Analyst and Investor Conference Call at 11:00 am EST Today TORONTO,
Feb. 14 /PRNewswire-FirstCall/ -- Agnico-Eagle Mines Limited today
announced that it has signed an agreement with Cumberland Resources
Ltd. (TSX and AMEX: CLG, "Cumberland") under which Agnico-Eagle has
agreed to make an exchange offer for all of the outstanding common
shares of Cumberland not already owned by Agnico-Eagle. The Company
currently owns 2,037,000, or 2.6%, of the outstanding shares of
Cumberland on a fully diluted basis. Cumberland owns 100% of the
Meadowbank gold project, located in Nunavut. The project is
currently under construction and has proven and probable reserves
of 21.3 million tonnes, grading 4.2 grams per tonne, or 2.9 million
ounces. Initial gold production is anticipated by Agnico-Eagle in
early 2010. Annual gold production is estimated to average 400,000
ounces for the first four years and average 350,000 ounces per year
over the life of the mine. Terms of the Offer - Exchange of 0.185
of an Agnico-Eagle common share for each Cumberland share -
Represents a 28.8% premium to Cumberland's closing share price on
February 13, 2007, or a 23.7% premium to the 20-day volume weighted
average prices on the TSX for both companies from that date -
Values Cumberland at approximately C$710 million based on 80.0
million fully diluted common shares outstanding, and the closing
price on February 13, 2007 - Transaction approved by the Boards of
Agnico-Eagle and Cumberland - Directors and Officers of Cumberland,
representing approximately 10.5% of the fully diluted common shares
outstanding, have agreed to tender their shares in an agreement
with Agnico-Eagle Highlights of the Offer If the acquisition is
completed, Agnico-Eagle expects: - its proforma gold reserves to
increase by 28% to 13.3 million ounces, 82% of which are located in
Canada; - its projected gold production to rise a further 39% in
2010 to approximately 1.3 million ounces; - its proforma cash
position to increase to over $550 million, with no additional
funding expected to be required to build its pipeline of five
development projects; and - construction of the Meadowbank project
to be supervised by Agnico- Eagle's Quebec based technical team
"The acquisition of Cumberland is expected to enhance our already
significant gold production and reserve growth and is a logical
next step in our strategy of building a premier international gold
growth company. The transaction is expected to be accretive to our
underlying net asset value, cash flow per share and reserves per
share. Furthermore, we anticipate that the Meadowbank project's
substantial reserve base will grow as we accelerate the exploration
program in 2007," said Sean Boyd, Vice Chairman and Chief Executive
Officer of Agnico-Eagle. "This offer enables Cumberland's
shareholders to participate not only in the development of
Meadowbank, but also in LaRonde's production and the development of
Agnico-Eagle's current project pipeline of five gold mines," added
Mr. Boyd. Cumberland Board and Officers Support Offer The Board of
Directors of Cumberland recommends that Cumberland shareholders
accept this offer. The recommendation of the Cumberland Board is
supported by a fairness opinion from their financial advisor,
Genuity Capital Markets. In addition, a special committee of the
Board of Directors of Cumberland received a fairness opinion from
their financial advisor, Dundee Securities Corporation. The
Cumberland Directors and Officers have also committed to tender
their shares to the offer under the terms of an agreement with
Agnico-Eagle. Agnico-Eagle has engaged Orion Securities Inc. and
Merrill Lynch Canada as financial advisors in connection with the
offer. Under certain circumstances, if the transaction does not
proceed to completion, Agnico-Eagle will be entitled to receive a
fee of C$21 million, or approximately 3% of the implied transaction
value. Consistent, and Conservative, Strategy of Creating Value for
Shareholders Agnico-Eagle has maintained a conservative and
consistent strategy over its 35-year history. The Company has grown
through a series of smaller, friendly, acquisitions and discoveries
following periods of detailed research and due diligence. This
acquisition is consistent with Agnico-Eagle's strategy. It has: -
Exploration upside suggesting the development of a long term mining
"camp" - Low political risk in a supportive, mining friendly region
of Canada - Proposed mining and processing plans which are very
straightforward - Major permits already in place - Minor
shareholder dilution of approximately 10%, with no new financing
required to build the project - A timeline for construction
matching the availability of the Company's proven mine building
team Agnico-Eagle is anticipating a long-term, respectful, and
mutually beneficial relationship with the people and government of
Nunavut, drawing on its experience over the past 35 years in
Quebec. Indicative Offer Timing As soon as practicable, the formal
offer and take-over documentation will be mailed to the
shareholders of Cumberland. The offer will be open for acceptance
for a minimum of 35 days following the date of the mailing. The
offer will be subject to certain conditions of completion
including: absence of material adverse changes; acceptance of the
offer by Cumberland's shareholders owning not less than two-thirds
of the Cumberland common shares on a fully diluted basis; and the
absence of an event that materially affects the financial markets.
