(All amounts expressed in U.S. dollars unless otherwise noted)
TORONTO, March 29 /PRNewswire-FirstCall/ -- Agnico-Eagle Mines
Limited announced today that it has completed the acquisition of
100% of the Pinos Altos Project from Industrias Penoles S.A. de
C.V. ("Penoles"). Under the exploration and option agreement,
Agnico-Eagle paid $32.5 million in cash and issued 2,063,635 common
shares of Agnico-Eagle to Penoles. Highlights of the Pinos Altos
Project, as previously disclosed, include: - Indicated gold
resources of approximately 12.5 million tonnes grading 3.9 grams
per tonne, or approximately 1.6 million ounces. Inferred gold
resources of approximately 3.2 million tonnes grading 5.2 grams per
tonne, or 0.5 million ounces. - Indicated silver resources are now
approximately 12.5 million tonnes grading 102 grams per tonne, or
41 million ounces. Inferred silver resources are now approximately
3.2 million tonnes grading 111 grams per tonne, or 11.6 million
ounces. - Preliminary project assessment contemplates a 3,000 tonne
per day operation, via open pit and underground methods.
Preliminary capital expenditure estimates to bring the project into
production are approximately $150 million. The Pinos Altos project
is located in the Sierra Madre gold belt, 225 kilometres west of
Chihuahua City, the state capital. The property is directly
accessible by paved highway, and within 10 kilometres of an
extension of the state power grid currently under construction.
Penoles acquired the mineral rights to the property in 1995 and
work to date, including Agnico-Eagle's $4.1 million exploration
program in 2005, has consisted of diamond drilling, metallurgical
testing, initial permitting, and a preliminary economic assessment.
The purchase includes the mineral rights and claims covering an
area of approximately 11,000 hectares, of which only the eastern
third has been extensively explored, as well as surface rights of
up to 400 hectares. Work on Pinos Altos Feasibility Study Commences
Based on the positive drilling results and the growing precious
metals resource, Agnico-Eagle will accelerate its work program on
the property with the objective of completing a bankable
feasibility study on the property in the second quarter of 2007.
The main objectives of the program will be to convert the present
resource estimates into reserves and test the potential target
areas. Agnico-Eagle is also consulting with the local communities
in the project area to ensure that the project provides real,
long-term sustainable benefits to the residents living and working
in the region. Agnico-Eagle has established a Mexican subsidiary
(Agnico Eagle Mexico, S.A. de C.V.) and opened a regional office in
Chihuahua as a base to facilitate the feasibility study and
permitting process and to carry out further exploration on the
Pinos Altos property. The office will also be used to evaluate
other opportunities in Mexico. Reconnaissance prospecting and
mapping has indicated that additional gold mineralization is known
to exist on the property. A detailed work plan will be completed
over the next month comprised of work required on the feasibility
study and further exploration on the property following up on known
gold showings. Agnico-Eagle Begins Trading on Frankfurt's Entry
Standard With Agnico-Eagle's acquisition of Finland's Suurikuusikko
gold deposit substantially complete, the Company is anticipating
building what it believes would be one of Europe's largest gold
mines. As part of an effort to increase European investor awareness
and interest in Agnico-Eagle, the Company has successfully applied
for listing on the Frankfurt Stock Exchange's Entry Standard under
the trading symbol AE9 (or in Germany also known as WKN: 860325).
Trading began on March 1, 2006. The common shares listed in the
Entry Standard are traded on Deutsche Borse's established
platforms: the floor of the Frankfurt Stock Exchange and the
pan-European electronic trading system Xetra. Due to this new
listing, Agnico-Eagle is automatically included in an all-share
index which comprises all companies in the Entry Standard.
Suurikuusikko Tour Planned The Company is planning a property tour
to its Suurikuusikko project in northern Finland. A chartered plane
will be departing Toronto, Canada on June 13 to Kittila, Finland
and returning by June 15. The tour is also open to analysts and
institutional investors who wish travel directly from other
locations in Europe. Interested equity analysts and institutional
investors should contact Hazel Winchester at (416) 847-3717, or .
