Agnico Eagle Mines Limited Third Quarter 2018 Results ......As we said, the Meliadine project, on budget, slightly ahead of schedule, which drives the sort of slight bump in guidance

1

"Though CNW Group has used commercially reasonable efforts to produce this transcript, it does not represent or warrant that this transcript is error-free. CNW Group will not be responsible for any direct, indirect, incidental, special, consequential, loss of profits or other damages or liabilities which may arise out of or result from any use made of this transcript or any error contained therein."

« Bien que CNW Telbec ait fait tous les efforts possibles pour produire cet audioscript, la société ne peut affirmer ou garantir qu’il ne contient aucune erreur. CNW Telbec ne peut être tenue responsable de pertes ou profits, responsabilités ou dommages causés par ou découlant directement, indirectement, accidentellement ou corrélativement à l’utilisation de ce texte ou toute erreur qu’il contiendrait. »

FINAL TRANSCRIPT

Agnico Eagle Mines Limited

Third Quarter 2018 Results Conference Call

Event Date/Time: October 25, 2018 — 11:00 a.m. E.T.

Length: 24 minutes

2



FINAL TRANSCRIPT

October 25, 2018 — 11:00 a.m. E.T. Agnico Eagle Mines Limited Third Quarter 2018 Results Conference

Call

CORPORATE PARTICIPANTS Sean Boyd Agnico Eagle Mines Limited — Chief Executive Officer Yvon Sylvestre Agnico Eagle Mines Limited — Senior Vice-President, Operations, Canada & Europe CONFERENCE CALL PARTICIPANTS David Haughton CIBC World Markets — Analyst

3



FINAL TRANSCRIPT


Call

PRESENTATION

Operator

Good morning. My name is Chris (phon) and I’ll be your conference Operator today. At this

time, I’d like to welcome everyone to the Agnico Eagle Third Quarter 2018 Results Conference Call.

All lines have been placed on mute to prevent any background noise.

After the speakers’ remarks, there will be a question-and-answer session. If you would like

to ask a question during this time, simply press *, then 1 on your telephone keypad. And if you would

like to withdraw your question, please press the # key. Thank you.

Mr. Sean Boyd, Chief Executive Officer, you may begin your conference.

Sean Boyd — Chief Executive Officer, Agnico Eagle Mines Limited

Thank you, Operator, and good morning, everyone, and welcome to our third quarter 2018

conference call. Please note that this presentation does contain forward-looking statements, and

there’s material in the slide deck that outlines the cautionary statements around that.

What we’d like to do is just give you a sense, as we have gone through Q3 of 2018, sort of

our positioning as we close the balance of the year and enter 2019. And essentially, as we look at our

operations and our strategy, we see a strategy that continues to be effective in driving growth, in

driving value per share. And we’re really focused now, just in the final stages of executing on the

growth that we see in Nunavut, as well as moving forward on several projects within the pipeline.

4



FINAL TRANSCRIPT


Call

So our growth in production is important as it’s going to drive cash flow per share, and also

drive free cash flow as we see a significant drop in our capital going forward, and we’ll go through

some of those numbers. So we’re fast approaching now the point where we’ll be entering a harvesting

phase where we’re harvesting cash for the benefit of our shareholders while still being able to invest

in the future of our business as we move some projects forward. And we’ll talk a little bit about that.

As you saw, the quarter, a strong production quarter resulted in our increasing our guidance.

We’ll go through that. We talked about the CapEx declining dramatically, going forward, from roughly

1.1 billion in 2018, which is the peak, as we build out the balance of the Nunavut platform, falling

dramatically, as we said, in 2019. That drives, particularly in the back half of next year, a significant

bump in net free cash flow.

But I think the importance of the Nunavut growth, as we can see in the fact that the projects

are on schedule and on budget—it really points to the in-house skills that we have here and the fact

that we have a process that allows us to be our own general contractors and build these mines. So

we just had the opportunity and pleasure of being at the Meliadine site this week with our board, and

it was great to see the sort of energy and excitement as we sort of round out the development plans

and the construction phase of Meliadine going into next year.

