Stock Symbols: AEM (NYSE)
AGE (TSX)
(All amounts expressed in U.S. dollars unless otherwise noted)
TORONTO, Feb. 25 /PRNewswire-FirstCall/ - Agnico-Eagle Mines Limited
today announced improved fourth quarter earnings of $2.4 million, $0.03 per
share compared to $0.8 million, or $0.01 per share, in the same period of
2002. Similarly, operating cash flow in the quarter nearly doubled to $10.5
million, or $0.12 per share, from $5.4 million, or $0.07 per share, the
previous year.
Highlights for the quarter include:
- Steady improvement in operating results at LaRonde Mine as
70,299 ounces of gold was produced at cash operating costs of
$180 per ounce ($220 per ounce total cash operating costs including
El Coco royalty).
- Operating improvements continue into 2004 with nearly 25,000 ounces
of gold produced in January at total cash operating costs of $115 per
ounce as increasing byproduct silver, zinc and copper production is
sold at higher prices.
- Proven and probable gold reserves increase by 96% to a record
7.9 million ounces as a substantial conversion of mineral resource to
reserve occurs at LaRonde, Lapa and Goldex.
- Drill intercepts from the Level 215 exploration drift on LaRonde II
encounter higher gold grades, indicating potential for more gold at
depth.
"We have made steady progress in the fourth quarter increasing output and
lowering unit costs to produce an ounce of gold. We expect this progress to
continue in 2004 with further increases in production, lower cash costs and
stronger earnings and cash flow," said Sean Boyd, President and Chief
Executive Officer. "Our gold reserves are at record levels and our regional
development projects put us in a strong position to build value through an
expanded production base," added Mr. Boyd.
Conference Call Tomorrow
The Company will host a conference call on Thursday, February 26, 2004 at
11:00 a.m. (EST). Please phone 416-640-4127 at that time if you would like to
participate or you can participate in a listen-only mode via the Company's
website www.agnico-eagle.com. The replay phone number will be 1-877-289-8525,
passcode 21031479 followed by the number sign.
Improved Fourth Quarter Results and Strong Financial Position
In the fourth quarter of 2003, the Company reported net income of
$2.4 million, or $0.03 per share, on metal revenues of $41.9 million, compared
to net earnings of $0.8 million, or $0.01 per share, on metal revenues of
$31.6 million in the comparable 2002 period. Gold production was 70,299 ounces
at a cash operating cost of $180 per ounce compared to 75,235 ounces at a cash
operating cost of $128 per ounce. Including the El Coco royalty, total cash
operating costs increased from $198 per ounce in 2002 to $220 per ounce in
2003.
The improved fourth quarter earnings reflect a higher gold price and a
tax recovery, offset somewhat by the lower gold production. As a result,
operating cash flow nearly doubled in the fourth quarter of 2003 to
$10.5 million, or $0.12 per share, compared to $5.4 million, or $0.07 per
share, in 2002.
The Company ended the year with over $140 million in working capital,
including $110 million in cash, and a completely undrawn $125 million
revolving bank facility. While positive operating cash flow of $4 million was
generated in 2003, over $52 million of cash was invested in the now completed
expansion at LaRonde and acquisitions.
LaRonde's Solid Fourth Quarter Performance Leads to Good Start in 2004
LaRonde delivered a solid operating performance in the fourth quarter as
627,000 tons of ore were processed for a daily rate of over 6,800 tons
compared to 538,000 tons or over 5,800 tons per day in the fourth quarter of
2002. More importantly, the mine delivered record quarterly production from
the lower level mining horizon, where the gold grades are highest, of over
456,000 tons, representing 73% of the total tonnage processed. Onsite mine
costs increased slightly to C$54 per ton in the fourth quarter from C$53 per
ton in 2002. However, the onsite costs showed improvement over the course of
the quarter as C$49 per ton was realized in December when ore production
reached nearly 7,400 tons per day.
Underground ore production exceeded mill production as 636,000 tons of
ore were hoisted from underground during the quarter, resulting in an increase
in surface stockpiles. This trend continued into January 2004 as over 234,000
tons were hoisted from underground while the mill processed 220,000 tons, or
7,100 tons per day, and onsite costs decreased to C$48 per ton. Overall, gold
production in January was nearly 25,000 ounces at a total cash operating cost
of $115 per ounce.
Gold Reserves at Record Level
The Company's proven and probable gold reserves increased to a record
7.9 million ounces, a 96% increase, as significant resources were converted at
LaRonde, Lapa and Goldex.
