Stock Symbol: AEM (NYSE and
TSX)
(All amounts expressed in U.S. dollars unless otherwise
noted)
TORONTO,
April 30, 2020
/PRNewswire/ - Agnico Eagle Mines Limited (NYSE:AEM,
TSX:AEM) ("Agnico Eagle" or the "Company") today
reported a quarterly net loss of $21.6
million, or net loss of $0.09 per share, for the first quarter of
2020. This result includes non-cash foreign currency
translation losses on deferred tax liabilities of $44.2 million ($0.18 per share), mark-to-market derivative
losses on financial instruments of $22.1
million ($0.09 per share),
non-cash foreign currency translation losses of $3.8 million ($0.02
per share), costs relating to the temporary suspension of
operations of $2.3 million
($0.01 per share) and various other
adjustments of $5.2
million($0.02 per
share). Excluding these items would result in adjusted net
income1 of $56.0 million or $0.23 per share for the first quarter of
2020. For the first quarter of 2019, the Company reported net
income of $37.0 million or
$0.16 per share.
Included in the first quarter of 2020 net loss, and not
adjusted above, is a non-cash stock option expense of $6.6 million ($0.03
per share).
In the first quarter of 2020, cash provided by operating
activities increased to $163.4
million ($204.8 million before
changes in non-cash components of working capital), as compared
with the first quarter of 2019 when cash provided by operating
activities was $148.7 million
($170.8 million before changes in
non-cash components of working capital).
The increase in cash provided by operating activities
during the first quarter of 2020, compared to the prior year
period, was mainly due to higher gold sales volumes and higher
realized gold prices, partially offset by higher costs at the
Meadowbank Complex and Meliadine mine which were still ramping up
operations during the quarter. Higher gold sales volumes were
largely a result of the increased production due to the
commencement of commercial production at Meliadine during
May 2019.
The decrease in net income during the first quarter of
2020, compared to the prior year period, was mainly due to
non-recurring losses on deferred taxes due to non-cash foreign
currency translation, primarily due to the weakening of local
currencies during the first quarter of 2020, unrealized losses
on derivatives and higher production costs and amortization at the
Meadowbank Complex and Meliadine mine, partially offset by higher
gold sales volumes and higher realized gold prices.
"The first quarter of 2020 was challenging given the
global COVID-19 pandemic and its impact on our gold production and
unit costs in March as operations were reduced to minimum
activities at all five of our Canadian mines. Throughout this
crisis the health, safety and well-being of all our employees and
the communities that we operate in have been our top priority and
remain a key focus as we have begun to carefully restart and ramp
up our Canadian operations", said Sean
Boyd, Agnico Eagle's Chief Executive Officer.
"Furthermore, despite the temporary shutdowns required to manage
COVID-19, substantial progress was made in the first quarter at our
LaRonde, Meliadine and Amaruq operations. As a result, we
expect to have a strong second half this year with quarterly gold
production expected to return to levels similar to the fourth
quarter of 2019. Given the strong gold price and much weaker
local currency environment than budgeted, we anticipate generating
significant free cash flow in the second half of 2020. In
addition, our dividend has remained unchanged and we declared a
quarterly dividend of $0.20 per
share", added Mr. Boyd.
---------------------------
|
1 Adjusted net income
is a non-GAAP measure. For a discussion regarding the
Company's use of non-GAAP measures, please see "Note Regarding
Certain Measures of Performance".
|
Agnico Eagle's Response to the COVID-19 Pandemic and
the Impact on its Business
From the start of the pandemic the Company took immediate
steps to ensure the safety and well-being of its employees.
In addition to enhanced screening, hygiene and physical distancing
measures, where possible, many employees continue to work
remotely. For the northernmost operations, the Company began
testing all its employees for COVID-19 as an additional level of
protection against the transmission of the virus. The Company
expects many of these measures to remain in effect for several more
months as it moves towards a new way of operating to ensure
employees remain safe, comfortable in their work environment and
productive. Although there are additional costs associated
with these measures, Agnico Eagle is working on ways to offset
these costs moving forward into the second half of the
year.
The more immediate impact of the COVID-19 pandemic has
negatively affected gold production and unit costs in the first and
second quarter of 2020 as seven of the Company's eight mines were
operating at much reduced activity levels at the same time.
The Company has recently begun to gradually ramp up and restart
several of its mines allowing it to position the business to return
to normal operating conditions.
The following summary outlines the impact of COVID-19 and
the current status of the Company's business:
First Quarter and Second Quarter of 2020 Gold
Production and Unit Costs Negatively Impacted by COVID-19 Related
Shutdowns
In March, the Company sent home its Nunavut-based workforce and reduced its mining
activities at Meliadine and Amaruq. In addition, the
Company's operations in Quebec
were temporarily suspended for three weeks in March and April
2020. Post the end of the first quarter of 2020, Agnico
Eagle's Mexican operations were also put on temporary
suspension. The Quebec
operations progressively restarted on April
15, 2020 and the Mexican operations are expected to restart
in early June 2020. Other than a three-day shutdown of
underground operations in March, the Kittila mine in Finland has remained in full operation
throughout the COVID-19 pandemic.
As a result, quarterly gold production was lower and unit
costs were higher than anticipated due to the temporary shutdowns
and reduced mining activities. Payable gold
production2 in the first quarter of 2020 was
411,366 ounces (including pre-commercial production ounces of 2,974
(50% basis) at Canadian Malartic from the Barnat deposit) at
production costs per ounce of $872,
total cash costs per ounce3 of $836 and all-in sustaining costs per
ounce4 ("AISC") of $1,099. Production in the first quarter of
2020 was affected by a nine-day shutdown of the Company's
Quebec operations, as mandated by
the Quebec Government, and significantly reduced mining activities
in Nunavut since March 19, 2020 related to COVID-19 precautionary
measures.
2020 Gold Production and Unit Cost
Guidance
Gold production for 2020 is expected to be 1.63 to 1.73
million ounces, compared to withdrawn guidance of 1.875 million
ounces5. This gold
production guidance for 2020 was reduced due to impacts from
COVID-19 related shutdowns. The Company expects gold
production to gradually ramp up in Quebec, Mexico and Nunavut in the second quarter of 2020 and
average approximately 480,000 to 500,000 ounces per quarter in the
second half of 2020. The previous gold production guidance
for 2021 and 2022 remains unchanged with a mid-point of 2.05
million and 2.10 million ounces, respectively.
Capital expenditures in 2020 are now forecast to be
$690 million (compared to previous
guidance of $740 million).
Total cash costs per ounce in 2020 are forecast to be $740 to $790
(compared to withdrawn guidance of $725 to $775). Total cash costs per ounce are
expected to be significantly lower in the second half of 2020 at
$690 to $740 as a result of the expected increase in gold
production. AISC per ounce in 2020 are now forecast to be
$1,025 to $1,075 (compared to previous guidance of
$975 to $1,025). The total cash costs per ounce and
AISC per ounce guidance for 2020 were increased due to the
substantial reduction in production caused by the temporary
suspension of operating activities at seven of the Company's mines,
partially offset by favourable moves in foreign exchange
rates.
----------------------------------
|
2 Payable production
of a mineral means the quantity of a mineral produced during a
period contained in products that have been or will be sold by the
Company whether such products are shipped during the period or held
as inventory at the end of the period.
|
3 Total cash costs
per ounce is a non-GAAP measure and, unless otherwise specified, is
reported on a by-product basis. For a reconciliation to
production costs and for total cash costs on a co-product basis,
see "Reconciliation of Non-GAAP Financial Performance Measures"
below. See also "Note Regarding Certain Measures of
Performance".
|
4 All-in-sustaining
costs per ounce is a non-GAAP measure and, unless otherwise
specified, is reported on a by-product basis. For a
reconciliation to production costs and for all-in sustaining costs
on a co-product basis, see "Reconciliation of Non-GAAP Financial
Performance Measures" below. See also "Note Regarding Certain
Measures of Performance".
|
5 On March 24, 2020,
with the reduced production activity at the Quebec and Nunavut
operations, together with the uncertainties with respect to future
developments, including the duration, severity and scope of the
COVID-19 pandemic and the measures taken to contain the pandemic,
Agnico Eagle withdrew its full year 2020 production and cash costs
guidance released on February 13, 2020.
|
Operational Updates
Prior to the impacts of COVID-19, the Company had made
good progress in the first quarter of 2020 at the LaRonde,
Meliadine and Amaruq mines in completing the planned work to
improve operating conditions at these sites. A summary of the
status of these operations follows:
- Infrastructure upgrades completed in the West mine
area at LaRonde – Since early January 2020, work has been ongoing to upgrade
the ground support in the West mine area at LaRonde and production
progressively resumed in this higher-grade area in late April
2020. At LaRonde Zone 5 ("LZ5"), the Company is evaluating an
expansion of the mining rate to 3,000 tonnes per day ("tpd")
(previous guidance of 2,800 tpd) and automated mucking and hauling
has already exceeded the target of 15% of 2020 tonnage
- Mining activities in Nunavut expected to ramp up in the second
quarter of 2020 – On March
19, 2020, the Company sent home its Nunavut based workforce and
significantly reduced its mining activities at Meliadine and
Amaruq. To minimize the COVID-19 impact, the Company has changed
the rotation of its employees to 28 days from 14 days. Mining
and milling activities at both operations are expected to
progressively ramp up to full capacity in June 2020
-
- Meliadine – The crusher apron
feeder, which failed in January 2020,
has now been repaired. Prior to the reduction in
activities, the processing facility was
operating at over 4,000 tpd. At
present, the mill is operating at approximately 85% capacity
(approximately 3,500 tpd) from underground ore and stockpile, while
the mining rate is at approximately 50% capacity (approximately
2,000 tpd). During this period of reduced mining
activity, work has focused on increased
backfilling of stopes, equipment maintenance and water
management
- Meadowbank Complex – During this
period of reduced activities, the focus was on reducing the
equipment maintenance backlog, development of the eastern portion
of the Whale Tail pit and mining at approximately 50% capacity
(approximately 50,000 tpd) to build stockpiles as milling
activities were suspended in March 2020. It is anticipated
that the processing facility will restart in early to
mid-June
First Quarter Financial and Production
Highlights
In the first quarter of 2020, quarterly payable gold
production was 411,366 ounces, which includes the pre-commercial
gold production from the Barnat deposit at Canadian Malartic,
compared to 398,217 ounces in the first quarter of 2019.
The higher level of gold production in the first quarter
of 2020, when compared with the prior-year period, was primarily
due to increased production at the Meliadine mine, which achieved
commercial production in May 2019. A detailed description of
the production at each mine is set out below.
Production costs per ounce in the first quarter of 2020
were $872, compared to $727 in the prior-year period. Total cash
costs per ounce in the first quarter of 2020 were $836, compared to $623 in the prior-year period.
Production costs per ounce and total cash costs per ounce
in the first quarter of 2020 increased when compared to the
prior-year period primarily due to higher costs at the Meadowbank
Complex and Meliadine mine which were still ramping up operations
during the quarter, partially offset by higher gold
production.
AISC in the first quarter of 2020 was $1,099 per ounce, compared to $836 in the prior-year period. AISC in the
first quarter of 2020 increased when compared to the prior-year
periods primarily due to higher total cash costs per ounce and
higher sustaining capital costs, partially offset by higher gold
production. A detailed description of the cost performance of
each mine is set out below.
Production and costs in the first quarter of 2020 were
negatively impacted by the COVID-19 shutdowns as previously
discussed.
Cash Position and Financial Flexibility are Strong;
Credit Rating Upgraded
Cash and cash equivalents and short-term investments
increased to $1,263.4 million at
March 31, 2020, from the December 31, 2019 balance of $327.9 million, primarily as a result of the
drawdown on the Company's unsecured revolving bank credit facility,
as discussed below. Not including the drawdown on the
Company's unsecured revolving bank credit facility, cash and cash
equivalents and short-term investments decreased to $263.4 million at March
31, 2020, from the December 31,
2019 balance of $327.9
million.
In March 2020, the Company
drew down $1.0 billion on its
$1.2 billion unsecured revolving bank
credit facility as a cautionary measure given the current
uncertainty with respect to the COVID-19 pandemic. Based on
current market conditions and the timing of the ramp up of its
mines, the Company repaid $500
million outstanding on its credit facility at the end of
April 2020. The remaining $500
million drawn under the credit facility is expected to be
repaid in the second half of 2020.
On April 7, 2020, the
Company entered into a note purchase agreement with certain
institutional investors, providing for the issuance of $200 million of notes with a weighted average
maturity of 11 years and a weighted average interest rate of
2.83%. The other terms of the notes are substantially the
same as the terms of the existing outstanding notes of the
Company. The Company used the proceeds from this note
offering to repay a portion of its $360
million 6.67% Series B senior notes that were due on
April 7, 2020. The remaining
balance of the senior notes was repaid with the Company's existing
cash balances.
During the first quarter of 2020, DBRS Morningstar
upgraded the Company's investment grade credit rating to BBB from
BBB (low) and changed the trend to Stable from Positive, reflecting
the Company's strong financial risk profile. Additionally in
April 2020, Fitch Ratings issued its
inaugural credit rating for Agnico Eagle, assigning a rating of BBB
with a Stable Outlook considering the Company's strong credit and
growing production profile. These ratings have reduced
funding costs on the Company's credit facility.
During the first quarter of 2020, the Company
opportunistically increased its currency and diesel hedge positions
to support its key input costs used in budgeting and mine planning
assumptions. As of March 31,
2020, approximately 56% of the Company's remaining
2020 Canadian dollar exposure is
hedged at an average floor price of approximately 1.34 C$/US$ and approximately 20% of the
Company's 2021 Canadian dollar
exposure is hedged at an average floor price of approximately
1.37 C$/US$.
As of March 31, 2020,
approximately 42% of the Company's remaining 2020 Mexican peso
exposure is hedged at an average floor price of approximately
20.30 MXP/US$ and approximately 40%
of the Company's 2021 Mexican peso exposure is hedged at an average
floor price of approximately 21.30
MXP/US$. Approximately 10% of the Company's remaining
2020 Euro exposure is hedged at an
average floor price of approximately 1.13
US$/EUR. All of these hedge positions compare
favourably to the Company's assumptions of 1.30 C$/US$, 18.00
MXP/US$ and 1.15 US$/EUR
provided in the news release dated February
13, 2020.
As of March 31, 2020, over
90% of the Company's remaining diesel exposure relating to its
Nunavut operations for 2020 is
hedged ahead of its assumption of C$0.85 per litre (excluding transportation costs)
used in preparation of its 2020 guidance by approximately
15%. In addition, approximately 35% and 20% of the Company's
2021 and 2022 diesel exposure, respectively, relating to its
Nunavut operations is similarly
hedged at prices significantly ahead of 2020 guidance and mine
planning assumptions. As of March 31,
2020, the mark-to-market valuation of the total currency and
diesel hedge positions resulted in an unrealized loss of
approximately $38.4 million
($22.1 million, net of tax), which
was excluded from normalized earnings. The Company will
continue to monitor market conditions and anticipates continuing to
add to its operating currency and diesel hedges to support its key
input costs.
Capital Expenditures
Total capital expenditures (including sustaining capital)
for the full year 2020 are now forecast to be approximately
$690 million (compared to previous
guidance of $740 million). The
capital expenditure guidance for 2020 was reduced primarily due to
a decrease in underground development costs at various operations
due to temporary COVID-19 shutdowns (approximately $14 million) and the deferral of development
costs associated with the Amaruq underground project (approximately
$10 million). In addition, the
Kittila shaft expansion has been delayed for at least three months
due to contractor travel restrictions related to the COVID-19
pandemic (which is expected to result in a decrease in capital
expenditures in 2020 of approximately $6
million). The foreign exchange benefit of weakening
local currencies also reduced the expected 2020 capital expenditure
guidance.
During the first quarter of 2020, the Company incurred
additional capital expenditures relating to the repurchase of a 2%
net smelter return royalty on the Hammond Reef project
($12 million). These additional
capital expenditures were offset by the foreign exchange benefit of
weakening local currencies previously mentioned.
The Company continues to evaluate opportunities to
decrease capital expenditures further in 2020.
The following table sets out capital expenditures
(including sustaining capital) in the first quarter of
2020.
Capital Expenditures
|
|
|
|
(In thousands of US dollars)
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31, 2020
|
|
Sustaining Capital
|
|
|
|
LaRonde
Complex
|
|
$
|
15,054
|
|
Canadian Malartic
mine
|
|
|
12,264
|
|
Meadowbank
Complex
|
|
|
13,587
|
|
Meliadine
mine
|
|
|
9,056
|
|
Kittila
mine
|
|
|
7,417
|
|
Goldex
mine
|
|
|
6,379
|
|
Pinos Altos
mine
|
|
|
4,782
|
|
Creston Mascota
mine
|
|
|
—
|
|
La India
mine
|
|
|
3,709
|
|
Total Sustaining
Capital
|
|
$
|
72,248
|
|
|
|
|
|
Development Capital
|
|
|
|
LaRonde
mine
|
|
$
|
5,275
|
|
LaRonde Zone
5
|
|
|
—
|
|
Canadian Malartic
mine
|
|
|
4,384
|
|
Meadowbank
Complex
|
|
|
17,203
|
|
Amaruq underground
project
|
|
|
5,166
|
|
Meliadine
mine
|
|
|
14,483
|
|
Kittila
mine
|
|
|
25,781
|
|
Goldex
mine
|
|
|
3,221
|
|
Pinos Altos
mine
|
|
|
883
|
|
Creston Mascota
mine
|
|
|
—
|
|
La India
mine
|
|
|
1,170
|
|
Other
|
|
|
13,504
|
|
Total Development
Capital
|
|
$
|
91,070
|
|
Total Capital
Expenditures
|
|
$
|
163,318
|
|
2020 Production and Cost Guidance
As a result of the impact of the COVID-19 pandemic to
Agnico Eagle's operations, the Company is providing new 2020
production and cost guidance, which is set out below. The new
guidance is based on the following currency and commodity price
assumptions:
New Guidance
Assumptions
|
Withdrawn
Guidance
Assumptions
|
1.38
C$/US$
|
1.30
C$/US$
|
1.12
US$/EUR
|
1.15
US$/EUR
|
22.00
MXP/US$
|
18.00
MXP/US$
|
Silver Price
$12/oz
|
Silver Price
$17.50/oz
|
Zinc Price
$0.85/lb
|
Zinc Price
$1.10/lb
|
Copper Price
$2.40/lb
|
Copper Price
$2.75/lb
|
Gold Production
Total gold production for 2020 is expected to be 1.63 to
1.73 million ounces (including pre-commercial production from the
Barnat deposit at Canadian Malartic and the Meliadine Phase 2
expansion), compared to withdrawn guidance of 1.875 million
ounces. The gold production guidance for 2020 was reduced due
to impacts from COVID-19 related shutdowns. The Company
expects gold production to gradually ramp up in Quebec, Mexico and Nunavut in the second quarter of 2020 and
average approximately 480,000 to 500,000 ounces per quarter in the
second half of 2020. The production guidance assumes the
return to normal operations by July 1,
2020, however, there could be additional measures relating
to the COVID-19 pandemic that could negatively affect productivity
at the Company's mining operations. The previous gold
production guidance for 2021 and 2022 remains unchanged with a
mid-point of 2.05 million and 2.10 million ounces,
respectively.
