Stock Symbol: AEM (NYSE and TSX)
(All amounts expressed in U.S. dollars ("$" or "US$") unless
otherwise noted)
TORONTO,
Feb. 10, 2016 /PRNewswire/ -
Agnico Eagle Mines Limited (NYSE:AEM, TSX:AEM) ("Agnico
Eagle" or the "Company") today reported a quarterly net loss
of $15.5 million, or a net
loss of $0.07 per share for
the fourth quarter of 2015. This result includes a non-cash
foreign currency translation loss on deferred tax liabilities of
$8.6 million ($0.04 per share), various mark-to-market
adjustment losses of $5.0 million
($0.02 per share), unrealized losses
on financial instruments of $3.3
million ($0.01 per share),
non-cash foreign currency translation losses of $1.3 million ($0.01
per share), non-cash stock option expense of $3.6 million ($0.02
per share) and non-recurring gains of $2.4
million ($0.01). Excluding
these items would result in adjusted net income of $3.9 million ($0.02
per share) for the fourth quarter of 2015. In the fourth
quarter of 2014, the Company reported a net loss of
$21.3 million or a net loss of
$0.10 per share.
Fourth quarter 2015 cash provided by operating
activities was $140.7 million
($112.6 million before changes in
non-cash components of working capital), this compares to cash
provided by operating activities of $164.0
million in the fourth quarter of 2014 ($151.6 million before changes in non-cash
components of working capital). The decrease in cash flow
before changes in working capital during the current period was
largely due to a tax adjustment in the fourth quarter of 2015.
"In 2015, our operations continued to perform
well, which allowed us to do better on both our production and cost
guidance for the fourth consecutive year. Despite a volatile
gold price environment, we doubled our exploration spending,
continued to advance our pipeline of development projects, and
reduced our net debt by approximately $190
million," said Sean Boyd,
Agnico Eagle's Chief Executive Officer. "Over the next three
years, we are forecasting stable annual production and costs, which
should allow us to continue to invest in our existing mines,
maintain funding levels at our key exploration projects, advance
our development pipeline in Nunavut at a steady and measured pace and
maintain our history of continuous dividend payments to
shareholders," added Mr. Boyd.
Fourth quarter and full year 2015 highlights
include:
- Guidance exceeded for fourth consecutive year - Payable
production1 in 2015 was 1,671,340 ounces of gold at
total cash costs2 per ounce on a by-product basis of
$567, compared to guidance of
1,650,000 ounces at total cash costs per ounce on a by-product
basis of $600. All-in
sustaining costs per ounce3 ("AISC") on a by-product
basis for 2015 were $810, compared to
guidance of $850 per ounce
- Stable production and costs expected through 2018 -
Average annual production from 2016 to 2018 is forecast to be
approximately 1.53 million ounces of gold. Production for
2016 is forecast to be between 1.525 and 1.565 million ounces of
gold with total cash costs per ounce on a by-product basis of
between $590 and $630 per
ounce. AISC for 2016 are forecast to be between $850 and $890 per ounce. Costs were
calculated using a US$/C$ exchange rate of 1.30, EURO$/US$ exchange
rate of 1.10 and a US$/MXP exchange rate of 16.00
- Increased gold reserve grades at key mines, significant
increase in year-end 2015 gold resources, slight decline in gold
reserves after mining depletion - Gold reserve grades increased
at the LaRonde, Canadian Malartic, Goldex and La India mines.
Measured and indicated mineral resources were up 1%, while inferred
mineral resources increased by 23%. Mineral reserves declined by
only 5% (0.9 million ounces) to 19.1 million ounces due to mine
depletion of approximately 1.8 million ounces
- Gold resources increased by 67% at Amaruq - Inferred
mineral resources at Amaruq now total 3.3 million ounces (16.9
million tonnes grading 6.05 grams per tonne ("g/t") gold).
The 2016 Phase 1 drill program (approximately 75,000 metres) is now
underway with a focus on expanding and upgrading mineral resources
and outlining a second open pit deposit
- Initial inferred gold resources declared at El Barqueño and
the Sisar Zone at Kittilla - At El Barqueño, initial inferred
mineral resources are estimated to be 0.61 million ounces (19.7
million tonnes grading 0.96 g/t gold), while at Kittila the
recently discovered Sisar Zone contains inferred mineral resources
of 0.65 million ounces (3.4 million tonnes grading 5.91 g/t
gold)
- Moderate 2016 capital spending preserves production
optionality in Nunavut -
Expenditures at Amaruq are designed to expand and upgrade the gold
resources and outline a second source of open pit ore for the
project. Planned spending levels at Meliadine for 2016 are expected
to be sufficient to keep critical path elements moving
forward. However, decreased spending as compared with
previous internal forecasts is expected to delay the potential
project start-up by approximately one year to 2020
- Improved financial flexibility - In 2015, net debt was
reduced by $190 million, further
strengthening the Company's investment grade balance sheet
- A quarterly dividend of $0.08
per share declared
_________________________________ |
1 Payable production of a mineral means the quantity
of mineral produced during a period contained in products that are
sold by the Company whether such products are shipped during the
period or held as inventory at the end of the period. |
2 Total cash costs per ounce is a Non-GAAP
measure. For a reconciliation to production costs, see
"Reconciliation of Non-GAAP Financial Performance Measures "
below. Total cash costs per ounce of gold produced is
presented on both a by-product basis (deducting by-product metal
revenues from production costs) and co-product basis (before
by-product metal revenues). Total cash costs per ounce of gold
produced on a by-product basis is calculated by adjusting
production costs as recorded in the consolidated statements of
income (loss) for by-product revenues, unsold concentrate inventory
production costs, smelting, refining and marketing charges and
other adjustments, and then dividing by the number of ounces of
gold produced. Total cash costs per ounce of gold produced on
a co-product basis is calculated in the same manner as total cash
costs per ounce of gold produced on a by-product basis except that
no adjustment for by-product metal revenues is made. See
"Note Regarding Certain Measures of Performance". For
information about the Company's total cash costs per ounce on a
co-product basis please see "Reconciliation of Non-GAAP Performance
Measures". |
3All-in-sustaining costs per ounce is a Non-GAAP
measure and is used to show the full cost of gold production from
current operations. For a reconciliation to production costs,
see "Reconciliation of Non-GAAP Financial Performance Measures -
Reconciliation of Production Costs to All-In Sustaining Costs per
Ounce of Gold Produced" below. The Company calculates all-in
sustaining costs per ounce of gold produced as the aggregate of
total cash costs per ounce on a by-product basis, sustaining
capital expenditures (including capitalized exploration), general
and administrative expenses (including stock option expense) and
reclamation expenses divided by the amount of gold produced.
All-in sustaining costs per ounce of gold produced on a co-product
basis is calculated in the same manner as all-in sustaining costs
per ounce of gold produced on a by-product basis except that no
adjustment for by-product metal revenues is made. The
Company's methodology for calculating all-in sustaining costs per
ounce may not be similar to the methodology used by other producers
that disclose all-in sustaining costs per ounce. See "Note
Regarding Certain Measures of Performance". The Company may
change the methodology it uses to calculate all-in sustaining costs
per ounce in the future, including in response to the adoption of
formal industry guidance regarding this measure by the World Gold
Council. |
New Three-Year Guidance Plan - Stable Production and Cost
Profile
The Company is announcing its production and
cost guidance for 2016 through 2018. The Company expects
average annual production of approximately 1.53 million ounces of
gold over the next three years with a stable cost profile.
Highlights from the new production and cost
guidance for 2016 through 2018 include:
- In 2016, payable production is expected to be between 1.525
million and 1.565 million ounces of gold. Total cash costs per
ounce on a by-product basis in 2016 are expected to be between
$590 and $630 using a US$/C$ exchange
rate assumption of 1.30. Previous guidance for 2016 (from the
February 2015 forecast) was 1.60
million ounces. The change from previous guidance is
primarily due to the expansion of the Vault pit, which increased
overall production from Meadowbank but deferred ounces from 2016 to
2017 and 2018, thereby extending the mine life
- Consolidated AISC for 2016 are expected to be between
$850 and $890 per ounce. In
2017 and 2018, the Company's goal is to reduce AISC below this
range
- The estimated production level in 2017 is currently forecast to
be approximately 1.55 million ounces of gold (up from 1.50 million
ounces in its February 2015
forecast), while production in 2018 is forecast to be approximately
1.50 million ounces of gold. However, the Company is
evaluating potential optimizations and opportunities (none of which
have yet been approved for construction) at a number of existing
operations to further enhance the production profile in 2018 and
beyond. These include:
-
- LaRonde optimization potential
-
- Bousquet Zone 5
- Lapa Zone 8 - Upper mine and Zulapa 7 - Deep 2 Zone
- Goldex optimization potential
-
- Increased throughput from Deep Zone 1
- Potential for accelerated development of Deep Zone 2
- Potential development of the Akasaba West satellite
deposit
- Kittila optimization potential
-
- Upper Rimpi Zone development
- Potential development of the new Sisar Zone
- Mexican optimization potential
-
- Satellite zones at Pinos Altos
and Creston Mascota
- Potential to expand reserves at La India
Development Pipeline Expected to Provide Further Production
Growth in 2019 and Beyond
The Amaruq and Meliadine projects in
Nunavut, the El Barqueño project
in Mexico, the Odyssey Zone and
near pit/underground opportunities at Canadian Malartic (these
opportunities are near or below the existing mining infrastructure)
and a possible expansion of the LaRonde mine at depth have the
potential to further add to the Company's production profile in
2019 and beyond.
Fourth Quarter and Full Year 2015 Financial
and Production Highlights
In the fourth quarter of 2015, strong
operational performance continued at the Company's mines.
Payable production in the fourth quarter of 2015 was 422,328 ounces
of gold compared to 387,535 ounces in the fourth quarter of
2014. A detailed description of the production and cost
performance of each mine is set out below.
Total cash costs per ounce on a by-product basis
for the fourth quarter of 2015 were $547 compared to $662 per ounce for the fourth quarter 2014.
The decrease in total cash costs per ounce on a by-product basis in
the fourth quarter of 2015 is mainly due to higher production
levels at the LaRonde, Canadian Malartic, Meadowbank, Kittila,
Pinos Altos and Creston Mascota
mines and favourable foreign exchange rates.
In the fourth quarter of 2015, the average value
of the Canadian dollar, Euro and Mexican Peso were 10%, 7%, and 17%
lower, respectively, than the Company's 2015 currency price
assumptions (see February 11, 2015
news release).
For the full year 2015, the Company recorded net
income of $24.6 million, or
$0.11 per share. In 2014,
Agnico Eagle recorded net income of $83.0
million, or $0.43 per
share.
Compared with the prior year, 2015 earnings were
affected by lower realized gold and silver prices (down 8% and 14%,
respectively, period over period) and increased exploration
expenses (up 97%, period over period). In 2015, exploration
drilling yielded a significant increase in inferred mineral
resources at the Amaruq project in Nunavut, an initial inferred mineral resource
at the El Barqueño project in Mexico and a maiden inferred mineral resource
at the Sisar Zone at Kittila. The decrease in realized gold
and silver prices and increase in exploration expenses were
partially offset by higher gold production and favourable foreign
exchange rates.
For the full year 2015, cash provided by
operating activities was $616.2
million ($660.0 million before
changes in non-cash components of working capital). This
represents a decrease over 2014, when cash provided by operating
activities totalled $668.3 million
($624.4 million before changes in
non-cash components of working capital). The decrease was
primarily due to increased inventory positions.
For the fourth consecutive year, Agnico Eagle
has reported annual gold production in excess of annual
guidance. The Company's payable production for the full year
2015 was 1,671,340 ounces of gold at total cash costs per ounce on
a by-product basis of $567, compared
to guidance of 1,650,000 ounces at total cash costs per ounce on a
by-product basis of $590 to
$610. In 2014, full year production was 1,429,288
ounces at total cash costs per ounce on a by-product basis of
$637.
The improvement in gold production in 2015 was a
result of strong operating results from all of the mines,
particularly Canadian Malartic as a result of the full year
inclusion of production, LaRonde as a result of the higher grades
from mining in more gold rich areas of the lower areas of the mine
(below the 215 level), Goldex due to better productivity, increased
throughput at Kittila from the ramp up of the mill expansion,
increased stacking capacity at La India, and higher grades from
Pinos Altos. The decrease in
total cash costs per ounce on a by-product basis in 2015 was
primarily due to higher gold production for 2015, strong cost
control initiatives at all of the mines and the positive effect of
foreign exchange rates.
For the full year 2015, the average value of the
Canadian dollar, Euro and Mexican Peso were 5%, 4%, and 18% lower,
respectively than the Company's 2015 currency price assumptions
(see February 11, 2015 news
release).
AISC for 2015 on a by-product basis was
$810 per ounce, which is below the
previous 2015 guidance between $840 and
$860 per ounce. The lower AISC is primarily due to
lower than forecast total cash costs per ounce on a by-product
basis in 2015 and a reduction in sustaining capital expenditures
through a strong emphasis on sustaining capital expenditure
controls.
Quarterly Dividend Declared
Agnico Eagle's Board of Directors has declared a
quarterly cash dividend of $0.08 per
common share, payable on March 15,
2016 to shareholders of record as of March 1, 2016. Agnico Eagle has now
declared a cash dividend every year since 1983.
Expected Dividend Record and Payment Dates for 2016
Record
Date |
Payment
Date |
March 1* |
March 16* |
June 1 |
June 15 |
September 1 |
September 15 |
December 1 |
December 15 |
*Declared
Dividend Reinvestment Plan
Please follow the link below for information on
the Company's dividend reinvestment plan. Dividend Reinvestment
Plan
Conference Call Tomorrow
The Company's senior management will host a conference call on
Thursday, February 11, 2016 at
11:00 AM (E.S.T.) to discuss
financial and operating results.
Via Webcast:
A live audio webcast of the conference call will be available on
the Company's website www.agnicoeagle.com.
Via Telephone:
For those preferring to listen by telephone,
please dial 416-260-0113 or toll-free 1-800-524-8950. To
ensure your participation, please call approximately five minutes
prior to the scheduled start of the call.
Replay Archive:
Please dial 1-647-436-0148 or toll-free
1-888-203-1112, access code 8252919. The conference call replay
will expire on March 15, 2016 at
2:00 PM (E.S.T.). The webcast
along with presentation slides will be archived for 180 days on
www.agnicoeagle.com.
Liquidity - Existing Cash and Credit Facility Provide
Flexibility
Cash and cash equivalents and short term investments decreased
to $131.6 million at December 31, 2015, from the September 30, 2015 balance of $208.1 million partly as a result of using cash
to repay outstanding balances on the Company's credit facility.
The outstanding balance on the Company's
$1.2 billion credit facility was
reduced from $350 million at
September 30, 2015 to $265 million at December
31, 2015, resulting in availability under its credit lines
of approximately $935 million, not
including the $300 million accordion
facility.
Total capital expenditures made by the Company
in the fourth quarter of 2015 were $133.0
million, including $22.2
million at Meliadine, $20.0
million at Pinos Altos,
$18.0 million at Meadowbank,
$18.0 million at Kittila,
$16.7 million at LaRonde,
$13.6 million at Canadian Malartic
(50% basis), $13.6 million at Goldex,
$7.9 million at La India,
$2.6 million at Creston Mascota and
$1.0 million at Lapa.
Total capital expenditures for the full year 2015 were
$449.8 million including $67.3 million at LaRonde, $66.7 million at Meliadine, $65.2 million at Meadowbank, $61.8 million at Pinos
Altos, $56.4 million at
Kittila, $48.8 million at Goldex,
$43.4 million at Canadian Malartic
(50% basis), $23.4 million at La
India, $6.5 million at Lapa and
$4.2 million at Creston Mascota.
Total sustaining capital expenditures made by
the Company in the fourth quarter of 2015 were $90.4 million, including $18.0 million at Meadowbank, $16.7 million at LaRonde, $15.1 million at Kittila, $13.6 million at Canadian Malartic (50% basis),
$11.4 million at Pinos Altos, $7.9
million at La India, $4.1
million at Goldex, $2.6
million at Creston Mascota and $1.0
million at Lapa.
Total sustaining capital expenditures for the full year 2015
were $305.1 million including
$67.3 million at LaRonde,
$65.2 million at Meadowbank,
$45.7 million at Kittila,
$41.6 million at Canadian Malartic
(50% basis), $35.5 million at
Pinos Altos, $23.4 million at La India, $15.7
million at Goldex, $6.5
million at Lapa, and $4.2
million at Creston Mascota.
Three-Year Guidance Plan Outlines a Stable Production and
Cost Profile
The Company is announcing its production and
cost guidance for 2016 through 2018. The Company expects
average annual production of approximately 1.53 million ounces over
the next three years with a stable cost profile.
Various internal projects at current operating
mines have the potential to add incremental production in 2018,
while Amaruq, Meliadine and El Barqueño are expected to add
significant production starting in 2019 to 2020. However, the
Company continues to take a prudent and measured approach to
development while maintaining financial flexibility.
In 2016, payable production is expected to be
between 1.525 million and 1.565 million ounces of gold. Total
cash costs per ounce on a by-product basis in 2016 are expected to
be in a range from $590 and
$630 using a US$/C$ exchange rate
assumption of 1.30. Previous production guidance for 2016
(from the February 2015 forecast),
was 1.60 million ounces.
The change in production compared to the
previous 2016 guidance is primarily due to the decision to proceed
with the expansion of the Vault pit at Meadowbank (thereby
extending the mine life). With the Vault extension, the
production forecast at Meadowbank was reduced in 2016, but
increased for 2017 and 2018.
Consolidated AISC for 2016 are expected to be
between $850 and $890 per ounce using
a US$/C$ exchange rate assumption of 1.30.
Sensitivities to the 2016 guidance are presented
in the table below:
2016
commodity and currency price
assumptions |
|
Approximate impact
on total cash costs per
ounce on a by-product basis |
Silver ($/oz) |
|
16.00 |
|
$1 / oz change in silver price |
$2 |
Copper ($/mt) |
|
4,700 |
|
10% change in copper price |
Nil |
Zinc ($/mt) |
|
1,750 |
|
10% change in zinc price |
Nil |
Diesel (C$/ltr)
US$/C$ |
|
0.77
1.30 |
|
10% change in diesel price
1.0% change in US$/C$ |
$2
$5 |
EURO$/US$ |
|
1.10 |
|
1.0% change in Euro$/US$ |
$1 |
US$/MXP |
|
16.00 |
|
10% change in US$/MXP |
$3 |
|
|
|
|
|
|
Estimated Payable
Gold
Production |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Northern Business |
|
2015 Actual |
|
|
2016
Forecast* |
|
2017
Forecast |
|
2018
Forecast |
LaRonde |
|
267,921 |
|
|
275,000 |
|
320,000 |
|
375,000 |
Canadian Malartic (50%) |
|
285,809
|
|
|
280,000
|
|
295,000
|
|
305,000
|
Lapa |
|
90,967 |
|
|
60,000 |
|
0 |
|
0 |
Goldex |
|
115,426 |
|
|
105,000 |
|
105,000 |
|
130,000 |
Kittila |
|
177,374 |
|
|
200,000 |
|
190,000 |
|
200,000 |
Meadowbank |
|
381,804 |
|
|
305,000 |
|
320,000 |
|
155,000 |
|
|
1,319,301 |
|
|
1,225,000 |
|
1,235,000 |
|
1,165,000 |
Southern Business |
|
|
|
|
|
|
|
|
|
Pinos Altos |
|
192,974 |
|
|
175,000 |
|
175,000 |
|
180,000 |
Creston Mascota |
|
54,703 |
|
|
45,000 |
|
40,000 |
|
40,000 |
La India |
|
104,362 |
|
|
100,000 |
|
105,000 |
|
115,000 |
|
|
352,039 |
|
|
320,000 |
|
320,000 |
|
335,000 |
Total Gold Production |
|
1,671,340 |
|
|
1,545,000 |
|
1,550,000 |
|
1,500,000 |
|
|
|
|
|
|
|
|
|
|
Total Cash Costs Per
Ounce |
|
|
|
|
|
2015 Actual |
|
2016
Forecast* |
Northern Business |
|
|
|
|
|
|
|
|
LaRonde |
|
|
|
|
|
$590 |
|
$592 |
Canadian Malartic
|
|
|
|
|
|
596
|
|
593
|
Lapa |
|
|
|
|
|
590 |
|
640 |
Goldex |
|
|
|
|
|
538 |
|
601 |
Kittila |
|
|
|
|
|
709 |
|
646 |
Meadowbank |
|
|
|
|
|
613 |
|
750 |
|
|
|
|
|
|
609 |
|
644 |
Southern Business |
|
|
|
|
|
|
|
|
Pinos Altos |
|
|
|
|
|
387 |
|
443 |
Creston Mascota |
|
|
|
|
|
430 |
|
604 |
La India |
|
|
|
|
|
436 |
|
470 |
|
|
|
|
|
|
408 |
|
474 |
Total |
|
|
|
|
|
$567 |
|
$608
|
*midpoint of expected ranges
In 2017, payable production is expected to be
approximately 1.55 million ounces of gold. Previous guidance
for 2017 (from the February 2015
forecast), was 1.50 million ounces. The increase in
production compared to the previous 2017 guidance is primarily due
to the Vault extension at Meadowbank, and increased production
expected at Goldex and La India. The increased production
levels at Goldex and La India are largely due to the forecast of
improved operating efficiencies at the mines.
In 2018, payable production is expected to be
approximately 1.50 million ounces of gold. However, the
Company is evaluating potential optimizations (none of which have
yet been approved for construction) at a number of existing
operations to further enhance the Company's production
profile. These potential optimizations are discussed in more
detail below.
Total cash costs per ounce on a by-product basis
for 2017 and 2018 are expected to be similar to the 2016
forecast. In 2017 and 2018, the Company's goal is to reduce
AISC below the level forecast for 2016.
Stable Three-Year Gold Production
Forecast
Since the prior three-year production guidance
of February 11, 2015 ("Previous
Guidance"), there have been several operating developments
resulting in changes to the overall three-year production
profile. Descriptions of these changes are detailed
below.
Northern Business
LaRonde Forecast |
2015 |
2016 |
2017 |
2018 |
Previous Guidance
(oz) |
245,000 |
300,000 |
330,000 |
n.a. |
Current Guidance (oz) |
267,921
(actual) |
275,000 |
325,000 |
375,000 |
LaRonde
2016
Forecast |
Ore
Milled
('000
tonnes) |
Gold (g/t),
Mill
Recovery |
Silver (g/t),
Mill
Recovery |
Zinc (%),
Mill
Recovery |
Copper (%),
Mill
Recovery |
Minesite
Costs
Per Tonne4 |
|
2,106 |
4.28, 94.9% |
20.0, 76.0% |
0.35, 56.1% |
0.3, 80.8% |
C$114 |
_____________________________ |
4 Minesite costs per tonne is a non-GAAP measure.
For a reconciliation of this measure to production costs as
reported in the financial statements, see "Reconciliation of
Non-GAAP Financial Performance Measures" below. See also
"Note Regarding Certain Measures of Performance". |
At LaRonde, the new cooling and ventilation
infrastructure that was commissioned in 2015 has helped to enhance
the productivity in the deeper portions of the mine.
Connection of the 269 and 293 mining pyramids and full
commissioning of the coarse ore conveyor is planned for 2016, which
should improve mining flexibility. The slightly lower
production guidance for 2016 (as compared to Previous Guidance) is
largely due to a more conservative sequence of merging strategic
mining pyramids. This year, about 89% of the ore will come
from the higher grade lower mine area (below the 248 level). The
increased production forecasts through 2018 largely reflect an
increase in grade closer to that of the average mineral
reserves.
Canadian Malartic
Forecast (50% basis) |
2015 |
2016 |
2017 |
2018 |
Previous Guidance (oz) |
280,000 |
290,000 |
290,000 |
n.a. |
Current Guidance (oz) |
285,809
(actual) |
280,000 |
295,000 |
305,000 |
Canadian Malartic
2016 Forecast |
Ore Milled
('000 tonnes) |
Gold
(g/t) |
Mill
Recovery |
Minesite
Costs
Per Tonne |
Strip
ratio |
|
9,505 |
1.03 |
89% |
C$23* |
2.4:1.0 |
*includes the 5% NSR
At Canadian Malartic (in which Agnico Eagle has
50% ownership) guidance for 2016 has been slightly reduced as
throughput levels are forecast to be approximately 53,000 tonnes
per day ("tpd"). Any increase in throughput above this 53,000
tpd level remains contingent upon updating the existing operating
permits. Several opportunities have been recognized to
further optimize productivity, which could provide additional
operational flexibility and result in increased production at the
mine.
Lapa Forecast |
2015 |
2016 |
2017 |
2018 |
Previous Guidance (oz) |
75,000 |
50,000 |
n.a. |
n.a. |
Current Guidance (oz) |
90,967
(actual) |
60,000 |
n.a. |
n.a. |
Lapa 2016
Forecast |
Ore Milled
('000
tonnes) |
Gold (g/t) |
Mill Recovery |
Minesite Costs
Per Tonne |
|
406 |
5.3 |
86.8% |
C$123 |
Under the current life of mine plan, Lapa is
only expected to operate until early into the fourth quarter of
2016. Two targets have been identified through exploration as
areas that could potentially support future mining activity
potentially in 2018, in a restart scenario. However,
additional exploration is required, and any potential production
from these areas are expected to require synergies with other
production opportunities such as the Bousquet Zone 5 or the Pandora
project (in which the Company has 50% ownership).
Goldex
Forecast |
2015 |
2016 |
2017 |
2018 |
Previous Guidance (oz) |
100,000 |
100,000 |
90,000 |
n.a. |
Current Guidance (oz) |
115,426
(actual) |
105,000 |
110,000 |
130,000 |
Goldex 2016
Forecast |
Ore Milled
('000 tonnes) |
Gold (g/t) |
Mill Recovery |
Minesite Costs
Per Tonne |
|
2,323 |
1.52 |
92.6% |
C$35 |
At Goldex, production in 2015 was above the
Previous Guidance due to a faster than expected ramp-up in mining
rates. Existing mineral reserves and exploitation of the M3
and M4 zones are expected to keep production levels and costs
relatively constant through 2017. In July 2015, the Company announced approval of the
Deep 1 project, which is expected to begin commissioning in
2018. Production guidance in 2018 reflects the potential to
increase mill throughput levels beyond the current forecast of
approximately 6,400 tpd.