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Gold Reserve/ Proven & Probable Measured & Inferred
Summary Reserve Indicated Resource Resource
-------------------------------------------------------------------------
(000's ozs.) 2003 2002 2003 2002 2003 2002
-------------------------------------------------------------------------
LaRonde 5,021 4,022 327 75 2,889 3,978
Goldex 1,647 - 91 997 173 423
Lapa 1,187 - 114 - 58 653
Bousquet 9 - 256 - 648 -
Ellison - - 41 41 483 106
------- ------- ------- ------- ------- -------
Total 7,864 4,022 829 1,113 4,251 5,160
------- ------- ------- ------- ------- -------
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Gold reserves and resources were estimated using an assumed gold price of
$325 per ounce. Though the gold price is higher than the $300 per ounce
assumption used in last year's reserve estimate, this impact was essentially
negated by the change in the C$/US$ exchange rate assumed from 1.50 to 1.40.
The above mineral reserve and resource estimate does not include the
significant byproduct silver, zinc and copper contained in the LaRonde ore
body. Please see the table appended to this press release for more detailed
reserve and resource estimates. Using a $350 gold price, gold reserves would
increase by 6%.
Agnico-Eagle also has excellent exposure to higher silver prices with
increasing silver production and silver reserves of 68 million ounces.
Deep Drilling at LaRonde Results in Significant Gold Reserve Conversion
At LaRonde, seven drills targeted the following areas:
- One drill testing Zone 7 between Levels 167 to 194.
- Three drills on production delineation drilling on Zone 20 North
between Level 152 and 194.
- Three drills on LaRonde II deep exploration below level 215.
Over 50,000 feet of diamond drilling was completed during the fourth
quarter, bringing the total in 2003 to over 160,000 feet. Of this total, over
69,000 feet was attributable to LaRonde II exploration.
Good development performance opened up new drill stations to the west
along the Level 215 exploration drift. At the end of the year, the drift was
1,500 feet to the east of the Bousquet property and is projected to reach the
property by April. The focus of the three drills on Level 215 during the
fourth quarter was to provide adequate drill hole density to enable the
further conversion of resource to reserve at depth and to probe Zone 20 North
at depth and to the west, now that previous boundary constraints have been
removed.
The results have been summarized below:
-------------------------------------------------------------------------
True Gold(oz/ton)
Drill Thickness Cut Silver Copper Zinc
Hole (ft) From To (1.5 oz) (oz/ton) (%) (%)
-------------------------------------------------------------------------
3215-68A 45.9 4,160.0 4,245.0 0.19 2.21 0.61 1.87
-------------------------------------------------------------------------
3215-69 15.7 1,494.5 1,511.2 0.18 0.27 0.34 0.03
-------------------------------------------------------------------------
3215-70 9.2 1,314.0 1,323.9 0.09 0.38 0.95 0.06
-------------------------------------------------------------------------
3215-71 12.5 1,191.0 1,203.5 0.33 0.32 0.17 0.11
-------------------------------------------------------------------------
3215-72 16.1 3,410.6 3,433.6 0.21 0.11 0.12 0.02
-------------------------------------------------------------------------
3215-73 22.6 3,420.1 3,452.6 0.26 0.11 0.01 0.06
-------------------------------------------------------------------------
3215-74A 73.5 3,135.0 3,287.6 0.20 0.28 0.12 0.04
-------------------------------------------------------------------------
including 42.7 3,135.0 3,225.9 0.28 0.22 0.04 0.01
-------------------------------------------------------------------------
3215-75 56.4 2,615.3 2,687.5 0.22 0.13 0.08 0.04
-------------------------------------------------------------------------
including 44.0 2,629.1 2,684.8 0.26 0.15 0.09 0.02
-------------------------------------------------------------------------
3215-76 43.3 2,921.7 2,989.3 0.32 0.09 0.02 0.03
-------------------------------------------------------------------------
including 34.1 2,921.7 2,974.9 0.39 0.10 0.02 0.03
-------------------------------------------------------------------------
Five drill holes were completed within the known gold resource at depth.
Depths varied from 8,800 feet to 10,000 feet below surface. The intercepts
confirmed the existence of a higher grade gold resource. Most of the drill
holes were characterized with uniform gold values across the intercept but
frequently with a higher grade core as demonstrated by drill holes 3215-74A,
3215-75, and 3215-76. The horizontal distance between drill holes 3215-73 and
3215-74A is approximately 1,000 feet with the grades varying between 0.21 to
0.28 ounces of gold per ton. Approximately 500 feet to 1,000 feet above this
axis, grades vary from 0.22 to 0.32 ounces of gold per ton. At this early
stage, the higher grade gold core has been defined over an area of 1,000 feet
by 1,000 feet. The area is still open at depth and to the west.
