|
Stock Symbol:
AEM (NYSE and TSX)
(All amounts expressed in U.S. dollars unless
otherwise noted)
TORONTO, July 29, 2015 /PRNewswire/ -
Agnico Eagle Mines Limited (NYSE:AEM, TSX:AEM)
("Agnico Eagle" or the "Company") today reported quarterly net
income of $10.1 million, or net income of $0.05 per share for the
second quarter of 2015. This result includes non-recurring
losses of $12.9 million ($0.06 per share), unrealized gains on
financial instruments of $9.4 million ($0.04 per share), non-cash
foreign currency translation losses of $4.8 million ($0.02 per
share), non-cash stock option expense of $4.1 million ($0.02 per
share), a non-cash foreign currency translation gain on deferred
tax liabilities of $3.2 million ($0.01 per share) and various
mark-to-market and other adjustment gains of $0.8 million ($0.01
per share). Excluding these items would result in adjusted
net income of $18.5 million or adjusted net income of $0.09 per
share for the second quarter of 2015. In the second quarter
of 2014, the Company reported net income of $22.2 million or net
income of $0.12 per share.
For the first six months of 2015, the Company reported net
income of $38.8 million, or $0.18 per share. This compares
with the first six months of 2014 when net income was $119.3
million, or $0.66 per share. Financial results in the 2015
period were negatively impacted by lower gold prices
(approximately 8% lower) and lower by-product metals
revenues.
Second quarter 2015 cash provided by operating
activities was $188.3 million ($152.8 million before changes in
non-cash components of working capital). This compares to
cash provided by operating activities of $182.7 million in the
second quarter of 2014 ($136.5 million before changes in non-cash
components of working capital). The increase in cash
provided by operating activities before changes in working
capital during the current period was mainly due to an increase
of 24% in gold production.
For the first six months of 2015, cash provided by
operating activities was $331.8 million ($329.6 million before
changes in non-cash components of working capital), as compared
with the first half of 2014 when cash provided by operating
activities was $433.1 million ($343.6 million before changes in
non-cash components of working capital). The decrease in
cash provided by operating activities before changes in working
capital during the period was mainly due to a decrease of 8% in
gold prices compared to the 2014 period, which more than offset a
17% increase in gold production.
"With continued strong operating performance,
favourable local currency foreign exchange rates, and near-term
opportunities to increase production at several of our mines, we
remain well-positioned to manage the current price volatility in
the gold market", said Sean Boyd, Agnico Eagle's Chief Executive
Officer. "In these challenging times, we will continue to
focus on reducing costs and we will remain measured in our
approach to managing and growing our business", added Mr.
Boyd.
Second Quarter 2015 highlights include:
-
Quarterly gold production
- Payable gold production
1
in Q2 2015 was 403,678 ounces of gold at total cash costs
2
per ounce on a by-product basis of $601 and all-in sustaining
costs
3
("AISC") on a by-product basis of $864 per ounce
-
Second consecutive record quarter of precious metal
production from Mexican operations
- In the second quarter of 2015, payable gold and silver
production from Mexican operations was 92,056 ounces and
685,869 ounces, respectively. Total cash costs per ounce
of gold on a by-product basis averaged $394
-
2015 production guidance maintained and cost forecasts
reduced
- Expected gold production for 2015 is maintained at
approximately 1.6 million ounces with total cash costs on a
by-product basis of $600 to $620 per ounce (previously $610 to
$630) and AISC of approximately $870 to $890 per ounce
(previously $880 to $900)
-
Vault Extension and Goldex Deep 1 approved for mining; 2015
capital for both projects increased by a total of approximately
$36 million -
The Vault extension is expected to reduce the potential
production gap between the end of production at Meadowbank and
the start of production at Amaruq (not yet approved for
construction) by approximately one year.
Goldex Deep 1 adds approximately seven years of production at
approximately 100,000 ounces of gold per year
-
Drilling at Amaruq's Whale Tail deposit confirms grades and
thicknesses; mineralization extended to depth
- Highlights include: 13.2 grams per tonne ("g/t") gold over
14.3 metres at 133 metres depth, and 13.9 g/t gold over 11.0
metres at 194 metres depth. The deepest intercept to date
on the property yielded 8.8 g/t gold over 6.0 metres at 568
metres depth, almost 200 metres deeper than previous intercepts
-
Continued focus on debt reduction
- In Q2 2015, $25 million was repaid under the Company's credit
facility, C$20 million (reflecting the Company's 50% interest)
was repaid under the Canadian Malartic General Partnership (the
"Partnership") secured loan facility, and the Canadian Malartic
senior unsecured convertible debentures (C$37.5 million,
reflecting the Company's 50% interest) were fully converted by
the holders. As a result, the Company's indebtedness was
reduced by approximately $70 million
-
A quarterly dividend of $0.08 per share was declared
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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 calculated 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". |
|
3
All-in-sustaining costs 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" below. The Company calculates All-in
sustaining costs per ounce of gold produced as the aggregate
of total cash costs 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.
Reference to all-in sustaining costs per ounce of gold
produced in this news release is calculated on a by-product
basis as described above. All-in sustaining 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 Company's methodology for
calculating all-in sustaining costs may not be similar to the
methodology used by other producers that disclose all-in
sustaining costs. See "Note Regarding Certain Measures
of Performance". The Company may change the methodology
it uses to calculate all-in sustaining costs in the future,
including in response to the adoption of formal industry
guidance regarding this measure by the World Gold
Council. |
| |
Second Quarter Financial and Production
Highlights
In the second quarter of 2015, strong operational
performance continued at the Company's mines.
Payable gold production in the second quarter of
2015 was 403,678 ounces compared to 326,059 ounces in the second
quarter of 2014. The higher level of production in the 2015
period was primarily due to the inclusion of a full quarter of
production from Canadian Malartic, increased throughput levels at
Goldex, increased mill capacity at Kittila, higher grades at
LaRonde and Pinos Altos and increased heap leach stacking at La
India and Creston Mascota. 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 second quarter of 2015 were lower at $601 versus $631 per
ounce for the second quarter 2014. The reduction in total
cash costs per ounce on a by-product basis in the second quarter
of 2015 was a result of higher silver production, higher gold
production at most of the Company's mines and weaker local
currencies compared to the second quarter of 2014.
In the second quarter of 2015 the value of the
Canadian dollar, Euro and Mexican Peso were 1%, 2%, and 17%
lower, respectively than the Company's 2015 currency price
assumptions (see February 11, 2015 news release).
Payable gold production for the first half of 2015 was 807,888
ounces, compared to payable gold production of 692,480 ounces in
the comparable 2014 period (which included only 11,878 ounces
from Canadian Malartic for production from June 16 to June 30,
2014).
For the first half of 2015, total cash costs on a by-product
basis were $595 per ounce. This compares with $582 per
ounce on a by-product basis in the first half of 2014. The
higher costs in the 2015 period are due to the increased costs at
Meadowbank when compared to the 2014 period. In 2014,
Meadowbank had record production and lower costs as a result of
processing higher grade ore from the Goose and reserve grade ore
from the Portage deposits.
AISC for the second quarter of 2015 was lower at
$864 versus $1,003 per ounce for the second quarter 2014. The
lower AISC is primarily due to higher production, lower than
forecast total cash costs per ounce on a by-product basis, lower
G&A expenditures and timing of capital expenditures.
For the first half of 2015, AISC was $835 versus $890 per
ounce for the 2014 period. The lower AISC in the 2015
period are due to the same reasons set out above.
Cash Position Remains Strong; Debt Levels Reduced;
and Capex Increased to Fund Near-term Production
Opportunities
Cash and cash equivalents and short term
investments increased to $183.9 million at June 30, 2015, from
the March 31, 2015 balance of $172.1 million.
The outstanding balance on the Company's $1.2
billion credit facility was reduced from $400 million at March
31, 2015 to $375 million at June 30, 2015. This results in
available credit lines of approximately $825 million, as well as
the $300 million accordion feature.
As of June 30, 2015, C$20 million (reflecting the
Company's 50% interest) was repaid under the Canadian Malartic
General Partnership secured loan facility. Also, the
Canadian Malartic convertible debentures with principal
outstanding of C$37.5 million (reflecting the Company's 50%
interest), assumed with the joint acquisition of Osisko Mining
Corporation ("Osisko") on June 16, 2014, was fully converted by
the holders.
Total capital expenditures made by the Company in
the second quarter of 2015 were $111.5 million, including $18.9
million at LaRonde, $18.2 million at Meadowbank, $17.2 million at
Pinos Altos, $13.9 million at Kittila, $12.0 million at Goldex,
$11.4 million at Meliadine, $10.7 million at Canadian Malartic
(50% basis), $6.2 million at La India, $1.7 million at Lapa and
$0.2 million at Creston Mascota.
Total capital expenditures for the first six months of 2015
were $194.4 million including $35.5 million at LaRonde, $29.3
million at Pinos Altos, $27.7 million at Meadowbank, $24.3
million at Kittila, $21.9 million at Goldex, $21.4 million at
Canadian Malartic (50% basis), $19.8 million at Meliadine, $8.5
million at La India, $4.4 million at Lapa and $0.5 million at
Creston Mascota.
Total sustaining capital expenditures made by the
Company in the second quarter were $81.9 million, including $18.9
million at LaRonde, $18.2 million at Meadowbank, $11.1 million at
Kittila, $10.6 million at Canadian Malartic (50% basis), $10.3
million at Pinos Altos, $6.2 million at La India, $4.7 million at
Goldex, $1.7 million at Lapa, and $0.2 million at Creston
Mascota.
Total sustaining capital expenditures for the first six months
of 2015 were $142.8 million including $35.5 million at LaRonde,
$27.7 million at Meadowbank, $20.1 million at Kittila, $19.8
million at Canadian Malartic (50% basis), $17.3 million at Pinos
Altos, $9.0 million at Goldex, $8.5 million at La India, $4.4
million at Lapa, and $0.5 million at Creston Mascota.
For 2015, capital expenditures are expected to
total approximately $539 million, representing a $58 million
increase from the previously announced figure. The increase
is primarily due to additional expenditures for the development
of Goldex Deep 1, the Vault pit extension, expansion of the
existing Meliadine surface and underground infrastructure, and
the sealift of additional equipment for the 2016 Meliadine work
program.
Based on the exploration success in the first six
months of the year, the 2015 expensed exploration budget has been
increased by approximately $20 million to $114 million. The
additional expenditure includes a phase two exploration program
at the Amaruq project; an initial exploration program at the
Barsele project in Sweden; a slight increase in exploration
spending at the Pandora property and the Odyssey deposits; and
additional drilling on the new parallel zone at Kittila.
Expenditures at Amaruq and El Barqueno could potentially increase
further, based on exploration results.
Revised 2015 Guidance - Production Maintained,
Costs Lowered, Depreciation Increased
Production guidance for 2015 is maintained at
approximately 1.6 million ounces of gold with total cash costs on
a by-product basis of $600 to $620 per ounce (previously $610 to
$630) and AISC of approximately $870 to $890 per ounce
(previously $880 to $900).
The Company expects depreciation and amortization
expense to be in the range of $575 to $600 million.
Previous guidance was $550 to $575 million. The increase is
primarily due to the finalization of the purchase price
allocation associated with the Canadian Malartic acquisition.
Second Quarter 2015 Results Conference Call and
Webcast Tomorrow
The Company's senior management will host a
conference call on Thursday, July 30,
2015
at
11:00 AM (E.D.T.)
to discuss financial results and provide an update of the
Company's operating activities.
Via Webcast:
A live audio webcast of the meeting will be available on the
Company's website
www.agnicoeagle.com
.
Via Telephone:
For those preferring to listen by telephone, please
dial 1-416-260-0113 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 6325908. The conference call replay
will expire on August 30, 2015.
The webcast, along with presentation slides, will
be archived for 180 days on
www.agnicoeagle.com
.
NORTHERN BUSINESS OPERATING 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 - Gold Production Steadily Increasing,
Commissioning of Coarse Ore Conveyor on Track for Late Q3
2015
The 100% owned LaRonde mine in northwestern Quebec
achieved commercial production in 1988.
The LaRonde mill processed an average of 6,242
tonnes per day ("tpd") in the second quarter of 2015, compared
with an average of 6,197 tpd in the corresponding period of
2014. Minesite costs per tonne
4
were approximately C$99 in the second quarter of 2015, higher
than the C$96 per tonne experienced in the second quarter of
2014. The increased costs in the 2015 period were primarily
due to higher underground development, mill maintenance and site
administration costs compared to the prior-year period.
For the first six months of 2015, the LaRonde mill processed
an average of 6,223 tpd, compared to 6,194 tpd in the first six
months of 2014. Minesite costs per tonne were approximately
C$101, compared to C$96 per tonne in the first six months of
2014. Costs were higher due to the reasons described above in
spite of the higher throughput.
LaRonde's total cash costs per ounce on a
by-product basis were $613 in the second quarter of 2015 on
payable production of 64,007 ounces of gold. This compares
with the second quarter of 2014 when total cash costs per ounce
on a by-product basis were $732 on production of 48,494 ounces of
gold. Costs in the 2015 period were positively impacted by
higher gold grades and favourable foreign exchange rates.
In the first six months of 2015, LaRonde produced 122,900
ounces of gold at total cash costs per ounce of $656 on a
by-product basis. This is in contrast with the first six
months of 2014 when the mine produced 107,846 ounces of gold at
total cash costs per ounce of $645 on a by-product basis.
Production in the 2015 period was positively impacted by higher
grades. Costs were lower in the 2014 period due to higher
by-product production and revenues.
During the quarter, work continued on the installation of the
coarse ore conveyor system that will extend from the 293 level to
the crusher on the 280 level. Installation of the new
conveyor and the connection of an internal ramp at the 281 level
are expected to be completed by the end of the third quarter of
2015. These two infrastructure components should help to
improve mining flexibility and reduce congestion in the deeper
portions of the mine.
Studies are continuing 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 2014, conversion drilling
added approximately 444,000 ounces of gold (2.6 million tonnes at
5.33 g/t gold) to the indicated mineral resources between the 311
and 341 levels.
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 km below the
surface).
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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 - Reconciliation of
Production Costs to Minesite Costs per Tonne by Mine"
below. See also "Note Regarding Certain Measures of
Performance". |
| |
Canadian Malartic Mine - Mining Productivity
Improves, North Zone Mining Rate Increases in Q2 2015
In June 2014, Agnico Eagle and Yamana Gold Inc.
