Toronto - August 7, 1997 -- Agnico-Eagle Mines Limited reports a net loss of $1.2 million or 3 cents a share in the quarter ended June 30, 1997, down from net income of $3.9 million or 10 cents a share a year earlier. Operating cash flow also declined in the second quarter to $2.7 million or 6 cents a share, from $10.0 million or 26 cents a share in the 1996 second quarter. The 1997 second quarter net income and cash flow were lower than 1996 second quarter results due largely to lower gold prices, lower gold production and reduced interest income. Cash operating costs to produce an ounce of gold remained low at US$213 per ounce.

The average gold price realized during the 1997 second quarter was US$343 per ounce compared to US$383 per ounce during the second quarter of 1996. Also adversely affecting revenue was lower gold production of 8,679 ounces due to anticipated lower gold grades in the main ore zone as compared to 1996 second quarter gold production which was at record levels. As a result of lower realized gold prices and reduced gold production revenue declined in the quarter by 26%. The combined impact of lower gold production and lower gold prices resulted in a reduction in quarterly earnings of 10 cents a share.

For the first half of 1997, the Company recorded a net loss of $2.0 million or 5 cents a share compared to net income of $5.7 million or 15 cents a share in the first half of 1996. Again, the major reasons for the decline in income were lower gold prices, lower gold production and reduced interest income.

Due to lower copper grades, copper production declined approximately 800,000 pounds in the 1997 first half. Higher copper prices received in the first half of 1997 partially offset the lower copper production resulting in a decrease in by-product revenue of $0.2 million. The decline in by-product revenue contributed to an increase in cash operating costs to produce an ounce of gold from US$192 in the first half of 1996 to US$213 in the first half of 1997.

Although overall operating results were below the results recorded for the first half of 1996 the Company's gold production and cash operating costs recorded in the first half of 1997 were better than the Company's forecasts. According to the Company's mine plan, budgeted gold production for the first half was 69,000 ounces at a cash operating cost of US$247 per ounce. This compares to actual gold production of 76,285 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 during the second half of 1997. Based on the better than expected gold production and cash costs for the first half 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 and additional 3.5 million ounces in the mineral resource category. Agnico-Eagle is currently focused on the expansion and large scale exploration program at its LaRonde Mine which is expected to result in increased gold production and expanded gold reserves.

Summarized quarterly data for the quarterly period ended June 30, 1997