TORONTO, July 25 /PRNewswire/ - Agnico-Eagle Mines Limited today reported
a second quarter net loss of $1.1 million, or $0.02 per share compared to a
net loss of $3.4 million, or $0.06 per share in the second quarter of 2000.
Operating cash flow improved to $3.6 million, or $0.06 per share, compared to
a deficit of $2.9 million, or $0.05 per share in 2000.
Highlights for the second quarter include:
-
A year over year increase of over 100 percent in gold production to
65,937 ounces.
-
A year over year lowering of 54 percent in total cash costs to $134 per
ounce of gold produced.
-
Decision to further expand LaRonde to 7,000 tons per day and completion
of a successful equity offering of 10.4 million shares for net proceeds
of $76.0 million.
-
Definition drilling continues to identify higher than average gold
grades in Zones 20 North and 20 South.
"The LaRonde Mine's improving performance continues to demonstrate Agnico-
Eagle's solid operating credentials", said Sean Boyd, President and Chief
Executive Officer. "The decision to further expand to 7,000 tons per day
strengthens an already impressive growth profile and will see gold production
increase significantly in 2002 to over 340,000 ounces and reach peak levels of
close to 400,000 ounces by 2004, with cash costs below $100 per ounce", added
Mr. Boyd.
The Company is hosting a conference call to discuss second quarter
results and to provide an update on exploration and development activities at
LaRonde on Wednesday July 25th, 2001 at 2:00 p.m. (EST). To participate in the
conference call, please dial (416) 620-2405. To access the rebroadcast, please
dial 1-800-558-5253 and enter the reservation number 19206605. The conference
call can also be accessed over the internet through the Company's website
www.agnico-eagle.com.
QUARTERLY MANAGEMENT DISCUSSION AND ANALYSIS
Results of Operations
Onsite operating costs were lowered by over 4 percent in the second
quarter to C$52 per ton of ore milled compared to C$54 per ton in the same
quarter of 2000. Production from underground averaged 5,300 tons per day in
the quarter with a total of 72,000 tons of broken ore stockpiled on surface
since LaRonde began producing at a rate of 5,000 tons per day last October.
Total cash operating costs (including accrued El Coco royalties) to produce an
ounce of gold improved dramatically to $134 per ounce from $293 per ounce. A
gold production increase of over 100 percent to 65,937 ounces, coupled with a
significant increase in byproduct silver and zinc production was slightly
offset by weaker prices for these byproducts.
As outlined in Management's Discussion and Analysis in the Company's 2000
Annual Report, production for 2001 remains on target for just under 230,000
ounces of gold at a cash cost below $150 per ounce. In May, the Company
announced a further expansion of LaRonde to 7,000 tons per day with the first
impact on metal production expected in 2002.
Liquidity and Capital Resources
At June 30, 2001 Agnico-Eagle's consolidated cash and cash equivalents
increased significantly to $87.3 million while working capital improved to
$101.9 million from $23.4 million at the end of the first quarter. The
improvement reflects the issuance of 10.4 million shares for net proceeds of
$76.0 million in the quarter. Including the undrawn portion of its bank
facility, the Company has $112.3 million of available liquidity. Cash flow
from operating activities in the second quarter improved to $3.6 million from
a deficiency of $2.9 million in the second quarter of 2000 as a significant
increase in gold and byproduct silver and zinc production was only partly
offset by weaker prices for these metals.
For the three months, capital expenditures were $7.5 million compared to
$16.9 million in the corresponding 2000 period. Much of the physical
infrastructure was still under construction in 2000 while the capital program
in 2001 is focused primarily on underground development in the lower
gold/copper rich portion of the Penna Shaft. The capital expenditure budget
for 2001 has been increased from $30.8 million, published in 2000 Annual
Report, to $35.5 million to reflect the commencement of the incremental
expansion to 7,000 tons per day at LaRonde.
DRILLING AND EXPLORATION
The Company's exploration program at LaRonde is moving into a new phase.
Although we are continuing with our deep exploration program focused on
enlarging our extensive gold resource, we have begun two new initiatives in
the second quarter. The first involves the extension of the 20th Level
exploration drift on the El Coco property to the east of LaRonde and the
second involves a more detailed drill pattern along the Level 235 horizon at
the bottom of the LaRonde reserve outline. More importantly this latter
program is also focused on drilling the felsic volcanic-sedimentary contact
which hosts the high grade Zone 20 South in the upper part of the LaRonde
Mine. Drilling is in the very early stages on both initiatives.