Kittila
Forecast |
2015 |
2016 |
2017 |
2018 |
Previous Guidance (oz) |
185,000 |
185,000 |
190,000 |
n.a. |
Current Guidance (oz) |
177,374 (actual) |
200,000 |
190,000 |
200,000 |
Kittila 2016
Forecast |
Ore Milled
('000 tonnes) |
Gold (g/t) |
Mill Recovery |
Minesite Costs
Per Tonne |
|
1,567 |
4.7 |
84.5% |
€75 |
At Kittila, production in 2015 was below
Previous Guidance due to slightly lower grades, recoveries and
tonnes milled. A key focus at Kittila in 2015 was improving
mill reliability. Several projects were carried out in the
fourth quarter of 2015 which appear to have improved maintenance
performance. With further optimization, the Company believes
there is potential for improved mill availability, which could lead
to higher throughput levels in the future.
Kittila performed well in the fourth quarter of
2015 resulting in record average daily throughput of 4,750 tpd in
December 2015. The Company is
evaluating the potential to maintain this level of underground
performance as well as the potential to fast track production from
the upper portions of the Rimpi Zone and the newly discovered Sisar
Zone.
Meadowbank
Forecast |
2015 |
2016 |
2017 |
2018 |
Previous Guidance (oz) |
400,000 |
310,000* |
345,000* |
130,000* |
Current Guidance (oz) |
381,804 (actual) |
305,000 |
320,000 |
155,000 |
*See revised guidance from the Company's news release
dated July 29, 2015
Meadowbank 2016
Forecast |
Ore Milled
('000 tonnes) |
Gold (g/t) |
Mill
Recovery |
Minesite
Costs
Per Tonne |
|
3,862 |
2.73 |
90.0% |
C$77 |
In 2015, a decision was made at Meadowbank to
extend the Vault pit. This resulted in decreased forecast
production in 2016, but added approximately another year of
production (now through the third quarter of 2018). This
extension helps to partially bridge the production gap with the
potential development of the Amaruq deposit. Production
levels are expected to decline from 2017 to 2018 due to a decline
in grade as the current mineral reserve base is depleted.
A major drill program is again planned at Amaruq
in 2016 to expand the 3.3 million ounce inferred mineral resource
(see the discussion on mineral reserves and mineral resources
below) and to try to delineate a second source of open pit
ore. The ultimate goal remains to potentially develop the
Amaruq deposit as a satellite operation to Meadowbank.
Southern Business
Pinos Altos
Forecast |
2015 |
2016 |
2017 |
2018 |
Previous Guidance (oz) |
175,000 |
175,000 |
175,000 |
n.a. |
Current Guidance (oz) |
192,974 (actual) |
175,000 |
175,000 |
180,000 |
Pinos Altos
2016 Forecast |
Total Ore
('000 tonnes) |
Gold (g/t),
Recovery |
Silver (g/t),
Recovery |
Minesite
Costs
Per Tonne |
|
2,054 |
2.77, 95.5% |
74.1,
43.2% |
$54 |
At Pinos Altos,
production in 2015 significantly beat Previous Guidance, primarily
due to higher grades and slightly better mill throughput and
recovery. Going forward, throughput, grades and recoveries
are expected to remain relatively stable. Commissioning of
the Pinos Altos shaft in 2016 will
allow better matching of the future mining capacity with the mill
once the open pit mining operation begins to wind down, as planned,
over the next several years.
Creston Mascota
Forecast |
2015 |
2016 |
2017 |
2018 |
Previous Guidance (oz) |
50,000 |
45,000 |
40,000 |
n.a. |
Current Guidance (oz) |
54,703
(actual) |
45,000 |
40,000 |
40,000 |
Creston Mascota
2016 Forecast |
Total Ore
('000 tonnes) |
Gold (g/t),
Recovery |
Silver (g/t),
Recovery |
Minesite Costs
Per Tonne |
|
2,000 |
1.17, 60.0% |
12.5, 13.4% |
$15 |
At Creston Mascota, production in 2015 was
slightly better than Previous Guidance due to additional ore being
encountered outside the block model, which resulted in more tonnes
stacked on the leach pad. Infill drilling has encountered
higher grade mineralization below the Creston Mascota pit. Work is underway to
evaluate the impact of this mineralization on the pit design and
production planning. In 2016, further work is planned on the
Bravo deposit to evaluate it as a
potential source of additional production.
La India Forecast |
2015 |
2016 |
2017 |
2018 |
Previous Guidance (oz) |
90,000 |
90,000 |
95,000 |
n.a. |
Current Guidance (oz) |
104,362 (actual) |
100,000 |
105,000 |
115,000 |
La India
2016 Forecast |
Total Ore
('000 tonnes) |
Gold (g/t),
Recovery |
Silver (g/t),
Recovery |
Minesite Costs
Per Tonne |
|
5,341 |
0.92, 63.4% |
6.85, 11.0% |
$9 |
At La India, production in 2015 was above
Previous Guidance primarily due to favourable block model
variances. The 2015 exploration program resulted in a 28%
increase in mineral reserves year-over-year, and a 21% increase in
measured and indicated mineral resources. The Company is
evaluating near pit potential with a goal of further expanding the
mineral reserves at the Main and North Zones and will consider
opportunities to increase production at La India based on the
success of that program.
Near-term Mine Optimization Projects Could Potentially
Enhance 2018 Production
Over the next three years (2016 through 2018)
annual production is forecast to average approximately 1.53 million
ounces. The estimated production level in 2018 is currently
forecast to be approximately 1.50 million ounces. However,
the Company is evaluating potential optimizations and opportunities
(none of which have yet been approved for construction) at a number
of existing operations to further enhance the Company's production
profile in 2018 and beyond.
LaRonde Optimization
In 2003, the Company acquired the Bousquet gold
property from Barrick Gold.
The property adjoins the LaRonde mining complex to the east and
hosts the Bousquet Zone 5, which previous operators had
partly exploited by open pit. The Company is evaluating the
potential to initially mine the Bousquet Zone 5 from a depth of 90
to 330 metres below surface via an underground ramp. This
portion of the deposit contains indicated mineral resources of
approximately 566,000 ounces of gold (9.3 million tonnes grading
1.90 g/t gold) and inferred gold mineral resources of approximately
109,000 ounces of gold (1.47 million tonnes grading 2.31 g/t
gold). The mining method is likely to be similar to that
employed at Goldex, and processing could utilize excess capacity
from the Lapa circuit at LaRonde. Dewatering of the old pit
is underway and permit applications to collect a bulk sample will
be submitted shortly. An internal technical study is expected
to be completed by the end of 2016.
At the Lapa mine two areas (Zone 8 East -
Upper mine and the Zulapa 7- Deep 2 Zone) have been identified
through exploration (see Lapa mine discussion) as areas that could
potentially support future mining activity. Further
exploration and internal studies are underway to look at synergies
with other production opportunities such as the Bousquet Zone
5.
In addition, Canadian Malartic Corporation ("CMC", owned 50% by Agnico
Eagle and 50% by Yamana Gold Inc. "Yamana") is continuing to
explore the Pandora project, which adjoins the Lapa mine to
the west (for additional details see the Canadian Malartic section
of this news release). Should the exploration efforts be
successful, Pandora could potentially have synergies with the other
opportunities currently being evaluated at the Lapa mine.
Goldex Optimization
At present, the Goldex mill has about 25% excess
capacity (rated capacity is 8,000 tpd, but forecast to process
approximately 6,400 tpd in 2016). As such, the Company is
evaluating opportunities to potentially increase throughput from
the Deep 1 Zone, and the potential to mine a portion of the
Deep 2 Zone. These opportunities, and the potential
development of the Akasaba West deposit (see below), could enhance
production levels or extend the current mine life and reduce
operating costs.
In January 2014,
Agnico Eagle acquired the Akasaba West gold-copper deposit
from Alexandria Minerals. Located less than 30 km from
Goldex, the Akasaba West deposit could create flexibility and
synergies for the Company's operations in the Abitibi region by
utilizing extra milling capacity at both Goldex and LaRonde, while
reducing overall costs. Akasaba West currently hosts a probable
mineral reserve of 141,000 ounces of gold and 24,557 tonnes of
copper (4.76 million tonnes grading 0.92 g/t gold and 0.52%
copper). Permitting and technical studies are ongoing with the goal
of moving the project towards a production decision in late 2016 or
early 2017.
Kittila Optimization
Previous drilling on the Rimpi Zone at
Kittila has outlined a significant zone of mineralization with
potentially wider widths and better grades than those currently
being mined. The main underground ramp at Kittila is being
extended to reach the Rimpi Zone, and it is also providing further
underground drill access to test for additional depth extensions of
the Rimpi, Suuri, Roura and the newly discovered Sisar mineralized
zones.
In addition, a surface ramp is being driven into
the Rimpi Zone (now at a depth of 190 metres below surface) for
production purposes and to provide a second egress for the Suuri
ramp system. It will serve as the main haulage route from the
deeper portions of both Rimpi and Suuri and potentially the
Sisar Zone.
In 2015, a new sub-parallel zone of
mineralization (Sisar Zone) was recognized by exploration drilling
from the underground ramp being driven towards the deeper portion
of the Rimpi Zone. Additional drilling through year-end 2015
continued to yield favourable results (see Kittila mine discussion
in this news release) at Sisar, and an initial inferred mineral
resource of approximately 651,000 ounces of gold (3.4 million
tonnes grading 5.91 g/t gold) has been announced (see "Detailed
Mineral Reserve and Mineral Resource Data (as at December 31, 2015)" below). In 2016,
additional drilling is planned to infill and further expand the
Sisar mineralization.
Given that the Sisar Zone is located
approximately 200 metres directly east of the exploration ramp (at
a depth of approximately 800 metres below surface), Sisar could
potentially provide an additional source of underground ore to the
Kittila mill with relatively little additional underground
development.
With the potential for higher mill capacity
(approximately 20%) through ongoing optimization, development of
the Rimpi and Sisar zones could result in increased future
production levels and reduced operating costs at Kittila.
Mexican Opportunities
At Pinos
Altos and Creston Mascota, the Company continues
to evaluate the sequencing of additional satellite zones, which
could provide additional ore to the Pinos
Altos complex. This drill data is being incorporated
into preliminary studies along with metallurgical testing and
geotechnical data in order to better optimize the development
potential of remaining satellite resources including Sinter and
Bravo.
During 2015, higher grade mineralization was
encountered at the bottom of the Creston Mascota pit. Work is
underway to understand the potential impact of this mineralization
on the pit design and production planning.
At La India, additional drilling was carried out
in 2015 with a focus on extending mineralization in the Main Zone
and the La India Zone, and conversion of sulfide mineralization
into mineral reserves and mineral resources. In addition,
drilling was also carried out on a portion of the El Realito property. The 2015
exploration program and new ore model resulted in a 28% increase in
mineral reserves, and a 21% increase in measured and indicated
mineral resources (see "Detailed Mineral Reserve and Mineral
Resource Data (as at December 31,
2015)" below). The Company is looking at near pit
potential for further mineral reserve expansion and will consider
opportunities to increase production at La India based on the success of that
program.
Development/Expansion Projects in the Abitibi, Nunavut and Mexico Expected to Provide Longer-term Growth
Opportunities beyond 2019
The expansion and development projects set out below, which have
not yet been approved for construction, have the potential to add
to the Company's production profile in 2019 and beyond.
Amaruq - Expanding the Mineral Resource Base and Locating a
Second Open Pit Deposit is the Key Focus in 2016
The 100% owned Amaruq property consists of
114,760 hectares of Inuit and federal crown land. Agnico
Eagle acquired its initial interest in April
2013 pursuant to a mineral exploration agreement with
Nunavut Tunngavik
Incorporated.
In 2015, a $37.7
million exploration program (378 drill holes totalling
approximately 108,000 metres) was carried out at the Amaruq
project, which is located approximately 50 kilometres northwest of
the Meadowbank mine in Nunavut.
A large portion of last year's drill program was
focused on the Whale Tail Zone, where drilling has outlined up to
five mineralized lenses along a strike length of 2.3 kilometres and
to a depth of up to 600 metres below surface. Mineralization
at Whale Tail remains open in all directions. Significant
mineralization has also been outlined in the IVR area.
As a result of the 2015 exploration program, the
inferred mineral resource at Amaruq increased by approximately 67%
compared to the inferred mineral resource of 2.0 million ounces of
gold (see the Company's August 19,
2015 news release for comparison) to 3.3 million ounces of
gold (16.9 million tonnes grading 6.05 g/t gold) at December 31, 2015 (for additional details see the
mineral reserve and mineral resource discussion in this news
release).
The first phase of a planned 75,000 metre drill
program (costing approximately $19
million) began with two drills in early February 2016. The goals of this program
are to infill and expand the known mineral resource areas and test
other favourable targets (for additional details see the
exploration section below). A mineral resource update is
expected in the second half of 2016.
In late 2015, the Company received approvals for
the construction of an all-weather access road linking the Amaruq
access site to the Meadowbank mine. In 2016 the Company
expects to carry out additional engineering and begin road
preparation from the Vault pit at Meadowbank.
The Company expects to ultimately develop Amaruq
as a satellite operation to Meadowbank, with the potential to begin
production in 2019. Given that the initial mineral resource
grade at Amaruq is well in excess of the mineral reserve grade at
Meadowbank, the Company believes that there is good potential for
Amaruq to have similar annual output to Meadowbank in its peak
production years.
Permitting activities and engineering studies
for the construction of an initial open pit mine and an underground
exploration ramp at Amaruq are ongoing.
Meliadine - Moderate 2016 Capital Expenditures Preserves
Production Optionality
Located near Rankin
Inlet, Nunavut, Canada, the Meliadine project was acquired
in July 2010, and is one of Agnico
Eagle's largest gold projects in terms of mineral resources.
The Company owns 100% of the 111,757 hectare property.
The updated technical study for Meliadine
released last year (see March 12,
2015 news release) forecast average annual production of
approximately 350,000 ounces at a life-of-mine total cash costs per
ounce on a by-product basis of approximately $531 over a nine-year mine life. The study
used a gold price of C$1,495 per
ounce (as compared to a current spot price of approximately
C$1,657 per ounce on February 8, 2016).
The technical study was based on extracting only
the 3.3 million ounces of gold in proven and probable mineral
reserves at December 31, 2014 (13.9
million tonnes of ore grading 7.44 g/t gold), which is all
contained in the Tiriganiaq and Wesmeg deposits.
At December 31,
2015, the Meliadine property hosted 3.4 million ounces of
proven and probable mineral reserves (14.5 million tonnes of ore
grading 7.32 g/t gold), 3.31 million ounces of measured and
indicated mineral resources (20.8 million tonnes of ore grading
4.95 g/t gold), and 3.55 million ounces of inferred mineral
resources (14.7 million tonnes of ore grading 7.51 g/t gold).
In addition, there are numerous other known gold occurrences in the
80-kilometre-long greenstone belt that require further
evaluation.
The capital budget for 2016 is $96 million with activities focused on further
underground development (approximately 3,000 metres), detailed
engineering and procurement, construction of essential surface
infrastructure and acquisition of a used camp facility. The
goal of the 2016 capital program is to ensure that the project
remains on track for a potential 2020 production start-up, which is
approximately a one year delay from previous expectations.
Internal studies are ongoing to evaluate the
potential to extract additional ounces of gold from the Tiriganiaq
and Wesmeg/Normeg deposits that could potentially extend the mine
life, increase annual production and improve the project economics
and the after-tax internal rate of return. These studies are
expected to be completed in the third quarter of 2016.
On October 5,
2015, the Nunavut Water Board issued the permit (License B)
for Meliadine pre-development work. License A, which is
required for production activities, is expected to be granted in
the second quarter of 2016.
The timing of future capital expenditures on the
Meliadine project beyond 2016 and the determination of whether to
build a mine at Meliadine are subject to approval by Agnico Eagle's
Board of Directors which will be based on prevailing market
conditions and outcomes of the various potential scenarios being
evaluated.
El Barqueño - Initial Mineral Resource Announced, Significant
Drilling Planned in 2016
The El Barqueño property in Jalisco State,
Mexico covers a land position with
known strike extent for mineralization larger than both the La
India and Pinos Altos properties combined.
Previous property owners outlined several mineralized zones through
surface exploration and diamond drilling.
In 2015, the Company completed approximately
69,500 metres of drilling at a cost of $17
million on the El Barqueño property. The primary focus
of the 2015 program was to define the limits of the
Azteca-Zapoteca, Angostura and
Peña de Oro prospects, and
delineate an initial mineral resource estimate for these
deposits. Several other prospects were also under
evaluation.
Based on the 2015 exploration results and
previous work programs, the Company has estimated initial total
inferred in-pit mineral resources of approximately 0.61 million
ounces (19.7 million tonnes grading 0.96 g/t gold) from the
Azteca-Zapoteca, Angostura and
Peña de Oro areas to open-pit
mineable depths. An additional 11,000 metres of drilling has
been completed since the estimation of the inferred mineral
resource. Further details on the El Barqueño inferred mineral
resource can be found in "Detailed Mineral Reserve and Mineral
Resource Data (as at December 31,
2015)" below.
In 2016, Agnico Eagle plans to carry out a
$13 million exploration program to
further expand and infill the known mineral resource areas and
evaluate other prospective targets such as: Olmeca, Zapote, Mixteca, El
Rayo, and Pilarica. At present there are 14 drills operating
on the project.
While it is too early to estimate the full
extent of the mineral resources and the number of deposits with
economic potential at El Barqueño, the Company has the experience
of developing cost-efficient mining operations in Mexico and increasing their size through
successful exploration as well as metallurgical innovation.
This body of knowledge will be applied as El Barqueño continues to
be explored and studied.
Agnico Eagle believes that El Barqueño
ultimately has the potential to be developed into a series of open
pits utilizing heap leach processing, similar to the Creston
Mascota and La India mines. Conceptual design studies and
additional metallurgical testing are underway at El Barqueño with a
goal of potentially starting operations in 2019.
Canadian Malartic - Odyssey Zone and Near Pit Opportunities
Could Provide Future Production Upside
At the Canadian Malartic mine (owned 50% by
Agnico Eagle and 50% by Yamana), exploration programs are planned
to evaluate a number of near pit/underground targets at the mine
and further define the extent of the mineralization at the Odyssey
Zone (which is located to the east of the Canadian Malartic open
pit). Both of these opportunities could provide new potential
sources of ore for the Canadian Malartic mill.
In 2016, the Canadian Malartic block model will
be reviewed to further define the potential of a number of near
pit/underground targets and a 60,000 metre drill program has been
proposed to further evaluate the extent of the mineralization at
Odyssey. For additional details on these opportunities, see
the Canadian Malartic section of this news release.
LaRonde - Studies Ongoing to Evaluate Potential to Mine Below a Depth of 3.1 Kilometres
Studies are continuing to assess the potential
to extend the mineral reserves and carry out mining activities
between the 311 and 371 levels at LaRonde. At present, the
mineral reserves extend to the 311 level, which is 3.1 kilometres
below the surface. Drilling is ongoing to further expand the
known mineral resource between the 311 and 341 levels.
Additional holes are also being drilled to evaluate the extent of
the mineralization down to the 371 level (a depth of 3.7 kilometres
below the surface). In 2016, the focus of drilling will be on
mineral resource expansion and mineral resource to mineral reserve
conversion in the western portion of the LaRonde orebody.
Continued Capital Discipline in 2016
Based on the Company's budget assumptions.
Agnico Eagle expects to fund this year's capital expenditures,
which are estimated to total approximately $491 million, from operating cash flow.
The estimated capital expenditures for 2016
include approximately $297 million of
sustaining capital at the mines and $179
million on development projects, as set out in the table
below. Additionally, approximately $15
million is estimated to be spent on capitalized exploration
and approximately $138 million on
expensed exploration, project evaluation and corporate
development.
Estimated 2016 Capital
Expenditures |
|
|
Sustaining |
|
Development
Projects |
|
Capitalized
Exploration |
|
Expensed
Exploration |
(millions of $) |
|
|
|
|
|
|
|
|
|
Northern Business |
|
|
|
|
|
|
|
|
|
LaRonde |
|
|
62 |
|
- |
|
2 |
|
2 |
Lapa |
|
|
- |
|
- |
|
- |
|
1 |
Goldex |
|
|
10 |
|
64 |
|
3 |
|
- |
Kittila |
|
|
56 |
|
10 |
|
3 |
|
9 |
Meadowbank |
|
|
41 |
|
- |
|
- |
|
- |
Amaruq |
|
|
- |
|
- |
|
- |
|
43 |
Meliadine |
|
|
- |
|
96 |
|
- |
|
- |
Canadian Malartic |
|
|
59 |
|
2 |
|
- |
|
8 |
|
|
|
228 |
|
172 |
|
8 |
|
63 |
Southern Business |
|
|
|
|
|
|
|
|
|
Pinos Altos |
|
|
54 |
|
7 |
|
2 |
|
- |
La India |
|
|
8 |
|
- |
|
2 |
|
2 |
Creston Mascota |
|
|
7 |
|
- |
|
1 |
|
- |
|
|
|
69 |
|
7 |
|
5 |
|
2 |
Project Eval/Corp Dev |
|
|
|
|
|
|
|
|
36 |
Other Exploration |
|
|
|
|
|
|
2 |
|
37 |
Total Expenditures |
|
|
297 |
|
179 |
|
15 |
|
138 |
2016 Exploration Program and Budget - Main Focus on Amaruq,
El Barqueño and the Sisar Zone at Kittila
A large component of the 2016 exploration
program will be focused on the Amaruq project near the Meadowbank
mine in Nunavut, the El Barqueño
project in Jalisco State, Mexico
and the Sisar Zone at the Kittila mine in Finland. These exploration programs are
designed to infill and expand known deposits and test other
favourable target areas. The goal is to delineate mineral
reserves and mineral resources that can supplement the Company's
existing production profile.
The 2016 Amaruq drill program commenced earlier
this month with two drills testing targets in the Mammoth Lake
area. Eventually the Company expects to have eight to ten
drills operating with a focus on infilling and expanding the known
mineralized zones, testing other nearby targets with a focus on
developing a second source of open pit ore and further evaluation
of regional target areas. The initial 2016 exploration
program contemplates approximately 75,000 metres of drilling with a
budget of approximately $19
million. The 2016 program also includes engineering
studies and permitting activities for the construction of an
initial open pit mine and an underground exploration ramp.
Exploration expenditures at El Barqueño in 2016
are budgeted at $13 million for
mineral resource development, conversion and regional
exploration. There are currently 14 drills on the property
working to define the limits of the known prospects and test new
target areas such as: Olmeca, Zapote, Mixteca, El
Rayo, and Pilarica.
El Barqueño's gold-silver deposits could
potentially be developed into a series of open pits utilizing heap
leach processing, similar to Creston Mascota and the La India mines.
In 2016, approximately $5 million
will be spent on further deep drilling at Kittila (which includes
the Sisar Zone). The goal of this program is to expand and
upgrade the mineral resources and evaluate the potential to
possibly develop the Sisar Zone as a new mining horizon at
Kittila.
Depreciation Guidance
Agnico Eagle expects its 2016 depreciation and amortization
expense to be in the range of $630 to $660
million.
General & Administrative Cost Guidance
Agnico Eagle expects 2016 general and
administration expense to be between $70 and
$80 million, excluding share based compensation. In
2016, share based compensation is expected to be between
$20 and $25 million including stock
option expense (which is a non-cash item) of between $18 and $22 million, which is consistent with
previous years.
Please see the supplemental financial data
section of the Financial and Operating Database on the Company's
website for additional historical financial data.
Tax Guidance for 2016
For 2016, the jurisdictional tax rates are expected to be:
Canada - 40% to 50%
Mexico - 35% to 40%
Finland - 20%
The Company's overall tax rate is expected to be between 40% and
45%.
Gold Reserves Decrease Slightly to Approximately 19.1M
Ounces, Reserve Grade Increased at Key Operations
To estimate the 2015 year-end mineral reserves,
the Company continued to use conservative assumptions: $1,100/ounce gold and $16/ounce silver, US$/C$, €/US$ and US$/MPX
exchange rates of 1.16, 1.20 and 14.00, respectively for all mines
and projects, other than Lapa, Meadowbank, Creston Mascota and the
Santo Niño pit at Pinos
Altos. Due to the shorter mine life of these mining
operations, the Company used exchange rate assumptions for US$/C$
and US$/MXP of 1.30 and 16.00, respectively (other assumptions
unchanged).
At year-end 2015, the Company's proven and
probable mineral reserves (net of 2015 production) totaled 251
million tonnes of ore grading 2.37 g/t gold, containing
approximately 19.1 million ounces of gold. This is a decrease
of approximately 0.9 million ounces of gold (5%) compared with a
year earlier. The decrease in the Company's mineral reserves
is largely due to the 1,671,340 ounces of payable gold production
in 2015 (1,910,000 ounces of in-situ gold mined), partially offset
by successful conversion of measured and indicated mineral
resources to mineral reserves at several operations.
Highlights from the December 31, 2015 Mineral Reserve Statement
include:
- Increased mineral reserve grades at LaRonde (5.31 g/t gold
versus 5.20 g/t gold), Canadian Malartic (1.08 g/t gold versus 1.06
g/t gold), Goldex (1.61 g/t gold versus 1.49 g/t gold), and La
India (0.90 g/t gold versus 0.85 g/t gold)
- At Goldex, the mineral reserves almost doubled to 668,000
ounces of gold with an 8% increase in the mineral reserve
grade
- At the Akasaba project, initial mineral reserves of 141,000
ounces of gold are reported (4.8 million tonnes grading 0.92 g/t
gold and 0.52% copper)
- At La India, the mineral reserves increased by 28% (188,000
ounces) to 867,000 ounces of gold (30.0 million tonnes of ore
grading 0.90 g/t gold and 4.23 g/t silver)
The Company's year-end 2015 gold reserves are
set out below:
Gold Mineral Reserves |
|
|
Proven & Probable |
|
|
|
Average Gold |
By Mine |
|
|
Mineral Reserve (000s
gold
ounces) |
|
|
|
Mineral Reserve Grade (g/t) |
|
|
|
2015 |
2014 |
Change |
|
|
|
2015 |
|
|
|
2014 |
|
|
Change |
Northern Business |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LaRonde |
|
|
3,109 |
3,432 |
-323 |
|
|
|
5.31 |
|
|
|
5.20 |
|
|
0.11 |
Canadian Malartic (50%) |
|
|
3,863 |
4,329 |
-466 |
|
|
|
1.08 |
|
|
|
1.06 |
|
|
0.02 |
Lapa |
|
|
78 |
170 |
-92 |
|
|
|
5.49 |
|
|
|
5.84 |
|
|
-0.35 |
Goldex |
|
|
668 |
340 |
328 |
|
|
|
1.61 |
|
|
|
1.49 |
|
|
0.12 |
Akasaba |
|
|
141 |
0 |
141 |
|
|
|
0.92 |
|
|
|
- |
|
|
|
Kittila |
|
|
4,353 |
4,524 |
-171 |
|
|
|
4.80 |
|
|
|
4.93 |
|
|
-0.13 |
Meadowbank |
|
|
943 |
1,168 |
-225 |
|
|
|
2.72 |
|
|
|
3.08 |
|
|
-0.36 |
Meliadine |
|
|
3,417 |
3,335 |
82 |
|
|
|
7.32 |
|
|
|
7.44 |
|
|
-0.12 |
Subtotal/Average |
|
|
16,572 |
17,299 |
-726 |
|
|
|
2.57 |
|
|
|
2.57 |
|
|
- |
Southern Business |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pinos Altos |
|
|
1,459 |
1,763 |
-304 |
|
|
|
2.88 |
|
|
|
3.01 |
|
|
-0.13 |
Creston Mascota |
|
|
176 |
236 |
-59 |
|
|
|
1.30 |
|
|
|
1.25 |
|
|
0.05 |
La India |
|
|
867 |
679 |
188 |
|
|
|
0.90 |
|
|
|
0.85 |
|
|
0.05 |
Subtotal/Average |
|
|
2,502 |
2,678 |
-175 |
|
|
|
1.56 |
|
|
|
1.70 |
|
|
-0.14 |
Total Mineral Reserves |
|
|
19,075 |
19,976 |
-902 |
|
|
|
2.37 |
|
|
|
2.40 |
|
|
-0.03 |
Amounts presented in the table and in this news
release have been rounded to the nearest thousand. See
"Detailed Mineral Reserve and Mineral Resource Data (as at
December 31, 2015)" set out at the
end of this news release for more details.