Space is limited so please register your interest as soon as
possible. Forward Looking Statements The information in this press
release has been prepared as at March 29, 2006. Certain statements
contained in this press release constitute "forward- looking
statements" within the meaning of the Canadian provincial
securities laws and the United States Private Securities Litigation
Reform Act of 1995. When used in this document, the words
"anticipate", "expect", "estimate," "forecast," "planned" and
similar expressions are intended to identify forward- looking
statements. Such statements reflect the Company's views at the time
with respect to future events and are subject to certain risks,
uncertainties and assumptions. Many factors could cause the actual
results to be materially different from those expressed or implied
by such forward-looking statements, including, among others, those
which are discussed under the heading "Risk Factors" in the
Company's most recently filed Annual Information Form and Annual
Report on Form 20-F. 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,
mining methods, capital costs and the location of surface
infrastructure, and actual results and final decisions may be quite
different from those currently anticipated. The Company does not
intend, and does not assume any obligation, to update these
forward-looking statements. About Agnico-Eagle Agnico-Eagle is a
long established Canadian gold producer with operations located in
Quebec and exploration and development activities in Canada,
Finland, the United States and Mexico. Agnico-Eagle's LaRonde mine
is Canada's largest gold deposit in terms of reserves. The Company
has full exposure to higher gold prices consistent with its policy
of no forward gold sales. It has paid a cash dividend for 26
consecutive years. Scientific and Technical Data Agnico-Eagle Mines
Limited is reporting mineral resource and reserve estimates in
accordance with the CIM guidelines for the estimation,
classification and reporting of resources and reserves. Investors
should be aware that the United States Securities and Exchange
Commission ("SEC") does not recognize the term "mineral resource".
Estimates were calculated using historic three-year average metals
prices and foreign exchange rates in accordance with the SEC
Industry Guide 7. Industry Guide 7 requires the use of prices that
reflect current economic conditions at the time of reserve
determination, which Staff of the SEC has interpreted to mean
historic three- year average prices. The assumptions used for 2005
reserves and resources were $405 per ounce gold, $6.35 per ounce
silver. There are no known relevant issues that would materially
affect the estimate. No independent verification of the data has
been published. The Qualified Person responsible for the Pinos
Altos mineral resource estimate is Christian D'Amours, P.Geo. of
Service Conseil Geopointcom of Val d'Or Quebec. The effective date
of the estimate is February 13th 2006. A technical report
describing the resource estimate will be filed with the securities
regulatory authorities in due course. Wireframe models of zones
comprising the Pinos Altos deposit that were used to estimate the
mineral resource were derived using drill hole intercepts. The key
assumptions used to determine the drill hole intercept intervals
were a gold price of $400 per ounce, a silver price of $6.00 per
ounce, metallurgical recoveries of 92.4% for gold and 47.8% for
silver, and net smelter return cut-offs that varied were applied
depending on whether the material could be potentially mined by
open pit or by underground methods. Gold assays were cut to 41
grams per tonne while silver assays were cut to 1,500 grams per
tonne. For the open pit resource models (estimated to a maximum
depth of approximately 130 metres to 170 metres, depending on the
zone), a minimum net smelter return cut-off of $11.90 per tonne was
used to evaluate drill hole intercepts that have been adjusted to
respect a minimum mining width of 4.0 metres (horizontal width).
For the underground resource models, a minimum net smelter return
cut-off of $35.60 per tonne was used to evaluate drill hole
intercepts that have been adjusted to respect a minimum mining
width of 3.0 metres (horizontal width). The mineral resource
estimate was derived using a three dimensional block model of the
deposit; the grades were interpolated using the inverse distance
power squared method. The same cut-off values and metallurgical
recoveries were used to estimate the mineral resource as were to
build the wireframe models but the price assumptions were cut-offs
varied open pit and underground resource models were determined
using mean historic three-year average prices assumptions
(described above). Although the price assumptions used to constrain
the wireframe models are slightly lower than those used to compile
the resource model, it is the opinion of the qualified person that
the differences are not significant. The Pinos Altos exploration
drilling program was supervised by Dino Lombardi, P.Geo., Senior
Geologist International Projects, who is a Qualified Person as
defined in National Instrument 43-101. Mr. Lombardi prepared and
reviewed the exploration results disclosed in this press release.
At Pinos Altos, the diamond drilling equipment recovers either NQ
(48 mm diameter) or HQ (64 mm diameter) core samples. In a few
cases, BQ (36.5 mm diameter) core was also recovered. The drill
core selected for analysis was sawed in half with one half sent to
a commercial analytical laboratory and the other half retained for
future reference. Agnico-Eagle, with the help of Keith Blair,
P.Geo.of Applied Geoscience LLC of Reno Nevada, have established an
Analytical Quality Assurance Program to control and assure the
analytical quality of assays in its exploration at Pinos Altos.