Five drills were in operation at the end of the quarter in comparison to
four the previous quarter. One drill was on definition drilling on Level 170,
one on geotechnical drilling on Level 190 to finalize infrastructure location
while three drills continued on exploration. A drill was added on the El Coco
20th Level exploration drift. The remaining two drills were located on Level
160, continuing the deep exploration program, and Level 220 drilling a tier of
drill holes at the Level 235 horizon at the lower limit of the present
reserves.
Delineation drilling on Zone 20 South for production purposes continued
during the quarter. The results above Level 110 to Level 106 continued to be
impressive. The drill holes were drilled from production draw points.
Generally, the definition drilling continued to confirm the reserve estimates
above Level 110. Some of the more recent results have been tabulated below:
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Drill True Gold(oz/ton)
Hole Thickness(ft) Cut(2.0 oz) Silver(oz/ton) Copper(%) Zinc(%)
-------------------------------------------------------------------------
10621741 18.0 0.12 1.85 0.21 4.12
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10621742 9.8 0.68 3.12 0.36 3.19
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10621761 26.2 0.59 4.46 0.56 5.35
-------------------------------------------------------------------------
10621762 19.0 0.55 3.09 0.39 5.42
-------------------------------------------------------------------------
10621781 16.7 0.67 5.62 0.39 10.36
-------------------------------------------------------------------------
10621782 18.4 0.56 4.30 0.51 6.85
-------------------------------------------------------------------------
11021821 9.2 0.27 2.58 0.18 4.78
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11021822 10.5 0.35 2.57 0.16 5.09
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11021842 12.1 0.29 3.92 0.28 5.96
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11421701 10.8 0.16 0.75 0.10 1.60
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11021841 9.2 0.36 2.49 0.15 5.54
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Exploration drilling and development resumed on the adjoining El Coco
Property. A total of 800 feet of level development was completed on the 20th
Level exploration drift. Drilling continued to be restricted to extending
previously drilled holes over the boundary on to the El Coco Property. The
first new drill station was completed during the month of June and drilling
will begin shortly. This underground drill station is the first to be
completed on the El Coco Property along the favourable horizon that hosts all
the deposits along the Cadillac Bousquet Belt since the completion of the
original 20th Level exploration drift in 1994. An additional 3 drill stations,
2,100 feet of development and 45,600 feet of drilling remain to be completed
this year.
Delineation drilling above Level 152 continued to confirm the existence
of higher-grade gold pockets within Zone 20 North and large thicknesses of
massive sulfide mineralization. Some of the more recent results have been
tabulated below:
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Drill True Gold(oz/ton)
Hole Thickness(ft) Cut(1.5 oz) Silver(oz/ton) Copper(%) Zinc(%)
-------------------------------------------------------------------------
10220741Au 14.4 0.10 11.68 1.21 2.53
-------------------------------------------------------------------------
10620751Au 16.1 0.13 3.38 1.76 1.21
-------------------------------------------------------------------------
10620761Au 11.2 0.16 1.65 0.65 0.12
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10620791Au 10.8 0.21 0.77 0.80 0.16
-------------------------------------------------------------------------
11020782Au 9.8 0.25 0.77 0.74 0.54
-------------------------------------------------------------------------
14320591Au 30.5 0.17 2.15 0.23 0.23
-------------------------------------------------------------------------
14320591Zn 57.1 0.04 5.31 0.13 11.95
-------------------------------------------------------------------------
14320592Au 29.5 0.27 1.73 0.18 0.20
-------------------------------------------------------------------------
14320592Zn 63.0 0.03 6.71 0.15 9.49
-------------------------------------------------------------------------
14620651Au 21.0 0.16 2.00 0.25 0.07
-------------------------------------------------------------------------
14920601Zn 52.8 0.03 3.31 0.08 10.91
-------------------------------------------------------------------------
15220601Zn 65.6 0.02 1.73 0.07 9.65
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Over the past two and one half years, most of the development and diamond
drilling has been focused on the area above Level 152 (5,000 feet below
surface). Significant development has now been completed on the lower levels.
