(All dollar amounts expressed in U.S. dollars unless otherwise
noted and all units of measurement expressed in metric unless
otherwise noted) TORONTO, May 11 /PRNewswire-FirstCall/ --
Agnico-Eagle Mines Limited today reported first quarter earnings of
$37.2 million, or $0.35 per share. This compares to net earnings of
$10.4 million, or $0.12 per share, in the first quarter of 2005.
First quarter 2006 earnings included an after tax gain of $15.4
million, or $0.15 per share, from the sale of certain marketable
securities. The quarterly earnings were negatively affected by a
non-cash foreign exchange translation loss of $1.9 million, or
$0.02 per share. The Company's financial position remains strong
with cash and cash equivalents of $154.9 million at March 31, 2006,
up from $121.0 million at year end 2005. Payable gold production in
the first quarter was 64,235 ounces at record low total cash cost
per ounce(1) of minus $241. This compares with payable gold
production of 55,310 ounces at total cash costs of $67 per ounce in
the first quarter of 2005. The 16% increase in year over year gold
production was mainly due improved gold recoveries and a 12%
increase in gold grades, as production from the lower levels at
LaRonde increased. Highlights for the quarter include: - Record low
total cash costs at LaRonde of minus $241 per ounce of gold. -
Record quarterly earnings of $37.2 million, or $0.35 per share. -
Redemption of the convertible debentures for common shares,
eliminating all the Company's long term debt. - Closing the
acquisition of 100% of the Pinos Altos project in northern Mexico.
- Addition of Agnico-Eagle to the S&P/TSX 60 Index and 60
Capped Index in May. "Consistently high levels of production from
Agnico-Eagle's low cost LaRonde operation, combined with the robust
pricing environment for all metals, continues to provide us with
strong cash flows", said Sean Boyd, Vice- Chairman and Chief
Executive Officer. "We believe that our shareholders will continue
to benefit from strong cash flows and continued growth in gold
reserves, leading us towards our goal of tripling gold production
by 2009", added Mr. Boyd. Shareholders' Meeting Tomorrow The
Company will host its Annual and Special Meeting of Shareholders on
Friday, May 12, 2006 at 10:30 a.m. (E.S.T.) at the King Edward
Hotel, 37 King St. E., in Toronto, Canada. Management will review
the Company's financial results for the first quarter 2006 and
provide an update of its exploration and development activities.
Via Telephone: To listen on the telephone, please dial (416)
644-3422 or 1 (800) 814-4862 toll free, at least five minutes
before the scheduled start of the presentation. The access phone
number for the archived audio replay is 1 (877) 289-8525, passcode
21184235 followed by the number sign. It will be available from
Friday, May 12, 2006 at 1:00 pm until Friday, May 19, 2006 at
11:59pm. Via Webcast: Additionally, a live audio webcast of the
call will be available on the Company's website at
http://www.agnico-eagle.com/. The webcast along with presentation
slides will be archived for 180 days on the website. LaRonde Mine -
Reliable Performance Leads To Further Records LaRonde processed an
average of 7,350 tonnes of ore per day in the first quarter,
compared with an average of 7,300 tonnes per day in the
corresponding period of 2005. LaRonde has now been operating at an
average of approximately 7,300 tonnes per day for ten consecutive
quarters, demonstrating the reliability of this world class mine.