LaRonde Gold Resource Expanding to the West
The most interesting result was obtained outside the previous resource
envelope in drill hole 3215-68A which intersected 45.9 feet grading 0.19
ounces of gold per ton, 2.21 ounces of silver per ton, 0.61% of copper and
1.87% zinc. This value was located 4,352 feet to the west of the Penna Shaft,
on the recently acquired Terrex Property, representing the most westerly drill
hole completed on Zone 20 North at depth.
The result is intriguing because of the reoccurrence of massive sulfide
bands, unlike the intercepts above, with locally up to 15% chalcopyrite
mineralization and the reoccurrence of zinc values. Historically, all massive
sulfide lenses on the LaRonde property have been characterized by zinc
mineralization along the eastern limits. Drill holes 3215-72, 3215-73 and
3215-68A seem to indicate a thickening of mineralization and increasing
massive sulphide occurrences to the west. In terms of a geological model, the
lower sulfide-higher grade gold core described above could be interpreted as
an alteration zone with additional potential further to the west than
previously interpreted. Alternatively, because of the distances involved,
drill hole 3215-68A could be the occurrence of a new massive sulfide lens as
indicated by the presence of massive sulphides, copper and zinc
mineralization. A final possibility is that this result represents the
extension of the LaRonde (Shaft No. 1)/Bousquet II horizon.
In summary, the recent drill results from Level 215 have indicated the
following:
- Existence of a higher grade gold core at depth.
- Existence of multiple lenses at depth that are open for further
exploration.
- Zone 20 North is open for further expansion at depth and more
importantly on the recently acquired Terrex and Bousquet properties
to the south and west.
Regional Project Update
On the Lapa Project the recent drilling results continued to be
encouraging. In the fourth quarter, seven drills completed 38 holes, focused
primarily on infill drilling that resulted in the significant resource to
reserve conversion. Gold reserves at Lapa stand at 1.2 million ounces and the
deposit remains open for expansion.
Five drills recommenced work on the property in early January with the
objective of expanding the reserve base by finding new ore shoots along strike
of the known gold bearing zones as well as proving the depth extension to the
current reserve and resource. In parallel with the ongoing surface drill
program, preliminary engineering has been initiated with the intent of having
various options available by the middle of the year to be able to "fast track"
the development of the property.
At Goldex, a new reserve and resource model was estimated and a review of
the project conducted by independent engineers. Based on their recommendation,
the Company has decided to undertake an underground program to provide
additional geological and sampling information to increase the level of
confidence in the gold grade. Three vertical slot raises plus additional
diamond drilling will be completed over the course of 2004 with a bulk sample
expected to be processed in the first quarter of 2005. A feasibility study
will be prepared at that time. The Goldex deposit has a reserve base of
1.6 million ounces.
At LaRonde II, a feasibility study is expected to be completed in late
2004, incorporating the results of the deep drilling program currently in
progress at LaRonde.
Evaluation of Bousquet commenced with four underground diamond drills.
The first drill is testing potential extensions of mineralization at depth on
the Ellison Property from the 9th Level. Two drills located in the ramp below
the 9th Level are testing for downward extensions of the 3-1 Zone. A fourth
drill is located at the bottom of the Bousquet Shaft and is probing the
results at depth encountered in Drill Hole 3215-68A, intersected from
LaRonde's Level 215 exploration drift.
Outlook for 2004
As previously disclosed, LaRonde's total cash operating costs are
expected to decline significantly in 2004 to a range of $155 to $165 per
ounce, based on a silver price of $5.00 per ounce, zinc price of $0.40 per
pound, copper price of $0.85 per pound and C$/US$ exchange rate of 1.30. The
decline in total cash operating costs from those estimated for 2003 is
attributable to the elimination of the El Coco royalty ($54 per ounce in 2003)
and higher gold and byproduct silver production as well as increases in other
byproduct metal production. In 2004, gold production is expected to increase
27% to 300,000 ounces while silver production is expected to increase 19% to
4.7 million ounces.
The estimated sensitivity of LaRonde's 2004 total cash operating costs to
changes in metal prices and exchange rates follows:
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Change in variable Impact on total cash operating costs ($/oz.)