("Yamana") acquired all of the issued and outstanding common
shares of Osisko and created the Canadian Malartic General
Partnership (the "Partnership") that 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 second quarter of 2015, the Canadian
Malartic mill processed an average of 50,705 tpd (on a 100%
basis). This period included a five day planned shutdown
for maintenance to the crushing and grinding circuit, and two
days of unplanned maintenance on the conveying system, which
reduced mill availability. Comparisons with the 2014 period are
not relevant given that the Partnership only took control of the
operations on June 16, 2014. Minesite costs per tonne were
approximately C$20 (C$23 including royalties), which was in line
with guidance. The average stripping ratio in the second quarter
of 2015 was 2.64 to 1.0.
For the first six months of 2015, the Canadian Malartic mill
processed an average of 51,343 tpd. Minesite costs per
tonne were approximately C$20 (C$23 including royalties).
For the second quarter of 2015, Agnico Eagle's
share of production at the Canadian Malartic mine was 68,441
ounces of gold at total cash costs per ounce of $609 on a
by-product basis.
In the first six months of 2015, Agnico Eagle's share of
production at the Canadian Malartic mine was 136,334 ounces of
gold at total cash costs per ounce of $621 on a by-product
basis.
Since acquiring the mine in June 2014, the
Partnership has been working on several initiatives to optimize
the operations. Current opportunities include:
- Improving SAG mill liners in an attempt to reduce the
number of planned shutdowns to three per year (currently four
per year)
- Increasing gyratory crusher availability by redirecting ore
containing scrap steel to a separate crusher
- Maintaining mining throughput levels at two million tonnes
per month in the North zone (which contains higher grades)
- Waste rock backfilling of the Gouldie pit, to reduce
haulage distances and noise
In the first quarter of 2015, the Partnership
reported that discussions were ongoing with permitting
authorities regarding pre-crushing activities at Canadian
Malartic. In the second quarter of 2015, discussions about
improving the efficiency and environmental performance of the
existing mobile crusher took place with the Quebec Ministry of
Sustainable Development, Environment, Wildlife and Parks.
The Ministry is reviewing this concept and an application for a
Certificate of Authorization is being prepared for possible
submission later this year. At this point, milling levels
are expected to be approximately 53,000 tpd through 2016.
For the full year 2015, Agnico Eagle's estimated share of gold
production from Canadian Malartic remains unchanged at 280,000
ounces.
Permitting activities for the Barnat Extension and
deviation of Highway 117 are continuing. An Environmental
Impact Assessment ("EIA") was submitted in February 2015, and
questions were received from permitting authorities in April and
May 2015. Answers to the first round of questions are
expected to be submitted by the end of August 2015. The
process remains on schedule for receipt of the necessary permits
in November 2016.
In March 2015, the Partnership increased its
interest in the Malartic CHL property to 100% by acquiring the
remaining 30% interest from Abitibi Royalties Inc.
(RZZ:TSX-V). The Malartic CHL property adjoins the Canadian
Malartic mine to the east and hosts part of the Odyssey North
discovery. Drilling continues on the Odyssey North and
Odyssey South zones with data currently being compiled and
interpreted.
Exploration Update on Pandora and Kirkland Lake
Projects
Canadian Malartic Corporation, a company in which
each of Agnico Eagle and Yamana has an indirect 50% interest, is
exploring, among other things, a portfolio of properties in the
Kirkland Lake area of Ontario and the Pandora property in the
Abitibi region of Quebec.
At the Upper Beaver property in Kirkland Lake, a mineral
resource update is underway and the Partnership will decide the
best alternative to develop the property.
At Pandora, underground development on the 101-W
exploration drift from the adjacent Lapa mine commenced in
February 2015 and approximately 285 metres of drifting was
completed during the second quarter of 2015. Approximately
433 metres of development has been completed year to date, and
for the full year, approximately 940 metres of development is
planned.
In mid-June 2015, exploration drilling resumed from
the 101-W drift and approximately 7,400 metres of underground
drilling is planned in 2015 to test for extensions to the Branch
zone and C zone on the Pandora property.
Lapa - Zulapa Z7 Zone Continues to Yield Higher
Grades and Recoveries
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 1,387 tpd in the second quarter of
2015. This compares with an average of 1,789 tpd in the
second quarter of 2014. Throughput in the 2015 period was
lower because of downtime related to the discovery of fatigue
cracks in the feed head of the Lapa ball mill. This
component is being repaired and ore is currently being processed
through the old LaRonde copper regrind circuit. As a
result, throughput levels are expected to be lower than normal
through at least the middle of the third quarter of 2015.
Excess ore is currently being stockpiled and there is sufficient
mill capacity that should allow the Company to meet its annual
throughput rate (tonnes and ounces) over the balance of 2015.
Minesite costs per tonne were C$126 in the second
quarter of 2015, compared to the C$105 in the second quarter of
2014. Costs in the 2015 period were higher due to lower
throughput compared to the same period in 2014.
For the first six months of 2015, the Lapa mill processed an
average of 1,538 tpd, compared to 1,769 tpd in the first six
months of 2014. Minesite costs per tonne were approximately
C$122, above the C$107 per tonne in the first six months of 2014
due to reasons explained above.
Payable production in the second quarter of 2015
was 19,450 ounces of gold at total cash costs per ounce on a
by-product basis of $678. This compares with the second
quarter of 2014, when production was 18,821 ounces of gold at
total cash costs per ounce on a by-product basis of $832.
In the 2015 period, production was higher and costs were lower
due to higher gold grades, better recoveries and favourable
foreign exchange rates.
In the first six months of 2015, Lapa produced 45,370 ounces
of gold at total cash costs per ounce of $615 on a by-product
basis. This compares to the first six months of 2014 when the
mine produced 42,230 ounces of gold at total cash costs per ounce
of $738 on a by-product basis. The higher production and
lower costs in the 2015 period are due to the reasons outlined
above.
At Lapa, 2015 is the last full year of production
based on the current life of mine plan. In 2016, production
is expected to exhibit a decline from the current level.
Additional exploration drilling is ongoing in the Zulapa Z7 zone
at depth and, if successful, could extend Lapa's mine life.
Goldex - Deep 1 Project Approved for Mining;
Production Expected to Extend Through 2024
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 (see October 19, 2011 news release). 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.
The Goldex mill processed an average of 6,640 tpd
in the second quarter of 2015. This compares with an
average of 5,692 tpd in the second quarter of 2014. The higher
throughput in the 2015 period was due to more mature mining
fronts and productivity improvements compared to the 2014
period.
Minesite costs per tonne were approximately C$34 in
the second quarter of 2015, which was essentially unchanged from
the C$34 per tonne experienced in the second quarter of 2014.
For the first six months of 2015, the Goldex mill processed an
average of 6,468 tpd, compared to 5,544 tpd in the first six
months of 2014. Minesite costs per tonne were approximately
C$34, the same as the first six months of 2014.
Payable gold production in the second quarter of
2015 was 26,462 ounces of gold at total cash costs per ounce on a
by-product basis of $633. This compares with the second
quarter of 2014, when production was 23,929 ounces of gold at
total cash costs per ounce on a by-product basis of $670.
The decrease in total cash costs in the 2015 period was largely a
result of increased production due to higher tonnage and
favourable foreign exchange rates compared to the 2014
period.
In the first six months of 2015, Goldex produced 55,712 ounces
of gold at total cash costs per ounce of $585 on a by-product
basis. This compares to the first six months of 2014 when the
mine produced 43,359 ounces of gold at total cash costs per ounce
of $711 on a by-product basis. The higher production and
lower costs in the 2015 period are due to the same reasons as
outlined above.
Following the completion of a positive internal
technical study, the Goldex Deep 1 Project was approved for
production by Agnico Eagle's Board of Directors.
The study focused on mining the lower part of the
Dx zone and the top of D zone (see Goldex composite longitudinal
section below) from a depth of 850 metres to 1,200 metres (Level
120). The Company plans to undertake development from the
current Goldex infrastructure, with existing equipment and
personnel. The planned mining method is long-hole stoping
with cemented paste backfill, which is the same method currently
used at Goldex.
Mineralogy in the D and Dx zones is very similar to
what is currently being mined in M, M2, M5, E and E2 zones.
Metallurgical testing of both the D and Dx zones has indicated
that recoveries for the Deep 1 project are expected to be
approximately 91.5%, which is in line with current recoveries at
Goldex. No changes to the processing plant are
anticipated. Tailings deposition at the Manitou site is
expected to continue, as the site has ample capacity.
The mining rate for Deep 1 is expected to be
approximately 6,000 tpd, which would allow for the potential
processing of up to 2,000 tpd of ore from other sources such as
the Akasaba West Project. The average grade milled is
expected to be approximately 1.69 g/t gold and the minesite costs
per tonne are estimated to be approximately C$35 to C$40.
Gold production is expected to average in excess of
100,000 oz per year from 2018 through 2024 at an average total
cash cost per ounce on a by-product basis of between $610 and
$630. Development capital is forecast to be approximately
$135 to $140 million, and sustaining capital is estimated at
approximately $60 to $70 million per year. The development
capital includes the cost of the installation of an automated
conveyor system.
The Dx zone contains approximately 51,000 ounces of
gold in indicated mineral resources (0.7 million tonnes at 2.12
g/t gold) and approximately 172,000 ounces of gold in inferred
mineral resources (3.7 million tonnes at 1.46 g/t gold).
The D zone contains approximately 727,000 ounces of gold in
indicated mineral resources (10.2 million tonnes at 2.21 g/t
gold) and approximately 709,000 ounces of gold in inferred
mineral resources (12.9 million tonnes at 1.70 g/t gold).
Additional details on the Goldex resources are presented in the
table below:
| |
|
|
|
|
|
|
|
|
|
|
Category |
|
|
Gold
(g/t)
|
|
|
Gold (oz)
(x000)
|
|
|
Tonnes
(x000)
|
|
Measured Resources (Underground) |
|
|
|
|
|
|
|
|
|
| |
GEZ |
|
|
1.86 |
|
|
739 |
|
|
12,360 |
| Total Measured
Resources |
|
|
1.86 |
|
|
739 |
|
|
12,360 |
| Indicated Resources
(Underground) |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| |
GEZ |
|
|
1.60 |
|
|
401 |
|
|
7,807 |
| |
Dx zone |
|
|
2.12 |
|
|
51 |
|
|
744 |
| |
D zone |
|
|
2.21 |
|
|
727 |
|
|
10,228 |
| |
Other zones* |
|
|
2.09 |
|
|
176 |
|
|
2,630 |
| Total Indicated
Resources |
|
|
1.97 |
|
|
1,356 |
|
|
21,409 |
|
Measured and Indicated Resources |
|
|
1.93 |
|
|
2,095 |
|
|
33,769 |
|
Inferred Resources (Underground) |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| |
GEZ |
|
|
1.80 |
|
|
146 |
|
|
2,529 |
| |
Dx zone |
|
|
1.46 |
|
|
172 |
|
|
3,667 |
| |
D zone |
|
|
1.70 |
|
|
709 |
|
|
12,943 |
| |
Other zones* |
|
|
1.58 |
|
|
513 |
|
|
10,102 |
| Total Inferred
Resources |
|
|
1.64 |
|
|
1,540 |
|
|
29,241 |
* "Other zones" includes M, E, P, S and South
zones
The internal technical study was carried out using
a gold price assumption of $1,200 per ounce and an US$/C$
exchange rate of 1.20.
Goldex composite longitudinal section
The advancement of the Deep 1 project at Goldex
also unlocks significant upside potential through:
- Potential for additional mineral resource conversion in
Deep 1
- Potential for mining at Deep 2 (below Level 120)
- Potential to develop the South Zone (a narrow high-grade
zone accessible via Deep 1 infrastructure)
- Potential development of the Akasaba West deposit
An Environmental Impact Assessment ("EIA") on the
Akasaba West deposit is expected to be submitted later in the
third quarter of 2015, which will allow the environmental review
process to commence. The Company anticipates the EIA
approval in the fall of 2017.
Based on an internal technical study, the Akasaba
West deposit has the potential to produce approximately 20,000 to
25,000 ounces of gold and 8.5 to 10.0 million pounds of copper
per year for four to five years. The average total cash
costs per ounce on a by-product basis is estimated to be
approximately $400. Capital costs (including closure costs)
are estimated at approximately C$50 million.
At Goldex, 2015 capital spending guidance has been increased
by $9 million. The higher planned capital expenditure is
due to:
- Use of a contractor to complete the near surface ramp
access to the M3 and M4 zones
- Acceleration of the Deep 1 underground development
program
- Accelerated mineral resource conversion drilling at Deep
1
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 reserve base. Exploration activities
continue to expand the mineral resource base and studies are
underway to evaluate the potential to cost-effectively increase
production.
Kittila - Gold Production Increases, Unit Costs
Decline, Drilling Encounters New Parallel Zone in Close Proximity
to Main Rimpi Ramp
The 100% owned Kittila mine in northern Finland
achieved commercial production in 2009.
The Kittila mill processed an average of 4,170 tpd
in the second quarter of 2015 compared to the 2,720 tpd in the
second quarter of 2014. The higher throughput in the 2015 period
is a result of the mill expansion completed in the fourth quarter
of 2014.
Minesite costs per tonne at Kittila were
approximately ¬75 in the second quarter of 2015, compared to
¬81 in the second quarter of 2014. Costs decreased in
the second quarter of 2015 due to the increased throughput when
compared with the 2014 period.
For the first six months of 2015, the Kittila mill processed
an average of 4,004 tpd, compared to 3,065 tpd in the first six
months of 2014. Minesite costs per tonne were approximately
¬76 in the first six months of 2015, the same as the
¬76 per tonne in the comparable 2014 period.
Since the expansion, the mill has shown potential
to operate in excess of 4,000 tpd and efforts are ongoing to
optimize throughput and recovery rates; in conjunction, the
Company is also working to optimize underground mining rates and
evaluate the potential to develop new mining areas. Unit costs
are expected to improve once steady state operations are
achieved.
Second quarter 2015 payable gold production at
Kittila was 41,986 ounces with a total cash costs per ounce on a
by-product basis of $776. In the second quarter of 2014,
the mine produced 31,830 ounces at total cash costs per ounce on
a by-product basis of $862. The higher production in the
2015 period is a result of the increased mill capacity compared
to the 2014 period. Costs decreased in the second quarter
of 2015 primarily due to increased production, lower energy costs
and a favourable foreign exchange rate.
In the first six months of 2015, Kittila produced 86,640
ounces of gold at a total cash cost per ounce of $727 on a
by-product basis. This is in contrast to the first six
months of 2014, when the mine produced 70,382 ounces of gold at
total cash costs per ounce of $825 on a by-product basis.
The lower cash costs in 2015 are mainly due to reasons described
above.