Minesite costs per tonne(2) were C$57 in the first quarter. These
costs are within the expected range for the year of C$56 per tonne
to C$58 per tonne, once again demonstrating the reliability of the
mine. These costs are higher than the C$52 per tonne realized in
the first quarter of 2005 due to higher costs for fuel, reagents
and steel, as has been seen throughout the mining industry. On a
per ounce basis, net of byproduct credits, LaRonde's total cash
costs remained very low by industry standards, at a company record
of minus $241 per ounce in the first quarter. This compares
favourably with the results of the first quarter of 2005 when total
cash costs per ounce were $67. The main reason for the decrease in
total cash costs per ounce is the significantly higher byproduct
metal prices realized in 2006 and the increase in gold production
during the quarter. The payable quarterly gold production of 64,235
ounces was 16% higher than in the corresponding period in 2005. The
main reason for the increase was a recovered gold grade of 3.3
grams per tonne, compared to 2.9 grams per tonne in the first
quarter of 2005 as an increasing proportion of ore production was
derived from the lower levels of the mine where gold grades are
higher. Gold recovery in the mill also increased from 90.6% to
91.9%, further contributing to the increased gold output. 2006
Total Cost Per Ounce Guidance Revised Considering significantly
higher metals prices than presented in our previous guidance in
December 2005, total cash costs for the full year 2006 are now
expected to be significantly below nil, as demonstrated in the
first quarter. Production estimates of 250,000 ounces of gold, and
byproduct production of 5.7 million ounces of silver, approximately
73,000 tonnes of zinc, and over 9,000 tonnes of copper remains
intact. Minesite costs per tonne are expected to continue to be in
the range of C$56 to C$58. Cash Position Continues to Grow in 2006
- No Long Term Debt Cash and cash equivalents grew to $154.9
million at March 31, 2006 from the 2005 year end balance of $121.0
million. During the quarter Agnico-Eagle added $19.7 million of
cash provided by operating activities (after changes in non-cash
working capital balances), $35.3 million from flow through common
share financings, $32.3 million from the sale of certain marketable
securities and $10.1 million from the exercise of common stock
options. Major expenditures in the quarter included $42.5 million
(including $10 million of refundable value added tax) in the
purchase of 100% of the Pinos Altos project in Mexico and $21.0
million in project and sustaining capital expenditures.
Additionally, the Company maintains substantially undrawn bank
lines of $150 million adding further financial flexibility. The
Company now has approximately 111 million shares outstanding and no
long term debt, following the complete redemption of the
convertible debentures in February. With a series of strong cash
flows over recent quarters, no long term debt, and excellent
financial flexibility, Agnico-Eagle is in a strong position to fund
and build its pipeline of gold projects. Forward-Looking Statements
The information in this press release has been prepared as at May
11, 2006. 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.
When used in this document, the words "anticipate", "expect",
"estimate," "forecast," "planned" and similar expressions are
intended to identify forward-looking statements. Such statements
include, without limitation: estimates and goals of future gold and
byproduct mineral production and sales; 2006 cost guidance,
including estimates of future production costs, total cash costs
per ounce, minesite costs and other expenses; estimates of future
capital expenditures and other cash needs; and other statements
regarding anticipated trends with respect to the Company's capital
resources and results of operations. Such statements reflect the
Company's views as at the date this press release was prepared and
are subject to certain risks, uncertainties and assumptions. 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 Company's dependence upon its LaRonde mine for all of its
current gold production; uncertainty of mineral reserve, mineral
resource, mineral grade and mineral recovery estimates; uncertainty
of future production, capital expenditures, and other costs; gold
and other metals price volatility; currency fluctuations; mining
risks; and governmental and environmental regulation. For a more
detailed discussion of such risks and other factors, see Company's
Annual Information Form and Annual Report on Form 20-F for the year
ended December 31, 2005, as well as the Company's other filings
with the Canadian Securities Administrators and the U.S. Securities
and Exchange Commission. The Company does not intend, and does not
assume any obligation, to update these 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, mining methods,
capital costs, and location of surface infrastructure and actual
results and final decisions may be quite different from those
currently anticipated. 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, Mexico and the United States. Agnico-Eagle's LaRonde Mine
is Canada's largest gold deposit. 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.