-------------------------------------------------------------------------
$0.10 in C$/US$ 25
$0.50/oz. in silver 10
$0.05/lb. in zinc 16
$0.10/lb. in copper 7
-------------------------------------------------------------------------
A summary of the Company's projected exploration and capital expenditures
in 2004 follows (thousands):
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Project Capitalized Expensed Total
-------------------------------------------------------------------------
LaRonde I projects $10,300 $10,300
LaRonde I sustaining 12,600 12,600
LaRonde II drilling & feasibility 3,800 3,800
Goldex bulk sample & engineering 4,700 4,700
Lapa drilling & engineering 3,200 3,200
Bousquet/Ellison drilling 2,300 2,300
Grassroots exploration(x) 2,000 2,000
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$36,900 $2,000 $38,900
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(x) does not include Agnico-Eagle's projected $1.2 million share of
grassroots exploration conducted by Sudbury Contact, its exploration
affiliate, which Sudbury Contact will fund out of its own cash
reserves. However, Agnico-Eagle must expense its share for accounting
purposes.
Where to Find Maps
The longitudinal illustrations that detail the drill results presented in
this news release can be viewed and downloaded from the Company's website
www.agnico-eagle.com (Press Release) or:
http://files.newswire.ca/3/AGNICO-LONG20N.pdf
http://files.newswire.ca/3/Laronde-BousquetCrSec.pdf
http://files.newswire.ca/3/PropertyPlan.pdf
Forward Looking Statements
This news 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).
About Agnico-Eagle
Agnico-Eagle is a long established Canadian gold producer with operations
located in northwestern Quebec and exploration and development activities in
eastern Canada and the southwestern United States. Agnico-Eagle's LaRonde Mine
in Quebec is Canada's largest gold deposit. The Company has full exposure to
higher gold prices consistent with its policy of no forward gold sales. It has
paid a cash dividend for 24 consecutive years.
Agnico-Eagle Mineral Reserve & Mineral Resource Data
-------------------------------------------------------------------------
Au
Category and Zone Au Ag Cu Zn (000's Tons
(oz/t) (oz/t) (%) (%) oz.) (000's)
-------------------------------------------------------------------------
Proven Mineral Reserve
-------------------------------------------------------------------------
LaRonde 0.09 2.49 0.42 4.24 638 6,848
-------------------------------------------------------------------------
Bousquet 0.09 9 104
-------------------------------------------------------------------------
Subtotal Proven Mineral
Reserve 0.09 647 6,952
-------------------------------------------------------------------------
Probable Mineral
Reserve
-------------------------------------------------------------------------
LaRonde 0.13 1.47 0.31 2.32 4,383 34,754
-------------------------------------------------------------------------
Lapa 0.25 1,187 4,661
-------------------------------------------------------------------------
Goldex 0.07 1,647 23,983
-------------------------------------------------------------------------
Subtotal Probable
Mineral Reserve 0.11 7,217 63,938
-------------------------------------------------------------------------
Total Proven and
Probable Mineral
Reserves 0.11 7,864 70,350
-------------------------------------------------------------------------
Measured & Indicated
Mineral Resource
-------------------------------------------------------------------------
LaRonde 0.09 0.70 0.27 1.10 327 3,716
-------------------------------------------------------------------------
Goldex 0.08 91 1,174
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Lapa 0.16 114 705
-------------------------------------------------------------------------
Bousquet 0.16 256 1,608
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Ellison 0.16 41 249
-------------------------------------------------------------------------
Total Measured &
Indicated Resource 0.11 829 7,452
-------------------------------------------------------------------------
Inferred Mineral
Resource
-------------------------------------------------------------------------
LaRonde 0.19 1.15 0.35 0.94 2,889 15,294
-------------------------------------------------------------------------
Bousquet 0.27 648 2,445
-------------------------------------------------------------------------
Goldex 0.06 173 2,797
-------------------------------------------------------------------------
Lapa 0.18 58 324
-------------------------------------------------------------------------
Ellison 0.29 483 1,692
-------------------------------------------------------------------------
Total Inferred Resource 0.19 4,251 22,552
-------------------------------------------------------------------------
A qualified person, Guy Gosselin, P.Eng., P.Geo., LaRonde Division's
Chief Geologist, has verified the LaRonde exploration information disclosed in
this news release. The verification procedures, the quality assurance program
and quality control procedures used in preparing such data may be found in the
2003 Mineral Resource and Mineral Reserve Report, Agnico-Eagle Mines Limited,
LaRonde Division, dated May 12, 2003, filed on SEDAR.
Agnico-Eagle Mines Ltd. is reporting mineral resource and reserve
estimates in accordance with the CIM guidelines for the estimation,
classification and reporting of resources and reserves. The effective date of
each estimate is December 31, 2003. More recent information on exploration,
mining, processing, metallurgy and other economic factors have also been used.