Previous drilling from the surface at Kittila has
outlined a significant zone of mineralization at Rimpi 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 a new surface ramp is also
being developed to access the shallower portions of the Rimpi
deposit. The surface ramp had advanced 715 metres to 119
metres depth by the end of June.
In April, the Company announced that drilling had
encountered a new parallel lens of mineralization approximately
1.3 kilometres below surface and 150 metres east of the main
Kittila ore zone, within the sheared and altered structure that
hosts the known Kittila deposits (see April 30, 2015 press
release). A recent hole in this area (ROU15-603) yielded
5.2 g/t gold (uncapped) over 13.3 metres (estimated true width)
at approximately 975 metres below surface. Further details
on this intercept and the drill hole coordinates are set out in
the tables below.
This latest intersection is located approximately
150 metres below the main exploration ramp being driven towards
Rimpi and opens up the possibility that the up-dip extension of
the new mineralized zone may be present at a similar elevation
east of the ramp. This new lens could provide additional
tonnage should further drilling confirm the continuity of the
mineralization. Additional drilling is underway, and a second
underground deep drill rig is expected to start operating in the
fourth quarter 2015 to test for extensions of the new parallel
zone.
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) |
| ROU15-603 |
new
parallel lens |
323 |
338 |
977 |
13.3 |
5.2 |
Kittila mine exploration drill collar
coordinates
| |
Drill collar
coordinates* |
| Drill hole ID |
UTM North |
UTM East |
Elevation
(metres
above sea
level) |
Azimuth |
Dip
(degrees) |
Length
(metres) |
| ROU15-603 |
7538600 |
2558637 |
-572 |
088 |
-36 |
432 |
| * Finnish Coordinate System KKJ
Zone 2 |
|
|
|
|
At the Kuotko deposit, located approximately 15
kilometres north of Kittila, drilling is ongoing to infill and
expand the existing approximately 170,000 ounce inferred resource
(1.8 million tonnes at 2.9 g/t gold). Metallurgical testing
is underway, and on completion of the drilling, studies will be
carried out to assess the viability of mining the deposit as an
open pit. If the studies are positive, permit applications
would then be expected to be submitted by the end of 2015.
Barsele Project - Joint Venture Transaction
Completed Late Q2 2015
On June 11, 2015, Agnico Eagle acquired a 55% interest in Orex
Minerals Inc's (REX:TSX-V) 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 and gold-rich volcanogenic massive sulphide
mineralization. In 2015, the Company plans to spend approximately
$3.25 million on exploration to further evaluate the mineral
potential of the property.
NUNAVUT REGION
With the Company's largest producing mine
(Meadowbank) and two significant development assets and
exploration projects (Meliadine and Amaruq) located in Nunavut,
Agnico Eagle has the potential to build an operating platform
that could have the ability to generate strong production and
cash flows over several decades.
Meadowbank - Mine Life Extended as Vault Pit
Extension Approved
The 100% owned Meadowbank mine in Nunavut, northern
Canada, achieved commercial production in March 2010.
The Meadowbank mill processed an average of 11,199
tpd in the second quarter of 2015, compared to the 11,549 tpd
achieved in the second quarter of 2014. Year-over-year mill
throughput levels were lower due to a higher percentage of Vault
ore processed which has a higher hardness factor.
Minesite costs per tonne were approximately C$74 in
the second quarter of 2015. These costs were higher than
the C$70 per tonne in the second quarter of 2014. The
higher costs per tonne were primarily due to lower throughput
compared to the respective 2014 period.
For the first six months of 2015, the Meadowbank mill
processed an average of 11,103 tpd, compared to 11,299 tpd in the
first six months of 2014. Minesite costs per tonne were
approximately C$73 in the first six months of 2015, which was the
same as the C$73 per tonne in the comparable 2014 period.
Payable production in the second quarter of 2015
was 91,276 ounces of gold at total cash costs per ounce on a
by-product basis of $688. This compares with the second
quarter of 2014 when 118,161 ounces were produced at total cash
costs per ounce on a by-product basis of $563. The lower
production and higher costs in the 2015 period compared to the
2014 period are primarily due to the processing of lower grade
ore (down 18%) and lower recoveries (down 2.5%).
In the first six months of 2015, Meadowbank produced 179,799
ounces of gold at total cash costs per ounce of $672 on a
by-product basis. In the first six months of 2014 the mine
produced 274,605 ounces of gold at total cash costs per ounce of
$489 on a by-product basis. The lower production and higher
costs in the 2015 period compared to the previous period was a
result of the final high grade ore from the Goose and Portage
pits that was mined in the first quarter 2014.
In 2013, approximately 246,000 ounces were removed
from mineral reserves at the Vault deposit due to a change in the
gold price assumption used to calculate mineral reserves at
December 31, 2013. Given the current US dollar to Canadian
dollar foreign exchange rate (which yields favourable revenues
and costs in Canadian dollar terms), lower fuel costs, and the
growing significance of the Amaruq Project, the Company has
decided to proceed with the expansion of the Vault pit.
With the expansion, the Meadowbank mine is now expected to be in
production until the third quarter of 2018 (approximately one
year longer than originally forecast). The extension of the
Meadowbank mine life is expected to help bridge the production
gap between the end of production at Meadowbank and the potential
start of production at a satellite operation at Amaruq (not yet
approved for construction).
The Meadowbank production profile has been revised
to reflect the need for additional waste stripping associated
with the pit extension. The revised production profile is
shown below (ounces of gold):
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2018 |
| |
February 2015 Guidance |
|
|
|
400,000 |
|
|
|
365,000 |
|
|
|
290,000 |
|
|
|
na |
| |
July 2015 Guidance |
|
|
|
400,000 |
|
|
|
310,000 |
|
|
|
345,000 |
|
|
|
130,000 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Meadowbank 2015 guidance for total cash costs
per ounce of gold on a by-product basis is unchanged at
$656. Meadowbank's average annual total cash costs per
ounce of gold on a by-product basis for 2016 through 2018 are
expected to be approximately $750 to $800.
Including the revised Meadowbank production
profile, the Company's average annual production for 2015 to 2017
is still expected to be approximately 1.6 million ounces.
The 2015 capital budget at Meadowbank has been
increased by $27 million to reflect additional costs associated
with developing the Vault extension (higher deferred stripping
and the purchase of additional mining trucks).
Amaruq Project - Drilling Continues to Infill Whale
Tail Zone; Positive Results at Mammoth Lake; Phase Two
Exploration Program Underway
Agnico Eagle has a 100% interest in the Amaruq
project in Nunavut, northern Canada. The large property
consists of 114,761 hectares of Inuit-owned and federal Crown
land, located approximately 50 kilometres northwest of the
Meadowbank mine.
The purpose of the 2015 winter and spring
exploration program was to infill the Whale Tail zone from
surface to 200 metres depth in order to convert inferred to
indicated mineral resources at open pit depths, with some
additional exploration drill holes as deep as 350 metres and
drilling into geophysical (magnetic and electromagnetic) targets
in the Mammoth Lake area. The Company last reported
exploration results from this project on June 9, 2015. As
of June 30, the $16-million phase one 2015 drill program was
complete with a total of 162 holes (48,081 metres).
Drilling Confirms and Expands Whale Tail
Mineralized Zone
To date, the Whale Tail deposit has been defined
over at least 1.2 kilometres of strike length between surface and
450 metres depth, suggesting potential for both open pit and
underground mining. The deposit remains open at depth and along
strike.
Recent work confirms that Whale Tail consists of
multiple lenses of mineralization with a high-grade wide
core. Some of the most significant results include 10.2 g/t
gold over 6.8 metres at 109 metres depth and 13.2 g/t gold over
14.3 metres at 133 metres depth (hole AMQ15-249). Hole AMQ15-236
intersected three lenses between 226 and 276 metres depth
including 13.0 g/t gold over 7.1 metres at 276 metres
depth. Hole AMQ15-250 intersected three lenses: 13.9 g/t
gold over 11.0 metres at 194 metres depth, 4.8 g/t gold over 6.5
metres at 219 metres depth, and 10.2 g/t gold over 9.8 metres at
279 metres depth. Hole AMQ15-221 intersected two lenses
below 300 metres depth including 7.3 g/t gold over 5.4 metres at
336 metres depth.
The deepest intercept to date on the property is in
a structure north of Whale Tail (first described in the June 9,
2015 news release): hole AMQ15-234 intersected 8.8 g/t gold over
6.0 metres at 568 metres depth, almost 200 metres deeper than any
previous intercept. Another intercept that may be associated with
the same structure is between the east end of the Whale Tail zone
and the R zone, where hole AMQ15-225 intersected 4.9 g/t gold
over 3.9 metres at 164 metres depth. This opens up a new
exploration area that could potentially connect the Whale Tail
deposit with the IVR deposit.
Positive Results from Initial Drill Holes at
Mammoth Lake
The first drill results in the east part of Mammoth
Lake area (located west of the Whale Tail zone) show
mineralization between 50 and 300 metres depth that appears to
connect with the Whale Tail deposit, possibly extending the
strike length of the combined mineralization to approximately 2.0
kilometres. In the extreme east part of Mammoth Lake, 600
metres west of the known Whale Tail zone, hole AMQ15-261
intersected 6.2 g/t gold over 11.3 metres at 74 metres
depth. Two hundred metres farther west, hole AMQ15-246
yielded two intercepts: 2.0 g/t gold over 8.8 metres at 248
metres depth and 6.8 g/t gold over 12.9 metres at 277 metres
depth. As well, hole AMQ15-264 yielded 8.0 g/t gold over 8.4
metres at 195 metres depth. Another 1,400 metres farther
southwest on the west side of Mammoth Lake, hole AMQ15-226
intersected 13.3 g/t gold over 3.0 metres at 162 metres
depth.
Recent drill intercepts from the Whale Tail zone
and Mammoth Lake area are set out in the table below and the
drill hole collars are located on the Amaruq project local
geology map. Pierce points are shown on the Whale Tail
composite longitudinal section; the Mammoth Lake collar
coordinates 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 will be updated as new information becomes available with
further drilling.
Recent exploration drill results from the Whale
Tail (WT) deposit and the Mammoth Lake 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)* |
| AMQ15-191 |
Mammoth Lake East |
73.6 |
80.0 |
56 |
4.0 |
3.9 |
3.9 |
| AMQ15-205 |
Mammoth Lake East |
188.0 |
191.3 |
150 |
2.6 |
6.7 |
6.7 |
| AMQ15-209A |
WT Central |
166.2 |
171.9 |
142 |
5.6 |
15.5 |
11.5 |
| and |
WT Central |
247.5 |
254.5 |
210 |
3.5 |
5.2 |
5.2 |
| and |
WT Deep |
295.9 |
300.0 |
249 |
3.2 |
11.8 |
11.8 |
| and |
WT Deep |
308.7 |
319.5 |
262 |
4.6 |
11.9 |
11.9 |
| and |
WT new structure |
365.8 |
369.5 |
307 |
3.4 |
7.5 |
7.5 |
| AMQ15-221 |
WT Deep |
367.6 |
373.2 |
304 |
3.9 |
11.3 |
11.3 |
| and |
WT Deep |
405.5 |
412.0 |
336 |
5.4 |
7.3 |
7.3 |
| AMQ15-225 |
WT new structure |
195.0 |
199.0 |
164 |
3.9 |
4.9 |
4.9 |
| AMQ15-226 |
Mammoth Lake West |
188.9 |
194.0 |
162 |
3.0 |
13.3 |
13.3 |
| AMQ15-230 |
Mammoth Lake East |
231.0 |
236.0 |
190 |
4.4 |
3.4 |
3.4 |
| and |
Mammoth Lake East |
252.0 |
261.0 |
209 |
7.1 |
3.9 |
3.9 |
| AMQ15-234 |
WT new structure |
664.0 |
672.5 |
568 |
6.0 |
8.8 |
8.8 |
| AMQ15-236 |
WT Deep |
263.0 |
273.7 |
226 |
10.3 |
3.7 |
3.7 |
| and |
WT Deep |
306.6 |
310.4 |
260 |
3.1 |
11.7 |
11.7 |
| and |
WT Deep |
322.5 |
331.2 |
276 |
7.1 |
13.0 |
13.0 |
| AMQ15-239 |
Mammoth Lake East |
214.9 |
219.0 |
175 |
3.2 |
6.0 |
6.0 |
| and |
|
380.8 |
386.0 |
312 |
3.7 |
3.8 |
3.8 |
| AMQ15-243 |
WT Deep |
282.0 |
305.6 |
245 |
8.1 |
11.6 |
11.6 |
| and |
WT Deep |
328.0 |
333.0 |
275 |
3.2 |
4.8 |
4.8 |
| AMQ15-246 |
Mammoth Lake East |
297.9 |
310.0 |
248 |
8.8 |
2.0 |
2.0 |
| and |
Mammoth Lake East |
328.5 |
351.1 |
277 |
12.9 |
9.4 |
6.8 |
| including |
|
328.5 |
332.8 |
270 |
2.5 |
28.2 |
14.4 |
| including |
|
345.0 |
351.1 |
284 |
3.5 |
8.8 |
8.8 |
| AMQ15-249 |
WT Central |
127.5 |
135.0 |
109 |
6.8 |
14.7 |
10.2 |
| and |
|
153.3 |
168.5 |
133 |
14.3 |
13.2 |
13.2 |
| AMQ15-250 |
WT Central |
224.7 |
239.1 |
194 |
11.0 |
37.7 |
13.9 |
| and |
WT Central |
254.6 |
267.6 |
219 |
6.5 |
4.8 |
4.8 |
| and |
WT Deep |
323.2 |
342.9 |
279 |
9.8 |
10.2 |
10.2 |
| AMQ15-261 |
Mammoth Lake East |
98.2 |
112.0 |
74 |
11.3 |
6.2 |
6.2 |
| AMQ15-264 |
Mammoth Lake East |
255.0 |
264.5 |
195 |
8.4 |
8.0 |
8.0 |
| AMQ15-267 |
Mammoth Lake East |
85.5 |
91.0 |
62 |
4.8 |
5.5 |
5.5 |
* Holes at Amaruq use a capping factor of 60 g/t
gold
Amaruq project's Mammoth Lake area exploration
drill collar coordinates
| |
Drill collar
coordinates* |
| Drill hole ID |
UTM North |
UTM East |
Elevation
(metres above
sea level) |
Azimuth |
Dip
(degrees) |
Length
(metres) |
| AMQ15-191 |
7255007 |
605562 |
152 |
161 |
-47 |
171 |
| AMQ15-205 |
7254862 |
605216 |
152 |
340 |
-54 |
285 |
| AMQ15-226 |
7254428 |
604097 |
152 |
340 |
-61 |
267 |
| AMQ15-230 |
7254792 |
605379 |
152 |
339 |
-55 |
471 |
| AMQ15-239 |
7254774 |
605310 |
152 |
341 |
-56 |
438 |
| AMQ15-246 |
7254778 |
605448 |
152 |
340 |
-55 |
564 |
| AMQ15-261 |
7255062 |
605620 |
153 |
159 |
-46 |
182 |
| AMQ15-264 |
7254755 |
605357 |
153 |
340 |
-53 |
330 |
| AMQ15-267 |
7255074 |
605702 |
153 |
159 |
-47 |
267 |
* Coordinate System UTM Nad 83 zone 14
Amaruq project local geology map
Amaruq project - Whale Tail composite
longitudinal section
In February 2015, the Company announced an initial
inferred mineral resource containing 1.5 million ounces of gold
(6.6 million tonnes at 7.07 g/t gold) at the Amaruq project,
based on drilling from 2013 through October 2014. An
updated Amaruq mineral resource including initial indicated
mineral resources is expected later this summer based on the
drilling completed through the end of June.