------------------------------- (1) Total cash costs per ounce is a
non-GAAP measure. For a reconciliation of this measure to the
financial statements, see Note 1 following the financial statements
(2) Minesite costs per tonne is a non-GAAP measure. For a
reconciliation of this measure to the financial statements, see
Note 1 to the financial statements AGNICO-EAGLE MINES LIMITED
SUMMARIZED QUARTERLY DATA (thousands of United States Dollars -
Unaudited) Three months ended ------------------ March 31,
--------- 2006 2005 ---- ---- LaRonde Division Revenues from mining
operations.............. $ 90,581 $ 61,766 Production
costs............................. 33,187 30,973 ------------
------------ Gross profit (exclusive of amortization shown
below)................................ $ 57,394 $ 30,793
Amortization................................. 5,997 7,211
------------ ------------ Gross
profit................................. $ 51,397 $ 23,582
------------ ------------ ------------ ------------ Net income for
the period.................... $ 37,190 $ 10,449 Net income per
share (basic)................. $ 0.35 $ 0.12 Net income per share
(diluted)............... $ 0.34 $ 0.12 Cash provided by operating
activities........ $ 19,711 $ 28,105 Cash used in investing
activities............ $ (31,206) $ (15,904) Cash provided by (used
in) financing activities.................................. $ 45,456
$ (1,095) Weighted average number of common shares outstanding -
basic (in thousands).......... 106,127 86,131 Tonnes of ore
milled......................... 661,528 656,635 Head grades: Gold
(grams per tonne)..................... 3.30 2.94 Silver (grams per
tonne)................... 77.00 73.00
Zinc....................................... 3.79% 4.14%
Copper..................................... 0.41% 0.39% Recovery
rates: Gold....................................... 91.91% 90.56%
Silver..................................... 86.50% 83.60%
Zinc....................................... 86.70% 81.70%
Copper..................................... 83.80% 77.10% Payable
production: Gold (ounces).............................. 64,235
55,310 Silver (ounces in thousands)............... 1,227 1,097 Zinc
(tonnes).............................. 18,462 18,661 Copper
(tonnes)............................ 2,053 1,810 Payable metal
sold: Gold (ounces).............................. 69,677 70,137
Silver (ounces in thousands)............... 1,190 1,398 Zinc
(tonnes).............................. 18,179 6,792 Copper
(tonnes)............................ 2,038 1,831 Realized prices
(US$): Gold (per ounce)........................... $ 611 $ 430
Silver (per ounce)......................... $ 10.83 $ 6.85 Zinc
(per tonne)........................... $ 2,640 $ 1,323 Copper (per
tonne)......................... $ 5,812 $ 3,241 Total cash costs
(per ounce) (US$): Production costs............................. $
517 $ 560 Less: Net byproduct revenues................. (748) (455)
Inventory adjustments...................... (8) (36) Accretion
expense and other................ (2) (2) ------------ ------------
Total cash costs (per ounce)(1).............. $ (241) $ 67
------------ ------------ ------------ ------------ Minesite costs
per tonne milled (C$)......... $ 57 $ 52 ------------ ------------
------------ ------------ (1) Total cash costs (per ounce) and
Minesite costs per tonne milled are non-GAAP measures. For a
reconciliation of these measures to the financial statements, see
note 1 to the financial statements AGNICO-EAGLE MINES LIMITED
SUMMARY CONSOLIDATED BALANCE SHEETS (thousands of United States
dollars - Unaudited) As at As at March 31, December 31, ---------
------------ 2006 2005 ---- ---- ASSETS Current Cash and cash
equivalents................... $ 154,909 $ 120,982 Metals awaiting
settlement.................. 65,212 56,304 Income taxes
recoverable.................... 4,434 7,723 Other taxes
recoverable..................... 12,558 6,794 Ore
stockpiles............................ 5,077 12,831
Concentrates.............................. 2,328 920
Supplies.................................. 9,768 10,092 Other
current assets........................ 10,621 27,689 ------------
------------ Total current assets.......................... 264,907
243,335 Other assets.................................. 3,891 7,995
Future income and mining tax assets........... 54,303 63,543
Property, plant and mine development.......... 743,083 661,196
------------ ------------ $ 1,066,184 $ 976,069 ------------
------------ ------------ ------------ LIABILITIES AND
SHAREHOLDERS' EQUITY Current Short-term
debt............................. $ 3,264 $ - Accounts payable and
accrued liabilities.... 24,584 37,793 Dividends
payable........................... 643 3,809 Interest
payable............................ - 2,243 ------------
------------ Total current liabilities..................... 28,491
