 135 Non-cash reclamation provision (293) (306) (567) (613) ---------- ---------- ---------- ---------- Cash operating costs $6,340 $6,737 $21,458 $(13,590) ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Gold production (ounces) 58,034 59,452 109,372 110,344 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Total cash costs (per ounce)(ii) $109 $113 $196 $(123) ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Goldex Cash Costs per Ounce --------------------------- Production costs............. $12,479 $- $23,950 $- Adjustments: Inventory adjustment(i) 586 - 1,329 - Non-cash reclamation provision (50) - (96) - ---------- ---------- ---------- ---------- Cash operating costs $13,015 $- $25,183 $- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Gold production (ounces) 35,645 - 71,604 - ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Total cash costs (per ounce)(ii) $365 $- $352 $- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Lapa Cash Costs per Ounce ------------------------- Production costs............. $3,818 $- $3,818 $- Adjustments: Inventory adjustment(i) 7,191 - 7,191 - Non-cash reclamation provision (7) - (7) - ---------- ---------- ---------- ---------- Cash operating costs $11,002 $- $11,002 $- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Gold production (ounces) 11,603 - 11,603 - ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Total cash costs (per ounce)(ii) $948 $- $948 $- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Kittila Cash Costs per Ounce ---------------------------- Production costs............. $3,190 $- $3,190 $- Adjustments: Inventory adjustment(i) 4,784 - 4,784 - Non-cash reclamation provision (62) - (62) - ---------- ---------- ---------- ---------- Cash operating costs $7,912 $- $7,912 $- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Gold production (ounces) 12,018 - 12,018 - ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Total cash costs (per ounce)(ii) $658 $- $658 $- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Mine Site Cost per Tonne ------------------------ Three Three Six Six months months months months ended ended ended ended (thousands of dollars, except June 30, June 30, June 30, June 30, where noted) 2009 2008 2009 2008 ----------------------------- ---------- ---------- ---------- ---------- LaRonde Cost per Tonne ---------------------- Production costs............. $41,526 $46,041 $79,773 $89,692 Adjustments: Inventory adjustments(iii) 2,137 (1,902) 1,109 (902) Non-cash reclamation provision (293) (306) (567) (613) ---------- ---------- ---------- ---------- Minesite operating costs (US$) $43,370 $43,833 $80,315 $88,177 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Minesite operating costs (C$) $48,602 $44,787 $95,096 $88,782 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Tonnes of ore milled (000's tonnes)..................... 656 663 1,305 1,339 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Minesite costs per tonne (C$)(iv) $74 $68 $73 $66 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Goldex Cost per Tonne --------------------- Production costs............. $12,479 $- $23,950 $- Adjustments: Inventory adjustments(iii) 586 - 1,329 - Non-cash reclamation provision (50) - (96) - ---------- ---------- ---------- ---------- Minesite operating costs (US$) $13,015 $- $25,183 $- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Minesite operating costs (C$) $14,887 $- $30,079 $- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Tonnes of ore milled (000's tonnes)..................... 626 - 1,235 - ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Minesite costs per tonne (C$)(iv) $24 $- $24 $- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Lapa Cost per Tonne ------------------- Production costs............. $3,818 $- $3,818 $- Adjustments: Inventory adjustments(iii) 7,191 - 7,191 - Non-cash reclamation provision (7) - (7) - ---------- ---------- ---------- ---------- Minesite operating costs (US$) $11,002 $- $11,002 $- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Minesite operating costs (C$) $12,145 $- $12,145 $- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Tonnes of ore milled (000's tonnes)..................... 81 - 81 - ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Minesite costs per tonne (C$)(iv) $149 $- $149 $- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Kittila Cost per Tonne ---------------------- Production costs $3,190 $- $3,190 $- Adjustments: Inventory adjustments(iii) 4,784 - 4,784 - Non-cash reclamation provision (62) - (62) - ---------- ---------- ---------- ---------- Minesite operating costs (US$) $7,912 $- $7,912 $- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Minesite operating costs (EUR) (euro) (euro) (euro) (euro) 5,717 - 5,717 - ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Tonnes of ore milled (000's tonnes)..................... 