Total Cash Costs and AISC
Total cash costs per ounce in 2020 are now forecast to be
$740 to $790 (compared to withdrawn guidance of
$725 to $775), and AISC per ounce in 2020 are now
forecast to be $1,025 to $1,075 (compared to previous guidance of
$975 to $1,025). The total cash costs per ounce and
AISC per ounce guidance for 2020 were increased due to the
substantial reduction in production caused by the temporary
suspension of operating activities at seven of the Company's mines,
partially offset by favourable moves in foreign exchange
rates. Total cash costs per ounce are expected to be
significantly lower in the second half of 2020 at $690 to $740 as a
result of the expected increase in gold production. AISC per
ounce in the second half of 2020 is expected to be between
$960 and $1,010. The total cash costs per ounce and
AISC per ounce guidance assumes the return to normal operations by
July 1, 2020; however, there could be
additional measures relating to the COVID-19 pandemic that could
negatively impact cost performance and productivity at the
Company's mining operations.
Exploration
The Company expects total exploration expenditures to be
reduced by approximately $15 million
for the full year 2020 (as compared to previous guidance), as a
result of the temporary suspension of exploration
activities.
Depreciation
The Company now expects its 2020 depreciation and
amortization expense to be between $600 and 650 million (compared to previous
guidance of between $625 and
$675 million).
General and Administrative
The Company expects general and administrative costs to be
reduced by approximately 5% to 10% for the full year 2020, when
compared to prior guidance of $110 to
$130 million (including share-based
compensation), and continues to evaluate opportunities for further
cost reductions.
Taxes
Income and mining taxes expense for the first quarter of
2020 was $44.9 million, or an
effective tax rate of 193%. The tax rate was impacted by the
revaluation of tax pools based in local currencies and the
distribution of earnings by jurisdiction in the first quarter of
2020. The Company anticipates the overall effective tax rate
to normalize over the second half of 2020 to the previous guidance
range of approximately 40% to 45% for the full year
2020.
COVID-19 Response
Agnico Eagle is closely monitoring developments around the
outbreak of COVID-19. The Company's priority is to protect
the health and safety of our employees and communities while
providing a safe work environment.
Set out below are some of the actions Agnico Eagle has
taken to help prevent the spread of COVID-19 and maintain a safe
work environment:
Protecting Employees
- Screening procedures have been implemented at all sites
to ensure that people exhibiting symptoms, who have travelled
recently or who were in close contact with a confirmed or probable
COVID-19 case, go into self-isolation to prevent the potential
spread of the virus. Prior to entering each site, employees,
contractors and suppliers are screened by testing their temperature
and conducting a questionnaire to reduce the risk of transmission
of COVID-19 once on site
- All of the Company's sites have increased the frequency
and standard of cleaning and disinfection services. Extra
hand-washing and sanitizing stations have been provided for ease of
use by employees, with compulsory use at some locations (e.g.:
prior to site entrance); enhanced cleaning protocols and hygiene
measures have been put in place in lunchrooms, change areas,
workplaces and equipment
- Modifications at the Company's mining operations have
been implemented to facilitate physical distancing. Some
examples include schedule changes, limiting the number of people in
transports and common areas, the installation of barriers or
safety-tape delineating zones and spaces for employees to adhere to
and the installation of physical barriers between employees such as
plexiglass and plastic curtains
- Given the remote nature of the Nunavut operations, the Company has set up a
mobile laboratory for on-site testing for COVID-19 at these
sites. A mobile health unit arrived at Meliadine in early
April 2020 with a team of medical
experts capable of testing employees and contractors for
COVID-19. The laboratory can confirm if a person tests
positive for COVID-19 even if the individual does not show any
symptoms, ultimately helping to protect our employees and local
communities. The laboratory has met all the requirements
equivalent or beyond other laboratories doing COVID-19 testing
across Canada. As of the date of this press release,
employees at our Meadowbank and Meliadine sites have tested
negative. At rotation change, the new crew is tested upon
arrival at site. While testing allows for an additional level
of screening, all other social distance and hygiene measures remain
in place
- In Finland, employees at
the Kittila mine were asked by the Municipality of Kittila and the
Infection Control Unit of the Lapland Hospital District to
participate in a COVID-19 study for the region of Lapland in an
effort to help the region fight the pandemic. This voluntary
program offered COVID-19 testing to every Agnico Eagle Finland
employee to help analyze the distribution of infections and detect
possible transmission chains. One employee
tested positive for COVID-19 in March. Since that time, all
employees at Kitilla who have participated in the COVID-19 study
have tested negative
- The Company's corporate and regional offices were closed
and employees were asked to work from home. At the
operations, employees whose work does not require sustained site
presence were also asked to work from home
Protecting Communities
- The Company donated safety equipment,
such as N95 masks and protective gloves,
to health services, funds to regional food banks and help
centres, food hampers to needy families in communities near our
operations and supplies to help clean and disinfect public areas
within communities, along with supporting other initiatives where
the need is greatest
- On March 19, 2020, after
extensive discussions with community leaders, the Company decided
to send its entire Nunavut-based
workforce home to reduce the chance of the virus spreading to the
local communities. The Company's Nunavut-based employees live in remote
communities with a health care system that has limited capacity to
face the challenges associated with managing COVID-19, and
consequently their communities are more vulnerable to the potential
effects of the virus
Protecting Operations
Agnico Eagle's Mexico operations are currently on a
government mandated temporary suspension and the Company's
Nunavut mines are operating at
reduced activity levels. The Kittila mine is operating
normally. The Company's Quebec mining operations are continuing to
ramp up after a period of approximately three weeks on temporary
suspension following the Government of Quebec's decision that mining operations would
be added to the list of priority activities and services permitted
to operate beginning on April 15,
2020. The Company has suspended all exploration drilling
activities in response to the COVID-19 pandemic and placed
exploration offices on a temporary suspension status.
A more detailed COVID-19 update for each region is set
out below
- The Company continues to promote safety and hygiene at
its operations while preparing to ramp back up to full production
safely and efficiently when the time is right. In doing so,
the Company works closely with the authorities (i.e. public health
and government ministries) and mining associations
- All non-essential visits to the Company's operations have
been suspended
- Globally, the Company's
response protocols have been updated to ensure that if an employee
has tested positive for COVID-19 while working or was recently in
the workplace before testing positive, clear procedures on
sanitizing the workplace and common areas are outlined along with
how to inform and monitor others that the employee has been in
close contact with. If the employee is at one of the
Company's remote locations, procedures are in place to isolate the
individual and transport them safely for testing and
treatment
Supply Chain Impact
- The Company has seen minimal impact to its supply chains
for its operations. The Company has sufficient stock of
critical components and has worked closely with its key suppliers
to secure future orders of materials. The Company is closely
monitoring its supply chain for potential risks
Costs Related to the Suspension and/or Reduction of
Activities
- As previously mentioned, in March
2020, Agnico Eagle decided to reduce its workforce at the
Meliadine mine and the Meadowbank Complex in response to
the COVID-19 pandemic. These mines are operating at
reduced levels and are expected to return to full operation in the
second half of 2020. The costs relating to the reduced
workforce amount to $0.6 million in
March 2020 and are expected to be
approximately $2.8 million for
April 2020
- The Government of Quebec
issued an order to close all non-essential business as of
March 23, 2020 which resulted in the
suspension of the Company's Quebec
mining operations for approximately one week in March 2020 and approximately two weeks in April
2020. Activities were minimized during the period while still
ensuring the integrity of the infrastructure. The costs
associated with the temporary suspension amount to $3.3 million in March
2020 and are expected to be approximately $7.3 million in the second quarter of 2020
- The Government of Mexico
mandated that all non-essential businesses, including mining and
exploration, temporarily suspend operations from March
30, 2020 to May 30,
2020. Activities at the Company's Mexico operations have been minimized during
this period and only activities ensuring the sustainability of the
infrastructure are being maintained. The costs associated to
the suspension are expected to be approximately $6.6 million in the second quarter of
2020
Agnico Eagle will continue to maintain high standards in
order to provide a healthy and safe working environment at each of
its operations. The Company will continue to follow the
situation closely to respond promptly as needed.
Dividend Record and Payment Dates for the Second
Quarter of 2020
Agnico Eagle's Board of Directors has declared a quarterly
cash dividend of $0.20 per common
share, payable on June 15, 2020 to
shareholders of record as of June 1,
2020. Agnico Eagle has declared a cash dividend every year
since 1983.
Expected Dividend Record and Payment Dates for
2020
Record Date
|
Payment Date
|
June 1*
|
June 15*
|
August 31
|
September
15
|
November
25
|
December
15
|
Dividend Reinvestment Plan
Please see the following link for information on the
Company's dividend reinvestment plan: Dividend Reinvestment
Plan
First Quarter 2020 Results Conference Call and Webcast
Tomorrow
Agnico Eagle's senior management will host a conference
call on Friday, May 1,
2020 at 8:30 AM
(E.D.T.) to discuss the Company's first quarter
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
1-647-427-7450 or toll-free 1-888-231-8191. To ensure your
participation, please call approximately five minutes prior to the
scheduled start of the call.
Replay Archive:
Please dial 1-416-849-0833 or toll-free 1-855-859-2056,
access code 3299663. The conference call replay will expire
on June 1, 2020.
The webcast, along with presentation slides, will be
archived for 180 days on the Company's website.
Annual Meeting
The Company's Annual and Special Meeting of Shareholders
(the "AGM") will begin on Friday, May
1, 2020, at
11:00 AM (E.D.T.)
. Due to the continuing public health impact of the
COVID-19 pandemic, and having regard to the health and safety of
the Company's employees and shareholders, as well as public health
guidelines to limit gatherings of people, the AGM will be held in a
virtual only meeting format. You will not be able to attend
the AGM in person. The Company expects to revert back to an
in-person annual meeting in future years after public health
conditions have improved.
For details on how to attend, communicate and vote at the
virtual AGM, please see the Company's news release dated
April 9, 2020 as well as the
additional materials filed under the Company's profile on SEDAR at
www.sedar.com and on EDGAR at
www.sec.gov. Shareholders who have questions
about voting their shares or attending the AGM may contact Investor
Relations by telephone at 416.947.1212, by toll-free telephone at
1.888.822.6714 or by email at
info@agnicoeagle.com.
NORTHERN BUSINESS REVIEW
ABITIBI REGION, QUEBEC
Agnico Eagle is currently Quebec's largest gold producer with a 100%
interest in the LaRonde Complex (which includes the LaRonde and
LaRonde Zone 5 mines) and the Goldex mine 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.
On March 23, 2020, the
Government of Quebec ordered all
non-essential businesses to close in response to the COVID-19
pandemic. Pursuant to this order, mining operations were
directed to minimize their activities, causing a meaningful
reduction in the first quarter and second quarter of 2020
production and a corresponding increase in unit production
costs. As a result, the Company's operations in the Abitibi
region of Quebec (the LaRonde
Complex, the Goldex mine and the Canadian Malartic mine (50%)) were
temporarily suspended. In mid-April 2020, the restrictions on mining
activities were lifted by the Government of Quebec and the Company's mining operations in
the Abitibi region resumed in a progressive and gradual manner on
April 15, 2020.
LaRonde Complex – Ground Support Upgrades Completed in
the West Mine Area and Production in this Area Resumed in Late
April 2020; the LaRonde Mill
Restarted on April 29, 2020;
Increased Daily Production Expected at LZ5
The 100% owned LaRonde mine in northwestern Quebec achieved commercial production in
1988. The Company acquired the LZ5 project in 2003. The
LZ5 property lies adjacent to and west of the LaRonde mine and
previous operators exploited the zone by open pit. The LZ5
project achieved commercial production in June 2018.
LaRonde Complex – Operating
Statistics
|
|
|
|
|
|
|
Three Months Ended
|
|
Three Months Ended
|
|
|
March 31, 2020
|
|
March 31, 2019
|
Tonnes of ore milled
(thousands of tonnes)
|
|
|
657
|
|
|
728
|
Tonnes of ore milled
per day
|
|
|
7,220
|
|
|
8,089
|
Gold grade (grams per
tonne ("g/t"))
|
|
|
3.48
|
|
|
4.10
|
Gold production
(ounces)
|
|
|
69,687
|
|
|
90,421
|
Production costs per
tonne (C$)
|
|
$
|
63
|
|
$
|
123
|
Minesite costs per
tonne (C$)
|
|
$
|
108
|
|
$
|
104
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
465
|
|
$
|
746
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
716
|
|
$
|
515
|
Production costs per tonne in the first quarter of 2020
decreased when compared to the prior-year period primarily due to
the timing of unsold concentrate inventory, partially offset by
lower throughput levels. Production costs per ounce in the
first quarter of 2020 decreased when compared to the prior-year
period due to the reasons described above, partially offset by
lower gold production.
Minesite costs per tonne in the first quarter of 2020
increased when compared to the prior-year period primarily due to
lower throughput levels. Total cash costs per ounce in the
first quarter of 2020 increased when compared to the prior-year
period due to lower gold production and lower by-product metal
revenue.
Gold production in the first quarter of 2020 decreased
when compared to the prior-year period primarily due to the delay
in accessing higher grade ore from the West mine area as additional
ground support work was being completed in the first quarter of
2020 and as a result of the temporary suspension of operations
ordered by the Government of Quebec on March 23,
2020.
Mining operations at the LaRonde Complex progressively
restarted on April 15, 2020 after the
Government of Quebec permitted
mining activities to resume. The LaRonde mill circuit
restarted on April 29, 2020 and the
LZ5 mill circuit is expected to restart on May 2, 2020. Stockpiles are expected to be
increased and maintenance work will be executed during the ramp up
period.
Production and unit costs are expected to return to more
normalized levels in the third and fourth quarters of 2020
(approximately 90,000 ounces of gold per quarter) as higher grade
ore is extracted from the West mine area. The production and
cost guidance assumes the return to normal operations (total mill
throughput of 8,500 tpd for the complex) by July 1, 2020, however, there could be additional
requirements relating to the COVID-19 pandemic that could impact
productivity and costs at the LaRonde Complex mining
operations.
LaRonde Mine
As discussed in previous news releases, the risks of more
frequent and larger seismic events has increased as the Company
mines deeper at LaRonde. Over the years, the Company has
continued to adapt and manage this risk. In early
December 2019, the Company saw an
increase in seismicity in the West mine area outside of normal
protocols. In addition, as development has progressed in the
West mine area, additional geological structures (faulting and
fracturing) have been recognized. This information has now
been incorporated into a revised ground support plan for the West
mine area.
This revised plan has been developed to ensure the safety
of the Company's employees, secure the higher-grade orebody to the
west and preserve existing mine infrastructure in the area.
To implement this plan, mining activity in the West mine was
temporarily suspended in mid-December
2019 and refocused in the East mine area.
During the first quarter of 2020, the Company reinforced
ground support in the West mine infrastructure and began
development activities in March 2020. Mining activities
resumed in the West mine in late April
2020 and the Company will continue to adapt ground support
on production levels. Seismicity is expected to continue but
ground support will be better adapted to manage stress
levels.
In 2020, approximately 12% of the tonnage mined at the
LaRonde Complex is expected to be from the West mine area with the
production rate expected to ramp up to approximately 1,000 tpd in
the fourth quarter of 2020.
The Company continues to test automated equipment at the
LaRonde mine. During the first quarter of 2020, the Company
began testing an automated production drill.
Infrastructure continues to be developed to provide
further access to mine LaRonde 3 and construction of the level 308
East mine cooling plant is ongoing. Development activities
are expected to resume on the access ramp to LaRonde 11-3 in May
2020. Production activities are expected to begin at this
zone in 2022.
In 2020, the Company will continue to evaluate previously
unexplored target areas at the LaRonde Complex with a focus on Zone
6 and the 20N zone. In the first quarter of 2020, exploration
drilling encountered favourable mineralization in the 20N Zinc
South lens, which had previously been mined at shallower levels in
the mine. Assay results are pending and additional holes are
planned for this area. Compilation of historic data from the
entire Bousquet property is also continuing.
LZ5
Continued productivity improvements and successful
automation implementation (autonomous mucking and hauling) led to
an increase in daily tonnage during the first quarter of
2020. Production in the third quarter of
2020 is forecast to increase to 3,000 tpd (compared to previous
guidance of 2,800 tpd).
In 2020, the Company will continue to test and refine
automated mining techniques at LZ5. The goal is to increase
the tonnage mined remotely to greater than 15% of the total tonnes
mined in 2020. During the first quarter of 2020, LZ5 achieved
the goal of exceeding 15 % of total tonnes mined remotely and
achieved a new daily record with 2,200 tpd mined with the automated
fleet.
Given the success in mining the upper portions of the LZ5
deposit (from surface to 330 metres), mining activities will be
extended to 480 metres starting in 2020. The Company is also
evaluating the potential to develop deeper portions of LZ5 (480
metres to 700 metres) and potentially mine portions of the
neighboring Ellison property from the LZ5 underground
infrastructure.
Canadian Malartic Mine – Productivity Impacted by
Increase in Remote Mining;
Development of Barnat Deposit Progressing on
Schedule
In June 2014, Agnico Eagle
and Yamana Gold Inc. ("Yamana") acquired Osisko Mining Corporation
and created the Canadian Malartic General Partnership (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 a direct and
indirect 50% ownership interest in the Partnership. All
volume numbers in this section reflect the Company's 50% interest
in the Canadian Malartic mine, except as otherwise
indicated.
Canadian Malartic Mine – Operating
Statistics
|
|
|
|
|
All metrics exclude pre-commercial production tonnes
and ounces
|
|
Three Months Ended
|
|
Three Months Ended
|
|
|
March 31, 2020
|
|
March 31, 2019
|
Tonnes of ore milled
(thousands of tonnes) (100%)
|
|
|
4,642
|
|
|
5,035
|
Tonnes of ore milled
per day (100%)
|
|
|
53,979
|
|
|
55,944
|
Gold grade
(g/t)
|
|
|
0.94
|
|
|
1.18
|
Gold production
(ounces)
|
|
|
61,789
|
|
|
83,670
|
Production costs per
tonne (C$)
|
|
$
|
28
|
|
$
|
26
|
Minesite costs per
tonne (C$)
|
|
$
|
27
|
|
$
|
25
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
787
|
|
$
|
595
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
734
|
|
$
|
572
|
Production costs per tonne in the first quarter of 2020
increased when compared to the prior-year period primarily due to
the timing of unsold inventory, higher contractor costs and lower
throughput levels. Production costs per ounce in the first
quarter of 2020 increased when compared to the prior-year period
due to the reasons described above and lower gold
production.
