TORONTO, April 26 /CNW-PRN/ - Agnico-Eagle Mines Limited today reported a
first quarter net loss of $3.5 million, or $0.06 per share compared to a net
loss of $1.7 million, or $0.03 per share in the first quarter of 1999.
Operating cash flow declined to a deficit of $2.8 million, or $0.05 per share,
compared to a deficit of $0.8 million, or $0.01 per share in 1999.
Highlights for the quarter included:
-
Phase I of LaRonde expansion completed as production reaches 3,600
tons per day.
-
Production targets met in the first quarter as Phase II of the
expansion to 5,000 tons per day proceeds to scheduled completion by the
fourth quarter of this year.
-
Shaft No. 3 sinking completed to a depth of 7,380 feet.
-
Ore reserves verified by independent engineers and ore reserve
conversion milestones met one year ahead of schedule. First quarter
metallurgical and physical construction milestones also achieved.
-
Deep drilling continues to confirm the potential to increase the gold
reserve base at depth.
"During the first quarter, we continued to make excellent progress on our
program to expand output at the LaRonde Mine as construction of the major
expansion components is nearing completion", said Sean Boyd, President and
Chief Executive Officer. "We are now very close to realizing the benefits of
this long-awaited expansion as gold production is set to increase and
production costs decline sharply in the second half of the year", added Mr.
Boyd.
The Company is hosting a conference call to discuss first quarter results
and to provide an update on exploration and development activities at LaRonde
on Thursday April 27th, 2000 at 11:00 a.m. To participate in the conference
call, please dial (416) 641-6446. To access the rebroadcast, please dial 1-800-
558-5253 and enter the reservation number 14988834.
OPERATING RESULTS
Onsite operating costs improved by 5 percent in the first quarter to C$56
per ton of ore milled compared to C$59 per ton in the same quarter of 1999.
However, cash operating costs to produce an ounce of gold increased to $282
per ounce from $216 per ounce. While gold production of 32,500 ounces in the
first quarter was on budget and essentially unchanged from a year ago, the
higher cash costs reflect lower grades from the nearly depleted Shaft No. 1
gold reserves.
As budgeted, the outlook for the second quarter is for similar operating
and financial results until the changeover at Shaft No. 3 is completed in
June. A significant improvement in gold production is forecast for the second
half of 2000 with 38,000 ounces at a cash cost of $197 per ounce and 71,000
ounces at a cash cost of below $60 per ounce in the third and fourth quarters,
respectively.
STRONG FINANCIAL POSITION
At March 31, 2000 Agnico-Eagle's financial position remained strong with
a cash balance, excluding bullion on hand, of $18 million and a working
capital position of $25 million. Including the undrawn portion of its bank
facility, Agnico-Eagle has over $85 million of cash available to complete the
expansion of the LaRonde operation and for other corporate activities.
Approximately $68 million remains to be spent to complete the expansion to
5,000 tons per day including $41 million during the remainder of 2000 and the
balance in the years 2001 and 2002. Over the remaining construction period,
the Company anticipates generating approximately $68 million in operating cash
flow.
To date, LaRonde has achieved all the reserve conversion, metallurgical
and construction milestones required under its bank facility. In its most
recent report to the banks, Roscoe Postle & Associates concluded that LaRonde
had achieved its reserve conversion milestones one year ahead of schedule. As
a result, additional liquidity was made available to the Company under the
bank facility.
DRILLING AND EXPLORATION
A total of three drills were in operation at the end of the quarter. Two
drills were employed on the definition-drilling program of the upper part of
the mine while one drill continued with the deep drilling program from Level
215.
Zone 20 South - Definition Drilling
The Zone 20 South-El Coco definition drill program was completed during
the quarter establishing the eastern limit of Zone 20 South on the El Coco
property. The grades at the Level 125 horizon produced uniform gold values in
the 0.09 to 0.17 ounce per ton range over horizontal thicknesses of 10 to 15
feet.
The drilling also confirmed increasing grades above Level 125 (i.e. 0.20
ounces of gold per ton and greater over 20 feet) on the higher elevations.
Above Level 118, grades averaged 0.18 to 0.52 ounces of gold per ton over
thicknesses of 20 feet. Some of the more recent drilling results are as
follows:
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True Gold(oz/ton) Silver
Drill Hole Thickness(ft) Cut(1.5 oz) (oz/ton) Copper(%) Zinc(%)
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11821761 27.6 0.47 3.41 1.18 2.65
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11821762 28.9 0.38 2.58 0.56 4.41
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(uncut) 28.9 0.60 2.58 0.56 4.41
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11821763 26.6 0.51 3.09 1.05 2.16
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(uncut) 26.6 0.47 3.09 1.05 2.16
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These high grade gold intersections above Level 118 indicate that the
transition to higher gold grades starts sooner than had been expected. This
area is scheduled for production in the third quarter of this year.