Once the two-thirds acceptance level is met, Agnico-Eagle intends
to take steps to acquire all outstanding Cumberland common shares.
Meadowbank: A Growing Gold Deposit in a Promising Camp The
Meadowbank gold project is a construction stage, high-grade, open
pit gold deposit. The deposit is located approximately 70
kilometres north of the port town of Baker Lake, Nunavut. A
110-kilometre road, once completed, will provide year round access
from Baker Lake to the minesite. Meadowbank will also be served by
a 1,600-metre airstrip in addition to the public airport located at
Baker Lake. The project covers an area of 30,521 hectares and
consists of 10 Crown mining leases encompassing 7,395 hectares and
three exploration concessions administered by Nunavut Tunngavik
Inc. encompassing 23,126 hectares. All leases and concessions are
held 100% by Cumberland. A location map, and other pertinent
information may be viewed by pasting the following internet address
into a web browser.
http://www.agnico-eagle.com/files/CumberlandRoadshowFinal.pdf The
geology of Meadowbank is similar to the prolific Precambrian
greenstone belt geology and topography of Agnico-Eagle's land
package in the Abitibi region of Quebec and the Company's Kittila
project in Lapland, Finland. Agnico-Eagle is evaluating the
possibility of increasing the capacity of the planned processing
facility to 8,500 tonnes per day from the currently contemplated
7,500 tonnes per day. Agnico-Eagle's preliminary estimates for
capital expenditures to bring the project into production are C$375
million. An additional C$65 million of capital is estimated to be
spent over the eight-year mine life. The average production rate is
anticipated to be 350,000 ounces of gold per year, with peak
production in the range of 400,000 ounces annually in the first
four full years. Agnico-Eagle estimates total cash costs over the
mine life to average approximately $250 per ounce. While
Agnico-Eagle is reviewing the planned capacity of the processing
plant and mine plan, construction work will continue on
infrastructure such as the road, fuel storage facilities, the site
camp and also on the exploration drilling program. The project will
be supervised by Agnico-Eagle's technical team, based in
northwestern Quebec. The project timeline is a good fit with
Agnico-Eagle's existing project development schedule, since the
team anticipates completing the construction of the Goldex and Lapa
projects in 2008, immediately prior to the start of the
construction of the surface facilities at Meadowbank. Large Gold
Reserve and Favourable Geology Indicates Exploration Upside The
Meadowbank drilling program is set to resume over the next month.