Minesite costs per tonne in the first quarter of 2020
increased when compared to the prior-year period due to the reasons
described above. Total cash costs per ounce in the first
quarter of 2020 increased when compared to the prior-year period
due to the reasons described above.
Gold production in the first quarter of 2020 decreased
when compared to the prior-year period primarily due to lower
grades resulting from less flexibility in the mining sequence as a
result of increased remote mining activity and the temporary
suspension of operations ordered by the Government of Quebec on March
23, 2020. This resulted in lower volumes of higher
grade ore being mined from the pit and additional draw down of
lower grade stockpiles. Pre-commercial production in the
first quarter of 2020 from the Barnat deposit was 2,974 ounces of
gold.
During the first quarter of 2020, mining activities at the
Barnat deposit continued to progress as planned. Overburden
stripping is on schedule and the first crown pillar was blasted in
March 2020. Mining activities at the Barnat deposit are
expected to continue to ramp up during 2020.
Mining operations at Canadian Malartic progressively
restarted on April 15, 2020 after the
Government of Quebec permitted
mining activities to resume. Milling activities resumed on
April 17, 2020. Mill throughput
since April 22, 2020, has been at
60,000 tpd with gold grades ranging from 0.65 to 0.70 g/t as low
grade stockpile is being processed along with run-of-mine
ore. As full mining activities ramp up, the mill is expected
to return to budgeted grades by June
2020.
The Partnership is evaluating the current maintenance
schedule to utilize a lower number of workers due to COVID-19
measures. This could result in several smaller staged
maintenance shutdowns in the second quarter of 2020. A
ten-day scheduled shutdown in June has been accounted for in the
revised guidance to consider these new hygiene
procedures.
As part of ongoing stakeholder engagement, the Partnership
has completed discussions with four First Nations groups concerning
a collaboration agreement. Given ongoing considerations with
respect to the COVID-19 pandemic, the Partnership will announce the
results of these discussions at a later time. As with the
Good Neighbour Guide and other community relations efforts at
Canadian Malartic, the Partnership is working collaboratively with
stakeholders to establish cooperative relationships that support
the long-term potential of the mine.
Drilling at the East Gouldie Zone Focused on Infilling and
Expanding Known Mineralization; Regional Exploration Tests
Near-Surface Targets
The Canadian Malartic property, together with the Rand
Malartic and Midway properties, cover in excess of 25 kilometres
along the Cadillac-Larder Lake
deformation zone.
At underground depths east of the Canadian Malartic/Barnat
open pit, 14 drill intercepts totalling 18,700 metres (on a 100%
basis) intersected the East Gouldie Zone during the first quarter
of 2020. Five rigs were drilling at a spacing of 150 metres
to increase the level of confidence in the overall grade, tonnage
and geometry of the mineralization at East Gouldie, while two rigs
focused on expanding the zone at depth and along strike.
An extensive drill program in 2019 allowed for the
declaration of initial inferred mineral resources at East Gouldie
of 1.4 million ounces of gold (12.8 million tonnes grading 3.34 g/t
gold) (reflecting Agnico Eagle's 50% interest), as of December 31, 2019.
In the regional exploration campaign during the first
quarter of 2020, five drill rigs completed an additional 41 drill
holes for 15,200 metres (100% basis) to test near-surface targets
on the Partnership's Rand Malartic and Goldfield/Midway properties,
as well as a deep extension target at the East Amphi
property.
Goldex – Solid Operating Results Driven by Strong
Rail-Veyor Performance and Higher Tonnage From the South
Zone
The 100% owned Goldex mine in northwestern Quebec began production from the M and E zones
in September 2013. Commercial production from the Deep 1 Zone
commenced on July 1, 2017.
Goldex Mine – Operating
Statistics
|
|
|
|
|
|
|
Three Months Ended
|
|
Three Months Ended
|
|
|
March 31, 2020
|
|
March 31, 2019
|
Tonnes of ore milled
(thousands of tonnes)
|
|
|
657
|
|
|
655
|
Tonnes of ore milled
per day
|
|
|
7,220
|
|
|
7,278
|
Gold grade
(g/t)
|
|
|
1.75
|
|
|
1.77
|
Gold production
(ounces)
|
|
|
33,883
|
|
|
34,454
|
Production costs per
tonne (C$)
|
|
$
|
40
|
|
$
|
39
|
Minesite costs per
tonne (C$)
|
|
$
|
39
|
|
$
|
39
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
589
|
|
$
|
554
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
558
|
|
$
|
558
|
Production costs per tonne in the first quarter of 2020
were essentially the same when compared to the prior-year
period. Production costs per ounce in the first quarter of
2020 increased when compared to the prior-year period primarily due
to the timing of unsold inventory and slightly lower gold
production.
Minesite costs per tonne in the first quarter of 2020 were
the same when compared to the prior-year period. Total cash
costs per ounce in the first quarter of 2020 were the same when
compared to the prior-year period.
Gold production in the first quarter of 2020 decreased
slightly when compared to the prior-year period primarily due to
the temporary suspension of operations ordered by the Government of
Quebec on March 23, 2020, which was partially offset by the
increased production resulting from the utilization of the
Rail-Veyor system. The utilization of the Rail-Veyor
continues to improve with a new quarterly performance record for
hauled tonnage of approximately 7,144 tpd (based on 82 days of
operation in the first quarter of 2020).
A new underground Rail-Veyor maintenance facility is
expected to be completed in the second quarter of 2020. This
new facility is expected to have a positive impact on future
Rail-Veyor productivity.
Mining operations at Goldex progressively restarted on
April 15, 2020 after the Government
of Quebec permitted mining
activities to resume. Milling activities resumed in late
April 2020.
Mining in the South Zone continued in the first quarter of
2020. Stopes mined to date continue to show better grades
than anticipated and have confirmed dilution and recovery
assumptions. The South Zone consists of quartz veins that
have higher grades than those in the primary mineralized zones at
Goldex. In the first quarter of 2020, mining rates at the
South Zone were better than expected, averaging approximately 497
tpd over the 82 days of operation. Mining rates at the South
Zone are expected to ramp up to 750 tpd in the fourth quarter of
2020 (averaging approximately 500 tpd for the full year
2020). The Company continues to evaluate the potential for
the South Zone to provide additional incremental ore feed to the
Goldex mill.
Drilling at the Deep 2 Zone continued in the first quarter
of 2020 and continues to focus on areas below the current mineral
reserve limit of Level 130.
Kirkland Lake Project – Drilling at Upper Beaver in the
First Quarter of 2020 Focused on Investigating Near-Surface
Mineralization and Converting Inferred Mineral Resources at
Depth
The Kirkland Lake project
in northeastern Ontario covers
approximately 25,506 hectares (approximately 35 kilometres long by
17 kilometres wide).
Exploration drilling continued in the first quarter of
2020 with 19 drill holes totalling 5,400 metres. At the
project's Upper Beaver deposit, drilling was carried out to
investigate the near-surface, crown pillar portion of the deposit
for its geotechnical properties in preparation for an internal
evaluation. Deeper drilling was also initiated at the Upper
Beaver deposit between 1,000 metres and 1,400 metres depth with the
aim of converting inferred mineral resources that could enhance the
project's economics.
The Company continues to investigate various opportunities
and potential synergies in terms of engineering concepts for future
development of the project's Upper Beaver and Upper Canada deposits.
NUNAVUT
REGION
Agnico Eagle has identified Nunavut as a politically attractive and stable
jurisdiction with enormous geological potential. With the
Company's Meliadine mine and Meadowbank Complex (including the
Amaruq satellite deposit at Meadowbank) and other exploration
projects, Nunavut has the
potential to be a strategic operating platform for the
Company with the ability to generate strong gold production
and cash flows over several decades.
On March 19, 2020, following
the declaration of a state of public health emergency relating to
COVID-19 by the Government of Nunavut, the Company took action to isolate
its Nunavut operations from local
communities with the aim of minimizing any risk of the virus
spreading to these communities. As part of these isolation
protocols, designed to reduce the risk to the people of
Nunavut, the Company sent all of
its Nunavut based work force
(employees and contractors) home from the Meliadine and Meadowbank
operations as well as the exploration projects.
The Company has instituted a number of additional
protocols to ensure the continued safety of its employees and the
communities. These include:
- All employees are on site on a voluntary
basis
- Increased pre-screening measures for all employees before
flying to site
- Isolation of the mine sites from the
communities
- Changing the shift rotation (now 28 days on site versus
the usual 14 days)
- Continuous COVID-19 testing of all Agnico Eagle employees
upon arrival at both sites. A testing strategy for longer-term
sustained operations is in development
Beyond increased safety and isolation protocols, the
Company has taken additional steps to support the local communities
during this difficult time, including:
- 458 hampers containing food and other essential supplies
distributed monthly to families in need in seven
communities
- Hygiene, medical and PPE supplies have been sent to
Rankin Inlet and Baker Lake.
Working with Naujaat and Whale
Cove to provide similar support
- Financially supporting local radio stations in
Baker Lake and Rankin Inlet to allow them to maintain
essential communication service during this difficult
time
- Continuing to pay salaries and health benefits of
Nunavut based employees sent home
as a result of isolation protocols
Since March 19, 2020, the
Company has continued to operate the Meliadine mine and
the Meadowbank Complex with a reduced workforce, albeit at
reduced operating levels. In
collaboration with the Nunavut
authorities, the Company is evaluating plans to re-integrate its
Nunavut based employees back into
the operations as soon as conditions permit. However, this
will be done only with the support of local authorities, on a
voluntary basis, and without compromising the safety of these
employees or their communities. Current operational plans
call for a ramp up in activities during the second quarter of 2020
and a return to full operations in the second half of
2020.
Meadowbank Complex – Continued Ramp Up of Mining
Activities Through the Second Quarter of 2020; Milling Expected to
Resume in June
The 100% owned Meadowbank Complex is located approximately
110 kilometres by road north of Baker
Lake in the Kivalliq District of Nunavut, Canada. The complex consists of
the Meadowbank mine and mill and the Amaruq satellite deposit,
which is located 50 kilometres northwest of the Meadowbank
mine. The Meadowbank mine achieved commercial production in
March 2010, and most mining
activities were completed in the fourth quarter of 2019.
The Amaruq mining operation uses the existing
infrastructure at the Meadowbank minesite (mining equipment, mill,
tailings, camp and airstrip). Additional infrastructure has
also been built at the Amaruq site (truck shop/warehouse, fuel
storage and an additional camp facility). Amaruq ore is
transported using long haul off-road type trucks to the mill at the
Meadowbank site for processing. The Amaruq satellite deposit
achieved commercial production on September
30, 2019.
Meadowbank Complex – Operating
Statistics*
|
|
|
|
|
|
|
Three Months Ended
|
|
Three Months Ended
|
|
|
March 31, 2020
|
|
March 31, 2019
|
Tonnes of ore milled
(thousands of tonnes)
|
|
|
579
|
|
|
628
|
Tonnes of ore milled
per day
|
|
|
6,363
|
|
|
6,978
|
Gold grade
(g/t)
|
|
|
|
2.86
|
|
|
2.28
|
Gold production
(ounces)
|
|
|
49,341
|
|
|
43,502
|
Production costs per
tonne (C$)
|
|
$
|
206
|
|
$
|
88
|
Minesite costs per
tonne (C$)
|
|
$
|
186
|
|
$
|
86
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
1,811
|
|
$
|
963
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
1,644
|
|
$
|
910
|
* Operating
statistics for the first quarter of 2020 relate to production from
the Amaruq satellite deposit while the operating statistics for the
prior-year period relate to production from the Meadowbank
mine
|
Production costs per tonne in the first quarter of 2020
increased when compared to the prior-year period primarily due to
the timing of unsold inventory, higher contractor and maintenance
costs, lower throughput levels and higher stripping costs as the
Complex transitioned to the Amaruq satellite deposit.
Production costs per ounce in the first quarter of 2020 increased
when compared to the prior-year period due to the reasons described
above, partially offset by higher gold production.
Minesite costs per tonne in the first quarter of 2020 increased
when compared to the prior-year period primarily due to higher
contractor and maintenance costs, lower throughput levels and
higher stripping costs as the Complex transitioned to the Amaruq
satellite deposit. Total cash costs per ounce in the first
quarter of 2020 increased when compared to the prior-year period
due to the reasons described above, partially offset by higher gold
production.
Gold production in the first quarter of 2020 increased when
compared to the prior-year period due to higher grades, partially
offset by lower throughput as the Complex transitioned to the
Amaruq satellite deposit.
The ramp up of production activities at Amaruq in the
first quarter of 2020 continued to improve over the fourth quarter
of 2019. Daily production targets have been achieved
periodically, but operations during the first quarter of 2020 were
hampered by lower equipment availabilities as well as the reduction
of staffing levels related to COVID-19 measures implemented in
Nunavut in March.
Access to ore was also affected by lake bed sediments in a
portion of the pit. The broken muck inventory at the end of
the first quarter of 2020 was approximately 1.2 million tonnes,
which was in line with the Company's expectations.
Progress continued to be made in catching up on the
maintenance backlog. The long haul operation was shut down on
March 25, 2020 due to a reduced
workforce as result of COVID-19 measures. Cost performance
was impacted by the smaller workforce, and the resultant reduction
in operating efficiencies during the second half of March.
Cost pressures are expected to increase in the second quarter of
2020, but improve materially in the second half of the
year.
The mine site exploration priority is to discover another
open pit orebody in the vicinity of the Meadowbank Complex (from
Baker Lake to Amaruq) and to
increase confidence in the inferred mineral resources of the
underground orebody near surface (0-600
m). The objective is to extend the Meadowbank mine
life beyond 2026 and expand the underground potential. During
the first quarter of 2020, approximately 3,237 metres of diamond
drilling was completed in 13 holes at Amaruq.
Underground ramp development continued during the first
quarter of 2020 with 444 metres completed, which was approximately
10% above forecast. Due to the uncertainties associated with
the COVID-19 pandemic, the Company has decided to postpone the
underground project in 2020.
Current Activities
As discussed above, the Company continues to work with the
Nunavut authorities and
communities to have Nunavut based
employees return as soon as conditions permit. In the
interim, the Company will focus on optimizing the operations with
the workforce available. Current activities are focused
on:
- Increasing the overall "mining footprint" of the pit
(especially in the eastern portion)
- Building up ore stockpiles
- Reducing the maintenance backlog on mining equipment
(loaders and trucks) and production drills
- Water management (preparation for the 2020
freshet)
As a result of the reduced workforce, the current mining
levels (ore and waste) are at approximately 50% of the normal
targeted mining rate, averaging approximately 50,000 tpd through
April 2020. The mining rate is expected to ramp up to more
normalized levels through the remainder of the second quarter of
2020 and continue at normalized levels in the second half of
2020. The Company is evaluating options to supplement the
current workforce until the Nunavut based work force is re-integrated back
into the operations.
Milling is expected to resume mid-June and average
approximately 9,500 tpd over the remainder of the year.
Average gold grades and recoveries are expected to be in line with
previous guidance issued in February
2020.
Compared to the life of mine forecast, production levels
and costs in 2020 are impacted by expected lower grades and a
higher than normal strip ratio. Production and costs at
Amaruq are expected to improve significantly in the second half of
the year due to increased mining productivity and mill throughput
as well as a lower strip ratio compared to the first half of
2020. Given the gradual ramp up of operations, the second
quarter of 2020 is expected to be the weakest quarter for gold
production at Amaruq and have the highest costs for the
year.
The permitting process to amend the Whale Tail project
certificate (Nunavut Impact Review Board ("NIRB") process) and Type
A Water Licence (Nunavut Water Board ("NWB") process) to include
the Amaruq Phase 2 expansion is ongoing. The NIRB process was
completed in January 2020. The NWB water licence amendment
process is ongoing and public hearings were held in
February 2020. It is expected that the Amaruq Phase 2
permitting will be completed in the third quarter of 2020.
However, the process could be slightly delayed due to the COVID-19
pandemic.
Planning and procurement activities for the 2020 sealift
are well underway. At the present time, no critical
procurement issues have been identified and some of the materials
are already being shipped to the port facility in Quebec.
With the COVID-19 pandemic, the Company is also setting up detached
operations protocols in order to isolate the sealift activities
from the community of Baker
Lake.
Meliadine Mine – Apron Feeder Issues Resolved;
Production Expected to Ramp-up Through Second Quarter 2020 Based on
Improved Milling and Mining Flexibility
Located near Rankin Inlet,
Nunavut, Canada, the Meliadine project was acquired in
July 2010 and is Agnico Eagle's
largest gold deposit in terms of mineral resources. The
Company owns 100% of the 111,358-hectare property. In
February 2017, the Company's Board of
Directors approved the construction of the Meliadine project.
Commercial production was declared on May
14, 2019.
Meliadine Mine – Operating
Statistics*
|
|
|
|
|
Three Months Ended
|
|
|
March 31, 2020
|
Tonnes of ore milled
(thousands of tonnes)
|
|
|
307
|
Tonnes of ore milled
per day
|
|
|
3,374
|
Gold grade
(g/t)
|
|
|
7.32
|
Gold production
(ounces)
|
|
|
69,975
|
Production costs per
tonne (C$)
|
|
$
|
234
|
Minesite costs per
tonne (C$)
|
|
$
|
241
|
Production costs per
ounce of gold produced ($ per ounce)
|
|
$
|
775
|
Total cash costs per
ounce of gold produced ($ per ounce)
|
|
$
|
799
|
* As the Meliadine
mine achieved commercial production on May 14, 2019, there is no
relevant data for the prior-year period.
|
Production costs per tonne in the first quarter of 2020
were C$234. Production costs
per ounce in the first quarter of 2020 were $775. Minesite costs per tonne in the first
quarter of 2020 were C$241.
Total cash costs per ounce in the first quarter of 2020 were
$799. Gold production in the
first quarter of 2020 was 69,975 ounces of gold.
In 2019, the Meliadine mill demonstrated the ability to
exceed nameplate capacity (3,750 tpd), with maximum daily
throughput reaching up to 4,950 tpd. In the fourth quarter of
2019, the processing plant averaged approximately 3,543 tpd, with
average recoveries of 94.6%. Bottlenecks at the front end of
the crushing circuit and wear issues with the apron feeder hampered
maximization of throughput in the mill in the fourth quarter of
2019.
The first quarter of 2020 started on a challenging note,
with a major failure of the crusher apron feeder on January 6, 2020, resulting in the process plant
having to be fed from screened material through the reclaim feeder
until mid-to-late March 2020. As a result, mill throughput
levels in the first quarter of 2020, were below expectations.