The estimates disclosed in this news release are based on the following key
metal price assumptions and foreign exchange rates: gold, $325/oz; silver,
$5.00/oz; copper $0.80/lb; zinc $0.50/lb; US$/C$(equal sign)1.40. There are no
known relevant issues that would materially affect the estimates. No
independent verification of the data has been published.
Tonnage amounts and contained metal amounts presented in the tables in
this news release have been rounded to the nearest 1000.
A mineral reserve is the economically mineable part of a measured or
indicated resource demonstrated by at least a preliminary feasibility study.
This study must include adequate information on mining, processing,
metallurgical, economic and other relevant factors that demonstrate, at the
time of reporting, that economic extraction can be justified. A mineral
reserve includes diluting materials and allows for losses that may occur when
the material is mined. A proven mineral reserve is the economically mineable
part of a measured resource for which quantity, grade or quality, densities,
shape and physical characteristics are so well established that they can be
estimated with confidence sufficient to allow the appropriate application of
technical and economic parameters, to support production planning and
evaluation of the economic viability of the deposit. A probable mineral
reserve is the economically mineable part of an indicated mineral resource for
which quantity, grade or quality, densities, shape and physical
characteristics can be estimated with a level of confidence sufficient to
allow the appropriate application of technical and economic parameters, to
support mine planning and evaluation of the economic viability of the deposit.
A mineral resource is a concentration or occurrence of natural, solid,
inorganic or fossilized organic material in or on the earth's crust in such
form and quantity and of such a grade or quality that it has reasonable
prospects for economic extraction. The location, quantity, grade, geological
characteristics and continuity of a mineral resource are known, estimated or
interpreted from specific geological evidence and knowledge. A measured
mineral resource is that part of a mineral resource for which quantity, grade
or quality, densities, shape, physical characteristics, can be estimated with
a level of confidence sufficient to allow the appropriate application of
technical and economic parameters, to support mine planning and evaluation of
the economic viability of the deposit. The estimate is based on detailed and
reliable exploration, sampling and testing information gathered through
appropriate techniques from locations such as outcrops, trenches, pits,
workings and drill holes that are spaced closely enough to confirm both
geological and grade continuity. An indicated mineral resource is that part of
a mineral resource for which quantity, grade or quality, densities, shape and
physical characteristics can be estimated with a level of confidence
sufficient to allow the appropriate application of technical and economic
parameters, to support mine planning and evaluation of the economic viability
of the deposit. The estimate is based on detailed and reliable exploration and
testing information gathered through appropriate techniques from locations
such as outcrops, trenches, pits, workings and drill holes that are spaced
closely enough for geological and grade continuity to be reasonable assumed.
An inferred mineral resource is that part of a mineral resource for which
quantity and grade or quality can be estimated on the basis of geological
evidence and limited sampling and reasonably assumed, but not verified,
geological and grade continuity. The estimate is based on limited information
and sampling gathered through appropriate techniques from locations such as
outcrops, trenches, pits, workings and drill holes. Mineral resources which
are not mineral reserves do not have demonstrated economic viability.
The qualified person responsible for the LaRonde II, Lapa and Goldex pre-
feasibility studies is Rosaire Emond P.Eng., Regional Division's Senior Mining
Engineer.
The qualified person responsible for the LaRonde mineral reserve and
resource estimate is Guy Gosselin, P.Eng, P.Geo., LaRonde Division's Chief
Geologist. A description of the operating and capital cost assumptions,
parameters and methods used to estimate the Penna shaft can be found in the
LaRonde Division SEDAR disclosure cited above. Recently disclosed probable
reserves, located between 9,200 ft and 9850 ft depth, are estimated using a
grade cut-off equivalent to a minimum net smelter return of $42.90/ton.
The qualified person responsible for the Lapa and Goldex mineral reserve
and resource estimates is Marc H. Legault, P.Eng., Manager, Project
Evaluations of Agnico-Eagle.
The minimum gold grade cut-off used to evaluate drill intercepts at
Goldex was 0.04 oz/ton over a minimum true thickness of 50 feet. The reserve
was derived by evaluating a three-dimensional model of the Goldex Extension
zone, whose gold grade was estimated using a 95% confidence interval grade
calculation method, and then adjusting the model envelope to only include
sectors with a high probability of exceeding the cut-off grade.