Agnico-Eagle is reviewing the proposed 2007 exploration program and
budget with a view to increasing the scope and scale of the work
program. The objectives are to test the extension of the deposits
at depth and along strike near the resource boundaries. However,
the 2007 exploration program will also focus outside of the current
resource envelope. In the short term, Agnico-Eagle's exploration
objectives are twofold: increase the inferred and indicated
resources via drilling on the main deposits and; restart the
exploration program on the large land package where over forty gold
occurrences have been discovered in the past years but have not
been appropriately tested. With this program, Agnico-Eagle hopes to
further increase the gold reserves of the orebody over the next
several years. Conference Call Today Agnico-Eagle will host a
conference call today at 11:00 A.M. (EST) to discuss the offer. Via
Telephone: To participate in the conference call, please dial
416-644-3424 or Toll Free 1-800-595-8550. To ensure your
participation, please call approximately five minutes prior to the
scheduled start of the call. Via Webcast: Additionally, a live
audio webcast of the call will be available on the Company's
website homepage at http://www.agnico-eagle.com/. Replay archive:
Please dial the toll-free access number 1-877-289-8525, passcode
21219307 followed by the number sign. The conference call will be
replayed from Wednesday, February 14, 2007 at 2:00 PM (E.S.T.) to
Friday, February 23, 2007 11:59 PM (E.S.T.). The webcast along with
presentation slides will be archived for 180 days on the website.
About Agnico-Eagle Agnico-Eagle is a long-established Canadian gold
producer with operations located in northwestern Quebec and
exploration and development activities in Canada, Finland, the
United States and Mexico. Agnico-Eagle's LaRonde Mine in Quebec is
Canada's largest gold deposit in terms of reserves. The Company has
full exposure to higher gold prices consistent with its policy of
no gold hedging. It has paid a cash dividend for 25 consecutive
years. U.S. Shareholders This press release does not constitute an
offer to purchase or sell or a solicitation of an offer to sell or
purchase shares of Cumberland or Agnico-Eagle made to any person in
the United States of America, its possessions and other areas
subject to its jurisdiction or to, or for the account or benefit
of, a U.S. person (as defined in Regulation S under the United
States Securities Act of 1933, as amended). The offer will be made
to these persons solely under the registration statement, offer to
purchase, prospectus and other offer documents that Agnico-Eagle
expects to file with the United States Securities and Exchange
Commission. U.S. investors and securityholders are advised to read
these documents carefully when they become available, because they
will include important information regarding the offer. At that
time, investors and stockholders may obtain a free copy of the
offer to purchase, prospectus, the related letter of transmittal
and certain other offer documents from the Securities and Exchange
Commission's website at http://www.sec.gov/. Free copies of these
documents can also be obtained by directing a request to
Agnico-Eagle. YOU SHOULD READ THE OFFER TO PURCHASE, PROSPECTUS AND
OTHER OFFER DOCUMENTS CAREFULLY BEFORE MAKING A DECISION CONCERNING
THE OFFER. Technical Data Meadowbank open pit mineral reserves
(Q4/2005) have been prepared in accordance with NI 43-101. Dr. Mike
Armitage, Managing Director of SRK Consulting (UK) Limited, is the
independent Qualified Person responsible for preparation of stated
reserves. Meadowbank mineral resources (Q4/05) were prepared in
accordance with the requirements set out in NI 43-101 under the
direction of Dr. Mike Armitage, Managing Director of SRK Consulting
(UK) Limited, who is an independent Qualified Person as defined by
NI 43-101. The PDF deposit resource estimates (Aug. 2000) were
prepared by Cumberland in accordance with standards outlined in
National Instrument 43-101 and CIM Standards on Mineral Resources
and Reserves (August 2000). James McCrea, P.Geo., Manager, Mineral
Resources for Cumberland, is the Qualified Person under NI 43-101.
PDF deposit resources are not included in the feasibility study of
the Meadowbank project. The Cannu mineral resource estimate (Jan.
2007) was prepared in accordance with the requirements set out in
NI 43-101 under the direction of Dr. Mike Armitage, Managing
Director of SRK Consulting (UK) Limited, who is an independent
Qualified Person as defined by NI 43-101. The Cannu zone resources
are not included in the feasibility study of the Meadowbank
project. To the best of Agnico-Eagle's knowledge, the Cumberland
estimate is relevant and reliable. The terms "measured",
"indicated" and "inferred" mineral resources are terms recognized
and required under Canadian securities legislation. United States
investors are advised that the SEC does not recognize these terms.