In late March 2020, the apron feeder
was put back into service using custom-built parts from a local
supplier in Abitibi, Quebec and
has since been operating at better than expected rates. A new
apron feeder has been ordered from another supplier, and is
expected to be shipped to site on the 2020 sealift for installation
in the third quarter of 2020. Despite the lower gold grade,
excellent recoveries were maintained during the first quarter of
2020, averaging 97.2%.
In the first quarter of 2020, lateral development
performance was above the budgeted target. Ore haulage
performance averaged approximately 3,300 tpd, which was slightly
below expected levels due to the reduced workforce measures
implemented in the last two weeks of March 2020. As part of
the ongoing mine performance improvement project, work was
completed which will allow hauling to surface with 50 tonne trucks
from the upper levels of the mine. This will reduce the
haulage distance and cycle time for the ore and waste produced in
the upper mining horizon.
Paste backfilling was
below expectations during the first quarter of 2020, largely due to
variations in mill throughput levels and issues with clumps of
frozen tailings in the mixer. To help offset this, the
Company has also been using cemented rock fill to supplement the
paste backfill process. In March
2020, a 260-metre-long paste hole from level 350 to level
100 was completed which will allow the mine to pastefill stopes at
the extremities of the lower mining horizon. In April,
backfilling activities were well ahead of budgeted
levels.
Production drilling performance in the first quarter of
2020 was also below budget due to a lack of drilling workplaces and
a reduced workforce. With increased backfilling capacity now
in place, the Company anticipates better production drilling, which
is expected to provide increased flexibility with regards to
mining sequence and stope availability. Drilled-off ore tonne
inventory in the first quarter of 2020 remained high with over
210,000 tonnes available at the end of the quarter (equivalent to
two months of stope mucking).
Exploration drilling in the first quarter of 2020 focused
on extending the central and western Tiriganiaq areas at depth as a
follow-up to favourable results from previous drilling campaigns in
2018 and 2019. Some of the better results from this year's
program were encountered at depth in the 1370 ore lens. An
additional 20,000 metres of drilling is planned in 2020 to
follow-up on these new results and test other favourable targets at
depth.
Updated Production Plan
The updated production plan for the balance of 2020
assumes that there will be a gradual ramp-up of mining and
processing activities in the second quarter of 2020, with full
operations resuming in July 2020. The Company is evaluating
options to supplement the current workforce until the Nunavut based work force is re-integrated back
into the operations.
In April and May 2020, the
mill is expected to operate at approximately 3,500 tpd with a mix
of stockpile and underground ore. The average grade is
expected to be approximately 4.0 to 6.0 g/t gold. Tonnage is
then forecast to increase to approximately 4,000 tpd in
June 2020 along with the introduction
of additional higher grade ore from underground.
Milling rates are expected to average approximately 4,000
tpd in the third quarter of 2020 and increase to approximately
4,600 tpd in the fourth quarter of 2020, which is in line with the
Phase 2 expansion plan outlined in the Company's news release dated
February 13, 2020.
Over the remainder of 2020, production and costs at
Meliadine are expected to improve on a quarter over quarter
basis. Given the gradual ramp up of operations, the second
quarter is expected to be the weakest quarter for gold production
in 2020.
Planning and procurement activities for the 2020 sealift
are well underway. At the present time, no critical
procurement issues have been identified, and some of the materials
are already being shipped to the port facility in Quebec.
With the COVID-19 pandemic, the Company is in discussions with
Nunavut authorities to set up
detached operations protocols in order to isolate the sealift
activities from the community of Rankin
Inlet.
Water Management Strategy
The current Meliadine water management plan includes
segregation of underground dewatering and surface runoff waters in
specific ponds, treatment and seasonal discharge to Meliadine Lake
or to the sea (Hudson Bay)
depending on the type of water.
One of the objectives of the water management plan is to
minimize the volume of water in the water containment
infrastructures prior to the freshet (spring melt). At the
present time, the total dissolved solids (TDS) in the runoff water
pond is higher than predicted, restricting the volume of water that
can be discharged within the prescribed TDS limit. Testing
indicates that the water is non-toxic. The Company is
currently in discussions with the regulatory agencies to modify the
discharge criteria and allow flexibility for the mine to manage
precipitation variations and spring freshet (spring melt) while
protecting the environment.
With regards to saline water, underground inflows have
been lower than forecast. Excavation of SP4 (an additional
surface storage pond) was completed in the first quarter of 2020,
two weeks ahead of schedule, which allowed the mine to start
dewatering mining area 3 slightly ahead of plan in the last week of
March 2020. Dewatering of mining area 3 is expected to
provide additional mining flexibility for both tonnes and grade in
the fourth quarter of 2020.
The Company is awaiting regulatory approval to increase
the discharge of saline water to the sea, with a new limit of 1,600
cubic metres per day. While discharge to sea is currently
done by trucks, the Company is applying for permits to install a
permanent waterline that will be used on a seasonal basis.
This is expected to reduce costs and the environmental impact by
reducing trucking. Consultations are currently underway with
local stakeholders and regulatory agencies and the permitting
process for the waterline is underway.
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 reserves and mineral resources and the Company
has approved an expansion to add an underground shaft and increase
expected mill throughput by 25% to 2.0 million tonnes per annum
("mtpa"). In Sweden, the
Company has a 55% interest in the Barsele exploration
project.
In March 2020, a COVID-19
case was confirmed at the Kittila mine. As part of the
response protocols, the Company immediately suspended all
underground operations at Kittila for 72 hours in order to identify
other employees who may have been in close contact with the
employee who had tested positive. As well, all common areas
in the workplace were thoroughly cleaned and disinfected.
Underground operations resumed on March
31, 2020. There was no interruption to surface or mill
operations as mill production was maintained with surface
stockpiles.
In April 2020, Kittila
employees were part of a COVID-19 testing initiative by Finnish
health authorities in the Lapland region. All employees who
participated in this study have tested negative.
Kittila – First Quarter Operations Largely Unaffected
by COVID-19 Pandemic; Shaft Sinking Activities Delayed by Three
Months Due to Contractor Travel Restrictions
The 100% owned Kittila mine in northern Finland achieved commercial production in
2009.
Kittila Mine – Operating
Statistics
|
|
|
|
|
|
|
Three Months Ended
|
|
Three Months Ended
|
|
|
March 31, 2020
|
|
March 31, 2019
|
Tonnes of ore milled
(thousands of tonnes)
|
|
|
420
|
|
|
456
|
Tonnes of ore milled
per day
|
|
|
4,615
|
|
|
5,067
|
Gold grade
(g/t)
|
|
|
4.21
|
|
|
3.95
|
Gold production
(ounces)
|
|
|
49,297
|
|
|
49,336
|
Production costs per
tonne (EUR)
|
|
€
|
94
|
|
€
|
75
|
Minesite costs per
tonne (EUR)
|
|
€
|
87
|
|
€
|
74
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
886
|
|
$
|
782
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
810
|
|
$
|
775
|
Production costs per tonne in the first quarter of 2020
increased when compared to the prior-year period primarily due to
higher contractor costs, the timing of unsold inventory and lower
throughput levels. Production costs per ounce in the first
quarter of 2020 increased when compared to the prior-year period
due to the reasons described above.
Minesite costs per tonne in the first quarter of 2020
increased when compared to the prior-year period due to higher
contractor costs and lower throughput. Total cash costs per
ounce in the first quarter of 2020 increased when compared to the
prior-year period due to the reasons described above.
Gold production in the first quarter of 2020 was
essentially unchanged when compared to the prior-year period as
lower throughput levels were offset by higher grades and higher
recoveries.
In February 2018, the
Company's Board of Directors approved an expansion to increase
throughput rates at Kittila to 2.0 mtpa from the current rate of
1.6 mtpa. Permitting is ongoing for the increase in
throughput. This expansion includes the construction of a
1,044-metre deep shaft, a processing plant expansion as well as
other infrastructure and service upgrades over the period from 2018
to 2021.
The expansion project is expected to increase the
efficiency of the mine and maintain or decrease operating costs
while providing access to the deeper mining horizons. In
addition, the shaft is expected to provide access to the mineral
resources located below 1,150 metres depth, where recent
exploration programs have shown promising results.
The shaft and mill expansion continued to advance in the
first quarter of 2020. The Company is currently evaluating
the timing of the final mill tie-in work, which was originally
scheduled to occur during a planned four to five-week mill
maintenance shutdown in the third quarter of 2020.
In the first quarter of 2020, construction of the shaft
head frame continued to progress according to plans and rockline
excavation and the raise boring of ore silos were completed.
However, work related to the shaft sinking ceased in mid-March as
Canadian workers contracted to work on the project returned to
Canada due to COVID-19 related
travel restrictions. A delay of at least three months is
expected and as a result, capital expenditures relating to the
shaft project of approximately$6 million have been deferred to
2021. The full expansion project is now expected to be
completed in late 2021.
SOUTHERN BUSINESS REVIEW
Agnico Eagle's Southern Business operations are focused in
Mexico. These operations have been a solid source of precious
metals production (gold and silver) with stable operating costs and
strong free cash flow since 2009.
On April 2, 2020, the
Government of Mexico mandated that
all non-essential businesses, including mining and exploration,
suspend operations until April 30,
2020 (the "Decree"). Pursuant to the Decree, mining
operations at the Company's Mexico
operations (Pinos Altos, Creston
Mascota and La India) ramped down activities in an orderly fashion
while maintaining the safety of the employees and the
sustainability of the infrastructure.
On April 17, 2020, the Government of
Mexico extended the suspension of
all non-essential business until May 30,
2020, but businesses in areas with few COVID-19 cases may be
able to restart on May 18,
2020. The Company is in discussions with the Government of
Mexico to determine whether its
mining operations would qualify to be able to restart at the
earlier date as there are few reported COVID-19 cases in the areas
surrounding the Company's operations. The Company's mining
operations and the exploration activities remain suspended pending
further clarification from the Government.
Pinos Altos –
Underground Development Ahead of Schedule at the Cubiro Satellite
Deposit and Drilling Continues to Yield Favourable
Results
The 100% owned Pinos
Altos mine in northern Mexico achieved commercial production in
November 2009.
Pinos Altos Mine – Operating
Statistics
|
|
|
|
|
|
|
Three Months Ended
|
|
Three Months Ended
|
|
|
March 31, 2020
|
|
March 31, 2019
|
Tonnes of ore
processed (thousands of tonnes)
|
|
|
480
|
|
|
478
|
Tonnes of ore
processed per day
|
|
|
5,275
|
|
|
5,311
|
Gold grade
(g/t)
|
|
|
2.36
|
|
|
2.89
|
Gold production
(ounces)
|
|
|
33,310
|
|
|
42,730
|
Production costs per
tonne
|
|
$
|
75
|
|
$
|
62
|
Minesite costs per
tonne
|
|
$
|
67
|
|
$
|
62
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
1,077
|
|
$
|
694
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
747
|
|
$
|
494
|
Production costs per tonne in the first quarter of 2020
increased when compared to the prior-year period primarily due to
higher costs associated with open pit mining of the Sinter pit,
higher underground development, lower throughput, and by the timing
of unsold inventory. Production costs per ounce in the first
quarter of 2020 increased when compared to the prior-year period
due to higher costs associated with lower gold production, open pit
mining, underground development, and by the timing of unsold
inventory.
Minesite costs per tonne in the first quarter of 2020
increased when compared to the prior-year period due to the reasons
described above. Total cash costs per ounce in the first
quarter of 2020 increased when compared to the prior-year period
due to the reasons described above.
Gold production in the first quarter of 2020 decreased
when compared to the prior-year period due to lower
grades.
At the Cerro Colorado
underground operations, the reconditioning activities of the area
affected by challenging ground conditions are progressing
well. Stope sizes have been reduced by 25%, all development
drifts have increased ground support and the mining sequence has
been adjusted. With these mitigating measures in place, the
ore contribution from this area is ramping up as set out in the
plan. To generate further flexibility in the mining sequence,
an aggregate of 900 metres were developed ahead of plan in
different underground structures during the first quarter of
2020. Full production at Cerro
Colorado is expected at the restart of the operation in
June 2020.
During the first quarter of 2020, ore sorting from the
Sinter deposit transitioned from pilot testing towards
pre-production following the favourable results achieved during the
fourth quarter of 2019. The Company will continue testing
ores from various assets of the Company during the second and third
quarter of 2020.
Development of the Sinter and Cubiro satellite deposits at
Pinos Altos continued to advance
in the first quarter of 2020. The Sinter deposit, located
approximately 2.0 kilometres northwest of the Pinos Altos mine, will be mined from
underground and a small open pit. At Sinter, the power line
relocation was completed as well as the ventilation raise from
surface to level 20. Production from the Sinter underground
is expected to begin in the fourth quarter of 2020. At
Cubiro, underground development activities are approximately 45%
ahead of budget.
Underground Conversion and Exploration Drilling at Cubiro
Deposit Confirms and Extends High-Grade Gold
Mineralization
At the Pinos Altos mine,
the Company expects to spend $7.8
million for 42,000 metres of drilling in 2020. The
work will include 10,000 metres to infill and expand the mineral
resource at the Cubiro deposit in the property's northwest and
5,000 metres of drilling to extend the Reyna East Zone along strike
and at depth in the southeast portion of the property.
The current proven and probable mineral reserves at
Pinos Altos are 957,000 ounces of
gold and 24 million ounces of silver (consisting of proven mineral
reserves of 3.3 million tonnes grading 2.55 g/t gold and 59.0 g/t
silver and probable mineral reserves of 11.1 million tonnes grading
1.91 g/t gold and 50.7 g/t silver); in addition, Pinos Altos has indicated mineral resources of
1.1 million ounces of gold and 26 million ounces of silver (19.6
million tonnes grading 1.68 g/t gold and 40.7 g/t silver) and
inferred mineral resources of 435,000 ounces of gold and 9.0
million ounces of silver (7.0 million tonnes grading 1.93 g/t gold
and 39.9 g/t silver) as of December 31,
2019.
Exploration at Pinos
Altos during the first quarter of 2020 focused on two
targets: the Cubiro deposit, where an exploration ramp is providing
additional access for drilling exploration targets from
underground; and Reyna East.
The Company drilled 21 holes (4,563 metres) on the
Pinos Altos property during the
first quarter of 2020, comprised of five holes (882 metres) at
Cubiro and 16 holes (3,741 metres) at Reyna East. The Company
completed 436 metres of underground ramp development at Cubiro
during the first quarter of 2020, bringing total underground ramp
development to 2,190 metres completed to-date.
The Cubiro deposit is located approximately 9.2 kilometres
northwest of the Pinos Altos mine
and 2.0 kilometres west of the Creston Mascota deposit. Based
on exploration drilling, Cubiro could potentially contribute
additional ore to be processed at Pinos
Altos.
Selected recent drill results from the Cubiro deposit at
the Pinos Altos mine are set out
in the table below. The collars are also located on the Pinos
Altos Mine - Local Geology Map; pierce points for the Cubiro
drilling are shown on the Pinos Altos Mine - Cubiro Longitudinal
Section. All intercepts reported for the Cubiro deposit show
uncapped and capped gold and silver grades over estimated true
widths, based on a preliminary geological interpretation that will
be updated as new information becomes available with further
drilling.
Selected recent exploration drill results from the
Cubiro satellite deposit at the Pinos
Altos mine
Drill Hole
|
Deposit
|
From
(metres)
|
To
(metres)
|
Depth of
midpoint
below
surface
(metres)
|
Estimated
true width
(metres)
|
Gold grade
(g/t)
(uncapped)
|
Gold grade
(g/t)
(capped)*
|
Silver
grade (g/t)
(uncapped)
|
Silver
grade (g/t)
(capped)*
|
CBUG19-023
|
Cubiro
|
115.0
|
125.7
|
75
|
10.4
|
0.8
|
0.8
|
9
|
9
|
including
|
|
118.6
|
122.7
|
74
|
4.0
|
1.3
|
1.3
|
12
|
12
|
CBUG19-024
|
Cubiro
|
202.6
|
215.0
|
175
|
10.7
|
4.0
|
3.1
|
17
|
17
|
including
|
|
208.3
|
213.0
|
177
|
4.1
|
8.5
|
6.0
|
34
|
34
|
CBUG19-026
|
Cubiro
|
55.4
|
61.8
|
109
|
6.0
|
2.3
|
2.3
|
10
|
10
|
and
|
Cubiro
|
80.0
|
113.6
|
50
|
31.5
|
0.9
|
0.9
|
9
|
9
|
including
|
|
104.0
|
109.9
|
38
|
5.5
|
1.7
|
1.7
|
24
|
24
|
CBUG20-027
|
Cubiro
North
|
92.5
|
100.0
|
308
|
7.2
|
1.8
|
1.8
|
20
|
20
|
including
|
|
96.5
|
100.0
|
309
|
3.4
|
3.3
|
3.3
|
20
|
20
|
CBUG20-028
|
Cubiro
North
|
120.9
|
130.2
|
296
|
9.2
|
2.1
|
2.1
|
26
|
26
|
including
|
|
128.0
|
130.2
|
296
|
2.1
|
4.2
|
4.2
|
54
|
54
|
CBUG20-029
|
Cubiro
|
59.2
|
75.7
|
197
|
16.2
|
1.6
|
1.6
|
14
|
14
|
including
|
|
69.2
|
75.7
|
200
|
6.4
|
3.0
|
3.0
|
29
|
29
|
|
Cut-off value 0.30 g/t gold, maximum 3.0 metres
internal dilution
|
*Holes at the Cubiro satellite deposit use a capping
factor of 10 g/t gold and 200 g/t silver
|
[Pinos Altos Mine - Local Geology
Map]
[Pinos Altos Mine - Cubiro Longitudinal
Section]
The Cubiro deposit is made up of multiple gold and silver
bearing white quartz-calcite veins (with barite and minor
sulphides) up to 30 metres wide that strike northwest for
approximately 1,100 metres, and dip steeply to the southwest.
These veins are enveloped in wider swarm-like vein systems,
including breccias and stockworks. The Cubiro deposit remains
open in all directions.
Drilling during the first quarter of 2020 continued from
underground platforms at the southeastern limit of the ramp,
targeting the main Cubiro Zone and the subparallel Cubiro North
Zone. Results from the Cubiro drill campaign were last
reported in the Company's news release dated February 13, 2020.
Drilling into the eastern portion of main Cubiro Zone was
completed to further evaluate the occurrence of higher-grade gold
mineralization in veins that often display pinch-and-swell
characteristics within wider, lower-grade envelopes.
The drilling encountered higher than expected gold grades
in holes such as CBUG19-024, which intersected 3.1 g/t gold and 17
g/t silver over 10.7 metres at 175 metres depth, including 6.0 g/t
gold and 34 g/t silver over 4.1 metres towards the central portion
of the main Cubiro Zone; as well as hole CBUG19-026, drilled
approximately 120 metres to the northeast, which intersected 2.3
g/t gold and 10 g/t silver over 6.0 metres at 109 metres depth as
well as 0.9 g/t gold and 9 g/t silver over 31.5 metres at 50 metres
depth, including 1.7 g/t gold and 24 g/t silver over 5.5
metres.