In prior years, economic parameters used to
model mineral reserves for all properties were calculated using
historic three-year average metals prices and foreign exchange
rates in accordance with the U.S. Securities and Exchange
Commission (the "SEC") guidelines. These guidelines require
the use of prices that reflect current economic conditions at the
time of mineral reserve estimation, which the SEC has interpreted
to mean historic three-year average prices. Given the current
lower commodity price environment, Agnico Eagle has decided to
continue to use more conservative gold and silver prices of
$1,100 per ounce and $16 per ounce, respectively, for the December 2015 mineral reserve estimates.
These prices are well below the three-year historic gold and silver
price averages (from January 1, 2013
to December 31, 2015) of
approximately $1,279 per ounce and
$19.54 per ounce, respectively.
The assumptions used for the December 2015 mineral reserves and mineral
resources estimate at all mines and advanced projects reported by
the Company (other than the Canadian Malartic mine) were
$1,100 per ounce gold, $16 per ounce silver, $0.90 per pound zinc, $2.50 per pound copper and exchange rates of
C$1.16 per $1.00, 14.00 Mexican pesos per $1.00 and $1.20 per
€1.00 for all mines and projects other than the Lapa and Meadowbank
mines in Canada, and the Creston
Mascota mine and Santo Niño pit at the Pinos Altos mine in Mexico; due to the shorter mine life for the
Lapa and Meadowbank mines in Canada, and the Creston Mascota mine and Santo Niño pit at the
Pinos Altos mine in Mexico, the exchange rates used were
C$1.30 per $1.00 and 16.00 Mexican pesos per
$1.00. The Canadian Malartic General
Partnership (the "Partnership"), owned by Agnico Eagle (50%) and
Yamana (50%), which owns and operates the Canadian Malartic mine,
has estimated the mine's December
2015 mineral reserves and mineral resources using the
following assumptions: $1,150 per
ounce gold, a cut-off grade between 0.30 g/t and 0.33 g/t gold
(depending on the deposit) and an exchange rate of C$1.24 per $1.00.
Details of the economic parameters used in
generating the December 2015 mineral
reserves are shown with the "Detailed Mineral Reserve and Mineral
Resource Data (as at December 31,
2015)" tables below.
While the gold price (in U.S. dollars) and
currency exchange rates have changed, the gold price has remained
relatively stable over the past 36 months, when reported in the
Canadian dollar, Euro or Mexican peso. The following table
shows the changes in gold price (in various currencies) and
exchange rates used in the assumptions over the past three years,
using the exchange rate assumptions of the long-life mines for the
2015 estimate.
Comparison of assumptions used to estimate mineral reserves
and the gold price in local currencies in 2013, 2014 and
2015
|
December 31 |
|
2015 |
|
2014 |
|
2013 |
Currency exchange rate |
|
|
|
|
|
US$/C$ |
1.16 |
|
1.08 |
|
1.03 |
Euro/US$ |
1.20 |
|
1.30 |
|
1.32 |
US$/MXP |
14.00 |
|
13.00 |
|
12.75 |
Gold price per ounce in local
currencies |
|
|
|
|
|
US$ |
US$1,100 |
|
US$1,150 |
|
US$1,200 |
C$ |
C$1,276 |
|
C$1,242 |
|
C$1,236 |
Euros |
€917 |
|
€885 |
|
€909 |
Mexican pesos |
MPX15,400 |
|
MPX14,950 |
|
MPX15,300 |
The Company's overall mineral reserve gold grade
has decreased slightly to 2.37 g/t from 2.40 g/t. This is the
result of a reduction in the cut-off grades at each operation
because of a slight increase of the assumed gold price when
converted to local currencies (shown in the table above).
Agnico Eagle has one of the highest mineral reserve grades among
its North American peers.
In the Northern Business, gold contained in
mineral reserves decreased by 726,000 ounces (4%) in 2015; during
the year this business segment produced 1,319,301 ounces of gold
(1,451,000 ounces of in-situ gold mined).
The largest mineral reserve increase in the
Northern Business was at the Goldex mine, where the amount
contained in mineral reserves increased by 328,000 ounces of gold
(96%), year-over-year, to 668,000 ounces of gold, with an 8%
increase in the mineral reserve grade to 1.61 g/t gold from 1.49
g/t gold. The increase is largely due to the successful
conversion of mineral resources to mineral reserves, mainly in the
D Zone as well as in the M and E zones. These are the initial
D Zone probable mineral reserves (354,000 ounces of gold in 6.3
million tonnes of ore grading 1.75 g/t gold), related to the
approval of mining the Deep 1 project announced in the Company's
news release dated July 29,
2015. This increase was offset by the 2015 production
of 115,426 ounces of gold (123,000 ounces of in-situ gold
mined).
At the nearby Akasaba project, initial probable
mineral reserves reported are 141,000 ounces of gold (4.8 million
tonnes grading 0.92 g/t gold and 0.52% copper), the result of
conversion of indicated mineral resources to mineral reserves.
Canadian Malartic had the largest decline in
mineral reserves; its mineral reserves decreased by 466,000 ounces
of gold, mainly due to 2015 gold production of 285,809 ounces
(322,000 ounces of in-situ gold mined). The remainder of the
decline was due to a slight reduction in the pit shells related to
the incorporation of the 5% net smelter return royalty payable to
Osisko Gold Royalties Ltd. and the termination of the Gouldie open
pit. All numbers shown for Canadian Malartic reflect Agnico
Eagle's 50% ownership in the mine.
The decrease in the Meadowbank mine's mineral
reserves by mine depletion was partially offset by the conversion
of mineral resources to mineral reserves for the Vault pit
extension, announced in the Company's news release dated
July 29, 2015.
At Kittila, the mining depletion was partially
offset by successful conversion of mineral resources to mineral
reserves.
In the Southern Business, the gold contained in
mineral reserves decreased by approximately 175,000 ounces (7%) in
2015. This business segment had production of 352,039 ounces
of gold (459,000 ounces of in-situ gold mined) in 2015.
There was a large increase at the La India mine
where the gold mineral reserves increased by 28% (188,000 ounces)
to 867,000 ounces of gold (30.0 million tonnes of ore grading 0.90
g/t gold and 4.23 g/t silver) compared with a year ago. The
mine depletion was more than offset by the addition of new oxide
reserves and by conversion of sulphide mineral resources to mineral
reserves in the Main pit, the result of successful metallurgical
investigations in 2015 and field-proven experience with the North
Zone sulphide material.
The 304,000-ounce decline in mineral reserves at
Pinos Altos was due to 2015
production of 192,974 ounces of gold (205,000 ounces of in-situ
gold mined) as well as a change to the Cerro Colorado block model based on
information gained from geological mapping and mining
development.
It is the Company's goal to maintain its global
mineral reserves at approximately 10 to 15 times its annual gold
production rate. The current mineral reserves are within this
range when compared to the Company's projected annual 2016
production rate.
In addition to gold, Agnico Eagle's proven and
probable mineral reserves include by-product metals of
approximately 55 million ounces of silver at the Pinos Altos, LaRonde, La India and Creston
Mascota mines (68.2 million tonnes of ore grading an average of
25.0 g/t silver), plus 147,927 tonnes of zinc and 43,357 tonnes of
copper at the LaRonde mine (18.2 million tonnes of ore grading
0.81% zinc and 0.24% copper) and 24,557 tonnes of copper at the
Akasaba project (4.8 million tonnes grading 0.52% copper).
At a gold price of $1,200 per ounce (leaving all other assumptions
unchanged), there would be an approximate 5.4% increase in the gold
contained in proven and probable mineral reserves.
Conversely, using a gold price of $1,000 (leaving all other assumptions unchanged),
there would be an estimated 5.4% decrease in the gold contained in
proven and probable mineral reserves.
Measured and Indicated Mineral Resources Grow by
Approximately 1%, While Inferred Mineral Resources Increase by
Approximately 23%
Highlights from the December 31, 2015 Mineral Resource Statement
include:
- Measured and indicated mineral resources now total
approximately 309 million tonnes of ore grading 1.52 g/t gold, or
approximately 15.1 million ounces of gold. This represents an
increase of approximately 1% over the 2014 estimate
- Inferred mineral resources total approximately 230 million
tonnes of ore grading 2.24 g/t gold, or approximately 16.5 million
ounces of gold. This represents an increase of approximately
23% over the 2014 estimate
- At Amaruq, inferred mineral resources increased by
approximately 67% to 3.3 million ounces of gold (16.9 million
tonnes grading 6.05 g/t gold)
- There was a 43% increase (approximately 533,000 ounces of gold)
in inferred mineral resources at Kittila, which includes initial
mineral resources in the Sisar Zone discovered in 2015
- An initial inferred mineral resource of 608,000 ounces of gold
and 3.7 million ounces of silver (19.7 million tonnes grading 0.96
g/t gold and 5.78 g/t silver) was estimated at the El Barqueño
project in Mexico
- At Canadian Malartic, the approach of tripling the cut-off
grade of the out-pit mineral resources had the effect of removing
343,000 ounces from the measured and indicated mineral resources,
leaving 625,000 ounces (12.8 million tonnes of ore grading 1.51 g/t
gold) in measured and indicated mineral resources. The same
approach resulted in removing 344,000 ounces from the inferred
mineral resource base, leaving 213,000 ounces (4.5 million tonnes
of ore grading 1.47 g/t gold) of inferred mineral resources. The
cut-off grade used for the calculation of mineral resources at
Canadian Malartic is now similar to that used at Goldex
The Company's measured and indicated mineral
resources now total approximately 309 million tonnes of ore grading
1.52 g/t gold, or 15.1 million ounces of gold. This represents
approximately a 1% increase in ounces and a slight increase in
grade over the December 2014 measured
and indicated mineral resource (see the April 30, 2015 news release for
comparison). Two of the Kirkland
Lake properties of CMC (50% owned by Agnico Eagle) reported
increased indicated mineral resources: the Upper Beaver project
increased by 179,000 ounces of gold to 901,000 ounces (4.4 million
tonnes grading 6.36 g/t gold), while the Amalgamated Kirkland
("AK") project reported initial indicated mineral resources of
133,000 ounces of gold (0.63 million tonnes grading 6.51 g/t gold)
(these amounts represent Agnico Eagle's 50% interest).
Measured and indicated mineral resources at
Kittila increased by 198,000 ounces of gold. La India's
measured and indicated mineral resources increased by 143,000
ounces of gold. These increases were offset by the successful
conversion drilling from inferred mineral resources at several of
the operations, particularly Akasaba and Meadowbank.
At Canadian Malartic, the gold in all mineral
resource categories declined as the result of adjusting the
approach to the out-pit material (adjacent to or below the pit
outline) throughout the property. The approach of tripling
the cut-off grade of the out-pit mineral resources had the effect
of removing 343,000 ounces from the measured and indicated mineral
resources, leaving 625,000 ounces (12.8 million tonnes of ore
grading 1.51 g/t gold) in measured and indicated mineral
resources. The same approach resulted in removing 344,000
ounces from the inferred mineral resource base, leaving 213,000
ounces (4.5 million tonnes of ore grading 1.47 g/t gold) of
inferred mineral resources. The cut-off grade used for the
calculation of mineral resources at Canadian Malartic is now
similar to that used at Goldex. All data shown for Canadian
Malartic represent Agnico Eagle's 50% ownership.
The Company's inferred mineral resources now
total 230 million tonnes of ore grading 2.24 g/t, or approximately
16.5 million ounces of gold. This represents an increase of
23% or approximately 3.1 million ounces of gold in inferred mineral
resources (see the Company's April 30,
2015 news release for comparison).
The largest part of this increase is the
significant updated inferred mineral resource of 16.9 million
tonnes grading 6.05 g/t gold (approximately 3.3 million ounces of
gold) at the higher-grade Amaruq discovery, which is 50 kilometres
from the Meadowbank mine in Nunavut. This is an increase of 1.8
million ounces of gold compared with a year ago. Approximately 56%
of the Amaruq mineral resources are near-surface.
A portion of the 2015 exploration program at
Amaruq involved drill testing portions of the Whale Tail deposit
from the north to the south to gain a better understanding of the
geological controls on the mineralization. This drilling led
to the modelling of thicker, but slightly lower grade zones of
mineralization, which resulted in a modest decline in the grade of
the inferred mineral resources reachable by open pit.
As at December 31,
2015, an initial inferred mineral resource of 608,000 ounces
of gold and 3.7 million ounces of silver (19.7 million tonnes
grading 0.96 g/t gold and 5.78 g/t silver) was estimated at the El
Barqueño project in Mexico.
This maiden mineral resource consists of inferred mineral resources
from the Azteca-Zapoteca, Angostura and Peña de Oro zones based on preliminary open pit
designs.
Exploration drilling at depth was responsible
for a 43% increase (approximately 533,000 ounces of gold) in
inferred mineral resources at Kittila, which includes initial
mineral resources in the Sisar Zone, which was discovered in
2015. More details about Sisar can be found in the Kittila
operations section of this news release.
The Upper Beaver and AK properties in the
Kirkland Lake area (50% owned by
Agnico Eagle) also reported increased inferred mineral resources,
the result of new drilling programs on these projects. The
Upper Beaver project increased inferred mineral resources by
136,000 ounces of gold to 659,000 ounces (3.45 million tonnes
grading 5.94 g/t gold), while the AK project reported initial
inferred mineral resources of 203,000 ounces of gold (1.19 million
tonnes grading 5.32 g/t gold) (in each case, representing Agnico
Eagle's 50% interest).
Successful conversion drilling at depth at the
Goldex mine resulted in approximately 329,000 ounces of gold from
the inferred mineral resource category to mineral reserves.
The distribution of mineral resources by
property is set out in the following table. For full details
including tonnage and grade, see the "Detailed Mineral Reserve and
Mineral Resource Data (as at December 31,
2015)" below.
December 31, 2015 Mineral
Resources
|
|
|
Measured & Indicated |
|
|
Inferred |
|
|
|
Mineral Resources |
|
|
Mineral Resources |
|
|
|
(000 oz gold) |
|
|
(000 oz gold) |
Northern Business |
|
|
|
|
|
|
LaRonde |
|
|
767 |
|
|
1,251 |
Canadian Malartic (50%) |
|
|
625 |
|
|
213 |
Lapa |
|
|
155 |
|
|
302 |
Goldex |
|
|
2,075 |
|
|
1,211 |
Kittila |
|
|
1,548 |
|
|
1,764 |
Meadowbank |
|
|
720 |
|
|
441 |
Meliadine |
|
|
3,306 |
|
|
3,552 |
Amaruq |
|
|
- |
|
|
3,283 |
Bousquet/Ellison |
|
|
969 |
|
|
917 |
Hammond Reef (50%) |
|
|
2,250 |
|
|
6 |
Upper Beaver (Kirkland Lake)
(50%) |
|
|
901 |
|
|
659 |
Akasaba |
|
|
54 |
|
|
- |
AK (Kirkland Lake) (50%) |
|
|
133 |
|
|
203 |
Other |
|
|
31 |
|
|
420 |
Subtotal |
|
|
13,535 |
|
|
14,221 |
|
|
|
|
|
|
|
Southern Business |
|
|
|
|
|
|
Creston Mascota |
|
|
70 |
|
|
145 |
Pinos Altos |
|
|
655 |
|
|
505 |
La India |
|
|
828 |
|
|
1,068 |
El Barqueño |
|
|
- |
|
|
608 |
Subtotal |
|
|
1,553 |
|
|
2,325 |
Total Mineral Resources |
|
|
15,089 |
|
|
16,546 |
NORTHERN BUSINESS REVIEW
ABITIBI REGION, QUEBEC
Agnico Eagle is currently Quebec's largest gold producer with a 100%
interest in three mines (LaRonde, Goldex and Lapa) and a 50%
interest in the Canadian Malartic mine. These mines are located
within 50 kilometres of each other, which provides operating
synergies and allows for the sharing of technical expertise.
LaRonde Mine - Increased Tonnage From Lower Mine Drives
Record Quarterly Production
The 100% owned LaRonde mine in northwestern
Quebec achieved commercial
production in 1988.
The LaRonde mill processed an average of 6,128
tpd in the fourth quarter of 2015, compared with an average of
5,847 tpd in the corresponding period of 2014. Minesite costs
per tonne were approximately C$94 in
the fourth quarter of 2015, lower than the C$97 per tonne experienced in the fourth quarter
of 2014. Throughput in the 2014 period was lower and costs
were higher due to the ten days of unscheduled shutdown related to
a production hoist drive failure at shaft #4 (the internal winze)
in December 2014.
Milling performance for the full year 2015 was
approximately 6,141 tpd, compared to 5,713 tpd in 2014.
Throughput in the 2014 period was lower due primarily to the
planned shutdowns for the installation of new hoist drives to
replace obsolete production and service hoist equipment in the
Penna shaft. Minesite costs per tonne for the full year 2015
were approximately C$99, unchanged
from C$99 per tonne in 2014.
LaRonde's total cash costs per ounce on a
by-product basis were $510 in the
fourth quarter of 2015 on payable production of 73,161 ounces of
gold. This compares with the fourth quarter of 2014 when
total cash costs per ounce on a by-product basis were $590 on production of 59,316 ounces of
gold. The decrease in total cash costs per ounce in the 2015
period was largely due to higher production (due to higher gold
grades from the lower mine area and the improved recoveries from
the CIP circuit) and favourable foreign exchange rates.
For the full year 2015, LaRonde's total cash
costs per ounce on a by-product basis were $590 on gold production of 267,921 ounces.
This compares to total cash costs per ounce on a by-product basis
of $668 on gold production of 204,652
ounces in 2014. The higher production and lower costs in the
2015 period are primarily due to the reasons outlined above.
In 2015, the LaRonde mine also produced
approximately 3,501 tonnes of zinc (67% less than in 2014), 0.9
million ounces of silver (28% less than in 2014), and 4,941 tonnes
of copper (1% less than in 2014) as by-products to the gold
production. These totals are consistent with the change in
the metals mix as the mine goes deeper and becomes more gold rich
as opposed to zinc/silver rich in the upper levels. In 2016,
approximately 89% of production is expected to come from the lower
mine area (below the 248 level).
In 2015, work was completed on the installation
of the coarse ore conveyor system that extends from the 293 level
to the crusher on the 280 level. The new conveyor was
commissioned in the fourth quarter and a new ore pass and silo
designed to feed the conveyor system are expected to be
commissioned in the second quarter of 2016. This new conveyor
should help improve mining flexibility and reduce congestion in the
deeper portions of the mine.
Studies are ongoing to assess the potential to
extend the mineral reserve base and carry out mining activities
between the 311 and 371 levels at LaRonde. At present, the
mineral reserve base extends to the 311 level, which is 3.1
kilometres below the surface. In 2015, exploration drilling focused
on the eastern portion of the LaRonde orebody down to the 371
level. As underground development progresses to the west, a
key exploration focus in 2016 will be drill testing the western
portion of the LaRonde orebody from the 311 to the 371 level.
The Company is also evaluating the potential to
develop and mine the Bousquet Zone 5 on the adjoining Bousquet
property. Previous property owners had partly exploited the
Bousquet Zone 5 by open pit and underground, and Agnico Eagle is
evaluating the potential to initially mine the Bousquet Zone 5 from
a depth of 90 to 330 metres below surface via an underground
ramp. The mining method is likely to be similar to that
employed at Goldex, and processing could utilize excess capacity
from the Lapa circuit at LaRonde. Dewatering of the old pit
is underway and permit applications to collect a bulk sample will
be submitted shortly. An internal technical study is expected
to be completed by the end of 2016.
Canadian Malartic Mine - Annual Records Set
for Ounces Produced and Tonnes Milled
In June 2014,
Agnico Eagle and Yamana acquired all of the issued and outstanding
common shares of Osisko Mining Corporation ("Osisko") and created
the Partnership. The Partnership owns and operates the
Canadian Malartic mine in northwestern Quebec through a joint management
committee. Each of Agnico Eagle and Yamana has an indirect
50% ownership interest in the Partnership.
During the fourth quarter of 2015, the Canadian
Malartic mill processed an average of 52,780 tpd (on a 100% basis)
compared with an average of 53,232 tpd in the corresponding period
of 2014. Minesite costs per tonne were approximately
C$25 (C$21.76 excluding royalties) compared to the
C$21 (C$19.32 excluding royalties) per tonne
experienced in the fourth quarter of 2014. In the 2015
period, throughput was lower and costs were higher primarily due to
a longer than planned mill shutdown in December 2015. During this shutdown
additional costs were incurred to repair the eccentric at the
crusher and for the alignment of the ring gear at the #2 ball
mill. The average stripping ratio in the fourth quarter of
2015 was 1.86 to 1.0.
For the full year 2015, the Canadian Malartic mill processed an
average of 52,300 tpd compared with an average of 51,248 tpd in
2014 (on a 100% basis). Minesite costs per tonne were
approximately C$23 (C$20.24 excluding royalties) compared to the
C$22 (C$19.76 excluding royalties) per tonne
experienced in 2014. The 2014 tonnage and costs are not
considered to be representative as they only reflect the period
from the acqusition date of June 16 through
December 31.
For the fourth quarter of 2015, Agnico Eagle's
share of production at the Canadian Malartic mine was 72,872 ounces
of gold at total cash costs per ounce on a by-product basis of
$606. This compares with the
fourth quarter of 2014 when total cash costs per ounce on a
by-product basis were $684 on
production of 66,369 ounces of gold. Production was higher in
the 2015 period primarily due to higher grades. Costs in the
2015 period were lower due to lower costs for fuel and explosives,
increased production and favourable foreign exchange rates,
partially offset by higher shutdown costs for the planned mill
maintenance.
For the full year 2015, Agnico Eagle's share of production at
the Canadian Malartic mine was 285,809 ounces of gold at total cash
costs per ounce on a by-product basis of $596. This is in contrast with production
from June 16 to December 31, 2014,
which only included 143,008 ounces of gold at total cash costs per
ounce on a by-product basis of $701
from Canadian Malartic.
Future Opportunities - Continuing to Look to
Further Optimize Operations
Since acquiring the mine in June 2014, the Partnership has been looking at a
variety of ways to optimize the operations. In parallel with
the Barnat permitting (see below), the Partnership is currently
working on the permitting necessary for improving the efficiency
and environmental performance of the existing mobile crusher.
At this point, milling levels are expected to be approximately
53,000 tpd through year-end 2016.
Several other opportunities have been identified
to further optimize productivity, including:
- Improvements to SAG mill liners in order to reduce the number
of major shutdowns to three from four
- Higher North Zone performance
with the purchase of an additional remote control production back
hoe. This should result in higher grade ore being brought to
the mill
- Cost savings opportunities: primarily on explosives and
contractors
- Ongoing continuous improvement projects
Ounce reconciliation with the block model
continues to be positive (approximately 5% higher) and is an
opportunity to provide additional production flexibility going
forward.
Permitting activities for the Barnat extension
and deviation of Highway 117 are continuing on schedule. An
Environmental Impact Assessment ("EIA") for this project was
submitted in February 2015. A
second series of questions from the Quebec government was received by the
Partnership in December 2015, and
final responses were submitted in January
2016.
Public hearings are expected to be held later in
2016. Granting of final permits is expected to occur after
the completion of the public consultation process. In
parallel, the Partnership is currently working on permitting for
improving the efficiency and environmental performance of the
existing mobile crusher.
Odyssey and Near Pit Targets Could Provide
Future Production Upside
At the Canadian Malartic mine, exploration
programs are planned to evaluate a number of near pit/underground
targets at the mine and further define the extent of the
mineralization at the Odyssey zone (which is located to the east of
the Canadian Malartic open pit). Both of these opportunities
could provide new potential sources of ore for the Canadian
Malartic mill.
At Odyssey, 44 holes (a total of 35,870 metres)
were drilled in 2015. Exploration to date has outlined two
mineralized zones: Odyssey North and Odyssey South. Odyssey
North has been traced from a depth of 550 to 1,200 metres below the
surface and along approximately 1,500 metres of strike length.
Odyssey South is approximately 200 to 550 metres below surface with
an approximate strike length of 1,500 metres. Gold occurs
along the margins of a porphyry body in both zones. Plan and
three dimensional views of the Odyssey mineralization are shown
below.
[Plan View Showing Odyssey Zones and Near
Pit/Underground opportunities at Canadian Malartic]
In 2016, the Canadian Malartic block model will
be reviewed to further define the potential of the near pit targets
and a 60,000 metre drill program has been proposed to further
evaluate the extent of the mineralization at Odyssey.
CMC Exploration Activities - Pandora and Kirkland Lake are focus areas
In addition to joint, indirect ownership of the
Canadian Malartic mine, Agnico Eagle and Yamana are also jointly
exploring a portfolio of properties in the Kirkland Lake area and the Pandora and
Wood-Pandora properties in the Abitibi region of Quebec. Agnico Eagle and Yamana,
indirectly through Canadian Malartic
Corporation (CMC) each hold a 50% interest in the
Kirkland Lake and Pandora
properties, while the Wood-Pandora property is a joint venture
between Globex Mining Enterprises Inc. (50%) and CMC.
