Agnico Eagle Reports Third Quarter 2021 Results - Meliadine and Laronde Mines Drive Record Quarterly Gold Production; 2021 Guidance Maintained; Reintegration of Nunavummiut Workforce at Meliadine and Meadowbank Completed; Development and Exploration Activities Progressing as Planned at Odyssey; Proposed Merger of Equals Announced With Kirkland Lake Gold.
(All amounts expressed in U.S. dollars unless otherwise noted)

Stock Symbol: AEM (NYSE and TSX)

TORONTO, Oct. 27, 2021 /CNW/ - Agnico Eagle Mines Limited (NYSE: AEM) (TSX: AEM) ("Agnico Eagle" or the "Company") today reported quarterly net income of $114.5 million, or net income of $0.47 per share, for the third quarter of 2021. This result includes non-cash mark-to-market losses on warrants of $15.6 million ($0.06 per share), derivative losses on financial instruments of $10.7 million ($0.05 per share), foreign currency translation losses on deferred tax liabilities and non-recurring tax adjustments of $8.8 million ($0.04 per share), non-cash foreign currency translation gains of $6.5 million ($0.03 per share) and various other adjustment losses of $2.3 million ($0.01 per share). Excluding these items would result in adjusted net income1 of $145.4 million or $0.60 per share for the third quarter of 2021. For the third quarter of 2020, the Company reported net income of $222.7 million or net income of $0.92 per share.

Included in the third quarter of 2021 net income, and not adjusted above, is a non-cash stock option expense of $3.9 million ($0.02 per share).

In the first nine months of 2021, the Company reported net income of $440.2 million, or net income of $1.81 per share. This compares with the first nine months of 2020, when net income was $306.4 million, or net income of $1.27 per share.

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

The decrease in net income in the third quarter of 2021, compared to the prior-year period, is primarily due to lower operating margins2 (lower average realized metal prices and higher production costs, partially offset by higher sales volumes), unrealized losses for non-cash items related to mark-to-market adjustments on financial instruments, higher amortization of property, plant and mine development from higher production volumes and the contribution of the Hope Bay mine and higher exploration expenses, partially offset by foreign exchange gains.

The increase in net income in the first nine months of 2021, compared to the prior-year period, is primarily due to higher operating margins (from higher sales volumes and higher average realized metal prices), partially offset by unrealized losses for non-cash items related to mark-to-market adjustments on financial instruments owned by the Company, higher amortization of property, plant and mine development from higher production volumes and the contribution of the Hope Bay mine, higher exploration expenses and higher income and mining taxes driven by higher operating margins.

In the third quarter of 2021, cash provided by operating activities was $291.0 million ($413.6 million before changes in non-cash components of working capital), compared to the third quarter of 2020 when cash provided by operating activities was $462.5 million ($434.4 million before changes in non-cash components of working capital).

In the first nine months of 2021, cash provided by operating activities was $1,054.3 million ($1,261.0 million before changes in non-cash components of working capital), compared to the first nine months of 2020 when cash provided by operating activities was $788.5 million ($824.3 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) in the third quarter of 2021, compared to the prior-year period, is primarily due to a decrease in mine operating margins that resulted from the reasons described above.

The increase in cash provided by operating activities in the first nine months of 2021, compared to the prior-year period, is primarily due to an increase in operating margins that resulted from the reasons described above, partially offset by higher cash taxes related to the higher mine operating margins and payments for taxes related to the 2020 tax year in the first quarter of 2021.

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2 Operating margin is a non-GAAP measure. For a discussion regarding the Company's use of non-GAAP measures, please see "Note Regarding Certain Measures of Performance".

"Another strong quarterly operating performance, including record gold production, continues to demonstrate our ability to optimize our assets and steadily grow output over the next several years. During the quarter, the Abitibi and Meliadine mines continued to be key drivers to the Company's ongoing operational success," said Sean Boyd, Agnico Eagle's Chief Executive Officer. "These strong production platforms will be integral components in the proposed merger of equals with Kirkland Lake Gold, which was announced late in the quarter. The combination is expected to unlock additional value through the realization of significant operational synergies while creating a low risk global gold mining leader with growing production and gold reserves, increased operating cash flow and the financial resources and long-life assets to maintain a high-quality sustainable business while increasing capital distributions to shareholders," added Mr. Boyd.

