AEM - AR06




Kittila – wide open at depth and along strike

	Production at our first mine outside of Canada is scheduled to commence in the third quarter of 2008. Situated in mining-friendly northern Finland, the Kittila mine has the potential to become one of the largest gold mines in Europe, extracting gold from the expansive Suurikuusikko deposit.


	Agnico-Eagle acquired the Suurikuusikko deposit in late 2005, recognizing the merits of expanding into a region with climate, topography, and geology similar to its base in the Abitibi region of Quebec. In addition, the region offers nearby infrastructure and a qualified labour pool, as well as political stability and a supportive local government. We first became actively involved in the property in 2004, through our 14% equity position and representation on the board of directors of Riddarhyttan Resources AB. In 2005, after having directed an extensive drilling program at the property, we made a successful $130-million bid for the remaining shares of Riddarhyttan. Named after the nearby community, the $135-million Kittila mine will initially source its ore via open pit followed by underground mining via ramp access. The mining operation will feed a 3,000-tonne-per-day surface processing plant. Production at Kittila is expected to average 150,000 ounces of gold per year at total cash cost of $250 per ounce over a 13-year mine life. We began construction of the mine in the second quarter of 2006. Many of the surface buildings have been erected. Also, stripping of the open pit has commenced, as has the ramp for underground development. Probable gold reserves at Kittila total 2.6 million ounces from 16.0 million tonnes grading 5.1 grams of gold per tonne. We are also encouraged by the results of ongoing in-fill and exploration drilling. With six drill rigs in operation, our team is focused on converting resources to reserves and extending the gold zones laterally and at depth. Success was recorded in 2006, as in-fill drilling encountered some of the thickest and richest intersections to date. Also, two new gold-bearing zones were discovered within three kilometres north of the Kittila project site. Good results such as these give us confidence that the reserves and resources will continue to grow at Kittila.