43,845 ------------ ------------ Fair value of derivative financial
instruments.................................. 12,127 9,699
------------ ------------ Long-term
debt................................ - 131,056 ------------
------------ Reclamation provision and other liabilities... 16,369
16,220 ------------ ------------ Future income and mining tax
liabilities...... 123,459 120,182 ------------ ------------
Shareholders' equity Common shares Authorized - unlimited Issued -
111,424,876 (2005 - 97,836,954)..... 973,116 764,659 Stock
options.................................. 4,243 2,869
Warrants....................................... 15,732 15,732
Contributed surplus............................ 7,181 7,181
Deficit........................................ (107,344) (138,697)
Accumulated other comprehensive income (loss).. (7,190) 3,323
------------ ------------ Total shareholders'
equity..................... 885,738 655,067 ------------
------------ $ 1,066,184 $ 976,069 ------------ ------------
------------ ------------ AGNICO-EAGLE MINES LIMITED SUMMARY
CONSOLIDATED STATEMENTS OF INCOME (thousands of United States
dollars except per share amounts - Unaudited) Three months ended
------------------ March 31, --------- 2006 2005 ---- ---- REVENUES
Revenues from mining operations............... $ 90,581 $ 61,766
Interest and sundry income.................... 23,054 1,229
------------ ------------ 113,635 62,995 COSTS AND EXPENSES
Production.................................... 33,187 30,973 Loss
on derivative financial instruments...... 7,431 4,020 Exploration
and corporate development......... 5,517 2,763 Equity loss in
junior exploration companies... 84 1,134
Amortization.................................. 5,997 7,211 General
and administrative.................... 5,544 3,749 Provincial
capital tax........................ 553 599
Interest...................................... 1,357 2,552 Foreign
currency loss (gain).................. 1,868 (384) ------------
------------ Income before income, mining and federal capital
taxes................................ 52,097 10,378 Federal capital
tax........................... 204 248 Income and mining tax
expense (recovery)...... 14,703 (319) Net income for the
period..................... $ 37,190 $ 10,449 ------------
------------ ------------ ------------ Net income per share -
basic.................. $ 0.35 $ 0.12 ------------ ------------
------------ ------------ Net income per share -
diluted................ $ 0.34 $ 0.12 ------------ ------------
------------ ------------ Weighted average number of shares (in
thousands) Basic....................................... 106,127
86,131 Diluted..................................... 108,598 86,545
AGNICO-EAGLE MINES LIMITED SUMMARY CONSOLIDATED STATEMENT OF CASH
FLOWS (thousands of United States Dollars - Unaudited) Three months
ended ------------------ March 31, --------- 2006 2005 ---- ----
Operating activities Net income for the period.....................
$ 37,190 $ 10,449 Add (deduct) items not affecting cash:
Amortization................................ 5,997 7,211 Future
income and mining taxes.............. 11,702 (319) Unrealized loss
on derivative contracts..... 6,683 3,439 Gain on sale of
securities.................. (21,574) - Amortization of deferred
costs and other.... 1,854 2,681 ------------ ------------ 41,852
23,461 Changes in non-cash working capital balances Metals awaiting
settlement.................. (8,908) 1,753 Income taxes
recoverable.................... 3,289 2,951 Other taxes
recoverable..................... 3,986 74
Inventories................................. (2,151) 1,703 Prepaid
expenses and other.................. (2,905) 263 Accounts payable
and accrued liabilities.... (13,209) (483) Interest
payable............................ (2,243) (1,617) ------------
------------ Cash provided by operating activities......... 19,711
28,105 ------------ ------------ Investing activities Additions to
mining properties................ (20,975) (15,182) Acquisitions,
investments and other........... (10,231) (722) ------------
------------ Cash used in investing activities.............
(31,206) (15,904) ------------ ------------ Financing activities
Dividends paid................................ (3,166) (2,542)
Short-term debt............................... 3,264 - Common
shares issued.......................... 45,358 1,447 ------------
------------ Cash provided by (used in) financing
activities................................... 45,456 (1,095)
------------ ------------ Effect of exchange rate changes on cash
and cash equivalents............................. (34) (6)
------------ ------------ Net increase (decrease) in cash and cash
equivalents during the period................ 33,927 11,100 Cash
and cash equivalents, beginning of period..........................