Other promising results from the main Cubiro Zone included
hole CBUG20-029, drilled towards the zone's southeastern end, which
intersected 1.6 g/t gold and 14 g/t silver over 16.2 metres at
197 metres depth, including 3.0 g/t gold and 29 g/t silver over 6.4
metres; and hole CBUG19-023, drilled approximately 80 metres
northeast of hole CBUG19-024, which intersected 0.8 g/t gold and 9
g/t silver over 10.4 metres at 75 metres depth, including 1.3 g/t
gold and 12 g/t silver over 4.0 metres.
The above results have better defined the higher-grade ore
shoots in this portion of the main Cubiro Zone, with the largest
extending at least 175 metres laterally and 175 metres vertically
and remaining open in all directions.
At the Cubiro North Zone, located approximately 110 metres
northeast of the eastern end of the main Cubiro Zone, infill
drilling confirmed the down-dip projection of higher-grade
mineralization approximately 300 metres from surface and
approximately 200 metres laterally along section.
Highlights from Cubiro North Zone include: hole
CBUG20-027, which intersected 1.8 g/t gold and 20 g/t silver over
7.2 metres at 308 metres depth, including 3.3 g/t gold and 20 g/t
silver over 3.4 metres; and hole CBUG20-028, which intersected 2.1
g/t gold and 26 g/t silver over 9.2 metres at 296 metres depth,
including 4.2 g/t gold and 54 g/t silver over 2.1
metres.
These latest results from both zones at Cubiro have the
potential to increase the gold grades of the mineral resource
estimate that is expected to be completed at year-end 2020.
As of December 31, 2019, the Cubiro
deposit (including Cubiro North) has indicated mineral resources of
212,000 ounces of gold and 1.4 million ounces of silver (2.4
million tonnes grading 2.78 g/t gold and 18.38 g/t silver) and
inferred mineral resources of 136,000 ounces of gold and 912,000
ounces of silver (1.4 million tonnes grading 2.59 g/t gold and
19.84 g/t silver), all at underground depth, declared as part of
the total Pinos Altos mineral
reserves and mineral resources estimate. The gold grades are
significantly higher at Cubiro than on average at Pinos Altos property.
Further work at Cubiro in 2020 will focus on infill drilling as
well as resource expansion drilling of both zones to the northwest
and down dip with the aim of extending existing high-grade ore
shoots and identifying new ones. Successful mineral resource
expansion and conversion at Cubiro would allow for the optimization
of gold production at the Pinos
Altos mine.
Creston Mascota – Processing of Higher Grade Ore at Pinos Altos Mill Drives
Strong Quarterly Production; Mining Extended Through September 2020; Residual Leaching Continues
Through the COVID-19 Shutdown
The Creston Mascota heap leach open pit mine has been
operating as a satellite operation to the Pinos Altos mine since late 2010. During
2018, the mine began preparations to transition operations to the
new Bravo pit and to expand the
existing heap leach pad facility. Creston Mascota open pit mineral
reserves are expected to be depleted by the end of the third
quarter of 2020, while gold leaching is expected to continue
through to the first quarter of 2021.
Creston Mascota Mine – Operating
Statistics
|
|
|
|
|
|
|
Three Months Ended
|
|
Three Months Ended
|
|
|
March 31, 2020
|
|
March 31, 2019
|
Tonnes of ore
processed (thousands of tonnes)
|
|
212
|
|
361
|
Tonnes of ore
processed per day
|
|
2,330
|
|
4,011
|
Gold grade
(g/t)
|
|
2.88
|
|
1.96
|
Gold production
(ounces)
|
|
18,184
|
|
13,529
|
Production costs per
tonne
|
|
$
|
56
|
|
$
|
27
|
Minesite costs per
tonne
|
|
$
|
54
|
|
$
|
25
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
651
|
|
$
|
727
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
423
|
|
$
|
525
|
Production costs per tonne in the first quarter of 2020
increased when compared to the prior-year period due to lower
tonnage stacked at the heap leach, increased costs to facilitate
the extension of the Bravo central
pit, and additional costs to mill high grade ore at the
Pinos Altos mill. Production
costs per ounce in the first quarter of 2020 decreased when
compared to the prior-year period due to higher gold production
from higher grades, partially offset by higher costs per
tonne.
Minesite costs per tonne in the first quarter of 2020
increased when compared to the prior-year period for the reasons
described above. Total cash costs per ounce in the first
quarter of 2020 decreased when compared to the prior-year period
due to higher by-product revenue and the reasons described
above.
Gold production in the first quarter of 2020 increased
when compared to the prior-year period due to higher grade ore from
the Bravo pit that was processed
at the Pinos Altos mill (with
better mill recoveries), partially offset by lower tonnage stacked
at the Creston Mascota heap leach. Residual precious metal
leaching continues through the COVID-19 shutdown.
The mining of high grade ore from the Bravo pit is now expected to be extended to
the third quarter of 2020. During this period, the high grade
ore will continue to be prioritized for processing at the
Pinos Altos mill. Heap
leaching activities are now expected to extend into
2021.
La India – Residual
Leaching Continues Through COVID-19 Shutdown
The La India mine in Sonora,
Mexico, located approximately 70 kilometres northwest of the
Company's Pinos Altos mine,
achieved commercial production in February
2014.
La India Mine – Operating
Statistics
|
|
|
|
|
|
|
Three Months Ended
|
|
Three Months Ended
|
|
|
March 31, 2020
|
|
March 31, 2019
|
Tonnes of ore
processed (thousands of tonnes)
|
|
1,534
|
|
1,451
|
Tonnes of ore
processed per day
|
|
16,857
|
|
16,122
|
Gold grade
(g/t)
|
|
0.74
|
|
0.67
|
Gold production
(ounces)
|
|
22,926
|
|
22,988
|
Production costs per
tonne
|
|
$
|
13
|
|
$
|
12
|
Minesite costs per
tonne
|
|
$
|
12
|
|
$
|
12
|
Production costs per
ounce of gold produced ($ per ounce):
|
|
$
|
875
|
|
$
|
772
|
Total cash costs per
ounce of gold produced ($ per ounce):
|
|
$
|
778
|
|
$
|
759
|
Production costs per tonne in the first quarter of 2020
were essentially the same when compared to the prior-year
period. Production costs per ounce in the first quarter of
2020 increased when compared to the prior-year period due to higher
reagents costs and by the timing of unsold inventory.
Minesite costs per tonne in the first quarter of 2020 were
the same when compared to the prior-year period. Total cash
costs per ounce in the first quarter of 2020 increased when
compared to the prior-year period due to lower by-product revenue
and the reasons described above.
Gold production in the first quarter of 2020 was
essentially unchanged when compared to the prior-year period.
The increased gold content of the ore placed on the leach pad
(higher tonnage and grades) was offset by lower recoveries due to
the high clay content of the ore.
Mining activities were suspended in early April as required by the
Government of Mexico Decree. Residual precious metal leaching
continues through the shutdown.
During the first quarter of 2020, the foundations for two new
agglomeration units were built. The equipment was received in
March 2020 and will be installed at
the restart of the operations in June 2020. These units are
expected to improve percolation at the heap leach and help restore
normal production rates for the second half of 2020.
Santa Gertrudis –
Drilling Expands the High-Grade Amelia Deposit and Espiritu Santo Zone in the Trinidad
Trend
Agnico Eagle acquired its 100% interest in the
Santa Gertrudis gold property in
November 2017. The 44,145-hectare property is located
approximately 180 kilometres north of Hermosillo in Sonora, Mexico.
The property was the site of historic heap-leach
operations that produced approximately 565,000 ounces of gold at a
grade of 2.1 g/t gold between 1991 and 2000. The project has
substantial surface infrastructure including pre-stripped pits,
haul roads, water sources and several buildings. Extensive
drilling and studies in 2019 led to the declaration of initial
indicated mineral resources of 104,000 ounces of gold (5.1 million
tonnes grading 0.64 g/t gold) at open-pit (oxide) depth, and
inferred mineral resources of 717,000 ounces of gold at open-pit
(oxide) depth (19.1 million tonnes grading 1.17 g/t gold) and
451,000 ounces of gold at underground (sulphide) depth (3.1 million
tonnes grading 4.58 g/t gold), as of December 31, 2019.
Drill results for the Santa
Gertrudis project were last reported in the Company's news
release dated February 13,
2020.
During the first quarter of 2020, drilling at Santa Gertrudis totalled 19 holes (11,413
metres) focused on the exploration and development of new mineral
resources in the Trinidad Trend in the northern part of the
property (including 3,940 metres in the Amelia deposit and 4,647
metres in the recently discovered Espiritu Santo zone); and in the Toro Trend
(2,826 metres), located approximately four kilometres south of the
Trinidad Trend.
Selected recent drill results from the Amelia deposit and
Espiritu Santo zone at the
Santa Gertrudis project are set
out in the table below. Drill collars are shown on the Santa
Gertrudis Project Local Geology Map; pierce points for the Amelia
and Espiritu Santo drilling are
shown on the Santa Gertrudis Project - Amelia Longitudinal Section
and Espiritu Santo Longitudinal Section, respectively. All
intercepts reported for the Santa
Gertrudis project show uncapped and capped gold and silver
grades over an estimated true width and depth of midpoint below the
surface, based on a preliminary geological interpretation that will
be updated as new information becomes available with further
drilling.
Selected recent exploration drill results from the
Amelia deposit and Espiritu Santo
zone at the Santa Gertrudis
project
Drill Hole
|
Area
|
From
(metres)
|
To
(metres)
|
Depth of
midpoint
below
surface
(metres)
|
Estimated
true width
(metres)
|
Gold grade
(g/t)
(uncapped)
|
Gold grade
(g/t)
(capped)*
|
Silver
grade (g/t)
(uncapped)
|
Silver
grade (g/t)
(capped)*
|
SGE19-308
|
Amelia
|
449.0
|
456.0
|
390
|
6.0
|
3.7
|
3.7
|
3
|
3
|
and
|
Amelia
|
472.0
|
487.3
|
410
|
13.0
|
3.3
|
3.3
|
10
|
10
|
including
|
|
480.8
|
487.3
|
412
|
5.5
|
5.3
|
5.3
|
17
|
17
|
and
|
Amelia
|
502.0
|
513.0
|
434
|
10.0
|
5.3
|
5.3
|
7
|
7
|
including
|
|
503.0
|
508.0
|
431
|
4.5
|
10.3
|
8.9
|
5
|
5
|
and
|
Amelia
|
532.0
|
544.0
|
454
|
10.5
|
3.1
|
3.1
|
6
|
6
|
including
|
|
540.0
|
544.0
|
457
|
3.5
|
5.4
|
5.4
|
5
|
5
|
and
|
Amelia
|
551.0
|
562.0
|
467
|
10.0
|
3.2
|
3.2
|
34
|
34
|
including
|
|
551.0
|
555.0
|
464
|
3.5
|
5.5
|
5.5
|
14
|
14
|
SGE19-324
|
Espiritu
Santo
|
55.5
|
59.0
|
38
|
3.0
|
3.7
|
3.7
|
37
|
37
|
and
|
Espiritu
Santo
|
258.3
|
261.5
|
206
|
3.0
|
1.5
|
1.5
|
1,019
|
424
|
SGE19-331
|
Amelia
|
68.0
|
72.0
|
86
|
4.0
|
3.5
|
3.5
|
5
|
5
|
and
|
Amelia
|
124.0
|
128.2
|
122
|
4.0
|
3.0
|
3.0
|
3
|
3
|
SGE20-336
|
Amelia
|
621.0
|
625.0
|
582
|
3.5
|
3.1
|
3.1
|
1
|
1
|
and
|
Amelia
|
666.0
|
671.0
|
593
|
4.5
|
5.1
|
5.1
|
20
|
20
|
SGE20-338
|
Espiritu
Santo
|
60.5
|
70.5
|
64
|
9.0
|
1.7
|
1.7
|
3
|
3
|
SGE20-340
|
Amelia
|
526.5
|
552.0
|
520
|
22.5
|
2.8
|
2.8
|
6
|
6
|
including
|
|
544.0
|
552.0
|
518
|
7.0
|
5.0
|
5.0
|
4
|
4
|
SGE20-347
|
Espiritu
Santo
|
138.0
|
151.0
|
172
|
11.5
|
3.6
|
3.5
|
7
|
7
|
including
|
|
145.0
|
151.0
|
174
|
5.0
|
7.1
|
6.8
|
13
|
13
|
and
|
Espiritu
Santo
|
163.5
|
168.5
|
191
|
4.0
|
2.2
|
2.2
|
2
|
2
|
|
*Holes in the
Trinidad Trend use a capping factor of 25 g/t gold and 1,000 g/t
silver. The cut-off grade used for these intervals is 0.3 g/t
gold in oxide material and 1.0 g/t gold in sulphide material. The
minimum estimated true width is 3.0 metres.
|
[Santa Gertrudis Project Local Geology
Map]
[Santa Gertrudis Project - Amelia Longitudinal
Section]
[Santa Gertrudis Project - Espiritu Santo
Longitudinal Section]
Amelia is one of three deposits that comprise the Trinidad
Trend and is the site of a previously operating open-pit gold
mine. High-grade gold mineralization can be found in multiple
parallel structures that commonly correspond to lithological
contacts. The Amelia deposit strikes east-west for a length
of approximately 900 metres and dips steeply to the north; it
includes an ore shoot on the west side that plunges steeply to the
east, that has been extended by 112 metres, or 593 metres below
surface, from the bottom of the underground mineral resource
defined at the end of 2019. Most of the open pit (oxide)
material lies between surface and 100 metres depth, while the
underground mineral resource extends below the open-pit mineral
resource to a depth of approximately 350 metres.
The inferred mineral resource at Amelia is comprised of
1.6 million tonnes grading 1.38 g/t gold (70,000 ounces of gold) at
open pit depth, and 3.1 million tonnes grading 4.58 g/t gold
(451,000 ounces of gold) of high-grade sulphide mineralization at
underground depth. The Amelia deposit's mineral resource is
part of the Santa Gertrudis
project mineral resource estimate as of December 31, 2019.
Exploration drilling at Amelia during the first quarter of
2020 continued to intersect high-grade gold mineralization, with
the results from hole SGE19-308 demonstrating that the deposit
remains open along the plunge of the ore shoot. Hole
SGE19-308 intersected five high-grade and wide structures that are
found to be typical of the bottom of the current underground
mineral resource: 3.7 g/t gold over 6.0 metres at 390 metres
depth; 3.3 g/t gold over 13.0 metres at 410 metres depth (including
5.3 g/t gold over 5.5 metres at 412 metres depth); 5.3 g/t gold
over 10.0 metres at 434 metres depth (including 8.9 g/t gold over
4.5 metres at 431 metres depth); 3.1 g/t gold over 10.5 metres at
454 metres depth (including 5.4 g/t gold over 3.5 metres at 457
metres depth); and 3.2 g/t gold over 10.0 metres at 467 metres
depth (including 5.5 g/t gold over 3.5 metres at 464 metres
depth).
The results from three additional holes drilled into
Amelia during the first quarter of 2020 show the potential for
mineral resource expansion under the currently defined mineral
resource, with all three holes drilled to expand the high-grade
mineralization at 80-metre step-outs. Approximately 243
metres to the northwest of hole SGE19-308, hole SGE20-336
intersected two mineralized structures that returned 3.1 g/t gold
over 3.5 metres at 582 metres depth and 5.1 g/t gold over 4.5
metres at 593 metres depth. Approximately 350 metres to the
southeast, hole SGE20-340 intersected 2.8 g/t gold over 22.5 metres
at 520 metres depth (including 5.0 g/t gold over 7.0 metres at 518
metres depth) while approximately 722 metres to the southeast of
hole SGE20-340, hole SGE19-331 intersected two mineralized
structures that returned 3.5 g/t gold over 4.0 metres at 86 metres
depth and 3.0 g/t gold over 4.0 metres at 122 metres
depth.
Exploration drilling at Espiritu
Santo during the first quarter of 2020 continued to test the
extensions of the gold- and silver-rich structures discovered in
2019. Approximately 688 metres southwest of hole SGE19-331 in
the Amelia deposit, hole SGE19-324 intersected a structure in
Espiritu Santo grading 3.7 g/t
gold and 37 g/t silver over 3.0 metres at 38 metres depth and a
second structure grading 1.5 g/t gold and 424 g/t silver over 3.0
metres at 206 metres depth. Approximately 305 metres to the
southwest, hole SGE20-338 intersected 1.7 g/t gold and 3 g/t silver
over 9.0 metres at 64 metres depth. Approximately 208 metres
to the northwest of hole SGE19-338, hole SGE19-347 intersected 3.5
g/t gold and 7 g/t silver over 11.5 metres at 172 metres depth
(including 6.8 g/t gold and 13 g/t Ag over 5.0 metres at 174 metres
depth) and 2.2 g/t gold and 2 g/t silver over 4.0 metres at 191
metres depth.
The latest results at Espiritu
Santo demonstrate that shallow gold and silver
mineralization continues to the southwest of the deposit.
Additional drilling is planned at Espiritu Santo during 2020, as well as
metallurgical testing to determine potential gold and silver
recoveries, with the expectation that an initial mineral resource
will be declared there by year-end 2020.
As the geological understanding of the Trinidad Trend is
refined, the Company will use the updated geological models to
evaluate other parts of the property with similar high-grade gold
and silver potential.
The Company plans to continue the drilling campaign at
Santa Gertrudis in 2020, with
$10.4 million budgeted for work that
will include 25,000 metres of drilling focused on expanding the
current mineral resources and testing new targets.
With potential production scenarios that include using a
heap-leach facility to process lower grade mineralization and a
small mill facility to process higher-grade ore, the Company
believes that the Santa Gertrudis
project has the potential to be a similar size operation to its La
India operation.
About Agnico Eagle
Agnico Eagle is a senior Canadian gold mining company that
has produced precious metals since 1957. Its operating 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.
Further Information
For further information regarding Agnico Eagle, contact
Investor Relations at info@agnicoeagle.com or call
(416) 947-1212.
Note Regarding Certain Measures of
Performance
This news release discloses certain measures, including
"total cash costs per ounce", "all-in sustaining costs per ounce",
"minesite costs per tonne" and "adjusted net income" that are not
standardized measures under IFRS. These measures may not be
comparable to similar measures reported by other gold mining
companies. For a reconciliation of these measures to the most
directly comparable financial information reported in the
consolidated financial statements prepared in accordance with IFRS,
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 (without
deducting 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, 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 this measure 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 of gold produced on a
by-product basis are calculated as the aggregate of total cash
costs on a by-product basis, sustaining capital expenditures
(including capitalized exploration), general and administrative
expenses (including stock options), lease payments related to
sustaining assets and reclamation expenses, and then dividing by
the number of ounces 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 on a co-product basis are used, meaning no adjustment is
made for by-product metal revenues. All-in sustaining costs
per ounce is used to show the full cost of gold production from
current operations. Management is aware that these per ounce
measures of performance can be affected by fluctuations in foreign
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.
