

Laronde Operations

	In 2005, Agnico-Eagle's LaRonde mine processed approximately 7,300 tonnes of ore per day, sustaining the performance level achieved in 2004. The mine produced at record low total cash costs of $43 per ounce of gold. This accomplishment is a tribute to our skilled and highly motivated mining team which, for two years in a row, has operated the mine at impressive production rates and has further established LaRonde as the engine of Agnico-Eagle's growth and prosperity.


	Our flagship LaRonde mine is located in the Cadillac-Bousquet region of the Abitibi Greenstone Belt in northwestern Quebec, approximately 650 kilometres northwest of Montreal. The mine extracts gold from the largest gold deposit in Canada in terms of reserves. Since 1988, LaRonde has produced more than 2.9 million ounces of gold. At LaRonde, we have demonstrated our ability to operate a quality business. We have overcome the operating challenges of mining at more than 2,200 metres underground. Gold reserves have been progressively replaced or expanded. We have maintained an exceptionally low cost base – total cash costs of $43 per ounce in 2005 rank among the lowest in the gold industry. And we have consistently attracted and retained top-quality employees. Solid Operating Performance LaRonde continued its solid operating performance in 2005. Ore production of 2.7 million tonnes, or a daily average of approximately 7,300 tonnes, was essentially unchanged from the record 2004 level of approximately 7,400 tonnes per day. Payable gold production for the year was 241,807 ounces, compared to 271,567 ounces in 2004. The mine also produced 4.8 million ounces of silver, 76,545 tonnes of zinc and 7,378 tonnes of copper. The lower gold production in 2005 was mainly due to the extra zinc ore processed, and lower ore recovery in the stopes of the lower mine. Ore recovery was expected to be 95%, but has now consistently been closer to 90%. Each of these factors has been incorporated into our 2006 production guidance.



	The LaRonde mine's low costs are a result of consistently high production volumes, byproduct revenue and a skilled workforce dedicated to cost-efficient mining operations. Daily ore production has averaged approximately 7,300 tonnes since the beginning of 2004, when steady state production was achieved, following the mill's final expansion. The mine's strong earnings and cash flows are helping fund Agnico-Eagle's international expansion.

	Lower Unit Costs Total cash costs were reduced yet again, largely because of the strong prices for byproduct metals realized in 2005. Total cash costs declined from $56 per ounce of gold in 2004 to an average of just $43 in 2005. In the fourth quarter, total cash costs were a record low minus $22 per ounce of gold. Meanwhile, the realized price of gold for the year was $449 per ounce, up from $418 per ounce in 2004. Reserves At the end of 2005, proven and probable gold reserves at LaRonde and LaRonde II rose to 5.3 million ounces, compared to 5.1 million ounces in 2004. As a result of ongoing infill drilling, resource ounces were moved to the reserve category. Also included in the LaRonde and LaRonde II orebodies are significant byproduct reserves of 54 million ounces of silver, 813 million kilograms of zinc and 124 million kilograms of copper. Canada's largest gold deposit has reserves sufficient to give it a mine life of approximately 20 years.


Shift change at the LaRonde mine.

	Skilled and Committed Workforce More than 600 experienced and highly skilled people work at the LaRonde mine and are the foundation for Agnico-Eagle's success. This applies equally to the miner extracting ore thousands of metres underground and to the employees on the surface. Many employees have been with the company since production began at LaRonde almost 20 years ago. Their dedication and experience, as well as the technical expertise they have developed in mining the deep and complex ores at LaRonde, are significant advantages as we expand. Our growth projects are well matched to the valuable technical skills of our personnel. This enables us to operate efficiently and cost-effectively, while we also see these projects as opportunities for our employees to expand their careers. The success of our approach is reflected in the fact that we are an industry leader in recruiting and retaining talented people.