We’re shifting gears a little bit now as we near the end of the big construction phase in

Nunavut. We’re now focused on the pipeline and the projects that could provide additional growth

5



FINAL TRANSCRIPT


Call

in production and cash flow per share, things like the Amaruq underground. And we’ll talk a little bit

about that in this presentation.

Focusing on the quarter. As we said, a strong quarter from a production standpoint, a little

over 420,000 ounces. Good cost performance; our total cash cost of $637 per ounce. As a result of

that strong Q3, we’ve increased our 2018 production guidance to be 1.6 million ounces. We’re

forecasting our total cash costs and our all-in sustaining costs to be at or slightly below the midpoint

of our guidance range.

Also, given the positive development progress that we see in Nunavut, particularly at

Meliadine, we are now guiding to a number that we expect to exceed the midpoint of the current

guidance range. And so we’ll be in a better position in February when we talk to you next on the

conference call for Q4 2018, when we’ll have an update on Nunavut and Meliadine and Amaruq and

what that does for our production expectations in 2019 and beyond.

As we said, the Meliadine project, on budget, slightly ahead of schedule, which drives the

sort of slight bump in guidance expectations for next year. Almost 90 percent complete in

construction. We will begin commissioning the plant early in Q1. We expect commercial production

in Q2 2019.

Amaruq, just touching quickly on that. We received the permit by the middle of July.

Construction’s well advanced on the dike; ramp continues underground. And as we said, we’re

already now looking—and we’ll talk a little bit more about it—about the underground phase there.

6



FINAL TRANSCRIPT


Call

And we’ve done some analysis, done some work, worked on some concepts. We’re confident there’s

an underground line there. And as a result, we’re now, as we said in the press release, capitalizing the

exploration ramp.

The drilling at Amaruq, we continue to get high-grade results at depth. So this deposit

remains wide open, as does Meliadine, and we’ll talk a little bit about that.

Just touching quickly on some of the mines. Both LaRonde and Canadian Malartic continue

to be big, solid cash flow generators. So good steady performance out of those mines. They’ll be

drivers for us in terms of cash flow generation over the next several years. We also had a good

performance at Meadowbank. Good throughput rates and good grade at Meadowbank, and that also

contributes to the increase in guidance in 2018.

From a financial position standpoint, we ended the quarter with $533 million in cash. We’ve

not drawn anything on our lines of 1.2 billion. I think it’s important to note that Q3 of 2018 was our

peak quarter from a CapEx perspective. We spent 340 million. That’s a record in a quarter for us in

terms of CapEx, and that starts to fall in Q4 2018. We’re expecting to spend about 300 million this

current quarter.

So we’re already on the down trend in terms of CapEx spend, and we should see a significant

dropout in CapEx in 2019, at the same time as production starts to grow dramatically, and we have a

good ability to control unit costs because a big portion of this increase in production is due to

increasing grades into the mine plan. And we’ll talk a little bit about that as we talk about the assets.

7



FINAL TRANSCRIPT


Call

On LaRonde. As we said, a solid quarter; almost 90,000 ounces coming from LaRonde. We

were mining, just based on the mining sequence, slightly below reserve grade there at 5.2 grams per

tonne in the quarter. So we would expect to see stronger quarters from a production standpoint at

LaRonde as we move forward.

LaRonde Zone 5, also in production. Dilution a bit lower; grade a bit higher. As you know, at

that project, it’s not just to generate additional cash and leverage off of existing infrastructure. It’s

also to test a new communications technology that was installed there for automated mining

equipment that we plan on using in the lower part of the LaRonde mine, as we mine below 3

kilometres.

There’s also opportunity at LaRonde Zone 5 to mine additional ounces. So what we

proposed, when we went into LaRonde Zone 5 initially as a base case, with the expectation that if we

proved our cost assumptions and our productivity assumptions, that there’s additional ounces that

were left by Barrick on that property when we bought it 13 or 14 years ago. So we’ve had a good start

there at LaRonde Zone 5, and that’s only going to strengthen LaRonde complex as we move forward.

Lapa, I think we constantly ask, is this it? Is it finally it? When is it finished? They’re using the

word final now, so I guess this is it. And so I think I said, for the last three or four conference calls,

congratulations, Lapa. Thanks for just outstanding performance. And as the employees move on to

other operations, well, I guess I’m going to say it again because they keep going.

