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 ($0.02per 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.

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 Nunavutcontinue 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

Third Quarter Financial and Production Highlights – Record Gold Production, Lower Production Costs – 2017 Cost Forecasts Decrease

In the third quarter of 2017, strong operational performance continued at the Company's mines.  Payable gold production was 454,362 ounces, compared to 416,187 ounces in the prior-year period.  The higher level of production in the 2017 period was primarily due to higher grades mined at LaRonde, Meadowbank and Canadian Malartic.  A detailed description of the production of each of the Company's mines is set out below.

In the first nine months of 2017, payable gold production was 1,300,321 ounces, compared to 1,236,455 ounces in the prior-year period.  The higher level of production in the 2017 period was primarily due to higher grades mined at LaRonde, Meadowbank and Canadian Malartic.

Production costs per ounce for the third quarter of 2017 were $578, which was 13% lower, compared to $666 in the prior-year period.  Total cash costs per ounce for the third quarter of 2017 were $546, which was 5% lower compared to $575 per ounce in the prior-year period.  Production costs per ounce and total cash costs per ounce in the third quarter of 2017 were positively affected by record quarterly production.  A detailed description of the cost performance of each of the Company's mines is set out below.

Production costs per ounce for the first nine months of 2017 were $596, which was 5% lower, compared to $628 in the prior-year period.  Total cash costs per ounce for the first nine months of 2017 were $547, compared with $580 in the prior-year period.  Production costs per ounce and total cash costs per ounce in the first nine months of 2017 were positively affected by higher production of gold at LaRonde, Meadowbank, and Canadian Malartic.  The Company now forecasts a decrease in total cash costs per ounce for 2017 to $570 to $600 per ounce, which is down from previous guidance of $580 to $610 per ounce.

AISC for the third quarter of 2017 were $789, which was 4% lower, compared to $821 in the prior-year period.  The lower AISC is primarily due to lower total cash costs per ounce and lower sustaining capital expenditures compared to the prior-year period.

AISC for the first nine months of 2017 was $772, compared to $821 in the prior-year period.  The lower AISC is primarily due to lower total cash costs per ounce and lower sustaining capital expenditures compared to the prior-year period.  The Company now forecasts a decrease in AISC for 2017 to $820 to $870 per ounce, which is down from previous guidance of $830 to $880 per ounce.

Cash Position Remains Strong

Cash and cash equivalents and short term investments decreased to $865.6 million at September 30, 2017, from the June 30, 2017 balance of $952.4 million due to the ongoing investment in the Company's growth projects.

The outstanding balance on the Company's credit facility remained nil at September 30, 2017.  This results in available credit lines of approximately $1.2 billion, not including the uncommitted $300 million accordion feature.

On October 25, 2017, the Company amended its $1.2 billion credit facility to extend the maturity date from June 22, 2021to June 22, 2022.

The Company's $500 million short form base shelf prospectus expired on October 4, 2017.  The Company intends to file a new base shelf prospectus, on substantially the same terms, qualifying up to $500 million of debt securities, common shares and warrants.  The Company has no present intention to offer securities pursuant to the new base shelf prospectus.  It has been the Company's practice to maintain a $500 million base shelf prospectus since 2002.  The notice set out in this paragraph does not constitute an offer of any securities for sale or an offer to sell or the solicitation of an offer to buy any securities.

Approximately 35% of the Company's remaining 2017 Canadian dollar exposure is hedged at a floor price of 1.30 US$/C$.  Approximately 11% of the Company's remaining 2017 Euro exposure is hedged at a floor price of 1.10 EUR$/US$.  Approximately 31% of the Company's remaining 2017 Mexican Peso exposure is hedged at a floor price of 18.60 US$/MXP.

Capital Expenditures

The total estimated initial capital costs at both the Meliadine and Amaruq projects in Nunavut remain unchanged at $900 million and $330 million, respectively.  The forecast for the Company's total 2017 capital expenditures is now approximately $895 million, which is an increase of approximately $36 million over the previous forecast.  The increase is largely due to an acceleration of capital spending at the Meliadine and Amaruq projects due to good progress made in 2017 on development and construction activities at both projects.  The following table sets out capital expenditures (including sustaining capital expenditures) in the third quarter and first nine months of 2017.