132 - 132 - ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Minesite costs per tonne (EUR)(iv) (euro) 43 (euro) - (euro) 43 (euro) - ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- (i) Under the Company's revenue recognition policy, revenue is recognized on concentrates when legal title passes. Since total cash costs are calculated on a production basis, this inventory adjustment reflects the sales margin on the portion of concentrate production for which revenue has not been recognized in the period. (ii) Total cash costs per ounce is not a recognized measure under US GAAP and this data may not be comparable to data presented by other gold producers. The Company believes that this generally accepted industry measure is a realistic indication of operating performance and is useful in allowing year over year comparisons. As illustrated in the table above, this measure is calculated by adjusting Production Costs as shown in the Consolidated Statements of Income and Comprehensive Income for net byproduct revenues, royalties, inventory adjustments and asset retirement provisions. This measure is intended to provide investors with information about the cash generating capabilities of the Company's mining operations. Management uses this measure to monitor the performance of the Company's mining operations. Since market prices for gold are quoted on a per ounce basis, using this per ounce measure allows management to assess the mine's cash generating capabilities at various gold prices. Management is aware that this per ounce measure of performance can be impacted by fluctuations in byproduct metal prices and exchange rates. Management compensates for the limitation inherent with this measure by using it in conjunction with the minesite costs per tonne measure (discussed below) as well as other data prepared in accordance with US GAAP. Management also performs sensitivity analyses in order to quantify the effects of fluctuating metal prices and exchange rates. (iii) This inventory adjustment reflects production costs associated with unsold concentrates. (iv) Minesite costs per tonne is not a recognized measure under US GAAP and this data may not be comparable to data presented by other gold producers. As illustrated in the table above, this measure is calculated by adjusting Production Costs as shown in the Consolidated Statements of Income and Comprehensive Income for inventory and asset retirement provisions and then dividing by tonnes processed through the mill. Since total cash costs data can be affected by fluctuations in byproduct metal prices and exchange rates, management believes minesite costs per tonne provides additional information regarding the performance of mining operations and allows management to monitor operating costs on a more consistent basis as the per tonne measure eliminates the cost variability associated with 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 is impacted by fluctuations in production levels and thus uses this evaluation tool in conjunction with production costs prepared in accordance with US GAAP. This measure supplements production cost information prepared in accordance with US GAAP and allows investors to distinguish between changes in production costs resulting from changes in production versus changes in operating performance. Detailed Mineral Reserve and Resource Data (as at December 31, 2008) ------------------------------------------------------------------------- Category Au and Au Ag Cu Zn Pb (000s Tonnes Operation (g/t) (g/t) (%) (%) (%) oz.) (000s) ------------------------------------------------------------------------- Proven Mineral Reserve ------------------------------------------------------------------------- Goldex 1.95 27 434 ------------------------------------------------------------------------- Kittila 4.84 31 199 ------------------------------------------------------------------------- Lapa 7.53 6 23 ------------------------------------------------------------------------- LaRonde 2.76 67.87 0.33 3.27 0.37 362 4,075 ------------------------------------------------------------------------- Pinos Altos 1.35 19.08 4 97 ------------------------------------------------------------------------- Subtotal Proven Mineral Reserves 2.77 430 4,828 ------------------------------------------------------------------------- Probable Mineral Reserves ------------------------------------------------------------------------- Goldex 2.05 1,544 23,391 ------------------------------------------------------------------------- Kittila 4.69 3,193 21,171 ------------------------------------------------------------------------- Lapa 8.80 1,055 3,730 ------------------------------------------------------------------------- LaRonde 4.52 31.18 0.28 1.42 0.12 4,612 31,735 ------------------------------------------------------------------------- Meadowbank 3.45 3,638 32,773 ------------------------------------------------------------------------- Pinos Altos 2.68 74.61 3,589 41,669 ------------------------------------------------------------------------- Subtotal Probable Mineral Reserves 3.55 17,631 154,469 ------------------------------------------------------------------------- Total Proven and Probable Mineral Reserves 3.53 18,061 159,297 ------------------------------------------------------------------------- ---------------------------------------------------------------- Category and Au Ag Cu Zn Pb Tonnes Operation (g/t) (g/t) (%) (%) (%) (000s) ---------------------------------------------------------------- Indicated Mineral Resources ---------------------------------------------------------------- Bousquet 5.63 1,704 ---------------------------------------------------------------- Ellison 5.68 415 ---------------------------------------------------------------- Goldex 1.79 220 ---------------------------------------------------------------- Kittila 2.99 3,471 ---------------------------------------------------------------- Lapa 4.36 987 ---------------------------------------------------------------- LaRonde 1.83 26.77 0.15 1.55 0.16 6,349 ---------------------------------------------------------------- Meadowbank 2.17 21,956 ---------------------------------------------------------------- Pinos Altos 1.00 26.08 12,468 ---------------------------------------------------------------- Total Indicated Resources 