The phase two exploration program, budgeted at
approximately $15 million, is now underway. This program,
which is planned to include approximately 50,000 metres of
drilling, prospecting, and geochemical sampling (soil, till, and
rock), is expected to continue through August 2015. The
main objectives of the phase two program are:
- Step out drilling between the Mammoth Lake and Whale Tail
areas to try and link the two zones together
- Continue drilling in the western part of Mammoth Lake with
the objective of defining the extent (size) of this new
discovery
- Drilling at IVR to test for a potential link with the Whale
Tail zone and investigate continuity of mineralization at depth
and long strike to the east where field work has identified
coincident geophysical and geochemical anomalies
- Additional deep drilling at Whale Tail (at a depth of
approximately 500 metres below surface)
The Company has also expanded the airborne
geophysical (VTEM) coverage on the Amaruq project. This
year an additional 68,044 hectares were surveyed resulting in
total coverage of approximately 81,000 hectares (approximately
71% of the Amaruq property). Data from the VTEM survey is
currently being reviewed with the intent of developing additional
targets for evaluation. Studies are ongoing to evaluate the
potential to develop the Amaruq deposit as a satellite operation
to Meadowbank.
Meliadine Project - Inuit Impact Benefit Agreement
Signed and 2015 Budget Increased
The Meliadine gold project was acquired in July
2010 and is the Company's largest development project based on
mineral reserves and mineral resources. The Company has a
100% interest in the 111,757 hectare property, which is linked to
the town of Rankin Inlet in Nunavut by a 25 kilometre all-weather
access road.
On July 13, 2015, the Kivalliq Inuit Association
(KIA) and Agnico Eagle signed the Inuit Impact Benefit Agreement
(IIBA) for the Meliadine gold project. Through the IIBA
both Agnico Eagle and the KIA are intent on ensuring that
business opportunities, employment and training opportunities
arising from this potential mine will benefit the Inuit of the
Kivalliq Region.
The IIBA addresses protection of Inuit values,
culture and language, protection of the land, water and wildlife
and provides financial compensation to Inuit over the mine
life. In moving forward, Agnico Eagle and the KIA will work
toward a rate of 50% Inuit employment. With the signing of
the Meliadine IIBA, the first financial payment from Agnico Eagle
to KIA totaling C$1.5 million has been made.
On March 12, 2015, the Company completed and filed
with Canadian securities regulators an updated National
Instrument 43-101 ("NI 43-101") technical report on the Meliadine
gold project. The updated technical study was based on
extracting only the 3.3 million ounces of gold in proven and
probable mineral reserves (13.9 million tonnes of ore at 7.44 g/t
gold), which is all contained in the Tiriganiaq and Wesmeg
deposits.
The Meliadine property also hosts 3.3 million
ounces of measured and indicated mineral resources (20.2 million
tonnes at 5.06 g/t gold), and 3.5 million ounces of inferred
mineral resources (14.1 million tonnes at 7.65 g/t gold).
In addition, there are numerous other known gold occurrences in
the 80 km long greenstone belt that require further
evaluation.
Internal studies suggest that if the mine were to
be developed there could be considerably more gold available to
be added to the mine plan from the Tiriganiaq and Wesmeg/Normeg
deposits, which could potentially extend the mine life, improve
the project economics, and increase the after-tax internal rate
of return ("IRR"). The Company is currently evaluating
potential expanded production scenarios at Meliadine.
At the end of the second quarter 2015, the
underground ramp had been advanced by 867 metres, and is now at a
depth of approximately 275 metres below surface. This
year's plan calls for total underground development of
approximately 2,500 metres. This development will allow for
more cost-effective exploration and conversion drilling of the
deeper parts of the Tiriganiaq and Wesmeg/Normeg deposits and
help to optimize potential mining plans.
The Company is currently studying options and
alternatives in Nunavut to capitalize on the large and growing
mineral resource base in the region and to maximize value.
In order to keep the Meliadine project on track for a potential
late 2019 startup, the 2015 capital budget has been increased by
$22 million. The increased budget will be used to expand
the existing surface and underground infrastructure and sealift
additional equipment for the 2016 work program.
The timing of future capital expenditures on the
Meliadine project beyond 2015 and the determination of whether to
build a mine at Meliadine are subject to approval by Agnico
Eagle's Board of Directors, prevailing market conditions and
outcomes of the various potential scenarios being evaluated.
SOUTHERN BUSINESS OPERATING REVIEW
At present, Agnico Eagle's southern business operations are
focused in Mexico. These operations have been the source of
growing precious metals production (gold and silver) with stable
operating costs since 2009.
Pinos Altos - Strong Performance Driven by Lower
Costs and Higher Throughput
The 100% owned Pinos Altos mine in northern Mexico
achieved commercial production in November 2009.
The Pinos Altos mill processed 5,854 tpd in the
second quarter of 2015, compared to 5,513 tpd processed in the
second quarter of 2014. During the second quarter of 2015,
approximately 114,800 tonnes of ore were stacked on the leach pad
at Pinos Altos, compared to 154,200 tonnes in the comparable 2014
period. Minesite costs per tonne at Pinos Altos were $43 in
the second quarter of 2015, slightly lower than the $46 in the
second 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, currency variations and routine fluctuations in
the waste to ore stripping ratio in the open pit mines.
For the first six months of 2015, the Pinos Altos
mill processed an average of 5,758 tpd, compared to 5,448 tpd
processed in the first six months of 2014. Approximately
189,200 tonnes of ore were stacked on the Pinos Altos leach pad
during the first six months of 2015, compared to 293,300 tonnes
in the prior year period. Minesite costs per tonne were
approximately $45 compared to $48 per tonne in the first six
months of 2014 with variance due to the proportion of heap leach
to mill ore and the proportion of underground ore to open pit,
and variations in the proportion of waste to ore mined, and
variations in the currency exchange rate.
Payable production in the second quarter of 2015
was 50,647 ounces of gold at a total cash costs per ounce on a
by-product basis of $384. This compares with production of
43,978 ounces at total cash costs per ounce on a by-product basis
of $516 in the second quarter of 2014. Higher production in
2015 is largely due to higher throughput and higher grades
processed over the comparable prior year period. The decrease in
the year over year total cash costs per ounce is largely due to
higher silver production (offset, in part by a decline in
realized silver prices) and favourable foreign exchange rates
compared to the prior year period.
In the first six months of 2015, Pinos Altos
produced 100,753 ounces of gold at total cash costs per ounce of
$371 on a by-product basis. This is in contrast to the
first six months of 2014 when the mine produced 89,195 ounces of
gold at total cash costs per ounce of $498 on a by-product
basis. The lower cash costs in the first six months of 2015
are primarily due to favourable foreign exchange rates and higher
silver production compared to the prior year period of 2014.
Site clearing and geotechnical studies have been
completed for the Phase IV heap leach pad at Pinos Altos.
Engineering design work is in progress with completion expected
by year-end 2015.
The Pinos Altos shaft sinking project remains on
schedule for completion in 2016. At the end of the second
quarter of 2015, the shaft had reached a depth of approximately
573 metres, and development activities had commenced on level
28. When the shaft is completed, it will allow better
matching of the mill capacity with the future mining capacity at
Pinos Altos once the open pit mining operation begins to wind
down as planned over the next several years.
The Company continues to evaluate a number of
regional satellite opportunities. A 6,000 metre in-fill and
conversion drill program on the Sinter deposit is 50% complete
with the expectation to add this deposit to the Pinos Altos mine
plan beginning in 2020.
Creston Mascota Deposit at Pinos Altos - Improved
Ore Stacking in Q2 2015
The Creston Mascota deposit at Pinos Altos has been
operating as a satellite operation to the Pinos Altos mine since
late 2010.
Approximately 608,500 tonnes of ore were stacked on
the Creston Mascota leach pad during the second quarter of 2015,
compared to approximately 394,800 tonnes stacked in the second
quarter of 2014. In the 2015 period, additional ore was
encountered outside the block model, which resulted in more
tonnes at lower grades being stacked compared to the 2014
period. Minesite costs per tonne at Creston Mascota were
$11 in the second quarter of 2015, compared to $18 in the second
quarter of 2014. Costs in the 2015 period were lower due to
currency fluctuations, a reduced stripping ratio, lower fuel
consumption and reduced power requirements compared to the 2014
period.
For the first six months of 2015, approximately
1,135,500 tonnes of ore were stacked on the Creston Mascota leach
pad, compared to 773,700 tonnes in the prior year period.
For the first six months of 2015, mine site costs
per tonne at Creston Mascota were $11, compared to $18 per tonne
in the first six months of 2014. Costs were lower in the
2015 period due to the reasons outlined above.
Payable gold production at Creston Mascota in the
second quarter of 2015 was 15,606 ounces at a total cash costs
per ounce on a by-product basis of $402. This compares to
11,159 ounces at a total cash costs per ounce on a by-product
basis of $613 during the second quarter of 2014. Production
was higher in the 2015 period due to more tonnes stacked,
compared to the 2014 period. Cash costs were lower in the
2015 period based on lower minesite costs per tonne (see above),
increased production and a favourable foreign exchange rate
compared to the 2014 period.
Payable gold production for the first six months of
2015 was 28,054 ounces at a total cash costs per ounce of $421 on
a by-product basis. This compares to 21,476 ounces at a
total cash costs per ounce of $606 on a by-product basis in the
first six months of 2014. The higher production and lower
costs in the 2015 period are due to the reasons outlined
above.
In April 2015, higher grade mineralization was
encountered at the bottom of the pit and outside the Creston
Mascota block model. Additional drilling is in progress to
test for continuity of this mineralization, and results are
currently being compiled. In the second half of 2015, a
3,500 metre infill and conversion drill program is planned on the
Bravo satellite zone which would offer the potential to extend
the Creston Mascota mine life.
La India - Gold Production Exceeds Design
Expectation as Growth Studies Continue
The La India mine property 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, 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 2013 and commercial production
was declared as of February 1, 2014.
Approximately 1,359,500 tonnes of ore were stacked
on the La India leach pad during the second quarter of 2015,
compared to approximately 1,137,500 tonnes stacked in the second
quarter of 2014. Minesite costs per tonne at La India were $9 in
the second quarter of 2015, compared to the $8 in the second
quarter of 2014. Tonnage variation reflects the ramp up to design
capacity and the increased minesite costs reflect normal
variations in waste/ore stripping ratio.
In the first six months of 2015, approximately
2,738,000 tonnes of ore were stacked on the La India leach pad,
compared to approximately 2,156,400 stacked in the first six
months of 2014. Minesite costs per tonne at La India were
$9 in the first six months of 2015, compared to the $7 in the
first six months of 2014. The higher production and costs
in the 2015 period are due to the reasons outlined above.
Payable gold production at La India in the second
quarter of 2015 was 25,803 ounces at total cash costs per ounce
of $410 on a by-product basis were. Production in the
second quarter of 2014 was 17,809 ounces at a total cash costs
per ounce on a by-product basis of $443. Total cash costs
in the 2015 period were favourably impacted by higher production
volumes and favourable foreign exchange rates.
For the first six months of 2015, La India produced
52,326 ounces of gold at total cash costs per ounce of $414 on a
by-product basis. This compares to 28,017 ounces at a total
cash costs per ounce of $437 on a by-product basis in the first
six months of 2014.
During the quarter, approximately 40% of the
earthworks had been completed on the second phase leach
pad. An additional contractor is being used to expedite the
process. This leach pad expansion will provide the capacity
for the current planned life-of-mine production at La India and
approximately 5.0 million tonnes of additional stacking.
Construction of the Main Zone haul road is 65% complete, with
work expected to be finished late in the third quarter of
2015.
Block model reconciliation remains
favourable. Infill drilling and technical evaluations are
underway to develop a more predictive model. Drilling is
expected to be completed later this fall, and the information is
expected to be incorporated into the year-end 2015 mineral
reserve and mineral resource estimates.
A re-logging program has been completed on holes
drilled between 2004 and 2011 on the Main Zone and the La India
Zone. This resulted in the delineation of new geological
domains containing gold bearing sulphide mineralization.
Preliminary metallurgical testing of this material indicates that
some transition and sulphide mineralization at La India may be
heap leachable. Follow-up work is in progress with the
potential to reassign some of the sulphide mineral inventory back
into the mineral resource category.
El Barqueno - Soltoro Acquisition Further
Consolidates Land Position, Drilling Continues with a Focus on
Resource Delineation
The El Barqueno property in Jalisco State, Mexico
now covers a land position of 41,112 hectares. Exploration
by previous operators outlined several mineralized zones through
surface exploration and diamond drilling, which in comparison is
larger than the strike length of the mineralized systems at both
the La India and Pinos Altos properties combined.
In early June 2015, Agnico Eagle completed the
acquisition of Soltoro Ltd., which added more than 30,000
hectares of property in the Barqueno district in Jalisco state,
including the El Rayo silver-gold project and the El Tecolote
property that are contiguous with and to the east of Agnico
Eagle's El Barqueno property.
The Company believes that the El Barqueno and
surrounding properties have the potential to host significant
gold-silver mineralization that could be developed as a
combination open pit and underground mine with heap leach and/or
mill processing facilities.
In the second quarter of 2015, 60 holes totaling
approximately 12,714 metres were drilled at El Barqueno.
Work primarily focused on the Pena de Oro, Azteca-Zapoteca and
Angostura zones.