As a result, drills have been moved onto Level 170 and Level 220 focused on
the lower level delineation drilling program. Some of the more recent results
have been tabulated below:
-------------------------------------------------------------------------
Drill True Gold(oz/ton)
Hole Thickness(ft) Cut(1.5 oz) Silver(oz/ton) Copper(%) Zinc(%)
-------------------------------------------------------------------------
3170-17Au 11.5 0.07 8.15 0.54 3.21
-------------------------------------------------------------------------
3170-17Zn 26.2 0.05 2.56 0.25 9.76
-------------------------------------------------------------------------
3170-18Au 12.5 0.09 10.56 1.72 2.57
-------------------------------------------------------------------------
3170-18Zn 31.5 0.03 2.25 0.08 11.24
-------------------------------------------------------------------------
The six-hole deep drill program continued during the quarter with Drill
hole 3160-12B completed. It intersected Zone 20 North at a depth of 8,270 feet
below surface approximately 2,815 feet to the west of the Penna Shaft. The
drill hole intersected 65.6 feet (true thickness) of massive pyrite bands with
local chalcopyrite. The drill hole averaged 0.03 ounces of gold over the
thickness but did not intersect a higher-grade core. The strength of the
mineralization suggests the intersection of a lower grade portion of Zone 20
North. Lower grade areas have previously been recognized within the Zone 20
North gold envelope. Currently, Drill hole 3160-04 is in progress. It will
test Zone 20 North at a depth of 9,200 feet along the western margin of the
known gold resource outline.
A series of five drill holes will be drilled from the Level 235 horizon
for ore reserve conversion (7,700 feet below surface). Two drill holes have
been completed to date. The first drill hole, Drill hole 3220-02C was drilled
close to the western ore limit on Level 235 (7,700 feet below surface). It
returned the following value:
-------------------------------------------------------------------------
Drill True Gold(oz/ton)
Hole Thickness(ft) Cut(1.5 oz) Silver(oz/ton) Copper(%) Zinc(%)
-------------------------------------------------------------------------
3220-02C 9.2 0.13 0.23 0.47 0.10
-------------------------------------------------------------------------
A second drill hole was completed in mid July. Drill hole 3220-03 was
located 600 feet to the east of Drill hole 233-02C. The drill hole continued
to confirm the increase in Zone 20 North gold-copper mineralization at depth.
It returned the following value:
-------------------------------------------------------------------------
Drill True Gold(oz/ton)
Hole Thickness(ft) Cut(1.5 oz) Silver(oz/ton) Copper(%) Zinc(%)
-------------------------------------------------------------------------
3220-03 26.2 0.16 1.14 0.82 0.11
-------------------------------------------------------------------------
This drill hole is currently proceeding to the Zone 20 South horizon.
Very little drilling has been completed on Zone 20 South below Level 215 and
the zone has not been incorporated into any mining plans at the Level 235
mining horizon. The Zone 20 South high grade horizon is a high priority
exploration target as higher-grade gold mineralization could have a
significant positive impact on the production profile.
Development on Level 215 has advanced 820 feet to the west of the Penna
Shaft. An additional 270 feet remains to be completed prior to reaching the
location of the first drill station. Additional exploration data will be
available on Zones 20 North and 20 South over the next six months from Level
215. In addition to new drill stations closer to the mineralized zones, Level
215 is now only 400 feet away from intersecting the gold-copper rich portion
of Zone 20 North at depth. The underground development along Level 215 and
accelerated drilling will provide additional geological information to fully
assess the size potential of the LaRonde deposit at depth.
The Longitudinal illustrations that detail the drill results presented in
this report can be viewed and/or downloaded from the Company's website.
www.agnico-eagle.com (Press Release) or
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 almost three decades of continuous gold production primarily
from underground mining operations. Current proven and probable reserves stand
at 3.3 million contained ounces, with an additional 4.5 million ounces in the
mineral resource category at its LaRonde Mine.