In estimating the Lapa resource and reserve, a minimum gold grade cut-off
of 0.15 and 0.19 oz/ton, respectively was used to evaluate drill intercepts
that have been adjusted to respect a minimum mining width of 9.2 ft. The
estimate was derived using a three dimensional block model of the deposit; the
grades were interpolated using the inverse distance power squared method.
The qualified person responsible for the Bousquet and Ellison mineral
reserve and resource estimates is Normand Bedard P.Geo., Regional Division's
Senior Geologist. In estimating the Bousquet and Ellison mineral resource and
reserve, a minimum gold grade cut-off of 0.09 oz/ton was used to evaluate
drill intercepts that have been adjusted to respect a minimum mining width of
9.8 ft. The estimate was derived using a combination of three dimensional
block modeling (grades were interpolated using the inverse distance power
squared method) for certain zones and for other zones, by the polygonal method
on longitudinal sections. A portion of the resource estimate is based on
estimates reported when the Bousquet I mine closed in 1996. The resource was
reviewed and reclassified using the CIM definition and guidelines. This
information is of a good quality and is considered reliable.
Summarized Quarterly Data (Unaudited) Agnico-Eagle Mines Limited
-------------------------------------------------------------------------
(thousands of United States Three months ended Year ended
dollars, except where December 31, December 31,
noted, US GAAP basis) 2003 2002 2003 2002
-------------------------------------------------------------------------
Consolidated Financial Data
Income and cash flow
LaRonde Division
Revenues from mining
operations $ 41,849 $ 31,640 $ 126,820 $ 108,027
Mine operating costs 30,153 23,293 104,990 75,969
-------------------------------------------------------------------------
Mine operating profit $ 11,696 $ 8,347 $ 21,830 $ 32,058
------------------------------------------------
-------------------------------------------------------------------------
Net income (loss)
for period $ 2,387 $ 816 $ (19,498) $ 4,023
Net income (loss)
per share $ 0.03 $ 0.01 $ (0.23) $ 0.06
Operating cash flow
(before non-cash
working capital) $ 10,477 $ 5,416 $ 3,952 $ 20,364
Weighted average number
of shares - basic
(in thousands) 84,424 77,487 83,889 70,821
Tons of ore milled 626,994 537,895 2,448,579 1,963,129
Head grades:
Gold (ounces per ton) 0.12 0.14 0.11 0.14
Silver (ounces per ton) 2.22 2.32 2.16 2.35
Zinc 2.87% 3.74% 3.10% 4.14%
Copper 0.60% 0.50% 0.55% 0.34%
Recovery rates:
Gold 91.79% 92.97% 91.41% 93.14%
Silver 85.80% 80.60% 82.60% 80.60%
Zinc 81.60% 78.00% 78.20% 78.40%
Copper 82.50% 80.30% 80.30% 71.40%
Payable production:
Gold (ounces) 70,299 75,235 236,653 260,183
Silver (ounces in
thousands) 1,220 1,104 3,953 3,094
Zinc (pounds in
thousands) 24,732 26,610 100,337 108,060
Copper (pounds in
thousands) 5,749 3,984 20,131 8,927
Realized prices per unit
of production:
Gold (per ounce) $ 395 $ 318 $ 368 $ 312
Silver (per ounce) $ 5.27 $ 4.51 $ 5.07 $ 4.61
Zinc (per pound) $ 0.43 $ 0.34 $ 0.38 $ 0.34
Copper (per pound) $ 0.94 $ 0.71 $ 0.82 $ 0.70
Onsite operating costs
per ton milled
(Canadian dollars) $ 54 $ 53 $ 52 $ 52
------------------------------------------------
-------------------------------------------------------------------------
Total operating costs per
gold ounce produced:
Onsite operating costs
(including asset
retirement expenses) $ 372 $ 244 $ 390 $ 253
Less: Non-cash asset
retirement expenses (3) (5) (2) (5)
Net byproduct revenues (189) (111) (173) (107)
-------------------------------------------------------------------------
Cash operating costs $ 180 $ 128 $ 215 $ 141
Accrued El Coco royalties 40 70 54 41
-------------------------------------------------------------------------
Total cash operating
costs $ 220 $ 198 $ 269 $ 182
Non-cash costs:
Asset retirement
expenses 3 5 2 5
Amortization 53 37 74 50
-------------------------------------------------------------------------
Total operating costs $ 276 $ 240 $ 345 $ 237
------------------------------------------------
-------------------------------------------------------------------------
Consolidated Balance Sheets Agnico-Eagle Mines Limited
-------------------------------------------------------------------------
(thousands of United
States dollars, December 31, December 31,
US GAAP basis) 2003 2002
-------------------------------------------------------------------------
(Unaudited)
ASSETS
Current
Cash and cash equivalents $ 110,365 $ 152,934
Metals awaiting settlement 34,570 29,749
Income taxes recoverable 7,539 2,900
Inventories:
Ore stockpiles 6,557 4,604
In-process concentrates 1,346 1,008
Supplies 6,276 5,008
Prepaid expenses and other 10,363 10,025
-------------------------------------------------------------------------
Total current assets 177,016 206,228
Fair value of derivative financial instruments 7,573 1,835
Investments and other assets 11,214 8,795