This program includes the systematic addition of blank samples,
duplicate samples and certified standards to each batch of samples
sent for analysis to commercial accredited laboratories. Blank
samples are used to check for possible contamination in
laboratories, duplicate samples quantify overall precision while
certified standards determine the analytical accuracy. In addition,
approximately 10% of the assayed samples are sent to a second
certified laboratory for check analysis. BSI Inspectorate
Laboratories, an ISO 9002 / 9001:2000 accredited exploration
analysis laboratory, collects the split core samples directly from
the Pinos Altos project site, then prepares the samples at its
facilities in Durango, Mexico and finally performs gold and silver
analyses at its lab in Reno, Nevada. ALS Chemex in Reno, Nevada,
also an ISO accredited laboratory, re-analyzes all of the samples
selected for check assaying. The gold assaying method, using a 60
gram charge, is by Fire Assay with either an atomic absorption
finish or, if the atomic absorption result is greater than 3 parts
per million of gold, gravimetric finish as requested by the project
geologist. Silver analysis, from a 30 gram charge, is either by
three acid digestion followed by atomic absorption or, if the
atomic absorption result is greater than 200 parts per million of
silver by Fire Assay with a gravimetric finish as requested.
Canadian Administrator's National Instrument 43-101 requires mining
companies to disclose reserves and resources using the
subcategories of "proven" reserves, "probable" reserves, "measured"
resources, "indicated" resources and "inferred" resources. Mineral
resources that are not mineral reserves do not have demonstrated
economic viability. A mineral reserve is the economically mineable
part of a measured or indicated resource demonstrated by at least a
preliminary feasibility study. This study must include adequate
information on mining, processing, metallurgical, economic and
other relevant factors that demonstrate, at the time of reporting,
that economic extraction can be justified. A mineral reserve
includes diluting materials and allows for losses that may occur
when the material is mined. A proven mineral reserve is the
economically mineable part of a measured resource for which
quantity, grade or quality, densities, shape and physical
characteristics are so well established that they can be estimated
with confidence sufficient to allow the appropriate application of
technical and economic parameters, to support production planning
and evaluation of the economic viability of the deposit. A probable
mineral reserve is the economically mineable part of an indicated
mineral resource for which quantity, grade or quality, densities,
shape and physical characteristics can be estimated with a level of
confidence sufficient to allow the appropriate application of
technical and economic parameters, to support mine planning and
evaluation of the economic viability of the deposit. A mineral
resource is a concentration or occurrence of natural, solid,
inorganic or fossilized organic material in or on the earth's crust
in such form and quantity and of such a grade or quality that it
has reasonable prospects for economic extraction. The location,
quantity, grade, geological characteristics and continuity of a
mineral resource are known, estimated or interpreted from specific
geological evidence and knowledge. A measured mineral resource is
that part of a mineral resource for which quantity, grade or
quality, densities, shape, physical characteristics, can be
estimated with a level of confidence sufficient to allow the
appropriate application of technical and economic parameters, to
support mine planning and evaluation of the economic viability of
the deposit. The estimate is based on detailed and reliable
exploration, sampling and testing information gathered through
appropriate techniques from locations such as outcrops, trenches,
pits, workings and drill holes that are spaced closely enough to
confirm both geological and grade continuity. An indicated mineral
resource is that part of a mineral resource for which quantity,
grade or quality, densities, shape and physical characteristics can
be estimated with a level of confidence sufficient to allow the
appropriate application of technical and economic parameters, to
support mine planning and evaluation of the economic viability of
the deposit. The estimate is based on detailed and reliable
exploration and testing information gathered through appropriate
techniques from locations such as outcrops, trenches, pits,
workings and drill holes that are spaced closely enough for
geological and grade continuity to be reasonable assumed. An
inferred mineral resource is that part of a mineral resource for
which quantity and grade or quality can be estimated on the basis
of geological evidence and limited sampling and reasonably assumed,
but not verified, geological and grade continuity. The estimate is
based on limited information and sampling gathered through
appropriate techniques from locations such as outcrops, trenches,
pits, workings and drill holes. Mineral resources which are not
mineral reserves do not have demonstrated economic viability.
Investors are cautioned not to assume that part or all of an
inferred resource exists, or is economically or legally mineable.
DATASOURCE: Agnico-Eagle Mines Limited CONTACT: David Smith,
Director, Investor Relations, (416) 947-1212
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