In 2015, approximately 960 metres of underground
drifting was carried out on the Pandora project from a track drift
developed from the Lapa mine. In addition, 34 surface holes
(a total of 19,200 metres) and 13 underground holes (a total of
approximately 7,900 metres) were drilled to test the C Zone and
Branch Zone targets. Results have been encouraging, and
additional underground development and 10,400 metres of drilling is
planned in 2016.
The proposed budget for Pandora in 2016 (100%
basis) is approximately C$4.1
million.
In Kirkland
Lake, a total of approximately C$7.4
million (100%) was spent in 2015. This work included
58 drill holes (a total of 15,140 metres) on the AK, Upper Canada, Skead-MacGregor and Northland properties. In
addition, an Airborne Gravity survey was completed.
This new drilling has been incorporated into a
new mineral resource estimate for the AK property which is included
in Agnico Eagle's December 31, 2015
mineral reserve and mineral resource update (see "Detailed Mineral
Reserve and Mineral Resource Data (as at December 31, 2015)" below).
The proposed budget for Kirkland Lake in 2016 (100% basis) is
approximately C$5.2 million.
This program will include 3,000 metres of drilling and further data
compilation.
Lapa - Strong 2015 Performance, Limited Mine Life in 2016 but
Exploration Could Provide Additional Upside
The 100% owned Lapa mine in northwestern Quebec achieved commercial production in
May 2009.
The Lapa circuit, located at the LaRonde mill,
processed an average of 1,478 tpd in the fourth quarter of
2015. This compares with an average of 1,760 tpd in the
fourth quarter of 2014. The reduced throughput in the 2015
period was largely due to lower mill availability resulting from
electrical and mechanical issues with the Lapa ball mill.
Minesite costs per tonne were C$111 in the fourth quarter of 2015, compared to
the C$109 realized in the fourth
quarter of 2014. Costs in the 2015 period were higher due to
the reasons above.
Milling performance for the full year 2015 was
approximately 1,534 tpd compared to 1,750 tpd in 2014.
Throughput in the 2015 period was lower primarily due to downtime
related to repairs carried out on the Lapa ball mill in the third
and fourth quarters. Full-year minesite costs in 2015 were
C$117 per tonne, higher than the
C$107 in 2014. Costs were
higher in 2015 largely due to the reasons outlined above.
Payable production in the fourth quarter of 2015
was 19,929 ounces of gold at total cash costs per ounce on a
by-product basis of $620. This
compares with the fourth quarter of 2014, when production was
25,611 ounces of gold at total cash costs per ounce on a by-product
basis of $607. In the 2015
period, production was lower and costs were higher due to a
combination of lower throughput and lower grades compared to the
2014 period.
For the full year 2015, payable production was
90,967 ounces of gold at total cash costs per ounce on a by-product
basis of $590. The prior year
production was 92,622 ounces of gold at total cash costs per ounce
on a by-product basis of $667.
Production in 2015 was lower due to lower throughput, while costs
were lower primarily due to favourable foreign exchange rates.
Under the current life of mine plan, Lapa is
only expected to operate until early into the fourth quarter of
2016. Two areas (Zone 8 East - Upper mine and the Zulapa 7 -
Deep 2 Zone) have been identified through exploration as areas that
could potentially support future mining activity post 2017.
However, additional exploration is required, and any potential
production from these areas would likely require synergies with
other production opportunities such as the Bousquet Zone 5 or the
Pandora project.
The LaRonde mine has now assumed
responsibilities for the management and administration of the Lapa
mine and progressive transfers of Agnico Eagle personnel from Lapa
are now underway throughout the Company.
Goldex - Record Underground Ore Hoisting in Q4 2015, Trend
Could Continue into 2016
The 100% owned Goldex mine in northwestern
Quebec began operation in 2008 but
mining operations in the original orebody, the Goldex Extension
Zone ("GEZ"), were suspended in October
2011. In July 2012, the
M and E satellite zones were approved for development. Mining
operations resumed on the M and E satellite zones in September 2013. Mining operations at GEZ
remain suspended.
During the fourth quarter of 2015, the Goldex
mine had record underground ore hoisting of 7,273 tpd.
Although not currently built into the 2016 production forecast, the
Company believes that there is potential for continued strong
underground performance in 2016. Should this performance be
sustainable, the Company will evaluate the potential to increase
mill throughput (current mill capacity is approximately 8,000
tpd).
The Goldex mill processed an average of 6,213
tpd in the fourth quarter of 2015 compared to 6,251 tpd in the
fourth quarter of 2014, which was similar to prior-year
levels. Minesite costs per tonne were approximately
C$31 in the fourth quarter of 2015,
lower than the C$34 per tonne
experienced in the fourth quarter of 2014. The 2015 decrease
in costs over the prior-year period is primarily due to the strong
underground performance outlined above.
For the full year 2015, the Goldex mill averaged
6,336 tpd, which compares to 5,799 tpd in the corresponding period
of 2014. The higher throughput in the 2015 period was largely
due to accelerated mining levels compared to the 2014 period.
Full-year minesite costs per tonne in 2015 were C$33, the same in 2014.
Payable production in the fourth quarter of 2015
was 27,646 ounces of gold at total cash costs per ounce on a
by-product basis of $513. This
compares with the fourth quarter of 2014, when production was
29,463 ounces of gold at total cash costs per ounce on a by-product
basis of $583. Production in
the 2014 period was higher due to slightly higher grades and
marginally more ore processed compared to the 2015 period.
Costs were lower in the 2015 period due to lower unit costs and
favourable exchange rates as compared to the same period in
2014.
For the full year 2015, payable production was
115,426 ounces of gold at total cash costs per ounce on a
by-product basis of $538. The
prior year production was 100,433 ounces of gold at total cash
costs per ounce on a by-product basis of $638. Production in 2015 was higher and
costs were lower than in 2014 due to higher tonnage, grade and
recoveries.
Rehabilitation of the surface ramp has been
completed which provides increased operational flexibility. This
ramp also provides access to the M2 and M5 satellite zones for
conversion drilling and development later this year.
The exploration ramp into the DX Zone (the top
of the Deep Zone) has reached the 120 level, which is the proposed
bottom of the Deep 1 development phase. Underground
development in the Deep 1 Zone will now shift to excavation of the
various sublevels needed for mining development and excavation of
the conveyor ramp.
Studies are underway to evaluate the potential
to increase throughput from the Deep 1 Zone, and the potential to
mine a portion of the Deep 2 Zone, both of which could enhance
production levels or extend the current mine life at Goldex and
reduce operating costs.
In January 2014,
Agnico Eagle acquired the Akasaba West gold-copper deposit from
Alexandria Minerals. Located less than 30 km from Goldex, the
Akasaba West deposit could potentially create flexibility and
synergies for the Company's operations in the Abitibi region by
utilizing extra milling capacity at both Goldex and LaRonde, while
reducing overall costs. Permitting and technical studies are
ongoing with the goal of moving the project towards a production
decision in late 2016 or early 2017.
FINLAND AND SWEDEN
Agnico Eagle's Kittila mine in Finland is the largest primary gold producer
in Europe and hosts the Company's
largest mineral reserves. Exploration activities continue to expand
the mineral resources and studies are underway to evaluate the
potential to cost-effectively increase production.
Kittila - Strong Mining Performance in Q4 2015 and Available
Mill Capacity Provide Potential for Increased Future
Production
The 100% owned Kittila mine in northern
Finland achieved commercial
production in 2009.
The focus at Kittila in 2015 was on improving
mill reliability. Several projects were carried out in the
fourth quarter of 2015 which appear to have improved maintenance
performance. With further optimization, the Company believes
that there is potential for improved mill availability, which could
lead to higher throughput levels (possibly up to 20% higher) in the
future.
The Kittila mill processed an average of 4,100
tpd in the fourth quarter of 2015 compared to the 3,980 tpd in the
fourth quarter of 2014. The underground performed very well
in the fourth quarter resulting in record average daily throughput
of 4,750 tpd in December 2015.
Minesite costs per tonne at Kittila were
approximately €80 in the fourth quarter of 2015, compared to €75 in
the fourth quarter of 2014. Costs increased in the fourth
quarter of 2015 due to the increased usage of consumables, higher
contractor costs and increased underground development costs when
compared with the 2014 period.
For the full year 2015, the mill processed an
average of 4,011 tpd, as compared with 2014 when the mill processed
an average of 3,168 tpd. The increase in throughput was a
result of the completion of the mill expansion at the end of
September 2014. For the full
year 2015, the minesite costs per tonne were €76, compared to €78
in 2014. The slight decrease in minesite costs per tonne in
the 2015 period are primarily due to efficiencies related to
increased mill capacity.
Fourth quarter 2015 payable production at
Kittila was 44,279 ounces of gold with total cash costs per ounce
on a by-product basis of $747.
In the fourth quarter of 2014, the mine produced 43,130 ounces at
total cash costs per ounce on a by-product basis of $809. The higher production and lower costs
in the 2015 period were a result of the completion of the mill
expansion which continues to ramp-up to design capacity and
favourable exchange rates.
For the full year 2015, payable production from
Kittila was 177,374 ounces of gold at total cash costs per ounce on
a by-product basis of $709. In
2014, the mine produced 141,742 ounces of gold at total cash costs
per ounce on a by-product basis of $845. The lower production in 2014 was
largely due to the planned mill shutdown in September 2014 to tie-in the expansion. The
lower total cash costs per ounce in the 2015 period are largely due
to increased production and favourable foreign exchange rates.
Previous drilling on the Rimpi Zone at Kittila
has outlined a significant zone of mineralization with potentially
wider widths and better grades than those currently being
mined. The main underground ramp at Kittila is being extended
to reach the deeper portions of the Rimpi Zone and it is also
providing further underground drill access to test for additional
depth extensions of the Rimpi, Suuri, Roura and the newly
discovered Sisar mineralized zones.
In addition, a surface ramp is being driven into
the Rimpi Zone (now at a depth of 190 metres below surface) for
production purposes and to provide a second egress for the Suuri
ramp system. It will serve as the main haulage route from the
deeper portions of both Rimpi and Suuri and, potentially, the Sisar
Zone.
At the Kuotko deposit, located approximately 15
kilometres north of Kittila, approximately 7,300 metre of drilling
was completed in 2015. New mineralized zones have been
identified outside of the known mineral resource areas.
Metallurgical testing is also ongoing and studies are being carried
out to assess the viability of mining the deposit as a satellite
open pit.
In 2015, a new zone of mineralization, known as
the Sisar Zone, was discovered by exploration drilling from the
underground ramp being driven towards the deeper portion of the
Rimpi Zone. The Sisar Zone is located to the east of the main
Kittila ore zone, and in close proximity to existing underground
infrastructure. The Sisar Zone could potentially provide an
additional source of underground ore to the Kittila mill with
relatively little additional underground development, should
further drilling outline an economic deposit. This new zone
is discussed in further detail below.
Inferred mineral resources at Kittila as of
December 31, 2015 include the initial
inferred mineral resources reported for the Sisar zone. As
the table below sets out, 37% (approximately 651,000 ounces of
gold) of the current inferred resources at Kittila are within the
Sisar zone. Note that all of the inferred resources at
Kittila, including Sisar, are above 1,400 metres depth.
Inferred mineral resources at the Kittila mine as of
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
Category |
|
|
|
Gold |
|
|
Gold (oz) |
|
|
Tonnes |
(g/t) |
|
|
(x000) |
|
|
(x000) |
Inferred Mineral Resources
(Underground) |
|
|
|
|
|
|
|
|
|
|
Sisar Zone |
|
|
|
5.91 |
|
|
651 |
|
|
3,423 |
Main and all other zones |
|
|
|
4.12 |
|
|
1,113 |
|
|
8,409 |
Total Inferred Mineral Resources |
|
|
|
4.64 |
|
|
1,764 |
|
|
11,833 |
With the potential for higher mill capacity
through ongoing optimization, development of the Rimpi and Sisar
Zones could result in increased future production levels and
reduced operating costs at Kittila.
New Parallel Sisar Zone Extends Above and Below Previous
Intercepts
Recent holes drilled from the exploration ramp
have extended the Sisar Zone upward, downward and to the north,
including two intercepts that are lower than any previous
intercepts on the Kittila property. The table below shows the
intercepts of three new holes and two previously released holes.
Pierce points for all these holes are shown on the Kittila
composite longitudinal section and two cross sections (100 metres
apart). All intercepts reported for the Kittila mine show
uncapped grades over estimated true widths, based on a current
geological interpretation that is being updated as new information
becomes available with further drilling.
Recent exploration drill results from the Kittila
mine
Drill hole |
Zone |
From
(metres) |
To
(metres) |
Depth of
midpoint
below
surface
(metres) |
Estimated
true width
(metres) |
Gold grade
(g/t)
(uncapped) |
ROD14-004F* |
Main |
839.5 |
870.0 |
1,550 |
10.0 |
5.3 |
RIE15-601 |
Sisar |
190.6 |
201.0 |
811 |
9.6 |
8.0 |
and |
Sisar |
223.0 |
227.0 |
811 |
3.7 |
3.6 |
RIE15-605 |
Sisar |
238.4 |
242.2 |
894 |
3.2 |
4.0 |
and |
Sisar |
261.0 |
266.9 |
902 |
5.3 |
4.8 |
and |
Sisar |
282.7 |
318.0 |
915 |
27.0 |
4.9 |
ROU15-603** |
Sisar |
323.0 |
338.0 |
977 |
13.3 |
5.2 |
ROD15-704D |
Sisar |
1,221.8 |
1,279.2 |
1,879 |
27.5 |
6.5 |
including |
|
1,230.1 |
1,243.2 |
1,870 |
6.2 |
10.1 |
including |
|
1,250.2 |
1,267.0 |
1,885 |
8.1 |
8.8 |
and |
Sisar |
1,294.9 |
1,300.0 |
1,909 |
2.5 |
4.9 |
* Hole ROD14-004F previously reported in Company news release
dated April 30, 2015
** Hole ROU15-603 previously reported in Company news release
dated July 29, 2015
[Kittila composite longitudinal section]
[Kittila composite cross sections - 7538600mN and 7538700mN]
Hole RIE15-601 was drilled essentially
horizontally from a drill station on the main exploration ramp
toward the east, and intersected mineralization in two places with
midpoints at 811 metres below surface; the first intercept was 8.0
g/t gold over 9.6 metres and the second was 3.6 g/t gold over 3.7
metres. These are the shallowest intercepts to date in the Sisar
Zone, almost 140 metres shallower than any previous intercepts in
this lens.
Hole RIE15-605 intersected the Sisar Zone
approximately 90 metres deeper than RIE15-601 and slightly to the
north. RIE15-605 had three mineralized intercepts between 894
and 915 metres depth of which the best was 4.9 g/t gold over 27.0
metres at 915 metres depth. This intercept is 150 metres
farther north than the previous northernmost Sisar intercept (hole
ROU15-603 which intersected 5.2 g/t gold over 13.3 metres at 977
metres depth, previously reported in Company news release dated
July 29, 2015). The two new
intercepts are included in the year-end 2015 Kittila mineral
resources.
From an underground drill station 100 metres to
the south, hole ROD15-704D intersected a deep extension of the
Sisar Zone in two places, approximately 300 metres to the east of
the interpreted location of the main ore zone. The first
intercept graded 6.5 g/t gold over 27.5 metres at 1,879 metres
below surface, including 10.1 g/t gold over 6.2 metres and 8.8 g/t
gold over 8.1 metres. The second intercept graded 4.9 g/t
gold over 2.5 metres at 1,909 metres below surface, which is 650
metres deeper than any previous intercepts in the Sisar Zone.
These two deep intercepts are interpreted to be
within the Sisar Zone based on their location along the general
strike and dip of the lens. Additional holes have been
drilled to investigate the area above these deep intercepts, and
assays are pending. Follow-up drilling to the north will
continue to investigate this deep level, in the first half of
2016.
In addition, the lowermost intercept of hole
ROD15-704D is 360 metres deeper than the previous lowest intercept
in the main Kittila ore zone (which was hole ROD14-004F, previously
reported in the Company's news release dated April 30, 2015). The two new deep
intercepts therefore point to a virgin area for deep exploration
(shown on the Kittila composite longitudinal secion) that could
prove to be significant for the future of the Kittila mine.
Barsele Project - Depth Extension Confirmed on the Central
Zone
On June 11, 2015,
Agnico Eagle acquired a 55% interest in the Barsele project in
Sweden. The Company can earn
an additional 15% interest in the project through the completion of
a pre-feasibility study.
The Barsele property is known to contain
intrusive-hosted gold mineralization (similar to Goldex) and
gold-rich volcanogenic massive sulphide mineralization (similar to
LaRonde). In 2015, the Company spent approximately
$1.57 million on exploration to
further evaluate the mineral potential of the property.
In September 2015,
trenching and mapping programs were carried out that confirmed that
the known intrusive-hosted deposits plunge to the southeast.
In the fourth quarter 2015, a 15 hole (8,350 metre) drill program
was completed that successfully tested the depth extension of the
Central Zone to 200 to 300 metres below surface. A
$4.3 million exploration program
consisting of 12,000 metres is planned to be carried out in 2016 to
further evaluate the intrusive hosted mineralization.
NUNAVUT REGION
Agnico Eagle has identified Nunavut as a politically attractive and stable
jurisdiction with enormous geological potential. With the
Company's largest producing mine (Meadowbank) and two significant
development assets (Meliadine and Amaruq) and other exploration
projects, Nunavut has the
potential to be a strategic operating platform with the ability to
generate strong production and cash flows over several decades.
Meadowbank - Improved Mining Rates Could Provide Additional
Flexibility Through 2018
The 100% owned Meadowbank mine in Nunavut, northern Canada, achieved commercial production in
March 2010.
The Meadowbank mill processed an average of
11,168 tpd in the fourth quarter of 2015, compared to the 11,160
tpd achieved in the fourth quarter of 2014. For the full year
2015, the Meadowbank mill processed an average of 11,049 tpd,
compared to 11,313 tpd in the full year 2014. Mill throughput
for the fourth quarter of 2015 was similar to the comparable period
of 2014. Year-over-year mill throughput levels were slightly lower
due to the hardness profile of the Vault ore processed.
Minesite costs per tonne were a record low
C$62 in the fourth quarter and
C$70 for the full year of 2015.
These costs were lower than the C$72
per tonne in the fourth quarter and C$73 full year 2014, respectively. The
improvement in cost per tonne in the 2015 periods was primarily
driven by improved productivity due to better mine planning and
mechanical availability compared to the previous periods.
Payable production in the fourth quarter of 2015
was 102,580 ounces of gold at total cash costs per ounce on a
by-product basis of $526. This
compares with the fourth quarter of 2014 when 86,715 ounces were
produced at total cash costs per ounce on a by-product basis of
$757. The higher production and
lower costs in the 2015 period compared to the 2014 period are
primarily due to higher tonnage, grade and recoveries, and
favourable foreign exchange rates.
Full year 2015 payable production was 381,804
ounces of gold at total cash costs per ounce on a by-product basis
of $613. In 2014, the mine
produced 452,877 ounces of gold at total cash costs per ounce on a
by-product basis of $599. The
higher production and lower costs in the 2014 period is primarily
due to the mining of higher than expected grades in the Goose pit
in the first half of 2014, higher crusher throughput levels and
slightly better recoveries.
In July 2015, the
Company decided to proceed with the expansion of the Vault
pit. This expansion resulted in revised production guidance
at Meadowbank for 2016 to 2018 (see guidance section above).
The mine is now expected to close in the third quarter of 2018,
which is approximately a year longer than previously forecast by
Agnico Eagle in February 2015.
Production levels are expected to gradually decline from 2016 to
2018 due to a decline in grade as the current mineral reserve base
is depleted.
The Company is actively exploring the Amaruq
deposit (see section below) with the goal of potentially developing
the deposit as a satellite operation to Meadowbank.
Amaruq Project - Inferred Mineral Resources Expanded 67%;
Final 2015 Drilling Extends Whale Tail Deposit at Depth in Two
Directions
Agnico Eagle has a 100% interest in the Amaruq
project. The large property consists of 114,761 hectares,
approximately 50 kilometres northwest of the Meadowbank mine.
The Amaruq drill program was completed in
mid-October 2015. Total
drilling at Amaruq for the year was 108,000 metres (378 holes), of
which approximately 85,000 metres were in Whale Tail/Mammoth zones,
approximately 17,000 metres in the IVR zone, and approximately
6,000 metres on regional targets and condemnation.
Results from all of the holes have been included
in the 2015 inferred mineral resource estimate, but assays from
several holes were received after the Company last reported drill
results in its October 28, 2015 news
release. A selection of the late 2015 drill results from
several areas of the Amaruq deposit are discussed below,
particularly in the Whale Tail Ore Shoot and the IVR Zone.
In August 2015,
the Company announced an updated inferred mineral resource estimate
as of June 30, 2015 of 2.0 million
ounces of gold (9.7 million tonnes grading 6.47 g/t gold).
The new inferred mineral resource estimate as of
December 31, 2015 increased by 67%
compared with the June 30, 2015
estimate (119% compared with the December
31, 2014 estimate) to 3.3 million ounces of gold (16.9
million tonnes grading 6.05 g/t gold). The Whale Tail deposit
contains 89% of the gold in mineral resources; these mineral
resources have been extended in two directions; along the
east-plunging ore shoot to a depth of approximately 500 metres, and
locally as deep as 600 metres in the central portion of Whale
Tail.
Since the June 30,
2015 estimate, the IVR inferred mineral resource has more
than doubled to 208,635 ounces of gold (1.01 million tonnes grading
6.43 g/t gold), and there are initial resources under Mammoth Lake
and in the former "gap" area between Whale Tail and Mammoth
Lake.
Selected late 2015 drill holes are set out in
the table below, and their collars are located on the Amaruq Local
Geology Map. The Whale Tail composite longitudinal section
(below) shows the location of the resources in the Whale Tail as of
December 31, 2015 and the pierce
points for Whale Tail and Mammoth drill holes in the table
below. Coordinates of the IVR drill holes are given in a
second table. All intercepts reported for the Amaruq project
show capped grades over estimated true widths, based on a
preliminary geological interpretation that is being updated as new
information becomes available with further drilling.
[Amaruq local geology map]
[Whale Tail Deposit Composite Longitudinal Section]
Whale Tail Ore Shoot
Additional drilling was conducted to continue to
expand the high-grade ore shoot within the Whale Tail
deposit. The ore shoot was traced over an additional 100
metres of strike length, with hole AMQ15-475 representing the
eastern-most mineralized interval within the ore shoot. This
hole intersected 8.1 g/t gold over 5.9 metres at 429 metres
depth. The high-grade ore shoot remains open to the
east. Hole AMQ15-511 yielded 5.8 g/t gold over 10.7 metres at
415 metres depth in the central area of the deposit which remains
open at depth. The deepest significant interval came from
hole AMQ15-536 and returned 11.8 g/t gold over 4.8 metres at 600
metres depth enhancing the potential for an underground operation
under the open pit in the future.
IVR Zone
The IVR Zone appears to be a different style of
mineralization than the Whale Tail deposit. IVR is dominated
by shear-zone-hosted, boudinaged quartz veins with high gold grades
and frequent coarse-grained visible gold (now referred to as the
"V-type shear zones" because they are typical of the V Zone
mineralization).
Recent drilling and mapping has shown that the V
zone is a significant mineralized structure dipping shallowly to
the southeast. The structure has been identified from outcrop
on surface to a depth of 155 metres in recent drilling and over a
lateral strike length of 570 metres; it remains open at depth and
laterally. Recent results include hole AMQ15-451 that
intersected 7.2 g/t gold over 10.4 metres at 136 metres depth, hole
AMQ15-544 that intersected 33.6 g/t gold over 3.3 metres at 56
metres depth, and hole AMQ15-549 that intersected 15.4 g/t gold
over 3.0 metres at 62 metres depth.
Whale Tail - Mammoth Target Area
Further drilling completed in the western
extension of Whale Tail allowed the Company to better understand
the relationship between stratigraphic and structural controls in
that area. Preliminary observations suggest that the
strongest mineralization on the west side of Whale Tail is hosted
by a different iron formation sequence that is slightly to the
north of the sequence that hosts most of the Whale Tail
mineralization. This area offers potential to further expand
the in-pit resources towards the west. Hole AMQ15-507
intersected 5.4 g/t gold over 12.4 metres at 79 metres depth.
The area requires more drilling in 2016.
Additional 2015 exploration drill results from the Whale Tail
(WT) deposit and the V Zone area, Amaruq project
Drill hole |
Location |
From
(metres) |
To
(metres) |
Depth of
midpoint
below
surface
(metres) |
Estimated
true width
(metres) |
Gold
grade
(g/t)
(uncapped) |
Gold
grade (g/t)
(capped)* |
AMQ15-451 |
V zone |
159.3 |
171.1 |
136 |
10.4 |
7.9 |
7.2 |
including |
|
159.3 |
163.0 |
133 |
3.3 |
22.8 |
20.5 |
AMQ15-475 |
WT Shoot |
521.0 |
529.4 |
429 |
5.9 |
8.1 |
8.1 |
AMQ15-507 |
WT/Mammoth |
100.8 |
120.1 |
79 |
12.4 |
5.4 |
5.4 |
including |
|
115.2 |
120.1 |
84 |
3.1 |
8.1 |
8.1 |
AMQ15-511 |
WT Shoot |
501.9 |
515.0 |
415 |
10.7 |
5.8 |
5.8 |
including |
|
504.8 |
510.0 |
413 |
4.5 |
9.9 |
9.9 |
AMQ15-536 |
WT deep |
689.8 |
698.1 |
600 |
4.8 |
11.8 |
11.8 |
including |
|
693.0 |
698.1 |
602 |
2.9 |
16.7 |
16.7 |
AMQ15-544 |
V zone |
68.4 |
71.8 |
56 |
3.3 |
71.0 |
33.6 |
AMQ15-549 |
V zone |
76.5 |
81.2 |
62 |
3.0 |
15.4 |
15.4 |
*Holes at Amaruq use a capping factor of 60 g/t gold.