8



FINAL TRANSCRIPT


Call

But from what I’ve been told, this is it. We’ll have processed the final ore at Lapa in

December of this year. And one of the reasons we’ve been able to increase guidance again is the fact

that Lapa has produced more ounces in 2018 than we expected. So good job from the Lapa team.

Canadian Malartic. Continued solid performance, both in terms of production, cash

generation, cost per ounce. Throughput, year over year, was up. Grades are higher. Barnat Extension

project is progressing and proceeding on budget and on schedule, so things are moving along very

nicely there. And I think, from our standpoint, the team is now focused on potential underground

opportunities there as we drill East Malartic and Odyssey. So we’ll provide an update in February on

the progress we’re making there.

Goldex, a good solid quarter at 31,000 ounces, a little over $600 in total cash costs. Again,

we continue to drill. We’re seeing good numbers in the South Zone; seems to be a bit bigger than we

had thought. So that will incrementally improve our production and output as we move forward.

What we’re doing now in the budget phase is that we’re at that point, as we look out to next

year, we have a series of menu items in front of us to determine what’s the best sort of CapEx

investment number sustaining in growth next year. So things like Akasaba would be considered a

menu item.

And our focus is really—looking at the gold price roughly at 1,200—what should be the

capital number next year? We originally said, earlier this year, that it would be in that 650 million to

9



FINAL TRANSCRIPT


Call

$700 million range. Hopefully, we can get it a little bit lower than that and still allow us to keep moving

the critical value drivers forward, as we grow output beyond 200 million ounces, past 2020.

Meadowbank, as we said, a good solid quarter. We had a lot more tonnes than what we had

expected in the budget. Not only were we mining at Vault, we also had ore from the Portage pit,

which had better grades and slightly better grades than we’d expected.

Again, one of the reasons why our guidance was up in 2018 was due to the performance of

Meadowbank. But if you look at Meadowbank, the average grade now, 2.5 grams per tonne. We will

complete mining at Meadowbank roughly by the end of this year. We’ll process the stockpile first half

of next year, then transition into Amaruq.

So essentially, what we’re doing in Nunavut is removing from a grade of 2.5 grams per tonne

to grades at Meliadine of 7 grams per tonne and at Amaruq close, ultimately, to 4 grams per tonne.

In the early years, less than 4 grams per tonne because we’re in the upper part of the open pit where

grades are lower. But certainly, Nunavut’s going to be a key driver because of the quality of the ore

that’s going to be introduced into the mine plan.

At Amaruq, we talked about the permit. I think what’s important about the permitting

process in Nunavut is it’s well defined, and it sticks to well- defined timelines. We received, as we

said, the Amaruq permit mid July, which was around roughly two weeks from the anticipated time to

receive that permit. That allowed us to get started on the dike construction. So things are progressing

well there to begin mining activities there in Q2 and commercial production in Q3 at Amaruq.

10



FINAL TRANSCRIPT


Call

And what’s important there, as we continue to drill the deposit, we continue to see very

good drill results as we look to extend the deposit at depth; look to understand how the V Zone and

the Whale Tail Zone may come together at depth; what that means and the implications of that for

an underground mine. We’ve concluded that—we’re confident that there will be an underground

mine once we mine out the Whale Tail and V Zone.

As a result, the permit process has commenced mid October for the V Zone in the

underground, and that’s approximately a two-year process. So we’ve started to put our planners and

the engineers on looking at different concepts around underground mining there. There’s a concept

that is looking at, do we make a smaller pit and mine more from underground, which would lower

CapEx to develop the pit? So there’s lots of opportunities there to improve the returns at Amaruq as

we get the production dates established.

But the big driver is Meliadine. That’s a project that we didn’t start erecting steel until

August of last year. And very soon, we’ll be able to introduce ore into the processing facility.

Essentially, the power plant’s complete. They were just in the early stages of starting up the power

plant on Monday when we were there. So good progress has been made.

And also, one of the key things is the fact that we kept that ramp going. We’ve got a sizable

stockpile, but more importantly, not just good solid tonnage, but a good grade at roughly 8.5 grams

per tonne. So we’re expecting a strong start at Meliadine for next year.

