Stock Symbols: AEM (NYSE)
AGE (TSE)
TORONTO, Dec. 16 /CNW-PRN/ - Agnico-Eagle Mines Limited ("Agnico-Eagle") announced today the closing of its US$100 million, 8-year bank facility (the "Facility") with a syndicate of banks (the "Banks").
The Facility was underwritten in August, 1999 by Barclays Bank PLC and Deutsche Bank AG and was subsequently syndicated to a number of banks including The Bank of Nova Scotia (Administrative Agent), Standard Bank London, Dresdner Bank Canada, National Bank of Canada, NM Rothschild & Sons Limited and Canadian Imperial Bank of Commerce.
The Facility, which is secured by a first charge on the LaRonde Mine, is intended partly to finance capital costs related to the expansion of the LaRonde Mine to 5,000 tons per day and partly for general corporate purposes. Under the Facility's terms, an initial tranche of US$75 million will be made available over the next fifteen months as key construction and ore reserve conversion milestones are met. A second tranche of US$25 million will also be made available, at the Company's option, once the milestones are met and contingent upon continued covenant compliance.
The Banks have also provided for up to US$75 million of 8-year credit lines for metal price, interest rate and foreign exchange hedging. To secure the Facility, Agnico-Eagle was required to purchase downside price protection on a portion of its gold production over the life of the loan. As a result, the Company has purchased put options on over 950,000 ounces of gold, representing approximately 20% of current gold reserves and resources at LaRonde's Shaft No. 3. This is consistent with Agnico-Eagle's policy of not selling the price upside on any of its future gold production, as put options act as a form of downside insurance only. Agnico-Eagle remains positioned to participate 100% in future gold price appreciation. The Company's gold put position is detailed below:
Gold Puts Purchased
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2000 2001 2002 2003 2004 2005 2006 2007
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Ounces 13,152 8,768 176,736 154,464 152,328 189,072 131,328 127,464
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Strike price
(US$/oz.) 280 280 260 260 260 260 260 260
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Agnico-Eagle financed the purchase of these puts primarily with cash received from the repayment of an intercompany loan from a subsidiary and partly from the sale of call options on a small portion of its by-product zinc, copper and silver reserves. The Company's entire option position on its by-product metals is detailed below:
Zinc Calls Sold and Purchased
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2000 2001 2002 2003 2004 2005
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Call options sold
(000's lbs.) 22,222 26,975 20,027 19,656 19,603 18,651
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Strike price
(US$/lb.) 0.55 0.55 0.55 0.55 0.55 0.55
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Call options
purchased
(000's lbs.) Nil Nil 20,027 19,656 19,603 18,651
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Strike price
(US$/lb.) 0.65 0.65 0.65 0.65
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Silver Calls Sold and Purchased
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2000 2001 2002 2003 2004 2005
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Call options sold
(000's ozs.) 1,328 1,731 1,969 1,956 2,158 2,060
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Strike price
(US$/oz.) 5.50 5.50 5.50 5.50 5.50 5.50
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Call options
purchased
(000's ozs.) 1,328 1,731 1,969 1,956 2,158 2,060
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Strike price
(US$/oz.) 7.00 7.00 7.00 7.00 7.00 7.00
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Copper Calls Sold
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2000 2001 2002 2003 2004 2005
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Call options sold
(000's lbs.) 6,508 7,090 13,598 13,651 13,757 13,651
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Strike price
(US$/lb.) 0.84 0.83 0.81 0.81 0.81 0.81
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With the above option positions, the Company has limited the amount of upside sold on its silver and zinc by purchasing call options at price levels above those where call options were sold. In aggregate a limited amount of upside was sold on approximately six percent of current by-product metal reserves and resources.
Agnico-Eagle Mines Limited is an established Canadian gold producer with operations located principally in northwestern Quebec and exploration and development activities in Quebec, Ontario and Nevada. Current proven and probable gold reserves stand at 1.5 million contained ounces, with an additional 3.5 million ounces in the mineral resource category at its LaRonde Mine. Agnico-Eagle is currently focused on the expansion and large scale exploration program of its LaRonde Mine which is expected to result in increased gold production and expanded gold reserves.
This press release contains certain "forward-looking statements" (within the meaning of the United States Private Securities Litigation Reform Act of 1995) that involve a number of risks and uncertainties. There can be no assurance that such statements will prove to be accurate; actual results and future events could differ materially from those anticipated in such statements. Other risks and uncertainties are disclosed under the heading "Risk Factors" in the Company's Annual Information Form (AIF) filed with certain Canadian securities regulators (including the Ontario and Quebec Securities Commissions) and with the United States Securities and Exchange Commission (as Form 20-F).
SOURCE Agnico-Eagle Mines Limited
CONTACT: Sean Boyd, President and CEO or David Garofalo, Vice President Finance (416) 947-1212/
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