Revised 2017 Guidance – Production Increased and Costs Lowered for the Sixth Year in a Row

Production for 2017 is now forecasted to exceed 1.68 million ounces of gold (previously 1.62 million ounces) with total cash costs per ounce expected to be $570 to $600 (previously $580 to $610) and AISC expected to be $820 to $870 per ounce (previously $830 to $880).

Dividend Record and Payment Dates for the Fourth Quarter of 2017

Agnico Eagle's Board of Directors has increased the dividend by 10% and has declared a quarterly cash dividend of $0.11per common share, payable on December 15, 2017, to shareholders of record as of December 1, 2017.  The previous quarterly dividend was $0.10 per common share.  Agnico Eagle has declared a cash dividend every year since 1983.

Dividend Reinvestment Plan

Please follow the link below for information on the Company's dividend reinvestment plan.  Dividend Reinvestment Plan

Third Quarter 2017 Results Conference Call and Webcast Tomorrow

The Company's senior management will host a conference call on Thursday, October 26, 2017 at 11:00 AM (E.D.T.) to discuss financial results and provide an update of the Company's operating activities.

Via Webcast:

A live audio webcast of the conference call will be available on the Company's website www.agnicoeagle.com.

Via Telephone:

For those preferring to listen by telephone, please dial 1-647-427-7450 or toll-free 1-888-231-8191.  To ensure your participation, please call approximately ten minutes prior to the scheduled start of the call.

Replay Archive:

Please dial 1-416-849-0833 or toll-free 1-855-859-2056, access code 50998337.  The conference call replay will expire on November 26, 2017.  The webcast, along with presentation slides will be archived for 180 days on the Company's website.

(Complete Business Review may be seen by clicking here).

SOUTHERN BUSINESS REVIEW

Agnico Eagle's Southern Business operations are focused in Northern Mexico, with two operations (Pinos Altos and Creston Mascota) in Chihuahua State and the La India mine in Sonora State.  These operations have been the source of increasing precious metals production (gold and silver), stable operating costs and strong free cash flow since Pinos Altos opened in 2009.

Pinos Altos – New Silver Flotation Circuit Nearing Steady State

The 100% owned Pinos Altos mine in northern Mexico achieved commercial production in November 2009. Pinos Altosis an open pit and underground mine that produces gold and silver dore from conventional milling and also a heap leach process.

Production costs per tonne in the third quarter of 2017 decreased when compared to the prior-year period due to the timing of inventory.  Production costs per ounce in the third quarter of 2017 decreased when compared to the prior-year period due to the reason described above.

Minesite costs per tonne in the third quarter of 2017 increased when compared to the prior-year period due to lower tonnage processed.  Total cash costs per ounce in the third quarter of 2017 increased when compared to the prior-year period due to lower gold production and lower by-product revenues.

Production costs per tonne for the first nine months of 2017 decreased when compared to the prior-year period primarily due to higher tonnes processed and timing of inventory.  Production costs per ounce for the first nine months of 2017 decreased when compared to the prior-year period due to the reasons described above.

Minesite costs per tonne for the first nine months of 2017 were essentially the same when compared to the prior-year period.  Total cash costs per ounce for the first nine months of 2017 increased when compared to the prior-year period due to lower production.

In late June, a new silver flotation circuit was commissioned at the Pinos Altos mill complex.  The new circuit is nearing steady state production and is expected to result in approximately a 10-12% increase in overall silver recovery.

Work is underway to expand the underground paste fill plant with commissioning expected by year-end 2017.  Detailed engineering is also underway for an expansion of the heap leach facility.

At the Sinter deposit, final permitting activities are underway, and a potential production decision could be announced with the 2017 year-end results.  Elsewhere, additional drilling is planned to further evaluate the underground potential at Cubiro, and surface potential at Reyna de Plata.

Creston Mascota – Drilling Continues to Extend Mineralization at Madrono

The Creston Mascota, open-pit, heap leach mine, has been operating as a satellite operation to the Pinos Altos mine since late 2010.

Production costs per tonne in the third quarter of 2017 were essentially the same when compared to the prior-year period.  Production costs per ounce in the third quarter of 2017 increased when compared to the prior-year period due to lower gold production resulting from lower recoveries and higher contractor costs.

Minesite costs per tonne in the third quarter of 2017 were essentially the same when compared to the prior-year period.  Total cash costs per ounce in the third quarter of 2017 increased when compared to the prior-year period due to lower gold production resulting from lower recoveries and higher contractor costs.