Economic intersections were also obtained from Zone 20 South at depth.
The most interesting value was obtained above the Level 182 horizon where
several spots of visible gold were observed in the drill core and the
following values were returned:
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True Gold(oz/ton) Silver
Drill Hole Thickness(ft) Cut(1 oz) (oz/ton) Copper(%) Zinc(%)
-------------------------------------------------------------------------
3194-10 29.6 0.14 0.91 0.24 0.99
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or 9.8 0.26 1.20 0.20 0.42
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Zone 20 North Definition Drilling Program
Most of the Zone 20 North drilling was completed on Levels 194, 206 and
215 horizons. Reserve conversion was completed down to the Level 226 horizon.
Since the last gold reserve update in late February, the most interesting
results have been summarized below:
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True Gold(oz/ton) Silver
Drill Hole Thickness(ft) Cut(1 oz) (oz/ton) Copper(%) Zinc(%)
-------------------------------------------------------------------------
3194-10 24.6 0.16 5.96 0.25 16.61
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or 39.4 0.08 1.69 0.03 8.65
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3215-03 Au 26.2 0.05 1.38 0.24 2.01
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3215-03 Zn 29.9 0.04 1.84 0.02 8.30
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14920591 Au 16.7 0.21 1.54 0.26 0.30
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14920591 Zn 52.8 0.03 6.47 0.10 11.37
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Drill hole 3194-10 continued to encounter economic mineralization with
the overall true thickness exceeding 60 feet. Drill Hole 3215-03 was the most
easterly drill hole drilled above Level 215. The drill pierced Zone 20 North
at the known eastern limit of mineralization. This current drill hole
indicates that the zone is still open to the east at this level. To date, a
minimum strike length of 1,300 feet has been interpreted on the level. None of
the above drill holes were incorporated in the reserve and resource estimate
published at the end of February. Previous level (i.e. Drill Hole 3215-01) and
deep drilling suggests that the area of greatest potential to increase ore
reserves remains to the west.
Deep Drilling Program
The deep drilling program continued from Level 215. Two deep drill holes
have been completed since the end of February. The drill intersections
returned the following values:
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True Gold(oz/ton) Silver
Drill Hole Thickness(ft) Cut(1 oz) (oz/ton) Copper(%) Zinc(%)
-------------------------------------------------------------------------
3215-04 75.5 0.11 1.16 0.40 0.05
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or 18.0 0.18 2.23 0.96 0.04
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3215-05 29.5 0.20 2.99 0.70 1.48
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Drill hole 3215-04 intersected Zone 20 North at a depth of 8,450 feet
below surface. The drill hole had deviated to the east and had intersected the
zone close to the eastern limit of the present resource calculation. Drill
hole 3215-05 intersected the zone at a depth of 7,510 feet below surface or
300 feet below a previously drilled hole 3146-6. Drill hole 3146-6 had
intersected 0.18 ounces of gold per ton over a true thickness of 45.9 feet. To
date, a total of five drill holes have been completed below the shaft bottom
covering a linear distance of 2,400 feet from drill hole 3146-16 to drill hole
3170-11B.
The two most recent deep drill holes have not been incorporated into the
current resource estimate at LaRonde. The drill hole results continue to
confirm the downward plunge potential as well as the large tonnage potential
at depth. Upon completion of the shaft changeover phase, drilling will resume
to test the area between drill holes 3214-04 and 3215-05. Further deep
drilling will attempt to intersect both Zones 20 North and 20 South at depth.
EXPANSION PROGRAM
Shaft No. 3 was completed in March to a depth of 7,380 feet and the shaft
is currently in the changeover phase to production. This phase will be
completed coincidently with modifications to the hoist and headframe. All
hoist components have been completed and installation will begin by the middle
of May, with commissioning of the new hoist scheduled for June.
Underground construction and development is proceeding on schedule.
Presently, the Level 152 loadout facilities are nearing completion and will be
commissioned by the end of April. Underground development is also proceeding
according to plan with ramp access available between Levels 114 to 150 on Zone
20 North and between Levels 125 and 110 on Zone 20 South. Access to 12
sublevels has also been achieved and sufficient mining blocks have been
developed to begin production through Shaft No. 3 at the initial rate of 3,600
tons per day starting in July and ramping up to 5,000 tons per day by October.