Amaruq project exploration drill collar coordinates of
selected holes from the IVR Zone
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Drill collar coordinates* |
Drill hole ID |
|
UTM North |
|
UTM East |
|
Elevation
(metres above
sea level) |
|
|
Azimuth |
|
|
Dip
(degrees) |
|
|
Length
(metres) |
AMQ15-451 |
|
7256248 |
|
607070 |
|
155 |
|
|
321 |
|
|
-54 |
|
|
249 |
AMQ15-544 |
|
7256355 |
|
607151 |
|
156 |
|
|
322 |
|
|
-53 |
|
|
201 |
AMQ15-549 |
|
7256446 |
|
607272 |
|
156 |
|
|
324 |
|
|
-54 |
|
|
240 |
* Coordinate System UTM Nad 83 zone 14
The first phase of a planned 75,000-metre drill
program (costing approximately $19
million) began with two drills in early February 2016. The goals of this program
are to infill and expand the known mineral resource areas, test
other favourable targets and potentially outline a second source of
open pit ore for the project.
In late 2015, the Company received approvals for
the construction of an all-weather access road linking the Amaruq
site to the Meadowbank mine. In 2016 the Company expects to
carry out additional engineering and begin road preparation from
the Vault pit at Meadowbank.
Engineering and environmental baseline studies
are underway to support the permitting process for the Amaruq
project as a potential satellite open pit operation to the
Meadowbank mine. The most recent drilling at depth in Whale
Tail also indicates that this deposit hosts high-grade intercepts
below the preliminary ultimate pit shell, suggesting that Whale
Tail has underground potential. As such, permit applications
for an underground exploration ramp will also be submitted in
2016.
Meliadine - Moderate 2016 Capital Expenditures Preserves
Production Optionality
Located near Rankin
Inlet, Nunavut, Canada, the Meliadine project was acquired
in July 2010, and is one of Agnico
Eagle's largest gold projects in terms of mineral resources. The
Company owns 100% of the 111,757 hectare property.
In 2015, capital expenditures at Meliadine were
approximately $67 million with a
focus on additional ramp development, permitting, camp operation
and completion of an updated National Instrument 43-101 -
Standards of Disclosure for Mineral Projects ("NI 43-101")
technical study (see news release dated March 12, 2015). In 2015, approximately 2,084
metres of underground development were completed, with the ramp now
extending to a vertical depth of approximately 300 metres below the
surface.
The technical study was based on extracting only
the 3.3 million ounces of gold in proven and probable mineral
reserves at December 31, 2014 (13.9
million tonnes of ore grading 7.44 g/t gold), which is all
contained in the Tiriganiaq and Wesmeg deposits.
At December 31,
2015, the Meliadine property hosted 3.4 million ounces of
proven and probable mineral reserves (14.5 million tonnes of ore
grading 7.32 g/t gold), 3.31 million ounces of measured and
indicated mineral resources (20.78 million tonnes of ore grading
4.95 g/t gold), and 3.55 million ounces of inferred mineral
resources (14.71 million tonnes of ore grading 7.51 g/t
gold). In addition, there are numerous other known gold
occurrences in the 80-kilometre-long greenstone belt that require
further evaluation.
The updated technical study forecast average
annual production of approximately 350,000 ounces at a life-of-mine
total cash costs per ounce on a by-product basis of approximately
$531 over a nine year mine
life. The study used a gold price of C$1,495 per ounce (as compared to a current spot
price of approximately C$1,657 per
ounce on February 8, 2016).
The capital budget for 2016 is $96 million with activities focused on further
underground development (approximately 3,000 metres), detailed
engineering and procurement, construction of essential surface
infrastructure, and acquisition of a used camp facility. The
goal of the 2016 capital program is to ensure that the project
remains on track for a potential 2020 production start-up, which is
approximately a one year delay from previous expectations.
Internal studies are ongoing to evaluate the
potential to extract additional ounces of gold from the Tiriganiaq
and Wesmeg/Normeg deposits, which could potentially extend the mine
life, increase annual production, and improve the project economics
and the after-tax internal rate of return. These studies are
expected to be completed in the third quarter of 2016.
In July 2015, the
Kivalliq Inuit Association and Agnico Eagle signed the Inuit Impact
Benefit Agreement ("IIBA") for the Meliadine gold project.
The IIBA addresses protection of Inuit values, culture and
language, protection of the land, water and wildlife, provides
financial compensation to Inuit over the mine life and contains
provision for training, employment and contracting.
On October 5,
2015, the Nunavut Water Board issued the permit (License B)
for Meliadine pre-development work. License A, which is
required for production activities, is expected to be granted in
the second quarter of 2016.
The timing of future capital expenditures on the
Meliadine project beyond 2016 and the determination of whether to
build a mine at Meliadine are subject to approval by Agnico Eagle's
Board of Directors, which will be based on prevailing market
conditions and outcomes of the various potential scenarios being
evaluated.
Acquisition of New Properties in Nunavut
Agnico Eagle is currently studying options and
alternatives in Nunavut to
capitalize on the large and growing mineral resource in the
region. As part of this initiative, the Company has staked in
2015 new claims totaling 68,012 hectares on properties to the
west-northwest of the project, on the continuation of the
greenstone belt that hosts the Meliadine deposits.
In summer 2015, an airborne VTEM magnetic and
electromagnetic survey was flown over the new properties. A
field crew initiated prospecting and sampling of areas with
geophysical signatures typical of iron formation-hosted
Archean/Proto-Proterozoic deposits, similar to those recognized at
Meadowbank, Amaruq and Meliadine projects. Close to 800 rock
samples have been collected from the properties. Initial
results have identified a 2-kilometre-long structure from which 21
rock samples returned values above 1.0 g/t gold including seven
values in excess of 10.0 g/t gold, with a maximum value of 42.0 g/t
gold.
The new properties appear to be geologically
similar to the Meadowbank, Meliadine and Amaruq projects where the
Company's exploration team has demonstrated the effectiveness of a
systematic exploration approach and the strong mineral potential of
this part of Nunavut.
Assembling and analyzing the data collected this summer will assist
in preparing a drill program for 2016 to further investigate the
higher potential areas on the new properties.
SOUTHERN BUSINESS REVIEW
Agnico Eagle's Southern Business operations are
focused in Mexico. These
operations have been the source of growing precious metals
production (gold and silver), stable operating costs and strong
free cash flow since 2009. In the fourth quarter of 2015, the
Mexican operations had record quarterly silver production of
approximately 745,000 ounces.
Pinos Altos - Shaft
Commissioning Scheduled for H1 2016
The 100% owned Pinos
Altos mine in northern Mexico achieved commercial production in
November 2009.
The Pinos Altos
mill processed 4,940 tpd in the fourth quarter of 2015 compared to
5,466 tpd per day processed in the fourth quarter of 2014.
During the fourth quarter of 2015, approximately 146,200 tonnes of
ore were stacked on the leach pad at Pinos Altos, compared to 131,000 tonnes in the
comparable 2014 period. Mill throughput in the 2015 period
was negatively impacted by cold weather conditions and a higher
percentage of clay in the ore.
Minesite costs per tonne at Pinos Altos were $44 in the fourth quarter of 2015, lower than the
$48 in the fourth quarter of
2014. The difference in minesite costs per tonne was largely
attributable to variations in the proportion of heap leach ore to
milled ore and open pit ore to underground ore and routine
fluctuations in the waste to ore stripping ratio in the open pit
mines. In addition, the 2015 costs were favourably impacted
by lower energy and fuel costs.
For the full year 2015, the Pinos Altos mill processed an average of 5,462
tpd, compared to 5,350 tpd processed in 2014. In 2015,
approximately 384,700 tonnes of ore were stacked on the leach pad
at Pinos Altos, compared to
approximately 567,800 tonnes in 2014. Minesite costs per tonne at
Pinos Altos for the full year
period in 2015 were approximately $45
compared to approximately $48 in
2014, with the difference due to the reasons mentioned above.
Payable production in the fourth quarter of 2015
was 44,496 ounces of gold at total cash costs per ounce on a
by-product basis of $417. This
compares with production of 40,669 ounces at total cash costs per
ounce on a by-product basis of $597
in the fourth quarter of 2014. Higher production in 2015 is
largely due to higher grades processed compared to the same period
last year. The decrease in the year over year total cash costs per
ounce is largely due to higher silver production and favourable
foreign exchange rates compared to the prior year period.
For the full year 2015, Pinos Altos produced 192,974 ounces of gold at
total cash costs per ounce on a by-product basis of $387. This is in contrast to 2014 when the mine
produced 171,019 ounces of gold at total cash costs per ounce on a
by-product basis of $533. The higher
ounces produced and decrease in the cash costs per ounce on a
year-over-year basis is largely due to the reasons mentioned
above.
The $106 million
Pinos Altos shaft sinking project
remains on schedule for completion in early 2016, with full
commissioning expected during the first half of 2016. When
the shaft is completed, it will allow better matching of the future
mining capacity with the mill capacity at Pinos Altos once the open pit mining operation
begins to wind down as planned over the next several years.
Creston Mascota - Record Annual Tonnes Stacked
The Creston Mascota heap leach has been
operating as a satellite operation to the Pinos Altos mine since late 2010.
Approximately 529,000 tonnes of ore were stacked
on the Creston Mascota leach pad during the fourth quarter of 2015,
compared to approximately 550,800 tonnes stacked in the fourth
quarter of 2014. In the 2015 period, crusher throughput was
slightly lower due to cold weather conditions which created minor
ore handling issues. Minesite costs per tonne at Creston
Mascota were $13 in the fourth
quarter of 2015 compared to $14 in
the fourth quarter of 2014. Costs were slightly lower in the 2015
period due to lower fuel consumption, favourable fuel price
variance and lower equipment rental charges.
For the full year 2015, approximately 2,098,800
tonnes of ore were stacked on the Creston Mascota leach pad,
compared to approximately 1,793,800 tonnes stacked in the full year
2014. In the 2015 period, additional ore was encountered outside
the block model, which resulted in more tonnes being stacked in the
first half of the year compared to the 2014 period. Minesite
costs per tonne at Creston Mascota were $12 for the full year 2015, compared to
$16 in 2014. The increase in tonnes
stacked in the 2015 period resulted in lower costs compared to the
2014 period.
Payable production at Creston Mascota in the fourth quarter of
2015 was 13,933 ounces of gold at total cash costs per ounce on a
by-product basis of $445. This
compares to 12,989 ounces of gold at total cash costs per ounce on
a by-product basis of $556 during the
fourth quarter of 2014. Production was higher in the 2015 period
due to higher grades. Costs in the 2015 period were lower primarily
due to increased production and favourable exchange rates.
Payable production for the full year 2015
totaled 54,703 ounces of gold at total cash costs per ounce on a
by-product basis of $430, compared to
47,842 ounces of gold at total cash costs per ounce on a by-product
basis of $578 in 2014. The higher
production in 2015 is primarily due to more tonnes stacked at
slightly higher grades. Costs were lower in the 2015 period
primarily due to more ounces produced and favourable exchange
rates.
In fourth quarter of 2015, work on the Phase 4
leach pad advanced with construction activities focused on
earthworks, drainages, peripheral roads and water diversion
channels. Overall, the project is 50% constructed with full
completion expected later in 2016.
As reported in the Company's July 29, 2015 news release, infill drilling has
encountered higher grade mineralization at the Creston Mascota
deposit. In the fourth quarter of 2015, five holes totaling
approximately 600 metres were completed which showed structural
continuity of the mineralization down dip. Work is underway
to evaluate the impact of these results on the pit design and
production planning.
La India - Increased Mineral
Reserves and Mineral Resources at Year-End 2015
The La India mine in Sonora, Mexico, located approximately 70
kilometres from the Company's Pinos
Altos mine, was acquired in November
2011 through the purchase of Grayd Resources Inc., which
held a 56,000 hectare land position in the Mulatos gold belt.
Commissioning of the mine commenced ahead of schedule in the third
quarter of 2014. Design, permitting, construction and
start-up of the La India mine were completed within 22 months of
the acquisition. In 2014, the mine reported 3,180 ounces of
pre-commercial production, and commercial production was declared
as at February 1, 2014.
Approximately 1,439,500 tonnes of ore were
stacked on the La India leach pad during the fourth quarter of
2015, compared to approximately 1,426,700 tonnes stacked in the
fourth quarter of 2014. Minesite costs per tonne at La India were
$8 in the fourth quarter of 2015,
compared to $9 in the fourth quarter
of 2014. The slightly lower costs in the 2015 period are
primarily due to lower costs for fuel, consumables and labour.
For the full year 2015, approximately 5,371,400
tonnes of ore were stacked on the La India leach pad compared to
approximately 4,773,200 tonnes stacked in the full year 2014.
Minesite costs per tonne at La India were $9
for the full year 2015, compared to $8 in 2014. The increase in tonnes stacked in the
2015 period reflects a full year of stacking versus 11 months (the
commercial production period) in 2014. Costs were slightly
higher due to higher maintenance and contractor costs.
Payable production at La India in the fourth
quarter of 2015 was 23,432 ounces of gold at total cash costs per
ounce on a by-product basis of $485. This compares to 23,273 ounces at
total cash costs per ounce on a by-product basis of $496 during the fourth quarter of 2014. Costs
were slightly better in the 2015 period due to favourable foreign
exchange rates.
Payable production for the full year 2015
totaled 104,362 ounces of gold at total cash costs per ounce on a
by-product basis of $436, compared to
75,093 ounces of gold at total cash costs per ounce on a by-product
basis of $487 in 2014. The higher
production in 2015 is primarily due to more ore tonnes stacked
compared to the 2014 period. Costs were lower in the 2015
period due to more ounces produced and favourable foreign exchange
rates.
In the fourth quarter of 2015, construction for
the leach pad expansion (earthworks and liner installation) was
finished within budget and haul road construction and preparation
activities for the start-up of mining at the Main Zone pit were
also completed.
Additional drilling was carried out at La India
in 2015, with a focus on extending mineralization in the Main Zone
and the La India Zone and conversion of sulfide mineralization into
mineral reserves and mineral resources. In addition, drilling
was also carried out on a portion of the El Realito property.
The 2015 exploration program resulted in a 28%
increase in mineral reserves, and a 21% increase in measured and
indicated mineral resources (see "Detailed Mineral Reserve and
Mineral Resource Data (as at December 31,
2015)" below). With the increased mineral reserves and
mineral resources, the Company is undertaking studies consider the
potential for expanding production at the mine.
El Barqueño - Drilling Continues with a Focus
on Mineral Resource Delineation and Defining New Target
Areas
Agnico Eagle has a 100% interest in the El
Barqueño project. The 32,840-hectare property is in the
Guachinango gold-silver mining
district, Jalisco State, Mexico,
approximately 150 kilometres west of the state capital of
Guadalajara. It consists of
three blocks of land: the original El Barqueño package (El Barqueño
I, II and III) acquired from Cayden Resources in November 2014, and two adjacent blocks acquired
from Soltoro Limited in June 2015
(El Rayo and El Tecolote). The Company last reported
on this project in a news release dated October 28, 2015.
The El Barqueño project contains a number of
known mineralized zones and several prospects that require further
evaluation. The project was a major exploration focus for the
Company in 2015, with a total of 279 holes (a total of 69,522
metres) drilled in the $17 million
exploration program. Using these results, an initial inferred
mineral resource at El Barqueño is being reported in this news
release: 19.7 million tonnes grading 0.96 g/t gold and 5.78 g/t
silver (containing 608,000 ounces of gold and 3.7 million ounces of
silver) at the Azteca-Zapoteca, Angostura and Peña de Oro zones.
Exploration expenditures at El Barqueño in 2016
are budgeted at $13 million for
mineral resource development, conversion and regional
exploration. There are currently 14 drills working to define
the limits of the known prospects and test new target areas such
as: Olmeca, Zapote, Mixteca,
El Rayo and Pilarica.
The project's gold-silver deposits could
potentially be developed into a series of open pits utilizing heap
leach processing, similar to Creston Mascota and the La India mine.
Annual General Meeting
Friday, April 29, 2016 at
11:00 am (E.D.T.)
Sheraton Centre Toronto Hotel (Dominion Ballroom)
123 Queen Street West
Toronto, ON M5H 2M9
About Agnico Eagle
Agnico Eagle is a senior Canadian gold mining
company that has produced precious metals since 1957. Its eight
mines are located in Canada,
Finland and Mexico, with exploration and development
activities in each of these countries as well as in the United States and Sweden. The Company and its shareholders have
full exposure to gold prices due to its long-standing policy of no
forward gold sales. Agnico Eagle has declared a cash dividend every
year since 1983.
Note Regarding Certain Measures of
Performance
This news release discloses certain measures,
including ''total cash costs per ounce'' and ''minesite costs per
tonne'', "all-in sustaining costs per ounce" and "adjusted net
income" that are not recognized measures under IFRS. These
data may not be comparable to data presented by other gold
producers. For a reconciliation of these measures to the most
directly comparable financial information presented in the
consolidated financial statements prepared in accordance with IFRS
and for an explanation of how management uses these measures, other
than adjusted net income, see "Reconciliation of Non-GAAP Financial
Performance Measures" below. The total cash costs per ounce
of gold produced is reported on both a by-product basis (deducting
by-product metal revenues from production costs) and co-product
basis (before by-product metal revenues). The total cash
costs per ounce of gold produced on a by-product basis is
calculated by adjusting production costs as recorded in the
consolidated statements of income (loss) for by-product revenues,
unsold concentrate inventory production costs, smelting, refining
and marketing charges and other adjustments, and then dividing by
the number of ounces of gold produced. The total cash costs
per ounce of gold produced on a co-product basis is calculated in
the same manner as the total cash costs per ounce of gold produced
on a by-product basis except that no adjustment is made for
by-product metal revenues. Accordingly, the calculation of
total cash costs per ounce of gold produced on a co-product basis
does not reflect a reduction in production costs or smelting,
refining and marketing charges associated with the production and
sale of by-product metals. The total cash costs per ounce of
gold produced is intended to provide information about the
cash-generating capabilities of the Company's mining
operations. Management also uses these measures to monitor
the performance of the Company's mining operations. As market
prices for gold are quoted on a per ounce basis, using the total
cash costs per ounce of gold produced on a by-product basis measure
allows management to assess a mine's cash-generating capabilities
at various gold prices. All-in sustaining costs per ounce is
used to show the full cost of gold production from current
operations. The Company calculates all-in sustaining costs
per ounce of gold produced on a by-product as the aggregate of
total cash costs per ounce on a by-product basis, sustaining
capital expenditures (including capitalized exploration), general
and administrative expenses (including stock options) and
reclamation expenses divided by the amount of gold produced.
The all-in sustaining costs per ounce of gold produced on a
co-product basis is calculated in the same manner as the all-in
sustaining costs per ounce of gold produced on a by-product basis
except that the total cash costs per ounce on a co-product basis is
used, meaning no adjustment is made for by-product metal
revenues. The Company's methodology for calculating all-in
sustaining costs per ounce may differ from to the methodology used
by other producers that disclose all-in sustaining costs per
ounce. The Company may change the methodology it uses to
calculate all-in sustaining costs per ounce in the future,
including in response to the adoption of formal industry guidance
regarding this measure by the World Gold Council. Management
is aware that these per ounce measures of performance can be
affected by fluctuations in exchange rates and, in the case of
total cash costs per ounce of gold produced on a by-product basis,
by-product metal prices. Management compensates for these
inherent limitations by using these measures in conjunction with
minesite costs per tonne (discussed below) as well as other data
prepared in accordance with IFRS.
Management also performs sensitivity analyses in
order to quantify the effects of fluctuating exchange rates and
metal prices. This news release also contains information as
to estimated future total cash costs per ounce, all-in sustaining
costs per ounce and minesite costs per tonne. The estimates
are based upon the total cash costs per ounce, all-in sustaining
costs per ounce and minesite costs per tonne that the Company
expects to incur to mine gold at its mines and projects and,
consistent with the reconciliation of these actual costs referred
to above, do not include production costs attributable to accretion
expense and other asset retirement costs, which will vary over time
as each project is developed and mined. It is therefore not
practicable to reconcile these forward-looking non-GAAP financial
measures to the most comparable IFRS measure.
Forward-Looking Statements
The information in this news release has been
prepared as at February 10,
2016. Certain statements contained in this document
constitute "forward-looking statements" within the meaning of
the United States Private
Securities Litigation Reform Act of 1995 and "forward-looking
information" under the provisions of Canadian provincial securities
laws and are referred to herein as "forward-looking
statements". When used in this document, the words
"anticipate", "estimate", "expect", "forecast", "planned", "will",
"could", "potential" and similar expressions are intended to
identify forward-looking statements. Such statements include
without limitation: the Company's forward-looking production
guidance, including estimated ore grades, project timelines,
drilling results, metal production, life of mine estimates,
production, total cash costs per ounce, minesite costs per tonne,
all-in sustaining costs per ounce and cash flows; the estimated
timing and conclusions of technical reports and other studies; the
methods by which ore will be extracted or processed; statements
concerning expansion projects, recovery rates, mill throughput,
optimization, and projected exploration expenditures, including
costs and other estimates upon which such projections are based;
estimates of depreciation expense, general and administrative
expense and tax rates; the impact of maintenance shutdowns;
statements regarding timing and amounts of capital expenditures and
other assumptions; estimates of future mineral reserves, mineral
resources, mineral production, optimization efforts and sales;
estimates of mine life; estimates of future mining costs, total
cash costs per ounce, minesite costs per tonne, all-in sustaining
costs per ounce and other expenses; estimates of future capital
expenditures and other cash needs, and expectations as to the
funding thereof; statements as to the projected development of
certain ore deposits, including estimates of exploration,
development and production and other capital costs and estimates of
the timing of such exploration, development and production or
decisions with respect to such exploration, development and
production; estimates of mineral reserves and mineral resources,
and statements and information regarding anticipated future
exploration; the anticipated timing of events with respect to the
Company's mine sites and statements and information regarding the
sufficiency of the Company's cash resources and other statements
and information regarding anticipated trends with respect to the
Company's operations, exploration and the funding thereof.
Such statements and information reflect the Company's views as at
the date of this document and are subject to certain risks,
uncertainties and assumptions, and undue reliance should not be
placed on such statements and information. Forward-looking
statements are necessarily based upon a number of factors and
assumptions that, while considered reasonable by Agnico Eagle as of
the date of such statements, are inherently subject to significant
business, economic and competitive uncertainties and
contingencies. The material factors and assumptions used in
the preparation of the forward looking statements contained herein,
which may prove to be incorrect, include, but are not limited to,
the assumptions set forth herein and in management's discussion and
analysis ("MD&A") and the Company's Annual Information Form
("AIF") for the year ended December 31,
2014 filed with Canadian securities regulators and that are
included in its Annual Report on Form 40-F for the year ended
December 31, 2014 ("Form 40-F") filed
with the SEC as well as: that there are no significant disruptions
affecting operations; that production, permitting and expansion at
each of Agnico Eagle's properties proceeds on a basis consistent
with current expectations and plans; that the relevant metal
prices, exchange rates and prices for key mining and construction
supplies will be consistent with Agnico Eagle's expectations; that
Agnico Eagle's current estimates of mineral reserves, mineral
resources, mineral grades and metal recovery are accurate; that
there are no material delays in the timing for completion of
ongoing growth projects; that the Company's current plans to
optimize production are successful; and that there are no material
variations in the current tax and regulatory environment.
Many factors, known and unknown, could cause the actual results to
be materially different from those expressed or implied by such
forward looking statements and information. Such risks
include, but are not limited to: the volatility of prices of gold
and other metals; uncertainty of mineral reserves, mineral
resources, mineral grades and mineral recovery estimates;
uncertainty of future production, project expenditures, capital
expenditures, and other costs; currency fluctuations; financing of
additional capital requirements; cost of exploration and
development programs; mining risks; community protests; risks
associated with foreign operations; governmental and environmental
regulation; the volatility of the Company's stock price; and risks
associated with the Company's currency, fuel and by-product metal
derivative strategies. For a more detailed discussion of such
risks and other factors that may affect the Company's ability to
achieve the expectations set forth in the forward-looking
statements contained in this document, see the AIF and MD&A
filed on SEDAR at www.sedar.com and included in the Form 40-F filed
on EDGAR at www.sec.gov, as well as the Company's other filings
with the Canadian securities regulators and the SEC. Other
than as required by law, the Company does not intend, and does not
assume any obligation, to update these forward-looking statements
and information.
Notes to Investors Regarding the Use of Mineral
Resources
Cautionary Note to Investors Concerning
Estimates of Measured and Indicated Mineral Resources
This document uses the terms "measured mineral
resources" and "indicated mineral resources". Investors are advised
that while those terms are recognized and required by Canadian
regulations, the SEC does not recognize them. Investors
are cautioned not to assume that any part or all of mineral
deposits in these categories will ever be converted into mineral
reserves.
Cautionary Note to Investors Concerning
Estimates of Inferred Mineral Resources
This document also uses the term "inferred
mineral resources". Investors are advised that while this
term is recognized and required by Canadian regulations, the SEC
does not recognize it. "Inferred mineral resources" have a
great amount of uncertainty as to their existence, and great
uncertainty as to their economic and legal feasibility. It cannot
be assumed that all or any part of an inferred mineral resource
will ever be upgraded to a higher category. Under Canadian rules,
estimates of inferred mineral resources may not form the basis of
feasibility or pre-feasibility studies, except in rare cases.
Investors are cautioned not to assume that part or all of an
inferred mineral resource exists, or is economically or legally
mineable.
Scientific and Technical Data
The scientific and technical information
contained in this news release relating to Quebec operations has been approved by
Christian Provencher, Eng., Vice-President, Canada; relating to operations in Nunavut has been approved by Dominique Girard,
Eng., Vice-President Technical Services and Nunavut Operations;
relating to the Kittila operations has been approved by Francis
Brunet, Eng., Corporate Director Mining; relating to Southern
Business operations has been approved by Tim Haldane, P.Eng., Senior Vice-President,
Operations - USA and Latin America; and relating to exploration has
been approved by Alain Blackburn,
Eng., Senior Vice-President, Exploration and Guy Gosselin,
Eng., Vice-President, Exploration. Each of them is a
"Qualified Person" for the purposes of NI 43-101.
The scientific and technical information
relating to Agnico Eagle's mineral reserves and mineral resources
contained herein (other than the Canadian Malartic mine) has been
approved by Daniel Doucet, Eng., Senior Corporate Director, Reserve
Development; and relating to mineral reserves and mineral resources
at the Canadian Malartic mine contained herein has been approved by
Donald Gervais, P.Geo., Director of
Technical Services at CMC. Each of them is a "Qualified
Person" for the purposes of NI 43-101.