Summarized Quarterly Data (Unaudited) Agnico-Eagle Mines Limited
-------------------------------------------------------------------------
(thousands of Three months ended Six months ended
United States dollars, June 30, June 30,
except where noted) 2001 2000 2001 2000
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Consolidated Financial Data
Income and cash flow
Revenues from mining
operations $ 28,799 $ 11,737 $ 49,591 $ 23,278
Net loss for period $ (1,116) $ (3,425) $ (1,369) $ (6,910)
Net loss per share $ (0.02) $ (0.06) $ (0.02) $ (0.13)
Operating cash flow (before
non-cash working capital) $ 3,591 $ (2,919) $ 9,533 $ (5,751)
Operating cash flow per
share $ 0.06 $ (0.05) $ 0.17 $ (0.11)
Weighted average number of
shares - basic (in thousands) 56,668 54,320 56,310 54,284
Operating and Financial Summary
LaRonde Division
Revenues from mining
operations $ 28,799 $ 11,737 $ 49,591 $ 23,278
Mine operating costs 20,688 11,999 32,760 23,633
-------------------------------------------------------------------------
Mine operating profit
(loss) $ 8,111 $ (262) $ 16,831 $ (355)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Tons of ore milled 459,400 328,828 937,389 631,767
Head grades:
Gold 0.16 0.11 0.15 0.12
Silver 2.53 0.90 2.31 0.94
Zinc 5.32% 1.73% 5.27% 1.70%
Copper 0.21% 0.30% 0.19% 0.33%
Recovery rates:
Gold 93.83% 91.23% 93.54% 90.91%
Silver 80.70% 59.20% 81.60% 60.40%
Zinc 78.10% 70.50% 78.50% 66.20%
Copper 60.30% 67.10% 60.30% 66.80%
Payable production:
Gold (ounces) 65,937 31,114 122,560 63,614
Silver (ounces in thousands) 723 134 1,357 275
Zinc (pounds in thousands) 32,600 6,358 65,862 11,565
Copper (pounds in thousands) 1,039 1,238 1,965 2,527
Realized prices per unit of
production (US$):
Gold (per ounce) $ 267 $ 287 $ 266 $ 288
Silver (per ounce) $ 4.59 $ 5.19 $ 4.57 $ 5.20
Zinc (per pound) $ 0.42 $ 0.51 $ 0.46 $ 0.53
Copper (per pound) $ 0.88 $ 0.80 $ 0.86 $ 0.81
Onsite operating costs
per ton milled
(Canadian dollars) $ 52 $ 54 $ 52 $ 55
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Operating costs per gold
ounce produced (US$):
Onsite operating costs
(including reclamation
provision) $ 237 $ 386 $ 261 $ 372
Less: Non-cash reclamation
provision (5) (3) (5) (5)
Net byproduct revenues (121) (90) (137) (81)
-------------------------------------------------------------------------
Cash operating costs $ 111 $ 293 $ 119 $ 286
Accrued El Coco royalties 23 - 12 -
-------------------------------------------------------------------------
Total cash costs $ 134 $ 293 $ 131 $ 286
Non-cash costs:
Reclamation provision 5 3 5 5
Depreciation and amortization 48 43 48 41
-------------------------------------------------------------------------
Total operating costs $ 187 $ 339 $ 184 $ 332
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Consolidated Balance Sheets Agnico-Eagle Mines Limited
-------------------------------------------------------------------------
(thousands of United States dollars) June 30, December 31,
2001 2000
-------------------------------------------------------------------------
(Unaudited)
ASSETS
Current
Cash and cash equivalents $ 87,335 $ 13,906
Metals awaiting settlement and gold bullion 20,921 15,235
Income taxes recoverable - 2,001
Inventories:
In-process and unsold metal products 4,486 3,101
Supplies 3,069 3,420
Prepaid expenses and other 2,798 5,081
-------------------------------------------------------------------------
Total current assets 118,609 42,744
Investments and other assets 16,758 18,012
Future income and mining tax assets 23,323 21,499
Mining properties 291,422 282,497
-------------------------------------------------------------------------
$ 450,112 $ 364,752
-------------------------------------------------------------------------
-------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities $ 11,121 $ 17,188
Dividends payable 496 1,651
Income and mining taxes payable 2,258 2,175
Interest payable 2,844 2,846
-------------------------------------------------------------------------
Total current liabilities 16,719 23,860
-------------------------------------------------------------------------
Long-term debt 190,141 180,666
-------------------------------------------------------------------------
Reclamation provision and other liabilities 3,944 5,567
-------------------------------------------------------------------------
Future income and mining tax liabilities 19,948 18,204
-------------------------------------------------------------------------
Minority interest 1,961 2,565
-------------------------------------------------------------------------
Shareholders' Equity
Common shares
Authorized - unlimited
Issued - 66,799,612 (2000 - 56,139,480) 241,516 158,252
Other paid-in capital 14,521 14,535
Contributed surplus 5,893 4,665
Deficit (43,622) (36,880)
Company's own shares held by a
subsidiary company (909) (6,682)
-------------------------------------------------------------------------
Total shareholders' equity 217,399 133,890