Third quarter of 2021 highlights include:

Record quarterly gold production – Payable gold production3 was 523,706 ounces (excluding 17,957 ounces of payable gold production at Hope Bay and including pre-commercial gold production of 6,881 ounces at the Tiriganiaq open pit at Meliadine) at production costs per ounce of $832, total cash costs per ounce4 of $765 and all-in sustaining costs ("AISC") per ounce5 of $1,011. Including Hope Bay, payable gold production in the third quarter of 2021 was new record of 541,663 ounces at production costs per ounce of $845, total cash costs per ounce of $784 and AISC per ounce of $1,059. Production costs per ounce, total cash costs per ounce and AISC per ounce exclude the pre-commercial production of gold at Tiriganiaq
Abitibi and Meliadine mines drive solid operating performance – In the third quarter of 2021, the LaRonde Complex, Goldex and Canadian Malartic mines (50%) in the Abitibi region of Quebec collectively produced 222,373 ounces of gold at production costs per ounce of $716 and total cash costs per ounce of $594. In Nunavut, the Meliadine mine had a record quarter producing 97,024 ounces of gold (including pre-commercial gold production of 6,881 ounces) at production costs per ounce of $585 and total cash costs per ounce of $634. In the third quarter of 2021, these four mines collectively represent approximately 59% and 68% of the Company's gold production and operating margin, respectively. Each of these operations have mine lives in excess of 10 years, and exploration efforts are ongoing to further expand their known mineral reserves and mineral resources
Production, cost and capital expenditure guidance confirmed for 2021 – Expected gold production in 2021 is unchanged at approximately 2,047,500 ounces, while total cash costs per ounce and AISC per ounce continue to be forecast in the range of $700 to $750 and $950 to $1,000, respectively. Estimated payable gold production and costs for 2021 exclude any contribution from Hope Bay. In 2021, gold production at the La India and Meadowbank mines is expected to be below forecast due to a variety of operational challenges. Any shortfall in production at these operations is expected to be offset by stronger than expected performance at the Meliadine and LaRonde mines. Total capital expenditures guidance for 2021 remains unchanged at approximately $803.0 million
Proposed merger of equals with Kirkland Lake Gold announced on September 28, 2021 – The transaction will create a best-in-class gold mining company operating in one of the world's leading gold regions, the Abitibi-Greenstone Belt of northeastern Ontario and northwestern Quebec, with superior financial and operating metrics. Canadian Competition Act approval was received on October 4, 2021. The Information Circular is expected to be mailed on November 3, 2021, and the shareholder votes for both companies are scheduled for November 26, 2021. The transaction is expected to be completed in December 2021 or the first quarter of 2022
Development and exploration activities progressing on schedule and on budget at the Odyssey Underground Project – Underground activities are focused on extending the main ramp and developing the first production levels and an exploration drift at Odyssey South. Construction of the concrete headframe began in late September and is expected to be completed in October. Shaft sinking is scheduled to begin in October 2022. All surface construction activities and the purchase of long lead items remain on target. Underground exploration began at the Odyssey South and Internal Zones in July and a second drill will be added in the fourth quarter of 2021. At East Gouldie, 12 surface drills are currently active (see results below)
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"Reconciliation of Non-GAAP Financial Performance Measures" below. See also "Note Regarding Certain Measures of Performance".