The World Gold Council ("WGC") is a non-regulatory market
development organization for the gold industry. Although the
WGC is not a mining industry regulatory organization, it has worked
closely with its member companies to develop relevant non-GAAP
measures. The Company follows the guidance on all-in
sustaining costs released by the WGC in November 2018.
Adoption of the all-in sustaining costs metric is voluntary and,
notwithstanding the Company's adoption of the WGC's guidance,
all-in sustaining costs per ounce of gold produced reported by the
Company may not be comparable to data reported by other gold mining
companies. The Company believes
that this measure provides helpful information about operating
performance. However, this non-GAAP measure should be
considered together with other data prepared in accordance with
IFRS as it is not necessarily indicative of operating costs or cash
flow measures prepared in accordance with IFRS.
Minesite costs per tonne are calculated by adjusting
production costs as recorded in the consolidated statements of
income (loss) for inventory production costs and other adjustments,
and then dividing by tonnes of ore processed. As the total
cash costs per ounce of gold produced can be affected by
fluctuations in by‑product metal prices
and foreign exchange rates, management believes that minesite costs
per tonne provide 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.
Adjusted net income is calculated by adjusting the net
income as recorded in the consolidated statements of income (loss)
for foreign currency translation gains and losses, mark-to-market
adjustments, non-recurring gains and losses and unrealized gains
and losses on financial instruments. Management uses adjusted
net income to evaluate the underlying operating performance of the
Company and to assist with the planning and forecasting of future
operating results. Management believes that adjusted net
income is a useful measure of performance because foreign currency
translation gains and losses, mark-to-market adjustments,
non-recurring gains and losses and unrealized gains and losses on
financial instruments do not reflect the underlying operating
performance of the Company and may not be indicative of future
operating results.
Management also performs sensitivity analyses in order to
quantify the effects of fluctuating foreign exchange rates and
metal prices. This news release also contains information as
to estimated future total cash costs per ounce and all-in
sustaining costs per ounce. The
estimates are based upon the total cash costs per ounce and all-in
sustaining costs per ounce 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 April 30, 2020. Certain
statements contained in this news release 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 news release,
the words "anticipate", "could", "estimate", "expect", "forecast",
"future", "plan", "possible", "potential", "will" and similar
expressions are intended to identify forward-looking
statements. Such statements include, without limitation:
statements regarding the Company's plans to resume operations
following temporary suspensions of operations related to the
COVID-19 pandemic, including the timing thereof and impacts on
anticipated gold production and costs, as well as expected
activities while such suspensions are ongoing; statements regarding
the impact of the COVID-19 pandemic and measures taken to reduce
the spread of COVID-19 on the Company's operations and overall
business; the Company's forward-looking production guidance,
including estimated ore grades, recovery rates, project timelines,
drilling results, metal production, life of mine estimates, total
cash costs per ounce, all-in sustaining costs per ounce, minesite
costs per tonne, other expenses, cash flows and free cash flow; the
estimated timing and conclusions of technical studies and
evaluations; the methods by which ore will be extracted or
processed; statements concerning the Company's expansion plans at
Kittila, Meliadine Phase 2 and Amaruq Phase 2, and the Company's
ramp up of activities at Meliadine and Amaruq, including the
timing, funding, completion and commissioning thereof; statements
concerning other expansion projects, recovery rates, mill
throughput, optimization and projected exploration, including costs
and other estimates upon which such projections are based;
statements regarding timing and amounts of capital expenditures,
other expenditures and other cash needs, and expectations as to the
funding thereof; estimates of future mineral reserves, mineral
resources, mineral production, optimization efforts and sales; 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 the effect of drill results on future mineral
reserves and mineral resources; statements regarding the Company's
ability to obtain the necessary permits and authorizations in
connection with its proposed or current exploration, development
and mining operations and the anticipated timing thereof;
statements regarding anticipated future exploration; the
anticipated timing of events with respect to the Company's mine
sites; statements regarding the sufficiency of the Company's cash
resources; statements regarding repayments of the Company's
unsecured revolving bank credit facility; future dividend amounts
and payment dates; and statements 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 news release and are subject to certain risks,
uncertainties and assumptions, and undue reliance should not be
placed on such statements. 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, 2019
filed with Canadian securities regulators and that are included in
its Annual Report on Form 40-F for the year ended December 31, 2019 ("Form 40-F") filed with the
U.S. Securities and Exchange Commission (the "SEC") as well as: the
return to normal operations as of July 1,
2020 at all of the Company's mine sites following measures
being put in place in response to the COVID-19 pandemic; that
governments, the Company or others do not take additional measures
in response to the COVID-19 pandemic or otherwise that,
individually or in the aggregate, materially affect the Company's
ability to operate its business; that cautionary measures taken in
connection with the COVID-19 pandemic do not affect productivity;
that measures taken relating to, or other effects of, the COVID-19
pandemic do not affect the Company's ability to obtain necessary
supplies and deliver them to its mine sites; that there are no
significant disruptions affecting operations; that production,
permitting, development, expansion and the ramp up of operations at
each of Agnico Eagle's properties proceeds on a basis consistent
with current expectations and plans; that the relevant metal
prices, foreign 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 seismic activity at the
Company's operations at LaRonde and other properties is as expected
by the Company; 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. Such risks include, but are not
limited to: the extent and manner to which COVID-19, and measures
taken by governments, the Company or others to attempt to reduce
the spread of COVID-19, may affect the Company, whether directly or
through effects on employee health, workforce productivity and
availability (including the ability to transport personnel to the
Meadowbank Complex and Meliadine mine which operate as
fly-in/fly-out camps), travel restrictions, contractor
availability, supply availability, ability to sell or deliver gold
dore bars or concentrate, availability of insurance and the cost
thereof, the ability to procure inputs required for the Company's
operations and projects or other aspects of the Company's business;
uncertainties with respect to the effect on the global economy
associated with the COVID-19 pandemic and measures taken to reduce
the spread of COVID-19, any of which could continue to negatively
affect financial markets, including the trading price of the
Company's shares and the price of gold, and could adversely affect
the Company's ability to raise capital; 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 development, capital
expenditures and other costs; foreign exchange rate fluctuations;
financing of additional capital requirements; cost of exploration
and development programs; seismic activity at the Company's
operations, including the LaRonde Complex; mining risks; community
protests, including by First Nations groups; 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 news release, 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.
Notes to Investors Regarding the Use of Mineral
Resources
The mineral reserve and mineral resource estimates
contained in this news release have been prepared in accordance
with the Canadian securities administrators' (the "CSA") National
Instrument 43-101 Standards of Disclosure for Mineral
Projects ("NI 43-101"). These standards are similar to
those used by SEC Industry Guide No. 7, as interpreted by the SEC
staff. However, the definitions in NI 43-101 differ in
certain respects from those under SEC Industry Guide 7.
Accordingly, mineral reserve and mineral resource information
contained in this news release may not be comparable to similar
information disclosed by United
States companies. Under the SEC's Industry Guide 7,
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
reserve determination is made.
For United States
reporting purposes, the SEC has adopted amendments to its
disclosure rules (the "SEC Modernization Rules") to modernize the
mining property disclosure requirements for issuers whose
securities are registered with the SEC under the United States
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
which became effective February 25,
2019. The SEC Modernization Rules more closely align the
SEC's disclosure requirements and policies for mining properties
with current industry and global regulatory practices and
standards, including NI 43-101, and replace the historical property
disclosure requirements for mining registrants that were included
in SEC Industry Guide 7. Issuers must begin to comply with
the SEC Modernization Rules in their first fiscal year beginning on
or after January 1, 2021, though
Canadian issuers that report in the
United States using the Multijurisdictional Disclosure
System ("MJDS") may still use NI 43-101 rather than the SEC
Modernization Rules when using the SEC's MJDS registration
statement and annual report forms. SEC Industry Guide 7 will
remain effective until all issuers are required to comply with the
SEC Modernization Rules, at which time SEC Industry Guide 7 will be
rescinded.
As a result of the adoption of the SEC Modernization
Rules, the SEC now recognizes estimates of "measured mineral
resources", "indicated mineral resources" and "inferred mineral
resources." In addition, the SEC has amended definitions of
"proven mineral reserves" and "probable mineral reserves" in the
SEC Modernization Rules, with definitions that are substantially
similar to those used in NI 43-101.
United States investors
are cautioned that while the SEC now recognizes "measured mineral
resources", "indicated mineral resources" and "inferred mineral
resources", investors should not assume that any part or all of the
mineral deposits in these categories will ever be converted into a
higher category of mineral resources or into mineral
reserves. These terms have a great amount of uncertainty as
to their economic and legal feasibility. Under Canadian
regulations, estimates of inferred mineral resources may not form
the basis of feasibility or pre-feasibility studies, except in
limited circumstances. Investors are cautioned not to
assume that any "measured mineral resources", "indicated mineral
resources", or "inferred mineral resources" that the Company
reports in this news release are or will be economically or legally
mineable.
Further, "inferred mineral resources" have a great amount of
uncertainty as to their existence and as to their economic and
legal feasibility. It cannot be assumed that any part or all
of an inferred mineral resource will ever be upgraded to a higher
category.
The mineral reserve and mineral resource data set out in this news
release are estimates, and no assurance can be given that the
anticipated tonnages and grades will be achieved or that the
indicated level of recovery will be realized. The Company
does not include equivalent gold ounces for by-product metals
contained in mineral reserves in its calculation of contained
ounces and mineral reserves are not reported as a subset of mineral
resources.
Scientific and Technical Information
The scientific and technical information contained in this
news release relating to Quebec
operations has been approved by Daniel Paré, P.Eng., Vice-President
Operations – Eastern Canada;
relating to Nunavut operations has
been approved by Dominique Girard, Eng., Vice-President, Nunavut
Operations; relating to Finland
operations has been approved by Francis Brunet, Eng., Corporate
Director, Business Strategy; relating to Southern Business
operations has been approved by Marc Legault, Eng., Senior Vice
President, Operations – U.S.A.
& Latin America; and relating
to exploration has been approved by Guy Gosselin, Eng. and P.Geo.,
Senior Vice-President, Exploration, each of whom 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
Dyane Duquette, P.Geo., Corporate
Director, Reserves Development of the Company; relating to mineral
reserves and mineral resources at the Canadian Malartic mine and
other Partnership projects such as Odyssey, East Malartic and East Gouldie projects, has
been approved by Sylvie Lampron, Eng., Senior Project Mine Engineer
at Canadian Malartic Corporation
(for engineering) and Pascal
Lehouiller, P.Geo., Senior Resource Geologist at Canadian
Malartic Corporation (for geology),
each of whom is a "Qualified Person" for the purposes of NI
43-101.
Assumptions used for the December 31, 2019 mineral reserves estimate at
all mines and advanced projects reported by the
Company
|
Metal
prices
|
Exchange
rates
|
|
Gold
(US$/oz)
|
Silver
(US$/oz)
|
Copper
(US$/lb)
|
Zinc
(US$/lb)
|
C$ per
US$1.00
|
Mexican
peso per
US$1.00
|
US$ per
€1.00
|
Long-life operations
and
projects
|
$1,200
|
$15.50
|
$2.50
|
$1.00
|
$1.25
|
MXP17.00
|
$1.15
|
Short-life operations
–
Creston Mascota
(Bravo) and Sinter
satellite operations
at Pinos Altos
|
$1.30
|
MXP18.00
|
Not
applicable
|
Upper Beaver*,
Canadian Malartic
mine**
|
$1,200
|
Not
applicable
|
$2.75
|
Not
applicable
|
$1.25
|
Not
applicable
|
Not
applicable
|
|
*The Upper Beaver project has a net smelter return
(NSR) cut-off value of C$125/tonne
|
**The Canadian Malartic mine uses a cut-off grade
between 0.40 g/t and 0.43 g/t gold (depending on the
deposit)
|
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. The mineral reserves presented in this news
release are separate from and not a portion of the mineral
resources.
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.
Additional Information
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), as well as other information, 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,
MD&A and Form 40-F.
Property/Project name and
location
|
Date of most recent Technical Report
(NI 43-101) filed on SEDAR
|
LaRonde, LaRonde Zone
5 & Ellison, Quebec, Canada
|
March 23,
2005
|
Canadian Malartic,
Quebec, Canada
|
June 16,
2014
|
Kittila, Kuotko and
Kylmakangas, Finland
|
March 4,
2010
|
Meadowbank Gold
Complex including the Amaruq Satellite Mine Development, Nunavut,
Canada
|
February 14,
2018
|
Goldex, Quebec,
Canada
|
October 14,
2012
|
Meliadine, Nunavut,
Canada
|
February 11,
2015
|
Hammond Reef,
Ontario, Canada
|
July 2,
2013
|
Upper Beaver
(Kirkland Lake property), Ontario, Canada
|
November 5,
2012
|
Pinos Altos and
Creston Mascota, Mexico
|
March 25,
2009
|
La India,
Mexico
|
August 31,
2012
|
AGNICO EAGLE MINES LIMITED
|
SUMMARY OF OPERATIONS KEY PERFORMANCE
INDICATORS
|
(thousands of United States dollars, except
where noted)
|
(Unaudited)
|
|
|
|
Three Months Ended
March 31,
|
|
2020
|
|
2019
|
|
|
|
|
Operating margin(i) by
mine:
|
|
|
|
Northern
Business
|
|
|
|
LaRonde
mine
|
$
|
45,194
|
|
$
|
65,202
|
LaRonde Zone 5
mine
|
10,851
|
|
5,079
|
Lapa mine
|
—
|
|
2,033
|
Goldex
mine
|
35,160
|
|
24,964
|
Meadowbank
Complex
|
3,813
|
|
19,030
|
Meliadine
mine
|
57,226
|
|
—
|
Canadian Malartic
mine(ii)
|
57,046
|
|
54,629
|
Kittila
mine
|
41,910
|
|
25,239
|
Southern
Business
|
|
|
|
Pinos Altos
mine
|
28,057
|
|
34,099
|
Creston Mascota
mine
|
17,591
|
|
11,115
|
La India
mine
|
18,928
|
|
13,940
|
Total operating
margin(i)
|
315,776
|
|
255,330
|
Amortization of
property, plant and mine development
|
153,509
|
|
128,242
|
Exploration,
corporate and other
|
138,936
|
|
74.567
|
Income before income
and mining taxes
|
23,331
|
|
52,521
|
Income and mining
taxes expense
|
44,896
|
|
15,489
|
Net (loss) income for
the period
|
$
|
(21,565)
|
|
$
|
37,032
|
Net (loss)
income per share — basic and diluted
|
$
|
(0.09)
|
|
$
|
0.16
|
|
|
|
|
Cash flows:
|
|
|
|
Cash provided by
operating activities
|
$
|
163,358
|
|
$
|
148,690
|
Cash used in
investing activities
|
$
|
(178,166)
|
|
$
|
(227,606)
|
Cash provided by
(used in) financing activities
|
$
|
954,830
|
|
$
|
(33,454)
|
|
|
|
|
Realized prices (US$):
|
|
|
|
Gold
(per ounce)
|
$
|
1,579
|
|
$
|
1,303
|
Silver
(per ounce)
|
$
|
15.74
|
|
$
|
15.65
|
Zinc
(per tonne)
|
$
|
2,217
|
|
$
|
2,673
|
Copper
(per tonne)
|
$
|
5,410
|
|
$
|
6,087
|
AGNICO EAGLE MINES LIMITED
|
SUMMARY OF OPERATIONS KEY PERFORMANCE
INDICATORS
|
(thousands of United States dollars, except
where noted)
|
(Unaudited)
|
|
|
|
Three Months Ended
March 31,
|
|
2020
|
|
2019
|
|
|
|
|
Payable
production(iii):
|
|
|
|
Gold
(ounces):
|
|
|
|
Northern
Business
|
|
|
|
LaRonde
mine
|
55,223
|
|
77,433
|
LaRonde Zone 5
mine
|
14,464
|
|
12,988
|
Lapa mine
|
—
|
|
5
|
Goldex
mine
|
33,883
|
|
34,454
|
Meadowbank
Complex
|
49,341
|
|
43,502
|
Meliadine
mine
|
69,975
|
|
17,582
|
Canadian Malartic
mine(ii)
|
64,763
|
|
83,670
|
Kittila
mine
|
49,297
|
|
49,336
|
Southern
Business
|
|
|
|
Pinos Altos
mine
|
33,310
|
|
42,730
|
Creston Mascota
mine
|
18,184
|
|
13,529
|
La India
mine
|
22,926
|
|
22,988
|
Total gold
(ounces)
|
411,366
|
|
398,217
|
|
|
|
|
Silver (thousands of
ounces):
|
|
|
|
Northern
Business
|
|
|
|
LaRonde
mine
|
160
|
|
197
|
LaRonde Zone 5
mine
|
3
|
|
2
|
Lapa mine
|
—
|
|
1
|
Goldex
mine
|
1
|
|
—
|
Meadowbank
Complex
|
20
|
|
22
|
Meliadine
mine
|
6
|
|
1
|
Canadian Malartic
mine(ii)
|
97
|
|
111
|
Kittila
mine
|
3
|
|
4
|
Southern
Business
|
|
|
|
Pinos Altos
mine
|
517
|
|
562
|
Creston Mascota
mine
|
279
|
|
133
|
La India
mine
|
20
|
|
46
|
Total silver
(thousands of ounces)
|
1,106
|
|
1,079
|
|
|
|
|
Zinc
(tonnes)
|
510
|
|
2,834
|
Copper
(tonnes)
|
749
|
|
808
|
AGNICO EAGLE MINES LIMITED
|
SUMMARY OF OPERATIONS KEY PERFORMANCE
INDICATORS
|
(thousands of United States dollars, except
where noted)
|
(Unaudited)
|
|
|
|
Three Months Ended
March 31,
|
|
2020
|
|
2019
|
|
|
|
|
Payable metal sold:
|
|
|
|
Gold
(ounces):
|
|
|
|
Northern
Business
|
|
|
|
LaRonde
mine
|
38,273
|
|
89,857
|
LaRonde Zone 5
mine
|
14,258
|
|
8,222
|
Lapa mine
|
—
|
|
3,777
|
Goldex
mine
|
34,740
|
|
33,811
|
Meadowbank
Complex
|
58,581
|
|
46,668
|
Meliadine
mine
|
70,979
|
|
3,210
|
Canadian Malartic
mine(ii)(iv)
|
64,900
|
|
74,846
|
Kittila
mine
|
54,250
|
|
49,205
|
Southern
Business
|
|
|
|
Pinos Altos
mine
|
34,997
|
|
42,455
|
Creston Mascota
mine
|
16,408
|
|
14,610
|
La India
mine
|
23,497
|
|
24,309
|
Total gold
(ounces)
|
410,883
|
|
390,970
|
|
|
|
|
Silver (thousands of
ounces):
|
|
|
|
Northern
Business
|
|
|
|
LaRonde
mine
|
175
|
|
186
|
LaRonde Zone 5
mine
|
2
|
|
2
|
Lapa mine
|
—
|
|
2
|
Meadowbank
Complex
|
22
|
|
23
|
Meliadine
mine
|
8
|
|
—
|
Canadian Malartic
mine(ii)(iv)
|
111
|
|
94
|
Kittila
mine
|
3
|
|
4
|
Southern
Business
|
|
|
|
Pinos Altos
mine
|
560
|
|
560
|
Creston Mascota
mine
|
263
|
|
140
|
La India
mine
|
22
|
|
54
|
Total silver
(thousands of ounces):
|
1,166
|
|
1,065
|
|
|
|
|
Zinc
(tonnes)
|
1,658
|
|
1,586
|
Copper
(tonnes)
|
754
|
|
764
|
AGNICO EAGLE MINES LIMITED
|
SUMMARY OF OPERATIONS KEY PERFORMANCE
INDICATORS
|
(thousands of United States dollars, except
where noted)
|
(Unaudited)
|
|
|
|
Three Months Ended
March 31,
|
|
2020
|
|
2019
|
|
|
|
|
Total cash costs per ounce of gold
produced — co-product basis
(US$)(v):
|
|
|
|
Northern
Business
|
|
|
|
LaRonde
mine
|
$
|
806
|
|
$
|
705
|
LaRonde Zone 5
mine
|
847
|
|
677
|
Goldex
mine
|
558
|
|
558
|
Meadowbank
Complex
|
1,650
|
|
918
|
Meliadine
mine
|
801
|
|
—
|
Canadian Malartic
mine(ii)(vi)
|
763
|
|
590
|
Kittila
mine
|
811
|
|
777
|
Southern
Business
|
|
|
|
Pinos Altos
mine
|
990
|
|
701
|
Creston Mascota
mine
|
643
|
|
697
|
La India
mine
|
793
|
|
793
|
|
|
|
|
Weighted average
total cash costs per ounce of gold produced
|
$
|
889
|
|
$
|
704
|
|
|
|
|
Total cash costs per ounce of gold
produced — by-product basis
(US$)(v):
|
|
|
|
Northern
Business
|
|
|
|
LaRonde
mine
|
$
|
682
|
|
$
|
488
|
LaRonde Zone 5
mine
|
845
|
|
674
|
Goldex
mine
|
558
|
|
558
|
Meadowbank
Complex
|
1,644
|
|
910
|
Meliadine
mine
|
799
|
|
—
|
Canadian Malartic
mine(ii)(vi)
|
734
|
|
572
|
Kittila
mine
|
810
|
|
775
|
Southern
Business
|
|
|
|
Pinos Altos
mine
|
747
|
|
494
|
Creston Mascota
mine
|
423
|
|
525
|
La India
mine
|
778
|
|
759
|
|
|
|
|
Weighted average
total cash costs per ounce of gold produced
|
$
|
836
|
|
$
|
623
|
|
|
|
|
Notes:
(i) Operating margin is calculated as revenues from mining
operations less production costs.
