Toronto - May 7, 1997 -- Agnico-Eagle Mines Limited reports a net loss of $0.8 million or 2 cents a share in the quarter ended March 31, 1997, down from net income of $1.8 million or 5 cents a share a year earlier. Operating cash flow also declined in the first quarter to $2.8 million or 7 cents a share, from $6.2 million or 16 cents a share in the 1996 first quarter. The 1997 first quarter net income and cash flow were lower than 1996 first quarter results due largely to lower gold prices, reduced interest income and lower copper production.

The average gold price realized during the 1997 first quarter was US$353 per ounce compared to US$399 per ounce during the first quarter of 1996. As a result, despite a 4% increase in gold production to 38,222 ounces during the 1997 first quarter, revenue declined 9% or $1.8 million due to the US$46 per ounce decline in realized gold price between quarterly periods. Earnings were also adversely affected by a $1.1 million decline in interest income due to lower interest rates and reduced cash balances. The combined impact of lower gold revenue and lower interest income resulted in a reduction in quarterly earnings of 5 cents a share.

Due to lower copper grades, copper production declined approximately 600,000 pounds in the 1997 first quarter. As a result by-product revenue decreased $0.9 million resulting in an increase in cash operating costs to produce an ounce of gold from US$198 in the first quarter of 1996 to US$213 in the first quarter of 1997. The impact of the reduced by-product revenue on quarterly earnings is 2 cents a share.

Although overall operating results were below the results recorded for the first quarter of 1996 the Company's gold production and cash operating costs recorded in the first quarter of 1997 were better than the Company's forecasts. According to the Company's mine plan, budgeted gold production for the first quarter was 32,000 ounces at a cash operating cost of US$258 per ounce. This compares to actual gold production of 38,222 ounces at US$213 per ounce. For the full year, gold production is budgeted at 160,000 ounces at a cash operating cost of US$215 per ounce. This budget is based on a mining plan that contemplates the mining of higher grade gold ore in the second half of 1997. Based on the better than expected gold production and cash costs for the first quarter of 1997, the Company is on pace to exceed its 1997 gold production and operating cost targets.

Agnico-Eagle Mines Limited is an established Canadian gold producer with operations located principally in northwestern Quebec and exploration and development activities in Quebec and Ontario. Consistently one of the industry's lowest-cost producers, Agnico's operating history includes 23 years of continuous gold production primarily from underground mining operations. Current proven and probable reserves stand at 1.0 million contained ounces, with an additional 3.5 million ounces in the mineral resource category. Agnico-Eagle is also currently working on several projects which are expected to result in increased gold production and expanded gold reserves.

Summarized quarterly data for the three months ended March 31, 1997