Detailed Mineral Reserve and Mineral Resource Data (as at
December 31, 2015)
|
Au |
Ag |
Cu |
Zn |
Pb |
Au |
Tonnes |
Category and Operation |
(g/t) |
(g/t) |
(%) |
(%) |
(%) |
(000s oz) |
(000s) |
Proven Mineral Reserve |
Northern Business |
|
|
|
|
|
|
|
LaRonde (underground) |
4.09 |
21.19 |
0.27 |
0.44 |
0.05 |
454 |
3,455 |
Canadian Malartic (open pit) (50%) |
0.97 |
|
|
|
|
860 |
27,446 |
Lapa (underground) |
5.49 |
|
|
|
|
78 |
444 |
Goldex (underground) |
1.54 |
|
|
|
|
15 |
300 |
Kittila (open pit) |
3.52 |
|
|
|
|
20 |
176 |
Kittila (underground) |
4.43 |
|
|
|
|
126 |
883 |
Kittila Total Proven |
4.28 |
|
|
|
|
146 |
1,059 |
Meadowbank (open pit) |
1.51 |
|
|
|
|
58 |
1,203 |
Meliadine (open pit) |
7.31 |
|
|
|
|
8 |
34 |
Southern Business |
|
|
|
|
|
|
|
Pinos Altos (open pit) |
2.07 |
67.48 |
|
|
|
11 |
164 |
Pinos Altos (underground) |
3.14 |
83.46 |
|
|
|
263 |
2,605 |
Pinos Altos Total Proven |
3.08 |
82.51 |
|
|
|
274 |
2,769 |
Creston Mascota (open pit) |
0.68 |
8.05 |
|
|
|
4 |
187 |
La India (open pit) |
0.68 |
12.69 |
|
|
|
5 |
244 |
Subtotal Proven Mineral
Reserve |
1.59 |
|
|
|
|
1,903 |
37,141 |
|
Probable Mineral Reserve |
Northern Business |
|
|
|
|
|
|
|
LaRonde (underground) |
5.59 |
19.39 |
0.23 |
0.90 |
0.04 |
2,654 |
14,765 |
Canadian Malartic (open pit) (50%) |
1.12 |
|
|
|
|
3,002 |
83,320 |
Lapa (underground) |
|
|
|
|
|
- |
- |
Goldex (underground) |
1.61 |
|
|
|
|
653 |
12,644 |
Akasaba (open pit) |
0.92 |
|
0.52 |
|
|
141 |
4,759 |
Kittila (open pit) |
3.64 |
|
|
|
|
18 |
157 |
Kittila (underground) |
4.83 |
|
|
|
|
4,189 |
26,979 |
Kittila Total Probable |
4.82 |
|
|
|
|
4,208 |
27,136 |
Meadowbank (open pit) |
2.87 |
|
|
|
|
885 |
9,586 |
Meliadine (open pit) |
5.00 |
|
|
|
|
644 |
4,001 |
Meliadine (underground) |
8.20 |
|
|
|
|
2,766 |
10,494 |
Meliadine Total Probable |
7.32 |
|
|
|
|
3,410 |
14,495 |
Southern Business |
|
|
|
|
|
|
|
Pinos Altos (open pit) |
2.54 |
71.21 |
|
|
|
281 |
3,440 |
Pinos Altos (underground) |
2.95 |
72.83 |
|
|
|
904 |
9,527 |
Pinos Altos Total Probable |
2.84 |
72.40 |
|
|
|
1,185 |
12,967 |
Creston Mascota (open pit) |
1.33 |
12.21 |
|
|
|
172 |
4,026 |
La India (open pit) |
0.90 |
4.16 |
|
|
|
862 |
29,743 |
Subtotal Probable Mineral Reserve |
2.50 |
|
|
|
|
17,172 |
213,442 |
Northern Total Proven and Probable Mineral
Reserves |
2.57 |
|
|
|
|
16,572 |
200,646 |
Southern Total Proven and Probable Mineral
Reserves |
1.56 |
|
|
|
|
2,502 |
49,937 |
Total Proven and Probable Mineral
Reserves |
2.37 |
|
|
|
|
19,075 |
250,583 |
|
Au |
Ag |
Cu |
Zn |
Pb |
Tonnes |
Category and Operation |
(g/t) |
(g/t) |
(%) |
(%) |
(%) |
(000s) |
Measured Mineral Resource |
|
|
|
|
|
|
Northern Business |
|
|
|
|
|
|
Canadian Malartic (open pit) (50%) |
1.32 |
|
|
|
|
1,752 |
Lapa (underground) |
5.33 |
|
|
|
|
49 |
Goldex (underground) |
1.86 |
|
|
|
|
12,360 |
Kittila (underground) |
2.58 |
|
|
|
|
991 |
Meadowbank (open pit) |
1.01 |
|
|
|
|
738 |
Hammond Reef (open pit) (50%) |
0.70 |
|
|
|
|
82,831 |
Southern Business |
|
|
|
|
|
|
La India (open pit) |
0.25 |
2.48 |
|
|
|
8,339 |
Subtotal Measured Mineral Resource |
0.83 |
|
|
|
|
107,059 |
Indicated Mineral Resource |
|
|
|
|
|
|
Northern Business |
|
|
|
|
|
|
LaRonde (underground) |
3.49 |
18.25 |
0.24 |
0.82 |
0.07 |
6,842 |
Canadian Malartic (open pit) (50%) |
1.55 |
|
|
|
|
11,079 |
Lapa (underground) |
4.21 |
|
|
|
|
1,086 |
Goldex (underground) |
1.88 |
|
|
|
|
22,069 |
Akasaba |
0.60 |
|
0.33 |
|
|
2,828 |
Kittila (open pit) |
2.90 |
|
|
|
|
72 |
Kittila (underground) |
3.05 |
|
|
|
|
14,863 |
Kittila Total Indicated |
3.05 |
|
|
|
|
14,935 |
Meadowbank (open pit) |
2.65 |
|
|
|
|
3,891 |
Meadowbank (underground) |
4.85 |
|
|
|
|
2,341 |
Meadowbank Total Indicated |
3.48 |
|
|
|
|
6,232 |
Meliadine (open pit) |
4.24 |
|
|
|
|
7,867 |
Meliadine (underground) |
5.38 |
|
|
|
|
12,911 |
Meliadine Total Indicated |
4.95 |
|
|
|
|
20,778 |
Bousquet (underground) |
2.47 |
|
|
|
|
11,380 |
Ellison (underground) |
3.25 |
|
|
|
|
646 |
Hammond Reef (open pit) (50%) |
0.57 |
|
|
|
|
21,377 |
AK (underground) (50%) |
6.51 |
|
|
|
|
634 |
Upper Beaver (underground) (50%) |
6.36 |
|
0.36 |
|
|
4,404 |
Swanson (open pit) |
1.93 |
|
|
|
|
504 |
Southern Business |
|
|
|
|
|
|
Pinos Altos (open pit) |
1.04 |
20.78 |
|
|
|
224 |
Pinos Altos (underground) |
1.85 |
42.87 |
|
|
|
10,916 |
Pinos Altos Total Indicated |
1.83 |
42.43 |
|
|
|
11,141 |
Creston Mascota (open pit) |
0.51 |
5.14 |
|
|
|
4,264 |
La India (open pit) |
0.38 |
0.55 |
|
|
|
61,950 |
Subtotal Indicated Mineral Resource |
1.88 |
|
|
|
|
202,147 |
Northern Total Measured and Indicated Mineral
Resources |
1.88 |
|
|
|
|
223,513 |
Southern Total Measured and Indicated Mineral
Resources |
0.56 |
|
|
|
|
85,693 |
Total Measured & Indicated Mineral
Resources |
1.52 |
|
|
|
|
309,206 |
|
|
Au |
Ag |
Cu |
Zn |
Pb |
Tonnes |
Category and Operation |
(g/t) |
(g/t) |
(%) |
(%) |
(%) |
(000s) |
Inferred Mineral Resource |
|
|
|
|
|
|
Northern Business |
|
|
|
|
|
|
LaRonde (underground) |
4.26 |
15.07 |
0.23 |
0.90 |
0.06 |
9,142 |
Canadian Malartic (open pit) (50%) |
1.47 |
|
|
|
|
4,494 |
Lapa (open pit Zulapa) |
3.14 |
|
|
|
|
391 |
Lapa (underground) |
7.78 |
|
|
|
|
1,049 |
Lapa Total Inferred |
6.52 |
|
|
|
|
1,440 |
Goldex (underground) |
1.53 |
|
|
|
|
24,630 |
Akasaba (open pit) |
|
|
|
|
|
- |
Kittila (open pit) |
3.89 |
|
|
|
|
373 |
Kittila (underground) |
4.66 |
|
|
|
|
11,460 |
Kittila Total Inferred |
4.64 |
|
|
|
|
11,833 |
Meadowbank (open pit) |
3.33 |
|
|
|
|
1,228 |
Meadowbank (underground) |
4.36 |
|
|
|
|
2,213 |
Meadowbank Total Inferred |
3.99 |
|
|
|
|
3,441 |
Amaruq (open pit) |
5.48 |
|
|
|
|
10,365 |
Amaruq (underground) |
6.96 |
|
|
|
|
6,515 |
Amaruq Total Inferred |
6.05 |
|
|
|
|
16,880 |
Meliadine (open pit) |
5.35 |
|
|
|
|
1,054 |
Meliadine (underground) |
7.68 |
|
|
|
|
13,656 |
Meliadine Total Inferred |
7.51 |
|
|
|
|
14,710 |
Bousquet (underground) |
4.00 |
|
|
|
|
5,373 |
Ellison (underground) |
4.03 |
|
|
|
|
1,746 |
Hammond Reef (open pit) (50%) |
0.74 |
|
|
|
|
251 |
AK (underground) (50%) |
5.32 |
|
|
|
|
1,187 |
Upper Beaver (underground) (50%) |
5.94 |
|
0.42 |
|
|
3,451 |
Kuotko, Finland (open pit) |
2.89 |
|
|
|
|
1,823 |
Kylmakangas, Finland (underground) |
4.11 |
31.11 |
|
|
|
1,896 |
Southern Business |
|
|
|
|
|
|
Pinos Altos (open pit) |
0.95 |
22.38 |
|
|
|
10,703 |
Pinos Altos (underground) |
2.96 |
68.95 |
|
|
|
1,877 |
Pinos Altos Total Inferred |
1.25 |
29.33 |
|
|
|
12,580 |
Creston Mascota (open pit) |
1.06 |
14.16 |
|
|
|
4,263 |
La India (open pit) |
0.37 |
|
|
|
|
90,868 |
El Barqueño (open pit) |
0.96 |
5.78 |
0.19 |
|
|
19,658 |
Northern Total Inferred Mineral
Resource |
4.32 |
|
|
|
|
102,294 |
Southern Total Inferred Mineral
Resource |
0.57 |
|
|
|
|
127,368 |
Total Inferred Mineral Resource |
2.24 |
|
|
|
|
229,662 |
Tonnage amounts and contained metal amounts presented in this
table have been rounded to the nearest thousand. Amounts
presented in this table may not add up due to rounding.
Mineral reserves are not a sub-set of mineral resources.
Cautionary Note To U.S. Investors - The
SEC permits U.S. mining companies, in their filings with the SEC,
to disclose only those mineral deposits that a company can
economically and legally extract or produce. Agnico Eagle
reports mineral resource and reserve mineral estimates in
accordance with the Canadian Institute of Mining, Metallurgy and
Petroleum Best Practice Guidelines for Exploration and
for Estimation of Mineral Resources and Mineral Reserves, in
accordance with NI 43-101. These standards are similar to
those used by the SEC's Industry Guide No. 7, as interpreted by
Staff at the SEC ("Guide 7"). However, the definitions in NI
43-101 differ in certain respects from those under Guide 7.
Accordingly, mineral reserve information contained herein may not
be comparable to similar information disclosed by U.S.
companies. Under the requirements of the SEC, mineralization
may not be classified as a "reserve" unless the determination has
been made that the mineralization could be economically and legally
produced or extracted at the time the mineral reserve determination
is made. A "final" or "bankable" feasibility study is
required to meet the requirements to designate mineral reserves
under Industry Guide 7. Agnico Eagle uses certain terms in
this news release, such as "measured", "indicated", and "inferred",
and "resources" that the SEC guidelines strictly prohibit U.S.
registered companies from including in their filings with the
SEC.
In prior periods, mineral reserves for all
properties were typically estimated using historic three-year
average metals prices and foreign exchange rates in accordance with
the SEC guidelines. These guidelines require the use of
prices that reflect current economic conditions at the time of
mineral reserve determination, which the Staff of the SEC has
interpreted to mean historic three-year average prices. Given
the current lower commodity price environment, Agnico Eagle has
decided to use price assumptions that are below the three-year
averages. The assumptions used for the mineral reserve
estimates at all mines and advanced projects as of December 31, 2015 (other than the Canadian
Malartic mine), reported by the Company on February 10, 2016, are $1,100 per ounce gold, $16.00 per ounce silver, $0.90 per pound zinc, $2.50 per pound copper, and US$/C$, Euro/US$ and
US$/MXP exchange rates for all mines and projects other than the
Lapa, Meadowbank and Creston
Mascota mines and Santo Niño open
pit at Pinos Altos of 1.16, 1.20
and 14.00, respectively. Due to shorter mine life the
assumptions used for the mineral reserve estimates at the
short-life mines (the Lapa, Meadowbank and Creston Mascota mines
and Santo Niño open pit) as of December 31,
2015, reported by the Company on February 10, 2016, include the same metal price
assumptions, and US$/C$ and US$/MXP exchange rates of 1.30
and 16.00, respectively.
The assumptions used for the mineral reserves
estimate at the Canadian Malartic mine as of December 31, 2015, reported by the Company on
February 10, 2016, are $1,150 per ounce gold, a cut-off grade between
0.30 g/t and 0.33 g/t gold (depending on the deposit) and a US$/C$
exchange rate of 1.24.
NI 43-101 requires mining companies to disclose
mineral reserves and mineral resources using the subcategories of
"proven mineral reserves", "probable mineral reserves", "measured
mineral resources", "indicated mineral resources" and "inferred
mineral resources". Mineral resources that are not mineral
reserves do not have demonstrated economic viability.
A mineral reserve is the economically mineable
part of a measured and/or indicated mineral resource. It
includes diluting materials and allowances for losses, which may
occur when the material is mined or extracted and is defined by
studies at pre-feasibility or feasibility level as appropriate that
include application of modifying factors. Such studies
demonstrate that, at the time of reporting, extraction could
reasonably be justified.
Modifying factors are considerations used to
convert mineral resources to mineral reserves. These include,
but are not restricted to, mining, processing, metallurgical,
infrastructure, economic, marketing, legal, environmental, social
and governmental factors.
A proven mineral reserve is the economically
mineable part of a measured mineral resource. A proven
mineral reserve implies a high degree of confidence in the
modifying factors. A probable mineral reserve is the
economically mineable part of an indicated and, in some
circumstances, a measured mineral resource. The confidence in
the modifying factors applying to a probable mineral reserve is
lower than that applying to a proven mineral reserve.
A mineral resource is a concentration or
occurrence of solid material of economic interest in or on the
Earth's crust in such form, grade or quality and quantity that
there are reasonable prospects for eventual economic
extraction. The location, quantity, grade or quality,
continuity and other geological characteristics of a mineral
resource are known, estimated or interpreted from specific
geological evidence and knowledge, including sampling.
A measured mineral resource is that part of a
mineral resource for which quantity, grade or quality, densities,
shape and physical characteristics are estimated with confidence
sufficient to allow the application of modifying factors to support
detailed mine planning and final evaluation of the economic
viability of the deposit. Geological evidence is derived from
detailed and reliable exploration, sampling and testing and is
sufficient to confirm geological and grade or quality continuity
between points of observation. An indicated mineral resource
is that part of a mineral resource for which quantity, grade or
quality, densities, shape and physical characteristics are
estimated with sufficient confidence to allow the application of
modifying factors in sufficient detail to support mine planning and
evaluation of the economic viability of the deposit.
Geological evidence is derived from adequately detailed and
reliable exploration, sampling and testing and is sufficient to
assume geological and grade or quality continuity between points of
observation. An inferred mineral resource is that part of a
mineral resource for which quantity and grade or quality are
estimated on the basis of limited geological evidence and
sampling. Geological evidence is sufficient to imply but not
verify geological and grade or quality continuity.
Investors are cautioned not to assume that
part or all of an inferred mineral resource exists, or is
economically or legally mineable.
A feasibility study is a comprehensive technical
and economic study of the selected development option for a mineral
project that includes appropriately detailed assessments of
applicable modifying factors together with any other relevant
operational factors and detailed financial analysis that are
necessary to demonstrate, at the time of reporting, that extraction
is reasonably justified (economically mineable). The results
of the study may reasonably serve as the basis for a final decision
by a proponent or financial institution to proceed with, or
finance, the development of the project. The confidence level
of the study will be higher than that of a Pre-Feasibility
Study.
The mineral reserves presented in this news
release are separate from and not a portion of the mineral
resources.
Property/Project
name and location |
Date of most recent
Technical Report (NI
43-101) filed on SEDAR |
LaRonde, Bousquet & Ellison, Quebec,
Canada |
March 23, 2005 |
Canadian Malartic, Quebec, Canada |
June 16, 2014 |
Kittila, Kuotko and Kylmakangas, Finland |
March 4, 2010 |
Meadowbank, Nunavut, Canada |
February 15, 2012 |
Goldex, Quebec, Canada |
October 14, 2012 |
Lapa, Quebec, Canada |
June 8, 2006 |
Meliadine, Nunavut, Canada |
February 11, 2015 |
Hammond Reef, Ontario, Canada |
July 2, 2013 |
Upper Beaver (Kirkland Lake project), Ontario,
Canada |
November 5, 2012 |
Pinos Altos and Creston Mascota, Mexico |
March 25, 2009 |
La India, Mexico |
August 31, 2012 |
Additional information about each of the mineral
projects that is required by NI 43-101, sections 3.2 and 3.3 and
paragraphs 3.4 (a), (c) and (d) can be found in Technical Reports,
which may be found at www.sedar.com. Other important operating
information can be found in the Company's AIF and Form 40-F.
AGNICO EAGLE MINES
LIMITED
SUMMARY OF OPERATIONS KEY PERFORMANCE INDICATORS
(thousands of United States dollars, except where
noted)
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31, |
|
Year Ended
December 31, |
|
|
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014
|
Operating margin(i) by
mine: |
|
|
|
|
|
|
|
|
|
|
Northern Business |
|
|
|
|
|
|
|
|
|
|
|
|
LaRonde mine |
$ |
50,667 |
|
$ |
33,535 |
|
$ |
145,924 |
|
$ |
120,058 |
|
Lapa mine |
|
12,363 |
|
|
16,060 |
|
|
52,214 |
|
|
54,198 |
|
Goldex mine |
|
17,108 |
|
|
20,693 |
|
|
72,567 |
|
|
60,738 |
|
Meadowbank mine |
|
64,664 |
|
|
39,839 |
|
|
216,334 |
|
|
305,032 |
|
Canadian Malartic
mine(ii) |
|
38,059 |
|
|
39,092 |
|
|
161,807 |
|
|
75,984 |
|
Kittila mine |
|
15,174 |
|
|
14,312 |
|
|
80,262 |
|
|
59,627 |
Southern Business |
|
|
|
|
|
|
|
|
|
|
|
|
Pinos Altos mine |
|
29,327 |
|
|
27,123 |
|
|
145,734 |
|
|
128,441 |
|
Creston Mascota deposit at Pinos
Altos |
|
9,919 |
|
|
8,392 |
|
|
40,194 |
|
|
31,566 |
|
La India mine(iii) |
|
15,832 |
|
|
16,727 |
|
|
75,101 |
|
|
56,563 |
Total operating
margin(i) |
|
253,113 |
|
|
215,773 |
|
|
990,137 |
|
|
892,207 |
Amortization of property, plant and
mine development |
|
157,129 |
|
|
139,095 |
|
|
608,609 |
|
|
433,628 |
Exploration, corporate and other |
|
76,963 |
|
|
74,390 |
|
|
298,900 |
|
|
269,441 |
Income before income and mining
taxes |
|
19,021 |
|
|
2,288 |
|
|
82,628 |
|
|
189,138 |
Income and mining taxes expense |
|
34,558 |
|
|
23,571 |
|
|
58,045 |
|
|
106,168 |
Net income (loss) for the
period |
$ |
(15,537) |
|
$ |
(21,283) |
|
$ |
24,583 |
|
$ |
82,970
|
Net income (loss) per share —
basic (US$) |
$ |
(0.07) |
|
|
(0.10) |
|
|
$ 0.11 |
|
|
0.43 |
Net income (loss) per share —
diluted (US$) |
$ |
(0.07) |
|
|
(0.12) |
|
|
$ 0.11 |
|
|
0.39 |
Cash flows: |
|
|
|
|
|
|
|
|
|
|
Cash provided by operating
activities |
$ |
140,747 |
|
$ |
163,956 |
|
$ |
616,238 |
|
$ |
668,324 |
Cash used in investing activities |
$ |
(115,786) |
|
$ |
(123,126) |
|
$ |
(374,519) |
|
$ |
(851,619) |
Cash provided by (used in) financing
activities |
$ |
(100,460) |
|
$ |
(18,685) |
|
$ |
(280,760) |
|
|
229,236 |
Realized prices (US$): |
|
|
|
|
|
|
|
|
|
|
|
Gold (per ounce) |
$ |
1,094 |
|
$ |
1,202 |
|
$ |
1,156 |
|
$ |
1,261 |
Silver (per ounce) |
$ |
14.56 |
|
$ |
15.60 |
|
$ |
15.63 |
|
$ |
18.27 |
Zinc (per tonne) |
$ |
1,602 |
|
$ |
2,216 |
|
$ |
1,875 |
|
$ |
2,224 |
Copper (per tonne) |
$ |
4,568 |
|
$ |
5,961 |
|
$ |
5,023 |
|
$ |
6,596 |
Payable
production(iv): |
|
|
|
|
|
|
|
|
|
|
|
Gold (ounces): |
|
|
|
|
|
|
|
|
|
|
|
|
Northern Business |
|
|
|
|
|
|
|
|
|
|
|
|
|
LaRonde mine |
|
73,161 |
|
|
59,316 |
|
|
267,921 |
|
|
204,652 |
|
|
Lapa mine |
|
19,929 |
|
|
25,611 |
|
|
90,967 |
|
|
92,622 |
|
|
Goldex mine |
|
27,646 |
|
|
29,463 |
|
|
115,426 |
|
|
100,433 |
|
|
Meadowbank mine |
|
102,580 |
|
|
86,715 |
|
|
381,804 |
|
|
452,877 |
|
|
Canadian Malartic mine(ii) |
|
72,872 |
|
|
66,369 |
|
|
285,809 |
|
|
143,008 |
|
|
Kittila mine |
|
44,279 |
|
|
43,130 |
|
|
177,374 |
|
|
141,742 |
|
Southern Business |
|
|
|
|
|
|
|
|
|
|
|
|
Pinos Altos mine |
|
44,496 |
|
|
40,669 |
|
|
192,974 |
|
|
171,019 |
|
Creston Mascota deposit at Pinos Altos |
|
13,933 |
|
|
12,989 |
|
|
54,703 |
|
|
47,842 |
|
La India mine(iii) |
|
23,432 |
|
|
23,273 |
|
|
104,362 |
|
|
75,093 |
Total gold (ounces) |
|
422,328 |
|
|
387,535 |
|
|
1,671,340 |
|
|
1,429,288 |
Silver (thousands of ounces): |
|
|
|
|
|
|
|
|
|
|
|
|
Northern Business |
|
|
|
|
|
|
|
|
|
|
|
|
LaRonde mine |
|
296 |
|
|
357 |
|
|
916 |
|
|
1,275 |
|
Lapa mine |
|
1 |
|
|
- |
|
|
4 |
|
|
- |
|
Meadowbank mine |
|
29 |
|
|
49 |
|
|
221 |
|
|
134 |
|
Canadian Malartic mine(ii) |
|
83 |
|
|
75 |
|
|
300 |
|
|
151 |
|
Kittila mine |
|
4 |
|
|
3 |
|
|
11 |
|
|
7 |
|
Southern Business |
|
|
|
|
|
|
|
|
|
|
|
|
Pinos Altos mine |
|
640 |
|
|
424 |
|
|
2,384 |
|
|
1,731 |
|
Creston Mascota deposit at Pinos Altos |
|
50 |
|
|
28 |
|
|
159 |
|
|
88 |
|
La India mine(iii) |
|
55 |
|
|
67 |
|
|
263 |
|
|
178 |
Total Silver (thousands of
ounces) |
|
1,158 |
|
|
1,003 |
|
|
4,258 |
|
|
3,564 |
Zinc (tonnes) |
|
999 |
|
|
2,432 |
|
|
3,501 |
|
|
10,515 |
Copper (tonnes) |
|
1,335 |
|
|
1,396 |
|
|
4,941 |
|
|
4,997 |
|
|
|
|
|
|
|
|
|
|
|
|
Payable metal sold: |
|
|
|
|
|
|
|
|
|
|
Gold (ounces): |
|
|
|
|
|
|
|
|
|
|
|
|
Northern Business |
|
|
|
|
|
|
|
|
|
|
|
|
LaRonde mine |
|
65,067 |
|
|
56,844 |
|
|
254,529 |
|
|
202,338 |
|
Lapa mine |
|
23,278 |
|
|
28,054 |
|
|
90,877 |
|
|
92,089 |
|
Goldex mine |
|
27,875 |
|
|
31,702 |
|
|
116,092 |
|
|
100,326 |
|
Meadowbank mine |
|
103,667 |
|
|
87,741 |
|
|
385,757 |
|
|
452,023 |
|
Canadian Malartic mine(ii)(v) |
|
71,982 |
|
|
66,219 |
|
|
271,416 |
|
|
142,689 |
|
Kittila mine |
|
43,499 |
|
|
42,609 |
|
|
178,936 |
|
|
139,766 |
|
Southern Business |
|
|
|
|
|
|
|
|
|
|
|
|
Pinos Altos mine |
|
41,418 |
|
|
45,457 |
|
|
186,580 |
|
|
176,468 |
|
Creston Mascota deposit at Pinos Altos |
|
14,997 |
|
|
12,940 |
|
|
55,844 |
|
|
46,698 |
|
La India mine(iii) |
|
25,366 |
|
|
24,019 |
|
|
105,050 |
|
|
72,941 |
Total gold (ounces) |
|
417,149 |
|
|
395,585 |
|
|
1,645,081 |
|
|
1,425,338 |
Silver (thousands of ounces): |
|
|
|
|
|
|
|
|
|
|
|
|
Northern Business |
|
|
|
|
|
|
|
|
|
|
|
|
LaRonde mine |
|
308 |
|
|
367 |
|
|
958 |
|
|
1,278 |
|
Meadowbank mine |
|
32 |
|
|
49 |
|
|
225 |
|
|
133 |
|
Canadian Malartic mine(ii)(v) |
|
98 |
|
|
68 |
|
|
285 |
|
|
140 |
|
Kittila mine |
|
3 |
|
|
2 |
|
|
10 |
|
|
6 |
|
Southern Business |
|
|
|
|
|
|
|
|
|
|
|
|
Pinos Altos mine |
|
607 |
|
|
456 |
|
|
2,289 |
|
|
1,823 |
|
Creston Mascota deposit at Pinos Altos |
|
49 |
|
|
34 |
|
|
156 |
|
|
84 |
|
La India mine(iii) |
|
56 |
|
|
67 |
|
|
261 |
|
|
169 |
Total Silver (thousands of
ounces): |
|
1,153 |
|
|
1,043 |
|
|
4,184 |
|
|
3,633 |
Zinc (tonnes) |
|
949 |
|
|
2,468 |
|
|
3,596 |
|
|
10,535 |
Copper (tonnes) |
|
1,354 |
|
|
1,399 |
|
|
4,947 |
|
|
5,003 |
|
|
|
|
|
|
|
|
|
|
|
|
Total cash costs per ounce of gold
produced - co-product basis
(US$)(vi): |
|
|
|
|
|
|
|
|
|
|
|
Northern Business |
|
|
|
|
|
|
|
|
|
|
|
|
LaRonde mine |
$ |
668 |
|
$ |
898 |
|
$ |
760 |
|
$ |
1,055 |
|
Lapa mine |
|
622 |
|
|
609 |
|
|
591 |
|
|
667 |
|
Goldex mine |
|
513 |
|
|
583 |
|
|
538 |
|
|
638 |
|
Meadowbank mine |
|
530 |
|
|
766 |
|
|
623 |
|
|
604 |
|
Canadian Malartic
mine(ii) |
|
623 |
|
|
702 |
|
|
613 |
|
|
721 |
|
Kittila mine |
|
748 |
|
|
810 |
|
|
710 |
|
|
846 |
Southern Business |
|
|
|
|
|
|
|
|
|
|
|
|
Pinos Altos mine |
|
623 |
|
|
755 |
|
|
578 |
|
|
718 |
|
Creston Mascota deposit at Pinos
Altos |
|
496 |
|
|
589 |
|
|
474 |
|
|
611 |
|
La India mine(iii) |
|
518 |
|
|
541 |
|
|
475 |
|
|
532 |
Weighted average total cash costs per
ounce of gold produced |
$ |
604 |
|
$ |
735 |
|
$ |
626 |
|
$ |
721 |
|
|
|
|
|
|
|
|
|
|
|
|
Total cash costs per ounce of gold
produced - by-product basis
(US$)(vi): |
|
|
|
|
|
|
|
|
|
|
Northern Business |
|
|
|
|
|
|
|
|
|
|
|
|
LaRonde mine |
$ |
510 |
|
$ |
590 |
|
$ |
590 |
|
$ |
668 |
|
Lapa mine |
|
620 |
|
|
607 |
|
|
590 |
|
|
667 |
|
Goldex mine |
|
513 |
|
|
583 |
|
|
538 |
|
|
638 |
|
Meadowbank mine |
|
526 |
|
|
757 |
|
|
613 |
|
|
599 |
|
Canadian Malartic
mine(ii) |
|
606 |
|
|
684 |
|
|
596 |
|
|
701 |
|
Kittila mine |
|
747 |
|
|
809 |
|
|
709 |
|
|
845 |
Southern Business |
|
|
|
|
|
|
|
|
|
|
|
|
Pinos Altos mine |
|
417 |
|
|
597 |
|
|
387 |
|
|
533 |
|
Creston Mascota deposit at Pinos
Altos |
|
445 |
|
|
556 |
|
|
430 |
|
|
578 |
|
La India mine(iii) |
|
485 |
|
|
496 |
|
|
436 |
|
|
487 |
Weighted average total cash costs per
ounce of gold produced |
$ |
547 |
|
$ |
662 |
|
$ |
567 |
|
$ |
637 |
Notes:
(i) |
Operating margin is calculated as revenues from mining
operations less production costs. |
|
|
(ii) |
On June 16, 2014, Agnico Eagle and Yamana jointly acquired
100.0% of Osisko by way of a statutory plan of arrangement (the
"Arrangement"). As a result of the Arrangement, Agnico Eagle and
Yamana each indirectly own 50.0% of Osisko (now Canadian
Malartic Corporation) and Canadian Malartic GP, which now
holds the Canadian Malartic mine. The information set out in this
table reflects the Company's 50.0% interest in the Canadian
Malartic mine since the date of acquisition. |
|
|
(iii) |
The La India mine achieved commercial production on
February 1, 2014. 3,492 ounces of payable gold
production were excluded from the calculation of total cash costs
per ounce produced in the year ended December 31, 2014 as they were
produced prior to the achievement of commercial production. |
|
|
(iv) |
Payable production (a non-GAAP non-financial performance
measure) is the quantity of mineral produced during a period
contained in products that are or will be sold by the Company,
whether such products are sold during the period or held as
inventories at the end of the period. |
|
|
(v) |
The Canadian Malartic mine's payable metal sold excludes the
5.0% net smelter royalty held by Osisko Gold
Royalties Ltd. |
|
|
(vi) |
Total cash costs per ounce of gold produced is not a recognized
measure under IFRS and this data may not be comparable to data
presented by other gold producers. Total cash costs per ounce of
gold produced is reported on both a by-product basis (deducting
by-product metal revenues from production costs) and co-product
basis (before by-product metal revenues). Total cash costs per
ounce of gold produced on a by-product basis is calculated by
adjusting production costs as recorded in the consolidated
statements of income (loss) for by-product metal revenues, unsold
concentrate inventory production costs, smelting, refining and
marketing charges and other adjustments, and then dividing by the
number of ounces of gold produced. Total cash costs per ounce of
gold produced on a co-product basis is calculated in the same
manner as total cash costs per ounce of gold produced on a
by-product basis except that no adjustment for by-product metal
revenues is made. The calculation of total cash costs per ounce of
gold produced on a co-product basis does not reflect a reduction in
production costs or smelting, refining and marketing charges
associated with the production and sale of by-product metals. The
Company believes that these generally accepted industry measures
provide a realistic indication of operating performance and provide
useful comparison points between periods. Total cash costs per
ounce of gold produced is intended to provide information about the
cash generating capabilities of the Company's mining operations.