Drilling continues to yield positive results in the third quarter of 2021 – The Company's exploration focus remains on pipeline projects and near mine opportunities. Detailed exploration results are expected to be reported in a news release on November 2, 2021. Recent exploration highlights include:
LaRonde – Drilling the extensions of the recently discovered 20N Zinc South Zone, near the East, mine has returned intercepts of 9.3 grams per tonne ("g/t") gold, 114 g/t silver, 0.9% copper and 2.6% zinc over 4.6 metres at 3,464 metres depth, and 0.5 g/t gold, 41 g/t silver and 11.9% zinc over 2.8 metres at 3,126 metres depth
Meliadine – Delineation drilling in the Tiriganiaq deposit at the Meliadine Mine intersected 20.3 g/t gold (capped at 50 g/t gold) over 27.4 metres in an interlode area at a depth of 380 metres. At the Tiriganiq deposit gold production has been exceeding expectations and the higher-than-expected grade in some infill drilling further confirms that grade estimation appears to be conservative in some portions of the deposit
Amaruq – Drilling has focused on finding extensions to the known mineralized zones. In the Mammoth area, approximately 600 metres to the west of the Whale Tail pit, drilling has encountered significant intercepts such as 4.7 g/t gold over 18.8 metres at 254 metres depth and 5.1 g/t gold over 4.7 metres at 179 metres depth. Additional holes are planned to test for extensions to these zones
Odyssey Project – Infill drilling continues to return wide, high-grade intersections in the core of the East Gouldie deposit, with recent results including 6.8 g/t gold over 41.4 metres at 1,069 metres depth, including 10.4 g/t gold over 20.6 metres at 1,064 metres depth. The East Gouldie extension continues to be tested, with the easternmost hole drilled to date returning 6.3 g/t gold over 4.8 metres at 1,989 metres depth on the adjacent Rand Malartic property, 1.5 kilometres east of the current mineral resource, further demonstrating the excellent exploration upside for new discoveries in the vicinity of the Odyssey Project
Upper Beaver Project – The conversion and expansion drilling program continues to intersect significant high-grade mineralization, further expanding the Footwall and East Porphyry zones at depth. The new results include an intercept of 8.7 g/t gold and 0.81% copper over 18.2 metres at 1,435 metres depth
A quarterly dividend of $0.35 per share has been declared
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3 Payable production of a mineral means the quantity of a 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.

4 Total cash costs per ounce is a non-GAAP measure and, unless otherwise specified, is reported 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".

5 AISC per ounce is a non-GAAP measure and, unless otherwise specified, is reported 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".

Third Quarter 2021 Financial and Production Highlights

In the third quarter of 2021, the Company's payable gold production was 523,706 ounces (excluding 17,957 ounces of payable gold production at Hope Bay, and including 6,881 ounces of pre-commercial production of gold at the Tiriganiaq open pit at Meliadine). This compares to quarterly payable gold production of 492,693 ounces in the prior-year period (which included 13,305 ounces of pre-commercial production of gold at the Barnat deposit at Canadian Malartic and 1,982 ounces of pre-commercial gold production at the Tiriganiaq open pit at Meliadine). Including the Hope Bay mine, the Company's quarterly gold production was a record of 541,663 ounces in the third quarter of 2021.

In the first nine months of 2021, the Company's payable gold production was 1,528,949 ounces (excluding 55,524 ounces of payable gold production at Hope Bay, and including 24,057 ounces and 348 ounces of pre-commercial production of gold at the Tiriganiaq open pit at Meliadine and Amaruq underground project, respectively). This compares to payable gold production of 1,235,123 ounces in the prior-year period (which included 18,930 ounces of pre-commercial production of gold at the Barnat deposit at Canadian Malartic and 1,982 ounces of pre-commercial gold production at the Tiriganiaq open pit at Meliadine). Including the Hope Bay mine, the Company's payable gold production was also a record of 1,584,473 ounces for the first nine months of 2021.

The higher gold production in the third quarter of 2021, when compared to the prior-year period, was primarily due to strong performance at the Company's mines, including higher gold grades and tonnage at the Meadowbank Complex, higher tonnage at the Meliadine, Canadian Malartic and Kittila mines, and higher gold grades at the LaRonde Complex. This was partially offset by lower production at La India related to lower ore tonnage stacked due to high clay content and at Creston Mascota where only residual leaching remains.

The higher gold production in the first nine months of 2021, when compared to the prior-year period, was primarily due to strong performance at the Company's mines, including higher gold grades and tonnage at the LaRonde and Meadowbank Complexes and the Canadian Malartic and Meliadine mines. This was partially offset by lower production at the La India mine related mostly to water conservation efforts and at Creston Mascota, where only residual leaching remains. In the first nine months of 2020, gold production was negatively affected by COVID-19 related reductions in mining activities which affected seven of the Company's then eight operations. A detailed description of the production at each mine is set out below.

Production costs per ounce in the third quarter of 2021 were $832 (excluding the Hope Bay mine), compared to $865 in the prior-year period. Total cash costs per ounce in the third quarter of 2021 were $765 (excluding the Hope Bay mine), compared to $764 in the prior-year period. Including the Hope Bay mine, production costs per ounce were $845 and total cash costs per ounce were $784 in the third quarter of 2021.

