Agnico Eagle Reports Second Quarter 2023 Results, record ...

26 July 2023

Record Quarterly Gold Production And Solid Cost Performance Drive Strong Quarterly Earnings And Operating Cash Flow; Well Positioned To Achieve Annual Production And Cost Guidance

(All amounts expressed in U.S. dollars unless otherwise noted)

TORONTO, July 26, 2023 /CNW/ - Agnico Eagle Mines Limited (NYSE: AEM) (TSX: AEM) ("Agnico Eagle" or the "Company") today reported financial and operating results for the second quarter of 2023.

"Agnico Eagle delivered another strong operational quarter, with record quarterly gold production and better than expected costs driving solid financial results.  With this excellent start to the year, we are tracking very well to meet our annual production and cost guidance.  I would also like to commend our team for one of the best quarterly safety performances in the Company's history," said Ammar Al-Joundi, Agnico Eagle's President and Chief Executive Officer.  "In June we released an update on the Odyssey project at Canadian Malartic, which highlighted an improved production profile, a mine life extension to 2042 and a significant geological upside.  We continue to advance the various studies of our key pipeline projects in the Abitibi Gold Belt, with the objective of leveraging our existing infrastructure and generating value for our shareholders.  We expect to report the results of these ongoing studies through the first half of 2024.  Finally, in the second quarter, we had strong exploration results from Detour, Meliadine, Kittila and at Hope Bay, with the intersection of higher grade mineralization at the Madrid deposit," added Mr. Al-Joundi.

Second quarter 2023 highlights

  • Record quarterly gold production and solid cost performance – Record quarterly gold production reflects 100% ownership of Canadian Malartic for the full quarter, combined with a strong operational performance at all producing sites. Payable gold production1 in the second quarter of 2023 was 873,204 ounces at production costs per ounce of $851, total cash costs per ounce2 of $840 and all-in sustaining costs ("AISC") per ounce3 of $1,150
  • Operational performance drives strong quarterly financial results – The Company reported quarterly net income of $0.66 per share in the second quarter of 2023, with adjusted net income4 of $0.65 per share. Operating cash flow was $1.46 per share
  • Strong operating and safety performance at all mine sites – Gold production and costs in the second quarter of 2023 were better than anticipated, reflecting strong operating performance across the Company's mines, despite the challenges related to wildfires in northern Ontario and Quebec and the caribou migration in Nunavut. Lower than expected costs reflect a strong operating performance, favourable foreign exchange rates and the easing of certain inflationary pressures
  • Important milestones achieved across the portfolio – At the Canadian Malartic complex, the team celebrated production of its seventh million ounce in June. In addition, Detour Lake, Goldex and Macassa each achieved record quarterly mill throughput rates, while Meliadine recorded its best ever monthly mill throughput in May 2023
  • Gold production, cost and capital expenditure guidance reiterated for 2023 – Expected payable gold production in 2023 remains unchanged at approximately 3.24 to 3.44 million ounces with total cash costs per ounce expected to be between $840 and $890 and AISC per ounce expected to be between $1,140 and $1,190. Total capital expenditures (excluding capitalized exploration) for 2023 are still estimated to be approximately $1.42 billion. The Company's 2023 production guidance assumes Kittila operates at an annual rate of 1.6 million tonnes per annum ("Mtpa"). A decision by the Supreme Court of Finland (the "SAC") to either maintain the 1.6 Mtpa permit or revert to the 2.0 Mtpa permit is expected in the third quarter of 2023
  • Solid cash flow generation strengthens the Company's balance sheet and liquidity position – During the second quarter of 2023, the Company repaid $900 million of the amounts drawn on its unsecured revolving bank credit facility. The amount repaid on the unsecured revolving bank credit facility was repaid using $300 million in cash on hand and $600 million drawn on an unsecured term loan facility (the "Term Loan Facility") which the Company entered into in the quarter. Additionally on June 30, 2023, the Company repaid the $100 million 4.54% Series A senior notes at maturity. As at June 30, 2023, the Company's long term debt was $1,942.0 million and its net debt5 was $1,509.5 million.