Management also uses these measures to monitor the performance of
the Company's mining operations. As market prices for gold are
quoted on a per ounce basis, using the total cash costs per ounce
of gold produced on a by-product basis measure allows management to
assess a mine's cash generating capabilities at various gold
prices. Management is aware that these per ounce measures of
performance can be affected by fluctuations in exchange rates and,
in the case of total cash costs of gold produced on a by-product
basis, by-product metal prices. Management compensates for these
inherent limitations by using these measures in conjunction with
minesite costs per tonne as well as other data prepared in
accordance with IFRS. Management also performs sensitivity analyses
in order to quantify the effects of fluctuating metal prices and
exchange rates. |
AGNICO EAGLE MINES
LIMITED |
CONSOLIDATED BALANCE
SHEETS |
(thousands of United States
dollars, except share amounts, IFRS basis) |
(Unaudited) |
|
|
|
As at |
|
|
As at |
|
|
|
December 31, |
|
|
December 31, |
|
|
|
2015 |
|
|
2014 |
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
124,150 |
|
$ |
177,537 |
|
Short-term investments |
|
|
7,444 |
|
|
4,621 |
|
Restricted cash |
|
|
685 |
|
|
33,122 |
|
Trade receivables |
|
|
7,714 |
|
|
59,716 |
|
Inventories |
|
|
461,976 |
|
|
446,660 |
|
Income taxes recoverable |
|
|
817 |
|
|
1,658 |
|
Available-for-sale securities |
|
|
31,863 |
|
|
56,468 |
|
Fair value of derivative financial
instruments |
|
|
87 |
|
|
4,877 |
|
Other current assets |
|
|
194,689 |
|
|
123,401 |
Total current assets |
|
|
829,425 |
|
|
908,060 |
Non-current assets: |
|
|
|
|
|
|
|
Restricted cash |
|
|
741 |
|
|
20,899 |
|
Goodwill |
|
|
696,809 |
|
|
696,809 |
|
Property, plant and mine
development |
|
|
5,088,967 |
|
|
5,155,865 |
|
Other assets |
|
|
67,238 |
|
|
27,622 |
Total assets |
|
$ |
6,683,180 |
|
$ |
6,809,255 |
LIABILITIES AND EQUITY |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Accounts payable and accrued
liabilities |
|
$ |
243,786 |
|
$ |
209,906 |
|
Reclamation provision |
|
|
6,245 |
|
|
6,769 |
|
Interest payable |
|
|
14,526 |
|
|
13,816 |
|
Income taxes payable |
|
|
14,852 |
|
|
19,328 |
|
Finance lease obligations |
|
|
9,589 |
|
|
22,142 |
|
Current portion of long-term debt |
|
|
14,451 |
|
|
52,182 |
|
Fair value of derivative financial
instruments |
|
|
8,073 |
|
|
8,249 |
Total current liabilities |
|
|
311,522 |
|
|
332,392 |
Non-current liabilities: |
|
|
|
|
|
|
|
Long-term debt |
|
|
1,118,187 |
|
|
1,322,461 |
|
Reclamation provision |
|
|
276,299 |
|
|
249,917 |
|
Deferred income and mining tax
liabilities |
|
|
802,114 |
|
|
797,192 |
|
Other liabilities |
|
|
34,038 |
|
|
38,803 |
Total liabilities |
|
|
2,542,160 |
|
|
2,740,765 |
EQUITY |
|
|
|
|
|
|
|
Common shares: |
|
|
|
|
|
|
|
|
Outstanding - 218,028,368 common shares issued,
less
377,573 shares held in trust |
|
|
4,707,940 |
|
|
4,599,788 |
|
Stock options |
|
|
216,232 |
|
|
200,830 |
|
Contributed surplus |
|
|
37,254 |
|
|
37,254 |
|
Deficit |
|
|
(823,734) |
|
|
(779,382) |
|
Accumulated other comprehensive
income |
|
|
3,328 |
|
|
10,000 |
Total equity |
|
|
4,141,020 |
|
|
4,068,490 |
Total liabilities and equity |
|
$ |
6,683,180 |
|
$ |
6,809,255 |
|
|
|
|
|
|
|
AGNICO EAGLE MINES
LIMITED |
CONSOLIDATED STATEMENTS OF
INCOME (LOSS) |
(thousands of United States
dollars, except share amounts, IFRS basis) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
December 31, |
|
Year Ended
December 31, |
|
|
|
|
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues from mining operations |
$ |
482,932 |
|
$ |
503,090 |
|
$ |
1,985,432 |
|
$ |
1,896,766 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COSTS, EXPENSES AND OTHER
INCOME |
|
|
|
|
|
|
|
|
|
|
|
Production (i) |
|
|
|
229,819 |
|
|
287,317 |
|
|
995,295 |
|
|
1,004,559 |
Exploration and corporate
development |
|
26,001 |
|
|
14,436 |
|
|
110,353 |
|
|
56,002 |
Amortization of property, plant and
mine development |
|
157,129 |
|
|
139,095 |
|
|
608,609 |
|
|
433,628 |
General and administrative |
|
|
22,505 |
|
|
25,995 |
|
|
96,973 |
|
|
118,771 |
Impairment loss on available-for-sale
securities |
|
3,929 |
|
|
12,882 |
|
|
12,035 |
|
|
15,763 |
Finance costs |
|
|
|
17,887 |
|
|
18,144 |
|
|
75,228 |
|
|
73,393 |
Loss on derivative financial
instruments |
|
3,318 |
|
|
2,512 |
|
|
19,608 |
|
|
6,156 |
Gain on sale of available-for-sale
securities |
|
(1) |
|
|
(263) |
|
|
(24,600) |
|
|
(5,635) |
Environmental remediation |
|
|
1,666 |
|
|
(949) |
|
|
2,003 |
|
|
8,214 |
Foreign currency translation loss
(gain) |
|
1,281 |
|
|
6,951 |
|
|
(4,728) |
|
|
3,781 |
Other expenses (income) |
|
|
377 |
|
|
(5,318) |
|
|
12,028 |
|
|
(7,004) |
Income before income and mining
taxes |
|
19,021 |
|
|
2,288 |
|
|
82,628 |
|
|
189,138 |
Income and mining taxes expense |
|
34,558 |
|
|
23,571 |
|
|
58,045 |
|
|
106,168 |
Net income (loss) for the period |
$ |
(15,537) |
|
$ |
(21,283) |
|
$ |
24,583 |
|
$ |
82,970 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share -
basic |
$ |
(0.07) |
|
$ |
(0.10) |
|
$ |
0.11 |
|
$ |
0.43 |
Net income (loss) per share -
diluted |
$ |
(0.07) |
|
$ |
(0.12) |
|
$ |
0.11 |
|
$ |
0.39 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common
shares outstanding (in thousands): |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
217,484 |
|
|
212,401 |
|
|
216,168 |
|
|
195,223 |
Diluted |
|
|
|
217,484 |
|
|
213,273 |
|
|
217,101 |
|
|
196,202 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(i) Exclusive of amortization, which
is shown separately. |
AGNICO EAGLE MINES
LIMITED |
CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(thousands of United States
dollars, IFRS basis) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
December 31, |
|
Year
Ended
December 31, |
|
|
|
|
|
|
|
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) for the period |
|
|
|
$ |
(15,537) |
|
$ |
(21,283) |
|
$ |
24,583 |
|
$ |
82,970 |
Add (deduct) items not affecting
cash: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of property, plant and
mine development |
|
157,129 |
|
|
139,095 |
|
|
608,609 |
|
|
433,628 |
|
Deferred income and mining
taxes |
|
|
|
(36,853) |
|
|
10,869 |
|
|
6,550 |
|
|
37,058 |
|
Gain on sale of available-for-sale
securities |
|
(1) |
|
|
(263) |
|
|
(24,600) |
|
|
(5,635) |
|
Stock-based compensation |
|
|
|
|
7,045 |
|
|
7,533 |
|
|
35,822 |
|
|
37,565 |
|
Impairment loss on available-for-sale
securities |
|
|
3,929 |
|
|
12,882 |
|
|
12,035 |
|
|
15,763 |
|
Foreign currency translation loss
(gain) |
|
|
|
1,281 |
|
|
6,951 |
|
|
(4,728) |
|
|
3,781 |
|
Other |
|
|
|
|
|
|
(3,862) |
|
|
(3,541) |
|
|
3,145 |
|
|
23,430 |
Adjustment for settlement of
reclamation provision |
|
|
|
(533) |
|
|
(669) |
|
|
(1,385) |
|
|
(4,160) |
Changes in non-cash working capital
balances: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade receivables |
|
|
|
|
|
(1,815) |
|
|
2,012 |
|
|
52,019 |
|
|
17,237 |
|
Income taxes |
|
|
|
|
|
64,315 |
|
|
5,783 |
|
|
(2,333) |
|
|
30,771 |
|
Inventories |
|
|
|
|
|
8,928 |
|
|
23,705 |
|
|
(40,547) |
|
|
(1,354) |
|
Other current assets |
|
|
|
|
|
(25,322) |
|
|
1,102 |
|
|
(74,106) |
|
|
787 |
|
Accounts payable and accrued
liabilities |
|
|
|
(11,348) |
|
|
(13,101) |
|
|
20,464 |
|
|
(3,391) |
|
Interest payable |
|
|
|
|
|
(6,609) |
|
|
(7,119) |
|
|
710 |
|
|
(126) |
Cash provided by operating
activities |
|
|
|
|
140,747 |
|
|
163,956 |
|
|
616,238 |
|
|
668,324 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions to property, plant and mine
development |
|
|
|
(132,958) |
|
|
(133,353) |
|
|
(449,758) |
|
|
(475,412) |
Acquisitions, net of cash and cash
equivalents acquired |
|
|
- |
|
|
3,477 |
|
|
(12,983) |
|
|
(400,032) |
Net (purchases) sales of short-term
investments |
|
|
|
(1,300) |
|
|
2,200 |
|
|
(2,823) |
|
|
(2,404) |
Net proceeds from sale of
available-for-sale securities and warrants |
|
40 |
|
|
4,057 |
|
|
61,075 |
|
|
44,692 |
Purchase of available-for-sale
securities and warrants |
|
|
(382) |
|
|
- |
|
|
(19,815) |
|
|
(27,246) |
Decrease in restricted cash |
|
|
|
|
|
18,814 |
|
|
493 |
|
|
49,785 |
|
|
8,783 |
Cash used in investing activities |
|
|
|
|
(115,786) |
|
|
(123,126) |
|
|
(374,519) |
|
|
(851,619) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends paid |
|
|
|
|
|
|
(14,940) |
|
|
(14,606) |
|
|
(59,512) |
|
|
(54,065) |
Repayment of finance lease
obligations |
|
|
|
|
(6,122) |
|
|
(7,087) |
|
|
(23,657) |
|
|
(21,453) |
Sale-leaseback financing |
|
|
|
|
|
- |
|
|
- |
|
|
- |
|
|
1,027 |
Proceeds from long-term
debt |
|
|
|
|
111,000 |
|
|
50,000 |
|
|
436,000 |
|
|
1,010,000 |
Repayment of long-term debt |
|
|
|
|
(196,000) |
|
|
(49,410) |
|
|
(697,086) |
|
|
(724,050) |
Note issuance |
|
|
|
|
|
|
- |
|
|
- |
|
|
50,000 |
|
|
- |
Long-term debt financing |
|
|
|
|
|
(196) |
|
|
- |
|
|
(1,689) |
|
|
(2,127) |
Repurchase of common shares for
restricted share unit plan |
|
|
- |
|
|
- |
|
|
(11,899) |
|
|
(7,518) |
Proceeds on exercise of stock
options |
|
|
|
|
3,662 |
|
|
- |
|
|
17,672 |
|
|
16,994 |
Common shares issued |
|
|
|
|
|
2,136 |
|
|
2,418 |
|
|
9,411 |
|
|
10,428 |
Cash (used in) provided by financing
activities |
|
|
|
(100,460) |
|
|
(18,685) |
|
|
(280,760) |
|
|
229,236 |
Effect of exchange rate changes on
cash and cash equivalents |
|
(2,315) |
|
|
(3,431) |
|
|
(14,346) |
|
|
(7,505) |
Net (decrease) increase in cash and
cash equivalents during the period |
|
(77,814) |
|
|
18,714 |
|
|
(53,387) |
|
|
38,436 |
Cash and cash equivalents,
beginning of period |
|
|
201,964 |
|
|
158,823 |
|
|
177,537 |
|
|
139,101 |
Cash and cash equivalents, end of
period |
|
|
$ |
124,150 |
|
$ |
177,537 |
|
$ |
124,150 |
|
$ |
177,537 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL CASH FLOW
INFORMATION |
|
|
|
|
|
|
|
|
|
|
|
|
Interest paid |
|
|
|
|
|
$ |
23,158 |
|
$ |
23,663 |
|
$ |
69,414 |
|
$ |
67,632 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income and mining taxes
paid |
|
|
|
$ |
33,756 |
|
$ |
13,070 |
|
$ |
81,112 |
|
$ |
51,302 |
AGNICO EAGLE MINES LIMITED
RECONCILIATION OF NON-GAAP FINANCIAL PERFORMANCE
MEASURES
(thousands of United States dollars, except where
noted)
(Unaudited)
Total Production Costs by
Mine |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Year Ended |
|
|
Year Ended |
|
|
|
December 31, 2015 |
|
|
December 31, 2014 |
|
|
December 31,
2015 |
|
|
December 31,
2014 |
(thousands of United States
dollars) |
|
|
|
|
|
|
|
|
|
|
|
|
LaRonde mine |
|
$ |
32,041 |
|
$ |
47,629 |
|
$ |
172,283 |
|
$ |
188,736 |
Lapa mine |
|
|
12,652 |
|
|
17,463 |
|
|
52,571 |
|
|
61,056 |
Goldex mine |
|
|
13,378 |
|
|
17,350 |
|
|
61,278 |
|
|
64,836 |
Meadowbank mine |
|
|
49,177 |
|
|
67,099 |
|
|
230,564 |
|
|
270,824 |
Canadian Malartic
mine(i) |
|
|
46,093 |
|
|
47,701 |
|
|
171,473 |
|
|
113,916 |
Kittila mine |
|
|
32,203 |
|
|
36,546 |
|
|
126,095 |
|
|
116,893 |
Pinos Altos mine |
|
|
24,351 |
|
|
32,690 |
|
|
105,175 |
|
|
123,342 |
Creston Mascota deposit at Pinos
Altos |
|
|
7,070 |
|
|
7,729 |
|
|
26,278 |
|
|
28,007 |
La India mine(ii) |
|
|
12,854 |
|
|
13,110 |
|
|
49,578 |
|
|
36,949 |
Production costs per the consolidated
statements of income (loss) |
|
$ |
229,819 |
|
$ |
287,317 |
|
$ |
995,295 |
|
$ |
1,004,559 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Production Costs
to Total Cash Costs per Ounce of Gold Produced(iii) by
Mine and Reconciliation of Production Costs to Minesite Costs per
Tonne(iv) by Mine |
|
|
|
|
|
|
|
|
|
|
|
|
|
LaRonde Mine - Total Cash Costs per
Ounce of Gold Produced(iii) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Year Ended |
|
|
Year Ended |
(thousands of United States
dollars, except as noted) |
|
|
December 31, 2015 |
|
|
December 31, 2014 |
|
|
December 31,
2015 |
|
|
December 31,
2014 |
Production costs |
|
$ |
32,041 |
|
$ |
47,629 |
|
$ |
172,283 |
|
$ |
188,736 |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory and other adjustments(v) |
|
|
16,847 |
|
|
5,633 |
|
|
31,417 |
|
|
27,070 |
Cash operating costs (co-product
basis) |
|
$ |
48,888 |
|
$ |
53,262 |
|
$ |
203,700 |
|
$ |
215,806 |
|
By-product metal revenues |
|
|
(11,553) |
|
|
(18,293) |
|
|
(45,678) |
|
|
(79,015) |
Cash operating costs (by-product
basis) |
|
$ |
37,335 |
|
$ |
34,969 |
|
$ |
158,022 |
|
$ |
136,791 |
Gold production (ounces) |
|
|
73,161 |
|
|
59,316 |
|
|
267,921 |
|
|
204,652 |
Total cash costs per ounce of gold
produced ($ per ounce)(iii): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Co-product basis |
|
$ |
668 |
|
$ |
898 |
|
$ |
760 |
|
$ |
1,055 |
|
By-product basis |
|
$ |
510 |
|
$ |
590 |
|
$ |
590 |
|
$ |
668 |
|
|
|
|
|
|
|
|
|
|
|
|
|
LaRonde Mine - Minesite Costs per
Tonne(iv) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Year Ended |
|
|
Year Ended |
(thousands of United States
dollars, except as noted) |
|
|
December 31, 2015 |
|
|
December 31, 2014 |
|
|
December 31,
2015 |
|
|
December 31,
2014 |
Production costs |
|
$ |
32,041 |
|
$ |
47,629 |
|
$ |
172,283 |
|
$ |
188,736 |
Inventory and other
adjustments(vi) |
|
|
2,316 |
|
|
(1,837) |
|
|
2,582 |
|
|
(1,511) |
Minesite operating costs |
|
$ |
34,357 |
|
$ |
45,792 |
|
$ |
174,865 |
|
$ |
187,225 |
Minesite operating costs (thousands of
C$) |
|
C$ |
53,119 |
|
C$ |
52,073 |
|
C$ |
222,799 |
|
C$ |
206,858 |
Tonnes of ore milled (thousands of
tonnes) |
|
|
563 |
|
|
538 |
|
|
2,241 |
|
|
2,085 |
Minesite costs per tonne
(C$)(iv) |
|
C$ |
94 |
|
C$ |
97 |
|
C$ |
99 |
|
C$ |
99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Lapa Mine - Total Cash Costs per
Ounce of Gold Produced(iii) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Year Ended |
|
|
Year Ended |
(thousands of United States
dollars, except as noted) |
|
|
December 31, 2015 |
|
|
December 31, 2014 |
|
|
December 31,
2015 |
|
|
December 31,
2014 |
Production costs |
|
$ |
12,652 |
|
$ |
17,463 |
|
$ |
$ 52,571 |
|
$ |
61,056 |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory and other adjustments(v) |
|
|
(247) |
|
|
(1,858) |
|
|
1,161 |
|
|
750 |
Cash operating costs (co-product
basis) |
|
$ |
12,405 |
|
$ |
15,605 |
|
$ |
53,732 |
|
$ |
61,806 |
|
By-product metal revenues |
|
|
(42) |
|
|
(55) |
|
|
(62) |
|
|
(61) |
Cash operating costs (by-product
basis) |
|
$ |
12,363 |
|
$ |
15,550 |
|
$ |
53,670 |
|
$ |
61,745 |
Gold production (ounces) |
|
|
19,929 |
|
|
25,611 |
|
|
90,967 |
|
|
92,622 |
Total cash costs per ounce of gold
produced ($ per ounce)(iii): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Co-product basis |
|
$ |
622 |
|
$ |
609 |
|
$ |
591 |
|
$ |
667 |
|
By-product basis |
|
$ |
620 |
|
$ |
607 |
|
$ |
590 |
|
$ |
667 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Lapa Mine - Minesite Costs per
Tonne(iv) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Year Ended |
|
|
Year Ended |
(thousands of United States
dollars, except as noted) |
|
|
December 31, 2015 |
|
|
December 31, 2014 |
|
|
December 31,
2015 |
|
|
December 31,
2014 |
Production costs |
|
$ |
12,652 |
|
$ |
17,463 |
|
$ |
52,571 |
|
$ |
61,056 |
Inventory and other
adjustments(vi) |
|
|
(1,297) |
|
|
(1,999) |
|
|
(1,000) |
|
|
545 |
Minesite operating costs |
|
$ |
11,355 |
|
$ |
15,464 |
|
$ |
51,571 |
|
$ |
61,601 |
Minesite operating costs (thousands of
C$) |
|
C$ |
15,076 |
|
C$ |
17,636 |
|
C$ |
65,686 |
|
C$ |
68,128 |
Tonnes of ore milled (thousands of
tonnes) |
|
|
136 |
|
|
162 |
|
|
560 |
|
|
639 |
Minesite costs per tonne
(C$)(iv) |
|
C$ |
111 |
|
C$ |
109 |
|
C$ |
117 |
|
C$ |
107 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Goldex Mine - Total Cash Costs per
Ounce of Gold Produced(iii) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Year Ended |
|
|
Year Ended |
(thousands of United States
dollars, except as noted) |
|
|
December 31, 2015 |
|
|
December 31, 2014 |
|
|
December 31,
2015 |
|
|
December 31,
2014 |
Production costs |
|
$ |
13,378 |
|
$ |
17,350 |
|
$ |
61,278 |
|
$ |
64,836 |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory and other adjustments(v) |
|
|
812 |
|
|
(161) |
|
|
878 |
|
|
(720) |
Cash operating costs (co-product
basis) |
|
$ |
14,190 |
|
$ |
17,189 |
|
$ |
62,156 |
|
$ |
64,116 |
|
By-product metal revenues |
|
|
(8) |
|
|
(4) |
|
|
(23) |
|
|
(20) |
Cash operating costs (by-product
basis) |
|
$ |
14,182 |
|
$ |
17,185 |
|
$ |
62,133 |
|
$ |
64,096 |
Gold production (ounces) |
|
|
27,646 |
|
|
29,463 |
|
|
115,426 |
|
|
100,433 |
Total cash costs per ounce of gold
produced ($ per ounce)(iii): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Co-product basis |
|
$ |
513 |
|
$ |
583 |
|
$ |
538 |
|
$ |
638 |
|
By-product basis |
|
$ |
513 |
|
$ |
583 |
|
$ |
538 |
|
$ |
638 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goldex Mine - Minesite Costs per
Tonne(iv) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Year Ended |
|
|
Year Ended |
(thousands of United States
dollars, except as noted) |
|
|
December 31, 2015 |
|
|
December 31, 2014 |
|
|
December 31,
2015 |
|
|
December 31,
2014 |
Production costs |
|
$ |
13,378 |
|
$ |
17,350 |
|
$ |
61,278 |
|
$ |
64,836 |
Inventory and other
adjustments(vi) |
|
|
(189) |
|
|
(290) |
|
|
(1,253) |
|
|
(797) |
Minesite operating costs |
|
$ |
13,189 |
|
$ |
17,060 |
|
$ |
60,025 |
|
$ |
64,039 |
Minesite operating costs (thousands of
C$) |
|
C$ |
17,605 |
|
C$ |
19,314 |
|
C$ |
76,408 |
|
C$ |
70,728 |
Tonnes of ore milled (thousands of
tonnes) |
|
|
572 |
|
|
575 |
|
|
2,313 |
|
|
2,117 |
Minesite costs per tonne
(C$)(iv) |
|
C$ |
31 |
|
C$ |
34 |
|
C$ |
33 |
|
C$ |
33 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Meadowbank Mine - Total Cash Costs
per Ounce of Gold Produced(iii) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Year Ended |
|
|
Year Ended |
(thousands of United States
dollars, except as noted) |
|
|
December 31, 2015 |
|
|
December 31, 2014 |
|
|
December 31,
2015 |
|
|
December 31,
2014 |
Production costs |
|
$ |
49,177 |
|
$ |
67,099 |
|
$ |
230,564 |
|
$ |
270,824 |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory and other adjustments(v) |
|
|
5,194 |
|
|
(656) |
|
|
7,282 |
|
|
2,688 |
Cash operating costs (co-product
basis) |
|
$ |
54,371 |
|
$ |
66,443 |
|
$ |
237,846 |
|
$ |
273,512 |
By-product metal
revenues |
|
|
(455) |
|
|
(805) |
|
|
(3,665) |
|
|
(2,420) |
Cash operating costs (by-product
basis) |
|
$ |
53,916 |
|
$ |
65,638 |
|
$ |
234,181 |
|
$ |
271,092 |
Gold production (ounces) |
|
|
102,580 |
|
$ |
86,715 |
|
$ |
381,804 |
|
$ |
452,877 |
Total cash costs per ounce of gold
produced ($ per ounce)(iii): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Co-product basis |
|
$ |
530 |
|
$ |
766 |
|
$ |
623 |
|
$ |
604 |
|
By-product basis |
|
$ |
526 |
|
$ |
757 |
|
$ |
613 |
|
$ |
599 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Meadowbank Mine - Minesite Costs
per Tonne(iv) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Year Ended |
|
|
Year Ended |
(thousands of United States
dollars, except as noted) |
|
|
December 31, 2015 |
|
|
December 31, 2014 |
|
|
December 31,
2015 |
|
|
December 31,
2014 |
Production costs |
|
$ |
49,177 |
|
$ |
67,099 |
|
$ |
230,564 |
|
$ |
270,824 |
Inventory and other
adjustments(vi) |
|
|
(724) |
|
|
(1,177) |
|
|
(4,441) |
|
|
2,539 |
Minesite operating costs |
|
$ |
48,453 |
|
$ |
65,922 |
|
$ |
226,123 |
|
$ |
273,363 |
Minesite operating costs (thousands of
C$) |
|
C$ |
63,514 |
|
C$ |
73,612 |
|
C$ |
280,950 |
|
C$ |
300,635 |
Tonnes of ore milled (thousands of
tonnes) |
|
|
1,028 |
|
|
1,027 |
|
|
4,033 |
|
|
4,129 |
Minesite costs per tonne
(C$)(iv) |
|
C$ |
62 |
|
C$ |
72 |
|
C$ |
70 |
|
C$ |
73 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Canadian Malartic Mine - Total Cash
Costs per Ounce of Gold Produced(i)(iii) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Year Ended |
