Agnico Eagle Kittilä Mine. AMA - Finland Mining Day September 3, PDF

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Agnico Eagle Kittilä Mine AMA - Finland Mining Day September 3, 2013 FORWARD LOOKING STATEMENTS The information in this document has been prepared as at April 25, Certain statements contained in

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Agnico Eagle Kittilä Mine AMA - Finland Mining Day September 3, 2013 FORWARD LOOKING STATEMENTS The information in this document has been prepared as at April 25, Certain statements contained in this document constitute forwardlooking 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. When used in this document, the words anticipate, expect, estimate, forecast, will, planned, and similar expressions are intended to identify forward-looking statements or information. Such statements include without limitation: statements regarding timing and amounts of capital expenditures and other assumptions; estimates of future reserves, resources, mineral production, optimization efforts and sales; estimates of mine life; estimates of future internal rates of return, mining costs, cash costs, minesite costs and other expenses; estimates of future capital expenditures and other cash needs, and expectations as to the funding thereof; statements and information as to the projected development of certain ore deposits, including estimates of exploration, development and production and other capital costs, and estimates of the timing of such exploration, development and production or decisions with respect to such exploration, development and production; estimates of reserves and resources, and statements and information regarding anticipated future exploration; the anticipated timing of events with respect to the Company s mine sites and statements and information regarding the sufficiency of the Company s cash resources. Such statements and information reflect the Company s views as at the date of this document and are subject to certain risks, uncertainties and assumptions, and undue reliance should not be placed on such statements and information. Many factors, known and unknown could cause the actual results to be materially different from those expressed or implied by such forward looking statements and information. Such risks include, but are not limited to: the volatility of prices of gold and other metals; uncertainty of mineral reserves, mineral resources, mineral grades and mineral 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; community protests; 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 that may affect the Company s ability to achieve the expectations set forth in the forward-looking statements contained in this document, see the Company s Annual Report on Form 20-F for the year ended December 31, 2012, 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 and information. Alain Blackburn, a Qualified Person and the Company s Senior Vice-President, Exploration, reviewed the technical information disclosed herein. For a detailed breakdown of the Company s reserve and resource position see the February 13, 2013 press release on the Company s website. That press release also lists the Qualified Persons for each project. agnicoeagle.com 2 NOTES TO INVESTORS Note Regarding the Use of Non-GAAP Financial Measures This document presents estimates of future total cash cost per ounce and minesite cost per tonne that are not recognized measures under United States generally accepted accounting principles ( US GAAP ). This data may not be comparable to data presented by other gold producers. These future estimates are based upon the total cash costs per ounce and minesite costs per tonne that the Company expects to incur to mine gold at the applicable projects and do not include production costs attributable to accretion expense and other asset retirement costs, which will vary over time as each project is developed and mined. It is therefore not practicable to reconcile these forward-looking non- GAAP financial measures to the most comparable GAAP measure. A reconciliation of the Company s total cash cost per ounce and minesite cost per tonne to the most comparable financial measures calculated and presented in accordance with US GAAP for the Company s historical results of operations is set forth in the notes to the financial statements included in the Company s Annual Information Form and Annual Report on Form 20-F, for the year ended December 31, 2012, as well as the Company s other filings with the Canadian Securities Administrators and the SEC. Note Regarding Production Guidance The gold production guidance is based on the Company s mineral reserves but includes contingencies and assumes metal prices and foreign exchange rates that are different from those used in the reserve estimates. These factors and others mean that the gold production guidance presented in this disclosure does not reconcile exactly with the production models used to support these mineral reserves. agnicoeagle.com 3 Agnico Eagle Mines Limited Milestones 55 years of operating history, dating back to 1957 when Agnico Mines Limited was founded 1972, Agnico Mines merged with gold exploration company Eagle Gold Mines Limited to form today s AEM 1994, AEM listed on the New York Stock Exchange 2000, LaRonde s Penna Shaft, the deepest single-lift shaft in the Western Hemisphere , acquires the Suurikuusikko gold deposit in Finland and the Pinos Altos property in Mexico Meadowbank mine and Meliadine project in Nunavut 2012 La India property in Mexico For many years, we have adhered to a consistent, low-risk strategy for strengthening our gold mining business and creating shareholder value. 