120,982 106,014 ------------ ------------ Cash and cash
equivalents, end of period...... $ 154,909 $ 117,114 ------------
------------ ------------ ------------ Other operating cash flow
information: Interest paid during the period............... $ 4,681
$ 3,824 ------------ ------------ ------------ ------------ Income,
mining and capital taxes paid (recovered) during the
period................ $ 484 $ (2,527) ------------ ------------
------------ ------------ Note 1: Reconciliation of Total Cash
Costs Per Ounce and Total Minesite Costs Per Tonne (thousands of
dollars, except where noted)
------------------------------------------ 3 Months 3 months ended
ended March 31, March 31, 2006 2005 ------------ ------------ Cost
of production per Consolidated Statements of
Income......................... $ 33,187 $ 30,973 Adjustments:
Byproduct revenues............................ (48,039) (25,261)
Inventory adjustment(i)....................... (504) (1,894)
Non-cash reclamation provision................ (105) (107)
------------ ------------ Cash operating
costs.......................... $ (15,461) $ 3,711 Gold production
(ounces)...................... 64,235 55,310 ------------
------------ Total cash costs (per ounce)(iii)............. $ (241)
$ 67 ------------ ------------ ------------ ------------ (thousands
of dollars, except where noted)
------------------------------------------ 3 Months 3 months ended
ended March 31, March 31, 2006 2005 ------------ ------------ Cost
of production per Consolidated Statements of
Income......................... $ 33,187 $ 30,973 Adjustments:
Inventory adjustment(ii)...................... 110 (3,220) Non-cash
reclamation provision................ (105) (107) ------------
------------ Minesite operating costs (US$)................ $
33,192 $ 27,646 ------------ ------------ Minesite operating costs
(C$)................. $ 38,005 $ 33,918 Tonnes milled (000's
tonnes).................. 662 657 ------------ ------------
Minesite costs per tonne (C$)(iv)............. $ 57 $ 52
------------ ------------ ------------ ------------
--------------------------------- Notes: (i) Under the Company's
revenue recognition policy, revenue is recognized on concentrates
when legal title passes. Since total cash costs are calculated on a
production basis, this adjustment reflects the portion of
concentrate production for which revenue has not been recognized in
the period. (ii) Inventory adjustments for the minesite costs per
tonne calculation reflect only costs associated with unsold
concentrates as minesite costs per tonne are calculated on a
production basis. (iii) Total cash cost is not a recognized measure
under US GAAP and this data may not be comparable to data presented
by other gold producers. We believe that this generally accepted
industry measure is a realistic indication of operating performance
and is useful in allowing year over year comparisons. As
illustrated in the table above, this measure is calculated by
adjusting Production Costs as shown in the Statement of Income and
Comprehensive Income for net byproduct revenues, royalties,
inventory adjustments and asset retirement provisions. This measure
is intended to provide investors with information about the cash
generating capabilities of our mining operations. Management uses
this measure to monitor the performance of our mining operations.
Since market prices for gold are quoted on a per ounce basis, using
this per ounce measure allows management to assess the mine's cash
generating capabilities at various gold prices. Management is aware
that this per ounce measure of performance can be impacted by
fluctuations in byproduct metal prices and exchange rates.
Management compensates for the limitation inherent with this
measure by using it in conjunction with the minesite cost per tonne
measure (discussed below) as well as other data prepared in
accordance with US GAAP. Management also performs sensitivity
analyses in order to quantify the effects of fluctuating metal
prices and exchange rates. (iv) Minesite cost per tonne is not a
recognized measure under US GAAP and this data may not be
comparable to data presented by other gold producers. As
illustrated in the table above, this measure is calculated by
adjusting Production Costs as shown in the Statement of Income and
Comprehensive Income for inventory and hedging adjustments and
asset retirement provisions and then dividing by tonnes processed
through the mill. Since total cash cost data can be affected by
fluctuations in byproduct metal prices and exchange rates,
management believes this measure provides additional information
regarding the performance of mining operations and allows
management to monitor operating costs on a more consistent basis as
the per tonne measure eliminates the cost variability associated
with varying production levels. Management also uses this measure
to determine the economic viability of mining blocks. As each
mining block is evaluated based on the net realizable value of each
tonne mined, in order to be economically viable the estimated
revenue on a per tonne basis must be in excess of the minesite cost
per tonne. Management is aware that this per tonne measure is
impacted by fluctuations in production levels and thus uses this
evaluation tool in conjunction with production costs prepared in
accordance with US GAAP. This measure supplements production cost
information prepared in accordance with US GAAP and allows
investors to distinguish between changes in production costs
resulting from changes in production versus changes in operating
performance. DATASOURCE: Agnico-Eagle Mines Limited CONTACT: David
Smith, Director, Investor Relations, (416) 947-1212
Copyright