Production costs per tonne for the first nine months of 2017 increased when compared to the prior-year period due to higher contractor costs.  Production costs per ounce for the first nine months of 2017 increased when compared to the prior-year period due to lower gold production resulting from lower recoveries and the reason described above.

Minesite costs per tonne for the first nine months of 2017 increased when compared to the prior-year period due to reason described above.  Total cash costs per ounce for the first nine months of 2017 increased when compared to the prior-year period due to lower gold production resulting from lower recoveries and the reason described above.

Exploration drilling in the third quarter of 2017 focused on the Madrono Zone, immediately southeast of the Creston Mascota pit, including 10,240 metres of conversion, step-out and exploration drilling in 65 holes.  Drilling results for Madrono were last reported in the Company's news release dated July 26, 2017.

Selected recent drill results from the Madrono Zone and drill hole collar coordinates are set out in the tables below.  The collars are also located on the Creston Mascota Area Local Geology Map.  All intercepts reported for the Madrono Zone show uncapped and capped gold and silver grades over estimated true widths, based on a preliminary geological interpretation that will be updated as new information becomes available with further drilling.

Recent exploration drill results from the Madrono Zone at the Creston Mascota mine 

Madrono Zone at Creston Mascota mine exploration drill collar coordinates

[Creston Mascota Area Local Geology Map]

The quartz vein systems at Madrono are nearly vertical.  While the dominant strike of the veins is to the northwest, there is also a set of steep veins that strike almost east-west.  Where these two vein sets intersect, the quartz vein material thickens into steeply plunging shoots including gold and silver.  In addition, the north-west-striking veins host shallowly plunging horizontal shoots of gold-bearing quartz, which are possibly flexures caused by fault movement along uneven vein surfaces.

Current drilling in the Madrono Zone is testing the underground potential of the shallowly plunging shoots.  Recent results are reported from the Madrono and Santa Martha veins.

Testing the east-west Madrono Vein, hole MAD17-091 (drilling to the north) intercepted two mineralized structures between 185 and 245 metres depth; the upper intercept was 3.3 g/t gold and 23 g/t silver over 15.8 metres at 185 metres depth, including 6.8 g/t gold and 55 g/t silver over 4.2 metres.  Approximately 60 metres to the northwest, hole MAD17-096 intersected 2.4 g/t gold and 4.0 g/t silver over 5.8 metres at 224 metres depth.  These two holes lie between intercepts reported in the Company's news release dated July 26, 2017, showing continuity of the Madrono Vein structure at depths between 70 and 245 metres below surface over a strike length of 480 metres.

In the northwest-striking Santa Martha Vein, hole MAD17-098 intersected 4.1 g/t gold and 68 g/t silver over 16.5 metres at 133 metres depth and 1.3 g/t gold and 24 g/t silver over 22.0 metres at 159 metres depth.  Approximately 170 metres to the northwest, hole MAD17-094 (with the same collar position as hole MAD17-091 but drilling to the northeast) had three wide intercepts in the Santa Martha Vein between 176 and 217 metres depth, almost in its junction with the Madrono Vein, including 1.4 g/t gold and 11 g/t silver over 11.3 metres at 176 metres depth.  These intercepts confirm the thicknesses and locally high gold and silver grades in the Santa Martha Vein over a strike length of 800 metres between 100 and 200 metres depth.

The recent Madrono results lie in a former gap between the Madrono and Santa Martha veins, and show the location where the two vein systems intersect; the Madrono Zone continues to be open at depth.

The results of the current drill program have the potential to increase the gold and silver grades of the Madrono Zone and consequently increase the mineral resources at Creston Mascota.

Drilling is also continuing on the Bravo Zone with the goal of increasing and upgrading the mineral resource.  In addition a new access road at Bravo is approximately 75% completed.  This road could ultimately be used for pre-stripping activities on the zone.

La India – Exploration Remains Focused on Expanding Mineral Reserves and Mineral Resources Close to Current Mining Areas

The La India, open-pit, heap leach mine, in Sonora, Mexico, located approximately 70 kilometres from the Company's Pinos Altos mine, achieved commercial production in February 2014.

Production costs per tonne in the third quarter of 2017 were essentially the same when compared to the prior-year period.  Production costs per ounce in the third quarter of 2017 increased when compared to the prior-year period due to lower gold production, higher contractor costs and the timing of inventory.

Minesite costs per tonne in the third quarter of 2017 were the same when compared to the prior-year period.  Total cash costs per ounce in the third quarter of 2017 increased when compared to the prior-year period due to lower gold production from lower grades, lower by-product revenues and higher contractor costs.