4 Agnico Eagle Strategy Deliver meaningful per share growth in operating and financial metrics Grow gold reserves and production in mining friendly regions Be a low-cost leader Goal is to move back into the industry s lowest cost quartile Acquire small, think big Buy early, add value through exploration and mine building Maintain a solid financial position $1.15 B of available bank lines Only 172 M shares outstanding after 55 years of operating history 5 Agnico Eagle Today Million ounce gold producer Focused on delivering total shareholder return Lower risk Mature operations Low political risk jurisdictions Measured production growth Free cash flow generator Committed to dividends - 30 consecutive years 6 Agnico Eagle Today Six mines in three countries Mineral exploration in Canada, USA, Mexico and Scandinavia LaRonde (Canada) Goldex (Canada) 2008 (2017) Kittilä (Finland) Lapa (Canada) Pinos Altos (Mexico) Meadowbank (Canada) Agnico Eagle - Financial and operating results and 2012 All amounts are in US$, unless otherwise indicated Full year 2012 Full year 2011 Revenues (millions) 1,918 1,822 Earnings (millions) 311 (540) Earnings per share (basic) 1.82 (3.19) Cash provided by operating activities (millions) Payable production Gold (ounces) 1,027, ,460 Silver (000 s ounces) 4,555 5,080 Zinc (tonnes) 42,604 54,894 Copper (tonnes) 4,115 3,216 Total cash costs ($ per oz) KITTILÄ MINE DEVELOPMENT FINLAND Kittilä Mine Agnico Eagle Finland All amounts are in Euros, unless otherwise indicated Full year 2012 Revenues (millions) Operating profit (millions) Full year 2011 Key numbers Gold production (ounces) 176, ,000 Ore production (tons) 1,220,000 1,030,000 Exploration drilling (kilometers) Other drilling (kilometers) 33 46 Kittilä Mine Location - Infrastrucure 55 km north of Kittilä 900 km north of Helsinki Excellent infrastructure: roads, airports, communication Mining license 857 ha KITTILÄ MINE History 1986 First gold finding by the Geological Survey of Finland (GTK) 1998 Exploration by Swedish Riddarhyttan Recources AB 2002 Environmental permit for mining 2003 Mining license 2005 Agnico-Eagle Mines Limited became the sole owner of Riddarhyttan 2006 Completion of final feasibility study and decision to build the Mine 2008 Ore production started in May, milling in September 2009 The first gold pour in January 2010 Stable production 2012 Open pit mining ended, solely underground mining LAPLAND GREENSTONE BELT million years old Metavolcanites Metasediments, BIF, black schist Quartzites Gold mines Bidjovagge Pahtohavare Viscaria Saattopora Sirkka Kutuvuoma Pahtavaara 1996 Suurikuusikko 2009 GEOLOGY Alteration: Carb, alb, chlor Shearing + brecciation Several (10) ore zones Pinch and swell Submicroscopic refractory gold 75 % in arsenopyrite 21 % in pyrite 4 % free gold Areal view of the kittilä mine From exploration to gold bullion Kittilä Focused Exploration Builds Long Term Value Ore reserves and resources As December 31, 2012 Au (g/t) Tonnage (000 s t) Au (000 s oz) Proven/Probable Reserve ,123 4,782 Indicated Reserve , Inferred Resource ,966 2,366 KITTILÄ MINING Mine Development Underground Mine Design 5.5 m Underground Development 5,268 m in ,232 m in ,045 m in ,439 m in ,518 m in 2012 Gradient 1:7 5.3 m Typical ramp profile Underground Main Level 350 M Ventilation Raise (Intake) Fuel Bay Maintenance Shop Warehouse Washing Bay Cafeteria Emergency Exit Electrical Station Underground Main Level 350 M KITTILÄ ORE PROCESSING Milling Crushing Grinding Flotation Pressure oxidation Leaching Electrowinning Mill Process Flow Sheet Crushing Cyclones Carbon Flotation Sulphur Flotation Grinding Surge Bin SAG Mill Process Water Column Carbon Concentrat e Sulphur Concentrate Concentrate Mill Thickener Water Tank Sulphur Flotation Tailings Flotation Tailings Thickener Oxygen Plant Storage Tank Autoclave Teed Tank Autoclave (CIL) Leaching Flash Tank CCD Circuit Acid Wash & Carbon Stripping Acid Water CCD Feed Tank Smelting Neutralization Paste Backfill Plant Paste Process Water Tank Flotation Tailings Disposal UNDERGROUND MINE Cyanide Destruction Carbon Reactivation Kiln Electrowinning Cell Doré Bars CIL Tailings Disposal INFILTRATION FIELD Milling Work on Autoclave May 2013 KITTILÄ ENVIRONMENT Kittilä Mine Leader in Environmental Protection Human and financial resources Good cooperation with Municipality, tourist industry, authorities, local people and associations - Social License to operate In full compliance with environmental legislation and permits Water treatment maintaining the ecological state of the Seurujoki river Process water - closed circuit - cyanide destruction 29 TAILINGS FACILITY Tailings Area Total area ~110 ha All ponds are lined with waterproof bitumen liners. KITTILÄ MINE EXPLORATION Kittilä Mine, Planned and Realized Exploration Drilling 2013 Budget $7 M WASTE DUMP DRILLING FROM EAST - WEST ETELA - SUURI UG-CONV UG-EXPL RIMPI m m m 2 350m 2 171m Exploration target areas 2013 Planned target In progress 2013 best sections 2012 reserves 2012 resources Q1-Q4 target area KITTILÄ MINE DEVELOPMENT Kittilä Mine Expansion Expansion project Expanding production from current rate of 3,000 ore tons per day to 3,750 ore tons per day Construction in Increased production start-up in mid 2015 Investment approximately EUR 80 million over three years Feasibility study underway on underground ore hoisting via shaft Objective: ore hoisting start-up in REGIONAL EXPLORATION Agnico Eagle Exploration