(ii) The information set out in this table reflects the Company's
50% interest in the Canadian Malartic mine.
(iii) 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. Payable production for the
three months ended March 31, 2020 includes 2,974 gold ounces at the
Canadian Malartic mine which were produced during this period as
commercial production at the Barnat deposit has not yet been
achieved. Payable production for the three months ended March 31,
2019 includes 17,582 gold ounces, which were produced prior to the
achievement of commercial production at the Meliadine mine and 5
ounces of payable gold production at the Lapa mine, which were
credited to the Company as a result of final refining
reconciliations following the cessation of mining and processing
operations at the Lapa mine on December 31,
2018.
(iv) The Canadian Malartic mine's payable metal sold excludes the
5.0% net smelter return royalty granted to Osisko Gold Royalties
Ltd., in connection with the Company's acquisition of its 50%
interest in the Canadian Malartic mine.
(v) The 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. 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 (without deducting 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
condensed interim consolidated statements of (loss) income for
by-product revenues, 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. 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 analysis in order to quantify the effects
of fluctuating metal prices and exchange rates.
(vi) The Canadian Malartic mine's cost calculations per ounce of
gold produced for the three months ended March 31, 2020 exclude
2,974 ounces of payable gold production which were produced during
this period as commercial production at the Barnat deposit has not
yet been achieved.
|
AGNICO EAGLE MINES LIMITED
|
CONSOLIDATED BALANCE SHEETS
|
(thousands of United States dollars, except share
amounts, IFRS basis)
|
(Unaudited)
|
|
|
|
|
|
As at
March 31, 2020
|
|
As at
December 31, 2019
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
1,255,273
|
|
$
|
321,897
|
Short-term
investments
|
8,149
|
|
6,005
|
Trade
receivables
|
7,038
|
|
8,320
|
Inventories
|
558,042
|
|
580,068
|
Income taxes
recoverable
|
248
|
|
2,281
|
Equity
securities
|
76,214
|
|
86,252
|
Fair value of
derivative financial instruments
|
9,894
|
|
9,519
|
Other current
assets
|
148,924
|
|
179,218
|
Total current
assets
|
2,063,782
|
|
1,193,560
|
Non-current
assets:
|
|
|
|
Goodwill
|
407,792
|
|
407,792
|
Property, plant and
mine development
|
7,024,966
|
|
7,003,665
|
Other
assets
|
199,390
|
|
184,868
|
Total
assets
|
$
|
9,695,930
|
|
$
|
8,789,885
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable and
accrued liabilities
|
$
|
274,385
|
|
$
|
345,572
|
Reclamation
provision
|
14,942
|
|
12,455
|
Interest
payable
|
35,595
|
|
16,752
|
Income taxes
payable
|
11,931
|
|
26,166
|
Lease
obligations
|
13,567
|
|
14,693
|
Current portion of
long-term debt
|
360,000
|
|
360,000
|
Fair value of
derivative financial instruments
|
36,956
|
|
—
|
Total current
liabilities
|
747,376
|
|
775,638
|
Non-current
liabilities:
|
|
|
|
Long-term
debt
|
2,351,907
|
|
1,364,108
|
Lease
obligations
|
95,050
|
|
102,135
|
Reclamation
provision
|
435,981
|
|
427,346
|
Deferred income and
mining tax liabilities
|
972,814
|
|
948,142
|
Other
liabilities
|
52,204
|
|
61,002
|
Total
liabilities
|
4,655,332
|
|
3,678,371
|
|
|
|
|
EQUITY
|
|
|
|
Common
shares:
|
|
|
|
Outstanding —
241,227,570 common shares issued, less 895,084 shares held in
trust
|
5,611,517
|
|
5,589,352
|
Stock
options
|
180,173
|
|
180,160
|
Contributed
surplus
|
37,254
|
|
37,254
|
Deficit
|
(716,902)
|
|
(647,330)
|
Other
reserves
|
(71,444)
|
|
(47,922)
|
Total
equity
|
5,040,598
|
|
5,111,514
|
Total liabilities and
equity
|
$
|
9,695,930
|
|
$
|
8,789,885
|
AGNICO EAGLE MINES LIMITED
|
CONSOLIDATED STATEMENTS OF (LOSS)
INCOME
|
(thousands of United States dollars, except per
share amounts, IFRS basis)
|
(Unaudited)
|
|
|
|
|
|
Three Months Ended
|
|
March 31,
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
REVENUES
|
|
|
|
Revenues from mining
operations
|
$
|
671,878
|
|
$
|
532,223
|
|
|
|
|
COSTS AND EXPENSES
|
|
|
|
Production(i)
|
356,102
|
|
276,893
|
Exploration and
corporate development
|
29,643
|
|
25,450
|
Amortization of
property, plant and mine development
|
153,509
|
|
128,242
|
General and
administrative
|
30,543
|
|
29,093
|
Finance
costs
|
27,762
|
|
25,766
|
Loss (gain) on
derivative financial instruments
|
42,602
|
|
(9,816)
|
Foreign currency
translation loss
|
3,846
|
|
2,206
|
Other
expenses
|
4,540
|
|
1,868
|
Income before income
and mining taxes
|
23,331
|
|
52,521
|
Income and mining
taxes expense
|
44,896
|
|
15,489
|
Net (loss) income for
the period
|
$
|
(21,565)
|
|
$
|
37,032
|
|
|
|
|
Net (loss) income per
share - basic and diluted
|
$
|
(0.09)
|
|
$
|
0.16
|
|
|
|
|
Weighted average
number of common shares outstanding (in thousands):
|
|
|
|
Basic
|
240,222
|
|
234,570
|
Diluted
|
240,222
|
|
236,218
|
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
|
|
March
31,
|
|
2020
|
|
2019
|
OPERATING
ACTIVITIES
|
|
|
|
Net (loss) income for
the period
|
$
|
(21,565)
|
|
|
$
|
37,032
|
|
Add (deduct)
adjusting items:
|
|
|
|
Amortization of
property, plant and mine development
|
153,509
|
|
|
128,242
|
|
Deferred income and
mining taxes
|
24,732
|
|
|
(5,034)
|
|
Unrealized loss (gain)
on currency and commodity derivatives
|
38,432
|
|
|
(9,328)
|
|
Stock-based
compensation
|
15,018
|
|
|
14,875
|
|
Foreign currency
translation loss
|
3,846
|
|
|
2,206
|
|
Other
|
(9,185)
|
|
|
2,845
|
|
Changes in non-cash
working capital balances:
|
|
|
|
Trade
receivables
|
1,282
|
|
|
(208)
|
|
Income
taxes
|
(22,130)
|
|
|
(17,344)
|
|
Inventories
|
7,677
|
|
|
16,212
|
|
Other current
assets
|
11,923
|
|
|
1,124
|
|
Accounts payable and
accrued liabilities
|
(58,690)
|
|
|
(38,033)
|
|
Interest
payable
|
18,509
|
|
|
16,101
|
|
Cash provided by
operating activities
|
163,358
|
|
|
148,690
|
|
|
|
|
|
INVESTING
ACTIVITIES
|
|
|
|
Additions to
property, plant and mine development
|
(168,811)
|
|
|
(203,353)
|
|
Net proceeds from
sale of property, plant and mine development
|
101
|
|
|
265
|
|
Net purchases of
short-term investments
|
(2,144)
|
|
|
(426)
|
|
Net proceeds from
sale of equity securities and other investments
|
8,759
|
|
|
908
|
|
Purchases of equity
securities and other investments
|
(16,071)
|
|
|
(25,000)
|
|
Cash used in
investing activities
|
(178,166)
|
|
|
(227,606)
|
|
|
|
|
|
FINANCING
ACTIVITIES
|
|
|
|
Dividends
paid
|
(37,494)
|
|
|
(25,478)
|
|
Repayment of lease
obligations
|
(3,729)
|
|
|
(3,378)
|
|
Proceeds from Credit
Facility
|
1,000,000
|
|
|
—
|
|
Repurchase of common
shares for stock-based compensation plans
|
(35,930)
|
|
|
(24,070)
|
|
Proceeds on exercise
of stock options
|
28,074
|
|
|
15,547
|
|
Common shares
issued
|
3,909
|
|
|
3,925
|
|
Cash provided by
(used in) financing activities
|
954,830
|
|
|
(33,454)
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
(6,646)
|
|
|
582
|
|
Net increase
(decrease) in cash and cash equivalents during the
period
|
933,376
|
|
|
(111,788)
|
|
Cash and cash
equivalents, beginning of period
|
321,897
|
|
|
301,826
|
|
Cash and cash
equivalents, end of period
|
$
|
1,255,273
|
|
|
$
|
190,038
|
|
|
|
|
|
SUPPLEMENTAL CASH
FLOW INFORMATION
|
|
|
|
Interest
paid
|
$
|
7,232
|
|
|
$
|
7,413
|
|
Income and mining
taxes paid
|
$
|
46,127
|
|
|
$
|
34,951
|
|
|
|
|
|
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
March 31, 2020
|
|
Three Months Ended
March 31, 2019
|
(thousands of United States
dollars)
|
|
|
|
|
|
|
|
|
LaRonde
mine
|
|
$
|
20,636
|
|
|
$
|
61,803
|
|
LaRonde Zone 5
mine
|
|
11,792
|
|
|
5,675
|
|
Lapa mine
|
|
—
|
|
|
2,844
|
|
Goldex
mine
|
|
19,958
|
|
|
19,704
|
|
Meadowbank
complex
|
|
89,366
|
|
|
41,905
|
|
Meliadine
mine
|
|
54,255
|
|
|
—
|
|
Canadian Malartic
mine(i)
|
|
48,656
|
|
|
49,759
|
|
Kittila
mine
|
|
43,671
|
|
|
38,600
|
|
Pinos Altos
mine
|
|
35,881
|
|
|
29,658
|
|
Creston Mascota
mine
|
|
11,837
|
|
|
9,836
|
|
La India
mine
|
|
20,050
|
|
|
17,739
|
|
Production costs per
the condensed interim consolidated
statements of (loss) income
|
|
$
|
356,102
|
|
|
$
|
276,893
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Production Costs to Total Cash
Costs per Ounce of Gold Produced (ii) by Mine and
Reconciliation of Production Costs to Minesite Costs per
Tonne(iii) by Mine
|
(thousands of
United States dollars, except as noted)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LaRonde Mine
|
|
Three Months Ended
|
|
Three Months Ended
|
Per Ounce of Gold
Produced(ii)
|
|
March 31, 2020
|
|
March 31, 2019
|
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
Gold production
(ounces)
|
|
|
|
55,223
|
|
|
|
|
77,433
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
20,636
|
|
|
$
|
374
|
|
|
$
|
61,803
|
|
|
$
|
798
|
|
Inventory and other
adjustments(iv)
|
|
23,856
|
|
|
432
|
|
|
(7,212)
|
|
|
(93)
|
|
Cash operating costs
(co-product basis)
|
|
$
|
44,492
|
|
|
$
|
806
|
|
|
$
|
54,591
|
|
|
$
|
705
|
|
By-product metal
revenues
|
|
(6,828)
|
|
|
(124)
|
|
|
(16,792)
|
|
|
(217)
|
|
Cash operating costs
(by-product basis)
|
|
$
|
37,664
|
|
|
$
|
682
|
|
|
$
|
37,799
|
|
|
$
|
488
|
|
|
|
|
|
|
|
|
|
|
LaRonde Mine
|
|
Three Months Ended
|
|
Three Months Ended
|
Per Tonne(iii)
|
|
March 31, 2020
|
|
March 31, 2019
|
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
Tonnes of ore milled
(thousands of tonnes)
|
|
|
|
412
|
|
|
|
|
547
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
20,636
|
|
|
$
|
50
|
|
|
$
|
61,803
|
|
|
$
|
113
|
|
Production costs
(C$)
|
|
C$
|
25,831
|
|
|
C$
|
63
|
|
|
C$
|
82,055
|
|
|
C$
|
150
|
|
Inventory and other
adjustments (C$)(v)
|
|
28,591
|
|
|
69
|
|
|
(17,655)
|
|
|
(32)
|
|
Minesite operating
costs (C$)
|
|
C$
|
54,422
|
|
|
C$
|
132
|
|
|
C$
|
64,400
|
|
|
C$
|
118
|
|
|
|
|
|
|
|
|
|
|
LaRonde Zone 5 Mine
|
|
Three Months Ended
|
|
Three Months Ended
|
Per Ounce of Gold
Produced(ii)
|
|
March 31, 2020
|
|
March 31, 2019
|
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
Gold production
(ounces)
|
|
|
|
14,464
|
|
|
|
|
12,988
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
11,792
|
|
|
$
|
815
|
|
|
$
|
5,675
|
|
|
$
|
437
|
|
Inventory and other
adjustments(iv)
|
|
462
|
|
|
32
|
|
|
3,113
|
|
|
240
|
|
Cash operating costs
(co-product basis)
|
|
$
|
12,254
|
|
|
$
|
847
|
|
|
$
|
8,788
|
|
|
$
|
677
|
|
By-product metal
revenues
|
|
(33)
|
|
|
(2)
|
|
|
(34)
|
|
|
(3)
|
|
Cash operating costs
(by-product basis)
|
|
$
|
12,221
|
|
|
$
|
845
|
|
|
$
|
8,754
|
|
|
$
|
674
|
|
|
|
|
|
|
|
|
|
|
LaRonde Zone 5 Mine
|
|
Three Months Ended
|
|
Three Months Ended
|
Per Tonne(iii)
|
|
March 31, 2020
|
|
March 31, 2019
|
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
Tonnes of ore milled
(thousands of tonnes)
|
|
|
|
245
|
|
|
|
|
181
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
11,792
|
|
|
$
|
48
|
|
|
$
|
5,675
|
|
|
$
|
31
|
|
Production costs
(C$)
|
|
C$
|
15,803
|
|
|
C$
|
65
|
|
|
C$
|
7,513
|
|
|
C$
|
42
|
|
Inventory and other
adjustments (C$)(v)
|
|
660
|
|
|
2
|
|
|
4,158
|
|
|
22
|
|
Minesite operating
costs (C$)
|
|
C$
|
16,463
|
|
|
C$
|
67
|
|
|
C$
|
11,671
|
|
|
C$
|
64
|
|
|
|
|
|
|
|
|
|
|
Goldex Mine
|
|
Three Months Ended
|
|
Three Months Ended
|
Per Ounce of Gold
Produced(ii)
|
|
March 31, 2020
|
|
March 31, 2019
|
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
Gold production
(ounces)
|
|
|
|
33,883
|
|
|
|
|
34,454
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
19,958
|
|
|
$
|
589
|
|
|
$
|
19,074
|
|
|
$
|
554
|
|
Inventory and other
adjustments(iv)
|
|
(1,063)
|
|
|
(31)
|
|
|
149
|
|
|
4
|
|
Cash operating costs
(co-product basis)
|
|
$
|
18,895
|
|
|
$
|
558
|
|
|
$
|
19,223
|
|
|
$
|
558
|
|
By-product metal
revenues
|
|
—
|
|
|
—
|
|
|
(6)
|
|
|
—
|
|
Cash operating costs
(by-product basis)
|
|
$
|
18,895
|
|
|
$
|
558
|
|
|
$
|
19,217
|
|
|
$
|
558
|
|
|
|
|
|
|
|
|
|
|
Goldex Mine
|
|
Three Months Ended
|
|
Three Months Ended
|
Per Tonne(iii)
|
|
March 31, 2020
|
|
March 31, 2019
|
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
Tonnes of ore milled
(thousands of tonnes)
|
|
|
|
657
|
|
|
|
|
655
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
19,958
|
|
|
$
|
30
|
|
|
$
|
19,074
|
|
|
$
|
29
|
|
Production costs
(C$)
|
|
C$
|
26,239
|
|
|
C$
|
40
|
|
|
C$
|
25,315
|
|
|
C$
|
39
|
|
Inventory and other
adjustments (C$)(v)
|
|
(932)
|
|
|
(1)
|
|
|
245
|
|
|
—
|
|
Minesite operating
costs (C$)
|
|
C$
|
25,307
|
|
|
C$
|
39
|
|
|
C$
|
25,560
|
|
|
C$
|
39
|
|
|
|
|
|
|
|
|
|
|
Meadowbank Complex
|
|
Three Months Ended
|
|
Three Months Ended
|
Per Ounce of Gold
Produced(ii)
|
|
March 31, 2020
|
|
March 31, 2019
|
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
Gold production
(ounces)
|
|
|
|
49,341
|
|
|
|
|
43,502
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
89,366
|
|
|
$
|
1,811
|
|
|
$
|
41,905
|
|
|
$
|
963
|
|
Inventory and other
adjustments(iv)
|
|
(7,944)
|
|
|
(161)
|
|
|
(1,965)
|
|
|
(45)
|
|
Cash operating costs
(co-product basis)
|
|
$
|
81,422
|
|
|
$
|
1,650
|
|
|
$
|
39,940
|
|
|
$
|
918
|
|
By-product metal
revenues
|
|
(301)
|
|
|
(6)
|
|
|
(353)
|
|
|
(8)
|
|
Cash operating costs
(by-product basis)
|
|
$
|
81,121
|
|
|
$
|
1,644
|
|
|
$
|
39,587
|
|
|
$
|
910
|
|
|
|
|
|
|
|
|
|
|
Meadowbank Complex
|
|
Three Months Ended
|
|
Three Months Ended
|
Per Tonne(iii)
|
|
March 31, 2020
|
|
March 31, 2019
|
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
Tonnes of ore milled
(thousands of tonnes)
|
|
|
|
579
|
|
|
|
|
628
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
89,366
|
|
|
$
|
154
|
|
|
$
|
41,905
|
|
|
$
|
67
|
|
Production costs
(C$)
|
|
C$
|
119,505
|
|
|
C$
|
206
|
|
|
C$
|
55,396
|
|
|
C$
|
88
|
|
Inventory and other
adjustments (C$)(v)
|
|
(11,925)
|
|
|
(20)
|
|
|
(1,104)
|
|