Production costs per tonne for the first nine months of 2017 increased when compared to the prior-year period due to higher contractor costs to accelerate open pit mine development, higher maintenance costs, higher ore and waste haulage costs as a result of longer trucking distances from the Main Zone pit and timing of inventory.  Production costs per ounce for the first nine months of 2017 increased when compared to the prior-year period due to lower gold production and the reasons described above.

Minesite costs per tonne for the first nine months of 2017 were essentially the same when compared to the prior-year period.  Total cash costs per ounce for the first nine months of 2017 increased when compared to the prior-year period due to lower gold production and by-product revenues.

During the third quarter of 2017, relocation of the overland conveyor and liner installation for an additional heap leach area was completed.  These activities are expected to improve processing efficiency.  In addition, a 3,000-tonne-per-day mobile crusher was installed which will provide an opportunity to treat incremental ore that was previously being stockpiled.

A powerline has been approved for the La India mine, which will also extend power to neighboring communities.  Land negotiation and permitting are in progress with the powerline expected to be in service in 2019.

A second phase of drilling has commenced under the Main Zone to further evaluate the potential to extend mineral reserves and mineral resources below the current pit design.  Drilling is also ongoing at the nearby El Realito, Chipriona, Cerro de Oro and El Cochi zones to evaluate the potential to increase mineral reserves and mineral resources in close proximity to the current mining areas.

Given the increases in mineral reserves and mineral resources in 2016 and promising results from ongoing exploration, the Company continues to evaluate location options to construct additional pad capacity.

El Barqueno – Exploration Focus Remains on Testing Satellite Targets and Extending Known Deposits

Agnico Eagle acquired its 100% interest in the El Barqueno project in November 2014.  The 63,997-hectare property is in the Guachinango gold-silver mining district of Jalisco State in west-central Mexico, approximately 150 kilometres west of the state capital of Guadalajara.  Drilling results for El Barqueno were last reported in the Company's news release dated September 5, 2017.

The El Barqueno project contains a number of known mineralized zones and several prospects.  The project contains 301,100 ounces of gold in indicated mineral resources (8.4 million tonnes grading 1.11 g/t gold) and 362,000 ounces of gold in inferred mineral resources (7.2 million tonnes grading 1.56 g/t gold) as of December 31, 2016.  The indicated mineral resources are in the Azteca-Zapoteca and Pena de Oro zones, while the inferred mineral resources are in these two zones as well as the Angostura Zone, the Olmeca area (Socorro vein) and the El Rayo prospect.

In the third quarter of 2017, approximately 16,800 metres of drilling (55 holes) was completed with a focus on extending known deposits such as Cuauhtemoc and testing other potential satellites such as Tecolote, El Rayo and Camino.  Drilling at Cuauhtemoc has now extended the mineral resources over one kilometre to the west of the Azteca-Zapoteca Zone.

Currently, six rigs are operating on the property, two at El Rayo, one at Cuauhtemoc, one at Pilarica, one at Azteca-Zapoteca and one at Socorro.  In addition, negotiations are continuing to finalize short- and long-term surface rights agreements for key areas for future exploration around the project.

Agnico Eagle believes that El Barqueno ultimately has the potential to be developed into a series of open pits utilizing heap leach and/or mill processing, similar to the Pinos Altos mine.  The Company is evaluating conceptual mine design scenarios and additional metallurgical testing is continuing at El Barqueno.

About Agnico Eagle

Agnico Eagle is a senior Canadian gold mining company that has produced precious metals since 1957.  Its eight mines are located in Canada, Finland and Mexico, with exploration and development activities in each of these countries as well as in the United States and Sweden.  The Company and its shareholders have full exposure to gold prices due to its long-standing policy of no forward gold sales.  Agnico Eagle has declared a cash dividend every year since 1983.

Further Information

For further information regarding Agnico Eagle, contact Investor Relations at [email protected] or call (416) 947-1212.

Original Article: https://www.agnicoeagle.com/English/investor-relations/news-and-events/news-releases/news-release-details/2017/Agnico-Eagle-Reports-Third-Quarter-2017-Results-Including-Record-Quarterly-Gold-Production-Improved-2017-Production-and-Cost-Guidance-Nunavut-Projects-Remain-on-Schedule-and-on-Budget-Dividend-Increased-by-10/default.aspx