2.07 47,569 ---------------------------------------------------------------- ---------------------------------------------------------------- Category and Au Ag Cu Zn Pb Tonnes Operation (g/t) (g/t) (%) (%) (%) (000s) ---------------------------------------------------------------- Inferred Mineral Resources ---------------------------------------------------------------- Bousquet 7.45 1,667 ---------------------------------------------------------------- Ellison 5.81 786 ---------------------------------------------------------------- Goldex 2.42 11,949 ---------------------------------------------------------------- Kittila 4.42 17,550 ---------------------------------------------------------------- Lapa 7.97 761 ---------------------------------------------------------------- LaRonde 5.91 18.91 0.44 0.77 0.08 4,937 ---------------------------------------------------------------- Meadowbank 2.78 4,953 ---------------------------------------------------------------- Pinos Altos 1.65 39.95 4,000 ---------------------------------------------------------------- Total Inferred Resources 3.84 46,603 ----------------------------------------------------------------
Forward-Looking Statements
The information in this press release has been prepared as at
Such statements include without limitation: the Company's forward-looking production guidance, including estimated ore grades, metal production, life of mine horizons, the estimated timing of scoping studies, internal rates of return, and projected exploration and capital expenditures, including costs and other estimates upon which such projections are based; the Company's goal to increase its mineral reserves and resources; and other statements and information regarding anticipated trends with respect to the Company's operations, exploration and the funding thereof. Such statements reflect the Company's views as at the date of this press release and are subject to certain risks, uncertainties and assumptions. 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 factors and assumptions of Agnico-Eagle contained in this news release, which may prove to be incorrect, include, but are not limited to, the assumptions set forth herein and in management's discussion and analysis and the Company's Annual Report on Form 20-F for the year ended
Notes To Investors Regarding The Use Of Resources Cautionary Note To Investors Concerning Estimates Of Measured And Indicated Resources.
This press release uses the terms "measured resources" and "indicated resources". We advise investors that while those terms are recognized and required by Canadian regulations, the SEC does not recognize them. Investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves.
Cautionary Note To Investors Concerning Estimates Of Inferred Resources.
This press release also uses the term "inferred resources". We advise investors that while this term is recognized and required by Canadian regulations, the SEC does not recognize it. "Inferred resources" have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases. Investors are cautioned not to assume that part or all of an inferred resource exists, or is economically or legally mineable.
Scientific And Technical Data
Agnico-Eagle Mines Limited is reporting mineral resource and reserve estimates in accordance with the CIM guidelines for the estimation, classification and reporting of resources and reserves.
Cautionary Note To U.S. Investors - The SEC permits U.S. mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. We use certain terms in this press release, such as "measured", "indicated", and "inferred", and "resources" that the SEC guidelines strictly prohibit U.S. registered companies from including in their filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our Form 20-F, which may be obtained from us, or from the SEC's website at: http://sec.gov/edgar.shtml. A "final" or "bankable" feasibility study is required to meet the requirements to designate reserves under Industry Guide 7. Estimates were calculated using historic three-year average metals prices and foreign exchange rates in accordance with the SEC Industry Guide 7. Industry Guide 7 requires the use of prices that reflect current economic conditions at the time of reserve determination which Staff of the SEC has interpreted to mean historic three-year average prices. The assumptions used for the mineral reserves and resources estimate reported by the Company on
The Canadian Securities Administrators' National Instrument 43-101 ("NI 43-101") requires mining companies to disclose reserves and resources using the subcategories of "proven" reserves, "probable" reserves, "measured" resources, "indicated" resources and "inferred" resources. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
A mineral reserve is the economically mineable part of a measured or indicated resource demonstrated by at least a preliminary feasibility study. This study must include adequate information on mining, processing, metallurgical, economic and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified. A mineral reserve includes diluting materials and allows for losses that may occur when the material is mined. A proven mineral reserve is the economically mineable part of a measured resource for which quantity, grade or quality, densities, shape and physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters, to support production planning and evaluation of the economic viability of the deposit. A probable mineral reserve is the economically mineable part of an indicated mineral resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit.
