PRESS RELEASE

Agnico Eagle Mines reports Q3 results

By
Thursday, October 26, 2017

PRESS RELEASE

(This is an abridged version of the release. For the full version click here)

Start your 15 day free trial now!

cta-arrow

Already a subscriber? Please, login

TORONTO, Oct. 25, 2017 /PRNewswire/ - Agnico Eagle Mines Limited (NYSE:AEM, TSX:AEM) ("Agnico Eagle" or the "Company") today reported quarterly net income of $71.0 million, or $0.31 per share, for the third quarter of 2017. This result includes non-cash foreign currency translation gains on deferred tax liabilities of $5.7 million ($0.03 per share), unrealized gains on financial instruments (net of tax) of $5.3 million ($0.02 per share), non-cash foreign currency translation losses of $4.3 million ($0.02 per share) and various mark-to-market and other adjustment losses (net of tax) of $2.2 million ($0.01 per share). Excluding these items would result in adjusted net income1 of $66.5 million or $0.29 per share for the third quarter of 2017. In the third quarter of 2016, the Company reported net income of $49.4 million or $0.22 per share.

Not included in the third quarter of 2017 adjusted net income is non-cash stock option expense of $3.7 million ($0.02 per share).

For the first nine months of 2017, the Company reported net income of $208.8 million, or $0.91 per share. This compares with the first nine months of 2016 when net income was $96.2 million, or $0.43 per share. Financial results in the 2017 period were positively affected by higher gold sales volumes (approximately 3%) and lower depreciation expense partly offset by lower realized gold prices.

In the third quarter of 2017, cash provided by operating activities decreased to $194.1 million ($207.9 million before changes in non-cash components of working capital) compared with cash provided by operating activities of $282.9 million in the third quarter of 2016 ($233.7 million before changes in non-cash components of working capital). The decrease in cash provided by operating activities before changes in non-cash components of working capital during the current period was largely due to lower realized gold prices.

________________________

1Adjusted net income is a non-GAAP measure. For a discussion regarding the Company's use of non-GAAP measures, see "Note Regarding Certain Measures of Performance".

For the first nine months of 2017, cash provided by operating activities was $600.6 million ($629.9 million before changes in non-cash components of working capital), as compared with the first nine months of 2016 when cash provided by operating activities was $658.0 million ($593.9 million before changes in non-cash components of working capital). The increase in cash provided by operating activities before changes in working capital during the first nine months of 2017 was mainly due to a combination of higher gold and by-product metals sales volumes partly offset by lower realized gold prices.

"We continued to see strong operating performance in the third quarter, culminating in record gold production and strong cash flow generation. Given these strong results, we have increased our 2017 production guidance and have increased our dividend by 10%", said Sean Boyd, Agnico Eagle's Chief Executive Officer. "Our major projects in Nunavut continue to advance on time and on budget and we are excited by the significant growth in gold production and the related cash flows that these projects are forecast to provide", added Mr. Boyd.

Third quarter 2017 highlights include:

  • Continued strong operating performance yields record quarterly gold production - Payable gold production2 in the third quarter of 2017 was 454,362 ounces at production costs per ounce of $578, total cash costs3 per ounce of $546 and all-in sustaining costs per ounce 4 ("AISC") of $789
  • Higher than expected grades and tonnage drive record quarterly gold production at the LaRonde mine - Payable gold production in the third quarter of 2017 was 105,345 ounces at production costs per ounce of $377 and total cash costs per ounce of $328
  • Full year production guidance increased and unit cost forecasts reduced - Given the strong nine month operational performance, 2017 production is now expected to exceed 1.68 million ounces of gold compared to previous guidance of 1.62 million ounces of gold. Total cash costs per ounce are now expected to be $570 to $600 (previously $580 to $610) and AISC are expected to be $820 to $870 per ounce (previously $830 to $880)
  • Meliadine project continues to advance on schedule and on budget - Surface construction activities are progressing well, with outside cladding and roofing expected to be completed on the mill facility, multi-service building and powerhouse in November 2017. Underground development is on plan and critical mining equipment, which was received during the 2017 summer sealift, is currently being commissioned
  • Drilling at Amaruq extends Whale Tail mineralization at depth, and demonstrates continuity and improving grades in the eastern part of V Zone - Significant results include: 7.3 grams per tonne ("g/t") over 16.1 metres at a depth of 627 metres at Whale Tail and 20.6 g/t gold over 6.2 metres at the V Zone at 452 metres depth, beneath the current planned pit outline
  • Quarterly dividend increased by 10% - Company has declared an $0.11 quarterly dividend. The previous quarterly dividend was $0.10

________________________

2Payable production of a mineral means the quantity of mineral produced during a period contained in products that have been or will be sold by the Company whether such products are shipped during the period or held as inventory at the end of the period.

3Total cash costs per ounce is a non-GAAP measure and, unless otherwise specified, is reported in this news release on a by-product basis. For a reconciliation to production costs and for total cash costs on a co-product basis, see "Reconciliation of Non-GAAP Financial Performance Measures" below. See also "Note Regarding Certain Measures of Performance" below.

4All-in sustaining costs per ounce is a non-GAAP measure and, unless otherwise specified, is reported in this news release on a by-product basis. For a reconciliation to production costs and for all-in sustaining costs on a co-product basis, see "Reconciliation of Non-GAAP Financial Performance Measures" below. See also "Note Regarding Certain Measures of Performance" below.