"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 all or any part of an inferred mineral
resource will ever be upgraded to a higher category. Under Canadian
rules, estimates of inferred mineral resources may not form the
basis of feasibility or pre-feasibility studies, except in rare
cases. United States investors are cautioned not to assume that all
or any part of measured or indicated mineral resources will ever be
converted into mineral reserves. United States investors are also
cautioned not to assume that all or any part of an inferred mineral
resource exists or is economically or legally mineable.
Forward-Looking Statements The information in this press release
has been prepared as at February 14, 2007. 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 and forward looking
information under the provisions of Canadian provincial securities
laws. When used in this document, words such as "expect", "will",
"estimated", "estimates", "anticipated", "believe", "projected" and
similar expressions are intended to identify forward-looking
statements or information. Such statements and information include
without limitation: statements regarding expectations as to the
timing, completion and settlement of the offer to Cumberland's
stockholders; anticipated timing of exploration, development,
construction and production of Cumberland's and Agnico-Eagle's
minesites; anticipated exploration potential and estimated
production amounts, including estimates of reserves and resources,
of Cumberland's minesites; estimates of capital expenditures and
other cash needs; estimates of mining costs, cash costs and other
operating costs and expenses; estimates of mine life; estimates of
cash resources; anticipated impact of the acquisition on
Agnico-Eagle's earnings and results of operations; anticipated
benefits to Cumberland's stockholders; and other expected or
anticipated benefits of the acquisition. Such statements and
information reflect the Company's views as at the date of this
press release and are subject to certain risks, uncertainties and
assumptions, and undue reliance should not be placed on such
statements and information. Many factors, known and unknown, could
cause the actual results and final decisions to be materially
different from those expressed or implied by such forward looking
statements and information. Such risks include risks relating to
acquisitions, including, without limitation, the parties may be
unable to obtain regulatory approvals required for the acquisition;
the parties may be unable to complete the acquisition or completing
the acquisition may be more costly than expected because, among
other reasons, conditions to the closing of the acquisition may not
be satisfied; problems may arise with the ability to successfully
integrate the businesses of Agnico-Eagle and Cumberland;
Agnico-Eagle may not be able to achieve the benefits from the
acquisition or it may take longer than expected to achieve those
benefits; and the acquisition may involve unexpected costs or
unexpected liabilities. Other risks include, but are not limited
to, the volatility of prices of gold and other metals; uncertainty
of future production, capital expenditures, and other costs;
currency fluctuations; financing of additional capital
requirements; cost of exploration and development programs; mining
risks; risks associated with foreign operations; and governmental
and environmental regulation. For a more detailed discussion of
such risks and other factors, see the Company's Annual Information
Form and Annual Report on Form 20-F, as amended, for the year ended
December 31, 2005, as well as the Company's other filings with the
Canadian Securities Administrators and the U.S. Securities and
Exchange Commission. The Company does not intend, and does not
assume any obligation, to update these forward-looking statements
and information. Accordingly, readers are advised not to place
undue reliance on forward-looking statements. Certain of the
foregoing statements, primarily related to projects, are based on
preliminary views of the Company with respect to, among other
things, grade, tonnage, processing, mining methods, capital costs,
and location of surface infrastructure and actual results and final
decisions may be materially different from those currently
anticipated. Note to Investors Regarding the Use of Non-GAAP
Financial Measures This press release presents estimates of future
"total cash cost per ounce" which is not recognized measures under
United States generally accepted accounting principles ("US GAAP").
This data may not be comparable to data presented by other gold
producers. These future estimates are based upon the total cash
costs per ounce that the Company expects to incur to mine gold at
the applicable projects and do not include production costs
attributable to accretion expense and other asset retirement costs,
which will vary over time as each project is developed and mined.
It is therefore not practicable to reconcile these forward-looking
non-GAAP financial measures to the most comparable GAAP measure.
DATASOURCE: Agnico-Eagle Mines Limited CONTACT: David Smith; VP,
Investor Relations, (416) 947-1212; John Lute, Media Contact, (416)
929-5883
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