At Pena de Oro, drilling has been on 80 metre by 80
metre centres along a one kilometre strike length. The
mineralization shows good continuity and remains open along
strike and at depth. At Azteca-Zapoteca, mineralization
extends for over one kilometre along strike and is also open at
depth and along strike. The Company last reported results
from these target areas on June 9, 2015, and additional results
from these zones are expected to be released in the third quarter
of 2015.
The initial 2015 drill program was completed in
June and a supplemental program has been approved to infill the
mineralized areas as well as to test extensions to the known
mineralization. Metallurgical and mineralogical studies
have been commissioned to further increase the understanding of
the mineral resource potential.
An inferred/indicated mineral resource is expected
to be completed by the end of the year for the Peña de Oro
and Azteca-Zapoteca areas to open-pit mineable depths (surface to
200 metres depth). The Angostura prospect is also being
studied for a potential inferred mineral resource estimate by
year-end.
An additional 10,000-metre reconnaissance drill
program is being proposed to commence in the third quarter of the
year. The program will be designed to test other new
high-priority targets outside the main deposits such as the
Zapote, Poncho East and West, Esperanza and Falco areas defined
last year and earlier this year using prospecting, geological
mapping and sampling, and geochemical (stream sediment and soil
surveys) and geophysical (magnetic, radiometrics, and
electromagnetic) surveys.
Dividend Record and Payment Dates for the Third
Quarter of 2015
Agnico Eagle's Board of Directors has declared a
quarterly cash dividend of $0.08 per common share, payable on
September 15, 2015 to shareholders of record as of September 1,
2015. Agnico Eagle has declared a cash dividend every year
since 1983.
Other Expected Dividend and Record Dates for
2015
| Record Date |
Payment
Date |
| December 1 |
December 15 |
Dividend Reinvestment Plan
Please follow the link below for information on the
Company's dividend reinvestment program.
Dividend Reinvestment Plan
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, see "Reconciliation of Non-GAAP Financial Performance
Measures" below. The 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). 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 are used to show the full
cost of gold production from current operations. The
Company calculates all-in sustaining costs per ounce of gold
produced as the aggregate of total cash costs on a by-product
basis, sustaining capital expenditures (including capitalized
exploration), general and administrative expenses (including
stock options) 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 total cash costs per ounce of gold produced on a
by-product basis except that no adjustment is made for by-product
metal revenues. The Company's methodology for calculating
all-in sustaining costs may not be similar to the methodology
used by other producers that disclose all-in sustaining
costs. The Company may change the methodology it uses to
calculate all-in sustaining costs 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 and minesite costs per tonne. The
estimates are based upon the total cash costs per ounce, all-in
sustaining costs 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 July 29, 2015. 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" 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 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, 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, minesite costs, all-in sustaining
costs and other expenses; estimates of future capital
expenditures and other cash needs, and expectations as to the
funding thereof; statements and information 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, 2104 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 U.S. Securities and Exchange Commission (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, 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 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 Northern Business operations has
been approved by Christian Provencher, Ing., Vice-President,
Canada and a "Qualified Person" for the purposes of NI
43-101. The scientific and technical information contained
in this news release relating to Southern Business operations has
been approved by Tim Haldane, P.Eng., Senior Vice-President,
Operations - USA and Latin America and a "Qualified Person" for
the purposes of NI 43-101. The scientific and technical
information contained in this news release relating to
exploration has been approved by Alain Blackburn, Ing., Senior
Vice-President, Exploration and 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 has been approved by Daniel Doucet, Senior
Corporate Director, Reserve Development. Mr. Doucet is a
designated Ing. with the Ordredes ingénieurs du Québec
and a qualified person as defined by NI 43-101.
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 CIM guidelines for the estimation,
classification and reporting of mineral resources and mineral
reserves in accordance with the Canadian securities regulatory
authorities' National Instrument 43-101
Standards of Disclosure for Mineral Projects
("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
reserves estimates at all mines and advanced projects as of
December 31, 2014 (other than the Canadian Malartic mine),
reported by the Company on February 11, 2015, are $1,150 per
ounce gold, $18.00 per ounce silver, $1.00 per pound zinc, $3.00
per pound copper, $0.91 per pound lead and C$/US$, US$/Euro and
MXP/US$ exchange rates of 1.08, 1.30 and 13.00, respectively.
For the mineral reserves estimate at the Canadian
Malartic mine, the Company has decided to continue to report the
mineral reserves estimated as of June 15, 2014, reported by the
Company in a news release dated August 13, 2014, minus the
production to the end of 2014. The assumptions used were $1,300
per ounce gold, a cut-off grade between 0.28 g/t and 0.35 g/t
gold (depending on the deposit), and a C$/US$ exchange rate of
1.10.
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 |
| Swanson, Quebec, Canada |
|
| Meadowbank, Nunavut,
Canada |
February 15, 2012 |
| Goldex, Quebec, Canada |
October 14, 2012 |
| Lapa, Quebec, Canada |
June 8, 2006 |
| Meliadine, Nunavut,
Canada |
February 11, 2015 |
| Akasaba, Quebec, Canada |
|
| Amaruq, Nunavut, Canada |
|
| 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 |
|
|
Six Months Ended |
| |
|
|
June 30, |
|
|
June 30, |
| |
|
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
Operating margin
(i)
by mine: |
|
|
|
|
|
|
|
|
|
|
|
|
| Northern
Business |
|
|
|
|
|
|
|
|
|
|
|
|
| |
LaRonde
mine |
|
$ |
32,799 |
|
$ |
26,402 |
|
$ |
62,813 |
|
$ |
71,826 |
| |
Lapa
mine |
|
|
11,351 |
|
|
9,050 |
|
|
26,038 |
|
|
24,391 |
| |
Goldex mine |
|
|
15,525 |
|
|
13,283 |
|
|
34,778 |
|
|
22,809 |
| |
Meadowbank
mine |
|
|
49,600 |
|
|
88,727 |
|
|
96,177 |
|
|
212,687 |
| |
Canadian
Malartic mine
(ii) |
|
|
44,737 |
|
|
3,669 |
|
|
79,456 |
|
|
3,668 |
| |
Kittila
mine |
|
|
16,145 |
|
|
14,184 |
|
|
43,560 |
|
|
33,186 |
| Southern
Business |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Pinos Altos
mine |
|
|
44,538 |
|
|
33,417 |
|
|
79,190 |
|
|
72,482 |
| |
Creston Mascota
deposit at Pinos Altos |
|
|
12,968 |
|
|
7,428 |
|
|
21,377 |
|
|
15,143 |
| |
La India mine
(iii) |
|
|
18,834 |
|
|
12,978 |
|
|
39,424 |
|
|
26,647 |
| Total operating
margin
(i) |
|
|
246,497 |
|
|
209,138 |
|
|
482,813 |
|
|
482,839 |
| Amortization of
property, plant and mine development |
|
|
157,615 |
|
|
93,656 |
|
|
293,512 |
|
|
177,137 |
| Exploration,
corporate and other |
|
|
67,973 |
|
|
81,665 |
|
|
111,679 |
|
|
125,167 |
| Income before
income and mining taxes |
|
|
20,909 |
|
|
33,817 |
|
|
77,622 |
|
|
180,535 |
| Income and
mining taxes expense |
|
|
10,826 |
|
|
11,659 |
|
|
38,796 |
|
|
61,232 |
| Net income for
the period |
|
$ |
10,083 |
|
$ |
22,158 |
|
$ |
38,826 |
|
$ |
119,303 |
| Net income per
share basic (US$) |
|
$ |
0.05 |
|
$ |
0.12 |
|
$ |
0.18 |
|
$ |
0.66 |
| Net income per
share diluted (US$) |
|
$ |
0.05 |
|
$ |
0.12 |
|
$ |
0.18 |
|
$ |
0.66 |
| Cash
flows: |
|
|
|
|
|
|
|
|
|
|
|
|
| Cash provided by
operating activities |
|
$ |
188,349 |
|
$ |
182,728 |
|
$ |
331,804 |
|
$ |
433,124 |
| Cash used in
investing activities |
|
$ |
(104,476) |
|
$ |
(488,543) |
|
$ |
(158,368) |
|
$ |
(596,831) |
| Cash provided by
(used in) financing activities |
|
$ |
(64,514) |
|
$ |
381,951 |
|
$ |
(187,696) |
|
$ |
283,864 |
|
Realized prices (US$): |
|
|
|
|
|
|
|
|
|
|
|
|
| Gold
(per ounce) |
|
$ |
1,196 |
|
$ |
1,291 |
|
$ |
1,199 |
|
$ |
1,300 |
| Silver
(per ounce) |
|
$ |
16.41 |
|
$ |
19.45 |
|
$ |
16.68 |
|
$ |
20.06 |
| Zinc
(per tonne) |
|
$ |
2,231 |
|
$ |
2,142 |
|
$ |
2,130 |
|
$ |
2,096 |
| Copper
(per tonne) |
|
$ |
6,274 |
|
$ |
6,893 |
|
$ |
5,656 |
|
$ |
6,594 |
|
Payable production
(iv): |
|
|
|
|
|
|
|
|
|
|
|
|
| Gold
(ounces): |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Northern
Business |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
LaRonde mine |
|
|
64,007 |
|
|
48,494 |
|
|
122,900 |
|
|
107,846 |
| |
|
Lapa mine |
|
|
19,450 |
|
|
18,821 |
|
|
45,370 |
|
|
42,230 |
| |
|
Goldex mine |
|
|
26,462 |
|
|
23,929 |
|
|
55,712 |
|
|
43,359 |
| |
|
Meadowbank mine |
|
|
91,276 |
|
|
118,161 |
|
|
179,799 |
|
|
274,605 |
| |
|
Canadian Malartic mine
(ii) |
|
|
68,441 |
|
|
11,878 |
|
|
136,334 |
|
|
11,878 |
| |
|
Kittila mine |
|
|
41,986 |
|
|
31,830 |
|
|
86,640 |
|
|
70,382 |
| |
Southern
Business |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Pinos Altos mine |
|
|
50,647 |
|
|
43,978 |
|
|
100,753 |
|
|
89,195 |
| |
|
Creston Mascota deposit at
Pinos Altos |
|
|
15,606 |
|
|
11,159 |
|
|
28,054 |
|
|
21,476 |
| |
|
La India mine
(iii) |
|
|
25,803 |
|
|
17,809 |
|
|
52,326 |
|
|
31,509 |
| Total gold
(ounces) |
|
|
403,678 |
|
|
326,059 |
|
|
807,888 |
|
|
692,480 |
| Silver
(thousands of ounces): |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Northern
Business |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
LaRonde mine |
|
|
201 |
|
|
345 |
|
|
398 |
|
|
694 |
| |
|
Lapa mine |
|
|
1 |
|
|
- |
|
|
1 |
|
|
- |
| |
|
Meadowbank mine |
|
|
57 |
|
|
25 |
|
|
153 |
|
|
51 |
| |
|
Canadian Malartic mine
(ii) |
|
|
69 |
|
|
10 |
|
|
141 |
|
|
10 |
| |
|
Kittila mine |
|
|
2 |
|
|
1 |
|
|
5 |
|
|
3 |
| |
Southern
Business |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Pinos Altos mine |
|
|
576 |
|
|
422 |
|
|
1,139 |
|
|
882 |
| |
|
Creston Mascota deposit at
Pinos Altos |
|
|
37 |
|
|
18 |
|
|
69 |
|
|
34 |
| |
|
La India mine
(iii) |
|
|
72 |
|
|
40 |
|
|
141 |
|
|
67 |
| Total Silver
(thousands of ounces) |
|
|
1,015 |
|
|
861 |
|
|
2,047 |
|
|
1,741 |
| Zinc
(tonnes) |
|
|
827 |
|
|
3,793 |
|
|
1,763 |
|
|
5,853 |
| Copper
(tonnes) |
|
|
1,133 |
|
|
1,058 |
|
|
2,300 |
|
|
2,612 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Payable metal sold: |
|
|
|
|
|
|
|
|
|
|
|
|
| Gold
(ounces): |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Northern
Business |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
LaRonde mine |
|
|
59,376 |
|
|
48,115 |
|
|
120,319 |
|
|
106,215 |
| |
|
Lapa mine |
|
|
20,771 |
|
|
18,162 |
|
|
44,268 |
|
|
41,613 |
| |
|
Goldex mine |
|
|
27,306 |
|
|
22,255 |
|
|
55,213 |
|
|
41,862 |
| |
|
Meadowbank mine |
|
|
96,870 |
|
|
118,176 |
|
|
181,649 |
|
|
265,678 |
| |
|
Canadian Malartic mine
(ii)(v) |
|
|
67,522 |
|
|
16,377 |
|
|
126,783 |
|
|
16,377 |
| |
|
Kittila mine |
|
|
39,385 |
|
|
31,519 |
|
|
88,366 |
|
|
68,948 |
| |
Southern
Business |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Pinos Altos mine |
|
|
54,402 |
|
|
43,058 |
|
|
95,835 |
|
|
89,868 |
| |
|
Creston Mascota deposit at
Pinos Altos |
|
|
16,537 |
|
|
10,737 |
|
|
27,936 |
|
|
20,965 |
| |
|
La India mine
(iii) |
|
|
23,803 |
|
|
15,025 |
|
|
50,701 |
|
|
29,657 |
| Total gold
(ounces) |
|
|
405,972 |
|
|
323,424 |
|
|
791,070 |
|
|
681,183 |
| Silver
(thousands of ounces): |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Northern
Business |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
LaRonde mine |
|
|
225 |
|
|
322 |
|
|
429 |
|
|
662 |
| |
|
Meadowbank mine |
|
|
59 |
|
|
24 |
|
|
157 |
|
|
52 |
| |
|
Canadian Malartic mine
(ii)(v) |
|
|
80 |
|
|
15 |
|
|
134 |
|
|
15 |
| |
|
Kittila mine |
|
|
2 |
|
|
1 |
|
|
5 |
|
|
3 |
| |
Southern
Business |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Pinos Altos mine |
|
|
616 |
|
|
430 |
|
|
1,062 |
|
|
937 |
| |
|
Creston Mascota deposit at
Pinos Altos |
|
|
48 |
|
|
18 |
|
|
68 |
|
|
32 |
| |
|
La India mine
(iii) |
|
|
76 |
|
|
34 |
|
|
139 |
|
|
60 |
| Total Silver
(thousands of ounces): |
|
|
1,106 |
|
|
844 |
|
|
1,994 |
|
|
1,761 |
| Zinc
(tonnes) |
|
|
733 |
|
|
2,458 |
|
|
1,997 |
|
|
4,131 |
| Copper
(tonnes) |
|
|
1,131 |
|
|
1,074 |
|
|
2,291 |
|
|
2,616 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cash costs per ounce of gold produced - Co-product
basis (US$)
(vi): |
|
|
|
|
|
|
|
|
|
|
|
|
| Northern
Business |
|
|
|
|
|
|
|
|
|
|
|
|
| |
LaRonde
mine |
|
$ |
811 |
|
$ |
1,185 |
|
$ |
850 |
|
$ |
1,050 |
| |
Lapa
mine |
|
|
679 |
|
|
832 |
|
|
616 |
|
|
738 |
| |
Goldex mine |
|
|
633 |
|
|
671 |
|
|
585 |
|
|
712 |
| |
Meadowbank
mine |
|
|
699 |
|
|
567 |
|
|
686 |
|
|
493 |
| |
Canadian
Malartic mine
(ii) |
|
|
626 |
|
|
641 |
|
|
638 |
|
|
641 |
| |
Kittila
mine |
|
|
777 |
|
|
863 |
|
|
728 |
|
|
826 |
| Southern
Business |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Pinos Altos
mine |
|
|
570 |
|
|
702 |
|
|
559 |
|
|
698 |
| |
Creston Mascota
deposit at Pinos Altos |
|
|
441 |
|
|
646 |
|
|
462 |
|
|
639 |
| |
La India mine
(iii) |
|
|
456 |
|
|
489 |
|
|
458 |
|
|
488 |
| Weighted average
total cash costs per ounce of gold produced |
|
$ |
666 |
|
$ |
730 |
|
$ |
658 |
|
$ |
676 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cash costs per ounce of gold produced - By-product
basis (US$)
(vi): |
|
|
|
|
|
|
|
|
|
|
|
|
| Northern
Business |
|
|
|
|
|
|
|
|
|
|
|
|
| |
LaRonde
mine |
|
$ |
613 |
|
$ |
732 |
|
$ |
656 |
|
$ |
645 |
| |
Lapa
mine |
|
|
678 |
|
|
832 |
|
|
615 |
|
|
738 |
| |
Goldex mine |
|
|
633 |
|
|
670 |
|
|
585 |
|
|
711 |
| |
Meadowbank
mine |
|
|
688 |
|
|
563 |
|
|
672 |
|
|
489 |
| |
Canadian
Malartic mine
(ii) |
|
|
609 |
|
|
613 |
|
|
621 |
|
|
613 |
| |
Kittila
mine |
|
|
776 |
|
|
862 |
|
|
727 |
|
|
825 |
| Southern
Business |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Pinos Altos
mine |
|
|
384 |
|
|
516 |
|
|
371 |
|
|
498 |
| |
Creston Mascota
deposit at Pinos Altos |
|
|
402 |
|
|
613 |
|
|
421 |
|
|
606 |
| |
La India mine
(iii) |
|
|
410 |
|
|
443 |
|
|
414 |
|
|
437 |
| Weighted average
total cash costs per ounce of gold produced |
|
$ |
601 |
|
$ |
631 |
|
$ |
595 |
|
$ |
582 |
| Notes: |
|
|
|
| |
|
|
|
| |
(i) |
|
Operating margin is calculated as revenues from mining
operations less production costs. |
| |
|
|
|
| |
(ii) |
|
On June 16, 2014, Agnico Eagle and Yamana Gold Inc.