Future income and mining tax assets 41,579 23,890
Mining properties 399,719 353,059
-------------------------------------------------------------------------
$ 637,101 $ 593,807
--------------------------
-------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities $ 29,915 $ 15,246
Dividends payable 3,327 3,013
Income and mining taxes payable - 954
Interest payable 3,161 1,873
-------------------------------------------------------------------------
Total current liabilities 36,403 21,086
-------------------------------------------------------------------------
Long-term debt 143,750 143,750
-------------------------------------------------------------------------
Fair value of derivative financial instruments - 5,346
-------------------------------------------------------------------------
Asset retirement obligation and other liabilities 15,377 5,043
-------------------------------------------------------------------------
Future income and mining tax liabilities 40,848 20,889
-------------------------------------------------------------------------
Shareholders' Equity
Common shares
Authorized - unlimited
Issued - 84,469,804 (2002 - 83,636,861) 601,305 591,969
Warrants 15,732 15,732
Contributed surplus 7,181 7,181
Deficit (218,055) (196,023)
Accumulated other comprehensive loss (5,440) (21,166)
-------------------------------------------------------------------------
Total shareholders' equity 400,723 397,693
-------------------------------------------------------------------------
$ 637,101 $ 593,807
--------------------------
-------------------------------------------------------------------------
Note: Certain items have been reclassified from financial statements
previously presented to conform to the current presentation.
Consolidated Statements of Income (Loss) and
Comprehensive Income (Loss) (Unaudited) Agnico-Eagle Mines Limited
-------------------------------------------------------------------------
(thousands of United States Three months ended Year ended
dollars, except per share December 31, December 31,
amounts, US GAAP basis) 2003 2002 2003 2002
-------------------------------------------------------------------------
REVENUES
Revenues from mining
operations $ 41,849 $ 31,640 $ 126,820 $ 108,027
Interest and sundry income (477) (830) 2,775 1,943
-------------------------------------------------------------------------
41,372 30,810 129,595 109,970
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COSTS AND EXPENSES
Production 30,153 23,293 104,990 75,969
Exploration and corporate
development 1,464 1,042 5,975 3,766
Equity loss in junior
exploration company 1,500 - 1,626 -
Amortization 3,729 2,756 17,504 12,998
General and administrative 1,820 1,667 7,121 5,530
Provincial capital tax 58 (345) 1,240 829
Interest 2,486 1,855 9,180 7,341
Foreign currency
(gain) loss 113 (134) 72 (1,074)
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Income (loss) before
income, mining and
federal capital taxes 49 676 (18,113) 4,611
Federal capital tax 192 221 1,090 949
Income and mining tax
recovery (2,530) (361) (1,448) (361)
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Income (loss) before
cumulative catch-up
adjustment 2,387 816 (17,755) 4,023
Cumulative catch-up
adjustment relating
to FAS 143 - - (1,743) -
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Net income (loss) for
the period $ 2,387 $ 816 $ (19,498) $ 4,023
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Net income (loss) before
cumulative catch-up
adjustment per share -
basic and diluted $ 0.03 $ 0.01 $ (0.21) $ 0.06
Cumulative catch-up
adjustment per share -
basic and diluted - - (0.02) -
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Net income (loss) per
share - basic and
diluted $ 0.03 $ 0.01 $ (0.23) $ 0.06
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Weighted average number
of shares (in thousands)
Basic & diluted 84,424 77,487 83,889 70,821
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Comprehensive income
(loss):
Net Income (loss) for
the period $ 2,387 $ 816 $ (19,498) $ 4,023
Other comprehensive
income (loss):
Unrealized gain (loss)
on hedging activities,
net of tax 1,708 (960) 8,807 (5,512)
Dilution gain on
issuance of shares by
subsidiary, net of tax - 1,610 4,500 1,610
Unrealized gain on
available for sale
securities, net of tax 625 1,558 2,258 1,558
Minimum pension
liability - (980) - (980)
Derivative instruments
maturing in the year,
net of tax 1,801 1,090 1,801 723
Realized gain on
available for sale
securities, net of tax (155) - (1,640) -
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Other comprehensive
income (loss) $ 3,979 $ 2,318 $ 15,726 $ (2,601)
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Comprehensive income
(loss) for the period $ 6,366 $ 3,134 $ (3,772) $ 1,422
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Note: Certain items have been reclassified from financial statements
previously presented to conform to the current presentation.