Production costs per ounce in the first nine months of 2021 were $816 (excluding the Hope Bay mine), compared to $864 in the prior-year period. Total cash costs per ounce in the first nine months of 2021 were $745 (excluding the Hope Bay mine), compared to $805 in the prior-year period. Including the Hope Bay mine, production costs per ounce were $828 and total cash costs per ounce were $755 in the first nine months of 2021.

In the third quarter and first nine months of 2021, production costs per ounce decreased when compared to the prior-year periods primarily due to higher gold production, partially offset by the strengthening of the Canadian dollar against the U.S. dollar. For the first nine months of 2021, total cash costs per ounce (excluding the Hope Bay mine) decreased when compared to the prior-year periods primarily due to higher gold production, higher by-product revenues from higher realized metal prices and higher sales volumes, partially offset by the strengthening of the Canadian dollar against the U.S. dollar. Total cash costs per ounce (excluding the Hope Bay mine) in the third quarter of 2021 were essentially the same when compared to the prior year period.

AISC per ounce in the third quarter of 2021 were $1,011 (excluding the Hope Bay mine), compared to $1,016 in the prior-year period. Including the Hope Bay mine, AISC per ounce were $1,059 in the third quarter of 2021. AISC per ounce in the first nine months of 2021 were $1,010 (excluding the Hope Bay mine), compared to $1,078 in the prior-year period. Including the Hope Bay mine, AISC per ounce were $1,035 in the first nine months of 2021.

AISC per ounce (excluding the Hope Bay mine) in the third quarter of 2021 decreased when compared to the prior-year period primarily due to lower total cash costs per ounce and lower sustaining capital expenditures primarily at the Meadowbank Complex. AISC per ounce (excluding the Hope Bay mine) in the first nine months of 2021 decreased when compared to the prior-year period primarily due to lower total cash costs per ounce, partially offset by higher sustaining capital expenditures at the Canadian Malartic and Goldex mines related to the temporary suspension of activities due to COVID-19 in the prior-year periods.

Cash Position – Strong Financial Flexibility

Cash and cash equivalents and short-term investments decreased to $243.6 million at September 30, 2021, from the June 30, 2021 balance of $280.9 million, primarily due to the increase of working capital (mainly supplies and fuel inventory) for the Company's Nunavut operations during the 2021 sealift season. The Company also accelerated the purchase of certain reagents and consumables in order to help offset inflationary trends. As of September 30, 2021, the outstanding balance on the Company's unsecured revolving bank credit facility was nil, and available liquidity under this facility was approximately $1.2 billion, not including the uncommitted $300 million accordion feature.

Approximately 54% of the Company's remaining 2021 estimated Canadian dollar exposure is hedged at an average floor price above 1.27 C$/US$. Approximately 48% of the Company's remaining 2021 estimated Mexican peso exposure is hedged at an average floor price above 20.75 MXP/US$. Approximately 10% of the Company's remaining 2021 estimated Euro exposure is hedged at an average floor price of approximately 1.23 US$/EUR. The Company's full year 2021 cost guidance is based on assumed exchange rates of 1.30 C$/US$, 20.00 MXP/US$ and 1.20 US$/EUR.

During the third quarter of 2021, the Company completed the purchase of diesel relating to its Nunavut operations for the balance of 2021 to mid-year of 2022. The diesel was delivered to the Nunavut sites on the 2021 sealifts. The purchase price, including the impact of fuel hedges, was in line with the 2021 cost guidance assumptions.

The Company will continue to monitor market conditions and anticipates continuing to opportunistically add to its operating currency and diesel hedges to strategically support its key input costs.

Capital Expenditures

Total capital expenditures (including sustaining capital) in the third quarter of 2021 were $223.3 million (excluding Hope Bay). Including Hope Bay, the total capital expenditures in third quarter of 2021 were $246.4 million. The total capital expenditures (including sustaining capital) in 2021 remain forecast to be approximately $803.0 million, excluding the Hope Bay mine.

The following table sets out capital expenditures (including sustaining capital) in the third quarter of 2021 and the first nine months of 2021.

Capital Expenditures
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