Currently a minimum of 10 million tons of ore has been developed and ready for
mining representing 5 years of production. Initial mining of eight ore blocks
has confirmed excellent ground conditions as dilution has averaged 11 percent.
Although the LaRonde mill is still under construction, peak daily tonnage
rates of 4,100 tons per day have been achieved. Approximately 120,000 tons of
Shaft 43 ore were processed between February and mid-April. The mill met all
metallurgical milestones with respect to recoveries and concentrate quality as
required by the bank facility.
Reconciliation of both tonnage and grade was completed on a 56,000-ton
sample processed during February. The amount of ore milled was approximately
25 percent greater than what was anticipated to be extracted from the ore
blocks mined. This is believed to be the result of conservative specific
gravity assumptions used in the ore reserve calculation. Mill head gold grades
were also higher than what were originally forecast likely due to the
historical upgrading effect of north-south fractures which were responsible
for gold grade upgrades at Shaft No. 1's Main Zone.
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. 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).
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. Agnico-Eagle's operating
history includes 25 years of continuous gold production primarily from
underground mining operations. Current proven and probable reserves stand at
3.0 million contained ounces, with an additional 3.1 million ounces in the
mineral resource category at its LaRonde Mine. 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) Agnico-Eagle Mines Limited
------------------------------------------------------------------------
(thousands of United States dollars, Three months ended March 31,
except where noted) (Note 1) 2000 1999
------------------------------------------------------------------------
(Unaudited)
Consolidated Financial Data
Income and cash flow
Revenues from mining operations $ 11,541 $ 10,106
Net loss for period $ (3,485) $ (1,745)
Loss per share $ (0.06) $ (0.03)
Operating cash flow (note 1) $ (2,832) $ (762)
Operating cash flow per share $ (0.05) $ (0.01)
Weighted average number of shares -
basic (in thousands) 54,248 53,211
Operating and Financial Summary -
LaRonde Division
Revenues from mining operations
(Note 2) $ 11,541 $ 10,106
Mine cash operating costs 11,634 7,983
------------------------------------------------------------------------
Mine cash operating profit (loss) $ (93) $ 2,123
------------------------------------------------------------------------
Tons of ore milled 302,939 203,897
Head grades:
Gold 0.12 0.18
Silver 0.98 0.64
Zinc 1.70% 0.82%
Copper 0.35% 0.41%
Recovery rates:
Gold 90.61% 93.89%
Silver 61.50% 64.80%
Zinc 61.30% 52.60%
Copper 66.50% 77.70%
Payable production:
Gold (ounces) 32,500 33,006
Silver (ounces in thousands) 141 76
Zinc (pounds in thousands) 5,207 1,564
Copper (pounds in thousands) 1,289 1,224
Realized prices (US$):
Gold (per ounce) $ 289 $ 288
Silver (per ounce) $ 5.21 $ 5.50
Zinc (per pound) $ 0.52 $ 0.45
Copper (per pound) $ 0.83 $ 0.72
Onsite cash costs per ton milled (C$) $ 56 $ 59
Operating costs per gold ounce produced
(US$):
Onsite operating costs (including
reclamation provision) $ 358 $ 242
Less: Non-cash reclamation provision (4) (3)
Net by-product revenues (72) (23)
-------------------------------
Cash operating costs $ 282 $ 216
Non-cash costs:
Reclamation provision 4 3
Depreciation and amortization 39 40
-------------------------------
Total operating costs $ 325 $ 259
-------------------------------
-------------------------------
(1) Before non-cash working capital
adjustments.