("Yamana") jointly acquired 100.0% of Osisko by way of the
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. |
| |
|
|
|
| |
(iv) |
|
Payable production (a non-GAAP 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
quantities of gold reflecting the 5.0% net smelter royalty
granted to Osisko Gold Royalties Ltd., in connection with the
Arrangement. |
| |
|
|
|
| |
(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 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 condensed interim consolidated
statements of income 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
June 30,
|
|
|
|
As at
December 31,
|
| |
|
|
|
2015 |
|
|
|
2014 |
| |
|
|
|
|
|
|
|
|
| ASSETS |
|
|
|
|
|
|
|
|
| Current assets: |
|
|
|
|
|
|
|
|
| |
Cash and cash equivalents |
|
|
$ |
158,331 |
|
|
$ |
177,537 |
| |
Short-term investments |
|
|
|
5,669 |
|
|
|
4,621 |
| |
Restricted cash |
|
|
|
19,939 |
|
|
|
33,122 |
| |
Trade receivables |
|
|
|
61,195 |
|
|
|
59,716 |
| |
Inventories |
|
|
|
439,875 |
|
|
|
446,660 |
| |
Income taxes recoverable |
|
|
|
11,838 |
|
|
|
1,658 |
| |
Available-for-sale
securities |
|
|
|
46,029 |
|
|
|
56,468 |
| |
Fair value of derivative
financial instruments |
|
|
|
899 |
|
|
|
4,877 |
| |
Other current assets |
|
|
|
146,529 |
|
|
|
123,401 |
| Total current assets |
|
|
|
890,304 |
|
|
|
908,060 |
| Non-current assets: |
|
|
|
|
|
|
|
|
| |
Restricted cash |
|
|
|
19,436 |
|
|
|
20,899 |
| |
Goodwill |
|
|
|
696,809 |
|
|
|
696,809 |
| |
Property, plant and mine
development |
|
|
|
5,120,069 |
|
|
|
5,155,865 |
| |
Other assets |
|
|
|
23,197 |
|
|
|
27,622 |
| Total assets |
|
|
$ |
6,749,815 |
|
|
$ |
6,809,255 |
| LIABILITIES AND
EQUITY |
|
|
|
|
|
|
|
|
| Current liabilities: |
|
|
|
|
|
|
|
|
| |
Accounts payable and accrued
liabilities |
|
|
$ |
232,674 |
|
|
$ |
209,906 |
| |
Reclamation provision |
|
|
|
7,666 |
|
|
|
6,769 |
| |
Interest payable |
|
|
|
13,611 |
|
|
|
13,816 |
| |
Income taxes payable |
|
|
|
18,488 |
|
|
|
19,328 |
| |
Finance lease
obligations |
|
|
|
15,218 |
|
|
|
22,142 |
| |
Current portion of long-term
debt |
|
|
|
16,033 |
|
|
|
52,182 |
| |
Fair value of derivative
financial instruments |
|
|
|
12,796 |
|
|
|
8,249 |
| Total current liabilities |
|
|
|
316,486 |
|
|
|
332,392 |
| Non-current liabilities: |
|
|
|
|
|
|
|
|
| |
Long-term debt |
|
|
|
1,180,326 |
|
|
|
1,322,461 |
| |
Reclamation provision |
|
|
|
246,572 |
|
|
|
249,917 |
| |
Deferred income and mining tax
liabilities |
|
|
|
802,261 |
|
|
|
797,192 |
| |
Other liabilities |
|
|
|
44,401 |
|
|
|
38,803 |
| Total liabilities |
|
|
|
2,590,046 |
|
|
|
2,740,765 |
| EQUITY |
|
|
|
|
|
|
|
|
| |
Common shares: |
|
|
|
|
|
|
|
|
| |
|
Outstanding - 217,377,496 common shares
issued, less 344,510 shares held in trust |
|
|
|
4,685,089 |
|
|
|
4,599,788 |
| |
Stock options |
|
|
|
209,529 |
|
|
|
200,830 |
| |
Contributed surplus |
|
|
|
37,254 |
|
|
|
37,254 |
| |
Deficit |
|
|
|
(775,073) |
|
|
|
(779,382) |
| |
Accumulated other comprehensive
income |
|
|
|
2,970 |
|
|
|
10,000 |
| Total equity |
|
|
|
4,159,769 |
|
|
|
4,068,490 |
| Total liabilities and
equity |
|
|
$ |
6,749,815 |
|
|
$ |
6,809,255 |
null
| |
|
|
|
|
|
|
| AGNICO EAGLE
MINES LIMITED |
| CONSOLIDATED
STATEMENTS OF INCOME |
| (thousands of
United States dollars, except per share amounts, IFRS
basis) |
| (Unaudited) |
| |
|
|
|
|
|
|
| |
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
| |
|
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES |
|
|
|
|
|
|
|
|
|
|
|
|
| Revenues from
mining operations |
|
$ |
510,109 |
|
$ |
438,521 |
|
$ |
993,705 |
|
$ |
930,288 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
COSTS, EXPENSES AND OTHER INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
| Production
(i) |
|
|
263,612 |
|
|
229,383 |
|
|
510,892 |
|
|
447,449 |
| Exploration and
corporate development |
|
|
30,616 |
|
|
11,627 |
|
|
47,267 |
|
|
21,045 |
| Amortization of
property, plant and mine development |
|
|
157,615 |
|
|
93,656 |
|
|
293,512 |
|
|
177,137 |
| General and
administrative |
|
|
23,572 |
|
|
41,515 |
|
|
48,793 |
|
|
67,785 |
| Impairment loss
on available-for-sale securities |
|
|
345 |
|
|
2,419 |
|
|
1,030 |
|
|
2,419 |
| Finance
costs |
|
|
17,955 |
|
|
17,259 |
|
|
37,667 |
|
|
34,397 |
| Gain on derivative
financial instruments |
|
|
(8,836) |
|
|
(518) |
| |
(260) |
|
|
(4,264) |
| Gain on sale of available-for-sale securities |
|
|
(2,675) |
|
|
(5,016) |
|
|
(23,724) |
|
|
(5,289) |
| Environmental remediation |
|
|
(141) |
|
|
501 |
|
|
288 |
|
|
673 |
| Foreign currency translation loss (gain) |
|
|
4,779 |
|
|
6,568 |
|
|
(6,911) |
|
|
1,509 |
| Other expenses |
|
|
2,358 |
|
|
7,310 |
|
|
7,529 |
|
|
6,892 |
| Income before income and mining taxes |
|
|
20,909 |
|
|
33,817 |
|
|
77,622 |
|
|
180,535 |
| Income and mining taxes expense |
|
|
10,826 |
|
|
11,659 |
|
|
38,796 |
|
|
61,232 |
| Net income for the period |
|
$ |
10,083 |
|
$ |
22,158 |
|
$ |
38,826 |
|
$ |
119,303 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Net income per share - basic |
|
$ |
0.05 |
|
$ |
0.12 |
|
$ |
0.18 |
|
$ |
0.66 |
| Net income per share - diluted |
|
$ |
0.05 |
|
$ |
0.12 |
|
$ |
0.18 |
|
$ |
0.66 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted average number of common shares outstanding (in thousands): |
|
|
|
|
|
|
|
|
|
|
|
|
| Basic |
|
|
215,426 |
|
|
185,718 |
|
|
214,996 |
|
|
179,845 |
| Diluted |
|
|
216,722 |
|
|
186,426 |
|
|
216,186 |
|
|
180,426 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| (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
June 30, |
|
|
Six Months Ended
June 30, |
| |
|
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| OPERATING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
|
|
| Net income for the period |
|
$ |
10,083 |
|
$ |
22,158 |
|
$ |
38,826 |
|
$ |
119,303 |
| Add (deduct) items not affecting cash: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Amortization of property, plant and mine development |
|
|
157,615 |
|
|
93,656 |
|
|
293,512 |
|
|
177,137 |
| |
Deferred income and mining taxes |
|
|
(13,680) |
|
|
(757) |
|
|
5,620 |
|
|
19,207 |
| |
Gain on sale of available-for-sale securities |
|
|
(2,675) |
|
|
(5,016) |
|
|
(23,724) |
|
|
(5,289) |
| |
Stock-based compensation |
|
|
8,131 |
|
|
9,872 |
|
|
19,849 |
|
|
22,480 |
| |
Impairment loss on available-for-sale securities |
|
|
345 |
|
|
2,419 |
|
|
1,030 |
|
|
2,419 |
| |
Foreign currency translation loss (gain) |
|
|
4,779 |
|
|
6,568 |
|
|
(6,911) |
|
|
1,509 |
| |
Other |
|
|
(11,403) |
|
|
7,681 |
|
|
2,133 |
|
|
7,906 |
| Adjustment for settlement of reclamation provision |
|
|
(407) |
|
|
(101) |
|
|
(709) |
|
|
(1,035) |
| Changes in non-cash working capital balances: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Trade receivables |
|
|
22 |
|
|
15,364 |
|
|
(1,462) |
|
|
8,253 |
| |
Income taxes |
|
|
13,043 |
|
|
(1,227) |
|
|
(11,020) |
|
|
20,520 |
| |
Inventories |
|
|
11,623 |
|
|
6,432 |
|
|
22,035 |
|
|
29,903 |
| |
Other current assets |
|
|
(18,186) |
|
|
(20,325) |
|
|
(23,023) |
|
|
(4,805) |
| |
Accounts payable and accrued liabilities |
|
|
36,435 |
|
|
53,161 |
|
|
15,853 |
|
|
35,756 |
| |
Interest payable |
|
|
(7,376) |
|
|
(7,157) |
|
|
(205) |
|
|
(140) |
| Cash provided by operating activities |
|
|
188,349 |
|
|
182,728 |
|
|
331,804 |
|
|
433,124 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
|
|
| Additions to property, plant and mine development |
|
|
(111,511) |
|
|
(115,157) |
|
|
(194,398) |
|
|
(216,617) |
| Acquisitions, net of cash and cash equivalents acquired |
|
|
(5,983) |
|
|
(403,509) |
|
|
(12,983) |
|
|
(403,509) |
| Net purchases of short-term investments |
|
|
(947) |
|
|
(2,004) |
|
|
(1,048) |
|
|
(2,004) |
| Net proceeds from sale of available-for-sale securities and warrants |
|
|
18,643 |
|
|
39,529 |
|
|
56,311 |
|
|
40,142 |
| Purchase of available-for-sale securities and warrants |
|
|
(14,158) |
|
|
- |
|
|
(19,433) |
|
|
(13,385) |
| Decrease (increase) in restricted cash |
|
|
9,480 |
|
|
(7,402) |
|
|
13,183 |
|
|
(1,458) |
| Cash used in investing activities |
|
|
(104,476) |
|
|
(488,543) |
|
|
(158,368) |
|
|
(5 96,831) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
|
|
| Dividends paid |
|
|
(14,423) |
|
|
(12,940) |
|
|
(29,198) |
|
|
(24,913) |
| Repayment of finance lease obligations |
|
|
(5,039) |
|
|
(2,442) |
|
|
(13,444) |
|
|
(6,694) |
| Sale-leaseback financing |
|
|
- |
|
|
- |
|
|
- |
|
|
1,027 |
| Proceeds from long-term debt |
|
|
75,000 |
|
|
730,000 |
|
|
75,000 |
|
|
730,000 |
| Repayment of long-term debt |
|
|
(126,086) |
|
|
(343,933) |
|
|
(226,086) |
|
|
(423,933) |
| Repurchase of common shares for restricted share unit plan |
|
|
(1,257) |
|
|
- |
|
|
(11,899) |
|
|
(7,518) |
| Proceeds on exercise of stock options |
|
|
4,735 |
|
|
8,471 |
|
|
12,958 |
|
|
10,456 |
| Common shares issued |
|
|
2,556 |
|
|
2,795 |
|
|
4,973 |
|
|
5,439 |
| Cash (used in) provided by financing activities |
|
|
(64,514) |
|
|
381,951 |
|
|
(187,696) |
|
|
283,864 |
| Effect of exchange rate changes on cash and cash equivalents |
|
|
966 |
|
|
1,658 |
|
|
(4,946) |
|
|
311 |
| Net increase (decrease) in cash and cash equivalents during the period |
|
|
20,325 |
|
|
77,794 |
|
|
(19,206) |
|
|
120,468 |
| Cash and cash equivalents, beginning of period |
|
|
138,006 |
|
|
181,775 |
|
|
177,537 |
|
|
139,101 |
| Cash and cash equivalents, end of period |
|
$ |
158,331 |
|
$ |
259,569 |
|
$ |
158,331 |
|
$ |
259,569 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| 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 |
|
|
Six Months Ended |
|
|
Six Months Ended |
| |
|
|
June 30, 2015 |
|
|
June 30, 2014 |
|
|
June 30, 2015 |
|
|
June 30, 2014 |
| (thousands of United States dollars) |
|
|
|
|
|
|
|
|
|
|
|
|
| Production costs per the consolidated statements of income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
| and comprehensive income (loss) |
|
$ |
263,612 |
|
$ |
229,383 |
|
$ |
510,892 |
|
$ |
447,449 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| LaRonde mine |
|
|
45,133 |
|
|
46,758 |
|
|
90,999 |
|
|
94,037 |
| Lapa mine |
|
|
13,656 |
|
|
14,356 |
|
|
27,641 |
|
|
29,706 |
| Goldex mine |
|
|
16,913 |
|
|
15,419 |
|
|
31,780 |
|
|
31,264 |
| Meadowbank mine |
|
|
66,888 |
|
|
63,808 |
|
|
123,983 |
|
|
130,888 |
| Canadian Malartic mine(i) |
|
|
42,185 |
|
|
18,333 |
|
|
83,371 |
|
|
18,333 |
| Kittila mine |
|
|
30,777 |
|
|
26,925 |
|
|
62,776 |
|
|
56,384 |
| Pinos Altos mine |
|
|
29,768 |
|
|
29,940 |
|
|
53,979 |
|
|
61,359 |
| Creston Mascota deposit at Pinos Altos |
|
|
7,501 |
|
|
6,809 |