A mineral resource is a concentration or occurrence of natural, solid, inorganic or fossilized organic material in or on the Earth's crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction. The location, quantity, grade, geological characteristics and continuity of a mineral resource are known, estimated or interpreted from specific geological evidence and knowledge. A measured mineral resource is that part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough to confirm both geological and grade continuity. An indicated mineral resource is that part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed. An inferred mineral resource is that part of a mineral resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. Mineral resources which are not mineral reserves do not have demonstrated economic viability.
Investors are cautioned not to assume that part or all of an inferred resource exists, or is economically or legally mineable.
A feasibility study is a comprehensive study of a mineral deposit in which all geological, engineering, legal, operating, economic, social, environmental and other relevant factors are considered in sufficient detail that it could reasonably serve as the basis for a final decision by a financial institution to finance the development of the deposit for mineral production.
The mineral reserves presented in this disclosure are separate from and not a portion of the mineral resources.
------------------------------------------------------------------------- Property/Project Qualified Person Date of most recent name and location responsible for the SEDAR Technical Report current Mineral Resource (NI 43-101) disclosure and Reserve Estimate and relationship to Agnico-Eagle ------------------------------------------------------------------------- LaRonde, Bousquet & Francois Blanchet Ing., March 24, 2005 Ellison, Quebec, LaRonde Division Canada Superintendent of geology ------------------------------------------------------------------------- Kittila, Finland Marc Legault P.Eng., VP December 11, 2008 Project Development ------------------------------------------------------------------------- Pinos Altos, Dyane Duquette, P.Geo., March 25, 2009 Chihuahua, Mexico Principal geologist, Abitibi Technical Services Group ------------------------------------------------------------------------- Meadowbank, Nunavut, Dyane Duquette, P.Geo., December 15, 2008 Canada Principal geologist, Abitibi Technical Services Group ------------------------------------------------------------------------- Goldex, Quebec, Richard Genest, Ing., October 27, 2005 Canada Goldex Division Superintendent of geology ------------------------------------------------------------------------- Lapa, Quebec, Canada Normand Bedard, P.Geo., June 8, 2006. Lapa Division Superintendent of geology -------------------------------------------------------------------------
The effective date for all of the Company's mineral resource and reserve estimates in this press release is
The contents of this press release have been prepared under the supervision of, and reviewed by,
Note Regarding Certain Measures Of Performance
This press release presents measures including "total cash costs per ounce" and "minesite costs per tonne" that are not recognized measures under US GAAP. This data may not be comparable to data presented by other gold producers. The Company believes that these generally accepted industry measures are realistic indicators of operating performance and useful for year-over-year comparisons. However, both of these non-GAAP measures should be considered together with other data prepared in accordance with US GAAP, these measures, taken by themselves, are not necessarily indicative of operating costs or cash flow measures prepared in accordance with US GAAP. The Company provides a reconciliation of realized total cash costs per ounce and minesite costs per tonne to the most comparable US GAAP measures in its annual and interim filings with securities regulators in
SOURCE Agnico-Eagle Mines Limited
Source: PR Newswire
Related Articles
- Volkswagen Jetta, Jetta SportWagen, Passat, CC and Tiguan Outrank the Competition in Strategic Vision's 2009 Total Value Index(TM) (TVI)
- XTO Energy Announces Record Production, Revenues and Cash Flow in Third Quarter; Expects Double-Digit Production Growth and Significant Free Cash Flow for 2010
- AU Optronics Exhibits Whole New Series of Innovative Technologies and Products at Display Taiwan 2009
- Finjan's Unified Secure Web Gateway Tops eWEEK's 'Most Interesting Products Exhibited at RSA 2009'
- Delayed Retirement, Increased Cost Concerns Dominate 2009 Total Rewards Trends
- XTO Energy Announces Record Production, Revenues and Cash Flow in Third Quarter
- Hidalgo Mining International (HMIT) Announces Plans to Build Pipeline to Lower Production Costs
- New Gold Announces Third Quarter Production Results and Cash Cost in Line With Annual Guidance
- Winners of Cash Prizes Totaling $252,000 Announced for Jose Iturbi Music Competition Presented By Cunard Line
- American Energy Production Inc. Announces 20% Increase in 3rd Quarter Production Revenues for Two Investees
 |
 |
User Comments (0)
RSS Feeds