-------------------------------------------------------------------------
$ 450,112 $ 364,752
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Interim Consolidated
Statements of Loss (Unaudited) Agnico-Eagle Mines Limited
-------------------------------------------------------------------------
(thousands of Three months ended Six months ended
United States dollars, June 30, June 30,
except per share amounts) 2001 2000 2001 2000
-------------------------------------------------------------------------
REVENUES
Revenues from mining
operations $ 28,799 $ 11,737 $ 49,591 $ 23,278
Interest and sundry income 353 358 516 653
-------------------------------------------------------------------------
29,152 12,095 50,107 23,931
COSTS AND EXPENSES
Production 20,688 11,859 32,760 23,633
Exploration 913 678 1,886 1,347
Depreciation and amortization 2,958 1,331 5,744 2,605
General and administrative 989 976 2,059 1,929
Capital tax 557 326 882 554
Interest 3,860 2,230 7,726 4,422
-------------------------------------------------------------------------
Loss before the undernoted (813) (5,305) (950) (10,559)
Foreign currency loss (536) (560) (752) (908)
-------------------------------------------------------------------------
Loss before income and mining
tax recoveries (1,349) (5,865) (1,702) (11,467)
Income and mining tax recoveries (233) (2,440) (333) (4,557)
-------------------------------------------------------------------------
Net loss for the period $ (1,116) $ (3,425) $ (1,369) $ (6,910)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Loss per share $ (0.02) $ (0.06) $ (0.02) $ (0.13)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Interim Consolidated Statements
of Cash Flows (Unaudited) Agnico-Eagle Mines Limited
-------------------------------------------------------------------------
(thousands of Three months ended Six months ended
United States dollars) June 30, June 30,
2001 2000 2001 2000
-------------------------------------------------------------------------
Operating activities
Net loss for the period $ (1,116) $ (3,425) $ (1,369) $ (6,910)
Add (deduct) items not
affecting cash from
operating activities:
Depreciation and amortization 2,958 1,331 5,744 2,605
Provision for (recoveries of)
future income and mining taxes (399) (2,569) 937 (4,877)
Foreign currency translation
loss 551 543 1,103 839
Amortization of deferred
interest and financing costs 1,209 1,169 2,411 2,330
Other 388 32 707 262
-------------------------------------------------------------------------
3,591 (2,919) 9,533 (5,751)
Net premiums paid on metals,
foreign currency and interest
rate option contracts - (106) (34) (284)
Net change in non-cash working
capital balances related to
operations
Metals awaiting settlement
and gold bullion (6,515) (751) (5,686) (5,191)
Inventories 2,712 970 (1,034) 2,004
Prepaid expenses and other 1,013 (35) 2,283 203
Income and mining taxes
recoverable and payable 573 3,191 960 2,875
Accounts payable and accrued
liabilities (3,310) (822) (6,067) 3
Interest payable 1,118 1,107 (2) -
-------------------------------------------------------------------------
Cash flows from (used in)
operating activities (818) 635 (47) (6,141)
-------------------------------------------------------------------------
Investing activities
Additions to mining properties (7,454) (16,889) (17,055) (31,880)
Decrease (increase) in
investments and other 29 (28) 35 10
-------------------------------------------------------------------------
Cash flows used in investing
activities (7,425) (16,917) (17,020) (31,870)
-------------------------------------------------------------------------
Financing activities
Dividends paid 2 (1) (1,114) (1,100)
Common shares issued 82,251 276 83,016 729
Share issue expense (5,373) - (5,373) -
Proceeds from long-term debt - 20,000 7,500 37,500
Purchase of the Company's own
shares held by a subsidiary
company and other 4,831 - 6,397 189
-------------------------------------------------------------------------
Cash flows from financing
activities 81,711 20,275 90,426 37,318
-------------------------------------------------------------------------
Effect of exchange rate
changes on cash and cash
equivalents (224) (297) 70 (205)
Net increase (decrease)
in cash and cash equivalents 73,244 3,696 73,429 (898)
Cash and cash equivalents,
beginning of period 14,091 17,994 13,906 22,588
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Cash and cash equivalents,
end of period $ 87,335 $ 21,690 $ 87,335 $ 21,690
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Other operating cash flow
information:
Interest paid during
the period $ 1,477 $ 1,797 $ 5,262 $ 3,411
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Taxes paid (recovered) during
the period $ 317 $ (2,245) $ (2,204) $ (2,975)
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SOURCE Agnico-Eagle Mines Limited
CONTACT: Sean Boyd, President and CEO, Agnico-Eagle Mines Limited,
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