|
|
Year Ended |
(thousands of United States
dollars, except as noted) |
|
|
December 31, 2015 |
|
|
December 31, 2014 |
|
|
December 31,
2015 |
|
|
December 31,
2014 |
Production costs |
|
$ |
46,093 |
|
$ |
47,701 |
|
$ |
171,473 |
|
$ |
113,916 |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory and other adjustments(v) |
|
|
(705) |
|
|
(1,100) |
|
|
3,630 |
|
|
(10,862) |
Cash operating costs (co-product
basis) |
|
$ |
45,388 |
|
$ |
46,601 |
|
$ |
175,103 |
|
$ |
103,054 |
|
By-product metal revenues |
|
|
(1,236) |
|
|
(1,230) |
|
|
(4,689) |
|
|
(2,771) |
Cash operating costs (by-product
basis) |
|
$ |
44,152 |
|
$ |
45,371 |
|
$ |
170,414 |
|
$ |
100,283 |
Gold production (ounces) |
|
|
72,872 |
|
|
66,369 |
|
|
285,809 |
|
|
143,008 |
Total cash costs per ounce of gold
produced ($ per ounce)(iii): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Co-product basis |
|
$ |
623 |
|
$ |
702 |
|
$ |
613 |
|
$ |
721 |
|
By-product basis |
|
$ |
606 |
|
$ |
684 |
|
$ |
596 |
|
$ |
701 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Canadian Malartic Mine - Minesite
Costs per Tonne(i)(iv) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Year Ended |
|
|
Year Ended |
(thousands of United States
dollars, except as noted) |
|
|
December 31, 2015 |
|
|
December 31, 2014 |
|
|
December 31,
2015 |
|
|
December 31,
2014 |
Production costs |
|
$ |
46,093 |
|
$ |
47,701 |
|
$ |
171,473 |
|
$ |
113,916 |
Inventory and other
adjustments(vi) |
|
|
(1,504) |
|
|
(1,627) |
|
|
280 |
|
|
(11,656) |
Minesite operating costs |
|
$ |
44,589 |
|
$ |
46,074 |
|
$ |
171,753 |
|
$ |
102,260 |
Minesite operating costs (thousands of
C$) |
|
C$ |
59,578 |
|
C$ |
52,327 |
|
C$ |
219,714 |
|
C$ |
113,818 |
Tonnes of ore milled (thousands of
tonnes) |
|
|
2,428 |
|
|
2,449 |
|
|
9,545 |
|
|
5,263 |
Minesite costs per tonne
(C$)(iv) |
|
C$ |
25 |
|
C$ |
21 |
|
C$ |
23 |
|
C$ |
22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Kittila Mine - Total Cash Costs per
Ounce of Gold Produced(iii) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Year Ended |
|
|
Year Ended |
(thousands of United States
dollars, except as noted) |
|
|
December 31, 2015 |
|
|
December 31, 2014 |
|
|
December 31,
2015 |
|
|
December 31,
2014 |
Production costs |
|
$ |
32,203 |
|
$ |
36,546 |
|
$ |
126,095 |
|
$ |
116,893 |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory and other adjustments(v) |
|
|
901 |
|
|
(1,625) |
|
|
(187) |
|
|
3,051 |
Cash operating costs (co-product
basis) |
|
$ |
33,104 |
|
$ |
34,921 |
|
$ |
125,908 |
|
$ |
119,944 |
|
By-product metal revenues |
|
|
(39) |
|
|
(37) |
|
|
(155) |
|
|
(124) |
Cash operating costs (by-product
basis) |
|
$ |
33,065 |
|
$ |
34,884 |
|
$ |
125,753 |
|
$ |
119,820 |
Gold production (ounces) |
|
|
44,279 |
|
|
43,130 |
|
|
177,374 |
|
|
141,742 |
Total cash costs per ounce of gold
produced ($ per ounce)(iii): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Co-product basis |
|
$ |
748 |
|
$ |
810 |
|
$ |
710 |
|
$ |
846 |
|
By-product basis |
|
$ |
747 |
|
$ |
809 |
|
$ |
709 |
|
$ |
845 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Kittila Mine - Minesite Costs per
Tonne(iv) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Year Ended |
|
|
Year Ended |
(thousands of United States
dollars, except as noted) |
|
|
December 31, 2015 |
|
|
December 31, 2014 |
|
|
December 31,
2015 |
|
|
December 31,
2014 |
Production costs |
|
$ |
32,203 |
|
$ |
36,546 |
|
$ |
126,095 |
|
$ |
116,893 |
Inventory and other
adjustments(vi) |
|
|
869 |
|
|
(1,753) |
|
|
(374) |
|
|
2,560 |
Minesite operating costs |
|
$ |
33,072 |
|
$ |
34,793 |
|
$ |
125,721 |
|
$ |
119,453 |
Minesite operating costs (thousands of
€) |
|
€ |
30,160 |
|
€ |
27,500 |
|
€ |
111,329 |
|
€ |
89,987 |
Tonnes of ore milled (thousands of
tonnes) |
|
|
377 |
|
|
366 |
|
|
1,464 |
|
|
1,156 |
Minesite costs per tonne
(€)(iv) |
|
€ |
80 |
|
€ |
75 |
|
€ |
76 |
|
€ |
78 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pinos Altos Mine - Total Cash Costs
per Ounce of Gold Produced(iii) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Year Ended |
|
|
Year Ended |
(thousands of United States
dollars, except as noted) |
|
|
December 31, 2015 |
|
|
December 31, 2014 |
|
|
December 31,
2015 |
|
|
December 31,
2014 |
Production costs |
|
$ |
24,351 |
|
$ |
32,690 |
|
$ |
105,175 |
|
$ |
123,342 |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory and other adjustments(v) |
|
|
3,374 |
|
|
(1,976) |
|
|
6,458 |
|
|
(581) |
Cash operating costs (co-product
basis) |
|
$ |
27,725 |
|
$ |
30,714 |
|
$ |
111,633 |
|
$ |
122,761 |
|
By-product metal revenues |
|
|
(9,188) |
|
|
(6,414) |
|
|
(37,030) |
|
|
(31,643) |
Cash operating costs (by-product
basis) |
|
$ |
18,537 |
|
$ |
24,300 |
|
$ |
74,603 |
|
$ |
91,118 |
Gold production (ounces) |
|
|
44,496 |
|
|
40,669 |
|
|
192,974 |
|
|
171,019 |
Total cash costs per ounce of gold
produced ($ per ounce)(iii): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Co-product basis |
|
$ |
623 |
|
$ |
755 |
|
$ |
578 |
|
$ |
718 |
|
By-product basis |
|
$ |
417 |
|
$ |
597 |
|
$ |
387 |
|
$ |
533 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Pinos Altos Mine - Minesite Costs
per Tonne(iv) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Year Ended |
|
|
Year Ended |
(thousands of United States
dollars, except as noted) |
|
|
December 31,
2015 |
|
|
December 31,
2014 |
|
|
December 31,
2015 |
|
|
December 31,
2014 |
Production costs |
|
$ |
24,351 |
|
$ |
32,690 |
|
$ |
105,175 |
|
$ |
123,342 |
Inventory and other
adjustments(vi) |
|
|
2,031 |
|
|
(2,375) |
|
|
2,481 |
|
|
(2,376) |
Minesite operating costs |
|
$ |
26,382 |
|
$ |
30,315 |
|
$ |
107,656 |
|
$ |
120,966 |
Tonnes of ore processed (thousands of
tonnes) |
|
|
600 |
|
|
634 |
|
|
2,378 |
|
|
2,520 |
Minesite costs per tonne
(US$)(iv) |
|
$ |
44 |
|
$ |
48 |
|
$ |
45 |
|
$ |
48 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Creston Mascota deposit at Pinos
Altos - Total Cash Costs per Ounce of Gold
Produced(iii)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Year Ended |
|
|
Year Ended |
(thousands of United States
dollars, except as noted) |
|
|
December 31, 2015 |
|
|
December 31, 2014 |
|
|
December 31,
2015 |
|
|
December 31,
2014 |
Production costs |
|
$ |
7,070 |
|
$ |
7,729 |
|
$ |
26,278 |
|
$ |
28,007 |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory and other adjustments(v) |
|
|
(156) |
|
|
(84) |
|
|
(328) |
|
|
1,232 |
Cash operating costs (co-product
basis) |
|
$ |
6,914 |
|
$ |
7,645 |
|
$ |
25,950 |
|
$ |
29,239 |
|
By-product metal revenues |
|
|
(720) |
|
|
(423) |
|
|
(2,412) |
|
|
(1,574) |
Cash operating costs (by-product
basis) |
|
$ |
6,194 |
|
$ |
7,222 |
|
$ |
23,538 |
|
$ |
27,665 |
Gold production (ounces) |
|
|
13,933 |
|
|
12,989 |
|
|
54,703 |
|
|
47,842 |
Total cash costs per ounce of gold
produced ($ per ounce)(iii): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Co-product basis |
|
$ |
496 |
|
$ |
589 |
|
$ |
474 |
|
$ |
611 |
|
By-product basis |
|
$ |
445 |
|
$ |
556 |
|
$ |
430 |
|
$ |
578 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Creston Mascota deposit at Pinos
Altos - Minesite Costs per Tonne(iv) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Year Ended |
|
|
Year Ended |
(thousands of United States
dollars, except as noted) |
|
|
December 31, 2015 |
|
|
December 31, 2014 |
|
|
December 31,
2015 |
|
|
December 31,
2014 |
Production costs |
|
$ |
7,070 |
|
$ |
7,729 |
|
$ |
26,278 |
|
$ |
28,007 |
Inventory and other
adjustments(vi) |
|
|
(328) |
|
|
(163) |
|
|
(757) |
|
|
870 |
Minesite operating costs |
|
$ |
6,742 |
|
$ |
7,566 |
|
$ |
25,521 |
|
$ |
28,877 |
Tonnes of ore processed (thousands of
tonnes) |
|
|
529 |
|
|
551 |
|
|
2,099 |
|
|
1,794 |
Minesite costs per tonne
(US$)(iv) |
|
$ |
13 |
|
$ |
14 |
|
$ |
12 |
|
$ |
16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
La India Mine - Total Cash Costs
per Ounce of Gold Produced(ii)(iii) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Year Ended |
|
|
Year Ended |
(thousands of United States
dollars, except as noted) |
|
|
December 31, 2015 |
|
|
December 31, 2014 |
|
|
December 31,
2015 |
|
|
December 31,
2014 |
Production costs |
|
$ |
12,854 |
|
$ |
13,110 |
|
$ |
49,578 |
|
$ |
36,949 |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory and other adjustments(v) |
|
|
(725) |
|
|
(514) |
|
|
(28) |
|
|
1,172 |
Cash operating costs (co-product
basis) |
|
$ |
12,129 |
|
$ |
12,596 |
|
$ |
49,550 |
|
$ |
38,121 |
|
By-product metal revenues |
|
|
(772) |
|
|
(1,055) |
|
|
(4,058) |
|
|
(3,230) |
Cash operating costs (by-product
basis) |
|
$ |
11,357 |
|
$ |
11,541 |
|
$ |
45,492 |
|
$ |
34,891 |
Gold production (ounces) |
|
|
23,432 |
|
|
23,273 |
|
|
104,362 |
|
|
71,601 |
Total cash costs per ounce of gold
produced ($ per ounce)(iii): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Co-product basis |
|
$ |
518 |
|
$ |
541 |
|
$ |
475 |
|
$ |
532 |
|
By-product basis |
|
$ |
485 |
|
$ |
496 |
|
$ |
436 |
|
$ |
487 |
|
|
|
|
|
|
|
|
|
|
|
|
|
La India Mine - Minesite Costs per
Tonne(ii)(iv) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Year Ended |
|
|
Year Ended |
(thousands of United States
dollars, except as noted) |
|
|
December 31, 2015 |
|
|
December 31, 2014 |
|
|
December 31,
2015 |
|
|
December 31,
2014 |
Production costs |
|
$ |
12,854 |
|
$ |
13,110 |
|
$ |
49,578 |
|
$ |
36,949 |
Inventory and other
adjustments(vi) |
|
|
(859) |
|
|
(652) |
|
|
(657) |
|
|
778 |
Minesite operating costs |
|
$ |
11,995 |
|
$ |
12,458 |
|
$ |
48,921 |
|
$ |
37,727 |
Tonnes of ore processed (thousands of
tonnes) |
|
|
1,439 |
|
|
1,427 |
|
|
5,371 |
|
|
4,442 |
Minesite costs per tonne
(US$)(iv) |
|
$ |
8 |
|
$ |
9 |
|
$ |
9 |
|
$ |
8 |
Notes:
(i) On June
16, 2014, Agnico Eagle and Yamana jointly acquired 100% of
Osisko by way of the Arrangement. As a result of the
Arrangement, Agnico Eagle and Yamana each indirectly own 50.0% of
Osisko (now Canadian Malartic
Corporation) and Canadian Malartic
GP, which now holds the Canadian Malartic mine. The
information set out in this table reflects the Company's 50.0%
interest in the Canadian Malartic mine since the date of
acquisition.
(ii) The La India
mine achieved commercial production on February 1, 2014. 3,492 ounces of payable gold
production were excluded from the calculation of total cash costs
per ounce of gold produced in the year ended December 31, 2014 as they were produced prior to
the achievement of commercial production.
(iii) Total cash
costs per ounce of gold produced is not a recognized measure under
IFRS and this data may not be comparable to data presented by other
gold producers. Total cash costs per ounce of gold produced is
reported on both a by-product basis (deducting by-product metal
revenues from production costs) and co-product basis (before
by-product metal revenues). Total cash costs per ounce of gold
produced on a by-product basis is calculated by adjusting
production costs as recorded in the consolidated statements of
income (loss) for by-product metal revenues, unsold concentrate
inventory production costs, smelting, refining and marketing
charges and other adjustments, and then dividing by the number of
ounces of gold produced. Total cash costs per ounce of gold
produced on a co-product basis is calculated in the same manner as
total cash costs per ounce of gold produced on a by-product basis
except that no adjustment for by-product metal revenues is made.
The calculation of total cash costs per ounce of gold produced on a
co-product basis does not reflect a reduction in production costs
or smelting, refining and marketing charges associated with the
production and sale of by-product metals. The Company believes that
these generally accepted industry measures provide a realistic
indication of operating performance and provide useful comparison
points between periods. Total cash costs per ounce of gold produced
is intended to provide information about the cash generating
capabilities of the Company's mining operations. Management also
uses these measures to monitor the performance of the Company's
mining operations. As market prices for gold are quoted on a per
ounce basis, using the total cash costs per ounce of gold produced
on a by-product basis measure allows management to assess a mine's
cash generating capabilities at various gold prices. Management is
aware that these per ounce measures of performance can be affected
by fluctuations in exchange rates and, in the case of total cash
costs of gold produced on a by-product basis, by-product metal
prices. Management compensates for these inherent limitations by
using these measures in conjunction with minesite costs per tonne
(discussed below) as well as other data prepared in accordance with
IFRS. Management also performs sensitivity analyses in order to
quantify the effects of fluctuating metal prices and
exchange rates.
(iv) Minesite costs
per tonne is not a recognized measure under IFRS and this data may
not be comparable to data reported by other gold producers. This
measure is calculated by adjusting production costs as shown in the
consolidated statements of income (loss) for unsold concentrate
inventory production costs, and then dividing by tonnes of ore
milled. As the total cash costs per ounce of gold produced measure
can be impacted by fluctuations in by-product metal prices and
exchange rates, management believes that the minesite costs per
tonne measure provides additional information regarding the
performance of mining operations, eliminating the impact of varying
production levels. Management also uses this measure to determine
the economic viability of mining blocks. As each mining block is
evaluated based on the net realizable value of each tonne mined, in
order to be economically viable the estimated revenue on a per
tonne basis must be in excess of the minesite costs per tonne.
Management is aware that this per tonne measure of performance can
be impacted by fluctuations in processing levels and compensates
for this inherent limitation by using this measure in conjunction
with production costs prepared in accordance with IFRS.
(v) Under the
Company's revenue recognition policy, revenue is recognized on
concentrates when legal title and risk is transferred. As total
cash costs per ounce of gold produced are calculated on a
production basis, an inventory adjustment is made to reflect the
sales margin on the portion of concentrate production not yet
recognized as revenue. Other adjustments include the addition of
smelting, refining and marketing charges to production costs.
(vi) This inventory and other
adjustment reflects production costs associated with unsold
concentrates.
Reconciliation of Production Costs to All-in Sustaining Costs
per Ounce of Gold Produced
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
|
Three Months
Ended |
|
|
Year
Ended |
|
|
Year Ended |
(United States
dollars per ounce of gold produced, except where noted) |
|
|
December 31, 2015 |
|
|
December 31, 2014 |
|
|
December 31, 2015 |
|
|
December 31, 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Production costs per the
consolidated statements of income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
(thousands of United
States dollars) |
|
$ |
229,819 |
|
$ |
287,317 |
|
$ |
995,295 |
|
$ |
1,004,559 |
Adjusted gold production
(ounces)(i) |
|
|
422,328 |
|
|
387,535 |
|
|
1,671,340 |
|
|
1,425,796 |
Production costs per ounce of adjusted gold
production(i) |
|
$ |
544 |
|
$ |
741 |
|
$ |
596 |
|
$ |
705 |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory and other
adjustments(ii) |
|
|
60 |
|
|
(6) |
|
|
30 |
|
|
16 |
Total cash costs per ounce of gold
produced (co-product basis)(iii) |
|
$ |
604 |
|
$ |
735 |
|
$ |
626 |
|
$ |
721 |
|
By-product metal revenues |
|
|
(57) |
|
|
(73) |
|
|
(59) |
|
|
(84) |
Total cash costs per ounce of gold
produced (by-product basis)(iii) |
|
$ |
547 |
|
$ |
662 |
|
$ |
567 |
|
$ |
637 |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Sustaining capital expenditures (including
capitalized exploration) |
|
|
214 |
|
|
240 |
|
|
183 |
|
|
230 |
|
General and administrative expenses (including
stock options) |
|
|
53 |
|
|
67 |
|
|
58 |
|
|
83 |
|
Non-cash reclamation provision and other |
|
|
3 |
|
|
4 |
|
|
2 |
|
|
4 |
All-in sustaining costs per ounce
of gold produced (by-product basis) |
|
$ |
817 |
|
$ |
973 |
|
$ |
810 |
|
$ |
954 |
|
By-product metal revenues |
|
|
57 |
|
|
73 |
|
|
59 |
|
|
84 |
All-in sustaining costs per ounce
of gold produced (co-product basis) |
|
$ |
874 |
|
$ |
1,046 |
|
$ |
869 |
|
$ |
1,038 |
Notes: |
|
|
(i) |
The La India mine achieved commercial production on February 1,
2014. 3,492 ounces of payable gold production were excluded
from the calculation of total cash costs per ounce of gold produced
for the year ended December 31, 2014 as they were produced prior to
the achievement of commercial production. |
|
|
(ii) |
Under the Company's revenue recognition policy, revenue is
recognized on concentrates when legal title and risk is
transferred. As total cash costs per ounce of gold produced are
calculated on a production basis, an inventory adjustment is made
to reflect the sales margin on the portion of concentrate
production not yet recognized as revenue. Other adjustments include
the addition of smelting, refining and marketing charges to
production costs. |
|
|
(iii) |
Total cash costs per ounce of gold produced is not a recognized
measure under IFRS and this data may not be comparable to data
reported by other gold producers. Total cash costs per ounce of
gold produced is reported on both a by-product basis (deducting
by-product metal revenues from production costs) and co-product
basis (before by-product metal revenues). Total cash costs per
ounce of gold produced on a by-product basis is calculated by
adjusting production costs as recorded in the consolidated
statements of income (loss) for by-product metal revenues, unsold
concentrate inventory production costs, smelting, refining and
marketing charges and other adjustments, and then dividing by the
number of ounces of gold produced. Total cash costs per ounce of
gold produced on a co-product basis is calculated in the same
manner as total cash costs per ounce of gold produced on a
by-product basis except that no adjustment for by-product metal
revenues is made. Accordingly, the calculation of total cash costs
per ounce of gold produced on a co-product basis does not reflect a
reduction in production costs or smelting, refining and marketing
charges associated with the production and sale of by-product
metals. The Company believes that these generally accepted
industry measures provide a realistic indication of operating
performance and provide useful comparison points between periods.
Total cash costs per ounce of gold produced is intended to provide
information about the cash generating capabilities of the Company's
mining operations. Management also uses these measures to monitor
the performance of the Company's mining operations. As market
prices for gold are quoted on a per ounce basis, using the total
cash costs per ounce of gold produced on a by-product basis measure
allows management to assess a mine's cash generating capabilities
at various gold prices. Management is aware that these per ounce
measures of performance can be affected by fluctuations in exchange
rates and, in the case of total cash costs of gold produced on a
by-product basis, by-product metal prices. Management compensates
for these inherent limitations by using these measures in
conjunction with minesite costs per tonne as well as other data
prepared in accordance with IFRS. Management also performs
sensitivity analyses in order to quantify the effects of
fluctuating metal prices and exchange rates. |
SOURCE Agnico Eagle Mines Limited