Consolidated Balance Sheets Agnico-Eagle Mines Limited
------------------------------------------------------------------------
(thousands of United States dollars) March 31, December 31,
2000 1999
------------------------------------------------------------------------
(Unaudited)
ASSETS
Current
Cash and cash equivalents $ 17,994 $ 22,588
Metals awaiting settlement
and gold bullion 10,297 5,857
Income taxes recoverable 2,346 2,353
Inventories:
In-process 3,033 2,390
Supplies 2,062 3,739
Prepaid expenses and other 3,619 3,857
------------------------------------------------------------------------
Total current assets 39,351 40,784
Investments, loans, advances
and other assets 21,177 21,605
Future income and mining tax assets 13,405 12,022
Mining properties 233,533 219,817
------------------------------------------------------------------------
$ 307,466 $ 294,228
------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued
liabilities $ 10,595 $ 9,770
Dividends payable 567 1,682
Income and mining taxes payable 2,590 2,913
Current interest due on senior
convertible notes 789 1,896
------------------------------------------------------------------------
Total current liabilities 14,541 16,261
------------------------------------------------------------------------
Long-term debt 142,619 124,122
------------------------------------------------------------------------
Reclamation provision and other
liabilities 5,427 5,061
------------------------------------------------------------------------
Future income and mining tax liabilities 8,771 9,695
------------------------------------------------------------------------
Minority interest 3,291 3,291
------------------------------------------------------------------------
Shareholders' Equity
Common shares
Authorized - unlimited
Issued - 55,476,183 (1999 - 55,391,451) 153,480 152,992
Other paid in capital 14,535 14,535
Contributed surplus 4,058 4,058
Deficit (30,756) (27,271)
Company's own shares held by a
subsidiary company (8,500) (8,516)
------------------------------------------------------------------------
Total shareholders' equity 132,817 135,798
------------------------------------------------------------------------
$ 307,466 $ 294,228
------------------------------------------------------------------------
Consolidated Statements of Loss (Unaudited) Agnico-Eagle Mines Limited
------------------------------------------------------------------------
(thousands of United States dollars, Three months ended March 31,
except per share amounts) 2000 1999
------------------------------------------------------------------------
REVENUES
Revenues from mining operations $ 11,541 $ 10,106
Interest and sundry income 295 647
------------------------------------------------------------------------
11,836 10,753
COSTS AND EXPENSES
Production 11,774 8,187
Exploration 669 402
Depreciation and amortization 1,274 1,331
General and administrative 953 980
Capital tax 228 348
Interest 2,192 2,149
------------------------------------------------------------------------
Loss before the undernoted (5,254) (2,644)
Foreign currency gain (loss) (348) 321
------------------------------------------------------------------------
Loss before income and mining tax
recoveries (5,602) (2,323)
Income and mining tax recoveries (2,117) (578)
------------------------------------------------------------------------
Net loss for the period $ (3,485) $ (1,745)
------------------------------------------------------------------------
Loss per share $ (0,06) $ (0,03)
------------------------------------------------------------------------
Consolidated Statements of Agnico-Eagle Mines Limited
Cash Flows (Unaudited)
-------------------------------------------------------------------------
(thousands of United States dollars) Three months ended March 31,
2000 1999
-------------------------------------------------------------------------
Operating activities
Net loss for the period $ (3,485) $ (1,745)
Add (deduct) items not affecting cash
from operating activities
Depreciation and amortization 1,274 1,331
Recoveries of future income and
mining taxes (2,308) (744)
Foreign currency translation (gain) loss 296 (732)
Amortization of deferred interest and
financing costs on senior convertible notes 1,161 1,022
Other 230 106
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(2,832) (762)
Net premiums paid on metals, foreign
currency and interest rate option contacts (178) -
Net change in non-cash working capital
balances related to operations
Metals awaiting settlement and gold bullion (4,440) 711
Inventories 1,034 111
Prepaid expenses and other 238 590
Income and mining taxes recoverable
and payable (316) (216)
Accounts payable and accrued liabilities 825 (1,668)
Current interest due on senior
convertible notes (1,107) (1,108)
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Cash flows used in operating activities (6,776) (2,342)
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Investing activities
Additions to mining properties (14,991) (14,635)
Purchase of shares of subsidiary companies
and other 38 1
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Cash flows used in investing activities (14,953) (14,634)
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Financing activities
Dividends paid (1,099) (1,033)
Shares issued under employee plans 453 273
Proceeds from long-term debt 17,500 -
Purchase of the Company's own shares held by
a subsidiary company and other 189 -
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Cash flows from (used in) financing activities 17,043 (760)
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Effect of exchange rate changes on cash
and cash equivalents 92 1,164
Net decrease in cash and cash equivalents (4,594) (16,572)
Cash and cash equivalents,
beginning of period 22,588 76,262
-------------------------------------------------------------------------
Cash and cash equivalents, end of period $ 17,994 $ 59,690
-------------------------------------------------------------------------
Other operating cash-flow information:
Interest paid during the period $ 1,614 $ 2,232
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Income and mining taxes paid
during the period $ 730 $ 763
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SOURCE Agnico-Eagle Mines Limited
CONTACT: Sean Boyd, President and CEO, Agnico-Eagle Mines Limited,
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