(All amounts expressed in U.S. dollars unless otherwise noted)
AGNICO-EAGLE REPORTS Q2 2010 RESULTS;
RECORD QUARTERLY REVENUE, NET INCOME AND GOLD PRODUCTION
Toronto, ON - July 28, 2010 � Agnico-Eagle Mines Limited ("Agnico-Eagle" or the �Company�) (NYSE and TSX - AEM) today reported a record quarterly net income of $100.4 million, or $0.64 per share, for the second quarter of 2010. This result includes a non-cash foreign currency translation gain of $17.4 million, or $0.11 per share, as well as a one-time tax recovery of $21.2 million, or $0.14 per share. The result also includes non-cash stock-based compensation expense of $8.1 million, or $0.05 per share. In the second quarter of 2009, the Company reported net income of $1.2 million, or $0.01 per share. A 116% increase in gold production and a 151% increase in gross mine profit over the second quarter of 2009 contributed to the r ecord financial and operating quarter.
Second quarter 2010 cash provided by operating activities was $161.6 million (including an increase in working capital of $16.7 million), up from cash provided by operating activities of $26.4 million in the second quarter of 2009 (which included a decrease in working capital of $27.4 million). This significant increase was largely due to gold production that was more than double that in the comparable period in 2009 and substantially higher prices for gold, zinc, silver and copper.
�Our record quarterly financial results were driven by record gold production as all six of our mines operated throughout the quarter for the first time. Four of the mines are now operating at steady state with the other two in the late stages of optimization� said Sean Boyd, Vice-Chairman and Chief Executive Officer. �Further increases in gold production and lower cash operating costs are expected in the second half of 2010 as we continue to optimize all our mines and focus on driving down the unit costs at our Kittila and Meadowbank mines� added Mr. Boyd.
Second quarter 2010 highlights include:
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Record Gold Production, Record Revenue and Record Net Earnings � quarterly gold production of 257,728 ounces resulted in revenue of $353.9 million and net earnings of $100.4 million
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Good Cost Control Continues at Steady State Mines � minesite costs per tonne continue to be on target at; LaRonde, Goldex, Lapa and Pinos Altos.
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Improved Available Liquidity � during the quarter the Company executed a new non-amortizing, unsecured $1.2 billion revolving credit facility through a syndicate of banks. The Company also issued $600 million of unsecured long-term notes which was used to reduce amounts outstanding under the credit facilities.
Payable gold production1 in the second quarter of 2010 was a record 257,728 ounces at total cash costs per ounce2 of $487. This compares with payable gold production of 119,053 ounces at total cash costs per ounce of $326 in the second quarter of 2009. The increase in total cash costs per ounce in the second quarter of 2010 is mainly due to the high costs at Meadowbank ($663/oz) as the mine moves through start-up and commissioning. Total cash costs are expected to decline as the mining and processing rate increases and gold output grows towards steady state levels.
For the first six months of 2010, payable gold production was a record 445,960 ounces at total cash costs per ounce of $469. This compares with payable gold production of 210,864 ounces at total cash costs per ounce of $320 in the first half of 2009. The increase in gold production is due to the impact of four new gold mines commencing operations in the past 14 months. The increase in total cash costs per ounce in the first half of 2010 is mainly due to the high costs at Meadowbank ($695/oz) as stated above.
For the full year 2010, gold production is still expected to be in line with previous guidance of between 1.0 and 1.1 million ounces.
Total cash cost per ounce guidance of $399 was provided on December 16, 2009. This was based on projected gold production of 1.057 million ounces and the following assumptions:
Silver ($/oz) 14.00
Zinc ($/lb) 0.82
Copper ($/lb) 2.77
C$/US$ 1.10
US$/Euro 1.40
Applying current spot rates for these factors would result in total cash cost estimates of approximately $420 per ounce. Based on the higher operating costs experienced at Kittila and Meadowbank during the commissioning phase in 2010, the Company expects that its full year total cash cost per ounce is likely to be in the range of $425 to $450.
Second Quarter 2010 Results Conference Call Webcast
The Company�s senior management will host a conference call on Thursday, July 29, 2010 at 11:00 AM (E.D.T.) to discuss financial results and provide an update of the Company�s exploration and development activities.
Via Webcast:
A live audio webcast of the meeting will be available on the Company�s website homepage at www.agnico-eagle.com.
