Toronto - May 12, 1998 -- Agnico-Eagle Mines Limited reports a net loss of $3.3 million or 7 cents a share in the quarter ended March 31, 1998, compared to a net loss of $0.8 million or 2 cents a share a year earlier. Operating cash flow also declined in the first quarter to a deficit of $0.2 million or one cent a share, from $2.8 million or 7 cents a share in the 1997 first quarter. The 1998 first quarter net loss and cash flow deficit were higher than 1997 first quarter results due largely to lower gold prices and reduced gold production.

Operating Results

The average gold price realized during the 1998 first quarter was US$296 per ounce compared to US$353 per ounce during the first quarter of 1997. Gold production decreased approximately 7% to 35,732 ounces during the 1998 first quarter due to slightly lower gold ore grades and a modest reduction in tons of ore milled. As a result of the US$57 per ounce decline in the Company's average realized gold price between quarterly periods and the reduced gold production revenue declined approximately 16% or $2.9 million during the 1998 first quarter. Despite the decline in quarterly gold production cash operating costs to produce an ounce of gold remained low increasing only US$2 to US$215 per ounce during the 1998 first quarter.

Financial Position

At March 31, 1997 Agnico-Eagle's financial position remained strong with a cash position excluding bullion, of $75.2 million and a working capital position of $97.9 million. On April 23, 1998 the Company moved to strengthen this financial position by entering into an underwriting agreement on a "bought deal" basis for the issuance of 9,302,326 common shares, at a price of $10.75 per common share, for total gross proceeds of $100 million. The issue is expected to close on May 14, 1998 and the net proceeds of the offering will be used primarily to complete the development and expansion of the LaRonde Mine.

LaRonde Mine Expansion

At the Company's LaRonde Mine, Shaft #3 has reached a depth of 5,000 feet of the planned depth of 7,350 feet. As previously reported the initial definition drilling from the 8th level of this shaft was completed during the first quarter and it indicated that the upper portion of the largest mineralized zone on the property (Zone 20 North) was longer and thicker than originally estimated. Definition drilling from the next level (9th level) is currently in progress and complete results are expected in June. Additional definition drilling on the 10th and 11th levels is planned for the second half of 1998. All of this definition drilling will provide us with important information with respect to the ultimate thicknesses of the Zone 20 North mineralization. If the pattern of increased thicknesses identified to date is maintained throughout the entire vertical extent of Zone 20 North, total reserves in this zone could increase.

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. Current proven and probable reserves stand at 0.8 million contained ounces, with an additional 3.4 million ounces in the mineral resource category at its LaRonde Division. In addition, Agnico-Eagle is currently focused on a development and expansion program at the LaRonde Division that is expected to result in increased gold production and expanded gold reserves.