|
|
13,107 |
|
|
12,633 |
| La India mine(ii) |
|
|
10,791 |
|
|
7,035 |
|
|
23,256 |
|
|
12,845 |
| Total |
|
$ |
263,612 |
|
$ |
229,383 |
|
$ |
510,892 |
|
$ |
447,449 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| 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 |
|
|
Six Months Ended |
|
|
Six Months Ended |
| (thousands of United States dollars, except as noted) |
|
|
June 30, 2015 |
|
|
June 30, 2014 |
|
|
June 30, 2015 |
|
|
June 30, 2014 |
| Production costs |
|
$ |
45,133 |
|
$ |
46,758 |
|
$ |
90,999 |
|
$ |
94,037 |
| Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Inventory and other adjustments(v) |
|
|
6,786 |
|
|
10,701 |
|
|
13,464 |
|
|
19,164 |
| Cash operating costs (co-product basis) |
|
$ |
51,919 |
|
$ |
57,459 |
|
$ |
104,463 |
|
$ |
113,201 |
| |
By-product metal revenues |
|
|
(12,701) |
|
|
(21,947) |
|
|
(23,835) |
|
|
(43,645) |
| Cash operating costs (by-product basis) |
|
$ |
39,218 |
|
$ |
35,512 |
|
$ |
80,628 |
|
$ |
69,556 |
| Gold production (ounces) |
|
|
64,007 |
|
|
48,494 |
|
|
122,900 |
|
|
107,846 |
| Total cash costs per ounce of gold produced ($ per ounce)(iii): |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Co-product basis |
|
$ |
811 |
|
$ |
1,185 |
|
$ |
850 |
|
$ |
1,050 |
| |
By-product basis |
|
$ |
613 |
|
$ |
732 |
|
$ |
656 |
|
$ |
645 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| LaRonde Mine - Minesite Costs per Tonne(iv) |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
Six Months Ended |
| (thousands of United States dollars, except as noted) |
|
|
June 30, 2015 |
|
|
June 30, 2014 |
|
|
June 30, 2015 |
|
|
June 30, 2014 |
| Production costs |
|
$ |
45,133 |
|
$ |
46,758 |
|
$ |
90,999 |
|
$ |
94,037 |
| Inventory and other adjustments(vi) |
|
|
854 |
|
|
2,666 |
|
|
1,719 |
|
|
3,814 |
| Minesite operating costs |
|
$ |
45,987 |
|
$ |
49,424 |
|
$ |
92,718 |
|
$ |
97,851 |
| Minesite operating costs (thousands of C$) |
|
C$ |
56,474 |
|
C$ |
53,898 |
|
C$ |
114,263 |
|
C$ |
107,342 |
| Tonnes of ore milled (thousands of tonnes) |
|
|
568 |
|
|
564 |
|
|
1,126 |
|
|
1,121 |
| Minesite costs per tonne (C$)(iv) |
|
C$ |
99 |
|
C$ |
96 |
|
C$ |
101 |
|
C$ |
96 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Lapa Mine - Total Cash Costs per Ounce of Gold Produced (iii) |
|
|
|
|
|
|
|
|
|
| |
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
Six Months Ended |
| (thousands of United States dollars, except as noted) |
|
|
June 30, 2015 |
|
|
June 30, 2014 |
|
|
June 30, 2015 |
|
|
June 30, 2014 |
| Production costs |
|
$ |
13,656 |
|
$ |
14,356 |
|
$ |
27,641 |
|
$ |
29,706 |
| Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Inventory and other adjustments(v) |
|
|
(459) |
|
|
1,307 |
|
|
290 |
|
|
1,467 |
| Cash operating costs (co-product basis) |
|
$ |
13,197 |
|
$ |
15,663 |
|
$ |
27,931 |
|
$ |
31,173 |
| |
By-product metal revenues |
|
|
(1) |
|
|
(1) |
|
|
(18) |
|
|
(3) |
| Cash operating costs (by-product basis) |
|
$ |
13,196 |
|
$ |
15,662 |
|
$ |
27,913 |
|
$ |
31,170 |
| Gold production (ounces) |
|
|
19,450 |
|
|
18,821 |
|
|
45,370 |
|
|
42,230 |
| Total cash costs per ounce of gold produced ($ per ounce)(iii): |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Co-product basis |
|
$ |
679 |
|
$ |
832 |
|
$ |
616 |
|
$ |
738 |
| |
By-product basis |
|
$ |
678 |
|
$ |
832 |
|
$ |
615 |
|
$ |
738 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Lapa Mine - Minesite Costs per Tonne(iv) |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
Six Months Ended |
| (thousands of United States dollars, except as noted) |
|
|
June 30, 2015 |
|
|
June 30, 2014 |
|
|
June 30, 2015 |
|
|
June 30, 2014 |
| Production costs |
|
$ |
13,656 |
|
$ |
14,356 |
|
$ |
27,641 |
|
$ |
29,706 |
| Inventory and other adjustments(vi) |
|
|
(658) |
|
|
1,340 |
|
|
(109) |
|
|
1,458 |
| Minesite operating costs |
|
$ |
12,998 |
|
$ |
15,696 |
|
$ |
27,532 |
|
$ |
31,164 |
| Minesite operating costs (thousands of C$) |
|
C$ |
15,919 |
|
C$ |
17,117 |
|
C$ |
33,996 |
|
C$ |
34,187 |
| Tonnes of ore milled (thousands of tonnes) |
|
|
126 |
|
|
163 |
|
|
278 |
|
|
320 |
| Minesite costs per tonne (C$)(iv) |
|
C$ |
126 |
|
C$ |
105 |
|
C$ |
122 |
|
C$ |
107 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Goldex Mine - Total Cash Costs per Ounce of Gold Produced (iii) |
|
|
|
|
|
|
|
|
|
| |
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
Six Months Ended |
| (thousands of United States dollars, except as noted) |
|
|
June 30, 2015 |
|
|
June 30, 2014 |
|
|
June 30, 2015 |
|
|
June 30, 2014 |
| Production costs |
|
$ |
16,913 |
|
$ |
15,419 |
|
$ |
31,780 |
|
$ |
31,264 |
| Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Inventory and other adjustments(v) |
|
|
(163) |
|
|
626 |
|
|
810 |
|
|
(411) |
| Cash operating costs (co-product basis) |
|
$ |
16,750 |
|
$ |
16,045 |
|
$ |
32,590 |
|
$ |
30,853 |
| |
By-product metal revenues |
|
|
(5) |
|
|
(5) |
|
|
(13) |
|
|
(11) |
| Cash operating costs (by-product basis) |
|
$ |
16,745 |
|
$ |
16,040 |
|
$ |
32,577 |
|
$ |
30,842 |
| Gold production (ounces) |
|
|
26,462 |
|
|
23,929 |
|
|
55,712 |
|
|
43,359 |
| Total cash costs per ounce of gold produced ($ per ounce)(iii): |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Co-product basis |
|
$ |
633 |
|
$ |
671 |
|
$ |
585 |
|
$ |
712 |
| |
By-product basis |
|
$ |
633 |
|
$ |
670 |
|
$ |
585 |
|
$ |
711 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Goldex Mine - Minesite Costs per Tonne(iv) |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
Six Months Ended |
| (thousands of United States dollars, except as noted) |
|
|
June 30, 2015 |
|
|
June 30, 2014 |
|
|
June 30, 2015 |
|
|
June 30, 2014 |
| Production costs |
|
$ |
16,913 |
|
$ |
15,419 |
|
$ |
31,780 |
|
$ |
31,264 |
| Inventory and other adjustments(vi) |
|
|
(328) |
|
|
686 |
|
|
432 |
|
|
(332) |
| Minesite operating costs |
|
$ |
16,585 |
|
$ |
16,105 |
|
$ |
32,212 |
|
$ |
30,932 |
| Minesite operating costs (thousands of C$) |
|
C$ |
20,318 |
|
C$ |
17,563 |
|
C$ |
39,635 |
|
C$ |
33,932 |
| Tonnes of ore milled (thousands of tonnes) |
|
|
604 |
|
|
518 |
|
|
1,171 |
|
|
1,003 |
| Minesite costs per tonne (C$)(iv) |
|
C$ |
34 |
|
C$ |
34 |
|
C$ |
34 |
|
C$ |
34 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Meadowbank Mine - Total Cash Costs per Ounce of Gold Produced (iii) |
|
|
|
|
|
|
|
|
|
| |
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
Six Months Ended |
| (thousands of United States dollars, except as noted) |
|
|
June 30, 2015 |
|
|
June 30, 2014 |
|
|
June 30, 2015 |
|
|
June 30, 2014 |
| Production costs |
|
$ |
66,888 |
|
$ |
63,808 |
|
$ |
123,983 |
|
$ |
130,888 |
| Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Inventory and other adjustments(v) |
|
|
(3,094) |
|
|
3,168 |
|
|
(554) |
|
|
4,479 |
| Cash operating costs (co-product basis) |
|
$ |
63,794 |
|
$ |
66,976 |
|
$ |
123,429 |
|
$ |
135,367 |
| |
By-product metal revenues |
|
|
(978) |
|
|
(493) |
|
|
(2,667) |
|
|
(1,045) |
| Cash operating costs (by-product basis) |
|
$ |
62,816 |
|
$ |
66,483 |
|
$ |
120,762 |
|
$ |
134,322 |
| Gold production (ounces) |
|
|
91,276 |
|
|
118,161 |
|
|
179,799 |
|
|
274,605 |
| Total cash costs per ounce of gold produced ($ per ounce)(iii): |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Co-product basis |
|
$ |
699 |
|
$ |
567 |
|
$ |
686 |
|
$ |
493 |
| |
By-product basis |
|
$ |
688 |
|
$ |
563 |
|
$ |
672 |
|
$ |
489 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Meadowbank Mine - Minesite Costs per Tonne(iv) |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
Six Months Ended |
| (thousands of United States dollars, except as noted) |
|
|
June 30, 2015 |
|
|
June 30, 2014 |
|
|
June 30, 2015 |
|
|
June 30, 2014 |
| Production costs |
|
$ |
66,888 |
|
$ |
63,808 |
|
$ |
123,983 |
|
$ |
130,888 |
| Inventory and other adjustments(vi) |
|
|
(3,768) |
|
|
3,551 |
|
|
(2,074) |
|
|
4,939 |
| Minesite operating costs |
|
$ |
63,120 |
|
$ |
67,359 |
|
$ |
121,909 |
|
$ |
135,827 |
| Minesite operating costs (thousands of C$) |
|
C$ |
75,290 |
|
C$ |
73,457 |
|
C$ |
145,917 |
|
C$ |
149,002 |
| Tonnes of ore milled (thousands of tonnes) |
|
|
1,019 |
|
|
1,051 |
|
|
2,010 |
|
|
2,045 |
| Minesite costs per tonne (C$)(iv) |
|
C$ |
74 |
|
C$ |
70 |
|
C$ |
73 |
|
C$ |
73 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Canadian Malartic Mine - Total Cash Costs per Ounce of Gold Produced (i)(iii) |
|
|
|
|
|
|
|
|
|
| |
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
Six Months Ended |
| (thousands of United States dollars, except as noted) |
|
|
June 30, 2015 |
|
|
June 30, 2014 |
|
|
June 30, 2015 |
|
|
June 30, 2014 |
| Production costs |
|
$ |
42,185 |
|
$ |
18,333 |
|
$ |
83,371 |
|
$ |
18,333 |
| Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Inventory and other adjustments(v) |
|
|
688 |
|
|
(10,721) |
|
|
3,554 |
|
|
(10,721) |
| Cash operating costs (co-product basis) |
|
$ |
42,873 |
|
$ |
7,612 |
|
$ |
86,925 |
|
$ |
7,612 |
| |
By-product metal revenues |
|
|
(1,177) |
|
|
(329) |
|
|
(2,319) |
|
|
(329) |
| Cash operating costs (by-product basis) |
|
$ |
41,696 |
|
$ |
7,283 |
|
$ |
84,606 |
|
$ |
7,283 |
| Gold production (ounces) |
|
|
68,441 |
|
|
11,878 |
|
|
136,334 |
|
|
11,878 |
| Total cash costs per ounce of gold produced ($ per ounce)(iii): |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Co-product basis |
|
$ |
626 |
|
$ |
641 |
|
$ |
638 |
|
$ |
641 |
| |
By-product basis |
|
$ |
609 |
|
$ |
613 |
|
$ |
621 |
|
$ |
613 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Canadian Malartic Mine - Minesite Costs per Tonne (i)(iv) |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
Six Months Ended |
| (thousands of United States dollars, except as noted) |
|
|
June 30, 2015 |
|
|
June 30, 2014 |
|
|
June 30, 2015 |
|
|
June 30, 2014 |
| Production costs |
|
$ |
42,185 |
|
$ |
18,333 |
|
$ |
83,371 |
|
$ |
18,333 |
| Inventory and other adjustments(vi) |
|
|
48 |
|
|
(10,754) |
|
|
1,733 |
|
|
(10,754) |
| Minesite operating costs |
|
$ |
42,233 |
|
$ |
7,579 |
|
$ |
85,104 |
|
$ |
7,579 |
| Minesite operating costs (thousands of C$) |
|
C$ |
51,937 |
|
C$ |
8,160 |
|
C$ |
105,126 |
|
C$ |
8,160 |
| Tonnes of ore milled (thousands of tonnes) |
|
|
2,307 |
|
|
398 |
|
|
4,647 |
|
|
398 |
| Minesite costs per tonne (C$)(iv) |
|
C$ |
23 |
|
C$ |
21 |
|
C$ |
23 |
|
C$ |
21 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Kittila Mine - Total Cash Costs per Ounce of Gold Produced (iii) |
|
|
|
|
|
|
|
|
|
| |
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
Six Months Ended |
| (thousands of United States dollars, except as noted) |