Consolidated Statements of Deficit
and Accumulated Other
Comprehensive Loss (Unaudited) Agnico-Eagle Mines Limited
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Three months ended Year ended
(thousands of United States December 31, December 31,
dollars, US GAAP basis) 2003 2002 2003 2002
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Deficit
Balance, beginning
of period $ (217,908) $ (194,330) $ (196,023) $ (197,537)
Net income (loss) for
the period 2,387 816 (19,498) 4,023
Dividends declared (2,534) (2,509) (2,534) (2,509)
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Balance, end of period $ (218,055) $ (196,023) $ (218,055) $ (196,023)
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Accumulated other
comprehensive loss
Balance, beginning
of period $ (9,419) $ (23,434) $ (21,166) $ (18,565)
Other comprehensive income
(loss) for the period 3,979 2,318 15,726 (2,601)
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Balance, end of period $ (5,440) $ (21,116) $ (5,440) $ (21,116)
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Note: Certain items have been reclassified from financial statements
previously presented to conform to the current presentation.
Consolidated Statements of Cash Flows
(Unaudited) Agnico-Eagle Mines Limited
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Three months ended Year ended
(thousands of United States December 31, December 31,
dollars, US GAAP basis) 2003 2002 2003 2002
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Operating activities
Net income (loss) for
the period $ 2,387 $ 816 $ (19,498) $ 4,023
Add (deduct) items not
affecting cash from
operating activities:
Amortization 3,729 2,756 17,504 12,998
Provision for future
income and mining taxes (1,161) 642 1,090 1,183
(Gain) loss on
derivative contracts 412 (336) (2,265) (1,680)
Cumulative catch-up
adjustment relating
to FAS 143 - - 1,743 -
Amortization of deferred
costs and other 5,110 1,538 5,378 3,840
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Cash flow from operations,
before working
capital changes 10,477 5,416 3,952 20,364
Change in non-cash working
capital balances
Metals awaiting
settlement (15,709) (12,095) (4,821) (9,669)
Income taxes recoverable (2,791) (1,360) (4,639) (2,549)
Inventories (295) (533) (3,559) (863)
Prepaid expenses and
other (4,273) (2,508) (5,382) (2,319)
Accounts payable and
accrued liabilities 15,443 5,615 17,414 8,327
Interest payable 2,851 1,466 1,288 (179)
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Cash flows from (used in)
operating activities 5,703 (3,999) 4,253 13,112
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Investing activities
Additions to mining
properties (13,062) (13,896) (42,038) (64,836)
Acquisitions, investments
and other 1,641 (965) (10,438) (1,773)
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Cash flows used in
investing activities (11,421) (14,861) (52,476) (66,609)
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Financing activities
Dividends paid - - (2,431) (1,344)
Common shares issued 1,501 177,718 8,461 193,784
Warrants issued - 15,732 - 15,732
Share and warrant
issue costs (271) (9,162) (271) (9,162)
Proceeds from long-
term debt - - - 143,750
Financing costs - - - (5,266)
Bank debt - (30,000) - (30,000)
Repayment of the Company's
senior convertible notes - - - (122,169)
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Cash flows from financing
activities 1,230 154,288 5,759 185,325
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Effect of exchange rate
changes on cash and
cash equivalents (20) (193) (105) (74)
Net decrease in cash and
cash equivalents (4,508) 135,235 (42,569) 131,754
Cash and cash equivalents,
beginning of period 114,873 17,699 152,934 21,180
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Cash and cash equivalents,
end of period $ 110,365 $ 152,934 $ 110,365 $ 152,934
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Other operating cash flow
information:
Interest paid during
the period $ 349 $ 640 $ 7,750 $ 23,590
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Taxes paid during the
period $ 653 $ (1,320) $ 2,887 $ (1,982)
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Note: Certain items have been reclassified from financial statements
previously presented to conform to the current presentation.
SOURCE Agnico-Eagle Mines Limited
CONTACT:
Barry Landen, V.P. Corporate Affairs
Agnico-Eagle Mines
Limited
(416) 947-1212
(AGE. AEM)
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