Update on key value drivers and pipeline projects

  • Odyssey mine at the Canadian Malartic complex – In June 2023, the Company released the results of a new internal study reflecting significant project advancements, an improved valuation and opportunities to further enhance value (see the news release dated June 20, 2023). Shaft sinking activities ramped up through the quarter, with approximately 60 metres sunk as at June 30, 2023. Production via the ramp at the Odyssey South deposit increased through the quarter and remains on schedule to reach a planned rate of 3,500 tonnes per day ("tpd") in 2024. Drilling activities focused on infilling the internal zones at the Odyssey South deposit and mineral resource expansion of the East Gouldie deposit to the east and west
  • Detour Lake – In the second quarter of 2023, the mill set a record for quarterly throughput, with an improved mill availability of 92.8%. The continued focus on mill process optimization and mill availability is tracking well to reach and potentially exceed, throughput of 28.0 Mtpa. The Company is advancing the underground mining scenario study based on a revised mineral resource model and expects to report the results of this study in the first half of 2024
  • Optimization of assets and infrastructure in the Abitibi Gold Belt – The Company continued to advance several internal evaluations to assess potential production opportunities at the Macassa Near Surface and the Amalgamated Kirkland ("AK") deposits, and at the Upper Beaver and Wasamac projects. These evaluations include an assessment of ore transportation via rail or truck to the Company's existing processing facilities in the region, with a goal of increasing future gold production at lower capital costs and with a reduced environmental footprint. The results of these evaluations are expected to be reported in the first half of 2024

Positive exploration results at Detour, Meliadine, Kittila and Hope Bay

  • Based on exploration success in the first half of 2023, a supplemental exploration budget of $32 million has been approved – The Company's exploration program returned positive results in the first half of 2023 at several key operating sites and projects, showing excellent potential to identify additional mineral resources and replace mineral reserves. These results support the focused addition of supplemental budgets. An update on selected exploration programs and budgets is set out in the sections below
  • Detour – Drilling continues to investigate the deposit below the West Pit mineral reserve and the western plunge extension of the mineralization to confirm the mineralized zones potentially amenable to underground mining. Drill results below the West pit reserve continue to demonstrate potential for a higher grade envelope with a recent intercept yielding 12.9 grams per tonne ("g/t") gold over 12.9 metres at 400 metres depth, while two kilometres west of the open pit mineral reserves mineralization remains open with a recent intercept returning 2.8 g/t gold over 14.4 metres at 1,061 metres depth
  • Meliadine – Drilling continues to investigate the vertical extensions of the mineralized zones in the central part of the Tiriganiaq, Wesmeg and Wesmeg North deposits. At Wesmeg North, a recent intercept yielded 6.3 g/t gold over 7.4 metres at 558 metres depth. Approximately 1.5 kilometres southeast of Tiriganiaq at the F-Zone deposit, a recent intercept yielded 6.4 g/t gold over 16.0 metres at 167 metres depth in the upper portion of the deposit
  • Kittila – Drilling has extended the Rimpi Main Zone to the north, outside of the current mineral resources, with a recent intercept yielding 7.2 g/t gold over 4.5 metres at 1,102 metres depth. In the Roura area close to the shaft bottom, a recent intercept in the Main Zone yielded 7.7 g/t gold over 7.3 metres at 1,152 metres depth. At shallow depth in the Rimpi area, the Parallel / Sisar Zone was identified in an area that has received limited drilling to date, yielding 3.1 g/t gold over 4.5 metres at 142 metres depth and opening a new near-surface target area for future exploration
  • Hope Bay project – A total of nine exploration drill rigs were operating at the Doris and Madrid deposits and regionally during the second quarter. At Doris, drilling in the BCO Zone continued to return good grades and thicknesses to further confirm the potential to expand the zone along strike. At Madrid, drilling focused on a two-kilometre long, previously untested gap between the Suluk and Patch 7 zones, with new highlight intercepts of 10.0 g/t gold over 14.0 metres at 677 metres depth and 13.7 g/t gold over 4.6 metres at 697 metres depth. This drilling confirms the potential of Madrid/Suluk/Patch 7 as it extends the high-grade Patch 7 Zone by 500 metres vertically and by 900 metres laterally at depth

A quarterly dividend of $0.40 per share has been declared

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