Agnico-Eagle targets $50 per ounce total cash costs in 2006; Announces 26th consecutive annual dividend; And strengthens board a
December 14 2005 - 8:22AM
PR Newswire (US)
(All amounts expressed in U.S. dollars unless otherwise noted)
TORONTO, Dec. 14 /PRNewswire-FirstCall/ -- Agnico-Eagle Mines
Limited today announced its production guidance for 2006. Included
in this guidance is the target for total cash costs from its
world-class LaRonde mine. The Company is targeting $50 per ounce, a
level which would again rank Agnico-Eagle among the lowest cost
producers in the gold industry. Overall, payable metals production
is likely to be at similar levels to those in 2005. "While we are
budgeting for cash costs of $50 per ounce of gold in 2006, at
current byproduct prices and exchange rates, the actual total cash
costs have the potential to be significantly lower," said Sean
Boyd, Vice Chairman and Chief Executive Officer. "Agnico-Eagle's
revenues, earnings, and cash flows enjoy significant leverage to
rising metals prices. This leverage, and our low cost production
base, puts us in an excellent position to finance our growth
pipeline of gold projects," added Mr. Boyd. A summary of the
estimated metal production and associated costs, together with the
material assumptions used in the Company's estimates for 2006,
follows: ---------------------------------------------------- Ore
processed (000's tons) 2,900 Grades: Gold (oz./t) 0.10 Silver
(oz./t) 2.48 Zinc (%) 3.82 Copper (%) 0.47 Payable metal
production: Gold (ozs.) 250,000 Silver (000's ozs.) 5,700 Zinc
(000's lbs.) 160,000 Copper (000's lbs.) 20,000 Minesite operating
costs (C$/ton) 52 Total cash costs ($/oz.) 50 By product and
currency assumptions: Silver ($/oz.) 7.00 Zinc ($/lb.) 0.65 Copper
($/lb.) 1.50 C$/US$ exchange rate 1.20
---------------------------------------------------- The estimated
sensitivity of LaRonde's 2006 total cash costs per ounce to a 10%
change in the metal prices and exchange rates assumptions above
follows:
---------------------------------------------------------------------
Change in variable Impact on total cash costs ($/oz.)
---------------------------------------------------------------------
C$/US$ 50 Zinc 20 Silver 15 Copper 10
---------------------------------------------------------------------
A summary of the Company's projected exploration and capital
expenditures in 2006 follows (thousands):
------------------------------------------------------------------------
Project Capitalized Expensed Total
------------------------------------------------------------------------
LaRonde I sustaining $10,000 $10,000 LaRonde II related projects
13,000 13,000 Lapa underground program 12,000 12,000 Goldex
construction 82,000 82,000 Exploration & corporate
development(x) 12,000 12,000
------------------------------------------------------------------------
$117,000 $12,000 $129,000
-------------------------------------------------------------------------
(x) does not include Agnico-Eagle's projected $3 million share of
exploration conducted by associated exploration companies, which
these companies will fund out of their own cash reserves. However,
Agnico-Eagle must expense its share for accounting purposes.
Dividend Paid For 26 Consecutive Years The board of directors of
Agnico-Eagle has declared an annual dividend of $0.03 per share
following a successful year in 2005, representing the 26th
consecutive year that Agnico-Eagle has paid a distribution to its
shareholders. The Company has declared a dividend of $0.03 per
share, payable March 23, 2006 to shareholders of record March 2,
2006. The dividend rate is unchanged from last year as management
and the Board of Directors have decided to conserve cash to fund
the Company's production and reserve growth objectives.
Shareholders Can Reinvest Dividends in Shares at a Discount Under
the Company's Dividend Reinvestment Plan, shareholders will have
the opportunity to reinvest their dividends at no commission in
shares of Agnico-Eagle, at 95% of the Average Market Price.
Individual shareholders can also make optional cash payments of up
to $20,000 to purchase additional shares, commission-free, at the
same price. Shareholders can obtain details of the Plan from the
Company or visit its website at http://www.agnico-eagle.com/.
Significant Finnish Mining Expertise Added to the Board of
Directors The Board of Directors is pleased to announce the
addition to the Board of Mr. Pertti Voutilainen, M.Sc., M.Eng.,
effective immediately. Mr. Voutilainen is a mining industry
veteran, most recently the Chairman of the Board of Riddarhyttan
Resources AB. Previously, Mr. Voutilainen was Chairman of the Board
and CEO for Kansallis Banking Group and President after its merger
with Union Bank of Finland. He was also the CEO of Outokumpu Corp.,
Finland's largest mining and metals company. "Mr. Voutilainen is a
tremendous addition to our Board of Directors," said James D.
Nasso, Chairman of the Board. "He will be an invaluable resource to
us as we bring the Suurikuusikko project through the feasibility
stage and will undoubtedly make an important contribution to the
Company as we move towards achieving our objective of tripling gold
production and doubling gold reserves by 2009." Management
Strengthened to Achieve Growth Objectives The Board of Directors is
pleased to announce several new appointments among its senior
management team. Sean Boyd has been appointed Vice Chairman and
Chief Executive Officer, while Ebe Scherkus has been appointed
President and Chief Operating Officer. Both Sean and Ebe have been
with Agnico-Eagle for twenty years. They have been instrumental in
building the Company, and laying the foundation for its future
growth. "Agnico-Eagle will continue to rely heavily on the
leadership and experience of Sean and Ebe as we move forward with
our objective of tripling gold production and doubling reserves
from existing projects by 2009" said Mr. Nasso. Additionally, Jean
Robitaille has been appointed to the position of Vice President,
Metallurgy and Marketing. Jean has been with Agnico-Eagle for 18
years and was most recently General Manager, Metallurgy and
Marketing. Jean's appointment reflects his increasing
responsibilities in the areas of metallurgy, processing, plant
construction, and concentrate marketing. "Jean's experience in
plant design and construction will be important in the
implementation and execution of our growth strategy" said Mr.
Scherkus. Jean will continue to report to Mr. Scherkus. Forward
Looking Statements The information in this press release has been
prepared as at December 14, 2005. Certain statements contained in
this press release constitute "forward-looking statements" within
the meaning of the United States Private Securities Litigation
Reform Act of 1995. When used in this document, the words
"anticipate", "expect", "estimate," "forecast," "planned" and
similar expressions are intended to identify forward-looking
statements. Such statements reflect the Company's views at the time
with respect to future events and are subject to certain risks,
uncertainties and assumptions. Many factors could cause the actual
results to be materially different from those expressed or implied
by such forward-looking statements, including, among others, those
which are discussed under the heading "Risk Factors" in the
Company's most recently filed Annual Information Form and Annual
Report on Form 20-F. The Company does not intend, and does not
assume any obligation, to update these forward-looking statements.
About Agnico-Eagle Agnico-Eagle is a long established Canadian gold
producer with operations located in Quebec and exploration and
development activities in Canada, Finland, the United States and
Mexico. Agnico-Eagle's LaRonde Mine is Canada's largest gold
deposit. The Company has full exposure to higher gold prices
consistent with its policy of no forward gold sales. It has paid a
cash dividend for 26 consecutive years. DATASOURCE: Agnico-Eagle
Mines Limited CONTACT: David Smith; Director, Investor Relations,
(416) 947-1212
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