|
(2)
|
|
Minesite operating
costs (C$)
|
|
C$
|
107,580
|
|
|
C$
|
186
|
|
|
C$
|
54,292
|
|
|
C$
|
86
|
|
|
|
|
|
|
|
|
|
|
Meliadine Mine
|
|
Three Months Ended
|
|
Three Months Ended
|
Per Ounce of Gold
Produced(ii)
|
|
March 31, 2020
|
|
March 31, 2019
|
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
Gold production
(ounces)
|
|
|
|
69,975
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
54,255
|
|
|
$
|
775
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Inventory and other
adjustments(iv)
|
|
1,787
|
|
|
26
|
|
|
—
|
|
|
—
|
|
Cash operating costs
(co-product basis)
|
|
$
|
56,042
|
|
|
$
|
801
|
|
|
$
|
—
|
|
|
$
|
—
|
|
By-product metal
revenues
|
|
(112)
|
|
|
(2)
|
|
|
—
|
|
|
—
|
|
Cash operating costs
(by-product basis)
|
|
$
|
55,930
|
|
|
$
|
799
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
Meliadine Mine
|
|
Three Months Ended
|
|
Three Months Ended
|
Per Tonne(iii)
|
|
March 31, 2020
|
|
March 31, 2019
|
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
Tonnes of ore milled
(thousands of tonnes)
|
|
|
|
307
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
54,255
|
|
|
$
|
177
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Production costs
(C$)
|
|
C$
|
71,927
|
|
|
C$
|
234
|
|
|
C$
|
—
|
|
|
C$
|
—
|
|
Inventory and other
adjustments (C$)(v)
|
|
2,118
|
|
|
7
|
|
|
—
|
|
|
—
|
|
Minesite operating
costs (C$)
|
|
C$
|
74,045
|
|
|
C$
|
241
|
|
|
C$
|
—
|
|
|
C$
|
—
|
|
|
|
|
|
|
|
|
|
|
Canadian Malartic Mine
|
|
Three Months Ended
|
|
Three Months Ended
|
Per Ounce of Gold
Produced(i)(ii)(vi)
|
|
March 31, 2020
|
|
March 31, 2019
|
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
Gold production
(ounces)
|
|
|
|
61,789
|
|
|
|
|
83,670
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
48,656
|
|
|
$
|
787
|
|
|
$
|
49,759
|
|
|
$
|
595
|
|
Inventory and other
adjustments(iv)
|
|
(1,507)
|
|
|
(24)
|
|
|
(373)
|
|
|
(5)
|
|
Cash operating costs
(co-product basis)
|
|
$
|
47,149
|
|
|
$
|
763
|
|
|
$
|
49,386
|
|
|
$
|
590
|
|
By-product metal
revenues
|
|
(1,773)
|
|
|
(29)
|
|
|
(1,556)
|
|
|
(18)
|
|
Cash operating costs
(by-product basis)
|
|
$
|
45,376
|
|
|
$
|
734
|
|
|
$
|
47,830
|
|
|
$
|
572
|
|
|
|
|
|
|
|
|
|
|
Canadian Malartic Mine
|
|
Three Months Ended
|
|
Three Months Ended
|
Per
Tonne(i)(iii)(vii)
|
|
March 31, 2020
|
|
March 31, 2019
|
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
Tonnes of ore milled
(thousands of tonnes)
|
|
|
|
2,321
|
|
|
|
|
2,517
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
48,656
|
|
|
$
|
21
|
|
|
$
|
49,759
|
|
|
$
|
20
|
|
Production costs
(C$)
|
|
C$
|
65,472
|
|
|
C$
|
28
|
|
|
C$
|
65,564
|
|
|
C$
|
26
|
|
Inventory and other
adjustments (C$)(v)
|
|
(2,526)
|
|
|
(1)
|
|
|
(484)
|
|
|
(1)
|
|
Minesite operating
costs (C$)
|
|
C$
|
62,946
|
|
|
C$
|
27
|
|
|
C$
|
65,080
|
|
|
C$
|
25
|
|
|
|
|
|
|
|
|
|
|
Kittila Mine
|
|
Three Months Ended
|
|
Three Months Ended
|
Per Ounce of Gold
Produced(ii)
|
|
March 31, 2020
|
|
March 31, 2019
|
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
Gold production
(ounces)
|
|
|
|
49,297
|
|
|
|
|
49,336
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
43,671
|
|
|
$
|
886
|
|
|
$
|
38,600
|
|
|
$
|
782
|
|
Inventory and other
adjustments(iv)
|
|
(3,676)
|
|
|
(75)
|
|
|
(282)
|
|
|
(5)
|
|
Cash operating costs
(co-product basis)
|
|
$
|
39,995
|
|
|
$
|
811
|
|
|
$
|
38,318
|
|
|
$
|
777
|
|
By-product metal
revenues
|
|
(54)
|
|
|
(1)
|
|
|
(76)
|
|
|
(2)
|
|
Cash operating costs
(by-product basis)
|
|
$
|
39,941
|
|
|
$
|
810
|
|
|
$
|
38,242
|
|
|
$
|
775
|
|
|
|
|
|
|
|
|
|
|
Kittila Mine
|
|
Three Months Ended
|
|
Three Months Ended
|
Per Tonne(iii)
|
|
March 31, 2020
|
|
March 31, 2019
|
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
Tonnes of ore milled
(thousands of tonnes)
|
|
|
|
420
|
|
|
|
|
456
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
43,671
|
|
|
$
|
104
|
|
|
$
|
38,600
|
|
|
$
|
85
|
|
Production costs
(€)
|
|
€
|
39,665
|
|
|
€
|
94
|
|
|
€
|
34,022
|
|
|
€
|
75
|
|
Inventory and other
adjustments (€)(v)
|
|
(3,358)
|
|
|
(7)
|
|
|
(301)
|
|
|
(1)
|
|
Minesite operating
costs (€)
|
|
€
|
36,307
|
|
|
€
|
87
|
|
|
€
|
33,721
|
|
|
€
|
74
|
|
|
|
|
|
|
|
|
|
|
Pinos Altos Mine
|
|
Three Months Ended
|
|
Three Months Ended
|
Per Ounce of Gold
Produced(ii)
|
|
March 31, 2020
|
|
March 31, 2019
|
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
Gold production
(ounces)
|
|
|
|
33,310
|
|
|
|
|
42,730
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
35,881
|
|
|
$
|
1,077
|
|
|
$
|
29,658
|
|
|
$
|
694
|
|
Inventory and other
adjustments(iv)
|
|
(2,906)
|
|
|
(87)
|
|
|
283
|
|
|
7
|
|
Cash operating costs
(co-product basis)
|
|
$
|
32,975
|
|
|
$
|
990
|
|
|
$
|
29,941
|
|
|
$
|
701
|
|
By-product metal
revenues
|
|
(8,079)
|
|
|
(243)
|
|
|
(8,851)
|
|
|
(207)
|
|
Cash operating costs
(by-product basis)
|
|
$
|
24,896
|
|
|
$
|
747
|
|
|
$
|
21,090
|
|
|
$
|
494
|
|
|
|
|
|
|
|
|
|
|
Pinos Altos Mine
|
|
Three Months Ended
|
|
Three Months Ended
|
Per Tonne(iii)
|
|
March 31, 2020
|
|
March 31, 2019
|
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
Tonnes of ore
processed (thousands of tonnes)
|
|
|
|
480
|
|
|
|
|
478
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
35,881
|
|
|
$
|
75
|
|
|
$
|
29,658
|
|
|
$
|
62
|
|
Inventory and other
adjustments(v)
|
|
(3,491)
|
|
|
(8)
|
|
|
(22)
|
|
|
—
|
|
Minesite operating
costs
|
|
$
|
32,390
|
|
|
$
|
67
|
|
|
$
|
29,636
|
|
|
$
|
62
|
|
|
|
|
|
|
|
|
|
|
Creston Mascota Mine
|
|
Three Months Ended
|
|
Three Months Ended
|
Per Ounce of Gold
Produced(ii)
|
|
March 31, 2020
|
|
March 31, 2019
|
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
Gold production
(ounces)
|
|
|
|
18,184
|
|
|
|
|
13,529
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
11,837
|
|
|
$
|
651
|
|
|
$
|
9,836
|
|
|
$
|
727
|
|
Inventory and other
adjustments(iv)
|
|
(143)
|
|
|
(8)
|
|
|
(402)
|
|
|
(30)
|
|
Cash operating costs
(co-product basis)
|
|
$
|
11,694
|
|
|
$
|
643
|
|
|
$
|
9,434
|
|
|
$
|
697
|
|
By-product metal
revenues
|
|
(4,000)
|
|
|
(220)
|
|
|
(2,330)
|
|
|
(172)
|
|
Cash operating costs
(by-product basis)
|
|
$
|
7,694
|
|
|
$
|
423
|
|
|
$
|
7,104
|
|
|
$
|
525
|
|
|
|
|
|
|
|
|
|
|
Creston Mascota Mine
|
|
Three Months Ended
|
|
Three Months Ended
|
Per Tonne(iii)
|
|
March 31, 2020
|
|
March 31, 2019
|
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
Tonnes of ore
processed (thousands of tonnes)
|
|
|
|
212
|
|
|
|
|
361
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
11,837
|
|
|
$
|
56
|
|
|
$
|
9,836
|
|
|
$
|
27
|
|
Inventory and other
adjustments(v)
|
|
(361)
|
|
|
(2)
|
|
|
(702)
|
|
|
(2)
|
|
Minesite operating
costs
|
|
$
|
11,476
|
|
|
$
|
54
|
|
|
$
|
9,134
|
|
|
$
|
25
|
|
|
|
|
|
|
|
|
|
|
La India Mine
|
|
Three Months Ended
|
|
Three Months Ended
|
Per Ounce of Gold
Produced(ii)
|
|
March 31, 2020
|
|
March 31, 2019
|
|
|
(thousands)
|
|
($ per ounce
)
|
|
(thousands)
|
|
($ per ounce
)
|
Gold production
(ounces)
|
|
|
|
22,926
|
|
|
|
|
22,988
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
20,050
|
|
|
$
|
875
|
|
|
$
|
17,739
|
|
|
$
|
772
|
|
Inventory and other
adjustments(iv)
|
|
(1,873)
|
|
|
(82)
|
|
|
479
|
|
|
21
|
|
Cash operating costs
(co-product basis)
|
|
$
|
18,177
|
|
|
$
|
793
|
|
|
$
|
18,218
|
|
|
$
|
793
|
|
By-product metal
revenues
|
|
(332)
|
|
|
(15)
|
|
|
(759)
|
|
|
(34)
|
|
Cash operating costs
(by-product basis)
|
|
$
|
17,845
|
|
|
$
|
778
|
|
|
$
|
17,459
|
|
|
$
|
759
|
|
|
|
|
|
|
|
|
|
|
La India Mine
|
|
Three Months Ended
|
|
Three Months Ended
|
Per Tonne(iii)
|
|
March 31, 2020
|
|
March 31, 2019
|
|
|
(thousands)
|
|
($ per tonne
)
|
|
(thousands)
|
|
($ per tonne
)
|
Tonnes of ore
processed (thousands of tonnes)
|
|
|
|
1,534
|
|
|
|
|
1,451
|
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
$
|
20,050
|
|
|
$
|
13
|
|
|
$
|
17,739
|
|
|
$
|
12
|
|
Inventory and other
adjustments(v)
|
|
(2,238)
|
|
|
(1)
|
|
|
(388)
|
|
|
—
|
|
Minesite operating
costs
|
|
$
|
17,812
|
|
|
$
|
12
|
|
|
$
|
17,351
|
|
|
$
|
12
|
|
|
Notes:
|
|
(i) The information
set out in this table reflects the Company's 50% interest in the
Canadian Malartic mine.
|
|
(ii) The 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. 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 (without
deducting 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 condensed interim
consolidated statements of (loss) income for by-product revenues,
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. 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 analysis in order to quantify the effects
of fluctuating metal.
|
|
(iii) 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.
Minesite costs per tonne are calculated by adjusting production
costs as recorded in the condensed interim consolidated statements
of (loss) income for inventory production costs and other
adjustments, and then dividing by tonnes of ore processed. As the
total cash costs per ounce of gold produced can be affected by
fluctuations in by-product metal prices and foreign exchange rates,
management believes that minesite costs per tonne provide
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.
|
|
(iv) Under the
Company's revenue recognition policy, revenue from contracts with
customers is recognized upon the transfer of control over metals
sold to the customer. As total cash costs per ounce of gold
produced are calculated on a production basis, an inventory
adjustment is made to reflect the portion of production not yet
recognized as revenue. Other adjustments include the addition of
smelting, refining and marketing charges to production
costs.
|
|
(v) This inventory
and other adjustments reflect production costs associated with the
portion of production still in inventory and smelting, refining and
marketing charges associated with production.
|
|
(vi) The Canadian
Malartic mine's cost calculations per ounce of gold produced for
the three months ended March 31, 2020 exclude 2,974 ounces of
payable gold production which were produced during this period
as commercial production at the Barnat deposit has not yet
been achieved.
|
|
(vii) The Canadian
Malartic mine's cost calculations per tonne for the three months
ended March 31, 2020 exclude 135,065 tonnes which were processed
during this period as commercial production at the Barnat deposit
has not yet been achieved.
|
Reconciliation of Production Costs to All-in
Sustaining Costs per Ounce of
Gold Produced
|
|
|
|
|
|
|
|
|
|
|
|
(United States dollars per ounce of gold
produced, except where noted)
|
|
Three Months Ended
March 31, 2020
|
|
Three Months Ended
March 31, 2019
|
Production costs per
the condensed interim consolidated statements of (loss)
income (thousands of United States
dollars)
|
|
$
|
356,102
|
|
$
|
276,893
|
Adjusted gold
production (ounces)(i)(ii)(iii)
|
|
408,392
|
|
380,630
|
Production costs per
ounce of adjusted gold production
|
|
$
|
872
|
|
$
|
727
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
Inventory and other
adjustments(iv)
|
|
17
|
|
(23)
|
Total cash costs per
ounce of gold produced (co-product basis)(v)
|
|
$
|
889
|
|
$
|
704
|
By-product metal
revenues
|
|
(53)
|
|
(81)
|
Total cash costs per
ounce of gold produced (by-product basis)(v)
|
|
$
|
836
|
|
$
|
623
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
Sustaining capital
expenditures (including capitalized exploration)
|
|
177
|
|
128
|
General and
administrative expenses (including stock options)
|
|
75
|
|
76
|
Non-cash reclamation
provision and other
|
|
11
|
|
9
|
All-in sustaining
costs per ounce of gold produced (by-product basis)
|
|
$
|
1,099
|
|
$
|
836
|
By-product metal
revenues
|
|
53
|
|
81
|
All-in sustaining
costs per ounce of gold produced (co-product basis)
|
|
$
|
1,152
|
|
$
|
917
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes:
|
|
(i) Adjusted gold
production for the three months ended March 31, 2020 excludes 2,974
ounces of payable gold production at the Canadian Malartic mine,
which were produced prior to the achievement of commercial
production at the Barnat deposit.
|
|
(ii) Adjusted gold
production for the three months ended March 31, 2019 excludes
17,582 ounces of payable gold production at the Meliadine mine,
which were produced prior to the achievement of commercial
production.
|
|
(iii) Adjusted gold
production for the three months ended March 31, 2019 excludes 5
ounces of payable gold production at the Lapa mine which were
credited to the Company as a result of final refining
reconciliations following the cessation of mining and processing
operations at the Lapa mine on December 31, 2018.
|
|
(iv) Under the
Company's revenue recognition policy, revenue from contracts with
customers is recognized upon the transfer of control over metals
sold to the customer. As the total cash costs per ounce of gold
produced are calculated on a production basis, an inventory
adjustment is made to reflect the portion of production not yet
recognized as revenue. Other adjustments include the addition of
smelting, refining and marketing charges to production of
costs.
|
|
(v) The 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. 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 (without
deducting 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 condensed interim
consolidated statements of (loss) income for by-product revenues,
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. 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 analysis in order to quantify the effects
of fluctuating metal prices and exchange rates.
|
View original
content:http://www.prnewswire.com/news-releases/agnico-eagle-reports-first-quarter-2020-results-new-2020-production-and-unit-cost-guidance-issued-to-reflect-impact-of-covid-19-temporary-shutdowns-at-seven-of-eight-mines-restart-and-ramp-up-activities-have-begun-at-the-five-ca-301050632.html
SOURCE Agnico Eagle Mines Limited