11



FINAL TRANSCRIPT


Call

At Kittila, the focus is continuing to be on trying to optimize that big deposit, and that

includes the shaft and expansion of the mill. And both of those initiatives are tracking according to

schedule and the budget.

In the Southern business. Pinos Altos continues to generate very good cash flow, almost

50,000 ounces of production; cash costs a little over $500 an ounce. We’re focused there on

developing satellite zones at Sinter. We expect to commence production from Sinter before the end

of the year.

We’re also focused on bringing the Cubiro deposit into the mine plan. Working on optimizing

with ore sorting there. So our focus in Mexico is really to keep that cash-generating business going

and extending the mine life by focusing on satellite deposits, as well as projects like Santa Gertrudis

and Barqueno.

La India, focused on El Realito and extending the mine life there. Good solid cash flow

generation. There’s lots more exploration we’re doing in the vicinity of the mine site, and our

expectations are we can extend the life there.

So just to summarize. Essentially, as we said, we’re quickly approaching that point where

we’ll be able to harvest the cash from the business, and that’s a result of some good thinking and

smart investing, particularly during that period from 2012 to 2015, when the bulk of the industry was

sort of contracting and deconstructing and rightsizing businesses.

12



FINAL TRANSCRIPT


Call

So our focus is on just the execution, as we said, but also focused on sort of the visibility of

the business for the next 8 to 10 years. Sort of beyond 2020, where do we ultimately get is at 2.2

million, 2.3 million, 2.4 million ounces. That’s the focus of our planning teams, our budgeting teams,

and looking at getting to those levels while investing a moderate amount in the future through those

projects, but also at the same time generating net free cash flow.

We did touch a little bit on exploration. It’s a key value driver. We’ll have more of a fulsome

update in our February press release. But what we can say, we continue seeing some results at

Amaruq. We continue to get good results at Meliadine, Kirkland Lake, Goldex, LaRonde, East Malartic,

Santa Gertrudis—that’s the pipeline.

And that’s why, as we look out at the M&A landscape, our focus should just be on what

we’ve done successfully for the last 20 years: continue to work the pipeline, look for early stage

opportunities that could strengthen the pipeline, and use the in-house mine building and exploration

skills to turn those early stage opportunities into meaningful parts of our business.

One of the things we get asked, if you go into this harvesting mode, what’re you going to do

with the cash? We point to a couple things. Pay down our debt as it matures to improve our financial

flexibility. But also, we’re in a strong position—clearly gold price-dependent—but we’re in a strong

position to boost our dividend.

Our dividend’s clearly important to us. We’ve paid one for 35 years. We didn’t eliminate it

during the period when gold fell from 1,700 to sub-1,100. And in fact, we were the first company to

13



FINAL TRANSCRIPT


Call

start the dividend higher in 2016, essentially, Agnico and Newmont. So the dividend’s important to

us. It’s $100 million a year. We’re certainly in a position, we feel, based on the strength of the business

and the confidence we have in our ability to execute, to look at returning cash to shareholders through

the dividend.

So I’ll now open it up, Operator, to questions.

Q&A

Operator

Thank you. And at this time, I’ll just remind everyone, if you’d like to ask a question, please

press *, then 1 on your telephone keypad. Again, *, 1 to ask a question.

And our first question is from David Haughton with CIBC. Your line is open.

David Haughton — CIBC World Markets

Good morning, Sean and team.

Sean Boyd

Good morning.

David Haughton

Thank you very much for the update. Amaruq underground, just having a—I think about

what your planning could be. We’d previously—at least I’ve been previously of the expectation that

you’d develop an underground site two years after the start-up of the open pit. But it looks like you’re

14



FINAL TRANSCRIPT


Call

thinking that you may be able to accelerate that. Can you just give us an outline of what your thoughts

are?

Sean Boyd

Yeah. It’s early. I’ll allow Yvon to give you some colour. But I think what’s important is the

fact that, based on how we’ve progressed on the development of the Whale Tail pit, based on

exploration results, we have been busy over the last several months at looking at various concepts,

and we saw some initial runs and numbers and cuts of what that could look like.

