Toronto - August 5, 1998

AGNICO-EAGLE REPORTS SECOND QUARTER RESULTS AND INCREASED RESERVES

Agnico-Eagle Mines Limited today reported a net loss of $3.0 million, or 6 cents per share for the quarter ended June 30, 1998 compared to a net loss of $1.2 million, or 3 cents per share in the same period last year. Operating cash flow also declined in the second quarter to $0.5 million, or 1 cent per share, from $2.7 million, or 6 cents per share in the 1997 second quarter. The increased loss and decreased cash flows reflect a significant decline in the gold price and lower by-product copper production.

"Increased gold production partly offset these factors, and, as a result cash operating costs to produce an ounce of gold continued to remain low at US$213 per ounce," said Sean Boyd, Agnico-Eagle's President and Chief Executive Officer.

Operating Results

The average gold price realized during the 1998 second quarter was US$300 per ounce, down 12.5 percent from US$343 per ounce realized in second quarter of 1997. A 7 percent increase in gold production to 40,580 ounces in the 1998 second quarter was attributable to higher grades as mill throughput was essentially unchanged. However, increased production and a more favourable U.S./Canadian dollar exchange rate were more than offset by a substantially weaker gold price. As a result, quarterly gold production revenue decreased by 8 percent to $16.6 million.

Due to lower copper grades, copper production declined approximately 1 million pounds quarter over quarter. Increased gold production and the improved foreign exchange rate allowed cash costs to remain unchanged at US$213 per ounce.

For the first half of 1998, the Company recorded a loss of $6.3 million, or 13 cents per share compared to $2.0 million, or 5 cents per share in the first six months of 1997. The higher loss reflected a 13.5 percent decrease in the average gold price realized to US$300 for the first half of 1998. Gold production for the first two quarters of 1998 remained virtually unchanged at 76,312 ounces when compared to the same period in 1997, as higher gold grades made up for lower mill throughput. A decline in by-product revenues, due to a 2 million pound decrease in copper production, was offset by a stronger U.S. dollar and resulted in only a slight increase in unit cash operating costs to US$214 per ounce.

Strong Financial Position

At June 30, 1998 Agnico-Eagle's financial position remained strong with a cash balance, excluding bullion on hand, of $162 million and a working capital position of $179 million. These balances include the equity financing concluded by the Company on May 14, 1998 for net proceeds of $95.4 million. With this share issue, Agnico-Eagle now has sufficient resources to complete the ongoing development and expansion of its low cost LaRonde Mine.

LaRonde Mine Increases Reserves at Zone 20 North

The definition drilling program from Shaft #3 has continued to return mineralization that is thicker than that indicated by previous exploration drilling. As a result, Zone 20 North has increased in size and a substantial quantity of the Zone 20 North mineral resource has now been converted to probable ore reserves. During the second quarter, definition drilling from Shaft #3 was directed at the 10th level horizon (5,260 feet below surface). Four drill holes were completed along the horizon covering a strike length of approximately 850 feet. This drilling has defined the eastern limit of Zone 20 North while the western limit remains open.

Definition drilling along the 10th level horizon has also encountered an increase in gold grades in the gold/copper section of Zone 20 North. This has been interpreted to be the beginning of the expected transition between the zinc/silver section of Zone 20 North and the gold/copper section. The geological interpretation of Zone 20 North is a mineralized structure that rakes steeply to the west with a zinc/silver section overlaying a gold/copper section. At depth, this structure transforms primarily into a gold/copper zone. Future definition drilling of Zone 20 North will be directed at this gold/copper zone which is still open to the west and at depth.

The drilling results returned during the second quarter from the 10th level horizon are summarized below with the sequence (top to bottom) being from east to west:

To evaluate the impact of the recent definition drilling of Zone 20 North, an ore reserve calculation was completed using all of the drill results returned to date from Shaft #3. This calculation is presented in the following table and it only represents Zone 20 North above the 10th level program:

By way of comparison, at the beginning of 1997, before definition drilling had begun from Shaft #3, probable reserves contained above the 10th level in Zone 20 North were 3.5 million tons with contained gold of approximately 200,000 ounces. Total probable reserves and mineral resource were 9.6 million tons with contained gold of approximately 450,000 ounces. Of particular note is the 63 percent increase in Zone 20 North total tonnage to 15.6 million tons and the 43 percent increase in contained gold to 640,000 ounces above the 10th level. Of more significance was the transfer of mineral resource to probable ore reserve. The probable ore reserve has increased 3.6 times to 12.6 million tons from 3.5 million tons at January 1, 1997.

The following table presents the current reserve and mineral resource picture for Zone 20 North. It is broken down into two parts; the area above the 10th level and the area below it.

The above figures indicate that the 9th and 10th level drilling results have added an additional 6.1 million tons of reserve and mineral resource for an increase of 28 percent over the beginning of the year. Only 60 percent of the known strike length on the 10th level horizon has been definition drill tested and the area is still open for expansion. The figures below the 10th level do not take into account any potential increase in thickness, which has been encountered above the 10th level. The overall deposit is still open at depth and to the west at depth. The above reserve and mineral resource calculation does not include any of the other zones (Zone 20 South, 7 and 6). A continuation of reserve increases in Zone 20 North could impact positively on the eventual daily mining rate as well as simplify the overall mining plan at LaRonde.

At the end of July, Shaft #3 had reached a depth of 5,150 feet of its planned depth of 7,350 feet. Ramp development from Shaft #1 reached Shaft #3 at the 7th level. Drilling from the ramp into the Zone 7 area has not encountered any significant mineralization. Currently mine development is proceeding according to schedule on both the 7th and 8th levels. The first development ore from Zone 20 North will be obtained from the 8th level during the middle of August. This will be the first exposure of Zone 20 North from Shaft #3. Based on the shaft sinking schedule, definition drilling will resume on the 11th level horizon in November.

Plant construction has continued during the second quarter with the zinc circuit expected to be completed in September. Expenditures on the expansion program, including mill construction and shaft sinking, totalled $11 million in the second quarter leaving approximately $193 million to spend over the next three and one half years.

Property Acquisition

In July, the Company signed a letter of intent with Battle Mountain Gold to acquire the remaining 50 percent of the Sphinx property not already owned by Agnico-Eagle, 1.5 miles east of the LaRonde property on the Cadillac belt. This property has excellent exploration potential given its geological similarities with the LaRonde Mine. A formal agreement is in the process of being finalized and under the terms of this agreement, the Company will pay Battle Mountain Gold $100,000 in cash. An additional $1.32 million and a 1.5 percent net smelter royalty will be paid if the property is brought into production.

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. Agnico-Eagle's operating history includes 23 years of continuous gold production primarily from underground mining operations. Agnico-Eagle is currently focused on a development and expansion program at its LaRonde Division that is expected to result in increased gold production and expanded gold reserves.

SUMMARIZED QUARTERLY DATA (Unaudited)
PERIOD ENDED JUNE 30, 1998

(thousands of Canadian dollars, except per share and per ounce amounts) [Note 1]

Balance Sheet