Via Telephone:
For those preferring to listen by telephone, please dial 416-644-3415 or toll-free 877-974-0445. To ensure your participation, please call approximately five minutes prior to the scheduled start of the call.
Replay archive:
Please dial 416-640-1917 or toll-free 877-289-8525, passcode 4328627#.
The conference call replay will expire on Thursday, August 5, 2010.
The webcast along with presentation slides will be archived for 180 days on the website.
THIS PRESS RELEASE CONTAINS OVERVIEWS AND FINANCIAL STATEMENTS, CLICK HERE TO VIEW ENTIRE DOCUMENT IN PDF FORMAT
1 Payable production of a mineral means the quantity of mineral produced during a period contained in products that are sold by the Company, whether such products are shipped during the period or held as inventory at the end of the period.
2 Total cash costs per ounce is a non-GAAP measure. For reconciliation of this measure to production costs, as reported in the financial statements, see Note 1 to the financial statements at the end of this press release.
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Forward-Looking Statements
The information in this news release has been prepared as at July 28, 2010. Certain statements contained in this press release constitute "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and �forward looking information� under the provisions of Canadian provincial securities laws and are referred to herein as �forward-looking statements�. When used in this document, words such as "anticipate", "expect", "estimate," "forecast," "planned", "will", "likely" and similar expressions are intended to identify forward-looking statements.
Such statements include without limitation: the Company's forward-looking production guidance, including estimated ore grades, metal production, life of mine horizons, commencement of production estimates, the estimated timing of scoping studies, recovery rates, mill throughput, optimization efforts, and projected exploration and capital expenditures, including costs and other estimates upon which such projections are based; the Company's goal to increase its mineral reserves and resources; and other statements and information regarding anticipated trends with respect to the Company's operations, exploration and the funding thereof. Such statements reflect the Company's views as at the date of this press release and are subject to certain risks, uncertainties and assumptions. Forward-looking statements are necessarily based upon a number of factors and assumptions that, while considered reason able by Agnico-Eagle as of the date of such statements, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The factors and assumptions of Agnico-Eagle contained in this news release, which may prove to be incorrect, include, but are not limited to, the assumptions set forth herein and in management�s discussion and analysis and the Company�s Annual Report on Form 20-F for the year ended December 31, 2009 (�Form 20-F�) as well as: that there are no significant disruptions affecting operations, whether due to labour disruptions, supply disruptions, damage to equipment, natural occurrences, political changes, title issues or otherwise; that permitting, production and expansion at each of Agnico-Eagle's mines and growth projects proceeds on a basis consistent with current expectations, and that Agnico-Eagle does not change its plans relating to such projects; that the exchange rate between the Canadian dollar, European Union euro, Mexican peso and the United States dollar will be approximately consistent with current levels or as set out in this news release; that prices for gold, silver, zinc, copper and lead will be consistent with Agnico-Eagle's expectations; that prices for key mining and construction supplies, including labour costs, remain consistent with Agnico-Eagle's current expectations; that Agnico-Eagle's current estimates of mineral reserves, mineral resources, mineral grades and metal recovery are accurate; that there are no material delays in the timing for completion of ongoing growth projects; that the Company�s current plans to optimize production are successful; and that there are no material variations in the current tax and regulatory environment. Many factors, known and unknown, could cause the actual results to be materially different from those expressed or implied by such forward-looking statements. Such risks include, but are not limited to: the volatility of pri ces of gold and other metals; uncertainty of mineral reserves, mineral resources, mineral grades and metal recovery estimates; uncertainty of future production, capital expenditures, and other costs; currency fluctuations; financing of additional capital requirements; cost of exploration and development programs; mining risks; risks associated with foreign operations; governmental and environmental regulation; the volatility of the Company's stock price; and risks associated with the Company's byproduct metal derivative strategies. For a more detailed discussion of such risks and other factors, see the Form 20-F, as well as the Company's other filings with the Canadian Securities Administrators and the U.S. Securities and Exchange Commission (the �SEC�). The Company does not intend, and does not assume any obligation, to update these forward-looking statements and information, except as required by law. Accordingly, readers are advised not to place undue reliance on forward- looking statements. Certain of the foregoing statements, primarily related to projects, are based on preliminary views of the Company with respect to, among other things, grade, tonnage, processing, recoveries, mining methods, capital costs, total cash costs, minesite costs, and location of surface infrastructure. Actual results and final decisions may be materially different from those currently anticipated. |
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