Finland / Sweden Oijärvi Regional Exploration Kittilä EXPLORATION SUURIKUUSIKKO HANHIMAA AREA Kittilä- Hanhimaa Area SUAS 260 K Oz ( g/t) not capped Low altitude flight data Combined Mag+ Conductivity Mag1VD_ReLF Green=Mag+Conduct. Blue= Mag Yellow = Conduct. Yellow oval exploration ongoing Kiima 10 holes/ started Feb/ received assays Hole North East Elevatio n Azimut h ( ) Dip ( ) Length (m) From (m) Interv al (m) HAM HAM b HAM HAM HAM Gold (g/t) KITTILÄ 2013 Kittilä Mine Workforce The Mine employs directly close to 600 professionals 420 are Agnico Eagle own employees over 55% from Kittilä and 90% from Finnish Lapland Construction; 160 contractor employees 15% from Kittilä and 41% from Lapland Average age 39.3 years 11.7% of the workforce are women 40 KITTILÄ MINE - SUMMARY Kittilä Mine steady state operations Running at, or above designed capacity Recoveries above planned Dilution better than planned Cost control measures successful Aggressive Regional and Mine Site exploration programs Mine Expansion is ongoing FS on shaft for ore hoisting agnicoeagle.com 41 IMPACT ON THE COMMUNITY Economic Impact on the Region The economy of the Kittilä municipality is based on two pillars: Tourism Tourism provides ca jobs = 42 % of Kittilä s total workforce In total 1800 jobs during high season Kittilä Mine Kittilä Mine provides ~ 600 jobs in total Approximately 50 % of employees from Kittilä More than 90 % of employees from Lapland Unemployment rate of Kittilä is below 10 % on average; during high season 6 %. Economic Impact on the Region Mine employees annual municipal income tax ~ EUR 4 million. Mine employees annual income tax to the state also ~ EUR 4 million. Annual real estate tax paid by the Mine is ~ EUR 250,000. Annual royalty payment to the state ~ EUR 3 million. Corporate tax will be ~ EUR million. Mine sales revenue 2012 over EUR 190 million. The total tourist industry sales revenue in 2012 ~ EUR 200 million. Kittilä population Kittilä Mine NOTES TO INVESTORS REGARDING THE USE OF RESOURCES Cautionary Note to Investors Concerning Estimates of Measured and Indicated Resources This document uses the terms measured resources and indicated resources. We advise investors that while those terms are recognized and required by Canadian regulations, the SEC does not recognize them. Investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves. Cautionary Note to Investors Concerning Estimates of Inferred Resources This document also uses the term inferred resources. We advise investors that while this term is recognized and required by Canadian regulations, the SEC does not recognize it. Inferred resources have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases. Investors are cautioned not to assume that part or all of an inferred resource exists, or is economically or legally mineable. 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. Cautionary Note To U.S. Investors The SEC permits U.S. mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. Agnico-Eagle uses certain terms in this press release, such as measured, indicated, and inferred, and resources that the SEC guidelines strictly prohibit U.S. registered companies from including in their filings with the SEC. U.S. investors are urged to consider closely the disclosure in our Form 20-F, which may be obtained from us, or from the SEC s website at: A final or bankable feasibility study is required to meet the requirements to designate reserves under Industry Guide 7. Estimates for all properties 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 the Staff of the SEC has interpreted to mean historic three-year average prices. The assumptions used for the mineral reserves and resources estimates at the Lapa, Meadowbank and Creston Mascota mines and the Goldex and Meliadine projects reported by the Company on February 13, 2013 are based on three-year average prices for the period ending December 31, 2012 of $1,490 per ounce gold, $29.00 per ounce silver, $0.95 per pound zinc, $3.67 per pound copper, $1.00 per pound lead and C$/US$, US$/Euro and MXP/US$ exchange rates of 1.00, 1.34 and 12.75, respectively. The assumptions used for the mineral reserves and resources estimates at the LaRonde, Pinos Altos and Kittila mines and the La India and Tarachi projects reported by the Company on February 13, 2013 were based on three-year average prices for the period ending June 30, 2012 of $1,345 per ounce gold, $25.00 per ounce silver, $0.95 per pound zinc, $3.49 per pound copper, $0.99 per pound lead and C$/US$, US$/Euro and MXP/US$ exchange rates of 1.00, 1.30 and 13.00, respectively. The Canadian Securities Administrators National Instrument ( NI ) 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. agnicoeagle.com 46 NOTES TO INVESTORS REGARDING THE USE OF RESOURCES A mineral reserve is the economically mineable part of a measured or indicated mineral 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 mineral resource demonstrated by at least a preliminary feasibility study. A probable mineral reserve is the economically mineable part of an indicated, and in some circumstances, a measured mineral resource demonstrated by at least a preliminary feasibility study. A mineral resource is a concentration or occurrence of natural, solid, inorganic material, or natural solid fossilized organic material including base and precious metals 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 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. 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,
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