|
|
June 30, 2015 |
|
|
June 30, 2014 |
|
|
June 30, 2015 |
|
|
June 30, 2014 |
| Production costs |
|
$ |
30,777 |
|
$ |
26,925 |
|
$ |
62,776 |
|
$ |
56,384 |
| Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Inventory and other adjustments(v) |
|
|
1,855 |
|
|
529 |
|
|
312 |
|
|
1,762 |
| Cash operating costs (co-product basis) |
|
$ |
32,632 |
|
$ |
27,454 |
|
$ |
63,088 |
|
$ |
58,146 |
| |
By-product metal revenues |
|
|
(38) |
|
|
(24) |
|
|
(73) |
|
|
(61) |
| Cash operating costs (by-product basis) |
|
$ |
32,594 |
|
$ |
27,430 |
|
$ |
63,015 |
|
$ |
58,085 |
| Gold production (ounces) |
|
|
41,986 |
|
|
31,830 |
|
|
86,640 |
|
|
70,382 |
| Total cash costs per ounce of gold produced ($ per ounce)(iii): |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Co-product basis |
|
$ |
777 |
|
$ |
863 |
|
$ |
728 |
|
$ |
826 |
| |
By-product basis |
|
$ |
776 |
|
$ |
862 |
|
$ |
727 |
|
$ |
825 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Kittila Mine - Minesite Costs per Tonne(iv) |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
Six Months Ended |
| (thousands of United States dollars, except as noted) |
|
|
June 30, 2015 |
|
|
June 30, 2014 |
|
|
June 30, 2015 |
|
|
June 30, 2014 |
| Production costs |
|
$ |
30,777 |
|
$ |
26,925 |
|
$ |
62,776 |
|
$ |
56,384 |
| Inventory and other adjustments(vi) |
|
|
1,858 |
|
|
414 |
|
|
199 |
|
|
1,496 |
| Minesite operating costs |
|
$ |
32,635 |
|
$ |
27,339 |
|
$ |
62,975 |
|
$ |
57,880 |
| Minesite operating costs (thousands of €) |
|
€ |
28,296 |
|
€ |
19,939 |
|
€ |
55,010 |
|
€ |
42,236 |
| Tonnes of ore milled (thousands of tonnes) |
|
|
379 |
|
|
247 |
|
|
725 |
|
|
555 |
| Minesite costs per tonne (€)(iv) |
|
€ |
75 |
|
€ |
81 |
|
€ |
76 |
|
€ |
76 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Pinos Altos Mine - Total Cash Costs per Ounce of Gold Produced (iii) |
|
|
|
|
|
|
|
|
|
| |
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
Six Months Ended |
| (thousands of United States dollars, except as noted) |
|
|
June 30, 2015 |
|
|
June 30, 2014 |
|
|
June 30, 2015 |
|
|
June 30, 2014 |
| Production costs |
|
$ |
29,768 |
|
$ |
29,940 |
|
$ |
53,979 |
|
$ |
61,359 |
| Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Inventory and other adjustments(v) |
|
|
(892) |
|
|
913 |
|
|
2,353 |
|
|
911 |
| Cash operating costs (co-product basis) |
|
$ |
28,876 |
|
$ |
30,853 |
|
$ |
56,332 |
|
$ |
62,270 |
| |
By-product metal revenues |
|
|
(9,404) |
|
|
(8,165) |
|
|
(18,978) |
|
|
(17,885) |
| Cash operating costs (by-product basis) |
|
$ |
19,472 |
|
$ |
22,688 |
|
$ |
37,354 |
|
$ |
44,385 |
| Gold production (ounces) |
|
|
50,647 |
|
|
43,978 |
|
|
100,753 |
|
|
89,195 |
| Total cash costs per ounce of gold produced ($ per ounce)(iii): |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Co-product basis |
|
$ |
570 |
|
$ |
702 |
|
$ |
559 |
|
$ |
698 |
| |
By-product basis |
|
$ |
384 |
|
$ |
516 |
|
$ |
371 |
|
$ |
498 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Pinos Altos Mine - Minesite Costs per Tonne(iv) |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
Six Months Ended |
| (thousands of United States dollars, except as noted) |
|
|
June 30, 2015 |
|
|
June 30, 2014 |
|
|
June 30, 2015 |
|
|
June 30, 2014 |
| Production costs |
|
$ |
29,768 |
|
$ |
29,940 |
|
$ |
53,979 |
|
$ |
61,359 |
| Inventory and other adjustments(vi) |
|
|
(1,732) |
|
|
466 |
|
|
948 |
|
|
(96) |
| Minesite operating costs |
|
$ |
28,036 |
|
$ |
30,406 |
|
$ |
54,927 |
|
$ |
61,263 |
| Tonnes of ore processed (thousands of tonnes) |
|
|
648 |
|
|
656 |
|
|
1,231 |
|
|
1,279 |
| Minesite costs per tonne (US$)(iv) |
|
$ |
43 |
|
$ |
46 |
|
$ |
45 |
|
$ |
48 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Creston Mascota deposit at Pinos Altos - Total Cash Costs per Ounce of Gold Produced (iii) |
|
|
|
|
|
|
|
|
|
| |
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
Six Months Ended |
| (thousands of United States dollars, except as noted) |
|
|
June 30, 2015 |
|
|
June 30, 2014 |
|
|
June 30, 2015 |
|
|
June 30, 2014 |
| Production costs |
|
$ |
7,501 |
|
$ |
6,809 |
|
$ |
13,107 |
|
$ |
12,633 |
| Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Inventory and other adjustments(v) |
|
|
(611) |
|
|
403 |
|
|
(143) |
|
|
1,084 |
| Cash operating costs (co-product basis) |
|
$ |
6,890 |
|
$ |
7,212 |
|
$ |
12,964 |
|
$ |
13,717 |
| |
By-product metal revenues |
|
|
(611) |
|
|
(376) |
|
|
(1,158) |
|
|
(710) |
| Cash operating costs (by-product basis) |
|
$ |
6,279 |
|
$ |
6,836 |
|
$ |
11,806 |
|
$ |
13,007 |
| Gold production (ounces) |
|
|
15,606 |
|
|
11,159 |
|
|
28,054 |
|
|
21,476 |
| Total cash costs per ounce of gold produced ($ per ounce)(iii): |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Co-product basis |
|
$ |
441 |
|
$ |
646 |
|
$ |
462 |
|
$ |
639 |
| |
By-product basis |
|
$ |
402 |
|
$ |
613 |
|
$ |
421 |
|
$ |
606 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Creston Mascota deposit at Pinos Altos - Minesite Costs per Tonne(iv) |
|
|
|
|
|
|
|
|
|
| |
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
Six Months Ended |
| (thousands of United States dollars, except as noted) |
|
|
June 30, 2015 |
|
|
June 30, 2014 |
|
|
June 30, 2015 |
|
|
June 30, 2014 |
| Production costs |
|
$ |
7,501 |
|
$ |
6,809 |
|
$ |
13,107 |
|
$ |
12,633 |
| Inventory and other adjustments(vi) |
|
|
(691) |
|
|
336 |
|
|
(292) |
|
|
918 |
| Minesite operating costs |
|
$ |
6,810 |
|
$ |
7,145 |
|
$ |
12,815 |
|
$ |
13,551 |
| Tonnes of ore processed (thousands of tonnes) |
|
|
609 |
|
|
395 |
|
|
1,135 |
|
|
774 |
| Minesite costs per tonne (US$)(iv) |
|
$ |
11 |
|
$ |
18 |
|
$ |
11 |
|
$ |
18 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| La India Mine - Total Cash Costs per Ounce of Gold Produced (ii)(iii) |
|
|
|
|
|
|
|
|
|
| |
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
Six Months Ended |
| (thousands of United States dollars, except as noted) |
|
|
June 30, 2015 |
|
|
June 30, 2014 |
|
|
June 30, 2015 |
|
|
June 30, 2014 |
| Production costs |
|
$ |
10,791 |
|
$ |
7,035 |
|
$ |
23,256 |
|
$ |
12,845 |
| Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Inventory and other adjustments(v) |
|
|
963 |
|
|
1,676 |
|
|
718 |
|
|
816 |
| Cash operating costs (co-product basis) |
|
$ |
11,754 |
|
$ |
8,711 |
|
$ |
23,974 |
|
$ |
13,661 |
| |
By-product metal revenues |
|
|
(1,179) |
|
|
(830) |
|
|
(2,311) |
|
|
(1,429) |
| Cash operating costs (by-product basis) |
|
$ |
10,575 |
|
$ |
7,881 |
|
$ |
21,663 |
|
$ |
12,232 |
| Gold production (ounces) |
|
|
25,803 |
|
|
17,809 |
|
|
52,326 |
|
|
28,017 |
| Total cash costs per ounce of gold produced ($ per ounce)(iii): |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Co-product basis |
|
$ |
456 |
|
$ |
489 |
|
$ |
458 |
|
$ |
488 |
| |
By-product basis |
|
$ |
410 |
|
$ |
443 |
|
$ |
414 |
|
$ |
437 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| La India Mine - Minesite Costs per Tonne(ii)(iv) |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
Six Months Ended |
| (thousands of United States dollars, except as noted) |
|
|
June 30, 2015 |
|
|
June 30, 2014 |
|
|
June 30, 2015 |
|
|
June 30, 2014 |
| Production costs |
|
$ |
10,791 |
|
$ |
7,035 |
|
$ |
23,256 |
|
$ |
12,845 |
| Inventory and other adjustments(vi) |
|
|
771 |
|
|
1,518 |
|
|
362 |
|
|
578 |
| Minesite operating costs |
|
$ |
11,562 |
|
$ |
8,553 |
|
$ |
23,618 |
|
$ |
13,423 |
| Tonnes of ore processed (thousands of tonnes) |
|
|
1,360 |
|
|
1,138 |
|
|
2,738 |
|
|
1,825 |
| Minesite costs per tonne (US$)(iv) |
|
$ |
9 |
|
$ |
8 |
|
$ |
9 |
|
$ |
7 |
| Notes: |
|
|
|
| |
|
|
|
| |
(i) |
|
On June 16, 2014, Agnico Eagle and Yamana jointly acquired 100.0% 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 first quarter of 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 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 condensed interim consolidated statements of income 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 presented by other gold producers. This measure is calculated by adjusting production costs as shown in the condensed interim consolidated statements of income 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, this inventory adjustment reflects 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 |
|
|
Six Months Ended |
|
|
Six Months Ended |
| (United States dollars per ounce of gold produced, except where noted) |
|
|
June 30, 2015 |
|
|
June 30, 2014 |
|
|
June 30, 2015 |
|
|
June 30, 2014 |
| Production costs per the condensed interim consolidated statements of income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (thousands of United States dollars) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
$ |
263,612 |
|
|
$ |
229,383 |
|
|
$ |
510,892 |
|
|
$ |
447,449 |
| Adjusted Gold production (ounces)(i) |
|
|
|
403,678 |
|
|
|
326,059 |
|
|
|
807,888 |
|
|
|
688,988 |
| Production costs per ounce of adjusted gold production(i) |
|
|
|
$653 |
|
|
|
$704 |
|
|
|
$632 |
|
|
|
$649 |
| Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Inventory and other adjustments(ii) |
|
|
|
13 |
|
|
|
26 |
|
|
|
26 |
|
|
|
27 |
| Total cash costs per ounce of gold produced (co-product basis)(iii) |
|
|
$ |
666 |
|
|
$ |
730 |
|
|
$ |
658 |
|
|
$ |
676 |
| |
Byproduct metal revenues |
|
|
|
(65) |
|
|
|
(99) |
|
|
|
(63) |
|
|
|
(94) |
| Total cash costs per ounce of gold produced (by-product basis)(iii) |
|
|
$ |
601 |
|
|
$ |
631 |
|
|
$ |
595 |
|
|
$ |
582 |
| Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Sustaining capital expenditures (including capitalized exploration) |
|
|
|
203 |
|
|
|
241 |
|
|
|
177 |
|
|
|
207 |
| |
General and administrative expenses (including stock options) |
|
|
|
58 |
|
|
|
127 |
|
|
|
60 |
|
|
|
98 |
| |
Non-cash reclamation provision and other |
|
|
|
2 |
|
|
|
4 |
|
|
|
3 |
|
|
|
3 |
| All-in sustaining costs per ounce of gold produced (by-product basis) |
|
|
$ |
864 |
|
|
$ |
1,003 |
|
|
$ |
835 |
|
|
$ |
890 |
| |
Byproduct metal revenues |
|
|
|
65 |
|
|
|
99 |
|
|
|
63 |
|
|
|
94 |
| All-in sustaining costs per ounce of gold produced (co-product basis) |
|
|
$ |
929 |
|
|
$ |
1,102 |
|
|
$ |
898 |
|
|
$ |
984 |
| 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 in the first quarter of 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, this inventory adjustment reflects 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 presented by other gold producers. 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 condensed interim consolidated statements of income 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. |
|
|