And clearly, that’s important because if there is a period of overlap from the underground

where the grades are better, and with the open pit, then you could see a decent increase in

production, which wasn’t in any of our modelling, which wasn’t in any of our life-of-mine plans. So

these are the things we’re sort of been focused on now, but Yvon’s going to provide you a bit more

colour.

David Haughton

Thank you. Thank you.

Yvon Sylvestre — Senior Vice-President, Operations, Canada & Europe, Agnico Eagle Mines Limited

I won’t add much more than Sean has added. But at this stage, I think we’re confident

enough with the resource quality that in some cases we can advance the process on some of these

ideas. So I think that’s the main issue at this stage. And I think that also we’ve seen some synergies

between the underground and the open pit operations that, over the next year or so, we’ll develop

15



FINAL TRANSCRIPT


Call

further. But we’re planning some type of updates on the underground opportunity scenarios that are

probably going to be timing around next year’s guidance in February.

David Haughton

Okay. So we’ll get a little bit more detail at that stage. But I would have presumed that

whatever you can get from the higher grade underground would simply displace the slightly lower

grade open pit ore, without necessarily looking at an expansion of the operation.

Yvon Sylvestre

Well potentially, you’re—basically address a slower-stripping strategy with the pit. So we’ll

consider all of these scenarios as we go forward.

Sean Boyd

And one other option that’s possible is a potential increase in throughput rate—modest

increase in throughput rate. There’s certainly—

David Haughton

Mm-hmm.

Sean Boyd

—the ability in the plant, so that if the numbers work that we’d have room to handle a bit

more ore.

David Haughton

16



FINAL TRANSCRIPT


Call

Okay. All right. In your commentary, you had mentioned that you’re starting to drill already

the Meliadine production stopes. Early days, I know, but is the ore as you would have expected it,

given what you’ve seen so far? Or are there any variations to the plan that you could talk about?

Yvon Sylvestre

I won’t go into specifics, but the early stage of delineation has shown that in some areas

we’re getting a little larger thickness. We’re also seeing some opportunities where we have some

parallel lands that we may be potentially in a position to mine them together. So it may have some

slight impact on grade, but significantly impact on productivity. So we’re looking at all of these, but I

don’t expect too many changes as far as overall ounces at this stage, and grade.

David Haughton

All right. Well, I guess if you’re looking for a trend, that’s the way you want the trend to

move, in your favour.

Yvon Sylvestre

Yeah. We’re quite happy with the delineation work, and it sort of secures our early start-up

and production profile for the current guidance.

David Haughton

Okay. Over to LaRonde now. You had 6,000 tonnes per day on average in Q3. Is there

potential to ramp up LaRonde beyond that? Or you feel comfortable with that kind of level of

throughput?

17



FINAL TRANSCRIPT


Call

Yvon Sylvestre

Well, I think we’ve been ramping up into the deep ore body. Now we’re sort of ramping up

in the western part of the deeper ore body. I think what we’re seeing now, at around the 6,000 tonnes

per day nameplate, is pretty well what we can do. As we entertain some of these opportunities around

automation, availability, or mucking time underground, is clearly like the benefit here. So as we evolve

on our automation projects, perhaps this is an opportunity down the road. But for the next year or

two, the 6,000 number’s basically what you’re going to see.

David Haughton

Okay. Thank you. I’ll leave it there for now.

Operator

And again, as a reminder, if you’d like to ask a question, please press *, 1 on your telephone

keypad. And I’ll pause for just a moment.

Showing no further questions. I’ll turn the call back to the presenters.

Sean Boyd

Very good. Thank you, Operator, and thanks, everyone. And hopefully, that music at the

start didn’t scare you away. We don’t really control that tune. But if there’s any questions or follow-

up questions, please reach out to us, and we’d be happy to help you. Thanks again.

Operator

18



FINAL TRANSCRIPT


Call

Ladies and gentlemen, this concludes today’s conference call. You may now disconnect.

Thank you.

*****

Documents

Agnico Eagle Mines Limited Third Quarter 2018 Results ......As we said, the Meliadine project, on budget, slightly ahead of schedule, which drives the sort of slight bump in guidance